Comes a sincere questioner:
If private banks issued currency, rather than central government banks, how do we keep such a currency system from being corrupted? More competition?
***Who is "we?" Right now "we" have an unspeakably corrupt monetary system. With privately issued currency, it is up to the immediate players (those who issue and those who use) to keep it clean. And yes, competition, a choice, would effect discipline. Right now not only is there no competition, it is a crime to use a competitor's currency. In anarchy, you are the cop.***
How can the integrity of a private currency be maintained?
*** This is the funny thing. The market did maintain the integrity of private currencies. As soon as someone began misbehaving, the market punished that actor severely and quickly. Eventually the state stepped in with a huge solution to a tiny problem, a usual tactic. Now, the state makes legal for a few what was once punished quickly by the market. This is why the standard of living is dropping for more and more people.***
How do you get people to maintain their long-term life savings, IRA's, etc., denominated in a private currency with confidence if their are competing private currencies?
***That question is mired in assumptions. What makes you think anyone else wants what you want? Why should everyone else be forced into a system that you think best? Who wants lang term savings? Who wants it denominated in any currency? And if not, "confidence" is moot point. Vast swathes of humanity want what savings they have to be fully invested on productive activities, which afford a more sure security, they want to fade away actively, not rotting away on some golf course community where both the weather and the people are in the 80s and 90s. Those people worry about a system that benefits them, which necessarily is at odds with those who prefer to fade away engaged in multi-generational family activities, in which the work is passed on. The retirees depend on the destruction of the productive to keep their system going. It will end badly, like in Rome.***
People think that an all powerful government can maintain law and order, and including the integrity and value of the currency - which obviously has people wondering about this as well these days.
***Indeed, it is disconcerting to be writing in criticism of some idea and to find that you are coming around to the idea under scrutiny. You know in your heart of hearts any life savings, one way or another will be taken away. You are hoping against hope the system from which you personally benefit (but most people do not) can somehow be reformed.
No, it cannot.***
I do think that a private currency system would be better. (MMT merely describes the US money system that is in place now, but many people (including academics, politicians, and other commentators that should know better) do not understand it.)
***Yes, that is what I have been saying about MMT, it is descriptive, and its touts offer a prescription, which sounds attractive. It is like patents, sounds good on paper, offers much hope for personal benefit for acolytes, but it is inherently wrong, because it does damage. To whom? The other side of the policy. But as I have said before, bad policies win out when states decide what to adopt.***
As the article says, there are some places that actually have a private currency system.
***Mostly Celtic... the last hope for mankind. I tremble...***
Emerging market economies that adopt a private currency system could have a competitive edge compared to developed first world countries that still adhere to a government fiat money system.
***Hong Kong.***
Maybe our national debate should not be so much on focusing on the US dollar, national deficit, money printing, etc., but rather on allowing a private currency system to develop, rather than maintaining a government fiat currency? Just scrap government fiat currency altogether? This issue is something that I have not thought of before I started reading this blog.
***Well, to be sure, as we saw with deregulation lite of telephony, airlines, trucking, shipping, beer, we go more better cheaper faster and economic recovery. (Banking was not deregulated, only a new set of regulations, which turned the wolves loose on the unsuspecting.) We could have a full economic recover in less than two years if we deregulated just one thing... medicine, education, banking... anything, it does not matter, only one thing would put us so far ahead of the rest of the world... (and it can even be de-reg lite, it does not take much to out class the Germans, Chinese and Japanese) and getting rid of the FED would be a subset of banking deregulation.
But the powers that be can depend on one thing, first played out (recorded anyway) in 1 Samuel 8 (and then doubled down in 1 Samuel 12)...
But then, sometimes, along comes a Jimmy Carter, who truly makes things better.
Update: An all-day seminar in Los Angeles.
Feel free to forward this by email to three of your friends.
If private banks issued currency, rather than central government banks, how do we keep such a currency system from being corrupted? More competition?
***Who is "we?" Right now "we" have an unspeakably corrupt monetary system. With privately issued currency, it is up to the immediate players (those who issue and those who use) to keep it clean. And yes, competition, a choice, would effect discipline. Right now not only is there no competition, it is a crime to use a competitor's currency. In anarchy, you are the cop.***
How can the integrity of a private currency be maintained?
*** This is the funny thing. The market did maintain the integrity of private currencies. As soon as someone began misbehaving, the market punished that actor severely and quickly. Eventually the state stepped in with a huge solution to a tiny problem, a usual tactic. Now, the state makes legal for a few what was once punished quickly by the market. This is why the standard of living is dropping for more and more people.***
How do you get people to maintain their long-term life savings, IRA's, etc., denominated in a private currency with confidence if their are competing private currencies?
***That question is mired in assumptions. What makes you think anyone else wants what you want? Why should everyone else be forced into a system that you think best? Who wants lang term savings? Who wants it denominated in any currency? And if not, "confidence" is moot point. Vast swathes of humanity want what savings they have to be fully invested on productive activities, which afford a more sure security, they want to fade away actively, not rotting away on some golf course community where both the weather and the people are in the 80s and 90s. Those people worry about a system that benefits them, which necessarily is at odds with those who prefer to fade away engaged in multi-generational family activities, in which the work is passed on. The retirees depend on the destruction of the productive to keep their system going. It will end badly, like in Rome.***
People think that an all powerful government can maintain law and order, and including the integrity and value of the currency - which obviously has people wondering about this as well these days.
***Indeed, it is disconcerting to be writing in criticism of some idea and to find that you are coming around to the idea under scrutiny. You know in your heart of hearts any life savings, one way or another will be taken away. You are hoping against hope the system from which you personally benefit (but most people do not) can somehow be reformed.
No, it cannot.***
I do think that a private currency system would be better. (MMT merely describes the US money system that is in place now, but many people (including academics, politicians, and other commentators that should know better) do not understand it.)
***Yes, that is what I have been saying about MMT, it is descriptive, and its touts offer a prescription, which sounds attractive. It is like patents, sounds good on paper, offers much hope for personal benefit for acolytes, but it is inherently wrong, because it does damage. To whom? The other side of the policy. But as I have said before, bad policies win out when states decide what to adopt.***
As the article says, there are some places that actually have a private currency system.
***Mostly Celtic... the last hope for mankind. I tremble...***
Emerging market economies that adopt a private currency system could have a competitive edge compared to developed first world countries that still adhere to a government fiat money system.
***Hong Kong.***
Maybe our national debate should not be so much on focusing on the US dollar, national deficit, money printing, etc., but rather on allowing a private currency system to develop, rather than maintaining a government fiat currency? Just scrap government fiat currency altogether? This issue is something that I have not thought of before I started reading this blog.
***Well, to be sure, as we saw with deregulation lite of telephony, airlines, trucking, shipping, beer, we go more better cheaper faster and economic recovery. (Banking was not deregulated, only a new set of regulations, which turned the wolves loose on the unsuspecting.) We could have a full economic recover in less than two years if we deregulated just one thing... medicine, education, banking... anything, it does not matter, only one thing would put us so far ahead of the rest of the world... (and it can even be de-reg lite, it does not take much to out class the Germans, Chinese and Japanese) and getting rid of the FED would be a subset of banking deregulation.
But the powers that be can depend on one thing, first played out (recorded anyway) in 1 Samuel 8 (and then doubled down in 1 Samuel 12)...
But then, sometimes, along comes a Jimmy Carter, who truly makes things better.
Update: An all-day seminar in Los Angeles.
Feel free to forward this by email to three of your friends.
2 comments:
From Wikipedia:
http://en.wikipedia.org/wiki/Private_currency
"Today, there are over four-thousand privately issued currencies in more than 35 countries. These include commercial trade exchanges that use barter credits as units of exchange, private gold and silver exchanges, local paper money, computerized systems of credits and debits, and digital currencies in circulation, such as digital gold currency."
So, private, non-government currency could offer many more options for using currency.
In Hong Kong, both government issued currency and private issued currency coexist, but the private currency is dominant. But what currency is accepted for paying taxes? Both? or does the private currency have to be exchanged for the government currency for paying taxes?
I am mystified by the fixation on the governments need to collect taxes. Most people in Hong Kong pay no taxes whatsoever, and for those who do, I suppose it is the government's problem, not the taxpayers. It is very strange this line of questioning.
Post a Comment