StarshipCapricorn User Forum

There are many puzzling aspects to the Wanta case and as time goes on and more stories come out, the puzzlement still persists. So now Leo Wanta is a bad guy? If any of this article is true, then it's just another sad story of what the lust for money will do to people.

All those in favor of exploring a plausable money-less trading system say: yea; those not in favor say: nay.

Quercus wrote:

Perhaps a precious-metal backed currency is what we should aspire to.

I say 'Yea!'...

Sorry, Christo, I must have missed this one somehow.

What did you have in mind? Trading cabbages for car parts (albeit electric cars),  swapping expertise, labour (labor) for goods etc. etc. We have had a few local experiments along those lines here in the UK, but they always end up evolving some sort of token system to make the process more convenient. Tokens are what money is; a means of exchange representative of perceived value. So, we're back where we started, but, at least the tokens are backed up by the value of the goods available.... until some clever dick starts making his own tokens. Next stage is more sophisticated tokens with security markers and so we end up with money. Obviously, we need to think further out-of-the-box and, I suspect this is where you come in with your "other possibilities". My mind is fairly open - some would say empty - but I can't perceive a system that would work without evolving into a currency.

It would be a different matter if we could rid the world of greed and ego and everybody was satisfied with their lot. Then, we could all contribute to the best of our abilities and receive to meet our needs; sounds like communism to me. Ah well, perhaps we had better wait a while until we all ascend to 4/5th. dimension, then we can just create whatever it is we need...... That'll be "soooooon" I expect.

Well, Q.... I'm well aware that my thinking is 'off into the future' by about three hundred years or so. I'm not inclined to press the issue, just suggesting that some consideration is applied to the possibility of a moneyless society.

A little insight into my way of thinking. You had already touched upon the most grievous aspect of money and that is, a placing of value upon it. Whatever one buys with money is what truly has value... the money itself can be lost, stolen, hoarded, manipulated and/or consumed by fire and what-have-you. So, since that is the case, we can make money out of precious metals which cannot be consumed by fire?, yes indeed--however, it still can be lost or stolen, or or or or...

Gennii presented to us all some food for thought with, what reads to me like a song. It's the last verse in this song which gives a clear understanding of the attitude we shall need to have in a collective sense...

Imagine yes I say to you
A change come down by man
Abundance everywhere
Gifts from hand to hand
God allowed to play in flesh
Upon this hallowed ground
The kingdom blessing us
That has always been around

This Grand & loving planet we all live on literally gives us everything we could possibly ever need or ever want. Is Gaia a Communist? No, far more communalistic in Her nature as She isn't interested in "letting it trickle down"  (for a price) to the rest of us, but rather She showers us with Her abundance. It's our so-called leadership and corporations who have stepped in between Gaia and the rest of us--who have insisted that we all must PAY for what Nature has so freely given.

If we simply trade what is given (the stuff of true value), we by-pass the need to push money around, account for it and safeguard it, and therefore we would also cut-out all the other inherent problems when money is used. Ahhh... but money was intended to facilitate trade in that, if one doesn't have what another needs or desires, then money is intended to fill the gap as an universal 'thing' of value--which can be used in place of whatever one doesn't have when trading.

When people reason that they must 'earn a living', I laugh myself silly at their reasoning. Say what?!!, really, earn a living?! Life was FREELY given to all of us, the planet FREELY gives everything we need to simply live FREE. There isn't a single creature on this planet that is so far out of tune to Nature than the human creature is. Not even a lowly ant would ever consider having to 'earn a living'... they just live and do what comes natural to them. Well, history shows that humans actually lived like that until the invention of governments and money.

Abundance everywhere, gifts from hand to hand. God allowed to play in the flesh upon this hollowed ground. [It's]The Kingdom blessing us that has always been around.

All humanity need do is recognize the communal nature of our planet and the need for money will eventually fade into history. So, it may take some three hundred years for humanities twisted brainwashing to be undone... which is to say, if you want money, you'll have to earn it, and by extension, you'll also have to earn a life that was given to you. The cost of living.... BAHW-HA-HA-HA-HA-HA-HA!!! A dollar for an apple that an apple tree freely gave? Oh sure, why not? I earned it didn't I? (yes, that's sarcasm.)

I'm all for bartering...works for me...

This article seems to fit well here... although, I wish its author would have used more fitting terminology, he's pretty much covered the gist of using gold as money. I disagree with him on one point, gold may not be easy to counterfeit but it's quite easily debased... gold plated lead is a prime example as is the the racketeer nickel.

Oct. 2, 2009

Forward: If there are only a few articles you ever read on the gold standard, this should be one of them. The reason is that it is complete. It covers the moral case for the gold standard as well as its practicality. Although beginning with the basics it incorporates some of the more intricate aspects of it's virtues.
There is no call in this article to re-establish the gold standard today. Whether the gold standard is ever re-established is not the point. The point, is that like freedom, it is the ideal. And like freedom, while achieving it may be a distant goal, moving toward it is always the direction we should be moving.
***********
At one time the case for the gold standard was practically self-evi dent — undisputed by most econo­mists and appreciated by both lay men and professionals. Today, however, the case for gold is bur­ied under decades of propaganda, misconceptions, and myths. It has been only recently that the case for the gold standard has begun to surface from under the Policy Makers’ anti-gold debris. Conse quently, gold is once again gain ing the attention and interest it so rightly deserves.
Today’s free-market advocates of the gold standard differ from past advocates. For example, free-market advocates do not exclude silver or other commodities from their concept of a gold standard. Indeed, they do not even insist that gold must be money. The case for the gold standard is actually the case for market-originated commodity money, and the case against government-regulated fiat money. It is simply an extension of the case for free markets which respect the rights of man, and the case against controlled markets which violate the rights of man.
To be concerned with the gold standard is to be concerned with a free economy, regulated by the values and choices of men, rather than a controlled economy in which the values and choices of men are regulated by government. This concern for man’s freedom to express values and exercise choices is derived from the deeper concern for justice and for man’s right to property. The man con cerned with justice does not aim to force others to use gold as money. Rather, he insists that gov ernment has no right to prevent him and other men from using gold as money if they choose. The man concerned with property rights does not urge government to legislate pro-gold policies in order to arbitrarily increase the value, popularity, or status of gold. Rather, he insists that gov ernment stop inflating, since this arbitrarily decreases the value of his money claims to property.
Antagonists of the gold stand ard claim that it is impractical. But the gold standard is, in fact, the most practical monetary sys tem yet conceived by man. How ever, the gold standard’s primary virtue does not lie in its practi cality: it lies in its morality. Those concerned about such things as freedom, justice, the preserva tion of property rights and pur chasing power, would do well to consider the moral case for the gold standard, for, once under stood, it is the individual’s best defense against government con fiscation of property through in flation.
The fact that prevents govern ment from indulging in inflation ary schemes under the gold stand ard can be best summed up in a phrase: governments can’t print gold. But to understand the impli cations of this statement, and the virtues of having gold as money, it is first necessary to understand what money is — and what money is not.
What Money Is . . .
A man on a desert island has no need for money. He produces the goods he needs to survive, and consumes all he produces. Simi larly, a primitive society has no need for money. The kinds of goods produced are extremely lim ited, and if individuals desire to exchange their goods with one another, they can do so through direct exchange, i.e., barter. But under a division of labor economy where men specialize in produc tion and where there is a variety of goods produced, desired, and traded, there is a very definite need for money. For how else could Mr. Jones in Florida sell his oranges to men throughout the world and then buy Mr. Smith’s best-selling novel, unless there ex isted some medium of exchange acceptable to all parties.
Money originates from men’s desire for indirect exchange. And more, since indirect exchange usu ally occurs between strangers like Smith and Jones, money must be an object which is mutually val ued. Thus, money is that commod ity which serves as a medium of exchange by virtue of its high degree of marketability.
The task of discovering which commodity will be most valued by and most acceptable to men as a medium of exchange can only be accomplished through a market process; for it is only through the market that men’s values and choices are properly reflected. The verdict of the market has re flected three general requirements for any lasting medium of ex­change: that money should be gen erally acceptable to most men; that it should be practical to use; and that it should be relatively stable in value. If these require ments are satisfied, the result is a money of trust.
Trust is the lifeblood of money, and money is the lifeblood of any economy based on the indirect ex change of goods and services. A money of trust serves to facili tate exchange among men, and in doing so, breeds a healthy and growing economy. But if men should ever begin to mistrust money, the market will immedi ately reflect this loss of confidence. Then money will begin to lose stability, lose its acceptability, and will soon become impractical to use in exchange.
Mistrusted money is the anti thesis of the lifeblood of an econ omy. It’s a kind of "bad blood" circulating between men through out the economy, breeding con fusion and suspicion. The fact that men’s mistrust of money will result in monetary crises and col lapse, underscores the need for a money that never contradicts men’s values, a money that at all times properly reflects men’s val ues, i.e., a money based on, and constantly exposed to, individual choices — which means a free -market-originated commodity money.
When one considers the com plex process that must take place before men can discover which commodity money constantly re flects their changing values and choices, one can understand why it is only through a free market process that money can properly evolve as a medium of trust. And one may also understand why no man, group of men, or govern ment, has the right to dictate what money or its value should be. This decision must be a market decision if it is to be a lasting decision.
Throughout history, almost every conceivable commodity has been used as a medium of ex change. Through the years of eco nomic development and through trial and error, those commodi ties least suited to serve as money were eliminated, while those com modities best suited survived as forms of money. After centuries of exchange between men, the commodity that emerged as the most valued, the most practical, the most trusted money among men, was gold.
What gives rise to men’s trust in gold? First, men value gold as money because men value gold as a commodity. Gold at any time can be converted to its commodity role if its monetary role should ever be questioned. Second, since gold is relatively scarce and precious to men, it has stability of value. Therefore, it can be trusted to serve as a relatively stable medium of exchange. And since most in dividuals desire to save part of what they produce in some mon etary form, gold’s stability of value provides them with a relia ble monetary method of accumu lating and storing wealth.
What else gives rise to men’s trust in gold? Gold is easily mar ketable, which means it is accept able to men in exchanges of all kinds. Gold is also trusted because it is practical: it’s durable, so it won’t perish or rot; it’s small in bulk, so it is easily transportable. It’s a metal, which means it can be used in different forms, such as bars or coins; and, since gold does not evaporate, it will lose neither quantity nor quality if or when men should decide to melt their coins into bullion or melt their bullion for use in production.
There is one more thing that gives rise to men’s trust in gold: the knowledge that gold cannot be counterfeited; the conviction that the money supply cannot be arti ficially and arbitrarily increased by those who would aim to con fiscate wealth rather than produce it; the knowledge that money (the claim to production and effort) will itself represent production and effort. In short, men’s trust in gold carries the conviction that the monetary system freely adopted by men is based, not on whim and decree, but on integrity and productivity.
These are some of the reasons why men have trusted gold as a medium of exchange through his tory — and why today’s Policy Makers damn its existence.
... And What Money Is Not
Money is not paper. Paper notes evolve from the desire for a con venient substitute for commodity money. The paper notes that cir culate as money today were once money substitutes (receipts for gold), defined by and convertible into a specific amount of gold. Paper notes did not and cannot become a money of trust without first representing a commodity of trust.
Consider the reaction of free men — men who, understanding and respecting the meaning of property rights, are suddenly and for the first time offered in place of gold, non-convertible paper notes. These notes would be mean ingless to such men. No man who had just come from harvesting a field of wheat would even consider trading his wheat for scrap paper.
There are only two ways in which men will accept paper notes without commodity convertibility : if they are forced to do so, or if they are conned into doing so. Americans are now legally forced to accept government’s non-con vertible paper notes — but only because they have been conned into believing that commodity money is "old-fashioned" and "im­practical" and that paper notes are indicative of a "modern and sophisticated economy."
Nothing could be further from the truth. Non-convertible paper "money" is fiat money that derives its value, not from its value as a commodity, not from its value as a useful medium of exchange ac cording to the requirements of a medium of exchange, but from the decree of government. Fiat money is a throwback to the days of kings and the mentality of dic­tators. It is not a money evolved from the values and choices of free men in free markets, but a money created through the coer cion of government.
Is commodity money old-fash ioned and impractical, as today’s Policy Makers contend it is? Con sider the following facts: Over the last several decades, the ex change ratios (the prices) of vari ous commodities have not varied much in value relative to each other. For example, the value of eggs to milk or milk to bread would be at approximately the same ratios today as they were years ago.
Why Prices Rise
But if it is true that the ex change ratios of commodities are relatively the same today as they were in the past, why then have prices (the exchange ratios of dollars to goods) soared over the years? The reason is that the val ue of the paper money, with which government forces everyone to deal, has fallen yearly relative to all commodities. Clearly, if a com­modity (theoretically, almost any commodity) had been used as a medium of exchange over the past decades instead of government’s fiat money, prices would have re mained relatively stable. It is im portant to realize that it is not commodities that are rising in value, but fiat money that is fall ing in value.
Since 1933, when the U.S. sev ered the dollar-commodity rela tionship by abandoning what was left of the gold standard, the value of the dollar has depreciated by over ninety per cent in relation to other commodities. This could nev er occur under a commodity stand ard — only under a government imposed fiat standard. Had the U.S. returned to a dollar based on and convertible into gold instead of severing the dollar-gold rela tionship, the supply of dollars over the years would have been limited to, or checked by, the sup ply of gold. Therefore, the value of the dollar today would have been equal to the value of gold in relation to other commodities. Instead, the U.S. decided to print dollars whenever "needed" and to pretend that the dollar was "as good as gold" by legally fixing its value. The pretense couldn’t last, and today the dollar is worth a mere fraction of its val ue in terms of gold in 1933.
Paper notes that are not repre sentative of and convertible into a commodity are not money and have never satisfied the require ments of money for long. They are notes of circulating debt which men are forced to accept, so that governments can continuously pur sue their policies of inflation.
The Nature of Inflation
Inflation is the fraudulent in crease in the supply of money sub stitutes and credit. It is a policy which allows government to arti ficially create and spend more money than it is able to collect in taxes or borrow from its citizens. Government is the cause of infla tion — the effect is higher prices.
Consider each dollar as a claim to some tangible good. If the claims are increased, the value of each claim goes down because there are more dollars seeking goods. This bids prices up.
But inflation is not simply ris ing prices. In fact, inflation may exist even when prices remain the same or decrease. How is this pos sible? If the production of goods and services increases more than the artificial increase in paper claims, prices will drop — but not by as much as they would have, had there been no artificial in crease in paper claims. Thus, in real terms, the value of paper claims is effectively reduced even though in relative terms the value of these claims may increase.
Historically, and in relatively free market economies, there are only two ways in which a general across-the-board increase in prices can occur: through a dramatic in crease in commodity money (such as new gold discoveries) or through a fraudulent increase of money substitutes by banks and governments. The former type of general price increase rarely oc curs and is perfectly natural. The latter is both unnatural and im moral.
In the case of new gold produc tion, those who have produced the new commodity money will have earned the right to exchange their product for the products of others. All other non-money producers may have to pay higher prices for goods, as the supply of gold in creases, but the higher prices are compensated for by having more money to spend. Who receives the "new" money will depend on indi vidual productivity — and this is as it should be, for it is the jus tice of the market that the acqui sition and distribution of wealth is based upon productivity rather than decree.
But, given a fiat standard where government sanctions and spon sors an artificial increase in paper money or credit, the increase in purchasing power for some men can only be obtained at the ex pense of other men. Given a fiat standard, income distribution is the result of chance, caprice, or government favors and loans. When government doles out its fiat money, these notes dilute the value of all other outstanding money claims. Those who receive the fiat money first, benefit from spending their money before prices rise. But as the fiat money is spent, prices are higher for all other consumers. Thus, the difference between a real increase in the money supply (i.e., commodity money) and an artificial increase (i.e., in paper claims) is the dif ference between production and theft.
Clearly, inflation is a moral is sue. However prices respond, it is immoral that some man, agency, or government is legally permit ted to obtain wealth at the invol untary expense of other men. The major challenge in the sphere of monetary relations today is how to abolish the coercive power of government to control the supply and regulate the value of money, and how to return this function to the market where it properly belongs.
The Fiat Standard at Work
Under a fiat standard, govern ment gains control of the banking system and thus, indirectly, of the nation’s money supply. It can arti ficially and arbitrarily create mon ey and furnish credit. Government paper notes are not based on or convertible into gold, or any other tangible commodity; man’s pro duction and labor are not the sole claim to other men’s production and labor : the supply and value of money are determined by govern ment.
Under the American version of the fiat standard, the banking sys tem and the nation’s money sup ply are controlled and regulated for the most part by a twelve-man Board of Governors which is em powered to make policy decisions for the majority of the nation’s banks. Thus, America’s banking system is not a free and private banking system — it is a quasi-governmental banking system, known as the Federal Reserve System.
It should be clear that the Fed eral Reserve System’s power to create claims against individuals’ property is immoral. But neither the Federal Reserve System nor the fiat standard is ever defended on moral grounds; they are de fended on practical grounds. Once inspected, however, these grounds turn out to be about as solid as quicksand. The primary justifica tion given for a fiat standard is that credit can be extended far more rapidly and extensively. This, it is claimed, is the fiat standard’s major virtue. It is, in fact, a major vice.
The greatest economic threat under a fiat standard is that the Federal Reserve System will sup ply heavy doses of money and credit to the loan market in an attempt to reduce interest rates and "stimulate" the economy. This attempt, while temporarily stimu lating economic activity, leads to malinvestment, as businessmen falsely anticipate greater profits. A "boom" results, but since the "boom" is artificially created, the prosperity is temporary and, for the most part, illusory. Govern ment has not furnished more goods; it has not increased the nation’s prosperity; it has simply increased the money supply —which leads men to believe they are richer. The fact is, however, they only have more paper claims to goods. This cannot enrich any one; it can only lead to future in flation, i.e., a reduction of the value of real claims to wealth.
The Illusion of Prosperity
Thus, increases of money and credit provide only an illusion of prosperity, for with increased money and credit come increased costs for producer goods and in creased wage costs. Higher wages then lead to over-consumption, as consumers, too, are enticed by the illusion of prosperity. But over consumption results in higher prices which reduce the consum er’s standard of living. Since the "boom" was inflation-inspired, producers and consumers are not better off — they are worse off. Mal-investment and over-consump tion are mistakes — errors in judg ment — caused by government’s at tempt to con its citizens into be lieving that profit opportunities are better than they really are.
When the credit expansion that stimulated the "boom" ends, the mistakes that were made cannot be perpetuated. These mistakes must be liquidated: consumers buy less and begin paying off their un realistic accumulation of debts. Producers liquidate inventories. Interest rates rise, and unemploy ment increases as the economy struggles to readjust. The severity of the readjustment depends on the degree and length of govern ment’s prior credit expansion and the policies implemented to cope with the adverse effects. Given continual injections of money and credit in the inane attempt to con­tinue the "boom" and prevent a necessary recession, hyperinfla tion will result. Hyperinflation must lead to monetary chaos as well as economic disaster, i.e., to depression. A major depression is not a necessary result of the fiat standard, but inflation and the "boom-bust cycle" are.
The whole purpose of fiat mon ey is to allow government to spend more money than it can raise in direct taxes from its citizens. As a result, the American fiat stand ard has worked more often as a means of redistributing wealth than a means of stimulating the economy. Government, instead of furnishing money to the loan mar ket in the attempt to continuously reduce interest rates, has created money to finance the "welfare" state. When government’s fiat money enters the economy in the form of checks for expenditures, rather than through the loan mar ket, the sequence of events and the effects are a little different.
Men usually hold their money as savings, but as prices continue to rise over the years of govern ment deficit spending, men realize that the pieces of paper they hold are continuously and progressively depreciating in value — that in flation is becoming a way of life. Once men begin to lose confidence in government’s fiat money, it’s only a matter of time before the years of simple inflation burst in to hyperinflation and monetary collapse.
Thus, whether government tries to stimulate the economy or to finance programs that it cannot afford, the fiat standard is self-de feating and counter-productive. The consequences of America’s fiat standard have been mild by historical standards: the Great Depression of the ’30’s, an end less series of booms and busts since then, and a depreciation of the dollar by about 92 percent. So much for the "practicality" of the fiat standard!
The Meaning of the Gold Standard
In a free society, no man, group of men, or government has the "right" to infringe upon the rights of others. This means that within a free society, the initia tion of force is banned. All goals must be attained through persua sion and voluntary cooperation, and no goal may be achieved at the expense of any man — not for the "good" of another man, not for the "good" of the state, and not for the "good" of society. A system of voluntary exchange is a system of laissez-faire capitalism. Under capitalism, man’s rights are supreme. They are defended by government — not violated by government.
A gold standard is an integral part of a free society; a fiat stand ard is an integral part of a con trolled society. A gold standard cannot exist without the consent of individuals; a fiat standard cannot exist without the initiated force of government. A gold stand ard is based on voluntary exchange, the recognition of men’s values, and respect for private property; a fiat standard is based on compulsory "exchange," the de nial of men’s values, and the insidi ous confiscation of private prop erty.
Wealth is production, and gold is the equivalent of wealth pro duced. Because neither wealth nor gold can be created out of nothing, neither wealth nor gold are pos sible without men of intelligence, men of ability, and men of produc tivity. Fiat is force and is the equivalent of wealth confiscated. Both fiat and force are the tools of the envious and the cowardly.
Where a gold standard is welcomed by the best of men, the fiat stand ard is welcomed by the worst of men. Where the gold standard de mands the earned, the fiat stand ard grants the unearned. Where a gold standard evolves from indi­vidual choice, a fiat standard evolves from government edict. Where a gold standard necessi tates only that men be left free to act, to choose, and to trade, a fiat standard invites government to control, to regulate, and to dic tate men’s choices, actions, and the terms of trade.
Gold limits the government’s power to spend more money than it receives in taxes, and in doing so, gold limits the government’s arbitrary power over the economy; gold checks artificial money and credit expansion; it prevents arti ficial "booms" which lead to very real "busts"; gold protects individuals from economically un sound government programs; and it protects citizens from the in flationary confiscation of private property. Not only is the gold standard the most practical mone tary system yet discovered, it is a standard consistent with freedom — yet it is the gold standard that today’s Policy Makers either ig nore or denounce.
Paul Nathan
October, 2009
www.kitco.com/ind/Nathan/oct022009.html

Last edited by Christo Alado (2009-10-17 23:52:07)

Quercus wrote:

Christo wrote:

...........I disagree with him on one point, gold may not be easy to counterfeit but it's quite easily debased... gold plated lead is a prime example as is the the racketeer nickel.

....which presumably is why all the Jewish moneylenders of old were completely mad, having used the technique of biting to test gold coins. Must have been a lot of lead based forged coins about in those days, probably issued by the Royal Mints, if the truth be known!

Another good argument for leniency, me thinks. Yes, it was the Royal mint that I had read about that had seriously debased coinage. Sterling silver is silver debased with nickel... but that's why it's called Sterling silver and not just silver... so I'll give'em some credit for honesty.

aries wrote:

I never understood why a metal like gold should be more worth than iron or an apple. Why? just because it is shining and does not grow on trees?

It could be to do with the fact that gold does not oxidise, therefore it is a convenient and stable way of storing "value" for a long time without losses occurring due to corrosion. It is also attractive and easily worked into ornaments which are much loved by the ladies, hence perceived as valuable by us blokes who, of course, are always trying to please them. That last bit was very much "tongue-in-cheek", before you all shout me down for being sexist or something. I'm just an old fashioned guy, honest. Well, old, anyway!