catallaxy files

catallaxy in technical exile

Birdfood for thought

with 29 comments

The advantage of gold in theory is that it affords a safeguard against the dishonesty of governments. This would be all very well if there were anyway of forcing governments to adhere to gold in a crisis, but in fact they abandon gold whenever it suits them to do so.

— Bertrand Russell

Just picked up In Praise of Idleness and it opened at that page.

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Written by Admin

November 2, 2006 at 9:57 am

Posted in Uncategorized

29 Responses

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  1. C8to,
    Simple, take away the power of governments to issue currency.

    Andrew Reynolds

    November 2, 2006 at 11:31 am

  2. exactly…

    but unless we have that power anyway governments will want it…

    that is i think private currency will come in because its technically feasible for the population to ignore the main currency not because governments are nice and give currency over to the private sphere…

    unless your suggesting by take it away that we go storm the reserve bank…

    c8to

    November 2, 2006 at 11:34 am

  3. What amazes me id the total acceptanc of this current system.

    I would actually say it started after the early 90’s recesssion and continues on now. In other words it is a totally different fiat system than the one operating before that time. Before that, recessions were accepted as a righting process.

    Greenspan in effect turned monetary policy into another government policy. Everyone seems to be happy as the value of money simply gets inflated away.

    We now have rolling bubbles from one sector to another. Look that the US Stock market hitting new highs primarliy becasue the fed is expected to lower interests rates in the new year

    Mark Farber is right. Anyone who buys a long dated government bond is going to own a piece of paper that is worth zero by maturity.

    jc

    November 2, 2006 at 11:45 am

  4. JC,

    your economic history is badly wrong.

    That happened after WW2.

    C8T0 how is what your proposing all that different from bartering?

    you are simply advocating increased transactions costs if you want private money everywhere

    Bring Back EP at LP

    November 2, 2006 at 12:21 pm

  5. Homer

    Enlighten me. Tell me how wrong I am?

    Private money is not bartering. Not if you’re using an accepted medium of exchange the medium is money.

    And no, one isn’t accepting increase transations costs if private money is used. If I use a C8to dollar to buy a loaf of bread, where’s the added cost, homer?

    You’re starting to sound like Fyor now.

    jc

    November 2, 2006 at 1:35 pm

  6. “Tell me how wrong I am?”

    Um, very?

    Fyodor

    November 2, 2006 at 1:41 pm

  7. Homer
    The 90’s recession left people pretty badly scared. It was the closest we have ever come to a depression in the English-speaking world. For the most part it was hard actually getting a bid for real estate and when one did the bid was way low.

    There was also little money around and I recall that in one OZ city that was badly hit, people were doing transactions on IOUs.

    From that point on central banks decided that they were never going to let things get as hard as that again and we ended up with the current governor of the fed making a speech that central banks can pretty well kill deflation by simply printing more. He’s known as helicopter Ben since that infamous speech. So my theory is that we have experienced five versions of fiat since the break up of Bretton Woods.
    1. The 70’s debacle when the Fed didn’t really know what the hell was going on.
    2. The early Volcker era, when Volcker actually did understand what was going on and began to simply target the money supply.
    3. Late Volcker when he gave up the ghost on this system because interest rates were too volatile for political tastes
    4. Greenspan took up the Volcker system of targeting interest rates hoping to hit the right note
    5. Greenspan running policy to ensure that we never had a recession again and therefore allowing money to rip. The stock market collapse of 87 and the subsequent liquidity draining that brought on the recession of the 90’s gave us the 5th version.

    We are currently in 5 and things are really starting to go slightly off the rails.

    jc

    November 2, 2006 at 1:51 pm

  8. JC,

    you are wrong as I previously stated in that Inflation started after WW11.

    previously prices were pretty much the same as they were in the 18th or 17th century I have forgotten which.
    The reason being depressions occurred regularly before WW11.

    whose private money are we using mine or yours.
    We then an an exchange rate which increases transactions costs.

    Ask any businessman if they would like multiple currencies or one?

    Bring Back EP at LP

    November 2, 2006 at 1:51 pm

  9. Piss off Fyador.

    You were touting this shit in the very first thread about how no banks in the west going broke. You then derailed the thread by forcing a debate on the definition of bankruptcy. You were sent packing, you filthy liar, when it was made clear to you that banks going bust in the west was actually far more prevalent than most people even knew.

    Now piss off you loathsome sissy

    jc

    November 2, 2006 at 1:56 pm

  10. 1. you are wrong as I previously stated in that Inflation started after WW11.

    You have to expand Homer. I don’t know what you mean here.

    2. previously prices were pretty much the same as they were in the 18th or 17th century I have forgotten which.

    As above

    3. whose private money are we using mine or yours.
    We then an an exchange rate which increases transactions costs.

    whichever is accepted as long as it is widely accepted.

    4 Ask any businessman if they would like multiple currencies or one?

    They’ll do what the consumer wants. As always

    jc

    November 2, 2006 at 2:00 pm

  11. Bertrand Russell is talking about fractional reserve gold with national currency.

    100% backed multi-metals does not afford the government any chance to exploit the situation..

    This is one of the many things counting against fractional reserve Gold. The political risk is way high. And higher now in democracies then it was under the monarchy.

    If the government is not allowed to link their currency to a promise….. Or if there is no government currency…. Or if there is no legal tender laws…

    Then your CURRENCY-PROPERTY-RIGHTS are secure just so long as there is eternal vigiliance against the fraudulent side of fractional reserve.

    There is a series of steps taking many decades to break these CURRENCY-PROPERTY-RIGHTS down.

    But it is fractional reserve that brings about the motive, the ability, and indeed the ‘need’ to break these property rights down.

    Back-test to Allende. What if Allende had come in and it was 100% backed silver?

    He couldn’t have done squat. He couldn’t have caused the trouble he did.

    At no time would there have been a disincentive for savings. Since having the more committed and driven looters in power would have seen that silver buried in the fields or invested overseas.

    But instead of massive devaluations the silver would hold its value. Because as the economy was being molested the silver would have been taken out of circulation.

    In this system an honest man can take or leave the banks. He can bury his coins in the field. And his coins will hold their value when he travels to the border to purchase a smorgasboard of weaponry.

    So the fact of a 100% backed metals system would have stopped this utopian JIVE before it got started.

    They wouldn’t have all gotten excited in the first place and deluded themselves that they could try it on.

    Property-rights, justice and the laws of karma are not enough. They won’t save a poorly thought out transition strategy from leading to absolute disaster.

    But us ignoring Property-rights, justice, karma and if you like GODS WILL…..

    Well thats got to be causing all sorts of trouble. And not just for us.

    We English-Speaking-World…. We Offshore-Islanders….. Well its sometimes ok for us FOR US! to be adopting money that carries with it great political risk.

    But what have we done to our brothers all over the world, who lack our historical and geographical advantages… who lack our political stability.

    We have bequeated to them a system that carries great political risk and we just say well ho-hum.

    Ho-hum IN THEORY it can work.

    “Ho-hum IN THEORY fractional fiat can work.” we say.

    What have we done by teaching this?

    What have we done by saying this?

    What have we done to all our brothers and sisters all over the world?

    When we could have given them a monetary system that protected them from this political risk.

    GMB

    November 2, 2006 at 2:36 pm

  12. That’s a good , Birdy. If you keep the money locked in the left can’t steal it.

    jc

    November 2, 2006 at 2:43 pm

  13. JC,

    you made the original comment . If you do not know what you meant how am I supposed to?

    there are more transactions costs with more currencies. If you wish to support private currency then you suppport higher trensaction costs.

    Bring Back EP at LP

    November 2, 2006 at 2:45 pm

  14. Homer

    It wasn’t my statement I was querying , it was yours. I have no idea what you were trying to convey. Help me out.

    jc

    November 2, 2006 at 2:52 pm

  15. I would actually say it started after the early 90’s recesssion and continues on now. In other words it is a totally different fiat system than the one operating before that time. Before that, recessions were accepted as a righting process.

    Greenspan in effect turned monetary policy into another government policy. Everyone seems to be happy as the value of money simply gets inflated away.

    We now have rolling bubbles from one sector to another. Look that the US Stock market hitting new highs primarliy becasue the fed is expected to lower interests rates in the new year

    Bring Back EP at LP

    November 2, 2006 at 3:13 pm

  16. Thats ridiculous.

    With 100% backing essentially you wouldn’t have more then four or five different currencies.

    Whereas now you have HUNDREDS.

    My goodness. That would be an argument for 100% backing if I’ve every heard one.

    GMB

    November 2, 2006 at 3:37 pm

  17. “…there are more transactions costs with more currencies.”

    Even now with its coverage limited e-Gold has the lowest transaction fee around.

    If all the international transaction banks can be certified 100% backed then this system will produce the lowest transaction costs EVER. Since the funds don’t need clearing, or risk built in, or currency trading costs built in.

    No question. This will be the cheapest system on a per transactiton basis.

    GMB

    November 2, 2006 at 4:16 pm

  18. I once saw a picture of inflation data that sky-rocketed after 1936 – when Keynes published the ‘General theory’. Coincidence, I’m sure.

    Sinclair Davidson

    November 2, 2006 at 6:06 pm

  19. Gays like Fyodor and Munn just don’t understand it. Hetro men can have great friendships and like one another with the thought of sex not even coming close to ones thought process or the way we think about gals. That’s why the idea of a guy/girl friendship is bogus. Sooner of later the guy is gonna try it on.

    Fyodor and Munn think that because I like how Birdy expresses himself, what he writes and that i admire him must have sexual connotations.

    It doesn’t gals. We’re hetro and don’t think like that. We’re proud hetros just like both of you are proud homos.

    Fyodor. Ilook, it must clsoely resemble the way you relate to gals. Think of it like that and you’ll never accuse hetros again.

    It’s so gay, Fyodor, you big sissy.

    jc

    November 2, 2006 at 6:41 pm

  20. Guys, gals, gays, whatever, let’s keep all the personal sniping out of this thread.

    Jason Soon

    November 2, 2006 at 6:50 pm

  21. homer, you are wrong that there would be more currencies…thats just a silly assumption…

    there would be the optimum number of currencies…

    credit cards and other soft monies are almost like private currencies since credit card companies are in away controlling the issued amount of soft currency by determining what borrowing limits people can have…

    c8to

    November 2, 2006 at 7:05 pm

  22. that it would be like barter is preposterous…i think we can all, including you ignore that claim…

    c8to

    November 2, 2006 at 7:06 pm

  23. C8to

    But they’re still expressed in the legacy currency.

    But I agree with all the rest.

    jc

    November 2, 2006 at 7:12 pm

  24. yes jc you’re right…thats why its only partial…but it ( the whole hog) will probably come

    c8to

    November 2, 2006 at 7:28 pm

  25. test comment

    c8to

    November 2, 2006 at 7:34 pm

  26. C8to

    There’s an estimated 25 trilion dols sitting in swiss and swiss like numbered accounts in the world. Private money is going to start with that loot in mind , i think.

    jc

    November 2, 2006 at 7:46 pm

  27. something happened about 7 years ago that I thought was very interesting.

    The IRS got together with various fed departments and threatened the shit out of the credit card companies and various Carib countries if they did not divulge the names of US residents that had credit cards domiciled in those countries. It was obvious that a credit card would be linked to a bunch of financial assets. The credit card companies rolled over along with caribs and lots of people got caught.

    This just shows what the US is prepared to do to get tax cheats. It also shows the power of a large state and what it is prepared to do to get its own way.

    My point is that private money won’t show up without a fight.

    jc

    November 2, 2006 at 8:17 pm

  28. Good Morning (or Good Evening for those living in less fortunate time-zones) ….

    c8to :

    credit cards and other soft monies are almost like private currencies since credit card companies are in away controlling the issued amount of soft currency by determining what borrowing limits people can have

    I thought, that for the last half century or more, we did indeed have a de-facto private currency system that just let the government issue the small change of coins and banknotes.

    Graham Bell

    November 3, 2006 at 6:45 am

  29. c8to:
    Bertrand Russell’s “In Praise Of Idleness”. First read that when I was 14. Excellent. Thought it had sunk into oblivion; glad it hasn’t.

    Graham Bell

    November 3, 2006 at 7:25 am


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