Mark Twain -- "You can't depend on your judgment when your imagination is out of focus."

Sunday, January 22, 2012

Money!



So im having a conversation on a political forum about Ron Paul that has led to the subject of money and expecting the typical go around. This was the 1st time i really put together all my ideas concerning solutions floating around in my head, and would like to bounce this off of people that i feel may be more coherent then this individual im talking to.

We will start with his quote....

"Well, since you brought up monetary policy, we can go there if you'd like. I'm sure you're pro gold-standard/commodity based money. Ron Paul's ideas here are about as wrong as one could possibly be. So if you'd like, the floor is yours"

My reply….

Youre right i am pro commodity based money, im also, like Paul, pro competing currencies but some may believe im more radical then Paul. Money is likely the most creative and marketable commodity. I have yet to see a sound argument against a diversity of currencies that can compete on the open market. In the past ive been declared wrong and loose out to the religion of central planning regardless of history. Lets see if this will be different.

On the national level a fiat is the only solution i can buy into. Thats not to say that congress couldnt have a multitude of currencies to fund the government. Commodity based currencies would market very well if the fiat falters or hits a down turn. The national fiat would be the common currency as it would be the most abundant due to the demand of the global market. The facts of the vulnerabilityof fiat to the political elements will always only be as marketable as its reach with the legitimacy based in its quantity can not be argued away.

States could develop their own currencies that would be commodity based (Article I, Section 10). Because this money would be backed its wouldnt likely be for everyday use at your local 7eleven. Like other commodities it would be used as a hedge (see my final paragragh), retirement portfolios, or for trade of larger tickets by the man on the street.

As credit of the state is inexorably pegged to its marketability and its ability to produce capitol. States that take on the creative endeavor in producing a currency will likely charter a state bank to fund public works projects and supply business loans as the fiduciary. These payment models would involve its currency being used as payment somewhat like we see in the oil market with dollars due to the bill of credit restrictions in the constitution (Article I, Section 10).The use of the currency will promote the credit of the state and promote economic growth based on a commodity.

I also wouldn’t be opposed to community money and the expansion of micro economies (ie: Dave & Busters). If a rural secluded town wants to avoid the typical impoverishment by Wal-Mart model, they may want to try and develop their own currency. On the micro economy front, Public/state schools may want to create incentives to draw in more capitol to keep the lights on and keep student costs down. Just some ideas to demonstrate the arguments of competing currencies.


I am personally benefiting from an alternative physical currency that is just emerging. They have been nicknamed "shinys" here in AZ but most people know them as dime cards. Also we arent just trading in dime cards (junk silver) we are using all silver for all kinds of transactions. We calculate the worth with apps and web sites like the silver calculators and coinflation.com. Some farmers markets are selling veggies at an incredible rate, 20 cent a gallon for a station in Orgeon, ammo is 20 to 40% off at some tables at gun shows, basic sales are bringing in bargin prices on just about anything you can think of, because an investment in a commodity is evolved in the trade. I say we because its not just me with some liberty minded people in AZ, its happening in a number of areas around the nation (ie: NH, MT, ID, UT).

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