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ABILITY TO PAY: As long as the monetary cash demand for wanted goods, services and labor is confined to the monopoly monies issued by governments and as long as clearing is not quite free and developed, government monopoly money only rarely and temporarily, if at all, be sufficient to easily and fast sell many to most of the wanted goods, services and labour. Nor are exchanges facilitated when monopoly monies are supplied either in excess of the total volumes of goods, services and labour offered for sale or below the circulation volume required to turn over all of them. Neither does it help but, instead, much wrong and harm is done when the value standard of governments is imposed and manipulated, usually inflated but sometimes also revalued. Only free choice of value standards will tend to achieve the use and spread of sound enough value standards for most transactions, which is important e.g. for long term credit contracts, the building and insurance industry, especially old age security. – J.Z., 28.3.10, 24.9.10. - READINESS TO SUPPLY WANTED GOODS, LABOUR & SERVICES COMPARED WITH THE MONEY SUPPLY & CLEARING FACILITIES, A SUFFICIENT SUPPLY OF EXCHANGE MEDIA & OF SOUND VALUE STANDARDS, UNEMPLOYMENT, INFLATION, DEFLATION, MONETARY CRISES.
ABILITY TO PAY: Enormous: The difference between a little money and no money. – “Hello, Dolly!” – The difference between the monies of monetary freedom and that of monetary despotism is also enormous. – The former is competitively supplied, the latter monopolistically and coercively imposed. – This is the only kind that is merely fiat money, the territorial monies of monetary despotism. All others are optional competitive, market rated and refusable. - J.Z., 25.8.10, 2.8.11. - LIQUIDITY
ABILITY TO PAY: If you owe the bank $ 100, that's your problem. If you owe the bank $ 100 million, that's the bank's problem. - J. Paul Getty, 1892-1976, American businessman. - MONETARY FREEDOM, DEBTS, BANKS, JOKES
ACCEPTANCE FOUNDATION: Acceptance of a money can either be by force of law or by the force of private contract obligations. An example of the former is tax foundation money, which amounts to tax anticipation certificates that can be issued to the amounts of due tax debts or soon due tax debts to keep their value at par in general circulation with a sound value standard, even if no other cover, backing, security or redemption for them exists than their redemption in tax payment receipts. Under the rule of private contracts monies can be issued by providers of goods and services, obliging themselves to accept their notes at their nominal value in payment for all their goods or services and for all debts that are due to them. Even without possessing any legally imposed monopoly in a region and without legal tender power, quite optional, thus refusable and discountable, because they are subject to free market rating and voluntary acceptance in general circulation, they can be maintained at par with their nominal value, in their circulation area, until they have streamed back to their issuers, as ticket monies or clearing certificates. Without being granted legal tender power both kinds cannot cause an inflation. But they can be over-issued, if they are carelessly accepted, assuming them to be sound. However, under sound value reckoning being continued, they would then only become depreciated themselves, while all prices etc. for goods and services and all debts would continue to be denominated in sound value standards would remain the same. Only the foolish acceptors of over-issued and optional notes would suffer a loss, equal to their discount when they pass them on in general circulation. Towards the over-issuers they should retain their full nominal value though, in a compulsory purchase, at market prices, for all their remaining personal property, once their goods and service cover is exhausted. If that would still not cover their debts to the note holders, then the note holders should get corresponding claims against them, including interest and collection charges, for all the future earnings and properties of the over-issuers. They should not be protected by bankruptcy laws from their moral and economic obligation to pay any debts that they incurred in this way, no matter how innocent or ignorant they would pretend to be. I hold that it would also be correct to hold their marriage partners and their children responsible for such debts - when such a debtor had registered some of his property under their names or had made large gifts to them, up to the value of such properties and gifts. Here would be one of the few cases where a degree of collective responsibility would be justified. – J.Z., 8.4.10, 22.9.10. - READINESS TO ACCEPT FOUNDATION, TAX FOUNDATION, SHOP FOUNDATION, CLEARING FOUNDATION, SOUND DEBT FOUNDATION
ACCEPTANCE VS. REDEMPTION FOUNDATION: When paper money is not redeemable (by the issuer in gold) then it will suffice, in order to preserve the parity of the paper money with gold, to arrange for the acceptance of the paper money like gold money - by institutions which sell goods in daily and general demand. (Such institutions are e.g. the taxation department - when it "sells" tax receipts, the railway, the P.O., and shops which owe something to the bank issuing that paper. Their indebtedness may arise out of the discounting of sound commercial bills and the corresponding contractual obligation to accept the notes of the bank like gold money. Naturally, in all such cases, the bank must concede its debtors the right to pay back all their bank debts with that paper money as soon as they receive it, at par, regardless of the exchange rate of the paper money.) - Ulrich von Beckerath, 25.1.52.
ADDRESSES OF MONETARY FREEDOM SEEKERS, INDIVIDUALS & ORGANIZATIONS: I am still trying to build up such a list and welcome any help for this project. - J.Z., 28.5.11. - An honours list of all the no longer living pioneers of this freedom might also be worth compiling. It might also lead to the discovery of more of their remaining relevant texts. - J.Z., 29.5.11.
ADVANTAGES OF MONETARY FREEDOM: Advocates of monetary freedom, like myself, do claim that the competitive supply of exchange media would end any currency or cash famine, and could do so quite rapidly. If not effectively repressed, it would drive unsound exchange media and value standards, like most of the government paper money and its associated paper standard, out of circulation. - Moreover, the free choice of value standards would lead to a wide acceptance of the best one (or best ones, most widely - J. Z., 14.9.02) - most likely a gold weight unit for account that is based on a free gold market, free private coinage, and gold redemption almost completely transferred to the free gold market and to gold-weight-unit pricing of goods and services, with private and optional exchange media being kept at par with their nominal gold weight value or close enough, in general local circulation and strictly at par when returned to the issuer in any payment. It would also lead to the rating of all exchange media against this standard and would thus prevent inflation, even when some exchange media would still and temporarily suffer a small discount. - Over-issues would then be to the obvious and rapid disadvantage of the issuer and not any longer, as at present, to his advantage. - With this monetary freedom, all the illiquid capital of a short term nature, especially working power and consumer goods and services, soon to be used or consumed, could be fully mobilised in monetary form and thus much easier exchanged and with less transaction costs. That is what the money of monetary freedom can do, has done wherever, whenever and to the extent that it was allowed to and will do also in the future, with or without the use of computers and the Internet. It should be the equivalent of labour, goods and services ready for sale, especially of consumer goods and services in daily demand and labour for their production and should facilitate their exchange. - The money types arising under monetary freedom would be very closely tied to this labour, service and goods basis, could not exceed it, i.e. could not inflate the money circulation and thereby the prices beyond this cover. One of the main safeguards would be the right of everyone to refuse to accept suspicious means of payment - like you would refuse my cheques or IOUs - knowing my financial situation. Full publicity for private issues and free and rapid clearing for all such tokens which went astray, would be essential features of the system. No fraud or coercion would be practised any longer in this sphere. - The most suitable issuers would be associations of retailers of consumer goods and services that would use the variety of goods and services they offer between them as a redemption fund for their local currency. These stocks and this service potential form anyhow and in all cases the short term backing of any currency, even of a gold coin currency. Fully mobilised, this capital could provide the sound exchange medium and the additional sales required to employ all the unemployed. In a city like Sydney, thousands of millions could thus be mobilised almost instantly for turn-over and wage payment credits, at all stable gold prices. - So far the retailers have not bothered to explore and state their issue potential and to demand that they be freed to utilise it, to their own advantage, that of the unemployed and of the rest of the economy. - J. Z., 1985 & 21.5.97. - To that extent they are not retailers in the same way as employers are not employers as long as unemployment exists. - J. Z., 14.9.02.
ADVERTISING COSTS WILL BE REDUCED: The rapid and automatic reflux of the private and competing currencies to the issuers, to be redeemed in their goods and services, seeing that they have no other value and only a limited circulation period, turns them also into advertisement leaflets and reduces the need for advertising the goods and services, thus making extra competitive price reductions likely. There will also be less need for advertising than under monetary despotism where free competition is confined to a struggle for scarce and exclusive forced currency. - J. Z., 3/97.
AGGRESSION & MONETARY DESPOTISM: The Hitler Regime would not have risen without the preceding great inflation and great deflation, nor would WW II have happened without it. Nevertheless, monetary despotism is still practised world-wide and with the usual disastrous consequences. - J.Z., 3.8.11. - See: WAR, PEACE
AGRICULTURAL PROGRAMS: 4. An agricultural price-support program which asks the consumer to buy with his tax dollars what he does not want, cannot use, and will never eat. - 5. An agricultural export subsidy program which asks the consumer to pay the farmer to sell his product to some foreign buyer at a price lower than that at which the consumer himself can get it. - Barry Goldwater, The Coming Break-Point, 1976, p.105.
AIRLINE MONEY: Air transport, at least in some countries, and internationally, is to a large extent replacing shipping, railway and road transport. Thus it could, like other transport facilities, issue its own competing currencies, mobilising more of its so far unused capacity, while helping to provide sound supplementary currencies. - Air lines are considered as rich and powerful but, under monetary despotism they are still struggling and many have failed, if not government subsidised or granted privileges. Nevertheless, so far and as far as I know, no struggling airline has seriously considered becoming a note- or service certificate issuer and used its influence upon government legislators to permit such self-help actions. - J. Z., 22.4.97, 7.9.02. - Compare Dr. Walter Zander's brochure on Railway Money, which is on www.reinventingmoney.com
ALAN'S Money Blog: BITCOINS: Bitcoin: An Innovative Alternative Digital Currency | Alan's Money ... - alansmoneyblog.com/.../bitcoin-an-innovative-alternative-digital-cu... - Cached - 5 May 2011 – Bitcoins are instead free-market money because PEOPLE choose to value them and to make use of them as a medium of exchange.
ALLBUSINESS.COM, Toward free-market money | Banking & Finance > Banking & Finance ... - www.allbusiness.com/management/3586456-1.html - Cached - 1 Oct 2001 – Despite the overwhelming evidence that markets perform best when left alone by the government, it is still virtually taken for granted that ...
AMERICAN OPINION, June 1983, contains an article of free banking interest, critical of Social Credit.
ANONYMOUS MONEY: If I had a choice, I would not readily trust and accept any money of which the issuers or acceptors remain anonymous or remote (like money of a central bank) and which relies upon compulsory acceptance and compulsory value, in combination with a monopoly for its issue. Such monies deserve, instead, extreme distrust and refusal to accept them whenever possible and other and better payment arrangements can be achieved. Central banks do not provide the goods and services consumers need. So why should they be entitled to issue claims to them? Any electronic currency has purchasing power towards those of the local suppliers who do accept them in payment or, for supplies from distant places, only to the extent that the additional transport costs and delays are considered to be acceptable. But for the required supplies from local suppliers it would be much more sensible to accept a local currency issued by them. For these neither a central bank currency nor an electronic world currency is required. The currency issues of distant issuers, which only they and their distant debtors have to accept, both of them unknown to me, have some value to me only if I can exchange them, at an acceptable rate, at a local money exchange bureau. They are not ready cash for me. The real backers of any sound local currency tokens are the local providers of goods and services, who have issued these tokens. Their readiness to accept them would also be sufficiently publicized. Acceptance in distant localities, by suppliers unknown to me, would not be good enough for me for most purchases. What value have "tickets" to performances for me when issuers, times of performances, their kinds and their locations are not known to me or too far away from me? Who in the world or in a country can rightly issue liquid claims to all the goods and services of a country or the world? The very concept is absurd. What can I know about the soundness of the issues of the central bank of a country or of the issues of a world bank or European Bank issuing notes? Historical experience rather teaches their unsoundness, at least in the long run. But I can easily become familiar with the soundness of the notes of a local shopping centre. - J.Z., 17.6.01, 26.8.02. - CENTRAL BANK MONEY, PUBLICITY ON ISSUERS & THEIR READINESS TO ACCEPT FOUNDATION, LOCAL MONEY VS. CENTRALIZED OR WORLD MONEY, FIAT MONEY, FORCED CURRENCY, EXCLUSIVE CURRENCIES, MONETARY DESPOTISM, PUBLICITY
APHORISMS ON THE MONEY PROBLEM, by Ulrich von Beckerath, 1932, in BANKWISSENSCHAFT, also in PEACE PLANS 587/588: - The question whether one could utilise non-interest bearing, long-term loan certificates and mortgage bonds in small denominations, e.g. "Wagemann Money", "Feder Money", etc., as a means of exchange, could perhaps be put into the following formula: MONEY IS A MEANS OF TRANSPORT. It serves to overcome spatial distances. With money one exchanges values that do already exist in the present. The exchange of harvested grain for clothing, household goods and hay forks is done through MONEY. - MONEY is necessarily interest-free. Both justifications for interest, namely a) difference between future and present services and b) a just share for the creditor in the production of the debtor, do not apply to MONEY. - The notes issued by a note-issuing bank or clearing bank are, by their very nature, clearing certificates (settlement scrip). As such they should not remain in circulation as long as possible but, instead, disappear from it as soon as possible. - To oblige any issuing centre (Zettelbank, note-issuing bank) to exchange its clearing certificates at any time for metal, is not only superfluous but harmful and contradicts the nature of this paper-money as a clearing certificate (or settlement scrip). - The interest rates charged by a note-issuing clearing centre are not interest but fees. Insofar, a properly conducted issuing centre operates INTEREST-FREE. Only when any customer of the note-issuing centre delays the clearing (settlement), does the bank charge INTEREST FOR LATE PAYMENT. This interest is something quite different from clearing, although both are CALLED interest and are ACCOUNTED as interest. (It is more in the nature of a contract fine. J. Z.) - Credit instruments that are FORCED INTO CIRCULATION, like e.g. interest-free mortgage bonds in small denominations, must lastly DESTROY credit. They amount to putting warehouses on wheels and wanting to drive in them. That is POSSIBLE but the goods storage business is thereby ruined - although it appears, at first, as if one had solved two problems with one stroke. It reminds of the famous rifles that were to be at the same time useful as umbrellas, telescopes, lances and tobacco pipes. But they were somewhat IMPRACTICAL. (Lombard loan certificates do often represent present goods, in large quantities, that are kept out of the present market in the expectation of future price rises. If such certificates are monetised then, obviously, the present purchasing power is increased but the present goods offered on the market are not correspondingly increased. - J.Z.) - Inflation is impossible without forcefully equating future services with present ones. Many do not realize this as yet. - Interest bridges differences in time. It makes possible the just exchange of FUTURE services with present ones. Between the present and the future neither TRANSPORT takes place nor CLEARING. Consequently, to bridge the present and the future is not a task for a CLEARING INSTITUTE like a note issuing bank (Zettelbank). - Indeed, a credit instrument with a properly certified interest claim, does have a value in the present and can thus be exchanged for other, present goods. Such a credit instrument (mortgage bond, annuity certificate) is even the natural means of payment for goods that exist in the present but are not PRODUCED in the present, e.g., for REAL ESTATE. For this reason, mortgages are often used as means of payment in REAL ESTATE PURCHASES. But goods PRODUCED in the present do require scrip as means of payment (notes or clearing cheques), if the producer wants to consume the equivalence in the present. If he does not want this but wants to consume only in the future, then the proper means of payment is, again, the credit instrument, e.g. the standardised mortgage bond. - Feder wants to create a means of circulation that at the same time bridges differences in SPACE and in TIME. That can NOT be done. (A sound commercial bill does it, to some extent, in a limited circulation sphere and only for a short period. Moreover, the bill debtor has immediately a corresponding quantity of goods for sale, payable in banknotes, with which the real bill had been discounted. - J.Z.) A railway has to overcome e.g. the distance between Berlin and Hamburg as fast as possible, if it is a GOOD railway. But if, at the same time, it is to act as a STORAGE facility, too, then it can no longer serve as a means of TRANSPORT.
APHTHONIOS' SCHEME: Various ways of filling it with monetary freedom proposals. It is a simple scheme of a few questions which every reform proposal must clearly answer in order to provide at least minimum information about it. I filled in one or several such forms for panarchies and panarchism, in www.panarchy.org but have not got around to do the same for monetary freedom ideas. I would welcome your attempts of this kind. - J.Z., 3.8.11.
ARBITRATION SYSTEM FOR WAGE DETERMINATION: National wage case decisions raising the general wage level can act inflationary. - Popular opinion. - You can try to demand money, to steal it or rob it, try to order people like employers to pay more, or try to extract more money from consumers via increased prices but what you will in effect achieve is no more money than people are able or willing to supply. An employer has always the option to dismiss you instead of paying you a raise. If he is not allowed to dismiss you then he might not be far from bankruptcy. The taxpayers can only support so many otherwise bankrupt enterprises for a while. Nor will you be able to force consumers to pay for goods that are overpriced due to your wage demands. If it were really possible to arbitrarily increase wages by more or less judicial decisions of arbitration courts, then we should demand of them that they each entitle us to demand a million dollars every week as our rightful wage, to maintain us in style. Why be satisfied with anything less? And if they cannot provide us with a wage increase of one million, then they, by their decision, cannot even provide us, on their own, with a wage increase of a single cent. - However, we tend to overlook this reality under a system of monetary despotism, which distorts not only our paper value standard and monopoly means of exchange, but also our vision or understanding of it. The arbitration system can "allocate" wage increases only when they are paid in additional forced currency, directly or indirectly. Their purchasing power would soon tend to be only the same as the former wage - and it might even amount to less. We might also lose our job in the process and the employer might be driven into bankruptcy, because the monetary despotism does not supply all employers evenly and all potential customers for him with sufficient of its scarce monopoly money, not even in times of galloping inflations, when prices and wages might race far ahead of the fast inflation rate. Usually the arbitration system's wage increase decisions, and the "wage gains" through anti-industrial and coercive union actions, are only responses to an inflation that has already increased many or all prices and has left wages behind, at their formerly fixed nominal rates. Then, while no more than an adaptation to the past inflation is achieved and no indemnification is offered for the inflationary losses in the meantime, the unionists and arbitration court supporters want to be praised for the merely nominal wage increases that supposedly were due only through their actions. If they were getting out of the way and individuals, in their wage contracts, could propose and contract value preserving clauses, then their purchasing power might thus not only be preserved but even be increased, corresponding to their own contributions to increased productivity. Union and arbitration court monopoly "actions" prevent this kind of self-help and self-promotion. They also tend to prevent the spread of productive cooperative enterprises, with no wage problem and personal subordination that is not warranted by a job. - J. Z., 24.3.97. - Wages are prices and free and just prices can only be determined by a free market system, by supply and demand, under freedom of contract, not by any trade union officials or judges or arbitrators. - They do also need monetary and financial freedom not monetary and financial despotism. - J.Z., 28.5.11. - UNIONS, NATIONAL WAGE CASES, COLLECTIVE BARGAINING, INFLATION, WAGE INCREASES, STRIKES, VALUE PRESERVING CLAUSES
ARMAMENT: In the year 2008 the USA, with 507 billion dollars, spent more on armament than all other States together. - Uwe Timm, in espero, September 2009, S.3. (Im Jahre 2008 gaben die USA mit 507 Milliarden Dollar mehr Geld für Rüstung aus als alle andern Staaten zusammen.) – How much could it have spent under voluntary taxation also for this purpose? – Its internal police forces are also monopolistic and thus far from ideal. As an international policeman the USA was and is also, largely, a failure. This organization, which spent most on guns has also passed over 20,000 local anti-gun laws, better called: “victim disarmament laws”. As its war- and peace-aim it has nothing better to offer than large territorial majority despotism and minority favouritism, to buy more votes. – That does not sufficiently to many or most people in many countries. It does not even raise enough volunteers for its military forces. They have largely to be bribed into them, thus turning them, more or less, into mercenary forces than genuine citizen forces or ideal militias. – With all that money somehow spent, their soldiers at the frontlines still find themselves often under-equipped, while the flawed USA policies raise more enemies than friends. – It is still the largest owner of mass extermination devices. Which are the rightful “targets” for such “weapons”? – I don’t know of any. Do you? – Ron Paul demanded the withdrawal of all US troops, stationed in 130 countries of the world. – Ibid, p. 6. -J.Z., 4.8.10.
ARMAMENTS, ARMS RACES & ALL KINDS OF MILITARY SPENDING DO INEVITABLY LEAD TO INFLATION: A popular view. It is true only if all such spending is "financed" by the government's printing presses for forced and exclusive currency. Without legal tender and the issue monopoly, it could not take place. Attempts to finance it then by additional paper money issues would depreciate this paper - but not sound value reckoning, and lead to more and more people totally rejecting government paper money issues. Under financial freedom they would then also effectively refuse to pay taxes to such a government and could not be forced to subscribe loans to such a government. Under monetary and financial despotism this kind of war promoting exploitation can, indeed, take place. This is one more good reason to abolish this despotism. - Before the Prussian wars of 1864, 1866 & 1871 Prussia was also well armed but it did not inflate its currency and could not because it had not given it legal tender, not even for the financing of these wars. But it did introduce legal tender for the conduct of WW I and maintained it, most of the time (a short period of the Rentenmark of 1923/24 excepted, I do not know exactly when that was ended), for WW II and the "liberating" Allies maintained this monetary despotism for the old RM and their occupation marks, to June 1948 and then tolerated it for the new DM ever since, i.e., a totalitarian and communist money system even for supposedly anti-communist States that were sometimes in armed conflicts with communist States. - J.Z., 24.3.97. - INFLATION
ASSET CURRENCIES: Asset currencies have been proposed and tried out again and again, largely without awareness of their historical precedents and failures and of the inevitability of their failures. See: LAND BANKS, REAL ESTATE AS COVER FOR CURRENCIES, BONDS & GOVERNMENT SECURITIES AS COVER FOR CURRENCIES. The issue principles and practices of financial freedom are different from the issue principles and practices of monetary freedom. They should not be mixed up. In both cases one deals with valuable properties. In both cases the transactions should be voluntary. In both cases free market rating should apply and in both cases value preserving clauses or value standards should be applied and expressed in them and in prices, wages, rents etc. Ready for sale consumer goods and services, through suitable claims upon them, could be used for subscriptions to capital securities, rather than the latter being wrongly used as a the basis of currency issues. Capital securities can and should be issued upon capital assets. Capital securities in small and even denominations may be easier to market - but that does still not turn them into currencies. Notes for apples and meat, mortgages for houses, shares for factories. Security issues can be sold and bought for cash or clearing certificates. Currencies or clearing certificates can be used to buy capital securities. But this limited and in each case to be voluntarily agreed upon exchange still does not make them identical, in the same market, among the same people, with each being a full substitute for the other, immediately, among all local people. Capital securities have their special markets and their separate circles of sellers and buyers. Securities represent rather land, bricks, timber and steel, hardware, machinery, resources or the expectation of their provision and of benefiting from them in the future. Currencies, on the other hand, represent goods, services and labour available for immediate purchase, consumption or use and these goods already produced and sold at least to wholesalers, on the road to retailers or already waiting for sales there. Next year's birthday or Christmas isn't today's birthday or Christmas. One should keep the two apart. Time differences do matter as you will notice when you are separated from your beloved ones for 3 months or 3 years. Future values are not present values. Present values are not future values, although the two are related and can be somewhat interchanged, at the prices and costs involved. Consumers, who want a currency for today's and next week's purchases, do not want, instead, a security for a future capital value, although sometimes, and to some extent, they want such values, too. In some heads a real block exists against such distinctions. They imagine that only useless hair splitting is involved. It would help if the experiences of a number of sound banks of issue for turnover-credit banknotes were put side by side with banks of issue that issued bank bonds, mortgage letters and shares and if these were also compared with the historical experiences of banks that tried to turn assets like land, private shares, government loan certificates, into currency, assuming that they would be immediately useful for consumer shopping, although they would be given no exclusive currency status and legal tender power. A fourth table might indicate the experience with asset currencies, where the assets became irrelevant because the paper monies, supposedly backed by them, were in reality only accepted because they were given exclusive currency status and legal tender power (forced acceptance combined with forced value. - Then the different recorded experiences might speak for themselves and suffice to convince. - J. Z., n.d., 30.4.97, 29.5.11, 3.8.11.
ASSET CURRENCIES: Assets have no real currency - except e.g., among brokers, financiers and real estate agencies - and those, who happen to be in the market for some assets, for a while and to some extent, with a fraction of their accumulated cash or of their earnings. - J. Z., 23.4.97.
ASSET CURRENCIES: Just because the laws have allowed them or even prescribed them in some instances, and this, sometimes, under the misnomer of "free banking", does not make them right, honest or economically sound and efficient or competitive under conditions of full monetary freedom. Modern views on this are nothing better than a revival of the old "land bank" schemes, by which the issuers attempted to foist fractions of mortgages upon the population as if they were and could be a sound currency. This particular fallacy was often refuted in the literature. But the general asset currency notion is still very much alive and all too widely practised by central banks. They even accept government "insecurities", or investments in tax slaves, as assets. When such issues are monopoly currency issues then the issuers can get away with them for all too long - for people often accept bad forms of money if that is the only one which is made available to them or permissible for them. But under monetary freedom no one would be obliged to give any real purchasing power to any such currencies, by accepting them for his goods, services and labour. They would, as currency, have no more status and ready acceptance, far less par acceptance, than have mortgages, bonds, shares and other securities have in most daily exchanges for most people. I.e., they would not be currencies. They would be useful only on the capital market, which embraces only a fraction of all buyers and a fraction of all their purchases and sales. That is the main reason why they cannot be sound currencies in local circulation. Their circulation sphere and volume is all too limited. They are not tickets or vouchers to daily wanted and ready for sale consumer goods and services. The do have no "shop foundation". That is an essential requirement even for gold or silver coins. - J. Z., 25.12.88, 16.5.97, 29.5.11. - FIAT MONEY, CENTRAL BANKING, MONETIZING GOVERNMENT DEBT CERTIFICATES, WHICH ARE INVESTMENTS IN TAX SLAVES. Compare: TAX FOUNDATION MONEY.
ASSET CURRENCIES: Some notes by J.Z. on an exchange between Don Werkheiser and T.M, March 23, 1990. Houses and note issues upon them: Assume the asset of a house, estimated to be worth $ 180,000 and notes issued upon that asset, valued, coming, nominally, only to $ 120,000. - Seemingly, and in the eyes of some, these notes are then "well covered" or secured. In reality, such "currency" notes are then only small and standardised mortgage bonds that do not even pay interest. Only the house owner would be morally obliged to accept them - if and when he wanted to sell the house. Others would accept them from him only if they are potential investors or buyers of that house. They might have to be tempted by the offer of interest to do so and would, otherwise, refused to accept them. Why should any shop owners or businesses accept such notes from such an issuer, if they are not interested in buying this house or investing in claims to it and no interest is paid and if there are no ready other acceptors for such notes? What could they do with them then? Who would be contractually obliged to accept them from him? Why should they act as brokers for such mortgage bonds? There is a difference between mortgages and sound bills of exchange and between mortgage letters (or bonds) and banknotes based upon real commercial bills. The difference lies in the kind of securities offered, the value of a house vs. daily wanted and offered consumer goods, i.e., mainly the time factor that is involved, the immediate usability which makes a currency "current" or immediately useful. For the house-based "currency" there is only a very limited readiness to accept it (in case of the sale or renting-out rooms of the house) by the single issuer. The shop-foundation and short-term debt-foundation of banknotes, on the other hand, is offered by many acceptors and they offers a great variety of daily wanted goods and services. They offer something useful to the note holders, immediately or soon, in a considerable and sufficient choice. The house owner would or could hardly want to sell his house brick by brick etc., after wrecking it first, nor would he find many buyers for such a limited offer or get a high enough price for them to cover this "currency"- or takers for his only thus "secured" mortgage bonds in money denominations. What an honest house owner, issuing notes "covered" by the value of his house, should explicitly declare on his "banknotes" is something like the following: "I want you to give me the values I want now, for these, my notes. But I am not willing to give you, with these notes, the values you want and might be able to get from me now - apart from the value of the house, which I have not even placed on the market as being for sale. All I offer you with my "house notes" are small mortgages secured by the market value of my house. I do not even offer to accept my notes e.g. in rent-payments to me, in case I were to let this house or some of its rooms to you, which I do not, presently, intend to do. I do not offer you any interest payment for the period that will pass until you manage to fob of these mortgage letters upon other victims with capital, goods, services or labour that they do want to thus invest. I merely rely on your good faith, trust and confidence, for which I can offer no other basis than that the total present market value of my house, which is not ready for sale right now, but which is larger than the total number of notes that I have issued upon this value. So, they are not altogether value-less but more than "covered" by their visible and properly estimated "security" and "cover". - If I were to issue notes for the total value of my house and if I were to set a date for its sales and if you had managed to accumulate all these notes in your hands and would want to buy my house, then I would be obliged to hand over the title to it, in return for you handing over to me all these notes. But, since I haven't made this sales offer, I do entirely rely on your unfounded trust and confidence that these notes do have their full nominal and free market value now, equivalent to the sales price of my house, if and when I would sell it. I also trust that you will be ingenious enough to fob them off unto others, also believing in the possibility of "asset currencies", thus passing on the problems of immediate redemption for these notes to them. - I cannot say why I prefer to call these notes my "banknotes", fully covered by the value of my house, instead of mortgage bonds or mortgage letters. - Money in the own eyes is not automatically money in the eyes of others, no matter how confident the issuer is or the person who assumes that he is a potential issuer for banknotes. One should try to think through every issue and reflux, every cover and redemption and security, step by step, taking all the liberties and rights involved in consideration, all the special and general interests of all the parties involved. Then one will find that it is not just a matter of a "unilateral issue" into "circulation", a "single convenience action", as Don Werkheiser called it, but that a "mutual convenience action" must be involved, in which potential acceptors would only accept what they want to accept and to the extent that they do want it and only at times that they do. That means, in practice, that a free and informed market, made up of all the potential acceptors for such notes, would largely refuse them and the few who would accept them would greatly discount them, so much so, that a potential buyer of the house could very cheaply buy up these claims and with them, if they came, nominally, to the value of the house, or if used in part-payment, could make a for him very cheap purchase bid for that house. The issuer, if he had persisted in issuing these mortgages in spite of their great discount, would have got only whatever values he would have been able to buy with them, at their discounted rate. - J.Z., 17.9.02, 29.5.11. - OR TURNOVER-CREDIT CURRENCIES?
ASSET CURRENCIES: The only assets which asset currencies could effectively move are capital assets and capital securities. E.g., capital scrip or mortgage letters. They can be issued and used to transfer large capital assets, which otherwise would not be as easily transferable. (To that extent there is an analogy to the discounting or Real Bills with new banknotes, to improve turnover credits without the need for metallic cover and redemption but merely the need for a short-term clearing in the turnover process of wanted consumer goods. - J.Z., 3.8.11.) But asset currencies do not represent and cannot, therefore, easily transfer ready-for-sale goods, services and labour. These require currencies based upon them. - Only when all other currencies are effectively outlawed can any monopolistic asset currency somewhat replace them, in spite of its unsound foundation for currency purposes. Rather than doing without monetary exchanges altogether, people would then even accept an asset currency - up to a fraction of all the capital assets, without responding to the asset currency issue with inflated price and wage demands. Such price and wage increases would not indicate a dearness of goods and labour but a depreciation of the forced and exclusive "asset currency" imposed upon them. - J. Z., 6.4.94, 24.4.97, 29.5.11.
ASSET CURRENCIES: To try to turn capital assets like raw materials, premises, and machinery or the capital securities that do represent them, directly into currency, supposedly useful for the current purchase of consumer goods, is a great mistake because at the same time no equivalent and additional consumer goods and services are provided by the issuer to redeem them with. The holder of the certificates could only force the issuer into liquidation and then claim his share in raw materials, premises and machinery - but only relatively few would want to acquire them. On the other hand, if there is someone prepared for a take-over bid for the business of the issuer, then such issue attempts would be very much welcomed by him, for this scrip would rapidly depreciate in a free market and could thus be bought up very cheaply and used in the take-over bid. A few such experiences, well publicised, will serve as a deterrent. But that does not mean that there should not be full freedom to issue financial securities, too, which do quite clearly represent capital assets and are bought up and traded by people interested in capital investments. To reduce this kind of mix up of capital securities with turnover bills and notes, the issue departments for both should be as far as possible kept separated because for people have fallen for the errors of "asset currencies" again and again and they have often been embodied in banking laws, especially those on central note-issuing banks or national governments, who wanted to thus liquidify their governmental insecurities or investments in tax slaves. - J.Z., n.d. & 29.5.11,3.8.11.
ASSET CURRENCY: An unsound turnover currency system is not sufficiently remedied by there existing, in case of its bankruptcy, some securities for the benefit of its creditors. Its primary intention is not to provide such an ultimate guaranty or backing for its currency, after its failure, but, rather, to provide for its currency a ready cover, reflux or redemption right now, especially by short term securities and by the ready for sale goods, services and labour which the issuers of the short term securities have to offer to the holders of the banknotes of the bank. Only such turn-over function, security, guaranty, redeemability, cover, reflux, or convertibility arrangement can keep a currency sound and current, by exerting a sufficient daily demand for bank notes, to keep them at par with their nominal value. If the issuing banks do not provide such an instant cover, security and convertibility and no one is instantly obliged to accept the currency issued by the bank, i.e., if there is no instant demand for it but only the distant future redemption via the capital securities, then such a currency must inevitably depreciate. - J.Z., 6.4.93, 27.5.97, 29.5.11.
ASSET CURRENCY: Just because the law has permitted or even prescribed it in some or many instances does not make it rightful or economically sound and a desirable and predictable practice under monetary freedom. "Modern" views on this are often merely a revival of the ancient "land-bank" and "assignat" fallacies that have been refuted by their practice and several scientific studies. - J. Z., 8.4.97. See: APHORISMS ON THE MONEY PROBLEM.
ATCOPS: Roger Young, in TC144p43 reports that ATCOPS is alive and well and in its 20th year. Current details are not known to me but wanted by me. - J.Z., 3.8.11.
ATKINSON, EDWARD, Pamphlet, title unknown, referred to by TANDY, Voluntary Socialism, p. 103, stated on a legal tender act: "... an act by which bad money may be forced into use so as to drive good money out of circulation." - All correct versions of Gresham's Law, with their author, title and date of publication, preferably also page references, are wanted by LMP, towards a monograph on this subject. - J.Z., 12.4.97. - I would prefer if someone else wrote it, a.s.a.p. - All such libertarian projects should be listed online in a common projects list in order to mobilize the manpower for them. - Compare my list of only 1,000 such projects back in PEACE PLANS No. 20, 1977, later digitized by me. - J.Z., LEGAL TENDER ACTS, GRESHAM'S LAW
AUDITOR, Periodical published by WESTRUP, ALFRED B., for free banking. At least 2 issues appeared. I have not seen any yet. - J. Z., 28.4.97. - Copies, best already scanned in, are wanted by me. - Google offered me today 40 references under his name, but not a hint towards digitized issues of this periodical. - Libertarians have still to bring so many treasures up to the light of computer screens. - J.Z., 3.8.11.
AUSTRALIAN MADE, BUY AUSTRALIAN! - If you want to sell Australian goods, services and labour, then monetise them freely and thus spend their value even in advance, before they are sold for this kind of privately or cooperatively issued competing currency. - Australian-made goods, if up to world standards and at world prices, are good enough for currency issues, too, for international trading. If they were not then there would be something wrong with these recommendations. Why should Australians be foolish enough to buy Australian goods and services and labour, if they were of inferior quality or offered only at higher prices? - J.Z., 6.10.93, 1.5.97. - If you spend Australian paper money overseas then there is only one rational use for them, namely, to use them in payment for Australian exports. Competing Australian clearing certificates that are redeemable only in Australian goods and services, freely market rated, refusable in general circulation and obligatory only for their issuers, also time-limited, would be more obviously balancing imports with exports. See the writings of Prof. Edgard Milhaud and of Ulrich von Beckerath on this subject. - J. Z.
AUSTRALIAN MADE, BUY AUSTRALIAN: Permit the owners of all "Australian Made" goods to issue goods-warrants and purchasing certificates as well as clearing certificates based upon their combined goods and service offers, for goods and services that are in daily demand by consumers, and allow wages, salaries and other debts to be paid in them, if the acceptance is voluntary and then, to the extent that such alternative monies will be readily accepted, the purchasers will buy goods made in Australia with money freely made and freely valued, accepted and spent in Australia. To the extent that such private vouchers, in money denominations, can be freely issued, they will stream back with much greater certainty to the issuer and his debtors, for their goods and services and labour, than any rare metal coins or legal tender money spent by them. They will be busy and employed and achieve sales to the extent that they can issue these "ticket-monies", goods warrants, service vouchers etc., in convenient money denominations and do get them readily accepted. Moreover, they are morally entitled to thus offer their own property in a monetised form. No government owns them and their property, their consumer goods stocks, services and labour for sale. Thus no government is morally authorised to issue assignments upon their property, for which, in the act of issue, it has to give nothing in return but a scrap of printed paper and the option to use this in payment of tax tributes which it extorts from its tax slaves. Government cannot provide such a soundly based money. It can only requisition, with its paper money, the real redemption fund for any currency in any country, one that belongs to the producers and traders themselves: the ready for sale goods, services and labour. (Apart from the issue of tax-foundation or contribution-foundation money, anticipating near future taxes or contributions and these can be rightful only for communities of volunteers.) - The Australian nationalists should seriously consider how free and independent they are when they are only allowed to buy their goods, services and labour provided by Australians or foreigners with the monopolised and forced paper money by a single privileged and legalized despotic institution in Australia, its central bank, called the Reserve Bank. - Why should all Australians, for all their economic activities, have to depend upon its good will and abilities - if any - and this in spite of all the evidence that speaks against any central bank? - When and to the extent that Australians can issue their own competing and optional currencies, they will, inevitably, "buy Australian!" - The same applies for competitively issued international clearing certificates that can only be used, after Australian imports have been paid for with them, to purchase Australian export goods. - With government paper money, often under a controlled exchange rate, and with foreign central banks mad enough to hoard such notes, as "foreign exchange reserves" or foreign private citizens being inclined to hoard such notes, because they are better than the still more inflated paper currency of their own government, the reflux of such paper money as purchasing certificates for Australian goods, is much less certain. - To speed up the reflux and make it more regular, all internal and external clearing certificates and goods and service-warrants should also be given a limited life span only, for 3 months to 12 months at most, thus appealing to the self-interest of the holders to redeem them in Australian goods, services and labour within that period. Alas, this kind of "buy Australian" with competing Australian monies, is not yet popular. - Help to make it so. - J. Z., 5.10.93, 24.4.97, 29.5.11.
AUSTRALIAN OWNED? Because something is "Australian owned" or "produced in Australia" or "bought in Australia", following the command: "Buy Australian!" - does not mean that it is cheaper or better than other businesses or goods or that Australia, as a whole, benefits more from such enterprises, purchases and sales than it does from others. If, instead of buying from an Australian owned firm, you buy from a foreign owned firm in Australia or one overseas, then you do, thereby, enable that foreign firm, whether situated in Australia or overseas, to buy the corresponding values from Australia. And these values, sold to foreigners, and paid with by the return of the Australian paper currency, would then be proudly claimed as Australian export achievements! (They are objectively achievements, like any other sales, but in contradiction to the insistence upon buying only Australian goods.) - If the owners of Australian enterprises were not free to sell them to foreigners, i.e., if most of their potential buyers were excluded, then they would thus be robbed of part of their property rights. Each foreign owned firm means: This firm has not been given away, stolen or occupied but SOLD by an Australian, who managed to get a higher price for it than other Australians were willing to pay him. Should his property rights be overlooked? Should he be penalised, taxed or should the buyer be boycotted? His property belonged to him, not to the nation. Those Australians, who did not buy it, did not offer more for it than a foreigner or foreign company did, have no right to complain. Every transaction that is free and voluntary, i.e., as a rule for mutual benefit (apart from some errors or misjudgements or frauds on one side or the other), is right, thereby. The nationality of the seller or buyer, or their race, religion, sex, age or ideology should have nothing to do with their trade or exchange. Nationalism, statism and borders should be entirely excluded from economic and moral considerations, as irrelevant, if not outright, wrong, harmful and anti-economic. If any Australians can make a better deal with foreigners than with other Australians, let them. The total of all earned economic satisfactions in Australia would be increased thereby - even while the number of dissatisfactions based upon ignorance, prejudices and myths would also be increased. Mercantilism and State Socialism were and are wrongful and harmful utopias. Only those individuals who voluntarily subscribed to them should have to suffer under them. - PIOT, J. Z., 22.5.97, 15.9.02, 29.5.11. - FOREIGN INVESTMENTS, FREE TRADE, EXPORT & IMPORT BALANCE
AUSTRIAN ECONOMICS ON MONEY: Austrian economists often asserted that the interventionism with currencies consisting in legally establishing an exclusive and forced currency would not matter at all if that were only done for gold coins and gold certificates. They could not do any harm, or so they believed, said and wrote. They could not be arbitrarily multiplied and thus would be the only exchange media and value standards that should be permissible and that should also be legally enforced as exclusive exchange media and value standards. They did this under the assumptions that prices and wages would be infinitely, fast enough and completely enough adaptable to any changes that might occur in the quantities of gold available for monetary transactions or to changes in the monetary demands for gold. - This belief is dogmatic for them, a fixed idea. They do not bother to check it against the facts. They ignored the numerous reports of currency shortages and currency famines. They ignored the ten-thousands of reported cases of the issue of emergency-, token- and truck-money, hundreds of years after the invention of rare metal coins and gold- and silver certificates and even the millions of incidents in which people in their exchanges were being reduced to primitive barter transactions - although, somewhere, the same quantities of gold and silver did still exist. Some still manage to ignore the phenomena of deflations and the reports on currency shortages or even currency famines. Nor did they consider the different effects which falling price levels have upon all sellers and buyers, to the extent that the buyers can postpone purchases, as opposed to fallen prices, e.g. due to some technical innovations. (Even here some buyer restraint occurs, e.g. in the purchase of computer hardware, in the expectation of even further price falls in spite of continued improvements in the hardware.) (Increased prices and increasing prices do also have different effects upon potential buyers. - J.Z., 29.5.11.) They do overlook the stickiness of prices and wages. They do overlook the numerous contracts which nominally express debts over a time period and which debtors would find it hard to fulfil with severely deflated currencies, which they would find it much harder to earn, in the same nominal quantities, while the prices for their goods, services and labour have been deflated. - If gold and silver were so abundant and so useful, there would also exist the possibility to provide them in weight units for the black market and have black market transactions finally take over the whole market. But that hasn't taken place, either. By now many people may never even have seen a gold coin. Then there is the fact of trade having existed even among Australian Aborigines, for small and portable items, used as barter goods across the continent of Australia. Gold coins or nuggets or dust did not become currency among them, either. The distribution of gold standard gold coins and certificates was rather limited to a few of the more developed countries and even there only for limited periods and limited circles. In others they were hardly ever seen, not even coined out in mini-weights, for very depressed monetary prices. Nor do most Austrian School economists seem to be aware as yet, that clearing underlies all money transactions and that pure clearing transactions do not require any gold coins or gold certificates at all to become possible, sound and wide-spread, even though they might prefer to use gold weights and their purchasing power but merely as their value standard units. Blinded by their dogma on "convertibility by the issuer, upon demand of the gold certificate holder", they remained blind to the possibilities and functioning of the real bills doctrine or banking principle and their functioning even without metal convertibility, even after their banks were declared officially failed and bankrupt, because they could not longer redeem their notes fully in gold. The clearing function involved in the real bills doctrine or banking principle, continued to function for a while, because the debtors of the bank exerted a strong demand for the notes, which enabled them to pay their debts to the banks. - The minds of the Austrians were so focused on the metal convertibility or non-convertibility of notes only, that most of them (probably some of them do so still) overlooked the much greater significance of legal tender - and the harmlessness and self-limitation of banknotes not covered in gold but soundly issued only in turnover credit transactions that are soon self-liquidating. How often have they been aware and to what extent are they aware now that without legal tender and the money issue monopoly one cannot inflate a currency in a market that enjoys monetary freedom and uses that freedom in freely competing exchange media, clearing avenues and freely chosen and competing value standards? Held back by their limited money model, as they are by their limited government model and limited defence model, they have not extended their thinking to the full range of monetary freedom, of free societal options and of libertarian and anarchistic defence and war prevention possibilities. Anyone who thinks that he already knows enough cannot be taught any more, as long as this illusion persists in his or her head. - J.Z.,26.1.94, 1.5.97, 29.5.11.
AUTHORITY, AUTHORITARIANISM IN MONEY: The fundamental, decisive idea of this Revolution is it not this: NO MORE AUTHORITY, neither in the Church, nor in the State, nor in land, nor in money? - Proudhon, General Idea of Revolution in the 19th Century. - Alas, in his practical proposal he always spoke only of THE Bank of the People, not of banks of the people. - Maybe he spoke and wrote in this way because he had only a particular model for mutual banking in mind, the one for which his drafted his bank statutes. It would have been quite inconsistent for him, as an anarchist, to demand a monopoly for his Bank of the People. Alas, not all of his papers and correspondence seem to have been published as yet. Their complete publication would help to settle this question. - J. Z., 15.4.97, 29.5.11. - MONETARY DESPOTISM, CENTRAL BANKING, EXCLUSIVE & FORCED CURRENCY, PROUDHON
AUTOMATION: Many people believe that there is a link between automation, robots and unemployment, that people would be replaced from their jobs by machines, robots and automation and could not find new jobs. - "Japan, for example, has about 400,000 robots installed and a declared unemployment rate of 2 1/2 %, while Australia has about 1800 robots and a much higher unemployment rate. - The Australian Robot Association estimates that 118 robots were installed in this country last year. This number is too small to have had any significant impact upon unemployment. - In the past two years, IBM reduced its workforce by 90,000 jobs, Boeing by 28,000 jobs, and Digital Equipment Corp by 27,700 jobs. But few, if any of these jobs, were lost because employees were replaced by machines. Rather, according to a recent survey by Ms Trudy Bell, published in the engineering journal IEEE Spectrum, the job losses were due to factors such as the dwindling market for mainframes, diminished military orders brought about by the end of the Cold War, and reduced purchasing because of the global recession." - Michael Kassler, Survey explodes myth of the link to jobless queue, THE AUSTRALIAN, 5.10.93. - ROBOTS & UNEMPLOYMENT
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BAKER, ALEXANDER, The Fed Is Lifeblood to the Root of Evil - "Central banking makes possible the expansion of government power in all forms, most particularly the wicked godfather of all government programs: war. Without central banking, it is doubtful that any of the great wars of the 20th century, or the current debacle in Iraq , would have ever taken place, certainly not on the scale we have seen." - Roy Halliday - FED, CENTRAL BANKING, MONETARY DESPOTISM
BALANCE OF TRADE: In truth, however, there is no dependable correlation between balances of trade and employment. During our long years of favourable trade balances, we sometimes had much unemployment. And sometimes we had labor scarcities. I have found this same situation in Argentina and various other countries. And the unfavourable balances of trade in Europe sometimes seemed to have a negative correlation with employment, i.e., the larger the inflow of goods and services from abroad, the more jobs at home in Europe. - Dean Russell, Government and Legal Plunder. Bastiat Brought Up to Date, FEE, May 85, ISBN-0-9106614-70-9, 116pp, p.81. - UNEMPLOYMENT, DIS.
BALANCING THE ECONOMY THROUGH MONETARY CONTROLS OR MANIPULATION: The good intention is to keep goods production and service offers in balance with the money issued. Some attempt to adapt the money circulation to the increased goods and service offers and others want to adapt productivity to the currency they make available. Most think only in terms of a centrally managed, exclusive and forced currency and would not allow free and competitive or cooperative issue and reflux arrangements to keep the goods and service side automatically in balance with the money side, through market forces, i.e., free enterprise, free trading, free contracts, free acceptance or refusals of currencies and free pricing for them, under full publicity for all details of issues and reflux arrangements. Under monetary despotism all these balancing attempts never succeed fully and for long and they cannot do so because almost all the automatically regulating indicators are stopped and no one is fully informed of what is happening and thus many false decisions result. Under monetary despotism the exchanges tend to be limited to those this despotism permits to occur and this often only under great difficulties, too. Despotic central banking and its forced paper value standard, maintained by attempted quantity controls ("open market" sales or purchases of securities by the issuer, discount or interest rate policies, credit restrictions or grant of credits and increased spending via the note printing presses) can never sufficiently supply all the exchange media needed, everywhere and by everyone, nor keep those supplied sufficiently stable for long. It is an unbalanced and unbalancing system. It is so mad that in some instances it has led to "valorisation (i.e., the burning, ploughing under or other destruction of crops) in order to artificially keep their prices up because, under monetary despotism and all too often, goods, labour and services cannot be sold at free market prices and the prices attainable under that despotic system might sometimes not even cover the costs, either, because they are too much deflated or, sometimes even because they are already inflated. (I have almost absolutely stopped getting hair cuts by a barber, many years ago, ever since their charges went above $ 1. That is not necessarily a rational response but it is an economic response.) That price controls and subsidies have sometimes misled producers to produce more, at artificially high prices, than the market really wants at these prices, does, naturally, not help, either. Nor can stockpiling of such artificial surpluses, by governments, at the expense of the taxpayers, help in the long run. The economic indicators should never be artificially and coercively falsified - if equilibrium is to be maintained as much as is possible in human affairs. Neither the goods side nor the money side is to be artificially manipulated if trouble is to be avoided. - J. Z., 24.3.97, 30.8.02.
BANK CHARTERS: Their (bank charters ) effect is to give to individuals the advantage of two legal natures - one favorable for making contracts, the other favorable for avoiding the responsibility of them, when made. (Spooner, Constitutional Law 21.) Spooner argues that all banking charters are unconstitutional for they violate the natural right of all men to make free contracts. Moreover, the legislature, in granting special favors to some and none to others, abuses its powers. - Charles Chiveley, introduction to Lysander Spooner, I/27. - MONETARY DESPOTISM, RIGHT TO BANKING
BANK FAILURES: Those, who are all too readily and prepared to indiscriminately accuse past and present banks of bank failures, have usually not distinguished e.g. between 1.) Failure of the issuing bank to redeem its notes upon demand fully and to their nominal value in rare metals, or, nowadays, in legal tender money or even in government insecurities. 2.) Failure to cover notes issued and current deposits granted, by means of short term and self-liquidating securities that represent goods produced and already sold and on the road to consumers, 3.) Failure to provide sufficient clearing facilities or debt foundation for all notes to keep up a strong demand for them, that could keep them at par until they are withdrawn in the final settlement or payment. 4.) Failure via dishonesty, corruption or embezzlement among the bank's officers. 5.) Failure due to malinvestments, large ones, in unprofitable enterprises, so large in relation to the whole bank business, that this single failure could send it broke. The lending risk was then not sufficiently distributed, in accordance with insurance principles. 6.) Failure through lending short term or medium term funds on long terms, instead of only on the terms they were deposited on. 7.) Failure in such cases to make contracts that would allow them such investments but also allow them to postpone repayments until they would be liquid again and in the meantime only offer to pay-outs in bank-bonds, transferable ones, that would cover the remaining outstanding loans, on repayment in instalments. 8.) There are also various other forms , e.g. "option clause" notes that would cover the risk of any temporary illiquidity in normal business, when debt and credit terms and amounts do not exactly enough equal each other. 9) Failure of other banks than the central banks of issue due to the inflationary, deflationary or stagflationary policies of the governmental central bank. 10) Failure to sign up a credit insurance policy for the ordinary risks of lending or undertaking sufficient self-insurance precautions, alone or in association with other banks. - J. Z., 11.4.97. - Runs on banks could have been prevented or greatly reduced in many ways. For instance, by starting a list for those who wanted to withdraw their money, in which those on the top of the list would have the top claim to monies received in payment of debts to the bank. The banks could have offered limits on the amounts of cash withdrawable immediately, without notice. Or it could have insisted on having been given sufficient notice for all withdrawals. (In the meantime, it could have accumulated the funds from repayments and by reducing further lending.) There is no fixed limit for the kinds of contractual safety clauses that could have been agreed upon. To promise something to all that could never be fulfilled if all suddenly claimed what was promised to them, was always wrong and bad business practice, even though, in normal times, they could get away with this for considerable periods. Generally speaking, banks and bankers do mostly not really comprehend the sound business of banking, or the "banking principle" for the issue of banknotes. Like politicians, they do engage in many wrongful and harmful practices, and, due to insufficient competition from alternative political and banking systems, they go on and on with their wrongful and harmful practices, all in accordance with all too widely spread popular prejudices, supported by supposed academic experts. Can one teach them to proceed morally and rationally in spheres where they imagine themselves to be experts? You try it! - J.Z., 5.9.02, 29.5.11.
BANK ROBBERIES: There would be less cash robberies under free banking because quantities of local cash that have thus gone astray are much harder to dispose of and at the same time much easier to trace than is, e.g., an exclusive legal tender paper currency or rare metal coin currency, that can be spent all over a large country or even all over the world. The same applies to forgery attempts. Moreover, freely competing currencies are likely to have only a short circulation period. Thus "hot money" cannot simply be hidden for a long period and then spent relatively safely. It might no longer be a valid currency by them. If, after a robbery has occurred and the robbers got away, any strangers or locals were suddenly to spend large amounts of the stolen local currency, even if the numbers of the stolen notes were not known, they would immediately become suspects. - J. Z., 21.3.86, 16.5.97, 29.5.11. - & OTHER CASH ROBBERIES
BANKERS OF THE PRESENT: Most of the present private and commercial bankers, supposedly free and capitalistic entrepreneurs, are only allowed to deal in nationalized and governmental exchange media, just like ordinary citizen subjects and think and act only in terms of such money. They are also forced to use the governmentally imposed “value standard, “which is everything but a sound value standard. These currencies are almost constantly mismanaged, usually inflated to some degree or even severely and sometimes deflated or stagflated, under wrongful and harmful “currency policies” that cause major economic crises and then prolong them. They know and care nothing about sound, alternative and completing private currencies, how to issue them and how to assure their reflux to them, while maintaining their par-value with a genuine value standard. This in spite of the fact that this should also be their business, not just to handle governmental currencies or savings, investments and capital assets. To my knowledge, the vast majority of them are either quite ignorant of and disinterested in fully free banking or monetary freedom or are severely prejudiced against the genuine individual rights and liberties involved in this business or enterprise. And yet they pretend to be bankers! Just like the public servants, who, in most of their actions are anything but servants of the public. They lobby for further privileges and subsidies to their incompetence and, as far as I know, nowhere do they demand quite free and self-responsible banking and full monetary freedom. Nor do I know of any institution and publication, sponsored by them, that stands, well informed and consistently, for all genuine liberties and rights in this sphere. They are much more merely the priests of the monetary religion of the mass of ignorant and misinformed people, rather than light-towers for the monetary enlightenment of the people. Thus, in my view, they do not even deserve the term “bankers”. They are just dealers in monopolized goods or mere government agents or subjects, helping to maintain monetary despotism- with all its inherent wrongs and harmfulness and its all too often disastrous economic, social and political consequences, as long as it is being maintained. Just look at its record over the last century! - Please, do correct me, if I am wrong in this! – J.Z., 5.8.10, 8.9.10. - CENTRAL BANKING VS. FREE BANKING, PRIVATE AND COMMERCIAL BANKERS AS SUBJECTS OF CENTRAL BANKERS, MONEY MARKET, CAPITAL MARKET
BANKERS: Bankers perform the function of the commercial virtues by demonstrating and advancing the pecuniary value of a good moral character. - Henry Meulen, THE INDIVIDUALIST, 10/75. - With their demand for securities or guarantors for loans, governmental guarantees and deposit insurance, bankers have either betted only on a sure thing or have become so careless to lend even to despotic foreign governments, not only some wasteful and inefficient large private corporations. Their own government would not allow them to fail, regardless of the huge number of bad debts they managed to "expertly" acquire. They do no longer have to be good judges of business opportunities or of good moral character. A successful fraud was often a better investment for them, at least temporarily, even if, finally, he cheated the bank itself. Personal loans have become only a very small fraction of the total loan accounts. In judging their security the assessors of personal loan companies were, for many decades and probably still, much more competent. Bankers also refused the mini-development loans now becoming popular in underdeveloped countries, although they have a very low risk. (Not so low if these small loans, too, do have to be repaid in the government's monopoly money, which also causes sales difficulties for their small business enterprises. - J.Z., 29.5.11.) The student loans, while self-administered, had also a better chance of being repaid than most bank loans had and have. - The number of bankers who really understood the note issue business and who conducted their deposit and savings accounts quite honestly has always been rather small. They were, all too often, rather gamblers and high risk taking speculators than sound investors, at the expense of their note holders, depositors - or the taxpayers. - The insistence of bankers on securities for loans has been satirised by the remark: "Bankers lend money only to those who can prove that they do not need it." - Moreover, the fact that a special insurance is required for cashiers does also seem to indicate that those who employ them are not good in assessing their moral characters, either. - Furthermore: How many bankers do you know who have anything sensible to say on inflation, deflation, stagflation, legal tender, the money monopoly, devaluation or re-valuation? - Mostly the good reputation of bankers is as unearned as that of politicians is. - J. Z., 18. 4.97, 29.5.11. - CREDIT & MORAL CHARACTER
BANKERS: Their remaining privileges and the mystique that surrounds banking still, in all too many heads, including those of most bankers and central bankers and economists, has allowed some or even many ignorant, stupid, prejudiced, careless and irresponsible bankers to get away with all too much, at other people's expense, while continuing to enjoy prestige, high earnings and high retirement benefits, no matter how many people they harmed or wronged. - Some people got even so disgusted with the false notions that most bankers entertain on bank note issues that they proposed that future note issuing centres should explicitly exclude anyone who had previously occupied any executive position in the banking world, unless they could prove that they were among the few exceptions in this business. The same might be said about lawyers and many of the brokers of our times. - That politicians should be totally excluded from this business seems self-evident, at least to me. No kind of confidence trickster, demagogue or power addict is suitable for it, while he persists in this kind of career and at least until he has been completely rehabilitated, as e.g., Auberon Herbert was. - I do know that there are SOME honest lawyers around - but what do they know about monetary freedom principles and practices and what opposition have they ever shown to monetary despotism? - If there are such exceptional people among them then they should not be kept out. - The free banking business, like the computing business, should be largely left to its fans, not to its enemies or disinterested, ignorant or prejudices people or those with a looter mentality. Luckily, the ones who are already in the business of providing consumer goods and services are also, through their local associations, the most suitable among all the potential issuers under monetary freedom and the ones who, apart from the unemployed, have the greatest possible interest in gaining and enjoying the benefits of monetary freedom. They would not need any politicians or lawyers- except in defence against the oppressive actions of other politicians and lawyers. - J. Z., 15.5.97. - OF THE OLD TYPE TO BE MOSTLY EXCLUDED FROM FREE BANKING & LAWYERS & POLITICIANS AS WELL
BANKERS: You can no longer bank on bankers. They will neither give you the highest interest nor credit when you need it most, nor can they protect you from inflation or from credit restrictions and deflations, nor from direct tax raids by governments, nor from the prying eyes of bureaucrats. They have let themselves be deprived of the business of note issue and have let the capital market become over-regulated. They know by now almost nothing about sound note issue techniques nor do they show any interest in them. They help the government to "invest" part of your savings in governmental "insecurities", which you or your children and grandchildren then have the honour, later on, to repay in parts, out of your taxes, or in depreciated currency. They have become mere agents for the government's despotic monetary policy. You can rely on them only in one respect: They will firmly resist, together with the government, all your attempts to go into competition with them, opening competitive and note-issuing banks and clearing centres, practising sound free banking principles and all aspects of financial freedom. - J. Z., 12.7.78, 24.4.97, 8.9.02. - & MONETARY FREEDOM OR FREE BANKING
BANKING PRINCIPLE: For me it is hard to comprehend how long two (or more) different scientific schools of thought can co-exist, side by side, without their differences becoming settled, or, worse still, how representatives of especially the ruling school of thought can simply ignore the facts and arguments advanced by their critics, as the currency school did, largely, versus the banking school and as is still being done today by various groups of "gold bugs" or "100% dollars" advocates. - Admittedly, much of the thinking of the free banking school was flawed, too. E.g., many of its members did, unnecessarily and without sufficient justification, adopt the obligation for rare metal convertibility for the issuer, although the banking principle or the real bills doctrine indicated already the real cover involved as the only cover required. - It is often not just one or two different views that are mostly or habitually ignored but sometimes hundreds, if not thousands. E.g., there are hundreds of different crisis theories and types of socialism. Nevertheless, most write on crises and socialism as if only their own favourite example of them did exist and were possible or worth talking and writing about. How often have primitive notions on trust or confidence in currencies, as one of their basic requirements, been thoughtlessly repeated, without mentioning the reflux and clearing foundation that is involved in short-term turnover loans, which do not have to be covered by gold stocks at all but are, like all debts and credits, clearable. There remain so many unsettled questions among freedom lovers, e.g. limited governments vs. anarchism, territorialism vs. exterritorialism, abortion vs. right to life, mercenary defence vs. militia defence, nuclear weapons strength and deterrence, vs. nuclear weakness and all the possible failures of nuclear deterrence. The money, currency, credit, clearing and value standard discussion is full of arguments still unsettled by libertarians and anarchists. - J. Z., 31.7.82, 24.4.97, 29.5.11. - It is high time to tackle all these differences of opinion fully and systematically and draw their balance sheets. - Our very survival may depend upon it. - J. Z., 8.9.02.
BANKING PRINCIPLE: How many different and correct formulations of the “banking principle” do exist and how many incorrect ones? Have all of them as yet been sufficiently clarified in any economic text books. The same applies to all the notions and misunderstandings of the “currency principle” – We have had centuries of discussions and writings on money and yet they have so far merely produced a proliferation of errors and misunderstandings, which dominate the hypotheses on money and its “laws”. (Most do not deserve the term “theories” and “laws”. – J.Z., 2.11.10. - CURRENCY PRINCIPLE
BANKING PRINCIPLE: The attacks of the advocates of the currency principle against the defenders of the banking principle do not constitute monetary enlightenment's last conclusions on the subject. The validity of the banking principle was recognized at least by some for more than 200 years. It was the properly expressed and understood banking principle that recognized early on the nature of money as essentially a clearing medium, while the advocates of the currency school remained stuck, to a large extent, in barter notions and practices, using bits of metal, in coin form, for this purpose, which were an advance upon the most primitive barter transactions but remained, essentially, merely barter transactions still. - J.Z., old German note, revised and translated: 23.4.11. - VS. CURRENCY PRINCIPLE, REDEMPTIONISM, METALLIC REDEMPTION OBLIGATION, GOLD STANDARD, SILVER STANDARD, COVER, CONVERTIBILITY
BANKING PRINCIPLE: The security for the bill is the legal claim which the bank has upon the property of its debtors. We see, therefore, that legal value may be made a basis for the issue of notes to serve as currency: (*) we see, therefore, the faint indication of a means whereby we may perhaps emancipate ourselves from the bondage of hard money, and the worse bondage of paper, which pretends to be a representative of hard money.” – (*) … The compiler of this pamphlet never foresaw that his theory would be exemplified in so objectionable form as the one which now obtains, and that he should live to see banks based on no actual capital at al, but solely on capital consisting of certificates of debts for actual values that have been used up in war, and no longer exist. The real capital of the national banks is the promise of the government to exact from the people BY TAXATION, sooner or later, an amount of money sufficient to pay the bonds, with interest…. – William B. Greene, Fragments, p.44/45 – Alas,at least here he did not clearly state that the debt should be a short-term one for goods already produced and sold to wholesalers, i.e., a “real” or “commercial” bill, instead of being merely a financial bill or a long-term capital debt certificate. – In his full statement, here, he recognized tax foundation but not shop foundation. – Alas, on page 49 he states: “Any member may borrow the paper money of the bank to which he belongs, on his own note running to maturity (without indorsement), to an amount not to exceed one-half of the value of the property pledged by him.” – Here again speaks of capital security or guaranty for a loan, in case of a debtor going bankrupt, instead of insisting upon the current or short-term reflux foundation that a currency should have, in payments to the issuer, to give it a current value at par in a free market, with its nominal value. (The pure banking principle.) Any long-term or medium-term capital value debt can be monetized only the extent of the next short term, say, quarterly, repayment instalment. Otherwise, such banknotes are, in reality, merely small shares, bonds or mortgage letters. To raise money on such capital debts, not note issuing banks and their bank notes should be used but the usual capital certificates of the capital market. – If even most of the bankers and theoreticians of money did not know this and still do not know this, then what can be expected from the voting public or its political or juridical representatives. All too few have studied genuine free market economics. – They are, rather, comparable to religiously faithful people and their priests. - J.Z., 27.7.10. - BILLS, BANKNOTES, REAL BILLS DOCTRINE, SECURITY.
BANKING, SAVINGS BANKS: Do banks already offer enough of a variety of accounts? Do they have the consent of all their savers for e.g. all their stock and money market speculations? That could be achieved by a wide enough spectrum of different accounts that would in each case clearly state their investment practice. Funds locally invested in productive enterprises and or local housing or other buildings should be distinguished, via separate accounts, from funds invested in shares, bonds, mortgages etc. in the general national or foreign capital market or in mere money market (foreign exchange) speculations. Thus the saver would know the kind of investments made with his money by the bank. With its own capital the bank should, naturally, be free to speculate as it likes. Some would prefer only investments in what they define as “ethical investments”. They should get this option through special accounts, paying them as much or as little as such accounts could bring them. – J.Z., 4.10.10. - FIXED DEPOSITS, INVESTMENTS, SPECULATIONS ON STOCK MARKETS & MONEY MARKETS
BANKNOTES: Banknotes and other exchange media should mainly represent the consumer goods and services that are already produced and offered for sale now. To that extent they should be merely "cut up" or discounted "real bills" or sound commercial bills or equivalent securities. They should not represent "cut up" or discounted capital assets, not wanted by most consumers at all or right now, or not to the extent that they are offered. The capital values, offered as "backing", might also be merely speculative. They might, in many instances, not even be ready for sale on the capital market but only may become ready for sale some time in the medium or long future. And they do not offer ready for sale consumer goods and services now, in form of ready or current claims against them. In some instance, they might be warehouse certificates, representing goods or mere raw materials, still to be processed into wanted products, that are currently not offered on the market at all but, rather, withheld from it, in the hope of higher future prices. Thus, instead of increasing the supply of wanted consumer goods and services, the backing for such currency is speculative, not ready for consumption but rather withheld from production or consumption. And yet the issuers of such "currency" believe that on a competitive currency market such exchange media could be kept at par without anyone being obliged to deliver any wanted goods or services at market prices for them. Somehow the notion of a monopoly and legal tender currency seems to have crept in, that would force the providers of goods and services to accept even such a badly founded currency, without sufficient reflux, if they want to engage in monetary exchanges at all. - J. Z., 9.11.88, 15.5.97. - CURRENCY, COVER, REDEEMABILITY, CONVERTIBILITY INTO GOODS & SERVICES, AS OPPOSED TO CONVERTIBILITY OR BACKING BY SECURITIES, PRIVATE ONES OR EVEN GOVERNMENT "INSECURITIES"
BANKNOTES: How many wrong or only partly correct theories exist on their origin, nature and function? - I hold that all of them should be listed and either proven or refuted. The same terms have all too often different meanings for the banking traditions in different countries and for different authors. Whenever such terms are used then the origin or definer ought, perhaps, to be included in brackets or the different definitions should be offered in a numbered list and. whenever the term is used, then the meaning should be indicated by its number being added in a bracket. - I hold, with Ulrich von Beckerath, that banknotes should mainly represent the consumer goods and services offered for sale now, within their private, voluntary and competitive payment circles or payment communities. Therefore, no "currency" should be issued that merely represent "cut-up" medium or long term securities or commodity or real estate capital values, whose medium or long term value is merely speculative and whose equivalent is anyhow not immediately available in form of ready for sale consumer goods and services and labour, at least not by the issuers of such "asset currencies". Why should the issuers of capital securities be allowed to thus dispose of goods, services and labour of others, without the consent of the owners or providers of these goods, services or labour? And why should these providers accept such "currencies", when they are not prepared to invest in the capital market? There is, indeed, room for small and standardised shares, bonds and other securities, but only in the capital market, not in the currency market. The two should be kept quite apart, in theory and in practice. A mortgage bond or a share does not have any immediate purchasing power. It does not oblige any storekeeper or department store or shopping centre, bus company, petrol station etc. to accept it, unless such acceptance is contractually provided for. And then these readiness to accept declarations would form the real and immediate cover or foundation or reflux option for such banknotes. But why should such providers depend upon others supplying them with notes - when they could issue them themselves? - Free after MFNL&MF 3/4, Feb. 89, & 8.4.97. 29.5.11. - BANKING THEORIES & FREE BANKING THEORIES, BANKING PRINCIPLE, REAL BILLS DOCTRINE, CURRENCY PRINCIPLE.
BANKNOTES: Just because SOME paper claims can in bill discounting be exchanged into bills or banknotes suitable for temporary and local circulation - and a short term later be withdrawn from circulation, in payment for the real bills they were issued upon, and then, preferably cancelled, rather than issued again in new transactions (thus facilitating the control of the circulation, issues and their reflux, e.g. by numbering and issues of series), does not mean that ANY kind of paper claim can be thus and successfully discounted, especially not mere financial bills, speculative and long term securities, or notes representing speculatively warehoused commodities, not available on the present market. Only goods, services and labour ready or very soon ready for sale, can give a real and immediate purchasing power to any kind of currency. Without it no currency is more than a speculative security certificate that may or may not be ultimately redeemed, one day, with interest, or that may lose its value fast. No one is obliged to redeem it with his ready for sale goods, services and labour - although at any time some fools or speculators can probably be found to accept some such notes for a while. A free market will not value them as currency at all or not for long and not at par. Seemingly, many issues had no other foundation than long term securities or assets - because the other foundations were overlooked or not reported. In these cases the own capital of the bank or the private "securities" or "government insecurities" deposited, were nothing but an ultimate guaranty or insurance funds in case the currency had no other and sounder foundation and did fail. Especially their other debt, credit and clearing foundations were all too often overlooked, although without them all banks would have immediately failed, i.e. would have been driven into bankruptcy and closure. That sound money is merely a clearing certificate and does need no other value than the acceptance or clearing readiness of its issuers, acceptors and users, for the payments of all their debts and the receipt of all debts owed to them, is even today not yet generally seen. Only Professor Heinrich Rittershausen has based his unfinished work on monetary theory upon this insight. And it is hinted at or implied in all the writings of Ulrich von Beckerath and the monetary writings of Dr. Walter Zander. - See: www.reinventingmoney.com - AS "CUT UP" REAL OR SOUND COMMERCIAL BILLS FOR GOODS ALREADY PRODUCED & SOLD & ON THEIR ROAD TO THE CONSUMERS
BANKOWSKI BLOG: BitCoin – The true free market money | Bankowski Blog - bankowski.wordpress.com/2011/06/02/bitcoin-true-money/ - Cached - 2 Jun 2011 – BitCoin – The true free market money. BitCoin Logotype. View This Poll - online survey. If you own BitCoins or know what it is you probably ... - Especially libertarianmoney reformers should be much more open-minded and tolerant towards other approaches than the one which they favour themselves. - J.Z., 9.8.11.
BANKRUPTCY Enterprises that are still basically sound but merely have a cash flow problem, under conditions of monetary despotism, with its deflations, inflations and stagflations, depressions, recessions and credit restrictions, should be set free to offer, in settlement of their debts, clearing certificates, in easily transferable money denominations, that entitle the bearer to obtain from the debtor his goods and services at par. Debtors should also be at liberty to set up a common clearing house for this purpose, mutually guaranteeing their repayments and they should be free to offer these certificates at a discount, that is attractive to their creditors, while these certificates are not accepted at par in general circulation. - With that liberty most of these debtors would not have got into their precarious cash flow situation in the first place. But once in it, they could trade themselves out of it. Moreover, their creditors could get the full value of their credits repaid to them, even if that required a larger quantity of somewhat discounted clearing certificates. The right of creditors to demand legal tender cash (or, as formerly, silver or gold coins) in payment, although that was not especially agreed upon in private contracts, should be abolished. All debtors and creditors should be set free to enable them to pay and be paid as far as is humanly and economically and monetarily possible, via clearing options. If we consider that money itself is never the ultimate objective but that it is merely a means to an end and that, with the curtain of the physical appearance of exchange media removed, in a thought-experiment, then not only the large number of non-cash transactions that do take place, invisibly for most people, but also the much smaller sums of cash transactions do merely achieve a mutual exchange for goods, services and labour for other goods, services and labour. Only some limited time delays are involved in these exchanges. (Exchanges over longer periods are involved when some of the goods are capital values and their capital securities.) ANYTHING that facilitates this process, through the technique of monetary exchanges or through clearing exchanges or any other non-cash payment alternative, that can satisfy debtors and creditors alike and that makes it easier to satisfy both of them, should be set completely free. It would then become obvious that, to the extent that an unemployed, tradesman, professional or a shopkeeper, could put into temporary circulation his own notes, or clearing certificates or electronically accounted clearing credits, buying with them his requirements, he would automatically, although indirectly, supply himself with work or sales. His spending would cause his earnings, instead of, as today, his spending would require first that he obtain scarce and exclusive currency for it, somehow, in a considerable struggle for them, by offering his goods and services in a market for such exchange media that is restricted through the coercive and exclusive currency of monetary despotism. - J. Z., n.d. & 30.4.97, 29.5.11. - AVOIDANCE VIA CLEARING OPTIONS:
BANKRUPTCY LAWS: Would BANKRUPTCY LAWS be permissible in a libertarian legal system? Clearly not, for bankruptcy laws compel the discharge of a debtor's voluntarily contracted debts, and thereby invade the property rights of the creditors. The debtor who refuses to pay his debt has stolen the property of the creditor. If the debtor is able to pay but conceals his assets, then his clear act of theft is compounded by fraud. But if the defaulting debtor is not able to pay, he has STILL stolen the property of the creditor by not making his agreed-upon delivery of the creditor's property. The function of the legal system should then be to enforce payment upon the debtor through, e.g., forced attachment of the debtor's future income for the debt plus the damages and interest on the continuing debt. Bankruptcy laws, which discharge the debt in defiance of the property rights of the creditor, virtually confer a license to steal upon the debtor. In the pre-modern era, the defaulting debtor was generally treated as a thief and forced to pay as he acquired income. Doubtless, the penalty of imprisonment went far beyond proportional punishment and hence was excessive;" (even when he was a fraudulent debtor and cheated people for millions? - J.Z.) but at least the old legal ways placed responsibility where it belonged: on the debtor to fulfil his contractual obligations and to make the transfer of the property owed to the creditor-owner. One historian of American bankruptcy law, though a supporter of these laws, has conceded that they trample on the property rights of the creditors." - Murray N. Rothbard, The Ethics of Liberty, 142. - Here is Rothbard at his best, in exposing a wrong. Alas, he does not conclude that the willing debtor ought to be enabled, as far as possible, to clear his debt by clearing, in the interest of the debtor and the creditor alike, even if, for this purpose, he could offer nothing but his own monetised IOU's, based upon his own continued goods and service offers and even if these would suffer a considerable discount, so that he would have to offer correspondingly more of them to make up the total debt, accounted in a sound value standard. - Rothbard would be likely to condemn such issues as mere fraudulent "fiat money" issues, even if such a payment were acceptable to the creditor or to an arbitrator that debtor and creditor had agreed upon. Thus, Rothbard, instead of making debt settlement easier via the right to clear one's debts, would make the debt settlement harder to impossible to achieve, by insisting upon debt payment only in gold metal or 100% gold-metal-covered gold certificates. These the debtors are often unable to obtain at all or in the required quantities and whenever needed and that would apply also to their own debtors. Thus the debt settlement is prevented rather than promoted. (To a large extent the bankruptcy laws were passed in recognition of such facts, such payment difficulties, even for quite honest and efficient debtors. - J.Z., 8.902.) Indeed, Rothbard assumes that, in case of a shortage of gold, all prices, expressed in the exclusive gold currency, would immediately fall correspondingly, so that gold payments would continue to be as easy as before, due to the fallen gold prices. Here he overlooks the often pointed out "stickiness" of prices and wages and the fact that in prior centuries and in some respects even in our century, barter transactions still persisted because gold prices never fell far enough to mediate all exchanges monetarily. Moreover, he overlooked, like most other economists, the different psychological effect of falling prices vs. fallen prices upon potential buyers who do have some money reserves which they do not have to spend immediately to survive. Falling prices discourage buyers. Only fallen prices encourage them. Thus falling prices lead to further falling prices, preventing, for too long a period, the immediate price adaptation that Rothbard expected and predicted. In the meantime, millions of unemployed and tens of thousands of bankrupt employers ask themselves: How did we get into this? Has Rothbard any sound advice to offer to use? All he would tell us is: Reduce your wages and prices further. He wants to confine our exchanges to his favourite exclusive and forced currency, which we are short of, precisely at a time when there is an abundance of real cover: consumer goods and services, including labour, ready for sale, for alternative optional and market-rated currencies of our own, which we might even, to do ourselves and Rothbard a favour, denominate in gold weight units as their value standards and would readily accept as if they were corresponding gold coins. But such self-help steps would be condemned as fraudulent by Rothbard - as an unjustified "expansion of fiat money". - He was a radical and helpful thinker, in many respects, but not in all. Regarding money, he remained a monopolist by prescribing "only gold" (or 100% gold covered certificates) instead of "only government paper money". - In other words, Rothbard's ruling on bankruptcy and on an exclusive gold currency (however competitively supplied), would assure more bankruptcies and would not help debtors and creditors to get the remaining debts settled, unless they can manage to settle them in gold metal or 100% covered gold-metal certificates. - Nor does Rothbard offer clearing as a solution. Mutual debts that can be cancelled, cleared or settled, obviously do not require, for this kind of non-cash payment, any gold coins or gold certificates, except for the balances remaining. And the settlement of these, through clearing, can be postponed, with some interest charge of fee added for make up for the delay. - The clearing might well use a gold weight unit as a standard of value for accounting purposes. But that was not considered by Rothbard or would not have satisfied him. He went on insisting on gold coin or 100% covered gold certificate payments. - Or did I miss some of his writings on this? Did he anywhere concede the possibility of non-cash gold value payments (using all kinds of other means of exchange at their gold weight market rating) in settlement of debts expressed in gold weight units? Sometimes e.g., custom duties were so fixed and so paid. - Did he report any complaints by debtors and creditors about such gold weight unit accounting and clearing and payment transactions that made the means of payment used optional and competitive, as well as market rated? - He fruitfully pondered most aspects of liberty but did not spend sufficient time and thought-energy on this one. - J.Z., 25.4.97, 29.5.11. - Or so I do believe, until the contrary is proven to me. - J.Z., 29.5.11. - BANKRUPTCY RULES: See: FUTURES DEALINGS WITH CASH, CLEARING.
BANKS: A Banker is a fellow who lends his umbrella when the sun is shining and wants it back the minute it begins to rain. - Mark Twain, 1835-1910. - CREDIT OR LOAN POLICY & THEIR DEMAND FOR SECURITY
BANKS: Alternative names: Debt-shops. - Ezra Heywood, Hard Cash, p.7. - How did he manage to overlook them as credit shops? - J.Z., 29.5.11.
BANKS: Apart from the Central Bank all banks are now reduced to being merely dealers in the nationalised exchange medium and its forced paper "standard". Even in these limited dealings they are highly regulated, likewise, in their options to issue and deal with capital securities. They are mere shadows of free banks. But, at the same time, they are privileged banks, insofar as entry into the business of banking is also highly restricted by legislation and governmental compulsory licensing schemes. They and the note acceptors are kept in a monetary kindergarten and thus are kept ignorant and irresponsible in monetary matters. - J. Z., 4.9.86, 29.4.97, 29.5.11.
BANKS: Banks of issue need sense not size, sound issue techniques, not capital, sound value standards, and competition with other banks of issue, not government guaranties, self-management, not government supervision and controls. - J. Z., J. Z., 4.4.89, 16.5.97. - BANKS OF ISSUE, NOTE-ISSUING BANKS: DO THEY NEED CAPITAL? FREE & COMPETITIVE NOTE-ISSUING BANKS
BANKS: Banks today are not free and competitive, private or cooperative enterprises but, largely, from the central bank to the smallest bank branch at the corner, government controlled, regulated and mismanage institutions, even though they remain formally in private hands. Just consider the flood of laws and regulations on them. The "economy" of fascism and totalitarian communism should not be equated with that of a free enterprise and free exchange or a capitalistic or market economy. Nevertheless, for all the mistakes of government banking, currency and credit policies, forced upon all, "capitalism" and the "market economy" and the "profit motive" and "private property" are usually blamed, even in a sphere where they do least of all exist. - J. Z., 28.7.93, 24.5.97, 29.5.11. - INDER MONETARY DESPOTISM. See: CENTRAL BANKING, MONETARY POLICY, CURRENCY POLICY, CREDIT REGULATION.
BANKS: Some banks really lock your money away from you. I noticed in Los Angeles, near Union Station, a branch of the Bank of America. It is only open on 3 week days and then only from 11.30am to 2.30pm, at least that was its schedule indicated on 20 Dec. 1990. And this in a country where many shops, e.g. photocopy shops, are open 24 hours a day! - J. Z., 16.4.97.
BANKS: You may earn the highest bank returns if you can manage to no longer go to the banks or to return to them. - More and more alternative payment methods are coming up. E. g., postal money orders are now sometimes cheaper than bank transfers. They are also not subject to taxes, like your bank deposits. Some traders, advertising on TV, allow you now to pay them through your telephone bills. Cash payments still give you the chance to arrange for discounts in all larger purchases. Unless you can establish your own or freely choose among free banks of issue and investments, you are often advised to avoid them if you want to save money. Alas, they have become paymasters for wages and salaries, which puts all too many funds at their disposal, for which they often pay an interest below the inflation rate. Your money in the bank is no longer safe. To some extent it has become the bank's money - and that of the tax department. Draw your own conclusions from this. Gain your independence from them. Use them only if you must. Safe as a bank has become a misnomer. They do not even guard themselves sufficiently against bank robbers. Nor do they offer you banking secrecy. They report at least to the tax department. - J. Z., 11.11.92, 16.5.97, 29.5.11. - & THEIR FEES & INTEREST PAYMENTS
BARTER: Any money transaction is essentially an anonymous and multilateral barter or clearing transactions, one spanning time and distance, in which goods, services and labour are exchanged for goods, services and labour. - Any attempts to issue monies that are not based on such turnovers are condemned to failures. But debts that are shortly due can keep money issues based upon them at par with their nominal value, so that they, too, are considered as acceptable in payment for daily wanted consumer goods and services. Both, the goods and service cover and the short term debt foundation, do establish a strong demand or "reflux" for the money involved, that keeps it at par with its nominal value expressed in some or the other sound or sound enough value standard. For money issued upon long-term assets there exists no strong enough demand or reflux right away and continuously. It will occur only once that debt or instalments of its repayment are soon due. In the meantime, no supplier of daily wanted goods and services is obliged to accept it, if he has not issued it. - J. Z.,5.12.90, 16.4.97, 29.5.11. - MONEY & CLEARING
BARTER: Only free clearing and full monetary freedom can fully employ all people willing to work, at their highest capacity and skills and can make them prosperous and independent. - J. Z., 27.7.83, 17.4.97. - IS NO SUBSTITUTE FOR FREE CLEARING & FREE MONETARY EXCHANGES
BAUMAN, BOB, Your Privacy again in danger: FATF Strikes Again. - July 18, 2003. - by Bob Bauman. - "Sovereign Society suggests a way to counter FATF and protect your financial privacy." - Roy Halliday, in section on Government-Regulated Banking. - The correct German name was, probably Baumann - but he or his German ancestors may have changed it. - J.Z.
BECK, WILLIAM, Mr. Beck thought out a Mutual Bank by generalizing credit in account; Proudhon, by generalizing the bill of exchange.” –59. – Greene quotes Beck on p.61: “… as the progress of money lies in a circular route, a certain system of account may be made to supply its place, where its track and extent can, in that circle, be included and distinguished. By a circle, I mean that range of society which includes the whole circulation of money, with the accompanying causes and effects of its progress; namely, claims, debts, and payments; so that, if we wish to trace its path, every point of that path will be contained within it. SUCH IS THE GREAT CIRCLE OF SOCIETY. This contains the whole body of debtors and the whole body of creditors. It contains all the debtors to the creditors, and all the creditors to the debtors… “ - Source?
BECKERATH, ULRICH von, 1882 -1969. See: ACADEMIC WRITINGS ON MONETARY FREEDOM IN RECENT YEARS. See also his numerous writings, listed in my main website: www.acenet.com.au/~jzube (Which is officially discontinued but somehow kept alive by my service provider, after I subscribed to broadband, and lost, thereby, my 5 Mbs. website entitlement with him. Many of his writings are also offered on www.reinventingmoney.com - J.Z., 29.5.11. - See also: GERMAN SCHOOL ON MONEY. & the main literature list of LMP on www.butterbach.net From ca. 1913 onwards, possibly already from 1908, he has, more thoroughly than anyone else that I ever heard of, knew or read about, explored and described the monetary freedom options. Alas, most of his correspondence before 1943 has been lost with his library in an air raid on Berlin. Recipients of his letters and papers from before that time, who preserved them, should make themselves known to me. I would like to digitize the wealth of ideas, facts and arguments in his whole correspondence, to the extent that it becomes available to me. - J. Z., 9.4.97, 29.5.11.
BECKERATH, ULRICH von, Aphorisms on the money problem, 1932, in BANKWISSENSCHAFT. Also in PEACE PLANS 587/588. - His three classical monetary freedom books are online at www.reinventingmoney.com
BECKERATH, ULRICH von, See: ECONOMIC & HUMAN RIGHTS ASPECTS IGNORED BY MOST MODERN AUTHORS. - A long draft of his on monetary rights and liberties is contained in my digitized anthology of private human rights drafts in PEACE PLANS 589/590. - J.Z.
BELIEF SYSTEMS ON MONEY: There are thousands of different articles of faith and prejudice and unfounded assumptions and assertions, fallacies and false arguments on money. Most are as false or misleading as the religious ones are. Only a systematic and an alphabetical register of all of them, together with their best refutations, so far offered, could show us the ways out of this labyrinth or avalanche. So far it has not yet been compiled and all too few people have shown any interest in such a project. - J. Z., 18.7.96, 20.3.97. 29.5.11.
BERWICK, JEFF: Ben Bernanke and The Confidence Men | Jeff Berwick | Safehaven.com - www.safehaven.com/article/.../ben-bernanke-and-the-confidence-m... - Cached - 9 Feb 2011 – A free market economy, with a free market money (gold, most likely), would not need confidence to run effectively. ... - No exclusive and forced exchange medium and value standard deserves our confidence or trust but, rather, our suspicion and our rejection. Only fools would choose such "fool's gold". - J.Z., 24.7.11. - CONFIDENCE, TRUST
BERWICK, JEFF, CNBC Clueless About Gold | Jeff Berwick | Safehaven.com - www.safehaven.com/article/20364/cnbc-clueless-about-gold - Cached - 23 Mar 2011 – The US dollar and US Treasuries are a Ponzi scheme. Gold? That's free market money ... you don't even recognize it anymore do you, John? ... - From my point of view, most "gold bugs" are still clueless about the alternatives to "the" classical gold standard, in spite of all its remaining flaws and wrongs, e.g. 1.) as an exclusive exchange medium, 2.) an exclusive value standard, 3.) an exchange medium compulsorily redeemable in its value standard and 4.) also given the legal tender power of compulsory acceptance. - It only does not have the second part of legal tender, namely a forced value. Freedom to clear or account in gold-weight values, without gold-cover, redemption and payment in gold coins obligation, would provide all the economic advantages of the old gold standard as a value standard and this without its remaining hang-ups or disadvantages. Gold bugs seem to be better, mostly, in distinguishing between e.g. the qualities of different wines, beers and sportsmen than between different kinds of gold standards. I don't know why, seeing how much they value "the" gold standard. - J.Z., 26.7.11.
BERWICK, JEFF: Kitco - Commentaries - Jeff Berwick - www.kitco.com/ind/Berwick/nov182010.html - Cached - 18 Nov 2010 – ... being an integral part of a money system in order to restrain governments, Warren has long been against any form of free market money. ...
BIBLIOGRAPHY OF MONETARY FREEDOM WRITINGS. Draft in PP 1022. Ask for further contributions and translations. Ask for permissions to reproduce still copyrighted material at least on microfiche, floppy disks and CD-ROMs and websites. A much later and enlarge free banking bibliography of mine, but still very incomplete and flawed, is now offered on www.panarchy.org/zube/money.index.html - FB BIBLIOGRAPHY: Antoine Clarke, The Micropolitics of Free Market Money: A ... which contains a useful Free Market Money bibliography. - Note under N. Elliott, The Uses and Abuses of …- See also my own bibliographical compilation at www.panarchy.org/zube/money.index.html - J.Z., 25.7.11.
BILL DISCOUNT WITH BANKNOTES: A commercial bank that issues paper money ought as such be a mere clearing-house for legitimate business paper running to maturity.” - William B. Greene, in: “… Fragments, p.271. – BANKING PRINCIPLE, CLEARING, BANKNOTES, DISCOUNTING OR SOUND COMMERCIAL BILLS, REAL BILLS DOCTRINE, BANKING PRINCIPLE, BANKS OF ISSUE, NOTE-ISSUING BANKS, REDEMPTIONISM?
BILL DISCOUNT WITH BANKNOTES: For a long time the payment of sound commercial bills, was ultimately enforceable in gold or silver coins, although, in most cases they were rather settled by clearing or payment in bank notes for which they had become the common basis for note issues. Banknotes, under the real bills doctrine or banking principle are nothing but cut-up sound commercial bills, in standardized, easily recognizable and convenient denominations, that can circulate easier than the commercial bills themselves (which are largely acceptable only among merchants and bankers) and these small and even bills, in convenient denominations, are finally used to redeem them. For all too long it was ignored that the right of creditors to have commercial bills redeemed in gold is quite unnecessary to preserve their value and that of the bank notes issued upon them. Their redeemability in banknotes and the short term debts that are involved, are quite sufficient to assure a corresponding reflux of banknotes from the short term debtors of the commercial bills. The bills were usually issued by wholesalers to employers, their suppliers, in payment for goods already produced and sold to them and on the road to the retailers. The employers, paid by the wholesalers with commercial bills, got these bills discounted into banknotes at a note-issuing bank. With these notes they paid their workers, suppliers and profits and then the notes streamed to the shops for goods and services and from them to their suppliers, largely the wholesalers, who redeemed their bills with the notes thus received. The whole is easier to describe and comprehend graphically, than in words. I have done that in PEACE PLANS 41 and later digitized these circulation charts. Still better charts of this payment circle would be welcomed by me. The right of creditors to demand payment in rare metals or rare legal tender paper money has done much more harm than good and has only secured recurrent payment crises. That right should be confined to quite optional contracts and even then, seeing that dealings in futures and their risks are involved, withdrawal premiums for the withdrawal from such obligations should also be agreed upon. Only then will the risk of such claims be reduced to acceptable proportions. It this risk remains quite unrestricted by withdrawal premiums and competition from suppliers of alternative exchange media and value standards, and only then it can lead to the rapid and prolonged collapse of the non-cash transactions, all dependent upon a minimum but quite regular and always available supply of cash. If cash supply sinks below this minimum, then numerous non-cash transactions are no longer possible and lead thus to a much larger demand for cash and this precisely when cash is already in short supply. Then some cash can only be attained by postponing the payment of bills and by dismissing workers and by ruthlessly collecting debts, payable in cash, even if that leads to the bankruptcy of the debtors and to emergency sales prices. Only the quite competitive supply of cash, in all its possible and desired forms, can prevent and end such money shortages, which, by the way, do also lead to a collapse of the prices of capital securities because fewer shares etc. are bought and enterprises that can no longer easily sell their goods and services are reduced in their market values and cannot pay dividends or interest or only much less. Thus the right to demand rare metals or other exclusive currency from a debtor must be replaced, in the general economy (apart from some payment communities which religiously adhere to the cash payment obligation voluntarily, at their own risk and expense), by the right to demand clearing, in stated value standards, but accepting any kind of usable exchange medium or clearing certificate - but only at its market rated value expressed in the agreed upon value standard. To my knowledge Ulrich von Beckerath, 1882-1969, was the only economist and writer who clearly saw and described this problem and its solution. If you know of others and their writings, please let me know about them. - J.Z., 27.9.02, 30.5.11. - SOUND COMMERCIAL BILLS VS. UNSOUND "FINANCIAL" BILLS, REAL BILLS DOCTRINE, BANKING PRINCIPLE, CIRCULATION CIRCLES, LEGAL & JURIDICAL "RIGHT" OF CREDITORS TO DEMAND PAYMENT IN RARE METALS OR OTHER LEGAL TENDER CASH, BANKING PRINCIPLE
BITCOINS: 5 notes - Bitcoin Money - www.bitcoinmoney.com/post/.../economics-of-bitcoin-video - Cached - ... has decided Bitcoins do have value and can be used as a trade facilitator because of the properties they have; therefore, they are free market money. ...
BITCOINS: A Response to “Bogus” David Kramer « Mises on … Bitcoin? - By Steve Oblevo. - misesonbitcoin.wordpress.com/.../a-response-to-bogus-david-krame... - Cached - 13 Jun 2011 – ... lead me to believe you are a Gold Bug above being an austro-libertarian. You would rather have a “gold standard” than free market money. ... - Downloaded for JZL. - FREE MARKET MONEY, AUSTRIAN SCHOOL
BITCOINS: Austrian Economics | Careful Cash - www.carefulcash.com/tag/austrian-economics/ - Cached - 21 Jun 2011 – Nonetheless, Bitcoin is free-market money. Quality isn't a prerequisite of freedom; it is simply the outcome of competition. ...
BITCOINS: BitCoin – The true free market money | Bankowski Blog - bankowski.wordpress.com/2011/06/02/bitcoin-true-money/ - Cached - 2 Jun 2011 – BitCoin – The true free market money. BitCoin Logotype. View This Poll - online survey. If you own BitCoins or know what it is you probably ...
BITCOINS: bitcoin | Tumblr - www.tumblr.com/tagged/bitcoin?before=1308856999 - Cached - ... has decided Bitcoins do have value and can be used as a trade facilitator because of the properties they have; therefore, they are free market money. ...
BITCOINS: BitCoin and free market efficiency | Bankowski Blog - bankowski.wordpress.com/2011/.../bitcoin-and-free-market-efficien... - Cached - 20 Jun 2011 – BitCoin and free market efficiency - BitCoin – The true free market money - Support levels for silver · Competitor for COMEX this May ...
BITCOINS: Bitcoin and the Denationalisation of Money - Thrica thri.ca/archives/549 - Cached - 8 Jun 2011 – First, let's look at the main schools of Austrian thought as to what free-market money would look like: Rothbard: 100% reserve specie-backed ...
BITCOINS: Bitcoin Crash | Careful Cash - www.carefulcash.com/tag/bitcoin-crash/ - Cached - 21 Jun 2011 – Nonetheless, Bitcoin is free-market money. Quality isn't a prerequisite of freedom; it is simply the outcome of competition. ...
BITCOINS: Bitcoin: An Innovative Alternative Digital Currency | Alan's Money ... - alansmoneyblog.com/.../bitcoin-an-innovative-alternative-digital-cu... - Cached - 5 May 2011 – Bitcoins are instead free-market money because PEOPLE choose to value them and to make use of them as a medium of exchange. ...
BITCOINS: Bitcoin: is a free market currency, Libertarian Goldbugs Hating On Bitcoin - Free Market Money. - Bitcoins Are a Free Market Money « Blog Post « Rex Pioneers - rexpioneers.com/.../bitcoins-are-a-free-market-money-lewrockwell-... - Cached - 30 Jun 2011 – Com ™:: Bitcoin Bitcoin: The Ultimate Free ...
BITCOINS: Bitcoins - An Unusable Ideal? - www.wealthvault.net/high-jinks/bitcoins-an-unusable-ideal/ - Cached - 7 Jul 2011 – Bitcoin is free-market money. Since there are few practical reasons to use Bitcoin, the supporters grab onto the idea that it's free-market ...
BITCOINS:Bitcoins Are a Free Market Money – 2 « LewRockwell.com Blog - www.lewrockwell.com/blog/lewrw/archives/90456.html - Cached - 29 Jun 2011 – Bitcoins Are a Free Market Money – 2. Posted by Michael S. Rozeff on June 29, 2011 08:27 AM. I deeply appreciate receiving the following ...
BITCOINS: Bitcoins Are a Free Market Money « Blog Post « Rex Pioneers - rexpioneers.com/.../bitcoins-are-a-free-market-money-lewrockwell-... - Cached - 30 Jun 2011 – bitcoin-225.png BitCoin – The true free market money | Bankowski Blog I AM IN DEMAND.Com ™: Bitcoin: is a free market currency, ...
BITCOINS: Bitcoins Are a Free Market Money « LewRockwell.com Blog - www.lewrockwell.com/blog/lewrw/archives/90453.html - Cached - 29 Jun 2011 – It's obvious that they are a free market money because people are using them as such. There have been a large number of free market monies ...
BITCOINS: Bitcoins V Gold | Careful Cash - www.carefulcash.com/tag/bitcoins-v-gold/ - Cached - 21 Jun 2011 – Nonetheless, Bitcoin is free-market money. Quality isn't a prerequisite of freedom; it is simply the outcome of competition. ...
BITCOINS: Bitcoins. I'm trying to make sense of what this is. 1. They are an entirely electronic form of currency, perhaps even money (commodity). 2. Each "coin" is an electronic file (data), which requires the cost of a processor and the electricity to run the "mining" process to create. 3. Each "coin" is anonymous, like real coins, in that the owner cannot be connected to the coin. 4. It is a medium of exchange, both for products directly, but also in a market of other currencies. (bitcoinmarket.com) 5. For a new currency (Jan 2011), it has a surprising number of businesses that will accept it. (https://en.bitcoin.it/wiki/Trade) - - On the down side, because it is entirely electronic, a hard-drive crash could potentially wipe you out. On the other hand, being part of a P2P network may remove that hazard to some (unknown) extent. - Tere is more to this concept that I do NOT understand that that I DO, but there seems to be something here worth tracking. At this point, it's greatest value seems to be exactly what the Federal Reserve (and other central banks) most fear -- a free-market alternative to their fiat currencies. - Dwight Johnson in email of 3.6.11. - - Sounds like a replacement for, not improvement on, what fiat money is now. The only difference seems to be who issues these credits. Did anyone find a solid benchmark basis for this currency? I'm with Michael on this one - silver, gold, rare minerals/gems have historically proved a 'no B$' - one-either-has-IT-or-not basis to help mankind keep the tool that is money a functional value. The old saying - If it seems to good to be true, it probably is. - rings my bell on this one. - Jain Daugh, in email of 3.6.11. - - Never heard of it, - Dwight. - - After 5 minutes of reading about it, and still not grasping its origination with any clarity, I concluded this -- that it's a novelty that won't last. It's a limited supply of NOTHING, and so its only value is in the demand and acceptance. But since others can create similar amounts of NOTHING for almost no cost, bitcoins will never rise much above their humble origins as novelties for use only among a small clique of users. And so I expect them to die out after the novelty wears off. I'd rather have silver myself. - Michael S. Rozeff, in email of 3.6.11. - - Dear Michael, et al, Or any other exchange medium that is sound enough and has local "shop foundation". We should certainly not become confined again to exchanging ONLY via gold or silver coins and gold- or silver certificates. There were never enough of them to fully introduce monetary economics everywhere. - J.Z., in email 3.6.11. - - Dear Dwight, I have read a bit about it but would, at this stage, no more trust it than any other underground digital currency, no matter how secure it is, supposedly, according to its promoters. Especially when it also deals with drug money, possibly money laundering as well. And when people try to invest safe from the taxers. Then you can bet on the State hiring the best code crackers, as they did, e.g. during WWII and such codes will sooner or later be cracked. Pure cash deals are, probably, safer still in most instances, in spite of them involving one or the other kind of inflated legal tender state paper money - but they are also risking confiscation by police, e.g. under forfeiture laws. Already years ago I read about a technology that, placed in a van, not far from you, could record every keystroke that you make on your computer. With the aid of such technology any code used could probably, be decoded rather fast, for it has to be used by the participants and they have to become informed about it. - While legalized criminals are still everywhere territorially all too much in charge, no one and nothing is quire safe from them. - J.Z., 3.6.11 - free banking commented on their own link. - How Private Are Bitcoin Transactions? - blogs.forbes.com - Are Bitcoin transactions really private? In an age of ubiquitous government surveillance and corporate information collection, the peer-to-peer currency's boosters tout privacy as a major benefit. I'm not convinced. Bitcoin's peer-to-peer method for clearing payments means that the currency's "books
BITCOINS: Could The State Exist If Property Rights Were Impossible To ... - www.abovetopsecret.com/forum/thread723596/pg1 - Cached - 7 posts - 5 authors - Last post:2 days ago. - Libertarian Goldbugs Hating On Bitcoin – Free Market Money www.libertariannews.org... The Economics Of Bitcoin – Why Mainstream Economists ...
BITCOINS: forum.bitcoin.org/index.php?action=printpage;topic=12895.0 - Cached - Print Page - Free Talk Live - 7 Jun 2011 – If anyone deserves free market money, it's FTL (and the Free State Project of course) Heard about the FSP from you, and about Bitcoin from ...
BITCOINS: Grim Decade for Employment Ahead | HoweStreet.com - howestreet.com/2011/06/grim-decade-employment/ - Cached - 21 Jun 2011 – Is it free-market money or not? This seems like an important issue, as everyone who has tried to sell me on the idea of Bitcoin has boasted ...
BITCOINS: Libertarian Goldbugs Hating On Bitcoin - Free Market Money : Bitcoin - www.reddit.com/r/.../libertarian_goldbugs_hating_on_bitcoin_free/ - Cached - 6 Jun 2011 – Libertarian Goldbugs Hating On Bitcoin - Free Market Money (libertariannews.org). submitted 6 days ago by michaelsuede ...
BITCOINS: Libertarian Goldbugs Hating On Bitcoin – Free Market Money | Ron ... - www.dailypaul.com › Forums › Daily Paul Liberty Forum - Cached - 7 Jun 2011 – The article gets into what makes money a money, and why Bitcoins meet all the criteria of a free market money according to Austrian theory. ... - Libertarian Goldbugs Hating On Bitcoin – Free Market Money ... - www.libertariannews.org/.../libertarian-goldbugs-hating-on-bitcoin-... - Cached - 6 Jun 2011 – Let me start off by giving you a little background as to my knowledge on the subject of monetary theory. As you can see in the header bar of ...
BITCOINS: Libertarian Goldbugs Hating On Bitcoin – Free Market Money ... - coinbits.com/libertarian-goldbugs-hating-on-bitcoin-free-market-m... - Cached - Libertarian Goldbugs Hating On Bitcoin – Free Market Money. Posted by CoinBits on Jun 7, 2011 in News Bits | 0 comments. line. submitted by michaelsuede ...
BITCOINS: LRC Schizophrenia over Bitcoin « Tom Luongo: The Present in Plain Text - tomluongo.wordpress.com/2011/06/.../lrc-schizophrenia-over-bitcoi... - Cached - 29 Jun 2011 – It's obvious that they are a free market money because people are using them as such. There have been a large number of free market monies ... - But their issuers and their acceptors were not, as yet, ever quite free enough. - J.Z., 26.7.11.
BITCOINS: Mises on … Bitcoin? - misesonbitcoin.wordpress.com/ - Cached - 13 Jun 2011 – You would rather have a “gold standard” than free market money. ... believe in free-market money had very bad things to say about bitcoin. ...
BITCOINS: MtGox | Careful Cash - www.carefulcash.com/tag/mtgox/ - Cached - 21 Jun 2011 – Nonetheless, Bitcoin is free-market money. Quality isn't a prerequisite of freedom; it is simply the outcome of competition. ... - FREE MARKET MONEY, MONETARY FREEDOM, FREE BANKING, EXPERIMENTAL FREEDOM, MONETARY TOLERANCE, MARKET RATING OF ALTERNATIVE MONIES & VALUE STANDARDS.
BITCOINS: Print Page - The Core Assumption of the Bitcoin Community forum.bitcoin.org/index.php?action=printpage;topic=1508.0 - Cached - 19 Oct 2010 – Though, I believed that money (*) are indeed a form of positive social order, particularly free market money. Silent Truth or Silent Assumption? ... (*) monetary exchanges? - J.Z.
BITCOINS: Print Page - what's your stop loss - forum.bitcoin.org/index.php?action=printpage;topic=26003.0 - Cached - 4 Jul 2011 – I'm buying them because I believe in the concept, and in the market need for frictionless free-market money. I have no idea what the right ...
BITCOINS: Releasing the U.S. Oil Reserves | HoweStreet.com - howestreet.com/2011/06/releasing-oil-reserves/ - Cached - 27 Jun 2011 – Bitcoin is free-market money. Since there are few practical reasons ... If I want to invest in free-market money, I can buy gold and silver ...
BITCOINS: The Economics Of Bitcoin – Challenging Mises' Regression Theorem ... - www.libertariannews.org/.../the-economics-of-bitcoin-challenging- - Cached - 7 Jul 2011 – I can demonstrate that a free market money exists which has absolutely no ... Libertarian Goldbugs Hating On Bitcoin – Free Market Money ...
BITCOINS: The Economics Of Bitcoin – How Bitcoins Act As Money | Libertarian ... - www.libertariannews.org/.../the-economics-of-bitcoin-how-bitcoins-... - Cached - 18 Jun 2011 – ... paper: “… if honest nodes control a majority of CPU power.” Tourist. OK Bitcoins as good as free market money so likewise can be stolen: ...
BITCOINS: Twitter / Bitcoin: Libertarian Goldbugs Hatin ... - twitter.com/bitcoinmedia/statuses/79631587683221506 - Cached - Libertarian Goldbugs Hating On Bitcoin – Free Market Money ...: Let me start off by giving you a little... http://bit.ly/lZh7ir #bitcoin .
BK FORUM: BK Forums: Free Market, money out of no where. - www.bluekaffee.com › ... › Science, Humanities and Politics - Cached - 33 posts - 10 authors - Last post: 10 Dec 2010. - Online community with a focus demographic of young Newfoundlanders.
BKMARCUS.COM: 2006 May 04 « bkmarcus.com - bkmarcus.com/2006/05/04/ - Cached - 4 May 2006 – ... established the word and the symbol as designations for free-market money. At least, that's my current, somewhat informed opinion. ...
BKMARCUS.COM: on goldbugs and free-market money « bkmarcus.com - bkmarcus.com/2005/07/02/on-goldbugs-and-free-market-money/ - Cached - 2 Jul 2005 – They are not advocating free-market money: they are advocating a central plan based on gold. The political goldbugs and the anti-political ... - This one sounds promising to me. - J.Z., 23.7.11.
BLOCK, WALTER, Building Blocks for a Libertarian Society, Critical Essays by Walter Block, a book offered by the Mises Institute, contains under 22 a chapter entitled: Voluntary Taxes: Abusive Language and Politicians. - Alas, so far the book is only offered in print, presently at a special US $ 19 price. Item 88542. - J.Z., 4.8.11. Gold is Free Market Money | Walter Block - YouTube - www.youtube.com/watch?v=L0m3aBogvZY2 - 7 min - 18 Nov 2008 - Uploaded by misesmedia - Recorded at the Mises Institute Supporters Summit, 1 November 2008; Auburn, Alabama. Walter Block is a professor and chair of economics, ... Cached - - More videos for "free market money" » - Gold is Free Market Money | Walter Block | Cash Gifting Experience - cashgiftingexperience.com/gold-is-free-market-money-walter-block/ - Cached 23 Apr 2011. - The Bubble Goes Bang: Gold is Free Market Money - thebubblegoesbang.blogspot.com/.../gold-is-free-market-money.ht... - Cached 15 Apr 2009. - Video About Gold is Free Market Money | Walter Block .... - (4th. entry on the same speech! - J.Z., 21.7.11.)
BLOCK, WALTER, Radical Privatization of the Gold Standard: A Critique of Friedman ... - citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.24.2063&rep... - File Format: PDF/Adobe Acrobat - Quick View - by W Block - Cited by 3 - Related articles - by this term than "free market money." The proof of this is in his warm embrace of any other metal (or commodity) which comes to be used as the money medium ...
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BLOCK, WALTER: Gold is Free Market Money | Walter Block | Аднавіць страчаныя грошы - - [ Translate this page ] - www.recoveryourlostmoney.com/.../gold-is-free-market-money-wal... - Cached - 17 Крс 2011 – Check book money is free market money if it is anything at all, ... “Gold is Free Market Money” – Ды – BUT (And I'm asking not declaring) ...
BLOCK, WALTER: Walter Block: Mises Institute Lectures by Walter Block on Audio ... - www.learnoutloud.com/Free-Audio-Video/Business/.../15235 - Cached - Gold is Free Market Money Walter Block Tue, Nov 04, 2008. Recorded at the Mises Institute Supporters Summit, 1 November 2008; Auburn, Alabama. ... - Is it the ONLY free-market money? All too many gold-bugs have fallen for that myth. - J.Z., 24.7.11.
BLOCK, WALTER, Walter Block versus Bryan Caplan on Fractional Reserve Banking - "The present debate got started when I read that Caplan had characterized Rothbard’s position on fractional reserve banking (frb) as "crazy." Further adding insult to injury, he denotes this position as too easy of a target to hit out against. Now, I suppose, I think of Milton Friedman roughly in the way that Caplan regards Rothbard. Yet, I never characterized Friedman’s views as "crazy" nor as a "too easy" target. That really got in my craw, and led me to write to Caplan." - Roy Halliday
BLACK LABOUR OR BLACK MARKET LABOUR: In Freiburg, Breisgau, on 4 March 93, I saw the van of a painter with the inscription: "Ohne Schwarzarbeit mehr Arbeitsplaetze." (Without black labour more jobs.) - Presumably, this professional painter would object against you yourself painting your own house, inside or outside, or getting your friends or family members to do so. Certainly he is opposed to untaxed underground contractors and does not like to take up such opportunities himself, although in his job it would be easier than in most others. He seems to count as productive labour only his own professional work. - Nor does he mention that largely rightful tax evasion and evasion of excessively high social security and accident levies are involved. Just because he is heavily taxed, he wants others to be taxed, too. Just because he loves bureaucratic interventionism, he would like others to be so enslaved likewise. He would count only officially created or recognized jobs as jobs, not private ones. Presumably, according to him, once all of us would be in untaxed and unregulated black market jobs, trading on the black market, we would all having no jobs at all. He did not only put his foot into his mouth, but, as a painter, on his van - was sure to find many other fools to support him. - J. Z., 24.5.97, 30.5.11.
BLACK MARKET PRIVATE CURRENCY ISSUES: To what extent are they possible? - Already now, sometimes and unofficially, other national currencies are substituting largely for inflated national currencies, e.g. the U.S. dollar internationally and the German DM in some European countries suffering more than Germany under inflation. - Full exploration of the extent to which the black market might make possible not only barter and some limited monetary exchanges (using the money of monetary despotism, or foreign exchange, or gold or silver coins and bullion) but, instead, at least some kinds of monetary freedom and free clearing exchanges that could, potentially, become so extensive that they could introduce a free market, for the first time, a fully free market. LETS founder Michael Linton believes his system to be capable of this. I don't. - He seemed more reasonable in his papers than in person and in his talk, although he is a smooth and popular speaker. - J. Z., 7.4.97. - To my knowledge, e.g. LETS has only made some extra garage-sale types of sales possible but not the payment of many wages and salaries and their ordinary consumer spending. - J.Z., 30.5.11.
BLUMEN, ROBERT, US To Return to Gold Standard. Really? - July 15, 2011. - "For adherents to Murray Rothbard’s theory of banking, the gold standard means gold as money proper with banks holding 100% reserves against demand deposits. Under these conditions there is no necessity or even any purpose to having a central bank and devaluation is a form of default." - Roy Halliday, in section on gold.
BONUS PAYMENTS: Issue the next Christmas bonus or extra salary payment or salary increase to employees in the own store currency or in the store currency of many or all employers doing the same. Employers would benefit by paying this expense in their goods and services - instead of having to sell these first for scarce legal tender notes. Knowing this, they might even be willing to pay a higher gratuity of this type in this form. - A fringe benefit would be that both, employers and employees, would become accustomed to dealing in private notes. - A single issue of that type, existing only temporarily, might altogether escape the notice of the authorities and thus legal prosecution. If not, then it would greatly reduce the penalties involved. - When an association of shops issued this temporary shop currency, the individual shop would receive the notes as a loan, to be repaid in goods warrants or in cash - in case, by chance or by insufficient competitiveness, one employer would not receive sufficient of these goods warrants back to repay this debt with them. - The same could be done for demanded wage increases, which they employer could not afford to pay in legal tender but could well afford in his own shop foundation money. The wage increase to the builders of Roseland's Shopping Centre, in 1964 (in Sydney, then the largest shopping centre in the southern hemisphere), was a precedent for this. This made possible the completion of the building in time, and a corresponding additional cash flow from its opening day on. Since this agreement with the unions broke a number of laws - by doing the morally and economically right thing, the case was hushed up. - Such issues might be considered as a pilot project for a monetary revolution, one to stop unemployment and end inflation - by paying all wages, salaries and profits and other expenses in shop currencies and by using a better or several better standards than the government's paper value standard in the shop currency and to express all prices, wages and salaries and other debts. - In Australia, at least for a number of years, shop currencies were extensively utilized in consumer credits - but, ultimately, repayable in the government's legal tender monopoly money. - J. Z., 1985 & 21.5.97, 30.5.11. - & WAGE & SALARY INCREASES IN THE MONIES OF MONETARY FREEDOM, SHOP CURRENCIES, AS INTRODUCTORY STEPS TOWARDS FULL MONETARY FREEDOM
BOOK MONEY: - The price effects of cash increases becomes multiplied through book money that is nominally based upon the increased cash. - As a rule everything and everybody gets blamed for inflation - with the exception of the real culprits, the central banks, their money monopoly and the legal tender legislation. - If "creative" book keeping could make the bookkeepers rich then everybody would want to become a bookkeeper and banker. Why work at all, if values can thus be merely created on paper? - We could then become a nation of book keepers and bankers. Why bother then to produce anything. We could all live on consuming our multiplied book values. - The same illusion is involved as is involved in the mere printing of paper money. Now we can express money values electronically and computers could multiply electronic symbols endlessly, without limits. But could they "create" a single cent of additional purchasing power for anybody, through electronic fiat or unilateral action or declaration, not based on any goods or services offered, ready for sale, without depriving anyone else of that one cent or without arranging a fair trade that is of mutual benefit to all the parties involved? - J. Z., 2.4.97. - MONEY CIRCULATION, QUANTITY THEORY & INFLATION, CREATION OF MONEY & CREDIT, DEPOSIT INFLATION, MONEY CIRCULATION, VOLUME OF MONEY.
BOOK MONEY: By means of bank or book money or credit or deposit accounts all cash can be multiplied up to tenfold by all banks. - Pop opinion. - Wouldn't the banks love that? Under competition they should then be able to pay their depositors much more or charge their debtors much less. But do they? - Is there no accountant left in the world who is able and willing to point out delusions or errors on these supposedly freely "created" super-profits? How can any rich people be prevented from becoming such bankers and as easily multiplying their riches? - J. Z., 28.3.97. - I hold that the phenomena of free clearing and of non-cash transactions are mixed up in many minds with increases in the amounts of physical exchange media. Clearing and non-cash transactions do not multiply exchange media but exchange transactions and permit us to manage with a much smaller cash circulation than would otherwise be the case. - J.Z., 30.5.11. - CREDIT MONEY & CASH See: CREDIT CREATION, MONEY CREATION, DEPOSIT INFLATION, DIS.
BOOKS WANTED LIST: Seeing that free banking titles are rare and mostly out of print and not yet reproduced in cheap alternative media, a wanted list for such titles should, perhaps, be added to a Free Banking bibliography. It might lead to more digitizations of such texts and, finally, to their offer on a single large disc. - J.Z., 30.5.11.
BRANCH BANK CLOSURES: Let the major banks close as many local branches as they like, in their cost-cutting attempts, but do allow the local people to establish not only their own local savings, current account, deposit and clearing banks but also note-issuing banks, quite free from Local Government, State and Federal Government legislation, regulation and jurisdiction. This would mean an end to depressions, mass unemployment and inflation in all the localities where this self-help freedom would be practised. - J. Z., 8.11.96, 19.3.97.
BRAY, JOHN FRANCIS, Labour's Wrongs & Labour's Remedy, Leeds, 1838, also advocated a particular kind of labour exchange, one different from that of Robert Owen. Further details are wanted and the whole book for digitizing. - J. Z., 20.3.97. (I may not yet have included all such hints in my Free Banking bibliography on www.panarchy.org/zube/money.index.html - J.Z., 30.4.11.
BRECKENRIDGE, R. M., The Canadian Banking System, 1871-1890, N.Y., MacMillan, 1895, defended the right to issue as the common right of all. - According to Wells/Scruggs, Towards Free Banking, p.1. - Westrup may also refer to him. Alas, I have not yet been able to obtain this book by Breckenridge for microfiching or digitizing in my monetary freedom series. - J. Z., 26.4.97, 30.4.11.
BROGDON, W. J., Jr., A Private-Enterprise Gold Standard? - August 1997. - "With all the debate about establishing a gold standard and multinational fiat money, why can’t businesses simply quote the prices of their products in gold? Why indeed can’t they establish a de facto gold standard? One tiny company is betting that it can be a start." - Roy Halliday, in section on gold.
BRONFENBRENNER, MARTIN, The Currency-Choice Defence. I have got myself a copy of this article from CHALLENGE, Jan/Feb. 1980, pp.31-36 and fiched it in PEACE PLANS 803. Already its sub-title seems to contain a disastrous misconception or wrong definition: "If any means of exchange, not only dollars, were considered as legal tender, the market would be left free to provide for monetary stability." - It is, actually, one of the main objections against free banking that, if everybody were free to issue money (and here, usually, legal tender is presumed), then everybody could cause an inflation. This is quite true. However, B. probably meant here merely the lawyer's excuse for legal tender, namely, that your are legally entitled to offer it in payment but not, necessarily, that the other party is obliged to accept it at all or at face value. In most cases, this harmless sounding term is interpreted quite differently by legislators and courts, e.g.: "Mark equals Mark", no matter how depreciated it becomes, $ equals $, even when its value is down to cents and mere paper currency, by government fiat, is declared to be the equivalent of gold-certificates. The worst interpretation and most wide-spread practice is: monopoly money with compulsory acceptance and a forced and fictitious value. As such it is the precondition for inflation, deflation and stagflation. Alas, only very few textbooks see it as such. How many more monetary catastrophes are required before enough people begin to realise the nature and effect of legal tender legislation and jurisdiction? - J. Z., in a note for MFNL, & 30.5.97, 30.5.11.
BROWN, PAMELA J., Constitution or Competition. Alternative Views on Monetary Reform, a bibliographical essay, in LITERATURE OF FREEDOM, Autumn 1882.Brown, Constitution or Competition? Alternative Views on Monetary ... - www.econlib.org/library/Essays/LtrLbrty/brnCCMR1.html - Cached - - Brown, Constitution or Competition? Alternative Views on Monetary ... - www.econlib.org/library/Essays/LtrLbrty/brnCCMR2.html - Cached - C. A Free Market Money System: The Competing Currencies Alternative. B.43. For decades, programs for a rule-restrained government monopoly had no serious ... - Constitution or Competition? Alternative Views on Monetary Reform - "Money, for practically as long as it has existed, has been employed to realize two fundamentally different sorts of goals: production or plunder. In a market economy, private individuals routinely use monetary institutions in a cooperative way to achieve voluntary exchanges of goods and services. Political authorities, by contrast, use monetary institutions in a non-cooperative way to achieve involuntary transfers of wealth." - Roy Halliday, in section on Counterfeit Money.
BUCK PASSING & THE BUCK STOPS HERE: These terms could acquire a completely new meaning if applied to monetary freedom. Those who have realized the importance of their monetary independence might say, to those who offered them the monies of monetary despotism: Your buck stops here: It cannot buy anything from me. I refuse to accept it in payment. But I have assumed the responsibility to produce and offer my own means of exchange with a sound value standard and am prepared, on that basis, to engage in honest trading with anyone at any time. (They could and should issue their own "bucks", based upon their readiness to supply wanted labour, services and goods for them, and these bucks would then stream back to them in payment, i.e., their own bucks would stop there, where they started from. - J. Z., 10.9.02, 30.5.11.) - They would no longer pass on the buck of the responsibility to the government (and its central banking system) to supply them with sufficient sound exchange media and with sound value standards (or welfare hand-outs at the expense of the tax payers). They could and should thus opt out of the government's "war against the poor". They would rather supply themselves with productive work and trade opportunities by their own independent monetary and financial efforts. From hand-out recipients they could turn into free people paying for their wants and needs with their own currency, redeemed by their own ready for sale goods, services and labour efforts. - J. Z., 27.5.97, 10.9.02, 30.5.11.
BUDGET: A balanced budget would stop inflation. - A popular opinion. - But what would stop inflation if no government were willing to balance its budget? As experience teaches us, this is mostly the case. Either it increases taxes or forced loans at the expense of future tax payers or it taxes us via inflation. It has the powers to inflate, in legal tender and the issue monopoly and will sooner or later and most of the times abuse them. A shortfall in its budget is no more than a motive. It does not give it the weapon to inflate a currency. If you have a shortfall in your budget then you cannot cause an inflation because you cannot turn your IOUs into legal tender and an exclusive currency. Honest or moral minds would not engage in crimes. Honest and moral governments would not engage in inflation. But then who has reasons to think that governments are honest and moral as a rule? So, should we grant them any means to engage in an inflation while refusing to ourselves the monetary rights and liberties to end or prevent one any inflation, also any deflation or stagflation? - J.Z., 28.3.97, 30.5.11. - The "balanced" budget of most governments today includes the degree of "deficit financing" or inflation that they planned for! - If it is balanced through government borrowing, then this means that the government has further extended "investments" in tax slaves. - J.Z., 30.8.02. - BALANCED & INFLATION
BUDGETS: Government budgets indicate the way governments are going to spend YOUR money, not THEIR money and also by how much they are going to Inflate The Currency EVEN FURTHER, INCREASE YOUR TAX BURDEN, even more so and PUT YOU IN DEBT, to an even greater extent and against your will. Then they do have the cheek to ask you to praise them for this and to vote for them. - J. Z., 18.9.92, 1.5.97. - OF GOVERNMENTS & THEIR BUDGET POLICIES
BUDGETS: Once can restrain an inflationary trend by introducing a supplementary budget which brings increased taxes. - Popular opinion. To the extent that it would introduce whatever is sound in tax foundation, this might be achievable for the government's paper money circulation. But for all other spheres, into which legal tender and monopoly currency is forced, it is wrong. To the extent that all free and competitive money issues are suppressed and coercively replaced by government paper money, these spheres are already inflated by that paper money. They would accept tax foundation money only to the extent that they needed it for the payment of these tributes. Any excess beyond that is already forced into it because people do need some money, and thus do have to accept it, and this at par and are not allowed to replace it, discount it or reject it. How much government money could circulate under free market conditions, without the issue monopoly, without legal tender and without taxation and by governments without a territorial monopoly? Only voluntary contribution and subscription monies issued by voluntary and only exterritorially autonomous communities could then remain in the sphere of the former governmental forced currency. They would be in free competition with all privately or cooperatively issued alternative currencies and their territorial institutions or empires. - J. Z., 6.4.97, 30.5.11. - Even when annual budgets are replaced by bi-annual or quarterly budgets, monetary despotism would remain, with its inflationary, deflationary and stagflationary effects. Instead of annual stop-and-go policies, we would have half-yearly or quarterly ones. And these "adaptations" would and could never be as accurate as would occur naturally and freely under monetary freedom. The victims of monetary despotism and taxation should also ask themselves whether they should be taxed to make up for the inflationary spending of governments, through additional legal tender issues or suffer extra taxes to make up for the mistakes of politicians, their spending and their central banking system, i.e., taxed to make up for the inflation tax. If a gallows currency is not introduced (Hanging those responsible, finance minister and central bank president, when they have, once again, depreciated the forced and exclusive currency), then perhaps another response would somewhat help: Reduce the real purchasing power received by all politicians and bureaucrats, their salaries, pensions and, expenditure claims at double the rate at which their currency is inflated! That might give them a vested interest in not inflating their paper currency. At present they have a vested interest in inflating it. - J. Z., 6.4.97, 30.5.11. - SUPPLEMENTARY BUDGETS, TAXES & INFLATION
BUDGETS: They indicate how the loot is to be increased, at the expense of the tax slaves and how it is to be distributed among the politicians, the bureaucratic empires and their favourites, or their voters, bribed through subsidies. - The whole tragicomedy is treated not as a farce or a crime but put on the same moral level as a private or company budget that only honestly disposes of the own and honest earnings. Calling a wolf a sheep does not turn him into a sheep. Calling a robber a benefactor does not turn him into a benefactor. One can rightfully distribute handouts, investments and subsidies and loans only from the own property. We should as much as possible avoid using the misleading or cover-up or obviously dishonest and false terms that governments want us to use to be able to continue fleecing us, their victims with or without our individual consents. - J.Z.,25.9.91, 27.4.97, 30.5.11. - OF GOVERNMENTS
BUILDFREEDOM.COM: Economic Rape of America - Stretch Your Imagination - www.buildfreedom.com/tl/rape6.shtml - Cached - In Chapter One you were asked to stretch your imagination and to consider the possibility of "free market money." The notion that people should be free to ...
BUSINESS SECRETS: Among other things, in a sound alternative note-issue, clearing and credit system, there will be no business secret. Either it will not be assumed to be necessary and justified or it will not be planned in, right from the beginning of competitive issues or current and clearing account services. I would also predict that issuers or account keepers who would not claim "business and privacy secrets" in this respect, would be more successful, i.e. more used, than the other ones would be. - J. Z., 3/97. - SECRECY, PUBLICITY ON NOTE ISSUES & REFLUX
BUTLER, Dr. EAMONN, How to regulate banks - July 27, 2010. by Dr Eamonn Butler. - "Regulate with chunky reserve requirements and forget the rest. Have even chunkier requirements on the bigger institutions which pose the biggest systemic risk. Don't try to legislate the structure of banks, but make them tell their customers how safe, or otherwise, their money is. And let's have sound money, so politicians can't get us into the same boom-bust cycles again." - Roy Halliday, in section on Government-Regulated Banking. - Another adherent to the reserve requirement spleen. As if nothing else could be soundly monetized! - What can we expect when even some libertarians advocate governmental laws or regulations? - J.Z., 9.8.11.
BUY AMERICA: The federal government's own "Buy America" procurement preferences, which can allow domestic producers to charge as much as 50 percent more than foreign sellers for the same item. - Barry Goldwater, The Coming Break-Point, 1976, p.105. - Buy American? - J.Z. - PROTECTIONISM, TAXATION & GOVERNMENT SPENDING
BUY AUSTRALIAN (GERMAN, ENGLISH, AMERICAN, etc.): If Australian money consisted of a number of competing Australian currencies, all of them truly based on Australian goods and services, then and automatically, all spending of it would lead to corresponding sales of Australian goods and services, by redeeming this money in the Australian goods and services it is based upon. Even if some bought only imported goods with such currencies, these would inevitably stream back to pay for the same amount of Australian exports. - It is also true that even the central bank's State paper money, when used in paying for imports, has ultimately no value for the foreigner than by being returned to pay for Australian exports. But there is not time limit on this kind of paper money, as is on private "ticket" money. Moreover, foreign central banks, in their foolish grasp for and accumulation of "reserve currencies", might retain a not yet too depreciated State paper money for years to decades. This would mean that for these periods we would have got these imports as interest-free loans. But our central bank might not sufficiently replace these notes, hoarded in foreign countries, perhaps also by private citizens, which may have reasons to trust their own government's paper money even less. Consequently, the own circulation of exclusive and forced currency might become correspondingly deflated. Such a diminished reflux of Australian notes might also boost the primitive notion of "buy Australian!" - Compare also a hypothetical payment of imports with gold coins. They would not necessarily or at all return to us for Australian exports, immediately or soon. The whole world market would be open for them. Only according to the "law of fluctuating gold quantities" would they ultimately tend to return to an Australia whose gold prices for goods would have become lower than those on the world market, because of a gold deflation (assuming gold here to be made an exclusive currency). If, however, we are free to issue at any time as many exchange media as we need for our transactions and also free to choose e.g. a gold weight unit as our value standard, then, although our gold stock would be reduced, our gold weight unit prices would not be. Only our actual payments in gold coins would become rarer. - Anyhow, this kind of model of an exclusive gold currency, that once spent does not return automatically to the spender, still spooks in the heads of people, long after gold coin circulation has disappeared and makes people jump to wrong and protectionist conclusions like: "Buy Australian!" - J. Z., 29.9.93, 25.5.97, 30.5.11. - Did you ever hear or see a good refutation of this stupid little slogan, from any Dr. or Prof. of economics or any commentator in the mass media? It is endlessly repeated in advertisements - without being accompanied or followed by any criticism that I am aware of. Oh the power of the great lies, myths and prejudices - while there exists no digitized encyclopaedia to systematically collect and publish their best refutations sufficiently. - J. Z., 8.9.02, 30.5.11.
BUY AUSTRALIAN. Buy your kid a job: Buy Australian". "Australian Made" or: "Made in Australia" and: "Buy Locally!" - Give a rational and new meaning to these slogans. Mobilise your own ready-for- sale goods-, service- and labour supply capacity monetarily. Pay, as far as you can, i.e., as far as you can find voluntary acceptors for them, with your own assignments or clearing certificates or IOU's, or purchasing vouchers, goods warrants and service scrip - upon whatever you have to offer, in money denominations, but avoiding the money terms and "value standard" of the government - due to its despotic monetary laws. All your local spending using sound and competitively issued private currencies would, inevitably (apart from the actions of note collectors) come back to you in form of extra sales. If, instead, you spend government money then it might never come back to you or to your local community. - But be not satisfied with whatever you can achieve with governmental forced and exclusive currency. At least discuss completely free clearing and note issues in your local community, or private payment community, as a theoretical possibility and as a self-help action as soon as you could legally or safely do so. - In the meantime, you might also play exchange games, issuing your tokens and mutually accept them at their agreed upon values, even if none is stated in conventional money or banking terms. (The might only be called "tickets, "bucks", "units", "notes" or "points" with their value agreed upon among the players.). At present you are already free to issue gift vouchers in money denominations and there are, in Australia, shop-currencies but only for consumer credits. Try whether you could issue them outside of consumer credits, especially in wage payments to young people out of jobs. At least start thinking and discussing such options and their consequences. Do not let yourself be disabled, fleeced and exploited by the central bank and its paper money any longer. End your self-caused ignorance of your monetary freedom options. If your monetary freedom remains effectively suppressed, then at least protest, e.g. by putting signs in your shop windows: "If a local currency could be freely issued in this community, I would be one of the first to welcome it and readily accept it. I do not like to be dependent upon the government's paper money, with its inflations, deflations stagflations, credit-restrictions, sales difficulties, numerous bankruptcies and mass unemployment as a consequence!" - Even while you are not yet free to issue your own sound money and, with it, are able drive out of circulation any unsound monies, including those of the government, at least talk about sound and alternative money options, with your neighbours, family members, friends and acquaintances. That is more important for you, in the long run, than talking about the weather, your sicknesses, your kids and your favourite sports teams. - J.Z., 22.3.93, 27.5.97, 30.5.11.
BUY AUSTRALIAN: Australians would inevitably buy largely Australian-made goods if only they were free to issue and accept alternative and competing local, private, cooperative and optional currencies that are based on local goods and services ready for sale. - A cinema owner who can pay for all his expenses with tickets will have no trouble getting his seats "sold", simply by the return of the tickets to him, in payment for the seats he offers for his performances. - - Why bother to export anything at all when we are only willing to buy Australian goods? - What could we then do with the sales proceeds, in foreign currencies, from our exports? - J. Z., 27.9.93, 29.9.93 & 24.4.97. 8.9.02, 30.5.11. - DIS.
BUY AUSTRALIAN: Buy your kids and yourself a job by buying locally, Australia-wide and internationally - with your own "Australian-made" money tokens and clearing certificates based on your own goods, products, services and labour. The government is quite unable to manage this Australian job, for you. - J. Z., 19.4.93. - On the contrary: It has outlawed such self-help steps! - J. Z., 6.9.02. - BUY YOUR KIDS A JOB! BUY AUSTRALIAN, UNEMPLOYMENT & IMPORTS & MONETARY FREEDOM.
BUY AUSTRALIAN: If Australian consumers were free to accept and spend, rate or refuse and also, as producers and traders, to issue and to offer to pay with their own printed or coined assignments upon their own goods- and service offers, in their own money tokens or clearing certificates or account, in standardised and convenient money denominations (different in appearance from any other money issues), and also free to using for these alternative exchange and clearing media any value standard that pleases them, as long as it does, then they would come to automatically buy Australian goods and services to a large extent. Their money would, mostly, have no other value or use for them. Moreover, it would often enable them to do so, in the first place, by this very freedom to issue and use their issues as their means of payment. Moreover, then they would be able to obtain or issue just as many sound means of payment as they would need for all their transactions and would no longer be misled, defrauded or cheated, exploited and taxed, restricted and held back by the despotic monetary policies of the central bank: the Reserve Bank of Australia, with its forced and exclusive paper currency, given legal tender powers (compulsory acceptance and compulsory value, no matter how much it has been depreciated). Nor would they be rendered unemployed by being forced to sell or work only for this exclusive and forced currency, although it has often been inflated, deflated or stag-flated and its managers or mis-managers have never managed to supply all Australians with just the quantity of sound exchange media that they do need for their exchanges. No central bank can achieve that. Free competition and free cooperation would work its wonders, here, too, if allowed to do so. Under freedom the good money would drive out the bad, as it should, by rights. - J. Z., 19.11.93, 24.4.97, 30.5.11. - By the way, any private currencies, redeemable in Australian goods and services only, if they were used to pay for imports would, in the hands of any foreigners, have no other value than as a purchasing medium in Australia. Thus, these imports would also lead to the purchase of Australian goods in our export trade. With government legal tender getting into the hands of foreign merchants this return is less certain. They might then end up, for many years, in the safes of foreign central banks, as "foreign exchange reserves". - J. Z., 7.9.02, 30.5.11. - "AUSTRALIAN MADE"
BUY AUSTRALIAN: This popular slogan makes sense only as an advice to let all national and local purchasing power be directly based upon Australian labour, services and goods, in the form of competitively issued alternative currencies, optional and market-rated, which the issuers would merely have to convert into their goods and services, upon demand. - As for external trading: Once Australian clearing certificates, redeemable only in standard Australian export goods, like wool, liquid gas, coal, wheat, meat, etc., are freely issued, offered and accepted, to pay for imports, then, indirectly, they buy, through the foreign buyers and consumers, Australian goods and services, when these clearing certificates are returned to Australia in payment. They have no other value and thus will be used in this way. - Generally, I would say: Buy Australian goods only if they are cheaper or better or do, for some other and personal reasons suit you more. Otherwise, buy foreign goods that suit you. Sooner or later, even the Australian government's paper money will return to Australia to pay for its exports. It has not other value for foreigners. (Apart from being hoarded as "foreign exchange" in some central bank. Sooner or later most foreign governments will spend that foreign exchange reserve as well. But the time delay involved may be considerable. But then and to that extent, and for this time, Australia would actually have been able to buy and use foreign goods and services - just for the price of getting deposited in the vaults of these banks some scraps or printed paper. Thus it would have received a foreign loan, interest free, in goods and services for this period. A real disaster this! - J.Z., 8.9.02.) - When you buy imported goods you do buy Australian goods indirectly. To that extent the slogan is senseless. But when your A $ is not as much depreciated as the currency in a foreign country then private persons there and its central bank might use it to hoard it as a reserve, thus introducing a time delay, in which no corresponding demand for Australian goods and services arises. This is one of the many defects of forced and exclusive currencies. Their hoarded notes are not easily, fast and efficiently replaced by new issues. This is already a sufficient reason to exclude them for import payments. Private, competitively and cooperatively issued international clearing certificates are a good substitute for them. Professor E. Milhaud and Ulrich von Beckerath have described their principles and practices. - Buy Australian is just a modern version of mercantilism and of the dogmatic statement that the own money should stay in the own country, before the truths of Free Trade were at least somewhat realized for a few decades. Now, with such notions, we are back to the wrongful, harmful and expensive morass of protectionism. - This planet, with all its people, and their products, services and labour is, or should be a single free market, one without any governmental or other criminal interferences. With the exception of voluntary victims and self-restrictionists, like e.g. monks and nuns. - J.Z., 27.7.93, 24.4.97, 8.9.02, 30.5.11.
BUY AUSTRALIAN? The only way how buying from yourself and your neighbours can be assured consists in issuing your own exchange media as far as possible, i.e. buying as many of your requirements and paying as many of your debts with them as possible. They would, obviously, have no other foundation than your own readiness to accept them in payment of your goods and services and for this they would inevitably return to you. Buy with your own local currencies, which only oblige you and they will inevitably return to you in payment for your goods and services, like any other IOU. Monetize your own goods and service supply capacity. You do not even have to be an Australian nationalist to do so in your own interest. As far as Australian imports are concerned: See to it that they are paid for with competitively issued assignments to Australian export goods and services in convenient denominations. Then, obviously and inevitably, corresponding exports will follow these imports, obviating your nationalistic slogan appeal. - J. Z., 27.8.95, 19.3.97, 30.5.11.
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C. A: Free Market Money System: The Competing Currencies Alternative. IV. Conclusion: Competition as the Proper Response to Ignorance. Bibliography ...
CAMPAIGN FOR LIBERTY: Campaign For Liberty — Fear the Boom & Bust, a guide to the Hayek ... - www.campaignforliberty.com/blog.php?view=32230 - Cached - 4 Feb 2010 – ... gold and silver (or create whatever free-market money a society uses) than the increase in human productivity over the same time period. ...
CANCELLATION OF SHOP CURRENCY OR OTHER CURRENCIES THAT HAVE RETURNED TO THE ISSUERS: Sound money would rather oscillate than circulate permanently. (Rare metal coins and some cheap metal money substitutes excepted, for purpose of small change.) It would be issued, frequently or constantly, as required, and frequently to constantly return in payment to the issuer. As turnover-credit money, not intended to be hoarded but to be spent, in its reflux to the issuer and his associates, it might have only a limited "circulation" or oscillation period. As such, upon return it should be cancelled, rather than issued again, for the still remaining stretch of that period. To replace it by newly issued other paper currency is easy and cheap enough. This would also facilitate the control of the reflux of each series and quantity of such money that is issued. To prevent forgery (a risk greatly reduced for oscillating money with a limited circulation period and circulation area and acceptance foundation) these competing notes, too, would be consecutively numbered. The return of all numbers of a series could then be easily checked - and forged notes rapidly discovered. Whatever current issue and reflux details the issuer may want to publicize, also whatever special advertisement, he could include on each new batch of notes issued. The frequent renewal of notes would also be more hygienic than notes that have been in the hands of hundreds or thousands of people. Then their texts would also be more legible than that of much handled notes. For savings purposes such notes with a limited circulation period could be exchanged into wanted securities or fixed deposits. - J.Z., 27.8.02, 30.5.11.
CAPITAL HILL BLUE: Free Market Money,- Free market money | Capitol Hill Blue - www.capitolhillblue.com/node/16276 - Cached - 26 Feb 2009 – In the long run, the only solution to the business cycle of boom, bubble, and crash is honest money, which is free market money. ...
CAPITAL REQUIRED FOR BANKS OF ISSUE? Banks of note issue do require, for this kind of business, one merely of short-term turnover credits, which are, essentially, only part of clearing transactions, neither a saved-up capital of their own, nor investments by others nor a guaranty capital in case of their liquidation. What they do need is at least a leased office, office equipment a trained staff, a printer's credit and an issue and reflux technique and agreement on it with the local businessmen, and sales organizations, mainly shopkeepers, supermarkets, shopping centres, department stores, who or which would provide the "cover" and "redemption fund" and "guaranty capital" with their ready-for-sale goods and services, and an agreement with local employees, suppliers, tradesmen and professionals to be paid in the notes of the bank of issue, at least as long as it stands at par with its nominal value and to the extent that they are indebted to the bank of issue. Moreover, full openness of all transactions and publicity would be needed for all its issue details, in order to dispel ignorance, prejudices, distrust, suspicion and slander. In other words, monetary freedom is only possible within sufficiently informed and enlightened circles. - J.Z., 3/97, 30.5.11.
CAPITAL REQUIREMENT FOR FREE MARKET MONEY EDUCATION? On a CD, or DVD, certainly on a large external HD, of 1 to 2 TBs, one could already offer much, if not everything on free market money. All these discs are cheap. Only labours of love are needed to fill them. The "capital investment required is quite negligible - Thus I do not see any sense in the following appeal. Such discs could make money for the compilers, and be it only through advertisements. - J.Z., 23.7.11. - Appeal for $100000 - Free Market Money - www.freemarketmoney.org/appeal.html - Cached - These resources are to be available to students and members seeking information about the association, free market money, monetary policy, and mining stocks ... - Let them pay their way! The charges could be kept so low that even poor students could afford them. - J.Z., 23.7.11.
CAPITAL SECURITIES VS. CLEARING CERTIFICATES: See: APHORISMS ON THE MONEY PROBLEM, LAND BANKS, CLEARING, COVER, SECURITY, RESERVES, REDEMPTIONISM, GOLD STANDARD
CAPITAL: stored up labour (capital), … Leo Tolstoy, What the Must we Do? Aylmer Maude translation, OUP, 1925, p. 112. – One of his few genuine economic insights. The labour capacity of a worker is also a kind of capital, just like a machine or a robot, but self-owned. – It is quite a misunderstanding to see both, Labour and Capital, as opposites and enemies. – Ulrich von Beckerath called capital “pre-done labour” and claimed that it, as such, has also the right to its just and free-market-determined reward. - J.Z., 19.10.10. - LABOUR, DIS.
CAPITALISM & FREE MARKET: Video About Gold Dinar and Silver Dirham "threaten" capitalism ... - www.encyclopedia.com/.../k_7ZP4f_CT8-gold-dinar-silver-dirham-... - Cached - Saying that free market money threatens capitalism is completely absurd! Free market money threatens our phony fiat "too big to fail" bailed-out casino ... - DIS.
CAPITALISM: In reality, said Bastiat, capital is always put at the service of other people who do not own it, and it is always used to satisfy a desire (good or bad) that other people want satisfied. In that important sense, all capital is truly owned in common by the entire community. Benefits come to all from the increasing division of labor that automatically follows the accumulation of capital. - Dean Russell, Government and Legal Plunder. Bastiat Brought Up to Date, FEE, May 85, ISBN-0-9106614-70-9, 116pp, p.18. - DIVISION OF LABOR, CAPITAL, EXPLOITATIOIN, POVERTY, DIS., WEALTH, RICHES
CAPITALISM: Too many advocates of economic freedom have only a limited horizon or blinkered view of the economic freedom potential. They fix most of their attention on a few economic liberties and interventions and ignore major ones, like a free and competitive supply of exchange media and free choice of value standards, and fully free clearing rather than imposed obligations to deliver gold, silver or legal tender in payment of debts, although these are obvious alternatives to the ruling monetary despotism of today. Without monetary freedom all other economic liberties are greatly devalued. Financial freedom, too, requires also not just some degree of deregulation and liberalisation or denationalisation but a complete freedom alternative to financial despotism: freedom to issue, free international and internal exchange rates, free transferability of all capital, absence of taxation, absence of imposed regulations, and absence of monetary despotism. Under full financial freedom any normal working person in a developed country could become a multi-millionaire through his old age security savings, productively invested, credit-insured, at the highest interest rate obtainable, not subject to inflation, interest regulation, taxation, forced loans, social security levies etc. - If that fact, calculation and tabulation becomes wide enough publicised, with the then obvious conclusion: The government prevents us from becoming millionaires, by honest labours and investments, at least in our old age, then we will have a bloodless revolution pretty soon. - Likewise, once the hundreds of millions of unemployed come to understand that monetary despotism keeps them unemployed and that monetary freedom could provide full employment for them, within hours to days, almost every present government will be shaken in its foundations if not overthrown - unless it jumps fast on this bandwagon. - If for truths like these a proper ideas market existed already, then we could benefit from them very soon. But so far not even one in a thousand is interested in such an ideas market, even among the free marketeers! - J. Z., 4.12.85, 9.5.97, 30.5.11. - CAPITALISM WITH & WITHOUT MONETARY FREEDOM, LAISSEZ FAIRE, FREE ENTERPRISE, FREE MARKETS, FREE TRADE, FREEDOM OF CONTRACT, MONETARY DESPOTISM & MONETARY & FINANCIAL FREEDOM
CASEYRESEARCH.COM: Grim Decade for Employment Ahead - Casey Research - www.caseyresearch.com/cdd/grim-decade-employment-ahead?... - Cached - 21 Jun 2011 – Is it free-market money or not? This seems like an important issue, ... In my opinion, Bitcoin is free-market money, but that shouldn't be ... - Assuming that all monetary freedom options were sufficiently known and that all laws of monetary despotism could be safely ignored, would it take a decade to get rid of involuntary mass unemployment or only hours or days? - J.Z., 24.7.11. - BITCOINS, DIS., UNEMPLOYMENT, FULL EMPLOYMENT, MONETARY DESPOTISM, DIS., TIME FACTOR, START-UPS.
CASH HOLDINGS: When there is a variety of different means of payment and not everyone but only issuers and their debtors will be under obligations to accept a particular one of them, one might come to expect that cash holdings, in a variety of exchange media, might increase in total. But that need not be true. It would, firstly, be counteracted by the right of refusal towards those means of exchange for which one has little or not use at all. Then there would be those who accepted some notes only because they had a discount and because of this they could rapidly and profitably spend them at the issuer (and his associates) for wanted goods or services, due to this discount. Then there is the limited circulation period of most privately issued means of exchange, which assures their fast reflux, before that period is expired. One would also have the option to issue one's own exchange media and thus largely refuse to accept any or many other currencies. Moreover, there is the effect of the better monies driving out the bad ones, so that only a few good ones would survive in general circulation, those which are widely acceptable, at least locally. - Exchange media that one would have to keep in one's wallet for a long time, before one had any opportunity to use them, would rarely ever get into and get stuck in a wallet. People can learn to distinguish between good shares and attractive girls and wallflower girls. They could also go for bargains and sound values in currencies and avoid the rest. - Another general effect of monetary freedom might be that cash-holdings would be reduced because money would be less scarce. One would find it much easier to sell for payments in sound and competitive currencies than for monopoly money - and one could also issue one's own or one's own clearing certificates. Credit, on a sound value basis, would be easier to obtain. Thus the need for cash holdings, for emergency situations, would be reduced. Under a sound currency system most people would also be better covered by insurance arrangements against personal emergencies. - J. Z., 29.3.93, 27.5.97, 30.5.11. - QUANTITY THEORY, CIRCULATION SPEED & A VARIETY OF COMPETING MEANS OF PAYMENT & CLEARING
CASH PAYMENTS: For tax-"reasons" and in the pursuit of its drug war, governments are more and more on the road to eliminate cash payments altogether. They wish to have all non-cash transactions becoming visible to them, on their computers and accessible to their form of legalized looting. Unless we can sufficiently privatize our computerised exchanges, we will thus become more and more exposed to Big Brother, his exploitation and abuses. I am in favour of our doing away with government cash and non-cash transactions, government taxes and subsidies, government guarantees and "insurance" schemes, altogether, in all spheres, at least for volunteer communities which do know and do want to arrange their affairs in a more just, non-exploitative and convenient way, one that does not endanger them and their property and exchanges. - J. Z., 3/97, 30.5.11. - & GOVERNMENT ATTEMPTS TO ELIMINATE THEM
CASH PAYMENTS: In recent years many to most wages and salaries were also paid directly into bank accounts only and spent from there via cheques and credit cards, without using cash. Thus the proportion of cash habitually kept available, in normal times, and formerly necessary for most wage and salary payments, becomes a smaller and smaller fraction of all the non-cash means of payment at any particular time. When, nevertheless, by law and juridical decisions, every debtor remains obliged to pay in cash upon demand by a creditor, then a large crisis factor is thereby built into the payment system, especially a monopolised and regulated one, that would require considerable time to provide any extra cash that is wanted and that may even be legally prohibited from providing it. - J. Z., 3/97, 30.5.11. - VS. NON-CASH PAYMENTS.
CASINO MONEY: Casino money is also possible and, to some extent, already practised, if only to ensure honesty among a casino's employees. So, the customers of a casino usually have to first of all buy the casino's own token money before beginning their games in it and they have to redeem their winnings, if any, into outside money, before they leave. Is casino money as taxed, regulated and mismanaged as government money is? Is it ever inflated? Is it ever deflated? Or is even a stagflation avoided in it? - J. Z., 19.3.97, 30.5.11.
CATALAN, JONATHAN M. FINEGOLD, The Austrian History of US Money and Banking August 6, 201, by Jonathan M. Finegold Catalan. - "Friedman and Schwartz attempt to derive theory and causation from statistics, often leading them to erroneous conclusions. By contrast, Rothbard's treatise is written to illustrate existing theory, not to gain additional insight." - Roy Halliday, - http://royhalliday.home.mindspring.com/
CENTRAL BANKING, FED, Division of Labour: Why do we have a Fed? - divisionoflabour.com/archives/004060.php - Cached - 22 Sep 2007 – (1) Is there a market failure in a free-market money and banking system that a central bank could in principle remedy? (I.e. do we need a ...
CENTRAL BANKING: A central bank, like a monarchy or a monopoly post office, may, sometimes, be reasonably well run for a while, within its inherent limitations. However, in the long run and for most cases and times, it is a recipe for planned or unintended disasters. - See e.g. Kurt Schuler's writing on the Currency Board version of a central bank and Prof. Heinrich Rittershausen's attempt to make the best of this evil, through his observation and proposals in his work: Die Zentralnotenbank. - J. Z., 30.8.93, 30.5.11. - FED, FEDERAL RESERVE SYSTEM, MONEY MONOPOLY
CENTRAL BANKING: A currency entrusted to any government is, usually, as good as lost. - J. Z., 27.1.93. - MONEY MONOPOLY, MONETARY DESPOTISM, GOVERNMENT, TRUST & CONFIDENCE
CENTRAL BANKING: An engine for inflation and mass unemployment and trade depressions and one that often manages to combine both, inflation and deflation, to "achieve" stagflation. - Nevertheless, legislated into power and upheld by monetary prejudices, it remains in force to dispense its wrongs and evils, in all countries. - J. Z., 10.2.93, 14.4.97, 30.5.11.
CENTRAL BANKING: Any power in the government to control credit destroys the freedom of the people and makes free enterprise a myth. Government control of credit and free enterprise cannot exist together. - Paul Bakewell, Jr., What Are We Using For Money. D. Van Nostrand Co., Toronto, New York, London, 1952, p.145. – The same applies to any exclusive currency, even a gold- and silver one. However, to turn it into and to keep it as an exclusive currency, governmental intervention is required. – J.Z., 29.7.10.
CENTRAL BANKING: Bankers wash their hands of jobless", by George Graham of the FINANCIAL TIMES in Jackson Hole, Wyoming", taken from a column in THE AUSTRALIAN, 30.8.94, from which I extract the following quotes which speak for themselves or, rather, against the central bankers and their "experts": "Central bankers from 19 countries gathered here at the weekend at the invitation of the Federal Reserve Bank of Kansas City in the shadow of the Grand Teton mountains to discuss unemployment and came away with the reassuring message: it is not their problem. A bevy of academic economists agreed that most of the high unemployment rates in industrialised countries was attributable to structural factors - principally the way the Welfare State distorts an unemployed person's incentive to work - and not to the cyclical demand factors which are within a central bank's power to influence. - Heads nodded piously in the audience as Paul Krugman, a professor at Stanford University, said it was now all but universally accepted among academic economists, though still suspect to politicians and journalists, that there was a natural rate of unemployment. A central bank could expand demand and push the actual rate of unemployment below that level but only at the expense of accelerating inflation. ... This is music to the ears of most central bankers, who have long been defending themselves against the accusation that they are buying lower inflation at the expense of higher unemployment. ..." - CENTRAL BANKERS & THEIR WISDOM OR LACK OF IT REGARDING THE CAUSE & CURE OF UNEMPLOYMENT
CENTRAL BANKING: By how much has every national central bank during the last century depreciated its monopoly money, its “value standard”, the purchasing power of its national currency? Are all their victims sufficiently aware of these figures to finally demand an end to these abusive institutions, still pretending to be rightful, necessary, useful and helpful ones? – How many of the present politicians would be re-elected if their voter-victims were fully aware of the wrongs and harmful effects of central banking? – What would happen if the majority of voters declared, before an election, that they would no longer vote for anyone still upholding the central banking legislation? –For instance, they could demanded of every candidate his promise to repeal this legislation and not only that, but also his signature to a bill draft to abolish central banking, as a legally and territorially imposed system. His promise then would have to be to submit this bill and to vote for it, as soon as he has been elected? – It should be a contract with the voters, by which he would lose his office in case he would break his promise. – Naturally, a well informed and organized monetary freedom revolution would be even better. – We should not even have to depend upon politicians recognizing our genuine monetary rights and liberties. – Alas, so far they have been expressed only in all too few private human rights declarations. - J.Z., 2.11.10.
CENTRAL BANKING: By legalizing the monopoly and coercive powers of the central bank we (our supposed representatives) have given the government blank cheques drawn on our earnings and our property, in form of its legal tender (compulsory acceptance and compulsory value) paper money or requisitioning certificates or forced and exclusive currency. It amounts to a camouflaged tribute system because it is not recognized as such by the majority of the population, persuaded that the central bank would be a force for the common good. - Instead, central banking has produced one economic disaster after the other and has even more suppressed monetary freedom and free banking than it was before the legalized establishment of central banking. - Should we put up with it for another century? - J.Z., n.d. & 30.5.11. - & LEGAL TENDER, FORCED CURRENCY, MONEY MONOPOLY
CENTRAL BANKING: Central bankers, other bankers, financial journalist and economists nowadays and as a rule to not seem to be able to think of and propose anything better than putting the interest rate of "our" despotic monopoly money either a few notches up or down. - J. Z., 3.10.96, 30.5.11. & INTEREST RATE POLICIES
CENTRAL BANKING: Central banking is the Golden Calf worship of today. It offers no benefits but only disasters. But when has that ever deterred any worshippers anywhere? - J. Z., 29.12.92. - See: MONETARY RELIGION, MONETARY DESPOTISM.
CENTRAL BANKING: Central Banking, in its national, Euro-currency and World Banking ideas and practices, exemplify the central Marxist error that to defeat private supposed "monopolies" (usually quite wrongly defined) you ought to establish, instead, a nation-wide, European or even world-wide monopoly, rather than abolish all legalized monopolies and introduce free competition for all productive, creative and free exchange activities. - J. Z., 14.8.89, 29.4.97, 30.5.11. - EURO-CURRENCY, WORLD BANK, INTERNATIONAL MONETARY FUND (IMF) & MARXISM, COMMUNISM, STATE SOCIALISM OR STATE CAPITALISM, MONOPOLISM & ANTI-MONOPOLISM
CENTRAL BANKING: Central banks are destroyers of the values of their currencies. Just compare the price history in all countries. - J.Z., 31.3.02, 30.5.11. - INFLATIONS & PRICE DEVELOPMENTS
CENTRAL BANKING: Central banks are not "guarding" their nationalized paper money currency against depreciation but, thanks to their monopoly and legal tender coercive power, they are systematically and regularly depreciating them - while suppressing any competition against their misrule and abuses. - J.Z., 28.4.02. - MONEY DEPRECIATION, "GUARDIANS" OF THE CURRENCY
CENTRAL BANKING: Central banks do not know and cannot do anything better than fluctuate, almost constantly, between inflation, deflation and stagflation. Having removed competition and market rating and full publicity for their issues and practices (compare especially their secrecy on the date and extent of planned devaluations), they are thrown back to fiscal policies, "open market" sales or purchases of securities (the insecurity of government securities), enforced claims upon the holdings of other banks, legal tender and their monopoly position, the control or manipulation of foreign exchange rates, and their stock of redemption funds in rare metals, securities, insecurities and foreign exchange and the regulatory power they have over the interest and discount rate, to more or less mismanage the exclusive and forced currency allowed to them. Almost all of them can point out only to decades of mismanagement, due to mis-judgments and to their failures to attain stable currencies, a booming economy and full employment. A few have managed to keep their deflations, inflations and stagflations within bounds, for a few years, one never knows for how long they can manage to do so. And, even in these cases, monetary freedom would have supplied rightful and better monetary services. Thus one would expect sufficiently enlightened victims of this system - if they can be bothered to take an interest in it and to study it and alternatives to it, to ignore, outlaw or overthrow this despotic and harmful regime. Except a few of its directors and employees, we are all wronged and harmed by it. But it does do well enough by them. - J. Z., 2.8.94, 17.4.97, 30.5.11, 0.5.11. - CENTRAL BANKS, UNABLE TO FULFIL THEIR SUPPOSED FUNCTION OR ROLE
CENTRAL BANKING: Central banks for communists and other central bank adherents only: They deserve to get what they want, in self-inflicted punishment. - J.Z., 27.5.01, 26.8.02.
CENTRAL BANKING: Central Banks Now Creating Hyperinflation? « Socio-Economics ... - socioecohistory.wordpress.com/.../central-banks-now-creating-hype... - Cached - 5 Feb 2011 – This is why it is so important to use free-market money, as Austrian, free-market economists argue. In, say, a free-banking arrangement, ... - ALL kinds of free market monies and clearing options, as well as value standards, all freely chosen by volunteers for themselves, instead of merely the all too limited monetary freedom options which most of the advocates of the Austrian School want us to confine to. - - Full monetary freedom instead of merely that of the austrian school, most of them still merely goldbugs! - J.Z., 26.7.11.
CENTRAL BANKING: Central banks specialize in depreciating the currency whose stability was legally and exclusively entrusted to them. – However, they also manage to produce deflations, stagflations and credit restrictions with their monetary, currency and credit policies. They are rather versatile when it comes to establishing and maintaining monetary despotism. – J.Z., 16.5.05, 6.10.10.
CENTRAL BANKING: Do nothing, be nothing and dissolution are the best 3 policies for any central bank. However, they still have some penalty lessons to teach to their VOLUNTARY victims and we should give them that chance. - J. Z., 7.4.94, 24.4.97.
CENTRAL BANKING: Economically, the central banks are the worst central committees of the communist movement. - J.Z., 5.8.91. CENTRAL BANKS & COMMUNISM, CENTRAL COMMITTEES OF DIRIGISM OR THE CENTRALLY PLANNED & MISMANAGED ECONOMY
CENTRAL BANKING: How fast would the central bank's forced and monopolised currency disappear or become reduced to a relatively harmless and even (to the tax slaves) somewhat helpful tax foundation money (while these tribute payments are still tolerated), once it were subjected to free competition from several sound, privately or cooperatively issued alternative currencies that are optional and market rated against sound alternative value standards, freely chosen, too? How fast could the State paper money be abolished or so reduced? - Almost overnight, if this monetary revolution is well thought-out and prepared by enough people. The sooner the better. - J. Z.,19.8.92., 23.4.97, 30.5.11. - & THE REDUCTION OF ITS FORCED & EXCLUSIVE CURRENCY TO A COMPETITIVE & OPTIONAL TAX FOUNDATION MONEY ONLY
CENTRAL BANKING: How much longer will it take "our" official "guardian" of "our" currency to reduce the value of the A$ to 1cents in U.S. currency? It has already brought the value of the Australian dollar down to 47 US cents. And that comparison does not even take into account how much the US $ has been depreciated in the meantime, by the same method and kind of institution. Against the former value of the US$ the A$ may already be down to close to 1US cent! - J.Z., 1/10/01, 27.8.02, 30.5.11. - INFLATION, PAPER MONEY, RESERVE BANK OF AUSTRALIA, AUSTRALIAN DOLLAR AGAINST US DOLLAR
CENTRAL BANKING: How, when, how often, by what means and why - do central banks, not private forgers or private issuers or "creators" of money, credits and deposits, depreciate national currencies? Do they report all the relevant facts and powers and consequences to the general public? Do they promote monetary enlightenment and emancipation or, rather, monetary ignorance, prejudices, myths and outright lies? - J. Z., 8.11.92, 15.4.97. - MONEY DEPRECIATION, CENTRAL BANKING POWERS & ACTIONS
CENTRAL BANKING: I would like to see a book written with this or a similar title, including the best refutations of all the central banking fallacies, errors, false assumptions, pretences and prejudices so far found. For easier recognition and referencing these fallacies should perhaps not only be alphabetized under catchwords and indexed and cross-referenced but also be numbered. I would welcome any such manuscripts or essays or drafts of them for micro-fiching or digitizing in my series. The ultimate book on this subject would have to result from extensive collaboration. For no one has access to all the monetary freedom writings - or would have time to read them and extract them sufficiently. The literature on monetary despotism, defending it or regarding it as self-evident or beneficial, is much more plentiful than the rich literature on monetary freedom (largely hidden from public view). When I looked for writings on central and free banking at the State Library of NSW, back in 1959 or 1960, I found ca. 400, a bookshelf full, discussing approvingly only central banking and no work critical of it at all. Then I thought that I might get around to extract their main arguments systematically and to have the time, energy and knowledge to gradually refute most of them. Now I know better. Each individual, even with the best of will, can only do so much. If I had tried this task on my own, to the exclusion of any other, I might have only provided another Don-Quichote fight against the wings of a windmill. - J. Z., 8.4.97, 30.5.11. - & ITS FALLACIES, DIS.
CENTRAL BANKING: I would like to see a comprehensive survey of all central banks, country by country, with relevant legal cases cited and abstracted. - Especially informative, if sufficiently published, would be the rise of their legal tender note circulation, for years to decades, in relation to all prices, wages, rents etc. which do have to be expressed in it. They would thus be revealed as the opposites of "guardians" of national currencies. All should be shown as characterized especially by their note issue monopoly and legal tender power. - J.Z., n.d. & 30.5.11. - CENTRAL BANK POLICIES TOWARDS COMPETING CURRENCY ISSUES
CENTRAL BANKING: If the central banking system and its paper money were really so efficient and popular as the government presumes it to be, then it would not need any monopoly and regulatory powers nor any legal tender power to achieve a ready acceptance of its paper money. - Then it could also continue on and on, at the risk and expense of voluntary victims only, as many churches and sects did and do. - J. Z., 26.3.93, 27.5.97. - & THE MONEY ISSUE MONOPOLY AND LEGAL TENDER POWER
CENTRAL BANKING: Is there any central bank that has existed for several years or decades, and that has not yet caused inflations, deflations and stagflations, several times - while blaming others for its actions and their consequences? - J. Z., 19.8.92, 23.4.97. - CENTRAL BANKS, INFLATIONS, DEFLATIONS & STAGFLATIONS
CENTRAL BANKING: It is based on self-interest of governments, that of politicians, bureaucrats and their lobbyist favourites, very contrary to the public interest. Otherwise the victims would not put up with its powers, monopoly, coercion, meddling, fraud and false pretences. It is the most powerful economic institution in every country. However, since it is legalized and has a whole statist faith as its backing, it goes on and on and is not judged on its merits or, rather, demerits, but upon the utopian and State socialistic dreams that are involved in it. To this faith it does not matter that almost all facts speak against it, since central banking was established. It even allows totalitarians like Lenin to gain power and maintain themselves in power. It allowed a madman like the German emperor Wilhelm II to start and continue WW I and it allowed a Hitler to "finance" WW II. - Nevertheless, we are not supposed to criticise this "holy grail" institution of the territorial statists and to try to replace it by free, cooperative and competitive ones. Nay, rather have WW III & IV & V and more totalitarian regimes for further decades. That, in the minds of most people, seems easier to bear than the job of tackling the problems created by monetary despotism and studying the solutions of monetary freedom. - If I were a visiting alien and looked at this all too wide-spread mentality, I could understand if such an alien would say to himself: I have the power to wipe out this insect pest on Earth - why shouldn't I use it? Perhaps, after a few million years, the cockroaches or butterflies might turn into something better! - J. Z., 19.8.92, 23.4.97, 30.5.11. - But then this would apply "collective responsibility" on an even larger scale than the present war on "Iraq" does, rather than holding Saddam Hussein individually responsible for his government's actions. For the latter approach one does not need any large military forces or any war. - J.Z., 7.9.02.
CENTRAL BANKING: It is, indeed, a paradox to say that the greatest borrower on earth has control of credit; and an anomaly that a government, which has defaulted and repudiated its own obligations, should assume control of credit.” Paul Bakewell, Jr., What Are We Using For Money. D. Van Nostrand Co., Toronto, New York, London, 1952, p.149/150.
CENTRAL BANKING: it only requires a parliamentary majority … to make the role of the central bank anything the politicians want to be. – Len Deighton, Berlin Game, Panther Books, 1984, p.118. - Politicians and “economists” talk or write of the “independence” of their central banks just like they speak or write of independence of the people or the nation, which they do territorially rule or misrule, mostly the latter, while really meaning their own independence from the people, their victims, in all States. – They even dare to call this deception, to their own advantage, “territorial integrity” and “representative” government. - J.Z., 2.11.10. - INDEPENDENCE?
CENTRAL BANKING: Karl Marx, the father of Communism (*), urged centralization of credit in the hands of the state as an essential step toward Communism. But (**) government control of credit makes free enterprise impossible. - Paul Bakewell, Jr., What Are We Using For Money. D. Van Nostrand Co., Toronto, New York, London, 1952, p.149. – (*) Marx was merely a popularizer and reviver of ancient communist notions, putting them into a pretentious “scientific” form. – (**) For! - J.Z., 29.7.10.
CENTRAL BANKING: Lenin knew it. He said that establishing a central bank was 90% of taking over a country. - James P. Hogan, Mirror Maze, p.315. - LENIN & COMMUNISM
CENTRAL BANKING: Like morality, law, language, and biological organisms, monetary institutions result from spontaneous order - and are similarly susceptible to variation and selection. Yet monetary institutions turn out to be the least satisfactorily developed of all spontaneously grown formations. Few will, for example, dare to claim that their functioning has improved during the last seventy years or so, since what has been an essentially automatic mechanism based on an international metallic standard was replaced, under the guidance of experts, by deliberate national 'monetary policies'. Indeed, humankind's experiences with money have given good reason for distrusting it, but not for the reasons commonly supposed. RATHER, THE SELECTIVE PROCESSES ARE INTERFERED WITH HERE MORE THAN ANYWHERE ELSE: SELECTION BY EVOLUTION IS PREVENTED BY GOVERNMENT MONOPOLIES THAT MAKE COMPETITIVE EXPERIMENTATION IMPOSSIBLE." - HAYEK, F. A., The Fatal Conceit, pp.103/104. - Alas, government interventionism with exchange media, clearing and value standard had begun, many centuries before. Hayek admits this in his next paragraph. They have, in almost every sphere, prevented or suppressed spontaneous development into the best forms possible for particular times, people and circumstances. For instance, the intervention with "truck" payments went on in Europe for ca. 500 years and did not permit them to develop beyond some primitive and still very inconvenient forms. However, even these were often the only "payment means" that employees could readily offer and neither the employers nor the employees cared much then - or now, about how such private payment options could be greatly improved and made even very attractive, superior to the coins of the realm or the paper monies of central banks. - J. Z., 27.5.97. - MONETARY EXPERIMENTATION, DEVELOPMENT & FREEDOM
CENTRAL BANKING: Like with any other powerful and monopolistic institution there are also many different conspiracy theories on central banking and its monetary despotism. – It does not matter which one, if any one of them is correct, as long as one is not subjected to any central banking system against one’s will. Ultimately, only central banks with voluntary victims should be tolerated. All wrongful, coercive and monopolistic central banks would fall together with territorialism, once it is ended and replaced by exterritorial autonomy for all kinds of communities and societies of volunteers. – J.Z., 1.2.10, 2.11.10. - CONSPIRACY THEORIES, TERRITORIALISM, PANARCHISM
CENTRAL BANKING: Maybe the Tamil Tiger terrorists of Ceylon are not so dumb as most other terrorists tend to be? According to ABC radio news on 1 Feb. 96, suicide bombers attacked the central bank in Colombo, Ceylon. Alas, in their attack ca. 100 people were killed. A night time raid, preceded by a warning, might not have cost any lives. There was no report on how much the bank and its ability to function were destroyed. No such raid would be as helpful as private and cooperative note issues could be - and refusals to accept the central bank's currency any longer. - J.Z., 1.2.95. - CENTRAL BANKS. SHOULD THEY BE ABOLISHED OR DESTROYED?
CENTRAL BANKING: National central banks have led to as many disappointments as national governments have, national post offices, national railways and national roads. Have any nationalised industries been successful under their motto: "Not for profit but for use!"? Have they achieved consumer satisfaction at less than market prices? Their subsidised prices should not be quoted here - without adding the subsidies that are involved. How many centuries of central bank failures do we have to suffer under before we finally abolish central banks? Price controls were tried, again and again, quite in vain, for 4,000 years. So were inflationary and deflationary policies by monetary despotism. One feature, the suppression of all kinds of truck-payments and truck payment notes, was applied over at least 4 centuries and in emergencies, caused by the government's monetary despotism and in spite of numerous legal and juridical prohibitions, employers and employees had to resort to this self-help means again and again. - Just like to other primitive barter transactions. If politicians, their experts and the whole community will not learn sufficiently from such failures, then at least we should set free all the minorities of people, who do believe that they have and can apply a better system, to try it - at their own expense and risk. We should grant them the same experimental freedom that we grant to scientists, artists, technicians, biologists, agriculturists etc. Otherwise monetary science and practice will stagnate under the rule of monetary despotism, possibly for further centuries, if not thousands of years. - J. Z., 19.8.92, 23.4.97, 30.5.11.
CENTRAL BANKING: National independence does not mean e.g. a national central bank or currency board but, rather, the independence of a nation and of all its citizens from any central bank and any other centralistic, monopolistic, despotic and territorial institutions. - J. Z., 5.9.92, 22.4.97. - & NATIONAL INDEPENDENCE, NATIONALISM, INDEPENDENCE, EXTERRITORIAL AUTONOMY, VOLUNTARISM & INDIVIDUAL SECESSIONISM & INDIVIDUAL SOVEREIGNTY VS. TERRITORIALISM
CENTRAL BANKING: News Link - Government Debt & Financing - Audit: Fed gave $16 trillion in emergency loans - 07-21-2011 - http://www.rawstory.com/ - The U.S. Federal Reserve gave out $16.1 trillion in emergency loans to U.S. and foreign financial institutions between Dec. 1, 2007 and July 21, 2010, according to figures produced by the government's first-ever audit of the central bank. - Read Comments - Make a Comment - Email this News Link - Send Letter to Editor - FED, BAILOUTS, FOREIGN AID, SUBSIDIES, INFLATION
CENTRAL BANKING: Small is beautiful", wrote Prof. Schumacher, and by this three-word aphorism, acquired more fame than by his big books. Cannot our politicians and economists see that the principle applies to banks as well? When this truth glimmers in on them, they may discover that it was state interference that gave us bank monopoly, and so gave rise to all the other monopolies." - Henry Meulen, THE INDIVIDUALIST, 6/78, p. 27. - See: DECENTRALISATION, MONEY MONOPOLY, NOTE ISSUE MONOPOLY.
CENTRAL BANKING: Somewhat decentralized central banking is still central banking and not free banking. - J.Z., 26.8.91. - Classical instance: The Federal Reserve System of the U.S. - Some have misread the FED so far that they think it is a private and capitalistic bank. Some still remain unaware of its legal tender and of its monopoly power, although they have handled its money often enough and have experienced the result of its actions. The Federal Reserve Act of 1913 and all its amendments, are so badly publicized that I have come across a copy of it only once, in the hands of a Social Credit advocate. The issue monopoly clause of it was so well hidden that I could not find it there in a hurry. That may have been intentional or the result of the usual bureaucratic bungling even in drafting legislation. - J.Z., 26.8.02. DECENTRALIZATION
CENTRAL BANKING: Somewhere and some years ago I found a hint that a central bank has been instructed to stop payments of the accounts of all outlawed groups. Thus, merely by one of an avalanche of interventionist laws, which no one has the time to fully peruse, any group could be outlawed and its bank accounts confiscated. The abuse potential of this power against political opponents is immense. Are ordinary criminals, who committed crimes of violence, treated as severely? Are the criminals in office so treated? - J.Z., 1.5.97. - ACCOUNTS OF OUTLAWED GROUPS
CENTRAL BANKING: The central bank, through its issue monopoly and legal tender power, has coercively and parasitically inserted itself as a third party into almost every economic transaction, exploits almost all of us to its own advantage and at the expense of our rights, liberties, security, property and earnings, keeping the economy unbalanced, throwing it from one crisis into another and provides us only with the illusion that a uniform currency would be a great benefit for us, and the illusion that it and only it could manage to provide a sound currency, although it has never delivered one so far but has destabilised the monetary system as much as possible. This system is legally upheld, no matter how wrong, mismanaged and uneconomic it is, for the whole economy and each of its participants. Those in charge of it seem to have adopted the motto of a French king before the French Revolution: "L'etat, c'est moi!" and: "Apres nous la deluge!" (I am the State! - The great flood will come - but only after me!) -That any person or institution with as great powers could become so corrupted and conceited is humanly understandable. But that people and even scholars put up with this, not only for years but for decades, for generations, is not as comprehensible. Most totalitarian regimes have by now been overthrown. The rest might follow, soon. However, we have established and retained their most totalitarian institution, everywhere, even in the supposedly free West! - I, too, am human, but this is all too inhumane and alien to me. - J. Z., 18.4.93, 2.5.97.
CENTRAL BANKING: The central banking system did not and cannot provide the jobs, crisis prevention, economic development, stable currency, prosperity, justice, efficiency, honesty, self-control and fairness that was promised upon its establishment and expected in its legal and juridical maintenance. Its record is poor in every respect – and, nevertheless, it has been coercively and monopolistically upheld for about a century or more almost everywhere. It provides an efficient machinery for man-made economic disasters, also, all too often, with terrible political consequences for whole populations. It is the moral equivalent to a man-made pest or epidemic being artificially, legally and coercively introduced and continued. – Two of its purely economic consequences, namely the Great Inflation and the Great Depression, in Germany, cost Germany as much as did WW I. They also lead to the rise of the Nazi Regime and WW II. and their consequences. – And yet this system is still constitutionally, legally, juridically and “scientifically” upheld and defended almost everywhere, by most of the living and supposed experts and most of the publicists! – Also tolerated by most of its all too ignorant, prejudiced and disinterested victims. It can be continued as long as its victims do not take a sufficient interest in their own affairs and do not even realized how much they are victimized by central banking. - J.Z., 24.2.10, 25.9.10. - MONETARY DESPOTISM, MONEY MONOPOLY, CURRENCY MONOPOLY
CENTRAL BANKING: The central banking system did not freely “develop” but was, rather, legally but unlawfully (morally and ethically quite wrongly) imposed, without the informed consent of all of its victims, who are still not free to drop out from under it and adopt for themselves alternative systems, better or worse ones, as soon and as long as they wish to. – J.Z., 14.5.10, 25.9.10.
CENTRAL BANKING: The central banks are so useless that they cannot even make use of all willing and available labor and skills, of all the services and goods offered for sale, of all the machines, workshops and offices available for productive efforts, not even for 8 hours a day, far less for 24 hours a day. - Instead, in their helplessness, ignorance and prejudices, the juggle with interest rates, play with selling or buying securities and offer promises and denials of their guilt and the wrongfulness of their monetary and currency policies, while almost continuously, apart from their credit restrictions, depreciating their fiat monopoly paper money. In the absence of free market rating for their paper money against a sound value standard, also of a well run tax foundation for their note issues, and of competing internal currencies and value standards, they do not even know how much more or less they ought to issue of their forced currency and where and when they ought to do so. - Nor are they able and willing to systematically study the alternatives to their own rule, although, surprisingly, some of their employees have managed to publish some papers on free banking in some of their periodicals. So, at least, not all of them do systematically suppress all freedom of expression and information in this sphere. But under the present conditions of monetary immaturity, from top to bottom, they do not have to do so, either, to maintain themselves in power. - However, one can also charge most opponents central banking with having insufficiently studied the alternatives to it. - J.Z., 22.4.01, 24.8.02. - UNEMPLOYMENT, SALES DIFFICULTIES, DEPRESSIONS
CENTRAL BANKING: The central banks print more of their depreciating currencies, because their issue monopoly and legal tender power allows them to do so, than all the criminal forgers in their countries do. Alas, they can't be accused of forgeries since one can hardly forge one's own notes. But they do certainly operate under false pretences, namely their pretended willingness and ability to prevent deflations, inflations and stagflations. Central banks also pretend to be able to help governments out of their financial difficulties without depreciating their forced and exclusive currencies. - J. Z., 8.11.92 & 15.4.97. - & FORGERIES
CENTRAL BANKING: The communist central banking system, as well as the communist system as a whole, like any other system or belief-construction or utopia, should be confined to volunteers only and that requires exterritorial autonomy or experimental freedom for all communities. - J.Z., 23.9.99, 24.8.02, 30.5.11. - COMMUNISM, VOLUNTARISM, PANARCHISM, MONETARY FREEDOM
CENTRAL BANKING: The effects of central banking, with its monopoly money and its legal tender or forced currency aspect over the last 100 years should be compiled and published in a table for at least all of the major countries, to help demolish he wrong image too many people still have of central banks as rightful and efficient guardians of national currencies. The losses of their victims might be expressed in billions of their currencies, in ounces of gold, or in reductions of their purchasing power in percentages or fractions of percentages. The table should also indicate how often in this century these imposed losses occurred in each country, with deflations, and inflations separately listed, perhaps also the stagflation periods. – Most people, if at all, are aware of some of these losses only in their own countries and not of the fact that the same cause caused the same problems and losses in all other countries as well. The record for inflation may still be held by a Hungarian one unless Zimbabwe has recently exceeded even it. The German Inflation from 1914 to 1923 may by now be only in third place. - See under Inflation. – J.Z., 1.11.10.
CENTRAL BANKING: The governments' central banks are reducing the value of their paper currencies almost all the time (at different rates), although they are supposed to guard their currencies against depreciation. - J.Z., 20.12.01. - As usual, governments achieve the opposite of what they aimed to achieve by their legislation, "measures" and "policies". In addition, central banking has achieved and maintained large degrees of involuntary unemployment over long periods and the persistence of some involuntary unemployment even during its "boom" periods. It has made all economic crises worse. It has also prevented the rapid and automatic ending and prevention of depressions, deflations and inflations by the self-help methods of monetary freedom. Regarding financial freedom and at least in countries like Germany, it has also outlawed value-preserving clauses or made them conditional upon permissions granted by the central bank, which are almost never granted. However, the customary, traditional or legislated exclusive currency condition of metallic currencies, and of metallic redemption currencies and lack of clearing knowledge, techniques and facilities, had also caused frequent and persistent deflations before central banking arose to its present dominant position. - J.Z., 26.8.02, 30.5.11. - CENTRAL BANKS AS "GUARDIANS" OF GOVERNMENTAL PAPER CURRENCIES
CENTRAL BANKING: The governments of the world must now get out of banking and trade.” – Secretary of the Treasury, Carter Glass, in 1919. – Quoted in p. 59 of: Anthony Sampson, The Money Changers. Bankers in a Dangerous World. Coronet Books, Hodder and Stoughton, 1981, 1982.
CENTRAL BANKING: http://www.facebook.com/The initial plan was to destabilize the British economy by dropping the notes from aircraft..." But remember, when Ben Bernanke drops notes from a helicopter it's a tremendous boon for the economy! - Ron Manners: - Adolf Hitler's fake British bank notes expected to fetch £2k at auction - www.dailymail.co.uk - Hitler ordered millions of the notes, in £5, £10, £20 and £50 denominations to be printed in 1942. But British spies got wind of the idea and intercepted the shipment. - Kevin Kartun Operation Bernhard portrayed in the academy award winning movie "The Counterfeiters". - John Zube It is central banking and legal tender laws that make such abuses possible. - It is much harder to impossible to forge a multitude of competitively issued private currencies, all only with a limited circulation area and circulation period. - LEGAL TENDER, FORGERY OF AN ENEMY REGIME'S MONOPOLY MONEY, STIMULUS PAYMENTS, GREENBACKISM, INFLATIONISM, MONETIZING GOVERNMENT DEBTS, FIAT MONEY, LEGAL TENDER & MONOPOLY MONEY.
CENTRAL BANKING: The management of money has not improved its quality. - Sir Ernest Benn, The State the Enemy, cover. - He should have said: Centralised and coercive management of money. He might have added: It has not managed to provide the correct but for each day fluctuating required quantities of money, either. Instead, it over-supplied or under-supplied its exclusive and forced currency for all too long, almost as a rule. - J. Z., n.d. &15.4.97, 30.5.11.
CENTRAL BANKING: The most important, centralistic and monopolistic economic institution of the Australian Federal Government is its Reserve Bank. - We should aim to break its stranglehold on the economy, not by destroying it but by depriving it of its privileges and powers, by introducing free and decentralised competition against it. Thereby we could overcome the depression, unemployment and inflation it has caused. - Try exchanging without money and you will soon find out how large your dependency on the central bank and its exclusive currency has become. - Allow any employer to offer, in payment of wages and any employee to accept any other exchange medium that is agreeable to him. Do not force both to deal only in a monopolistic and also rapidly deteriorating and otherwise mismanaged exchange medium and value standard. Let's have the exchange media as competitively supplied as knives and forks are - and we will have no shortage of them, either. - With sufficient sound exchange media, free and sound value-standard reckoning, free pricing and when no job or trade is closed to anyone by any monopolies, then unemployment could be done away with within hours to days in almost all cases - by people who understand and are free to apply the monetary freedom techniques. - J.Z., 1985, 30.5.11. - CENTRALISM, MONOPOLISM, THE POWER OF IT
CENTRAL BANKING: The Reserve Bank (central bank of Australia) proposed to reduce unemployment benefits in order to reduce unemployment. While it is true that one can get almost any degree of unemployment that one is able and willing to pay for, the total abolition of involuntary unemployment should remain the aim. Here the central bank is the main culprit, with regard to unemployment, although subsidies, price controls, wage controls, coercive unionism, collective bargaining, etc., do also play a role. Typically, the Reserve Bank did not propose the reduction or abolition of its monopoly, privileges and regulatory powers, as means towards the abolition of unemployment. Most of its directors and employees probably still imagine that it could reduce rather than cause and increase unemployment. Nor did it propose the transformation of the unemployment benefits from handouts into credits, a thought which ought not to be way-out for any bank. But then only the central banks have access to the note printing presses for their exclusive and forced currency. With that power, they do not seriously consider the alternative of permitting employers to pay and employees to be paid in alternative and competing currencies. - To sort out the moochers (dole bludgers etc., the voluntarily unemployed) from the genuinely unemployed, I would rather propose an increase in unemployment benefits but, at the same time, make them repayable by the unemployed, even if he might have to sell his house and car for this purpose. Moreover, he should see to it that his family members and friends do guaranty his repayment, if necessary. That will tend to spur them into accepting almost any job they can get and looking for any job opening. That would also induce them to accept lower wages or salaries. But this would still not suffice to induce most of them to ponder monetary and financial freedom as the main cure for unemployment. With the gambling spirit probably still rather large among the unemployed, too, perhaps it might be worthwhile to get them involved in a prize competition for the best ideas, not so far refuted in literature and practice, to end unemployment. Let them seriously search for such ideas and practices. Let us say that there are 1 million unemployed in Australia (there may be, governments tend to understate this case). Then, if every unemployed just contributed 1 dollar a month, there could be monthly prizes of 1 million for the best idea of the month. The scheme could even be judged by the unemployed themselves, voting on each scheme, with its pro and con, as compiled by them. To simplify the voting process, one could use the jury system. 12 of them would have to agree, unanimously, on the best proposal for the month. Such jury sessions should be publicised as much as possible. Let thus the finding and proving of the cure for unemployment be the job, as far as possible, of the unemployed themselves - and of anyone else really interested in this question. - The news on the Reserve Bank proposal was aired on radio news on 13 Dec.,1993. - J. Z., 23.4.97, 30.5.11. - I may be the only surviving member of the Berlin Society of 1952 to Fight the Causes of Unemployment. It had much to say on this subject which is new still to most people, even to those who consider themselves to be experts on this subject. See the details in my PEACE PLANS series, all on microfiche. - J. Z. - Later I suggested, somewhere, that half of the money so collected should be used for the prize money for the best proposal and the other half for the collection, ordering and publishing of all these ideas and opinions in the cheapest media, e.g. on microfiche, floppy disks and CD-ROMs, even paying some of the unemployed for full-time work on this library, archiving, editing and publishing project. As Ulrich von Beckerath frequently remarked: Combined purchasing power is one of the greatest and also one of the least utilised forces in the world. - J. Z., 7.9.02, 30.5.11. - REDUCTION OR INCREASE IN UNEMPLOYMENT BENEFITS, THEIR TRANSFORMATION FROM HANDOUTS INTO CREDITS & THE DEGREE OF UNEMPLOYMENT, PRIZE COMPETITION BY THE UNEMPLOYED ON IDEAS HOW TO ABOLISH UNEMPLOYMENT.
CENTRAL BANKING: The very cheek of the central banks of governments, forcing themselves as a monopoly mediators into every monetary exchange transaction and into every value standard measurement within a country and this with a very inferior and fast depreciating means of exchange and a rubber band and manipulated value standard that is close to the worst of all which have ever been imagined and practised. And with all this they still pretend to be able and willing to sufficiently supply the market with exchange media and with a sound currency. It is like a highwayman monopolising crime in a country and then pretending to be a crime fighter. Could anyone possibly have accumulated more disqualifications for the job of supplying a sound value standard and sufficient exchange media, than have the central banks, in every country? - J. Z., 19.8.92, 23.4.97.
CENTRAL BANKING: The wrongfully legalized money issue monopoly of central banks makes them feel so strong and confident, while territorial statism is still popular, that they often do not even bother to suppress some private monetary experiments, holding that lack of interest in them, combined with their remaining flaws will prevent them from spreading widely and lead them soon to their demise. Mostly they are right with this assumption. The defence of the sound monetary freedom experiments against prejudices of public opinion and against political, police and juridical suppression would need to well prepared and organized long in advance of the need for it. – J.Z., 12.2.10, 24.9.10. - MONETARY FREEDOM, MONETARY EXPERIMENTS
CENTRAL BANKING: There is not a single good reason to confine monetary, clearing or credit competition or cooperative credit and monetary arrangements to international competition between central banks, their exclusive and forced currencies, for whole national territories and their exclusive and enforced paper "value standards" only. That is like considering politics only from the point of view of despotism and economics only from that of command economies. Those with as limited horizons should only be free to limit their own notions and actions to their own limited spheres and associations of volunteers, instead of going on to legally and territorially impose them upon peaceful dissenters and involuntary victims. - J. Z., 18.3.97, 30.5.11.
CENTRAL BANKING: This is a great... | Facebook - www.facebook.com/EconStoriesTV/posts/217012434999760 - Cached - Free-market money and banking! Its time we break free from the chains of soviet interest rates and cash creation. It's not enough to audit the Federal ... - FREE MARKET MONEY, CENTRAL BANKING, COMMUNISM, MARXISM, MONETARY DESPOTISM, MONETARY & CURRENCY LIBERATION
CENTRAL BANKING: Totalitarian communism in East and West, go on and on, at least in the following forms: the monetary despotism of central banking (See point 5 of the platform of the Communist Manifesto), territorialism, taxation, welfare statism, collective decision-making on war and peace, armament and disarmament, international treaties, economic policies, migration and trade, labor, housing, roads, transport, buildings, libraries, postal services, policing, research and education. Collectivist mass murder preparations are also very much "scientifically advanced." Their targets: the masses of the people, rather than their Big Brothers and "statesmen". (By comparison the mass murder camps of the Nazi regime were primitive.) Dozens to hundreds of millions of people can now be murdered by "great leaders" and button pushers in minutes to hours, largely in automated ways. And such powers are hardly questioned at all. To that extent communism hasn't fallen but gained an almost universal victory over public opinion, public actions and public institutions. Naturally, all the problems inevitably associated with these communistic institutions go on and on. - J.Z., 26.8.91, 24.8.02. - & COMMUNISM, EAST & WEST
CENTRAL BANKING: Trust any central banks to depreciate any national currency fast, at least somewhat, if not very extensively. – If you should find an exception to this rule, lasting for years to decades, please, let me know. - J.Z., 1.11.10.
CENTRAL BANKING: Under government patronage the monetary system has grown to great complexity (*), but so little private experimentation and selection among alternative means has ever been permitted that we still do not quite know what good money would be - or how good it could be. (**) Nor is such interference and monopoly a recent creation: it occurred almost as soon as coinage was adopted as a generally accepted medium of exchange. Though an indispensable requirement for the functioning of an extensive order of cooperation of free people, money has almost from its first appearance been so shamelessly abused by governments that it has become the prime source of disturbance of all self-ordering processes in the extended order of human cooperation. The history of government management of money has, except for a few short happy periods, been one of incessant fraud and deception. In this respect, governments have proved far more immoral than any private agency supplying distinct kinds of money in competition possibly could have been. I have suggested elsewhere, and will not argue again here, that the market economy might well be better able to develop its potentialities if government monopoly of money were abolished." (Hayek, 1776/78, and 1986: 8-10.) - HAYEK, F. A., The Fatal Conceit, 103/104. - (*) This complexity is built upon simple despotic foundations: Note issue monopoly and forced acceptance and forced value or legal tender for the notes. The rest is more or less only window-dressing and false pretences. - (**) Illegally numerous monetary experiments have taken place. But precisely because they were not legal and not supported by most scholars, they did not last long enough and the records of these experiments are rather incomplete. Moreover, they were never fully gathered together, translated into the major languages and then fully explored theoretically. But scholars like Ulrich von Beckerath, in a life-long effort, have come as close to such an exploration and to sound theoretical conclusions based upon them, as an individual, largely on his own, could. - J. Z., 27.5.97. - & MONETARY DESPOTISM, MONETARY FREEDOM, EXPERIMENTAL FREEDOM, MONETARY LIBERATION, VS. CENTRAL BANKING, CURRENCY POLICIES, INTEREST RATE POLICIES
CENTRAL BANKING: Using a central bank's banknotes it is often easy to get credit paid in them - but hard to pay it back because these notes, once spent, do not return automatically to the spender. E.g., tax collectors and other users, in other localities and industries do "waylay" them. Trade becomes a struggle for a scarce exclusive currency that is well supplied only in those channels favoured by the central bank system and governments spending its notes after first extracting them from almost everyone or simply printing them. Self-issued notes or notes locally issued in association with others would return to the issuer or issuers, soon. - J. Z., 13.5.87, 9.5.97, 13.9.02. That describes only the deflationary and part of the stagflationary aspect of central banking. Under its inflations the debtors are allowed to pay back their debts nominally, in depreciated currencies. Naturally, as a result they find it harder to get any further credits. - J.Z., 30.5.11 - NOTE ISSUE MONOPOLY, REFLUX, DEFLATION, INFLATION
CENTRAL BANKING: Was there ever a large-scale and persistent paper money inflation, inflating the whole price and wage level, without the issue monopoly and legal tender? Economists and historians should be able and willing to check these relationships out. If the finding is that there was not and there cannot be an inflation without these two preconditions, by the very nature of monetary exchanges under freedom, then these findings should be publicised and lead to resistance against monetary despotism. Can they really call themselves economists and historians if they do not engage in such surveys? - J. Z., 15.4.97, 30.4.11. - LEGAL TENDER & ISSUE MONOPOLY, INFLATION
CENTRAL BANKING: Why Do Central Banks Exist - www.scribd.com › Business/Law › Finance - Cached - 5 Nov 2009 – By contrasting free market money and banking with State-controlled systems, we see that central banks exist to benefit the government, ...
CHEAP & EASY MONIES: Both, cheap and easy money could be either sound or unsound money. That to use these and similar terms without adding a qualification does not make sense. They could be optional or forced currencies, currencies with a free market rate or with a forced value, currencies that must be accepted in a country or that are competitive and can be refused and discounted. They could have a sound or an unsound value standard. The same applies to terms like “soft” and “hard” currencies. Shells, stone and diamonds, used as money, would certainly be hard but not necessarily very useful as currency. Pure gold coins, even copper coins are relatively soft and yet considered as kinds of “hard” money, while iron or nickel money would be harder and yet by some considered to be soft and cheap currencies. – Wooden nickels or plastic token money would be “soft” money but could have a sound shop foundation and could be accepted e.g. for wanted consumer goods and services, priced out in gold weight units, for which such tokens would be accepted at their nominal gold weight value. - In each sphere appropriate terms should be used rather than prejudices and misleading ones. – J.Z., 20.1.10, 1.11.10.
CHEAP & EASY MONIES: Those, who thoughtlessly condemn all of them, wholesale, have failed to sufficiently distinguished between their unsound and their sound forms, issues and reflux arrangements and their varied value standards. If an exchange medium and its value standard are sound, then the cheaper and more easily it can be obtained, with minimum transaction costs, e.g. through print on paper or in effective digital form, then the better it would be for all its users. It is a cheap and misleading attack to thus try to deny the possibility that cheap and easy paper money issues can be quite sound in their value standard, without metallic redemptionism by their issuers, upon demand by the note holder, that they can be hard rather than soft currencies and reveals a great ignorance and prejudice by the user of such terms, as if they were indicating, in every case, a genuine crime with involuntary victims. – If such attacks were only directed against the issues of central banks then they would be justified for most of them, for most periods. Alas, they are also used against many of the rightful and economic options of free banking and monetary freedom and thus, at least to some extent, support monetary despotism, even if it is “only” that of exclusive gold coins and gold certificates. - J.Z., 1.11.10. – EASY, CHEAP, SOFT, HARD MONEY, PAPER
CHEAP & EASY MONIES: When “cheap” and “easy” money is indiscriminately attacked, then usually only the “cheap and easy” money of monetary despotism is meant, which is cheap and easy for politicians and central bankers but not cheap and easy money for their victims, while the cheap and easy as well as sound money issue and money reflux options of full monetary freedom are simply ignored. The complexities of all forms of money cannot be “cheaply and easily” covered by using such misleading terms. – J.Z., 2.11.10. – EASY MONEY, SOFT MONEY, SOUND MONEY, UNSOUND MONEY
CHEAP MONEY: The “cheap”, exclusive and forced currency money of the central banks of territorial governments is, usually very expensive for its subjects and victims – in the long run. To that extent it is quite wrong to call it “cheap” money. It is cheap only for the issuer. Mises remarked somewhere: I takes a government to turn two valuable commodities like paper and ink into worthless scrap. – Quoted only from my flawed memory. – Money that is merely a clearing certificate or a goods warrant and service voucher can be cheap to produce and yet can honestly reckon and account in e.g. gold weigh value units, kept in par with this, its nominal value and be accepted for the goods and services that its issuers do offer, without any of the issuers or acceptors possessing even a single gold coin. – It bugs me that the gold bugs have still not realized this cheap, honest and efficient gold standard currency and exchange medium or clearing certificate option but continue to ignore it, in the vast majority of all cases. - J.Z., 2.6.10, 29.7.10. – LEGAL TENDER, MONOPOLY MONEY, FORCED CURRENCY, COMPULSORY ACCEPTANCE & FORCED VALUE
CHEAP MONEY: The cheap money of monetary freedom is different from the cheap money of monetary despotism. It would not and could not lead to inflation and unjustified economic investments. - J. Z., 1.12.96. Its production and acquisition would be cheap. It would be relatively cheap to get it accepted in your local community. And it would have a cheap, easy and fast reflux to you, for its redemption into the goods and services that are the basis of your note issues. You would not have to pay a monopoly interest rate for exclusive and forced exchange media provided by a monopolistic and coercive central bank. Your own money would be cheaper and better for your purposes and those of your customers. - J. Z., 20.3.97.
CHEAP MONEY: To attack some monies as "cheap" money is a rather cheap attack. Neither cheapness nor expensiveness is decisive for money but, rather, its usefulness, soundness, competitiveness, free market rating for it, refusability, discountability, availability or unavailability, the ability or inability to supply it oneself or in association with others, its acceptability to sovereign consumers, at least locally, e.g. in wage payments., and, quite basically, its rightfulness or honesty, its degree of "optionality" or "voluntarism" or "free choice" or "competition", as opposed to coercion, intolerance and despotism. Indeed, some alternative currencies, that CAN be as good as gold coins, although not convertible into gold coins by the issuer but only on the free gold market, are cheap to produce, compared with gold coins and gold certificates. But that does not turn them into cheap and nasty money. Indeed, central banks that can pump their forced and exclusive currency into circulation, almost without limits, will find their paper currency cheap to produce and circulate - until the last stages of the inflations they do thus cause or until other effects of inflation begin to matter considerably, e.g. the results of price controls and rationing, the cessation of credits on a paper money basis, and finally even the severely increased printing costs for the notes. To that extent its "cheap" money can very often become very expensive for a government. It might even be overthrown, if not immediately, by a crackpot like Hitler & Co, who tried it in 1923, but, largely as a result of this inflation- and the subsequent monetary crisis of the Great depression, by the same crackpot dictator, 10 years later. Money that is very expensive to obtain and with which an economy cannot be fully supplied, can reduce that economy to degrees of barter and to emergency sales prices. In such situations - until normal marketing conditions for goods, services and labour are restored, the availability of some form of cheap money, even if it is not ideal money, would be widely welcomed. But governments in such situations make neither the own exclusive currency sufficiently accessible nor do they permit or encourage unofficial competitive supplies of exchange media. (On the contrary, in the last years of the Weimar Republic the suppression of alternative currencies reached new heights in legal and juridical comprehensiveness.) Once the "cheap" (despotic) money of monetary despotism has expropriated creditors (including all wage and salary and pension recipients) by the millions, a rather costly treatment for them, the value of that currency will finally come close to zero and to total refusals to accept it. Already in the meantime many people will resort largely to primitive barter. - The money of monetary freedom is physically cheap to produce, too. Only some forms of it are believed, by their supporters, to require gold treasures, circulating gold coins and convertibility into gold. Others can do without that, even while continuing gold weight reckoning and would thus be much cheaper to provide. The cheapness of aluminium via modern production methods has not made it valueless but much more widely useful and used. - One should also distinguish between the low production costs and high production costs of money tokens and low and high purchasing power of them. Low production costs for monetary freedom issues do not mean that they have to have a low purchasing power. And high production costs of notes during a galloping inflation does not meant that they do have a high purchasing power, even though their denominations are very high. The largest German RM note of 1923 was 100 billion RM, worth then only ca. 7 pounds sterling. Poor people, with a few dollars or pounds, could then live in luxury in Germany, although their foreign exchange paper money was also very cheaply produced. - In general, the mere production costs of sound exchange media should be as low as possible and their purchasing power should be as high and stable as possible. - J. Z., 13.1.94, 1.5.97.
CHEQUES FOR CLEARING ONLY: They do not have to be covered by legal tender savings or deposits or gold or silver reserves and do not have to be redeemed in any rare metal. It is enough if they are useful enough for clearing settlements, i.e. if the cheque account holder gets enough credits written into his cheque account from the sales of his goods, services or labour, which here, too, form the real cover for the value of his cheques. Without them his cheque account would soon run red. - J.Z., 3/97.
CHEVALIER, MICHAEL, French economist who opposed the note issue monopoly - according to Rist.
CHICAGOMORTGAGESPECIALIST.COM: The Myth of the Free Market – Money, Interest and Power! - www.chicagomortgagespecialist.com/.../the-myth-of-the-free-marke... - Cached - 3 Jul 2011 – A video to send to those who think the free market produced all the recent economic catastrophes… …and happy new year to all my listeners ...
CHILD LABOUR: Child labour, voluntary and unexploited, should be part of a child's learning process and could make a child financially independent of its parents at an early stage, which would help to avoid much friction and frustrations between the generations and also among parents in nuclear families. When unemployment is wide-spread, then children and juveniles are kept out of the labour market by compulsory schooling and "protective" child labour laws, like minimum wages, set about the market level for their work contributions. (In the average case, not in all individual cases. Under freedom of contract for wages many able and willing young people could earn much more than their present minimum wage. But now neither they nor their employers are given the chance to find out how productive they can be.) When labour is still very unproductive and insufficiently supplied with capital and also forced to be sold only for a forced and exclusive currency, then the income of a family was often insufficient and so the children had to be sent work to work. Now they are not allowed to and their time is taken up by compulsory school attendance and imposed homework so that for much of the rest of the time they try to escape into games, entertainment and play. (Just like adults, who are bored or stressed by their job situations.) Neither of these are very educational and a good substitute for giving children the chance to become early-on involved in various self-supporting labours that are self-chosen and naturally educational. Under full employment they could change their jobs e.g. every week, if they wanted to, to give them a more varied although not a thorough experience with them - but they might find their true vocation in this way. That they should no be exposed to great risk to life, limb and health is self-evident. Parents and guardians should have a veto there. Under monetary and financial freedom parents would, as a rule, be able to earn enough to support their children and they would remain their guarantors and guardians and not forced, by their poverty to send their children to go to work just to earn enough money to help support the family. Most would see the value of unforced labour for their children. Moreover, then there would be many more part-time jobs. A few hours of work a day, or for some days a week, is more bearable for them than 40 hours or more a week. Furthermore, upbringing and education loans would be much easier to obtain and easier to repay later, by the parents or the children or both. One child charity asks currently for $ 1 a day to support a child in an underdeveloped country. I feel certain that FREE children (ECONOMICALLY FREE, and that would also require full monetary and financial freedom) would be able to earn much more than $ 1 in no more than 1-4 hours of daily work, if allowed to do so and most of them would tend to learn more from this than they do now in schools (in their "12 year sentences"). At the same time, competing schools and education systems, could be made much more attractive for them, give them a choice and their lessons could also be paid for by the children themselves, so low could they be, if they were organized e.g. under the monitor system of Joseph Lancaster. (Or, nowadays, digitally. - J.Z., 30.5.11.) High school and university students, being already literate (only somewhat literate, under present government schooling), would find it much easier to support themselves through part-time work, with chosen stretches of full time work between stretches of full time studies. Learning is more and more becoming a life-long process, anyhow, for all, since the job skills and knowledge required are continuously changing, too. The fixed, long and compulsory school years are a form of unjustified enslavement for children and one of the major causes of juvenile delinquency, escape into drugs and alcohol, mind-numbing and hearing-damaging music and of unnatural friction between children and parents. It also does most children good when they are not only disciplined by parents and teachers but by job, trade and market requirements, as spenders of their self-earned money etc., becoming as early as possible self-responsible instead of delaying that more and more. How many of them are e.g. killed on the road, because the driving option was withheld from them until they were almost 17? I would like to see a statistics comparing country children, who often drive tractors etc. on their parent's farms, much earlier, with the driving records of city children, forcefully kept from driving until almost 17. For any suppression of natural urges there is always a price to be paid. Their internal control and naturally learned self-control is much more preferable then the controls imposed by compulsory school attendance and government run or regulated schools. - J. Z., 4.5.97, 13.9.02. - The existing controls by teachers have not even eliminated bullying. - J.Z., 30.5.11. - CHILD LABOUR LAW, UNEMPLOYMENT & MONETARY FREEDOM
CHILD LABOUR: Why are most kids not productive most of the time? Because we are prepared to subsidize their idleness, although there would be plenty of jobs for them in house and garden, industry, business and agriculture, all voluntary, part time, market rated, if only all restrictions upon their creative and productive activities, including taxation, licensing, labour laws, wage controls etc., were abolished. Only their guardians should be free to set rightful limits upon their activities. - J. Z., 16.3.97.
CHILDREN AS FREE BANKERS? To what extent would they be immune from the penalties for infringing the money monopoly that would fall upon adults? Could they be penalised at all? Would their parents be? Could children be trained for such freedom actions? (That would certainly be more rightful and useful than training them in the use of automatic weapons, as some regimes do. - J. Z., 10.9.02.) Would they be interested enough to try? - One should try to write a primer, interesting and understood even by children, on this option. It should point out the connection between unemployment and child abuse and youth suicides, the especially high rates of unemployment among young people, the educational options of free child labour, the economic independence they could acquire as such bankers and as children, whose jobs would be made possible by such a bank. Their right not to be taxed in their productive efforts should be stressed. A bill of rights for children should be attached. The project should be discussed with children, e.g. on the Internet, to which many school children now have access. - J. Z., 2.3.95 & 27.5.97. - See: START-UP OPTIONS, OLD PEOPLE'S BANK OF ISSUE, WOMEN'S BANK OF ISSUE, ABORIGINES' BANK OF ISSUE, RED INDIAN BANKS OF ISSUE, IN RESERVATIONS, NEGRO BANKS OF ISSUE?
CHINA, UNEMPLOYMENT: 200 MILLION UNEMPLOYED: "China admits 200 m people unemployed." Headline in BANGKOK POST, Wednesday, March 3, 1993, p. 18: Peking, (UPI) - A government-run newspaper admitted yesterday that China has more than 200 million unemployed and called on the government to replace its failed social welfare policies with neo-classical economic solutions to the growing problem. - The official ECONOMIC DAILY asserted that misleading government figures are covering up whopping unemployment figures equivalent to more than one-sixth of the nation-wide population.... No statistics were given on the national working-age population, but 200 million unemployed could translate into an unemployment rate of as high as 30% if western statistical methods are used. ... The Ministry of Labour has officially admitted to only a 2.3% unemployment rate nation-wide for the last few years, but these figures have long been considered suspect by outside experts. ... But most of the unemployed are made up of farmers, who migrate by the hundreds of thousands into cities to look for jobs. ..." - That is like the population of 4 large nations. Add their dependants! What a bankruptcy declaration for a communist regime, a supposed dictatorship of the proletariat. With all the political and economic powers imaginable in its hands, it still does not manage to employ and thus, according to its notions and practices, exploit as many unemployed. Even the millions of political prisoners in the forced labour camps and the dozens of millions of supposed "class enemies", which the regime previously murdered, have not prevented such an enormous failure rate. - That many unemployed does automatically suggest: Why do as many people, mostly intelligent and productive people not employ each other, i.e., produce and exchange as best as they can? What hinders them, apart from their ignorance, increased by the mis-education system of the regime? - Admittedly, in China they do encounter not only monetary and financial despotism but more than the usual other economic interventionism. Obviously, when the government is not able or willing to employ them, they ought to be free to assert their right and liberty to employ themselves, as best as they can and this independent of any government laws, policies, measures, institutions, especially the monetary, financial and trading and taxing laws of their government. As many people, the equivalent of several large nations, ought to be able to arrange for division of labour and free exchanges among themselves, if not forcefully hindered to do so, and thus to employ themselves fully and productively and even prosper. Naturally, there ought to be no hard and fast borders around them. They should not be reduced to a ghetto existence. In other words, they should also be free to trade with "outsiders", to mutual benefit. Self-employment to mutual benefit and among themselves is only suggested here as a thought-model to break through the mentality that either the central government "provides" jobs or private employers do or one is completely helpless and must remain unemployed. China has a long tradition with various monetary experiments. Its copper tael currency, using copper by weight as an accounting unit, has for centuries helped Chinese to become independent in their value standard reckoning from the depreciated standard their governments provided. Private and competitive note issues go back, according to one book in my possession, to about 1300 AD - but were suppressed by the paper money despotism of the ruling Mongols. - The communists may talk about production for use, not for profit. But they do not enable these 200 million to produce and exchange for their own use and to profit thereby. They should not be forced for their production and exchanges to use exclusive currency of the Communist Regime which is also a legal tender one has made and kept them unemployed - and exploited and oppressed for so long and to such an extent. Allow them to pay taxes with their own currencies - if they cannot avoid tax payments at all. - With as many Chinese producing and exchanging independently from the regime, even the communist regime could benefit much more internal and exterritorially autonomous economic communities, practising free enterprise, and free trade internally and externally, under the practices of full monetary and financial freedom, than it has benefited, over the last few decades, from trade with Hong Kong. The communist regime, in its own interest, has tolerated this trade with a much freer Hong Kong, on the basis of a territorial separation, until now, when the treaty with the U.K. runs out and, for its future, it has promised to continue its economic liberty. It has also permitted various industrial and free trade zones (a little bit liberated from its economic despotism) in its domain, out of sheer necessity. Hong Kong, when it was leased, was a largely rocky, mountainous and infertile area. It showed something of what people can do, if only somewhat set free. Instead of a territorial liberation let there be a personal one, based on individual and groups secessionism, combined with exterritorial autonomy for communities of volunteers - starting with those the regime is helpless to help. - Naturally, this would and should ultimately have political consequences, too. - I for one would favour allowing them to produce or purchase arms for their defence against continued aggressions and interventions by a government that has made and kept them unemployed. Allow them to trade freely with the world and to refuse to trade , if they want to, with the Communist Regime, which kept them largely enslaved but would not even supply them with the life support of slave labour! They should be free to refuse to pay taxes to Peking and to levy any, if they want to, only for their own purposes. They should be free to declare their political independence, too. Also, to federate freely, if they want to, with all other more or less free Chinese communities in the rest of the world - and all other somewhat free communities. - Once they have learned to support themselves by their own labours, in a division of labour and free exchange process, then an army or self defence force or militia of millions of members, serving voluntarily and part time, a real "people's army", could serve for their defence, protecting their liberties. Among its rightful aims should also be full exterritorial autonomy for all the remaining communists and socialists and other ideological groups, all based completely on the free choices of sovereign individuals. That is not a declaration for a permanent civil war or party struggle but a declaration for a quite tolerant and permanent peace option, offering to everyone the government or society of his or her dreams. It would be the analogy to religious liberty or religious tolerance but this time in the political, economic and social (ideological) spheres. Chinese had much experience in the last 2 centuries with exterritorial or personal laws. Alas, these were, mostly, unilateral options for foreigners only. Chinese, unilaterally, could make them multilateral, for all kinds of Chinese groupings and for all kinds of foreigners, not only in China but in the rest of the world. (As the oldest continuous culture, with the longest economic, political and social experience, they should and could take the lead in this sphere. - J.Z., 16.9.02. - If the communist regime tried to suppress their self-help and autonomy efforts and defeated them in China, allow them to retreat to any other country, there going on to employ and support themselves, rather than becoming burdens for others as refugees under other regimes that also cause mass unemployment. They would probably gain much international sympathy if they formally declared their secession from the communist regime - but, at the same time, did not engage in any revenge or repression measures of remaining communists in their areas or spheres of influence but allowed them to continue to do their things to themselves, at their own risk and expense. On that basis they could minimise resistance against them and maximise the chances for Chinese people anywhere to become liberated, as far as they want to become liberated. - Any territorial "nation" is largely an involuntary conglomerate, too! If it has an unemployment rate of 1/6th, as the above quoted article suggested, then it is already in a potentially revolutionary situation. The Nazis rose to power on ca. 10% only. Obviously, friends and relatives of these 200 million victims and self-liberators would sympathise with them. Once monetarily and financially liberated, they could offer amnesty and jobs to the conscripts sent to fight against them, provided only that they either desert, let themselves be taken prisoners or declare themselves neutral. - Chinese people, if not lorded over by ideological fanatics, could also establish various self-management and cooperative production and consumer coop enterprises, very different from the governmental ones, with all individual and group incentives and rights maximised, rather than subjected to externally imposed bureaucratic plans, dictates and rules, so that the best ideas of e.g. alternative forms of socialism and communism (There exists even something that calls itself "libertarian communism"!) could also become, be realized by themselves and among themselves, on a quite voluntary basis,. In practice it would be found, I believe, that the best forms of "socialist" self-management practices are not greatly different from the internal best business practices of what has been called "free market capitalism", with its property, profit and free enterprise incentives, which were, alas, only realized in the "free" countries for a minority in every enterprise, instead of for everybody, from the messenger boy to the to manager. - J. Z., 24.5.97. Various exterritorial governments in exile of Chinese, in other countries, could and should be free to set attractive examples for alternative political, economic and social systems, all of them only for volunteers, thus demonstrating how they could peacefully coexist in the future China as well and also world-wide. - J.Z., 31.5.11. - LIBERATION, LIBERTARIAN REVOLUTION, SECESSIONISM, PANARCHISM
CHINA, UNEMPLOYMENT: Hong Kong Bank says in its latest CHINA MONTHLY REPORT that labour problems in the country have worsened but have only recently drawn major concern and attention. - The bank estimates that there are between 10 million and 20 million redundant workers in the State sector, with another 120 million in rural areas - figures which are growing each year." - Robin Brombi, "Bank warns on China's soaring unemployment." A photo accompanies the article with the inscription: Searching: Some of the 25,000 students who applied for 1500 jobs in Zhuhai zone. - THE AUSTRALIAN, 24.4.94. - How can one raise interest in the monetary freedom options in mainland China, or at least in Taiwan? Could only a revolutionary army be interested in them? If it could supply deserters and POW's almost instantly with productive jobs, then it might not have much fighting to do. - J. Z., 27.5.97. - Even our defence department should be interested in "armies" of unemployed, for another Hitler, this time with Chinese features, could turn them into conquering armies. Moreover, if we could supply any number of deserters and refugees very rapidly with productive and self-supporting jobs, by utilising especially all monetary and financial freedom options, then we would not have to fear any conscript armies or hordes of refugees. - J. Z., 10.9.02. - I wonder what its unemployment rates have been since then. - Has the part-liberation of the economy made a difference? At least monetary and financial despotism, apart from political despotism, do still remain. - J.Z., 31.5.11. - LIBERATION, DEFENCE & FULL EMPLOYMENT
CHINA: Can China Change the Rules of Global Capitalism? - www.dailyreckoning.com.au/can-china-change-the-rules.../13/ - Cached - 13 Jul 2009 – Free market money - at least in a world rife with mistrust about government money-is going to be gold and silver. ... - People of China (at least 56 different ethnic groups, not to speak of religious and ideological diversity) had, historically, a very interesting and varied monetary freedom tradition, of which most of its present misrulers are, probably, still quite unaware. Only a few modern writings point out this tradition. Most of the older and relevant Chinese texts are, probably, still not translated into Western languages. Territorial rulers merely change their wrongful rules, rarely somewhat for the better, and do not permit anyone to opt out from under them. Full monetary and financial freedom ideas can be a great help to overthrow their territorial rule and this rather non-violently. Chinese merchants did achieved much, even under government paper money mismanagement, with e.g. copper-weight value standard reckoning. - Dr. Walter Zander wrote an article on this. - All of the monetary freedom tradition and experiments in China may still have to be compiled in a special digitized anthology. E.g., if I remember a reference right, a Shanghai electricity work produced its own electricity money. Street money experiments go back to the Middle Ages and were outlawed by the Mongol rulers then. Barber shops, restaurants, tea-houses and brothels did then issue their own emergency street monies. See e.g.: Herbert Franke, Geld und Wirtschaft in China unter der Mongolen-Herrschaft, Beitraege zur Wirschaftsgeschichte der Yüan Zeit, 1949, Otto Harrassowitz, Leipzig, indexed & with a large bibliography, 175pages, especially pages 118, 120,124, 127, 133. - This author got away with publishing such ancient freedom experiments under the totalitarian communist regime of East Germany. - J.Z., 24.7.11.
CHOICE IN CURRENCY COMMISSION, Exec. dir. Joe Cobb, 325 Pennsylvania Ave., S. E., Washington, DC 20003, USA, T.202-226-7850. (1986).
CIRCULATING MEDIUM: A forced and exclusive currency hardly deserves the name of a "circulating medium". - J. Z., 2.7.96. It is rather forced, like a requisitioning certificate, into the hands of helpless creditors, including all wage and salary and pension recipients. - Something that circulates only under coercion and fraud (due to its depreciating value standard) does not circulate under its own steam. It would be rejected under freedom. - J. Z., 19.3.97. - GRESHAM'S LAW, LEGAL TENDER, FORCED CURRENCIES
CIRCULATION CHARTS: See my 11 pages on this in PEACE PLANS 41, on microfiche. I also offer them digitized. - J.Z., 31.5.11. - CIRCULATION CHART DRAFTS BY J.Z.: See file: FB JZ circulation charts, 145 KB.
CIRCULATION OF FREELY ISSUED SOUND EXCHANGE MEDIA, ESPECIALLY UNDER THE REAL BILLS DOCTRINE OR BANKING PRINCIPLE: Verbal description of the circulation process involved: 1.) The employers have received the services of their employees and produced, using their capital (raw material, machines, premises, etc.) consume goods which they would sell to wholesalers on short term credits. - 2.) For these the employers would receive commercial bills of the wholesalers, or other short term debt certificates, instead. - 3.) These they would then get discounted, into private goods warrants or bank notes by the issuing centre of the local shop association or by a bank operating on the pure banking principle or real bills doctrine. - 4.) With these notes or goods warrants the employers would pay the wages and salaries of their employees and also the bills of their suppliers. They would take out their own profit in this way, as well and, after a corresponding tax reform, pay also their taxes with them. (Otherwise the State, as long as it is still allowed to raise taxes, could raise only as much in taxes as it made sound tax foundation money available for current and near future tax payments.) - 5.) The wholesalers would have received the goods and given their commercial bills in return, obliging themselves to repay their bills when they are due in goods warrants, or get them settled by clearing. They would sell the goods to retailers, usually not for cash but upon the short term promises of payment given by the retailers, to pay them for the goods in goods warrants or banknotes within 1-3 months. - 6.) The retailers, between them, would receive the goods from the wholesalers, and would be obliged to repay them in goods warrants or banknotes in the near future. The additional goods they could thus offer, together with their stocks remaining from previous deals, would constitute the ready for sale cover (shop foundation or readiness to accept foundation) of the goods warrants or bank notes issued by the issuing centre of the local shop association or the local bank of issue. - 7.) The retailers would sell their consumer goods to the employees and all other peoples profiting from these turn-over credits, for the goods warrants or banknotes thus issued and would thereby become enabled to repay their debts to the wholesalers. 8.) The employees would have given their labour, would have been paid in local goods warrants or banknotes and would have spent their earnings in the shops. 9.) The issuing centre had discounted the commercial bills, or the equivalents, of the wholesalers, presented to them by the employers, with its own goods warrants, or notes, keeping the bills as a short term security. Lastly, the wholesalers would have been paid for the goods supplied to the retailers and thus enabled to redeem the bills of exchange, that were discounted and kept by the bank. - - All these transactions could also be done via non-cash accounts, deposit or cheque and clearing accounts, credit cards or purely electronic transactions. - All members of the issue association or bank, at least as debtors of the banks of issue, would have to oblige themselves to accept these certificates in payment. Especially the employees, if they want to be employed, should not refuse such payments, as they have long been accustomed to do. But they might rightly state that they would only be prepared to accept these alternative means of payment if and while they are locally accepted at par, in the shopping centre and, e.g., in their own consumer cooperative and in the canteens of the employers. Their wages having been contracted in sound value standards, they would insist upon being paid correspondingly more - in case the local currency would ever be depreciated. - If they insisted instead upon being paid in some or the other exclusive currency, which the employer could not or not as easily and sufficiently obtain, they might lose their jobs or their pay would have to be reduced. - To make this form of payment initially more attractive, a wage and salary increase might be readily offered if they accepted it in this form of payment. - Once the notes or goods warrants have been used to redeem the short-term securities - upon which they were issued, which would represent goods produced and sold, the circulation process would be closed. Not a single gold- or silver coin would be required for it and not a single legal tender note. Then this process could be repeated over and over again. - For competitively issued exchange media based upon a service cover that is locally offered, the circulation system would be slightly different. The independent tradesmen and professionals involved as issuers could get their own bills discounted by the retailers' issuing centre - up to the amount of their service potential and average trading during the next short term period. By paying their suppliers, profits and wage bill in their warrants, they would put them into circulation. By accepting them in payment for their services, they would be enabled to withdraw them and repay their IOUs with them. - Instead of joining the local note-issuing bank or issuing centre of the local shop associations, the service providers, tradesmen and professionals, could also establish their own issuing centre. They might include not only tradesmen and professional services but e.g. transport services, restaurants, amusement centres, educational services, also suppliers of gas, electricity, communication, water and sewage services etc. - - Local people would individually decide whether they would be prepared to accept 2 or more such local currencies. - The issues of the goods and service warrants would merely provide the necessary turnover credit. They would not and should not be issued to provide medium or long term capital loans - because these would not assure their rapid enough return to the issuing centre. If issued for longer periods than those of short-term turnover credits, they could depreciate. But they could be used, saved up and invested like cash, to purchase term deposits, bonds, mortgages and shares and to repay medium and long term loans or instalment repayments and interest payments on them. - This use of monetary freedom would mean that due to our private local issues (alone, or, preferably, in association with others), we would no longer have to scramble for a chance to sell our labour, services and products against a monopolistic and more or less scarce exchange medium issued by a central banking system. Instead, we would be enabled to pay with our own notes or the notes of our association and thereby we would assure that our own notes or those of your association would come back to us or our association - to pay for the goods and services we have to offer, alone or together with them. - To the extent that we have valuable goods and services to offer and do offer them at competitive market prices, and that others have valuable goods and services to give in exchange, also at free market prices, we would then be enabled to exchange them, independently of the monetary policies and mistakes of the territorial government to which we are subjected, its central bank, its monetary legislation and its currency and interest rate "policy". All our issues would automatically flow back to us to be redeemed e.g. in the gold-weight-values expressed in our goods and services. (If we had accepted these as our value standards, for our notes, goods, services and labour.) All our earnings and contract earnings and debts would also be expressed in sound value standards as reckoning units. - - An instance of a single issuer, however unlikely and rare such instances might be: A barber, to the extent that he would be able to issue in payment and get accepted his standardised hair cutting tickets, would not have to be afraid of being out of work. They would, inevitably, stream back to him to be redeemed by him through his services. If he were to spend the same amount of government cash, it would not necessarily stream back to him or not fully. - - Without this freedom, employment opportunities are, indeed, tied down to the supply of legal tender. Under monetary freedom, they are only limited by your willingness to give your productive labour and services in exchange for those of others. In fact, under monetary freedom you could anticipate your earnings, spend them with your own notes or clearing certificates and then work, to earn them back, be paid in them and thereby finally pay off what you bought with your standardised IOUs or those borrowed from your local shop association. Naturally, you would always have to accept your own notes in payment for your own work. Likewise, the notes of your creditor, since you could use them immediately to pay your debt to him. (I am speaking only of short-term turnover credits!) - - Compare this self-liquidating issue, acceptance and reflux system with the issue of e.g. gold or silver coins or the circulation of legal tender paper money notes. These coins and notes are not as effective in providing work for you because - whenever you pay with them, they do not necessarily return to you, or your association, or not soon enough or with sufficient certainty. Instead, they may flow to anyone else in the country or even, temporarily, into foreign countries. - Private notes, promising redemption in the goods and services of the issuer - and his associates - have the essential capacity for a rapid and regular reflux, i.e. they must stream back to the issuer, if they are to have any value for the holder, and will thus provide corresponding sales and employment for the issuer. To that extent they are like tickets. That could and should be formalised by giving them only a limited circulation period, 3-12 months at most. - If they happened to suffer a small discount in general circulation and all the rules of a sound issue technique would have been obeyed, then these notes and their discount with them, would rapidly disappear from circulation. Debtors of the issuing centre would not only accept them at par for their goods and services when anyone buys something from them, but would go out of their way in attempts to buy them up on the market for exchange media, using other means of payment, and gladly acquire them thus at a discount. If a debtor would thus be enabled to buy such notes at 1% discount and could with them repay, on the same day, his debt to the issuing centre, he would have made a 1 % profit on this day, amounting to an annual profit rate of 365%. That would be so attractive that the discounted notes, and with them their discount, would soon disappear from circulation. (Provided only the issue and reflux technique had been quite sound.) Potential customers of the stores of the issuing centre (if it is a shop association) would also love to acquire such notes at a discount - in order to carry them fast to these stores to be redeemed in goods and services at par. In other words, a discount for a sound goods warrants issue could not last long and would not be large. But, if a discount were considerable and persistent, then something else would happen. People would mostly refuse to accept the notes altogether. Only a few would continue to accept them, at a considerable discount - to the extent that they could still use them against the issuer. In other words, the issuer could no longer issue more notes or only at a loss. The loss would occur because he could issue them only to a few and at a discount whilst he would have to accept them again at par and immediately. - J. Z., 1985 & 21.5.97. - For graphical descriptions of the circulation process for optional and freely issued exchange media that are based upon shop or service foundation see my drafts in PEACE PLANS 40, which I also offer digitized. In the writings of Ulrich von Beckerath you will also find many much shorter and clearer verbal descriptions of this process. - I have not yet got around to extract them all and all his numerous other important remarks upon monetary freedom, which he studied, pondered for over 60 years and wrote about for at least 48 years. Alas, some of his writings, to the extent that they were preserved, are still unpublished, even on my microfiche, in German only, i.e. untranslated. - J. Z., 14.5.02, 31.5.11.
CIRCULATION OF MONEY: Strictly speaking, money does not 'circulate': it is exchanged against goods. When the turnover of (*) money increases, the turnover of goods increases correspondingly." - Henry Hazlitt, Where the monetarists go wrong, THE FREEMAN, Aug. 76, p. 76. - (*) Here I would insert: "good" or "sound". - If money is just turnover-credit money then it could and should, perhaps, upon every return to the issuing centre, be cancelled, instead of being issued out again into circulation. This would facilitate the control of the issue. It would correspond to the cancellation of the real bills the issue was based upon. It would make e.g. the issue of new series more frequent and thus give less opportunity for forgers. It would correspond to the use of tickets, mostly just once. (Unless it is a subscription pass for a whole period.) And it might be considered necessary or useful by their issuers and final acceptors. The discovery of forged notes, with the same numbers, would be facilitated, too. (Theoretically, one could take down the numbers of returned notes before one issued them again. But when another note appears with the same number, it would not always be clear or easy to determine which of the two notes is the forged one, in the absence of the first one that was received and re-issued again. - Thus Ulrich von Beckerath advised to follow the old practice of the Bank of England and to clearly cancel all returned notes and keep them as a record. - In that case notes would have only a very short and temporary circulation, it could be called that at all, and would, instead, oscillate, with each new oscillation: issue and reflux, being undertaken by a new series or new set of numbers of an old series. - J.Z., n.d. & 31.5.11, 2.8.11.
CIRCULATION OR OSCILLATION OF MONEY? Not all kinds of sound money need to "circulate". Various private notes might be issued and, shortly afterwards, stream back, like stamps, tickets and gift-vouchers or tokens. The more it is issued merely upon the "security" of the consumer goods and services that any money is, usually, "redeemed" in, every day, by consumers, according to the note-holders' wishes and needs, among the many choices offered to him in his payment community, usually the local shopping centre, the more will the issues be the accurate equivalent to the goods and services for sale and wanted, at market prices. Then, with any increase in output, that can still be sold at close to the old prices, or with any increase in the total of all prices asked for and which the consumers would be prepared to pay, if only they were sufficiently supplied with purchasing power, the additionally required purchasing power could be issued by the suppliers. The money would be issued and would stream back fast, in the quantities required, to be redeemed in its goods and services cover. More could not be issued than is required for this, for then it would be discounted - and the issuer would still have to accept it at par and wants to stay in business, rather than being boycotted for not keeping his exchange media sufficiently at par in general circulation. - Henry Hazlitt may have had something similar in mind when he wrote, in "Where the Monetarists Go Wrong", THE FREEMAN, August 1976, p. 76: "Strictly speaking, money does not 'circulate': it is exchanged against goods. When the turnover of money increases, the turnover of goods increases correspondingly." - I would rather say: When the turnover of goods money or goods warrants or purchasing certificates increases, the turnover of goods increases correspondingly. - J. Z., MFNL 3/4. - Money is here like oxygen in the blood circulation: Continuously issued by the issuing centre, it is earned and used up by the consumers, in their working lives, and replaced again and again by the issuing centre, e.g. the local shop association. A clearer image is probably provided by comparing them with transport tickets or other tickets. They, too, oscillate rather than circulate permanently. They are continuously replaced by new issues when they have achieved their intended turnovers. - J.Z., 5.9.03.
CIRCULATION PERIOD, LIMITED, FOR COMPETING CURRENCIES: The possibility of a discount of competing exchange media, as a warning signal, is a necessary factor in the payment system of monetary freedom. It is a sign that something might be wrong with the issue or its reflux and that some counter-action is required. For instance, if it happens, the issuers might arrange for a special sale to speed up the reflux of their notes. They might also charge a higher fee for short term loans they grant in their own currencies, for wage payment purposes or increase the discount rate when they discount sound commercial bills of their members. Another option would be to shorten the reflux period for all newly issued notes, until they have achieved a reflux period which would keep their notes at par. E.g., if they used a reflux period of 10 years, then their notes might become discounted because they are not rapidly enough streaming back to the store in repayment. A reflux period of 1 day only (like for cinema or theatre or sports events tickets) might maximise reflux but would be rather inconvenient for a local currency. Thus, somewhere between at least a week, if not a fortnight or a months, at most 3 to 12 months, is the optimal circulation period for any competitively issued exchange medium that is to retain its par value while it changes hands locally. Ulrich von Beckerath ascribed the limited circulation period to a proposal by Prof. Edgard Milhaud. But it merely corresponds to the limited circulation period for most sound commercial bills of exchange. It also can satisfy the anti-hoarding aspirations of Gesellians, without burdening the note holders with a special tax upon their notes or the obligation and bother to affix stamps to them. It would, moreover, express the nature of most alternative currencies as ticket money, transport vouchers, clearing certificates etc., for time limited, i.e., perishable goods and service capacities. A reflux of notes that is assured only in 1 to 10 years is no more useful to most sellers of goods and services than is a rain, coming only every 120 days to 120 months is to an agriculturists. - Even for hardware goods the owners and sellers do not want irregular but as far as possible regular sales. Naturally, especially with regard to this, it would be a mistake to issue large quantities of a local currency and all of it with the same expiry date. Instead, the expiry dates should be staggered, best perhaps from the day of issue, perhaps by date-stamping previously printed notes only once they are issued. What is possible for transport tickets should be possible for these paper token monies, too. - J. Z., 11.3.89, 28.11.92, 16.5.97. - TO SPEED UP & ENSURE THEIR SUFFICIENTLY FAST & COMPLETE REFLUX
CIRCULATION QUANTITY: How can one determine for any particular time and place and condition the right quantity of exchange media? In the same way as the right quantity of any products and services is determined, i.e. by free pricing, determined by supply and demand. When sound exchange media are freely chosen and publicly rated against their value standards, other value standards and against competing exchange media, then the exchange media will either be at par with their nominal value (their value standard units) or below or above par with them. If below par, or at a discount, they will be less and less issued and more and more refused or discounted. Thus they reach the limit of their circulation. (If they are rated against other exchange media, then they will either stand in their exchange rate at par, below or above them and these changes will be published and observed. As long as they do still circulate still at par or even above par, with their own sound enough value standards, then further issues are possible and desirable. Free market rating for exchange media, sound value standards, and full publicity for the issue and reflux of competing money notes do make their circulation or volume determination for any period quite automatic. Under a competitive supply of exchange media we would no more suffer shortages of these media and of sound standards, than we do suffer shortages of pens and rulers, milk and litre measures, wheat and kg weights. Any despotic attempt to determine for others the right quantity of exchange media or clearing transactions and of supposedly ideal value standards for all their transactions (currency or monetary policy), is condemned to failure, like all other attempts at central planning and direction or experiments with command economies. - J. Z., 3/97. - LIMITS FOR ISSUES, VOLUME OF SOUND MONEY
CIRCULATION SPEED: A rapid circulation of exchange media is not as important, mostly, as a certain and full circulation is of all wanted or needed goods, services and labour, mediated by money tokens or clearing. Only monetary and clearing freedom, combined with free choice of value standards, can achieve that. This freedom can also make issuers and acceptors largely independent of the quantity of hoarded exchange media, since they can be easily replaced by additional issues, should a currency shortage occur. Moreover, competing exchange media, to assure their reflux, will usually be given a limited circulation period, too, like commercial bills and cheques and tickets. However, in their own interest, issuers of sound and private or cooperatively issued turn-over credit currencies, will see to it that their issues will return to them, in payment for their goods, services and labour, as soon as possible. To the extent that electronic clearing and account checking has become possible, payment and clearing can become almost instantaneously. Quite possibly, people who do some of their shopping still for cash but only weekly or fortnightly, would be quite satisfied with a local shopping currency, to the extent that they want to and can spend it, that is valid only for a week, a fortnight or a month, and to the extent that they can and want to satisfy their requirements from local suppliers. The circulation of alternative media of exchange will also tend to be speeded up whenever and wherever they have suffered a discount. For then the holders will want to spend them fast - and can be sure of getting them accepted at par only by the issuer. Even while a discount does not occur, the system must provide for the possibility of a discount. The slightest discount, perhaps only at money exchange offices or in wholesale trading, or on rare metal markets sends an important signal or even an alarm to the issuer, inducing him to discontinue further issues, while the discount exists and before it become noticeable in general circulation and thus give his note issues a bad reputation. The same self-interest would also induce the issuers, if self-given or adopted issue statutes do not already oblige them to do so, to use other means of exchange to purchase the own ones, especially when they are anywhere traded at some discount. Any money that is essentially ticket money or clearing money, does not have, as a rule, any trouble with its circulation speed. Nevertheless, additional reflux arrangements could be provided for it. E.g., debt repayments in other exchange media could involve payment of a small penalty or a fee for the conversion of exchange media which one is not obliged to accept, because they are not the own. The prices might then be marked in the own exchange medium at par and, if paid in other exchange media "plus 1-5%". That would also speed up the reflux of the own exchange media. Furthermore, loans might only be made within the vicinity of the centre of issue. Nor should the total amount lent to any one business come to a large fraction of the total note issue, thus involving too large a percentage of the issues of a centre in the always possible failure of that particular business. To "suck" the own notes back to the issuing centre, in payment of debts, like with a vacuum cleaner, the issuing centre might oblige all its debtors to accept its own notes and to indicate their readiness to do so, by large signs in their shops and offices. Daily note exchanges and clearing between centres of issues will also speed up the reflux of notes or clearing of accounts. Electronically clearing could even occur almost instantaneously. - J.Z., 14.12.93, 1.5.97. - OR RAPIDITY, NUMBER OF TURNOVERS OF A CURRENCY, DEGREE OF HOARDING, DEGREE OF CASH HOLDINGS, HOARDING
CIRCULATION: The economic problem is in reality not a problem of consumption or of production but a problem of circulation." - Dr. Bank. Banks? Date? Title? - Which economic problem? Are consumption and production really problematical? Does money really have to circulate permanently? What does have to circulate? Are economic crises due to insufficient "circulation" of capital or of exchange media? Doesn't, at least during an inflation, one thing, the monopoly money, with its legal tender power, circulate all too extensively and exclusively, namely as the government's forced and depreciating currency? All such general phrases and explanation attempts do not sufficiently explain the realities but rather distract from them. - J. Z., 9.9.02. - DIS., PRODUCTION, DISTRIBUTION, CONSUMPTION, MONEY, TURNOVER CREDIT & TURNOVER CLEARING OR TURNOVER EXCHANGE MEDIA, CAPITAL & THE ECONOMIC PROBLEM OR CRISES, EXCHANGE MEDIA, FREE EXCHANGE, MONETARY FREEDOM, FREE BANKING, MONETARY DESPOTISM.
CIVIL RIGHTS: Civil rights must not include, however, the "right" to violate the property rights of others. Legislation which seeks forcibly to segregate private property must, of course, be opposed, but legislation which seeks forcibly to integrate private property must also be opposed, for this too constitutes a violation of freedom. - Richard W. Grant, The Incredible Breadmachine, self-published, n.d., indexed, 286pp, p.208. - INDIVIDUAL RIGHTS, PROPERTY RIGHTS
CLARKE, ANTOINE, The Micropolitics of Free Market Money, a proposal by Antoine Clarke; Currency Competition some options considered by Antoine Clarke ... - Libertarian Views on Money - its Creation and Control - projects.exeter.ac.uk/RDavies/arian/libertarian.html - Cached - 29 Feb 2008. - - The Micropolitics of Free market Money: a proposal. THE MICROPOLITICS OF FREE MARKET MONEY: A PROPOSAL - www.libertarian.co.uk/lapubs/econn/econn039.pdf - File Format: PDF/Adobe Acrobat - Quick View by A CLARKE - 1992 - Related articles - Economic Notes No.39. ISSN 0267-7164. ISBN 1 85637 081 X ... - - The Micropolitics of Free Market Money: a Proposal » The Cobden Centre - www.cobdencentre.org/.../the-micropolitics-of-free-market-money-... - Cached - COBDEN CENTRE,: a Proposal By Antoine Clarke, on 7 December 09. This paper originally appeared as Economic Notes No. ... - CLARKE, ANTOINE, The Micropolitics of Free Market Money: A Proposal.- - Roy Halliday, in section on Genuine Money.
CLASS WARFARE: As Frederic Bastiat said in THE LAW: "When plunder is organized by law … all the plundered classes try somehow to enter - by peaceful or revolutionary means - into the making of laws." - Dean Russell, Government and Legal Plunder. Bastiat Brought Up to Date, FEE, May 85, ISBN-0-9106614-70-9, 116pp, p.21. - PLUNDER-BUND, MUTUAL PLUNDER, LAWS, LEGISLATION, REVOLUTIONS, REFORMS
CLASSIFICATION OF WRITINGS ON THE SUBJECT: Maybe they or the exchange media and value standards discussed in them, should be presented in form of charts, especially of the details of exchange media and value standards proposed or described as used in the past or present, stressing good points and also all wrongs and errors or mistakes still involved in them. Otherwise, the great variety of ideas, experiences and potentials that does exist in this sphere, is all too often not clarified in the writings of partisans of one particular system or the other, be they green-back advocates, Gesellians, Social Credit people, one or the other kind of gold bucks or rare metal redemptionists, currency- or the various free banking school advocates or those of "community currencies". The differences between them are so numerous that Siegfried Schwenke, in his online draft of a manuscript on monetary theory, has confined himself to describing just a few of this multitude. I hold that the number of those worth discussing becomes greatly reduced if one describes a) optional, competing and market-rated currencies as opposed to b) monopolistic or exclusive ones with legal tender power. The latter do already condemn themselves by their usual disastrous economic consequences and also by the political, social and even military consequences of them. Thus they could, largely, be only indicated as such and, otherwise, ignored, on the road to sound exchange media (or clearing options) and to sound value standards. - J.Z., 31.5.11.
CLASSIFICATION SCHEME: The literature on the subject is too extensive. Tabulations of the historic and proposed exchange media and their characteristics and, likewise, of value standards should be drafted, amended and gradually filled out in a collaborative process. False premises, observations, conclusions and theories involved in them should be pointed out, as well as the literature defending and attacking each position taken. No copyrights should be claimed. But each contributor should sign his statements, preferably with a contact address. Giving each statement a number would make referrals more easy. - J. Z., 16.3.97, 31.5.11. - FOR EXCHANGE MEDIA AND VALUE STANDARDS
CLEARING & CASH TRANSACTIONS: Over a short period the same total amount of clearing certificates or clearing account credits or electronically accounted and transferred dollar totals can settle dozens to hundreds of times as many debts than are due immediately and payable immediately and in cash. These alternatives can function very well under full freedom and this without the daily cash circulation being multiplied and thus being enabled, under monetary despotism, to drive up prices and wages expressed in is "value standard". Sound value reckoning in any chosen value standard can then go on. Much more is thus being turned over, than could be turned over in cash and this without inflation. All exchange media and methods that merely promote clearing and use sound value standards, are by their nature no more inflationary than an pure barter transactions. Every day, every hour, only as much cash and clearing options are required to settle all debts due on that day or by a certain hour. However, when cash-redemptionist "thinking" or thoughtlessness is still very strong, i.e. the assumption of the legal and juridical right of creditors persists to demand, at any time, a debt settlement in cash (rare metal coins, gold certificates or legal tender), rather than settlement by clearing or non-cash payments, while, in normal times, much more is settled cash-less, i.e. by clearing or money transfers, then, quite unnecessarily and irrationally a risk and panic factor is built into this situation. Each credit becomes then a dealing in futures (in cash one hopes to get for the repayment) and each sudden growth in the demand for cash can set off further cash demands instead of continuing the normal and numerous as well as voluminous clearing and non-cash transactions. Then, whatever amount of cash is available will not suffice to satisfy the increasing demands for cash and the monopoly cash supplier, the central bank, can then not supply the additional cash required fast enough, when and where it is needed, at least sometimes,. - One should not try to discuss this topic without referral to a survey of the increase in cash circulation of the central bank's forced and exclusive paper currency over the last few decades, a survey of the correspondingly increased prices and wages, compulsorily expressed in this currency, and one of the normal total of daily non-cash transactions and their growth over the last decades. One should keep in mind the fact that the much larger daily total of non-cash transactions, which are legally and juridically claimable by the creditor, upon his whim, in legal tender cash, are much larger than the cash that the government makes available through its central bank. - The existing money issue monopoly system, with its inbuilt cash claim authority for all creditors towards all debtors for all transactions, even those normally settled by clearing or non-cash payments, is prone to deflations, stagflations and inflations, cash panics or currency famines, which can all appear quite suddenly, extensively and repeatedly. - Even if the monopoly issuer were able and willing to rapidly satisfy any cash demand of creditors with additionally printed notes, as legal tender these notes, issued beyond their tax foundation, would tend to stay in circulation even after the cash crisis is over. The deflationary crisis would thus be "overcome" only by inflation, as soon as the amount of non-cash transactions is back to normal. - J.Z., 2.4.97, 10.6.11, 12.6.11, 2.8.11. - CREATION OF MONEY, CREDIT, DEPOSITS, DIS., RIGHT OF CREDITORS TO DEMAND CASH, LEGAL TENDER MONEY OR A PARTICULAR MEANS OF PAYMENT, INFLATION, VOLUME OF EXCHANGE MEDIA & METHODS
CLEARING BANKS: Clearing banks are the same as note issuing banks in principle. Only the metal redemption does not apply to them. - Ulrich von Beckerath, in correspondence. - That applies only to clearing banks that operate by clearing only, not to cheque banks, that authorise their cheque account holders to withdraw either a rare metal deposit or legal tender, upon demand. - J. Z., 7.4.97. & NOTE ISSUING BANKS
CLEARING CERTIFICATES & CAPITAL SECURITIES: See: APHORISMS ON THE MONEY PROBLEM.
CLEARING: A clearing transaction does not need ANY quantity of exchange media nor ANY quantity of value standard units (e.g. rare metal coins), beyond the one unit adopted, e.g., an ounce or gram of gold, merely as a reckoning or accounting standard. It can operate well enough with book keeping and digital accounting only, in figures, expressing purchasing power in multiples or fractions of the adopted value standard units, e.g. a gram or an ounce of gold. The value of the value standard chosen is in no way changed by changes in the number of clearing transactions using it, in the same way as the sizes of the meter, the weight of 1 kg, the volume of 1 litre, are not changed at all with the number of transactions that use these measures. To affect the purchasing power of a medium of exchange its nature of exchange medium must be legally and coercively or by prevailing custom combined with a fictitious abstract or paper value "standard", and an exclusive exchange medium and this value standard must also be exclusive and forced (compulsory acceptance AND compulsory value, at its nominal value, as a result of legal tender acts). Then the people are not be free to express their prices, wages, and salaries etc. in sound alternative value units and payable in competing, optional and market rated notes and clearing certificates. Then, indeed, quantity changes in such forced and exclusive currencies do affect prices, wages etc., which have to be priced out in this "value standard" and "exchange medium" and have to pay paid, at least in all official and public transactions, in this "value standard" and "exchange medium" and the forced and monopolistic official value standard does then have to be used even in all open clearing transactions. Only on the usually all to limited black markets are people then free to act otherwise, honestly and voluntarily - without, however sufficient legal and juridical protection for their contracts. On the contrary, they risk penalties, in some instances, historically recorded, even the death penalty. - J. Z., 4.1.0.91, 27.4.97, 31.5.11.
CLEARING: A man, who can properly clear his own labour services and products against those he wants, is no longer unemployed. His danger would rather be over-employment - since the wants of most men are rather unlimited. - J.Z. 7.8.75
CLEARING: Almost all sound exchange media, which do not, like gold or silver coins, carry their subjective and market-determined commodity value in themselves, are essentially merely clearing certificates for an anonymous and multilateral clearing process, which they facilitate and simplify by their very nature. But it lies also in the very nature of free clearing that it does not inherently depend upon any QUANTITY of exchange media or any QUANTITY of value standard units but merely upon a sound enough value standard that is agreeable to all concerned and that is merely used for clearing, accounting and reckoning purposes, but that value standard does not have to be supplied and used as a means of payment, cover or reserve, or redemption fund, in quantities and values that are equivalent to the free clearing transactions that could be carried out without any exchange media and without the transfer of any rare metal coins, then being used merely as value standards. To maintain the value of an adopted value standard unit it is not required that it becomes demandable as a physical means of exchange by every creditor. It suffices that some transactions in this metal take do place, which confirm its market value against exchange media and against value standards of another kind and that such trades are regularly and publicly reported. While it can do no harm if debtors, well enough supplied with quantities of gold coins, remain free to offer them in payment, even gold coins should not be turned into legal tender - except perhaps within private payment communities whose members agreed to so offer and accept them. - The clearing nature and value reckoning nature of money is essential. The rest is an unnecessary although sometimes a convenient formality. No monetary policy or theory should ever ignore this fact. Then it will not be lead to wrong conclusions or towards monetary despotism. - J. Z., n.d., & 30.4.97, 31.5.11 - & EXCHANGE MEDIA OR MONEY
CLEARING: An extension of clearing merely indicates easier sales and a greater total turnover. It does not directly indicate or represent a corresponding increase of medium and long-term capital becoming available. Additional turn-over clearing can only reduce the short term turnover credit interest rate. To affect the capital interest rates, clearing certificates and notes must, like money now, be saved up and invested on medium or long terms. Tickets to a cinema are just turnover media, too. One cannot buy the cinema with them, directly. But if one had bought e.g., a large block of tickets for a large party and for one or the other reason the party is turned off, then one could negotiate with the cinema, offering to sell it back the block of tickets, either for other forms of cash or for one or several shares in the cinema. If the cinema is certain to be able to sell the tickets again, before the performance, then it will be amenable to either buying them with other means of exchange or, perhaps, with some shares in the cinema. The time span, motivation, ownership, function of shares and circulating notes is quite different. They circulate for different periods and among different people and are used for different purposes, even when both are issued, somewhat circulating and ultimately somewhat redeemed, at least during liquidation of a business. To try to turn capital assets like raw materials, premises, and machinery or the capital securities that represent them, directly into currency, supposedly useful and sufficiently "secured", into means of purchase for currently offered consumer goods and services, is a great mistake because at the same time no equivalent consumer goods and services are provided by the issuer to redeem them with. Nor is the acceptance of such money, i.e. the subscription to such capital certificates by potential acceptors assured. The holder of capital certificates (if they had accepted them at all, and why should they?) could only force the issuer into liquidation and then claim his share in raw materials, premises and machinery - but few would want to acquire them. On the other hand, if there is someone prepared for a take-over bid for the business of the issuer, then such issue attempts would be very much welcomed by him, for this scrip would rapidly depreciate in a free market and could thus be bought up very cheaply and used in the take-over bid. A few such experiences, well publicised, will serve as a deterrent. But that does not mean that there should not be full freedom to issue and offer financial securities for sale, for one kind or the other of cash or bank credit accounts, too, or for other kinds of capital security assets, among people interested in capital investments and organized in stock exchanges. To reduce this kind of mix up of capital securities with turnover bills and notes, the issue departments for both should be as far as possible kept separate, for people have fallen for the errors of "asset currencies" again and again and they have often been embodied in banking laws. - J.Z., n.d. & 31.5.11, 31.5.11. - & INTEREST RATES, SHARES & TICKETS, SAVINGS, INVESTMENTS & TURNOVER CREDITS
CLEARING: Clearing is the principle and practice behind all monetary exchanges. We should be mainly concerned with how it could be carried out more purely and easily, for all but minor or trivial transactions. - J.Z., n.d. & 31.5.11.
CLEARING: Clearing needs no official organization or regulation nor any official or private funding - no more so than e.g., postage stamp or coin exchanges for collectors do. But what it does need is freedom to organise itself under its own statutes, independent of all repressive legislation, regulation and jurisdiction. - J.Z., 19.7.91, 26.4.97.
CLEARING: Distinctions should be made e.g. between a) banks with or - b) without their own capital and capital reserves, c) banks that promise rare metal or legal tender redemption, d) banks that don't make such a promise and do not accumulate and keep such redemption funds at all, e) banks regulated by a central bank and f) banks not regulated by a central bank and in free competition with each other, g) banks that promote turnover transactions by notes or clearing and h) banks that promote capital savings, investments and transfers. - Preliminary notes. This is a very muddled-up subject. All kinds of different definitions and premises, arguments and conclusions abound. It is difficult to work oneself through the jungle they form. Even when one manages to hack, temporarily, a path through it, much of the jungle remains, right and left and the path is soon overgrown again. I have seen some famous libertarians and free marketeers repeating a few of the most popular errors and prejudices in this sphere. All the errors and myths in this sphere, often combined in Social Credit notions, are a great obstacle to monetary freedom. - For mere current account or clearing banks no bank capital or reserve would be required at all. It would merely administer the accounts of its clients, more of less efficiently. Ideally, even its customers would not have to deposit any cash, gold or credits from other banks there. Its bank customers could just start with it "ab ovo": Each just opening an account there, with a zero credit and would contract to use this account for all his trading with the other customers with this bank. For the sake of simplicity let us assume that this is the only bank that they would use and that this would bank would mediate all their trading, i.e. that there would be no trading by them with the rest of the country or the rest of the world. We could assume this to happen either on the local level, on the national or even at the international level. Let us also assume that the participants have agreed upon a sound standard of value for their pricing, all their trades and their accounting at this bank. Let us also agree that they would use their accounts only for their daily turnovers, not as a savings and investment account. (Here certain precautions could and should be taken: Those building up too much of a credit balance might, at a certain point, either have to forfeit them or to purchase, with all the excess amounts, bank bonds or fixed term deposits or other capital securities of this bank or other banks or other issuers of such securities. These amounts, and these alone, could then be used for corresponding loans to members or outsiders. On the other hand, all those who built up too much of a debit balance, would have to pay up the excess debt in their own IOUs, in convenient denominations and with a discount to be settled between the bank and its debtor, perhaps through arbitration. The debtor would have to accept these IOUs at par from the bank or any of its customers. In other words, he would be forced to undertake a discount sale towards all who offered him his IOUs. For all customers some leeway would have to be determined in their debts and credits on this account, in accordance with their kind of business and their normal turnovers. - So much about possible abuses and difficulties of this system. - Normally, the members could then settle all the debts and credits arising out of their current trading among themselves, without any other means of exchange, merely by assigning account credits or account debts to each other. They could do so by cheques (cheques for clearing only), by orders to the banks, by passbook entries, via credit cards or any other convenient means. Among these might be standardised clearing notes of the bank, in convenient money denominations, which would promise nothing else by the bank than acceptance at par on all its clearing accounts. When giving such certificates to any account holder, his account would, naturally, be proportionally reduced or put into debt. - To assure their use for clearing only, not for credits, these clearing house certificates should be given only a short life-span or circulation period. In essence, each payment through this bank would be an instruction to the bank: Debit my account by xyz and credit B with xyz. They would use these payment instructions (whichever payment method or means is used, in payment of any goods, services and labour received. Naturally, they could do that only towards all those willing to accept these transfers, clearing certificates, etc. at all and at par or at a mutually agreed upon discount. - The total of the debts of the members would exactly be proportional to the total of the credits of the members. There would be no left-over capital amounts which the bank could lend out, on medium or long term, with or without consent of the account holders, apart from the above-mentioned (in brackets) purchases of bank bonds or fixed deposits. - It is very important to note that their turnovers would not be confined to any level, to any maximum totals. If they can manage to produce and sell more to each other, then all their mutual debts and credits will simply become correspondingly larger. Goods, services and labour being priced in sound value units, likewise the accounts and the transfer orders, the fact of there being many more payments would merely meant that there are many more exchanges. Millions instead of hundred-thousands, billions instead of millions - IF people could increase their productivity and exchanges by that much - or just in accordance with the increases, or decreases, that take place at any time. Thus, apart from fluctuations of prices - from the goods, services and labour side, no depreciation of these means of payment or clearing would take place. They could increase their turnovers a hundred-fold or a thousand-fold and there still would not be an inflation. Simply as much more would be exchanged. Their self-chosen value unit, e.g. a gram of gold, would not be depreciated by so many more turnover transactions using it. (Under a computerised accounting system even a number of freely agreed-upon value standards could be utilised, with ease, among the members. By 1990 a major Australian Bank, like Westpac, was prepared and, apparently permitted, to keep accounts not only in Australian dollars but also in gold weight units.) - None of the account holders could demand payment in gold grams of all the clearing credits he had accumulated and the bank could not demand of its account debtors payment in gold grams, but merely payment in his own and also gold-weight valued IOUs, perhaps only with a fair discount, and then his acceptance of his own IOUs, from anyone to whom the bank or its customers might have transferred them, at par, as if they were gold grams in the stated quantities. - Naturally, bad debtors could go bankrupt in this system, too, although not due to a faulty payment and clearing system. They picked the wrong trade or did not conduct it properly or got careless in some large transaction or wasted capital and earnings instead of improving their business, etc. Many other problems than payment problems, do require many other solutions. If they accumulated too much of a debt and had to pay this back in their own IOUs at such a large discount that they could not recover their costs, then they would be out of business, soon. The charges levied by the bank on the clearing accounts it holds, would include an insurance premium to cover this risk. - Seeing that all these accounts are only intended as turnover and clearing accounts, and perhaps also have to cover an insurance premium, to cover bad debts, those who accumulate large debits on their accounts and do so for more than a few days, might be charged a considerable interest rate as an additional inducement to reduce their debits fast. - One kind of low prices would be avoided by the system: emergency sales prices due to money shortages. - Depending on the tax situation, the clearing bank accounts might be open to inspection, at least to potential buyers and sellers, who then could, perhaps even by phone, verify for instance the current clearing account status of the buyers. - The members of this bank would all, ultimately, and more obviously than usual in monetary transactions today, pay for all their purchases with their own goods, services and labour. The accounts and their figures at the bank would just keep track of all these free exchanges - and facilitate them in a monetary or ideal clearing way. Their own accounts would be deducted and those of their suppliers credited or they would be credited with whatever their customers paid them through this system. The bank would charge a small percentage of the total turnover as its fee. The members would at any time have to let their own debts be accounted against themselves. These deductions would be made with or without their consent, if any genuine debt is involved. - They might also be put under obligation to use any outside means of payment received towards the abolition of their account debt at this bank. (The bank would then sell this "foreign exchange" to those who had built up a large credit with it and wanted to use it in this way.) The bank would explicitly and publicly state: These accounts have not been established through cash deposits, rare metal coin reserves or a reserve fund made up of some capital assets. They do not entitle to any cash withdrawals or rare metal redemption. They are merely current and clearing accounts. The clearing bank merely helps to transfer the mutual credits and debts of its customers and keeps account of them. It does not grant any credits and cannot grant any credits from these current accounts. However, to the extent that some of our account holders want to make some of their credits on their accounts contractually available, for medium and long term credits, it would be willing to mediate these, too, amongst its customers. - To that extent such a bank would be safe from any time risk and means of payment or ability to pay risk or difficulty. (Naturally, sickness, accidents, catastrophes, insufficient business sense or business mistakes excluded. Thus the bank might insist that its customers insure themselves, as far as possible, against such risks.) - Such clearing and "deposit" banks (of current trading credits transferred from others of its customers) should be open to inspection by their members, or representatives of their members, but do not constitute institutions that threaten the payment and value accounting situation in any country. On the contrary. Without legal tender, subject to a free market rate against a sound value standard, these means of payment or clearing could not depreciate from the money side - unless they had picked a value standard that was not really as sound as they thought it would be and at the first sign of this they could change over to a better one. The elasticity of the system would be unlimited. It could precisely fit all the output of and trade in wanted goods, services and labour (among its members). It would not distort exchanges but, instead, greatly facilitate them. For small transactions, not worth any writing efforts or electronic checks and transfer costs, such a clearing bank could issue token coins whose only foundation would be their ready acceptance at par in all its clearing accounts. To avoid the charge that thereby it would "levy a loan from the public" or "create money out of nothing", it could be quite correct on this, too, and debit each of its accounts with e.g. $ 30 (or the gold gram equivalent) and pay out that amount to each of its customers in small token coins, less the cost of producing them. - The general assumption for such a service is, naturally, that monetary despotism could not effectively outlaw and suppress it. - Secondly, such a clearing bank should, naturally, possess no monopoly and should be free to clear with all other clearing banks. - - This is as simple a free exchange system as I can imagine, free of all the ordinary flaws and wrong assumptions and imposed requirements, supposedly necessary controls and safeguards. Mind you, I have not described a savings and short to long term credit bank. The credits mediated by this clearing bank would be explicitly confined only to current and short term turnover and clearing transactions. Those credits which their customers would make explicitly available for medium and long term loans should be transferred to other accounts or certificates, under corresponding terms. They would not have to be run by a separate department of the bank, although it would probably appoint one or several investment specialists if there were many such funds available for investments. - One should add that the loans given by the bank would be given only by its credit transfers and they would also be repayable by such credit transfers. Terms and interest rates would have to be haggled out among lenders and borrowers, with the bank merely acting as a mediator. It might e.g., publish the funds available and under which conditions they are available and the funds wanted and under what conditions they are wanted and then act as a broker to achieve as many mutually satisfactory agreements between these customers as possible. Part of the interest payable would serve for credit insurance purposes. In this uncomplicated model I see no need for any outside interventionism or any suspicion that the bank or its customers would thereby be given any special opportunity to cheat or defraud others, to "create" any money or value out of nothing, to appropriate what really belongs to others, a chance to deflate, inflate, stag-flate, or tax the economy, to speculate at the expense of others, to establish a monopoly or any coercive power to intervene with any productive or creative activities, with any individual rights or liberties. It would be a contractual self-help project. I see no need or justification for government control or supervision or guaranties for such institutions. They would and should operate quite separately from the government, more independently than the present churches and sects are from them. Ideally, they should not be subjected to any taxes and licences, laws and regulations and official supervisory boards and inspectors at all, either. However, once governments began to operate as competing business organizations and for voluntary customers only, then they and their members should be free to open clearing accounts there, too, or establish their own clearing banks. - When dealing with all other models and notions of deposit, note-issuing, savings and investment banks, we should, first of all, keep this simple model in mind and check whether any added features are really rightful and necessary or, rather, wrong and self-defeating or risky and distorting, leading to panics, failures, booms and busts or would be too inelastic and deceptive or coercive or all of these combined. - What would happen, e.g., if any credit established in such a simple clearing bank did go astray and were used as a credit in some other banking institution, which might consider it as a valuable foreign exchange and, based upon it, using it as a reserve and blow up its deposit volume or note circulation in an inflationary way?. - Imagine that the other banks would and do this. Would our clearing bank have to be blamed for their actions? Would it suffer from this? To make it easier to answer this questions, let us assume that our clearing bank, instead of establishing clearing certificates or accounts with gold gram value accounting, had possessed some gold coins and issued gold certificates and that these gold certificates would have got into the hands of some other banks of issue and were there used as "currency reserve" for a fractionally covered and over-issued currency that is monopolised and made legal tender. Would you, then, blame the gold weight clearing bank for the wrongs and mistakes of that foreign bank, perhaps a central bank? If not, then you would have no right to blame the gold clearing bank, either, when its credits were somewhere else so used. - But, we should also consider that not only the credits of our clearing bank would go astray but, those of other banks, too. Our clearing bank could insist upon note exchanges or mutual clearing and thus get the own credits back, soon. If, as we assume, our clearing bank adheres to stable value reckoning, i.e., does not engage in an inflation, with its clearing media and all the prices of its customers would continue to mark their market prices etc. out in the agreed-upon stable value units, while all around it central banks would engage in monetary inflations. Then, most likely, many more foreign exchange media would be offered to it than notes of its own that would have gone temporarily astray - by arriving at central banks in other countries. So our clearing bank could easily pay for the return of its credits, even before their stated validity has expired. The exchange rate for the foreign currencies would fall and the clearing bank would tend to refuse them altogether if it would not need them to buy back its own exchange media or account credits gone astray. If central banks began to imitate its value standard reckoning, then this would also not impose any risk for our clearing bank. A mere clearing or accounting standard can be shared with an unlimited number of other people. Nor would the establishment of clearing credits at this bank by foreigners or even foreign central banks bring any risks or problems. The accounts are for clearing purposes only. No gold or cash withdrawal claims can be raised. They can only be used for purchases or sales among the members, the more, the better. Loans to foreign governments would no more be granted by it than to the own - unless the own government would turn into a bank robber against it, using all kinds of pious or cover-up or confidence trick phrasing in the process. Naturally, this system could not function freely and without frictions and problems if it were forced to use a fiat paper money standard (forced currency: compulsory value and compulsory acceptance), were subject to quantity regulations on the totals of its turnovers, had to redeem all its debts upon demand in gold coins or legal tender paper money, had to keep part of its accounts with a central bank, were severely taxed or not permitted to freely clear the accounts of its customers, had to turn over any foreign exchange received at a fixed rate, payable in legal tender, to the central bank, had to purchase government "insecurities" or private capital assets. Freedom from all acts of monetary and financial despotism is here presupposed. Its business is the liquidation, balancing or settlement of debts of its customers, payable for the sale of goods, services or labour, or their purchase, i.e. daily turnovers of what holds body and soul together in a society based upon division of labour and free exchange. It would not make any promises it could not keep - if not governmentally prevented from doing its job. Up to the limits of the productive and trading capacity of its members, to provide goods, services and labour to each other, it could increase its business turnover, total of accounts, total of debts settled, its short term clearing credits granted. Both terms, "overdrafts" and "credit expansion" are misleading here. The customers started with a zero account and did not have to deposit any rare metals or legal tender to establish at first a disposable credit account. They might merely have a personal debt limit on their clearing account, as is also practised with credit cards. Such a bank would not and could not "expand credit" but its customers might increase their exchanges among themselves and grant each other short-term turnover credits through the mediation of the bank. - But it could become involved in international trade clearing to the extent that it could issue, with the consent of exporters among its customers, clearing certificates upon their ready for sale export goods, sell these, via account transfers to importers among its customers, to the extent that these can use them to pay for their imports, and could stimulate the rapid returns of these clearing certificates in payment for the export goods, which would redeem these clearing certificates. - I try to deal here with economics not with anti-economics or neo-comics, as Dr. H. G. Pearce used to say. To grant other credits, medium or long-term ones, to foreigners or countrymen, would, again, be a matter for its customers. The clearing bank would only help in the process. By allowing foreigners to pay with clearing certificates upon their export goods, to the extent that the clearing bank's internal importers would accept these, it could, in most cases, make the granting of credits to foreigners by the own exporters, unnecessary. In other words, it would act like a bench (origin of the work bank) or special market for the transactions of its customers. This market institution would neither have the power nor the interest to inflate, deflate or stagflate the transactions of its customers but, rather, to make them as easy and fast as possible. All accounts would represent real goods (services and labour included) and real sales. Or the bank would anticipate sales of its customers, who are ready to sell, by allowing them to spend themselves into debt, up their personal limits. The bank would EXPRESS or RECOGNIZE that turnover credit of one of its debtors. It would not CREATE it. The acceptors of the clearing bank's transfers would CONFIRM these turnover credits by their acceptance of the transfers certificates or account credits at par. No arbitrary credit "creation" or "money creation" would be involved. Its turnover credits would not promise any more than could be delivered at anytime: the ready for sale goods, services and labours of its debtors. Especially gold or silver coins or legal tender would not be promised. - Those who would not merely desire the par-value of the clearing bank's clearing accounts, clearing certificates or tokens with their nominal gold weight values, but, instead, gold metal of the corresponding weight total, instead, would be referred by such a clearing bank to the free gold market, especially its local representatives, with access to all the gold reserves in the world - and the best knowledge of the clearing bank's par value and the par value of any other local currencies that might exist parallel with it. The clearing bank itself should not be in the gold metal storage and trading business. That is a business for other specialists. The only connection would be the gold weight value unit used by it for accounting and clearing purposes only. - If the clearing bank were paid in gold coins or gold certificates it should use these to buy back its certificates or account credits from whoever wants to buy gold or gold certificates with them. If it saw its accounts or certificates suffering a small discount somewhere, then it should make such gold coin and gold certificate exchanges especially then and there. But it should not accumulate any gold coin and gold certificate "reserves" for this purpose or promise to supply them upon demand. To that extent its proclaimed fractional gold "cover" and redemption would be expressly "zero"! It would only promise clearing AT GOLD WEIGHT VALUES. No one would be granted any right to claim gold metal from it, except in the deals in which it sells all gold coins received, instead of its own certificates or account credits, at par. All foreign notes and credits received would also be used to speed up the reflux or reduction of its own clearing certificates and account credits. If you can express all this more clearly, convincingly and shortly, without any of my remaining errors and mistakes, please, do so. - I am neither a banker nor an accountant. - J.Z., n.d. & 31.4.11. - BANKING, DEPOSIT BANKING, CURRENT ACCOUNT BANKING, CREDIT CREATION? CREDIT EXPANSION? MONEY CREATION?
CLEARING: Full clearing freedom (as well as the freedom to issue and to rate and discount or to refuse money tokens, be they "real" money or "merely" sound money substitutes) when fully thought through and applied, at least in thought experiments, demolishes the notion that a certain quantity of money is absolutely necessary and that it ought to be fixed, e.g. to the GNP, as calculated by some, or increased at a fixed rate, or tied to the population, the price level, a corresponding gold-reserve etc. etc. People need only freedom to clear and to account in value units chosen by them or accepted by them or even established by them, not any exchange medium or any particular quantity of any exchange medium. However, once exchange media are seen as media to facilitate clearing, then as many of these media as those people involved in the clearing find convenient to use, should be freely issued and accepted, rated or refused by them and cancelled after their use. Nobody can rightly prescribe for others how many of such more or less advanced private "cash" or clearing or ticket certificates they should be allowed to issue and accept. That would be like prescribing to them how much they should produce and exchange. The subjective value theory applies here, too, quite apart from property rights and the right to make private contracts. No monetary theoretician or technician, expert, reformer or authority has the right to prescribe to them how they are to settle their exchanges and to promote them to the utmost and what means and processes they are to use for them. In fact, there exists no one and no one may ever exist who knows best what is best for all other people in all situations or even some of them. Even if he did exist, he would still not be entitled to force other people to become happy or rich in the way he thinks they ought to go. If they do adopted him, individually, or as a group, as their medicine man or guru, then that is their affair and risk, indeed, also their right and part of their liberty. - J.Z., 3/97. - & QUANTITY OF MONEY, QUANTITY THEORY OF MONEY.
CLEARING: If it is true that all exchanges can be settled by clearing and, lastly, are settled by clearing, even if only indirectly so, with the help of currencies, paper monies or coins or banknotes, then there is INHERENTLY no need to give such clearing media any other backing or cover or redemption other than their clearing function. At the same time, seeing that clearing means the cancelling of mutually owed debts, it is obvious that forced and artificial values for clearing media would distort clearing transactions and so would the compulsory acceptance or demand for any fiat currency or rare metal coins. Clearing claims should never be legally and compulsorily turned into the exclusive coin and note currency for a whole country. Thereby, and inevitably, the monopolist and coercer could shed his own debts, by unilateral action and authorise all other debtors to do the same, to the extent that this monopolist has inflated his currency. Creditors and debtors ought to be freed to agree upon sounder value standards - and means of payment - that suit both of them. Through private and free clearing and note issues, acceptance and reflux we should make ourselves independent of the wrongful, flawed and limited options that are the only ones which the governmental central banking system offers us. Free choice of exchange media, clearing facilities, credit instruments and value standards, all of them optional and market rated - except for their issuers, towards whom a juridical legal tender should apply, since they ought to recognize and accept their own debt certificates at par from anyone. Everything else would be fraudulent. - J.Z., 7.9.97, 10.9.02, 31.5.11
CLEARING: Let's clear the air about clearing. With people free to clear their labour, services and goods, all ready to be supplied, for the labour, services and goods of others, there could be no unemployment or underemployment or sales difficulties for any labour, services and goods that are still wanted at market prices. All being supplied with either sufficient sound exchange media or clearing avenues, to facilitate all these desired exchanges (settled, even when paid in "cash", simply by a convenient form of clearing), all could be cleared against each other, provided only that all people concentrated on supplying labour, services and goods that are wanted rather than on those that are not wanted or not wanted at higher than free market prices. Moreover, under this condition, all ready for sale labour, services and goods wanted at market prices could become liquidified then utilized as purchasing power - redeemable in these wanted things. Whoever puts any obstacle in the way of the free and competitive private or cooperative supply of sound exchange media or of clearing avenues and banking institutions and payment centres, does thereby assure unemployment, underemployment, sales difficulties, depressions, inflations and stagflations. While a single and very efficient clearing centre for the whole world could, theoretically, arrange for all possible and desired exchanges, keeping all willing to provide labour, services or goods busy, producing them and exchanging them through this clearing centre, it remains true that coins and paper notes, do facilitate clearing, e.g. in the purchase of a newspaper or a book. Thus, fully freed clearing should always be accompanied by the free issue of optional and market rated and competitively issued exchange media in form of paper notes and coins or tokens. The sum of clearing exchanges and the total circulation of notes required can be no more rightly and efficiently prescribed or limited than could be the sum of labour, services and goods which people are able and willing to provide for each other in a division of labour process that depends upon free enterprise, free exchanges and free trade. All attempts to centrally manage and limit exchange media and clearing facilities have led to abuses and economic crises. Only full monetary freedom, including clearing freedom, can prevent abuses and crises - as far as is humanly possible. - J.Z., 3/97, 31.5.11.
CLEARING: Mutual settlement, balancing of accounts, set-offs, mutual payment adjustments, mutual writing off of debts, mutual cancellation of debts, non-cash payments, trade-off money or methods, transfers of accounts only, book money settlement, balancing of debits against credits, numerical money, symbolic money, accounting money. In German: Abrechnung und Verrechnung. Perhaps from other languages more suitable terms could be taken? - J.Z., n.d. - CLEARING HOUSES, CLEARING PROCESS, CLEARING CERTIFICATES: ARE THERE BETTER NAMES FOR IT, NAMES MORE EASILY UNDERSTOOD, LESS LIKELY TO BE MISUNDERSTOOD?
CLEARING: Short term credits and debts that represent turnover transactions amount mainly to clearable credits and debts that would and could almost always be settled by clearing, if only the creditors were not given the authority to demand cash payments instead and would not, sometimes, be inclined to demand them. Thus the assumption or legal presumption that all short term non-cash credits, deposits and cheques are to be claimable in cash ought to be done away with and replaced by a right to clearing only, in as convenient and just a way as can possibly be arranged by private and monetised notes and clearing certificates and clearing accounts. Capital savings should not be used to finance such turnover credits. They are unnecessary for them. Such transactions are inherently self-liquidating if only no form of monetary despotism interferes with them. - J.Z., 7.12.92 & 15.4.97. - CREDITS & DEBTS ON SHORT TERMS
CLEARING: To the extent that any kind of money is a clearing medium (Actually any kind of money is, basically, a clearing medium, a counting token, whether its material is cheap, expensive or electronic, for a multilateral and anonymous and automated clearing process.) it does not need a "cover" at all. It either represents a debt or a credit and all of these cancel each other out, at least over a period. However, instantly or soon clearable debts and credits should be distinguished from those settled only over medium to long term periods. For instantly or soon clearable debts and credits money tokens and accounts are suitable aids. For medium to long term debts and credits the special capital securities are the suitable issues. In any somewhat free economy some cash exchange media (or non-cash payment accounts) are all the time turned into capital securities or capital securities into cash or bank accounts, but only to a limited extent, one voluntarily determined by savers and investors. Capital securities are not suitable "covers" for cash. Most cash is needed to buy goods and services, not capital securities and capital securities do represent real productive capital and future earnings opportunities and, as such, do not need a cash cover but merely some cash operating funds. Their main purpose is not to represent cash but to earn cash by the production of wanted goods or services or to maintain or increase the capital value of capital investments. The fact that most of the time sound capital securities can be relatively easily turned into cash does not make them equal to cash. Sometimes, for instance, they are hard to sell or only at a loss. With sound cash it is different in normal times, only emergency situations excepted, when real goods and services are often preferred to cash or when goods and services are sold at emergency prices for cash. Both are valuable in their spheres, promoting the transfer of values, but that does not make them identical or sufficiently, fully and rapidly interchangeable for all purposes. The main purpose of cash, or corresponding liquid bank accounts, is to pay for daily living expenditures and frequently occurring minor debts. Try to pay for them with shares, bonds, treasury notes or mortgage letters! In a perfect clearing system we would not need any physical or electronic money tokens at all. All debts and credits could be cancelled without them. Only some suitable value standards would have to be agreed upon by the participants. Bad debts would have to be born as losses by some - and unearned gains by others - or would be covered by insurance premiums that had been paid by the traders. - J.Z., 13.3.02, 24.8.02. - COVER, LIQUIDITY VS. SECURITIES, CASH VS. CAPITAL
CLEARING: To use a somewhat clarifying analogy: Free and open exchanges of facts, opinions, ideas and proposals do also achieve a kind of clearing. They clear the air of errors and misunderstandings, clear the minds and are enlightening, although not as clear-cut and thoroughly as the clearing is that uses a sound value standard to measure and settle mutual debt relationships. – J.Z., 23.6.05, 6.10.10.
CLEARING: We are all each other's debtors and creditors, with the totals of debts and credits exactly balancing each other. Consequently, if only we organized a perfect clearing system between us, one not disturbed by any legally or juridically authorised demands for rare metal cash or monopoly paper money, which is legal tender, then we could clear all our transactions. All the notes we would still use for the sake of convenience need be nothing more than clearing certificates to facilitate this free exchange via free clearing. We should no longer tolerate any law, regulation, juridical decision or administrative authority which prevents this from happening freely, naturally and fast, doing away with and preventing all monetary crises, especially inflations, deflations, stagflations, with their involuntary mass unemployment, expropriations, bankruptcies due to this despotism, general impoverishment and their trends towards despotism, terrorism, civil wars, and wars. - J. Z., 24.7.93, 24.4.97, 8.9.02.
CLEARING: When you consider money merely as a clearing facilitator, not as a commodity, then the quantity of goods, labour and services that people possess or can and will offer, in exchange for the goods, services and labour of others, has no other limit than these goods, labour and service readiness themselves and the quantity of "money" available becomes irrelevant, because under fully developed and free clearing no money would be required at all. Only for some minor payments, e.g. the daily newspaper, would some form of physical clearing certificates, which might be called money, still be convenient and cheap, more convenient than formal non-cash transactions, no matter how much they are computerized. Under free clearing, essentially not needing any money tokens or money commodity at all, in quantities corresponding to the sum total of the cleared goods and services, but, possibly, using e.g. a gold weight unit as a value standard to price all goods, services, labours and other contracts. The value standard unit that might be used in all the accounting and clearing of the free exchanges might not even exist at all in physical form, or free transactions using it or might not be used at all within that clearing community for its pricing. E.g., gold value trading in Sydney might use the market price of that gold weight unit in London, Zuerich or N.Y. for its own value measuring purposes. Some clearing or payment communities might be satisfied with a value standard less stable than gold weight units or they might discover or invent one that is even more stable and use that one. Freedom of choice, here, too. No exclusive and forced value standard (except by private contracts, binding only the contractors) and no exclusive and forced exchange media and clearing avenues (except within voluntary payment communities). Under free clearing the number of transactions might increase or decrease. The total value of transactions might increase or decrease. This would not influence the standard of value used or depreciate or increase the value of the clearing avenue - or of clearing certificates or account credits. To try to put a quantitative limit on clearing certificates or mere turnover credit notes would amount to forcing people to limit their production and their exchanges when there is no justification or need for this at all. An imposed issue or circulation limit would then amount to a rationing system for the community subjected to it, for the exchange of its goods, services and labour. No more could then be offered and traded than is prescribed or permitted by the monetary despotism involved. - The quantity theory of money makes only some sense for an exclusive and forced currency that is issued beyond the limit at which, under freedom, it would have been accepted at par with a sound value standard. Then it can be arbitrarily multiplied and thus depreciated, while the goods and services at the same time cannot be as much multiplied and would, even by multiplication, not necessarily be depreciated in their value, either. For instance, if a baker bakes 10,000 loaves of bread instead of merely 1,000 a day, and if he finds buyers for all of them, then the value of the bread for each of the buyers would not be depreciated. Nor would the money or clearing medium be depreciated because at least for these turnovers ten times as many money tokens or clearing certificates or account credits would have to be used. The need for monetary exchanges is, essentially, a need for clearing exchanges in a very convenient form. If that is kept in mind, then we will avoid wrong conclusions on varying quantities of optional and market-rated as well as refusable exchange media. A community is enriched, not impoverished, when its money and clearing system enable it to exchange more goods, services and labour efforts, quite freely and easily. The money and clearing transactions would be increased - and so would be the quantity of goods, services and labour turned over. - The best method would be to transform, as far as possible, all ready-for-sale goods, services and labour into exchange media or clearing certificates or clearing accounts (using sound value standards), to the extent that this can be done without turning the par-value of such shop currency into a deterring discount. (If one can judge by the experience with sound tax foundation money then shops might even be able to monetise not only their current stocks but their turnover for the next 1-3 months. Much would depend on current terms for earnings and timing habits for consumer spending.) Then any quantity of goods, services and labour could, with their help, be easily exchanged for those of others, in a division of labour and free exchange process - in a free market that would include monetary and clearing freedom. The need for money is merely a need for clearing or for complete freedom to exchange, using the best and easiest available means, those accessible, in self-help steps, to every productive and honest persons. As Ulrich von Beckerath used to say: Allow people to transform their NEEDS into effective monetary DEMAND, but only to the extent that they are prepared to supply, ready for sale, and wanted goods, services and labour in exchange. - Then and with their "ticket-money" (or goods, labour or service warrants), they can satisfy their needs and wants, to this extent and the others can use these tickets against him as an issuer, to the extent that he is able to supply their needs and wants. That would amount to "production for use" and mutual profit at the same time. Useless tickets would be refused. Tickets that are only marginally useful would be discounted or refused, thus limiting their circulation. The ticket-money would have an automatic reflux to the issuer - and would serve as an advertisements at the same time. Ticket money! That's the ticket! - J. Z., 26.4.97, 8.9.02, 31.5.11. & MONEY & THE QUANTITY THEORY OF MONEY, MONETARY DESPOTISM & TICKET MONEY
CLEARING: Without government assistance but also without any governmental hindrance, however legalized and excused, any number of people could come to clear the monetary value of all their free transactions that they have between them, using whichever clearing system and value standard they have agreed upon among themselves. To that extent they would become independent of the governmentally regulated banking and central banking system, with its monopoly money and fictitious and forced value standard and the kind of clearing processes that it has allowed the existing banks to undertake. Under free clearing all those, who do have wanted consumer goods and services or productive labour to offer, could clear them against those which they do wish to acquire in exchange, in an economy based upon the division of labour and on free exchange. Under that condition involuntary unemployment as well as subsidies for unemployed people would soon become impossible. Full employment among all those able and willing to work would be the rule, also as much overtime-work as people are willing to undertake, quite freely, would become available. - One alternative to comprehensive free clearing would be the issue and ready acceptance of exchange media that are, essentially, clearing certificates or clearing accounts and that also use a self-chosen sound value standard. No governmental monopoly currency or clearing system could be a good enough substitute for such a system. However, those still believing in it should be free to practise it among themselves, as long as they wish too, surrounded by others, who do practise their monetary rights and thus get the benefits of free exchange. - The practice of free enterprise, whether under the employer-employee system or under some form of self-management, is here taken for granted, for all those, who do prefer it for themselves, regardless of how other groups of volunteers, choose to restrict their rights and liberties in this sphere. - Free markets in every sphere for all those in favour of them. Restricted markets only for those still desire these restrictions for themselves. - J.Z., 10.11.10, 2.5.11. - PANARCHISM, EXPERIMENTAL FREEDOM, MONETARY & CLEARING FREEDOM, VOLUNTARISM
COCHRAN, JOHN P., Book Review: Free Banking - January 3, 2011. - "The new preface is an important contribution to the ongoing debate within Austrian circles over banking freedom versus 100 percent–reserve banking." - Roy Halliday, in section on Free Market Banking. - Author not mentioned in this hint. I would bet that it is not Henry Meulen's book. - Maybe he reviewed serval free banking books. - J.Z., 9.8.11.
COHRSSEN, HANS R. L., Cohrssen, article written in 1932 about the "Wara" scrip issued in Germany ... (It should be Wära. - J.Z.) - More on scrip, not all only of the Gesellian type: Very detailed paper on the Alberta Prosperity Stamp Scrip. ... - Google's cache of http://www.depressionscrip.com/ref.html. It is a snapshot of the page as it appeared on 19 Jun 2011. The current page could have changed in the meantime. - This page by "Rod" offers the best survey of this literature that I have seen. It includes the Hans R. L. Cohrssen title: Wara, (Waera. - J.Z.), also an article on the clearing house certificates of 1907. It ends with: All content on this site is © 2005. If you see anything that you think should be changed, or if you have anything to contribute, just email me at Rod@depressionscrip.com. - J.Z., 1.7.11. - SCRIP, IRVING FISHER, STAMP SCRIP, GESELL.
COIN AND MONEY COLLECTION HANDBOOKS: They should be perused and partly abstracted or extracted for precedents. - J.Z., 31.5.11. - More details should be dug up on the monetarily interesting cases that they do report, than they do offer for coin and note collectors. - J.Z., 31.5.11.
COIN OF THE REALM: Allow people to pay and be paid in other monies than the "coin of the realm" or the government's exclusive and forced currency - and most of our economic problems would be over. - J. Z., 1989, 8.4.97. - OR LEGAL TENDER PAPER MONEY
COLES/MEYER SHOPS IN AUSTRALIA AS POTENTIAL ISSUERS: Their annual turnover according to news of 2.8.93 was 15 billion. (Currently around 20-20 billion A $'s. - J. Z., 12.9.02.) Assume that they could keep in circulation, or oscillation, for short periods, ca.10% of this. This would mean that at any time they could issue and keep in thus, temporarily, A $ 1.5 billion worth of their own shop currency in circulation. This amount alone suggests they should take an interest in this aspect of their own business. Moreover, if they could issue that much of their own currency - assured of its reflux in sales, then their total turnover could probably be increased considerably. Moreover, they might also use a stable value standard in their currency and in their pricing, thus making their own notes still more widely acceptable. Furthermore, they could grant wage payment loans with them, to that extent of their "shop foundation". Such extra short term loans could greatly contribute to reduce the current unemployment, officially above 800,000, unofficially probably considerably above that number. (By exerting an extra monetary demand for productive labour and also turning over more goods and services than before. - J. Z., 12.9.02, 31.5.11.) Unemployment for young people is sometimes and in some areas as high a 20 - 40%. But these unemployed are not interested in or free to ask for payment in shop currencies and the potential issuers are not free to offer them such payments. - J. Z., 30.4.97, 31.5.11.
COLLECTIONS: It could start with the hand books for coin and money collectors but could be supplemented, for research purposes, with good photocopies of other specimens, not mentioned in these. - More details on their issues and reflux should also be collected than these books for collectors do offer. - J.Z., n.d. & 31..5.11. - OF MONEY TOKENS AND PRIVATE ISSUES
COMMITTEE FOR MONETARY RESEARCH & EDUCATION: Seeks to promote the public understanding for monetary processes and the vital value of a healthy monetary system for a free society. Pamphlet series, newsletter MEN & MONEY. Pres. Elisabeth R. Currier, POB 1630, Greenwich, CT 06 836, USA, Tel. 203-661-2533.
COMMODITY MONEY, RARE METAL CURRENCIES: Online Debate: Commodity money (i.e. a gold standard) is ... - www.debate.org/debates/Commodity-money-i.e.-a...is.../1/ - Cached - Once one develops this understanding of monetary history, it is easy to see how commodity money (i.e. free-market money) is an aid to long-term, ... - Rare metal commodity money is NOT the only SOUND and RIGHTFUL MONEY. Even primitives knew of many alternatives to them. - Railway-, Bus-, Electricity-, Rent-, contribution-based- and shop currency monies, as well as all other service-based monies, e.g. telephone money, postal money, are not based on rare metal commodities, while shop currencies are based upon hundreds of thousands of daily wanted consumer goods and services. History showed barbers and brothels as issuers of street monies. Where is the "commodity" there? History is full of numerous examples, which this author ignores. Also of clearing actions, which needed only the goods or services being exchanged and the use of a sound value standard, but not redemption in rare metals. More nonsense than sense is written on money and currencies, exchange media and value standards. - J.Z., 24.7.11. - There are millions of different commodities and services - but when it comes to the redemption of alternative free market monies and their cover for note issues and giving free market monies a sound value, then all too many economists and libertarians seem to be able to think of only two commodities, namely, gold and silver, although only rarely do they ever buy gold or silver and daily or at least weekly they buy their choices of xyz consumer goods and services. Daily experiences do not always lead people to rightful conclusions and principles, to a full understanding of e.g. monetary phenomena and possibilities. Another instance: We have seen or read the legal tender note on their paper monies thousands of times but how many have understood the relationship between legal tender and inflation and even clearly distinguish between exchange media and value standards when they think, speak or write about money? - I was already 19 before somebody, Ulrich von Beckerath, gave me an understanding of this inscription and its significance. - J.Z., 9.8.11.
COMMODITY MONEY: Commodity money, as usually understood, in form of gold, silver, platinum or copper coins and of certificates that are 100 % or, quite openly, only fractionally covered by them (preferably with precautionary option clauses, which would cover the risk of sudden redemption demands), represents just a few of the numerous options for monetary freedom. Sometimes and quite without justification or necessity, such issues would be granted legal tender status. - If it is so good, why insist upon it being legal tender? Then it would still constitute an exclusive or monopoly currency, unless freedom to issue and use other kinds of exchange media and value standards is introduced. If it is so good, why insist upon such a privilege? It would limit value accounting to these standards and this in the face of hundreds of different value standards that have been proposed and that are believed in - at least by some. It would also limit exchanges to those that can be covered by ready availability of these commodities. It would mean that a few or even one selected commodity only would have to cover the exchanges of all other commodities, as well as of all services, not merely as mere standards of value but as means of payment, too. This means the establishment of a very tight bottleneck for all transactions. Prices in exclusive rare metal currencies went never so low that the available rare metal coins sufficed to make monetary transactions penetrate universally, everywhere. Even primitive barter continued to exist, to a considerable extent, in developed countries, well into the 20th century, at least in some spheres, where e.g. some agricultural workers were being partly paid in wheat, potatoes and firewood. Under monetary freedom the ultimate redemption fund that most currency holders are interested in, namely, ready for sale goods and services, in millions of varieties, would be the kind of commodities or services that would back and redeem or provide the convertibility for the most common, competitive and optional monies of monetary freedom. Once these have been widely issued and accepted, rapidly streaming back and being replaced by new issues, and when they have a relationship to commodities like gold, or other rare metal weigh units, only as their agreed-upon accounting and clearing value standard units, in the competitive notes and certificates of private currencies and in the prices of all goods, services and labours, then the idea of confining all exchanges to those coverable and redeemable by rare metal commodities will come to appear ridiculous. To take an example from today: Do you imagine that railway, bus-, cinema or lottery tickets or postage stamps, to preserve their value and to measure them accurately, would have to be convertible, by the issuer, at any time and upon demand, into a rare metal? Neither does a shop foundation money need such a cover to give it value - measured e.g. in gold grams and keeping it at par, in a free market, with such a value, perhaps even above par (among those who do not want to carry gold coins around or do not want to confine their earnings to those that can be paid in 100% covered gold certificates). All other ready-for-sale consumer goods (commodities) and even daily wanted consumer services should be considered as suitable "commodities" for redemption, cover and convertibility, by those desiring it. And the specialized convertibility desires of some, who do want to turn their "ticket money" or effective shop currency into rare metals, should be referred to the greatest redemption and convertibility fund of all, namely the free and world-wide market for gold and other rare metals. Notes that are locally accepted at par with their nominal gold weight value can also be used to purchase gold metal from a local representative of the world-wide gold market. Even now most banks do also sell gold coins to investors or collectors, but not because they are legally or juridically obliged to do so. They are not. - A shop association issuing its own shop currency, reckoning in gold weight units as its value standard, would greatly prefer accepting its own shop currency in payments to being offered gold coins to the same value. It could easily check the validity of its own shop currency note but not the gold weight value and fineness of a gold coin. The lines at the check-outs would grow longer or the supermarkets would have to introduce a special check-out for people only willing to pay their debt to them in this form. - The owner of a small corner grocery store would have even more difficulties in checking out a small or large gold coin. He might refer you to a jeweller and he might charge you for his testing. Or to a bank or money exchange office, which might also cost you a fee and time. To that extent a shop currency reckoning in gold weight units would not only be then and there as good as gold coins but better than gold coins. - For small shopping and their debts most gold coins are also too large. You could not expect to get change in still smaller gold coins. Even if they were offered, would you be able to check easily and fast whether this change is of the right weight and fineness? - Thus, in practice, even pure gold coins do not have a sufficient "shop foundation" but would be considered as a nuisance by payer and payee, unless the payee is a coin collector and the payer would then not get the collector's value of his coin in most cases. - J.Z., 1.8.94, 17.4.97, 7.9.02, 31.5.11. - SOME BUGS FOR GOLD BUGS.
COMMODITY MONEY: Rare metal commodities or their certificates are certainly not the ones which consumers usually want but only in-between commodities or certified claims to them, in attempts to assure that their holders or claimants can get the value satisfaction in the commodities and services that they really want. Originally, there seemed to be no better way, than this important step-up from primitive barter. However, since then, in millions to billions of daily transactions, easier, cheaper and more direct means have been found and used, illegally or legally, to achieve consumer satisfaction, to balance the variety of commodities and services with a variety of commodity and service vouchers, and in millions of cases the interest in value preservation has also been served by rare metal commodities not being used as exclusive or frequent means of exchange or as exclusive redemption media but, merely, as value standards, reckoning or accounting units, using their purchasing power, weight, in free rare metal markets, as daily reported in the mass media, in all free exchanges, in which this kind of value standard was agreed upon, to be used in pricing, banknotes, paper money and money tokens. For free transactions the barter or sales value of gold weight units can be abstracted, and used merely for reckoning or accounting in value of gold-weight units, for prices, wages, rents etc. and exchange media with which they are paid, without any gold coins being present or changing hands in a transaction, as an exclusive currency as well of being offered in monetary certificates for their redemption by the issuer, upon demand by the holder. For this purpose gold does not have to be physically present. Nor does it have to physically back up each transaction, nor do even gold certificates have to be backed or covered by gold or be redeemable or convertible into gold coins by the issuer of the certificates himself. Gold clauses can not only be used in investment certificates but also in prices, wages, salaries, rents etc. merely as a value standard. He has only to see to it that his "paper gold" remains at par with its nominal gold weight value. Then the actual convertibility of any notes or certificates can then be transferred to the world-wide gold market, embracing all gold stocks and all current gold production. Most of the commodity money advocates (gold bugs) never dreamt of such a huge redemption or convertibility fund for their supposedly ideal gold standard currency. They considered only the tiny fraction of the total which their kind of commodity currency issuers could mobilise for their purposes. Goods warrants with local shop foundation could liquidify most currently wanted goods and services while still preserving gold weight pricing and reckoning, independent of the local, national or world-wide supply of gold. When private, no-exclusive or forced paper money has been supplied, which is optional and free market rated but kept at par with its nominal gold weigh value, then it is "as good as gold" and it was usually preferred to gold as long as people expected this goodness of paper money to be continued. Monetary freedom would permit gold coin and gold certificates, whether 100% or fractionally covered, for all voluntary payment communities and at their risk and expense. After having been all too long outlawed, they would probably blossom for a while but then shrink in their occurrence and volume, in free competition with cheaper and better alternatives, which would preserve what is good in rare metal currencies (in coins or certificates), namely their use as value standards only, by those, who prefer that value standard, but would eliminate their drawback as exclusive exchange media. (For all but the voluntary victims of such a payments system.) - Say's Law would then get fully realized: All suppliers of daily wanted goods and services, suitably associated, could then issue the required purchasing power for them to achieve the sale of their goods and services within a normal consumption period. - J. Z., 22.4.97, 7.9.02, 31.5.11. - REDEMPTION, COVER & CONVERTIBILITY TERMS SHOULD NOT ONLY BE APPLIED TO RARE METAL CURRENCIES & RARE METAL CERTIFICATES. - REDEEMABILITY IN WANTED CONSUMER GOODS & SERVICES, WITH THEIR PRICES, EXPRESSED IN GOLD WEIGHT UNITS, ALSO USE IN SHOP CURRENCIES, MERELY AS THEIR VALUE STANDARD, WITHIN A SYSTEM OF FREE CHOICE OF VALUE STANDARDS & OF MEANS OF PAYMENT OR CLEARING.
COMMODITY RESERVE STANDARD: Competition would provide better money than would government. I believe we can do much better than gold ever made possible. Governments cannot do better. Free enterprise, i.e. the institutions that would emerge from a process of competition in providing good money, no doubt would. There would in that event also be no need to encumber the money supply with the complicated and expensive provision for convertibility which was necessary to secure the automatic operation of the gold standard and which made it appear as at least more practicable than what would ideally seem much more suitable - a commodity reserve standard. ... - Hayek, Denationalisation of Money, p.83. - OR CLASSICAL GOLD STANDARD? MONETARY FREEDOM
CONFIDENCE: Ben Bernanke and The Confidence Men - news.goldseek.com/GoldSeek/1297261015.php - Cached 9 Feb 2011 – A free market economy, with a free market money (gold, most likely), would not need confidence to run effectively. ... - Also on: Ben Bernanke and The Confidence Men « Vince's Economic Blog - vinceseconomicblog.wordpress.com/.../ben-bernanke-and-the-confi... - Cached - 10 Feb 2011 – A free market economy, with a free market money (gold, most likely), would not need confidence to run effectively. ... - Does the value of tickets to xyz performances depend on "confidence" or "trust" or, rather, the close to 100% certainty that a wanted performance will happen? So why should e.g. ticket-money and shop-foundation currency, or clearing certificates have to depend upon "confidence" or "trust". Do we have to depend on such primitive notions on money for the next few centuries, too? - One think is sure: Neither central banks nor their bankers deserve any trust or confidence from us, judging by their performances and their utterances. - J.Z., 23.7.11 - DEBT FOUNDATION, SHOP FOUNDATION, TAX FOUNDATION, READINESS TO ACCEPT FOUNDATION, SERVICE FOUNDATION, TICKET MONEY, GOODS WARRANTS, PURCHASING VOUCHERS, CLEARING CERTIFICATES, VALUE STANDARDS, EXCHANGE MEDIA, DIS.
COMMUNISM: Communism lives on, e.g. in central banking, also in compulsory taxation and the collectivist ownership claim upon "national" territories that I call "territorialism". It is also preserved in "protectionism", social insurance legislation, legislation on industrial relations and in numerous other State interventions with the economy and our work and private lives, even in the supposedly non-communistic or even anti-communistic countries. But the worst aspect is central banking. From it either the other evils arose or have greatly grown through it. Since it is preserved by a faith it cannot be abolished or effectively outlawed. But what is achievable is tolerance for dissenters, freedom for them to opt out of central banking and to do their own things for themselves, i.e., making use of monetary freedom, as part of the whole range of exterritorial autonomy options for communities of volunteers or of freedom of action, freedom to experiment or exterritorial autonomy or minority autonomy. Since popular majoritarian faiths are not directly challenged by it, as they are e.g. by terrorists, and since monetary freedom is not appreciated by most, that is an aim that is attainable, even if only as a "fool's" liberty. It can also be claimed under the right to make mistakes, at one's own expense and risk. So much about freedom of action contrary to central banking beliefs. But that does not mean that central banking should no longer be intellectually attacked. One of the most promising attacks in our times could very well be to point out its communist connection, unknown to most of the victims of State schools or State-controlled "private" educational institutions. Even those who can't be bothered to study monetary freedom options might thus come to reject central banking as a mainstay of what remains of totalitarian communism, even in most supposedly free Western countries. - J. Z., 11.5.97, 14.5.97, 31.5.11, 31.5.11. - & CENTRAL BANKING
COMMUNISM: Ever wondered how Communist countries (*) first become Communist? It’s not the secret police who do the deed, it’s the tax collectors. That’s how the Communists wiped out private companies: they increase the tax rate steeply according to the number of employees. Only firms with less than a dozen employees had a chance of surviving. … – Len Deighton, Berlin Game, Panther Books, 1984, p.37. – That overlooks precedents like central banking for decades, monopoly post offices for centuries and the totalitarian aspect of territorialism for thousands of years. Also numerous other interventions with individual rights and liberties, all legalized, like e.g. Protectionism and Conscription. The totalitarian Communists simply did more of the same kind of territorial Statism. – (*) Countries, as geographical areas, are neither communistic nor anti-communistic. Their population is not single-minded, either, for or against any ideology or faith. To use such misleading terms favours coercive and territorial collectivism and camouflages what is really happening. – J.Z., 2.11.10. - NATIONALIZATION BY STEALTH, TAXATION, EXPROPRIATION, FINANCIAL DESPOTISM, MONOPOLISM, TERRITORIALISM
COMMUNISM: The institutions and conditions of Russia as well as those of the supposedly free Western world will remain largely collectivistic and communistic as long as the coercive and monopolistic central banking system and its monetary despotism are upheld. - J.Z., 26.8.91. - COLLECTIVISM, MONETARY DESPOTISM, CENTRAL BANKING, STATE SOCIALISM, RUSSIA & THE "FREE WORLD"
COMMUNISM: Why did and do all supposedly anti-communist parties and non-communist parties support both central banking and legal tender even after the fall of most communist regimes and economic systems? Why is that system still preserved in the countries supposedly liberated from communist regimes? Karl Marx and Engels in their platform in the Communist Manifesto of 1848: "5. Centralization of credit in the hands of the State by means of a national bank with state capital and an exclusive monopoly." In an 1848 leaflet this was further clarified in point 10: "A state bank the paper money of which is legal tender, will replace all private banks." - In the Communist Manifesto they called their programme themselves one of "despotic inroads on the rights of property and on the conditions of bourgeois production, by means of measures, therefore, which appear economically insufficient and untenable." - So, why is this despotic, insufficient and untenable system still legally and coercively upheld everywhere and hardly even criticized? - J. Z., 20.3.97. - CENTRAL BANKING AND LEGAL TENDER
COMMUNIST MANIFESTO: Did you ever read the 10 Points Platform in the Communist Manifesto? - It was expressly drafted to create an economic chaos, by economically untenable methods - a disorder in which the Communist Party could flourish and finally take over power. - Its point 5 runs: Centralization of credit in the hands of the State by means of a national bank with state capital and an exclusive monopoly." In an 1848 leaflet this was further clarified in point 10: "A state bank the paper money of which is legal tender, will replace all private banks." - We know by now and through bitter experience that neither the ALP nor the LP or CP nor the DLP have a workable employment programme. If either of them had it, it would be firmly in power. All of them, in spite of some lip service to anti-communism, support at least point 5 of the Communist Manifesto, i.e. a system expressly designed to create disorder and further the cause of communism. They do not even apologise for this but consider their behaviour as self-evidently justified and necessary. - The supposed anti-monopolists in the main parties did thus establish the largest and most dangerous monopoly of all, the money monopoly. - All Western and, supposedly free and anti-communist governments did legalise this communistic (or state socialistic or State capitalistic) proposal and outlawed all free market alternatives. (I find this communist idea in almost every mind and, almost, "under every bed" - and more or less hotly defended by most of its adherents.) - Frederic Bastiat once said: "Society Is Exchange." If this statement is correct then the socialists and other dictocrats, who raised exchange difficulties in this form and others, are thereby and to this extent revealed as anti-social elements, as enemies of society. - Full employment is something NO government can PROVIDE. Not even a libertarian government could. A libertarian government (severely limited government) would just leave the unemployed free to supply themselves with work - and to take all the monetary, financial and organisational steps required for this purpose. At most it would provide advice and would see to it that none of its own measures would continue to create and maintain unemployment. - J. Z., 1985 & 21.5.97. - & UNEMPLOYMENT
COMMUNITY CURRENCIES: The term "community" is still all too vague. Usually only territorial communities of various sizes are considered. The territorial political communities can really offer only a single tax- or rate-based currency for the range of their tax- or rate-supported services that they do offer. Non-territorial communities of volunteers, might also have their taxation, contribution, subscription or insurance premium charges for the services, insurances and protection they do offer their volunteers and could base their kind of tax-foundation or subscription-foundation money issues on anticipating this income. The other notions on "community currency" that I encountered are all too vague or, in my opinion, flawed. However, all deserve close examination, free experimentation among volunteers and good record keeping online or on discs. The following organization might come to provide that service: Error! Hyperlink reference not valid. - The CC Resource Center is an international, multi-lingual resource for those interested in Complementary Currency Systems. The founder and coordinator is Stephen DeMeulenaere, who has 20 years experience in the field. - A March 2011 entry from Facebook. The website under that name offers numerous links. - Stephen DeMeulenaereComplementary Currency Resource Center - The April 11 issue of the CC Magazine is out now! http://www.ccmag.net/ - For other local currencies a combination of local goods and service providers, most importantly a local shop association, is required to provide a locally widely acceptable currency even among those local people who, politically, are not members of the same exterritorially autonomous community of volunteers. - Local providers of e.g. water, sewage, garbage collection, electricity and gas supply as well as transport and communication services might also supply separate or combined local currencies, between them as many or as few as traffic will bear. - J.Z., 14.1.11, 25.4.11. - LOCAL CURRENCIES, TAX FOUNDATION, SHOP FOUNDATION, INSURANCE FOUNDATION, SHOP CURRENCIES
COMMUNITY CURRENCIES: They are something as vague in their monetary foundation as are "national" currencies, unless their issue and reflux policies are clearly stated and sound enough. All too often they resemble "social credit" notions and "greenback"-"policies" or the monetary and currency "policies" of central banks. They assume the existence of communities, mostly only on a territorial model. Merely to realize all the inherent wrongs and mistakes of central banking on a smaller, decentralized, but still territorial scale is simply not yet rightful and good enough. To my, admittedly, limited knowledge, of the many different kinds of "community currencies" proposed, many of which are already offered online, their supporters have no clear ideas on the traditions and proposals of sound tax foundation or contribution-foundation money and of the "readiness to accept foundation" or clearing foundation of banknotes issued on the Real Bills Doctrine, in its best form, or of e.g. the shop currency of an association of local shops. Usually, they do not see the connection between legal tender and the issue monopoly - with the inflation threat associated with them and the connection of the issue monopoly with the deflation threat associated with it. - Why should anybody accept a "community currency"? Just because it has been given this name or another? Why should anybody supply his labour, services or goods for it? What rights have the issuers, except to oblige themselves by their own IOU issues or clearing offers? Have all participants already agreed upon a sound value standard or upon free choice of value standards? Do they all recognize the right to refuse or discount any currency one has not issued oneself or obliged oneself to accept and this at its par-value? - A monetary freedom or free banking handbook, including the best refutations of all the popular errors, myths, dogmas, false assumptions and conclusions in this sphere, is still sorely amiss. Has at least one of the different schools of monetary thinking and proposals so far made use of digital "argument mapping" as proposed by Paul Monk et al online? (Dr. Paul Monk, pmm@austhink.com , Dr. Tim van Gelder, info@austhinkconsulting.com , www.austhinkconsulting.com/storage/ara.pdf , www.austhinkconsulting.com/storage/austhinkargumentmapping/09may.pdf - With this method the fog or confusion of views, hypotheses and theories, proposals, opinions and ideas could become rapidly dissolved, as it could be through a monetary freedom data bank, as proposed by Klaus Falke or through a large alphabetized encyclopaedia on all the terms, ideas, writings, proposals and experiences in this sphere, towards which I have accumulated large files. Both need of the latter attempts do, indeed, still much input from others. - At least all the supporters of "community currencies" should and could come to an agreement of freedom for all kinds of monetary experiments - among voluntary participants and become, gradually, acquainted with all the genuine rights and liberties in this sphere and should subscribe to them. - J.Z., 23.4.11. - ARGUMENT MAPPING, MONETARY RIGHTS & LIBERTIES, MONETARY THEORY
COMMUNITY CURRENCY MAGAZINE: Stephen DeMeulenaere: An excellent magazine about Complementary Currency Systems! - Error! Hyperlink reference not valid.
COMPETITION UNDER MONETARY DESPOTISM & UNDER MONETARY FREEDOM: Instead of a severe competition (which has given competition a bad name in public opinion) among suppliers of labour, goods and services, largely free to compete with each other as such suppliers, for a monopolised and thus scarce or unreliable or depreciating exchange medium, upon which all their exchanges depend but which was, obviously, not competitively supplied, nevertheless, under monetary despotism - there would be, under monetary freedom, the easy competition of not only supplying one's own goods, services and labour competitively but, also, that of competitively supplying money tickets for their acquisition and use and for paying all one's debts with them, to the extent that such money tickets or purchasing vouchers etc. can be issued at par with their nominal values (expressed in whatever value standards are found acceptable under free choice of value standards). Not only the goods, services and labours could be almost endlessly varied, as wanted, but the means to pay for them could be, too, by those who have the wanted consumer goods, services and labour to offer. Each certificate would only have to offer that degree of variety of local goods and services as its redemption fund which would induce potential acceptors to accept it at par. Thus severe competition in goods, labour and services supplies would be ended through an easy competition in the supply of goods-, service-, and labour vouchers, in convenient denominations and issued by the local suppliers, the retailers, within the limits of their supply and labour capacities. No more monetary bottleneck or excess friction would exist. Each supplier could also supply the purchasing power to turn over all his supplies and could do so over and over again. The quantity of goods, services and labour could be freely brought into balance with the quantity of purchasing media for them, by the goods and service providers themselves, rather than by outside monopolists, who have other priorities and even contrary interests to these suppliers and no rightful claim to dispose of the goods, services and labours of others by means of exclusive and forced currencies. Monetary emancipation would fully realize or emancipate competition, too, as well as free cooperation on a free market. - J. Z., 14.4.97.
COMPETITION: [A]s we have seen, when the Individualist Anarchist proceeds to reduce his principle to practice, he is inevitably led to Mr. Tucker's program of "competition everywhere and always" among occupying owners, subject only to the moral law of minding their own business. - George Bernard Shaw, The Impossibilities of Anarchism, London, Fabian Society, 1893 (published as Fabian Tract 45). Reprinted by Leonard L. Krimerman & Lewis Perry, Patterns of Anarchy, Anchor Books, 1966, p.506. (Pages 500-514.) - INDIVIDUALIST ANARCHISM, BENJAMIN R. TUCKER
COMPETITION: Competition from unregulated markets makes life tough. - Lisa Allen in THE AUSTRALIAN FINANCIAL REVIEW, 7.6.11, p.13. - There is, obviously, no competition from unregulated exchange media, clearing options and alternative value standards. That is one of the main factors which makes it tough for the jobless, those still employed, the employers, producers, wholesalers and retailers and other traders still in business, as far as they can be under xyz wrongful and irrational restrictions and wrongful charges upon free enterprise and free exchanges, which have created almost the opposite of a free market in every sphere. Even this financial review manages to overlook that or passes such notions without critical comment. - It is the lack of competition and the over-abundance of wrongful laws and regulations which makes our lives relatively hard, quite wrongfully and unnecessarily. However, the believers in regulations and other restrictions should be quite free to impose them - upon themselves! - Monetary and financial freedom only for their volunteers and monetary and financial despotism only for their volunteers! - J.Z., 22.6.11. - DIS., REGULATIONS, CHAINS UPON FREE MARKETS, PANARCHISM, PERSONAL LAWS, TOLERANCE FOR TOLERANT ACTIONS & EXPERIMENTS, VOLUNTARISM.
COMPUTERISED MONEY, DIGITAL MONEY, LEGAL TENDER, INTERNET MONEY: How sound can they be, or how soundly can you judge the currencies involved, if all you see and can know about them, through the computers, are figures on a screen? All face to face evaluations, knowledge of particulars, trades, goods and services involved are abstracted in the process. Moreover, the prices quoted are often prices artificially and wilfully manipulated by governments to give a wrong impression. Such money manipulations can occur, as despotic actions, almost at any time and at any degree. The monopolized and forced currencies traded, as well as those which are offered on the Internet, are all too separated from daily consumer goods, services and labour exchanges and their conditions. The exchanges and exchange media offered by monetary despotism and to a large extent also those offered only electronically, via the Internet, are all too anonymous, not immediately visible, touchable or testable. Too much has to be accepted upon legal commands, faith, advertisements and reputations. It is almost as if one considered only the markets established by powerful criminals, organized crime, pirates, highwaymen, with their loot, their fiat money, their requisitioning certificates, their regular and irregular tributes and levies, and from them tried to judge the economy in general and come to rational decisions. Indeed, the government securities traded in the money markets are investments in tax slaves. When and where and to what extent these tax slaves will finally rebel or simply refuse to pay or evade or avoid taxes can't be safely predicted. To the extent that credit claims to cash or gold are traded, and lead by its system to of an immense non-cash payment and clearing structure, upon a comparatively small gold and legal tender basis, with creditors entitled to demand rare metal cash or legal tender paper money (of which there is never enough to pay all the current non-cash payment and clearing claims), the whole system is very unstable and subject to panics and collapses at any time. Consider also the huge stocks of U.S. paper dollars hoarded all over the world because the other national currencies are, usually, even worse. As soon as the other national currencies improved or became more stable than the U.S. dollar, then these huge amounts might suddenly flow back to the U.S., leading there to a strong paper money price inflation, since there they still have legal tender purchasing power. Who can predict when that will happen? - The whole embodies all the uncertainties of the old court watchers, the Kremlin watchers of recent decades and of the Washington and Tokyo watchers etc. - While the government is still despotically involved with currency and finance - this market cannot be free and sound, either. - Digital monies are still far from being local currencies, useful in local shopping centres. LETS is, perhaps, the best example for this. However, as I learnt from my relatives nearby, for larger private purchases within driving distance, the information of offers for sale there of wanted items can be very rich and helpful. They also managed to sell some of their surplus items this way - with both kinds of deals for legal tender currency, just like in garage sales. - J.Z., 12.4.97, 18.5.97, 1.6.11. - DIGITAL CURRENCIES
COMPUTERIZED MONEY SYSTEM: Can any electronic system, no matter how extensive, and how often it is changed or reformed, be a full substitute for the inventiveness, creativeness and ingenuity of free participants in a free market for exchange media, value standards, foundations, clearing and credit methods etc. and the subjectivity of values for different people or is it merely another instance of the "one size or one utopia fits all" notion? Especially libertarians should be wary of computerizing all their transactions, making them thus more or less open to government snooping with the most expensive and extensive decoding equipment, software and manpower resource for that purpose. While in a quite free market computerization would offer many advantages, under the rule of territorial governments it also offers many disadvantages. Computers, software and their networks are not and may never the panacea that many people expect them to be. I find that indicated by the way libertarian computer users neglected and still neglect e.g. their microfiche, floppy disk and CD-ROM publishing options for libertarian literature. - J.Z., 27.8.02. - However, in the same year I discontinued the expansion of my libertarian PEACE PLANS on microfiche, because most libertarians, apart from their preference for texts in print, which I can't afford to offer, they much prefer to get then digitized rather than on microfilm. - J.Z., 1.6.11.
COMPUTERIZED, DIGITAL OR ELECTRONIC CURRENCIES, PRIVATELY SUPPLIED & MANAGED, FOR CLEARING PURPOSES ONLY: This kind of clearing money would have to be hacker proof. Forgery would also have to be prevented. Any PC should easily connected to a payments centre. All one's digital spending should provide one's identity, assured by scanning, codes, pass words, whatever. The system should also be pre-programmed to sound an alarm at the account holder's computer and a security check computer at the clearing centre, whenever any tampering with any account seems to occur, e.g. by repeated tries to hit upon a code number, flawed scanning etc. E.g., the credit card, holding the phone clearing credits of a participant, might be associated with a beeper that would indicate to the card holder any attempt to spend from his account. Then he should have the option to press a button leading to the message at the clearing centre: I am not trying to spend anything now. Apparently, a fraudulent attempt is in process to use my account. - Then such payments attempts, at the expense of others, without their consent, should not be completed until the matter has been clarified via checks with the account holder. Whoever made the attempt to break into an account and rifle it, electronically, should also become automatically and electronically traced and identified. - We may not be there yet but we might not be very far from that situation, either. I am less worried about this than about governments, especially the tax department, getting access to this kind of private trading and paying. Security against this should become close to 100% before I would prefer that system to cash payments. - Some claims have already been made for a large degree of security for private payment channels. I do not know how true and how costly these security avenues are. - Perhaps as an experiment, libertarians and anarchists could set up such a system among themselves, for the exchange of printed, disked, micro-fiched, on-line literature or literature compilations on hard disk drives, ZIP disks and CD-ROMs of the cheapest kind, that offer only text files. Expensive multimedia are not necessary to convey essential freedom information. - I still think that e.g. 5,000 active micro-fichers in the world, producing and reading microfiche actively, could use their fiche between them to set up a clearing bank, using a microfiche of acceptable quality of reproduction and legibility, as a value standard unit and also quantities of them, as media of exchange. If each participant deposited a few duplicates of each of his issues at that central bank of freedom microfiche, then he could there get a corresponding credit, in form of the other freedom microfiche that he wants. The centre might also act as a literary agency for the participants and offer their fiche for sale, directly, on a commission basis or by mediating subscriptions. Thus it could cover its costs and make some profits - provided only that microfiche would have been already as widely accepted as that. Indeed, that might never happen, in spite of all the advantages this medium offers. But the potential is there. - J. Z. - 1.5.97. - The potential is much greater for digitized texts transferred as email attachments or in large batches, whole special freedom libraries, on discs. - Such exchangers might reckon in MBs or GBs of wanted texts. - Libertarians should make a start with such exchanges, until finally a complete digital freedom library is achieved, portable in a powerful and high capacity disc drive, still so cheap that such drives are currently offered at slightly below A$60 per TB. - J.Z., 31.5.11.
CONFIDENCE & TRUST: The present banking system of monetary despotism does not deserve the maintenance or restoration of confidence or trust but, rather, the solid establishment of permanent doubt and distrust and the replacement of this despotism by the individually chosen alternatives of monetary freedom. - J.Z., 15.3.97. - DIS.
CONFIDENCE: An honest currency is not a confidence game or trick. It can be as honestly offered and accepted as goods and labour services can be. - And its quality could be as rapidly checked: E.g., would it be accepted as "as good as gold", or at its other par value, to a different standard used in it, in the next shop or service station? If it is, any suspicion, distrust and lack of confidence would be rapidly dispelled. - One might even say that it is a self-interested confidence game of advocates of an exclusive and either 100% or fractionally covered gold certificate currency, to insist that "confidence" would be required for banknotes. Such nonsense is simply thoughtlessly copied, from one author or lecturer to another, over generations. - J.Z., 6.11.91, 26.4.97. - DIS.
CONFIDENCE: Confidence as the basis for the value of a currency? Nowadays you can only be confident that a government paper currency will NOT be redeemed by the government issuer (or its central banking system) in gold or silver or by any private bank, forced to deal only in the government's forced and exclusive currency - or forced and exclusive currencies of other governments. - You can also be confident that you can pay your taxes with it and that the government will mostly back you if you use its depreciated currency to cheat your creditors with it for part of your repayment obligation. At most you remain somewhat free to try to purchase rare metals with it, at current paper prices for gold weight units, often taxed for such transactions. - J.Z., 16.3.97. - DIS.
CONFIDENCE: Only that confidence is needed for a currency, to be widely enough accepted, at least locally, that consists in the assurance that one can buy with the currency all one's wanted consumer goods and services and pay one's debts with it. When this confidence is assured then it comes close enough to a certainty. A further guaranty by the issuer: a promise to deliver gold or silver for the currency, too, upon demand, is then not required and thus metal redemption will be renounced by competitive note issuers, as a superfluous and expensive as well as insufficient luxury. It will also not asked for by most users of freely competing and market rated optional currencies. If they really want to buy gold, instead of consumer goods or services with their various local and competing shop currencies, they would remain free to do so on a free gold market. - J. Z., 16.3.97, 1.6.11.
CONNECTION, THE: Published by Erwin S. Strauss: On and off it discussed also monetary freedom options, e.g. Dio in TC141p48, Jim Stumm in TC142p29. Stumm, in TC133p115 sees Gresham's Law correctly: Without legal tender & money monopoly, good money drives out the bad. Some of the usual objections are raised by D. Ust, in the same issue, p.52. Strauss offered some comments to them in TC134p6. I marked 3 free banking contributions in TC143, on pp 8, 9, 38/39. - I would like him or others providing all back issues digitized and the magazine also continued in this form, sent as an email attachment to subscribers. It seems to be still continued only in print, up to March 2011, according to the WIKIPEDIA: You can get a sample issue for $2.50, or an 8-issue subscription for $20, by writing to Erwin S. Strauss, 10 Hill Street, #22-L, Newark, NJ 07102, USA. - Google offered today 2840 hints to him and this magazine, many less when I put the search words in quotation marks. - Email address & website? I did not see any mentioned. Latest issue number I noticed: 258. - J.Z., 1.6.11.
CONSIDERATION FOR OTHERS: A system of monetary despotism is hardly considerate towards the rights and liberties of others. It does not learn from its mistakes. It does not allow its victims to opt out from under it. It does not permit competition by others. It is the product of totalitarian fanaticism. Under the pretence of providing the greatest possibly public services it manages to provide, actually, some of the greatest possible public disservices and this not only for a moment but, for years and even decades, and this with the consent of most of its victims, while suppressing the free actions of a few enlightened individuals and groups, that could clearly show up its wrongs and defects. - J. Z., 11.5.97.
CONSPIRACY THEORIES: To assume that all accountancy and trustee companies and directors of banking coops are unanimous members in an international conspiracy, to "cover up" an endless "creation" of deposits and credits out of thin air, goes a bit too far for me to take on credit or faith, just upon the hot air or written ones assertions that such things could and would occur. Some accountants have written detailed reports to prove that such frauds and cover ups do not and cannot occur (although many other culpable acts do happen in this sphere), and that we have here merely one segment of the many sectarian and prejudiced popular beliefs on money and credit. - J. Z., 3/97, 1.6.05. - & CREDIT-, MONEY- AND DEPOSIT "CREATION"
CONSTITUTION PARTY, Ballot Access News » Blog Archive » 2012 Constitution Party ... - www.ballot-access.org/.../2012-constitution-party-national-conventi... - Cached - 18 Nov 2010 – The same is true with a so-called free market money system. One major mistake our Founding Fathers made in writing the Constitution, ...
CONSTITUTIONALISM: First Snowfall of Kondratieff Winter - www.runtogold.com/2008/02/first-snowfall-of-kondratieff-winter/ - Cached - 1 Feb 2008 – If the United States followed the free-market money of the Constitution instead of establishing the Federal Reserve that manipulates the ... - No territorial constitution was, so far, ever good enough in that sphere! - Some of the merely proposed ones are, at least for their volunteers. - J.Z., 24.7.11.
CONSULTANCY OFFERS FOR MONETARY FREEDOM EXPERIMENTS:
CONSUMER COOPS & MONETARY & FINANCIAL FREEDOM:
CONSUMER PRICE INDEX: How can one achieve the transformation of a politically determined and correspondingly fraudulent CPI to one or several ones that are economically determined? Full publicity on the details of its determination would be essential. Without them one cannot criticise its foundation. A debtor, as large as the government, with its CPI committed payments, should not be permitted to manipulate the CPI under the pretence of properly measuring the inflation which it caused in the first place, and still continues, through its legalized monetary despotism, thus diminishing its debt burden through unilateral and fraudulent action, under the pretence that it would fully undo the inflationary effects it had caused, at least at annual intervals, for some people, so "protected". (That would leave, for instance, the losses through the degrees of weekly and monthly depreciations, for those receiving regular weekly or monthly payments, like wage and salary recipients.) Naturally, the abolition of monetary despotism would be a more fundamental solution. But honestly compiled indexes, well publicised, could be among the first of the required steps to reveal monetary despotism for what it is. - One wonders why the creditors of the government, so defrauded, do not speak up and defend their interests. Also, why supposedly free economists do not speak up against this fraud. - How much does the government owe its CPI indexed creditors, every year still, after it fraudulently determined the CPI in its favour? - We do let governments get away with all too much, against our own rights, liberties and interests. - J. Z., 14. & 18. Dec. 93, 2.5.97, 1.6.11. - INDEX DETAILS, INDEX CURRENCIES.
CONSUMER PRICE INDEX: How honest or dishonest is e.g. the Australian Consumer Price Index (CPI)? E.G. Superannuation payments are determined by it. Personally, observing the prices that I have to pay as a consumer, I was always of the opinion that it understated the inflation rate - because that was opportune for politicians and saved them money in indexed payments. I was also assured by several economists that in the determination of it, in Australia, some price controlled items were intentionally included. That is an obvious absurdity, wrong and fraudulent. To measure inflation one should use only prices that are not controlled, or artificially kept low or perhaps subsidized. Details on which of hundreds to thousands of possible indexing methods are used in Australia to determine its official CPI, are not known to me. Unfortunately, the mass media and associations of employers, employees, retailers and wholesalers are not supplying or sufficiently publishing independent and other CPIs, to my knowledge, that would help to throw doubts upon the official one. - J. Z., 6.7.91, 30.4.97.
CONSUMER PRICE INDEX: The official CPI seems to be an at least annually repeated malicious and self-interested lie of officials entrusted with its calculation and application. It harms millions, whose incomes are thus wrongly indexed in the inflated and forced currency of the government. The culprits involved seem to remain anonymous and immune from prosecution and even from public censure by genuine economists. So far no investigative journalist has tackled this fraud, as far as I know. No one has been brought to court for it, as he should be, by a class action. The top rulers and politicians do not depend upon CPI increases. They seem to legislate salary increases for themselves and various perks almost as they please - and then even cheat in their declarations on their recoverable expenses. When one was recently found out, an Australian Senator, he first blamed mere accounting mistakes. But, apparently, there were dozens of them and almost all in his favour. (No full reporting on this took place but the matter is supposedly under full police investigation.) When he pointed out that most of his colleges did the same, he earned their wrath, risked his future and was called a traitor. Indeed, he betrayed their all too common frauds and dishonesty. They did not like that. But this hue and cry is likely to be soon over and these rorts will go on and on, in one form or the other, usually far beyond an honestly determined CPI, which they have so far not managed to provide for poor retirees like myself. The State Superannuation Fund, to which I was forced to contribute at least a minimum amount annually, was once bragging that it provided cheap, i.e. very low interest housing loans to other than public servants. The "representatives" of the thus "insured" remained silent. Moreover, the employer's half of contributions were not paid together with mine, earning interest over the years, but, in nominal and depreciated dollar amounts, only when I retired, after 28 years. Economically, these contributions were part of my wages and as my wages, if invested, would have earned interest over almost 3 decades. Another fraud in this old age security system which is passed over in silence by most. At least part of this superannuation fund's accumulated reserves had, probably, to be invested in government insecurities - repayable largely by the same people in form of taxes, although in depreciated money. Rorts upon rorts. And at the same time quite honest and safe old age security arrangements are outlawed and the existing systems are frequently interfered with and taxed and regulated contrary to the interests of the thus "insured". I was not at liberty to opt out of that system, while I remained a public servant in NSW and to adopt an alternative old age security option not government regulated and controlled. Even if I had been allowed to opt out, all the others would be just as much be wrongfully meddled with, quite legally and none of them was free to offer value preserving clauses, except to the extent that it was also investing in CPI indexed government securities. Flawed as this CPI is, to the advantage of the Fund, or its favoured borrowers, and to my disadvantage, at least I am somewhat protected by it against the results of further inflations of the Australian governmental paper dollar. What is misnamed social or old age "security" has actually forced many people into involuntary poverty, who, under full monetary and financial freedom could have become rich in their old age on no higher contributions than they were forced to contribute to achieve a low pension or superannuation in their old age. Never trust any territorial government to get or do anything right. - J. Z., 30.4.97, 1.6.11. - COST OF LIVING
CONVERTIBILITY: Convertibility is a safeguard necessary to impose upon a MONOPOLIST, but unnecessary with COMPETING suppliers who cannot maintain themselves in the business unless they provide money at least as advantageous to the user as anybody else. - Hayek, Denationalisation of Money, p.84. - Some have argued that there would be a competition to provide the best possible convertibility and that would be a 100% convertibility by the issuer upon demand of the note holder. However, under free competition it would soon be revealed that convertibility of banknotes into gold coins as their bank of issue and the ultimate liquidity or guaranty that people would like to receive upon failure of a bank of issue is less important for the current value and use of a currency than is its acceptability, right now, for goods and services in daily demand. Consequently, and in order to save the outlay for a gold redemption fund, many issuer would proclaim merely that they are always ready to provide for convertibility of their notes into goods and services that are in daily demand and priced in gold weight values. They would clearly state, that they would not supply themselves their equivalent value in gold weights, too. Instead, they would merely price their goods and services and their debts in gold weight units and accept their own notes at par with their nominal gold weight value (and other notes only at their gold weight value in a free market). In other words, they would only try to preserve the par value of their own notes with gold weight units but without obliging themselves to supply gold coins on demand. Those who would then wish to acquire gold with them, rather than purchase their nominal gold weight value in goods and services, would be referred not to any stocks of gold that the issuer might also posses, for other than currency purposes, but, instead, to the greatest gold reserve and redemption or convertibility fund of all, that of the whole world, of all of mankind, the one available to all buyers and sellers of gold, to all fans of convertibility, metal cover, gold value guaranties and redemption, namely to the free gold market. They cannot demand more than that the notes which they hold of any issuer are accepted there at par with their nominal gold weight value (or as good as gold). With the maintenance of that par value the rightful obligation of the issuer would be ended. Nor would the issuer be obliged to maintain the par value of his notes outside the locality where he issues them as turnover or clearing media. He is not under any obligation to maintain them at par in the whole country, other countries or the whole world. At the place of issue no only the issuer but most of the whole local trading community would treat his notes as good as gold and so would the local gold sellers. But, ultimately, only the issuer would be obliged to accept them at par from anyone and that would tend to keep it locally at par in other local transactions as well. What more can one rightly ask for from any as convenient paper means of exchange than its local purchasing power and value being at par with its nominal value? It would then be considered as superfluous and unnecessarily expensive to try to provide each note holder with a 100% or fractional gold metal redemption fund as well. Those who do not offer it and declare that they will not cover their notes thus, would win out in free competition. Their prices will be lower and their exchange media and their value standard will be just as good or even better and less subject to fraud and deception and runs upon the remaining gold hoard of an issuer. - J. Z., 18.4.97, 1.6.11. - REDEMPTIONISM, FRACTIONAL OR 100 IN RARE METAL OR 100% IN WANTED OR NEEDED CONSUMER GOODS? SHOP FOUNDATION, GOLD MARKET CONVERTIBILITY, GOLD WEIGHT VALUE ACCOUNTING VS. CLASSICAL GOLD STANDARD
COOPERATIVE BANKS OF ISSUE: See e.g. the U. von Beckerath writings on money, SHOPPING CENTRES AS ISSUERS OF SHOP CURRENCIES.
COPYRIGHTS: Seeing the catastrophic consequences of monetary despotism - and how often they occurred and for how long, should we still insist upon copyrights for all monetary freedom writings, when this might obstruct their publication or republication? Or should we try to promote their duplication and publication by any means, in any medium that we can afford, fully aware that at least at this stage it would be almost impossible to acquire any riches or even to recover the costs of such publishing efforts? Or can you imagine any such writings becoming best-sellers, soon? - J.Z., MFNL&MF 3/4, 2/89. - FOR MONETARY FREEDOM WRITINGS? RENUNCIATION OF COPYRIGHTS FOR MONETARY FREEDOM WRITINGS, AT LEAST UNTIL THIS BASIC LIBERTY IS FINALLY ATTAINED
CORRESPONDENCE ON MONETARY FREEDOM:
COSME, PARAGUAY, Cooperative Colony, had a Labour Exchange Bank, according to TIMES, Aug. 31, 1897. - Source: Anton Menger.
COST OF LIVING: Always a problem. With inflation you worry about the cost, and with deflation you worry about the living. – Anon. – This would be nothing to worry about if we worried enough about monetary and financial despotism to abolish them, at least for the affairs of an enlightened community of volunteers. – J.Z., 25.8.10. - CONSUMER PRICE INDEX
COST OF LIVING: When I first started working I used to dream of the day when I might be earning the salary I’m starving on now. – Anon. – Not enough people dreamed about their monetary and financial freedom options and thus they became victims of monetary and financial despotism – and most of them still grant it the sanction of the victims. – J.Z., 25.8.10.
COST-PUSH & WAGE-PUSH INFLATION: These notions are based on the same fallacies as those of the wage-price-spiral. They ignore the monetary factor or assume merely the degree of monetary mismanagement that is normal for monetary despotism, in which politicians depreciate the currency in the effort to maintain their own power by buying votes with inflated paper money (inflation tax) and with other taxes funding their "government-spending" programs. - J.Z., 24.3.97, 30.8.02.
COST-PUSH INFLATION: In the strict sense, there is simply no such thing as a 'cost-push' inflation. Neither higher wages nor higher prices of oil, or perhaps of imports generally, can drive up the aggregate price of all goods UNLESS THE PURCHASERS ARE GIVEN MORE MONEY TO BUY THEM. What is called a cost-push inflation is merely the effect of increases in the quantity of money which governments feel forced to provide in order to reduce the unemployment resulting from a rise in wages (or other costs), which preceded it and which was conceded in the expectation that governments would increase the quantity of money. They mean thereby to make it possible for all workers to find employment through a rise in the demand for their products. If government did not increase the quantity of money, such a rise in the wages of a group of workers would not lead to a rise in the general price level but simply to a reduction in sales and therefore to unemployment.- Hayek, Denationalisation of money, p.75. - WAGES, PRICES, QUANTITY THEORY, INFLATION.
COUNTERFEITING: Counterfeiting is a crime which politicians monopolise. - Stormy Mon, TC121, 29.7.84. - CAN one "counterfeit" one's own notes? - The issue-monopoly of central banks and the legal tender coercion and monopoly of its nominal paper "value standard" are by themselves criminally wrong and harmful enough without adding the false charge of "counterfeiting" the own notes. - When other governments counterfeit the notes of the own governments, or when private forgers do so, or when private banknotes are forged by criminals, then that is counterfeiting. - J.Z., 2.8.89, 29.4.97. - The wide circulation area and long circulation period as well as the uniform appearance of government paper money makes large-scale and prolonged forgery of it easier and more difficult and slower to find out. - Thus some people predicted that some day government currencies might become destroyed through forgery. Usually they manage self-destruction well enough on their own. - J.Z., 9.9.02. - FORGERIES, DIS.
COUNTERFEITING: If you do it it's illegal. - From a Workers Party leaflet: Something's Wrong in Australia. - A forger does not forge his own notes but those of others. At most he could water down his stock or issue more of his own notes secretly than he has promised to do or recorded as having done. But all his notes would still be genuine. Only their value would be reduced. Not a single one of them could be declared to be a total forgery and quite invalid, although the purchasing power of all of them would be reduced. - J. Z., 19.4.97. - Alas, I had subscribed to the same error myself, when I wrote on 14.11.73: If you want to engage in counterfeiting legally, join the central bank. - & INFLATION OF LEGAL TENDER PAPER MONEY, DIS.
COUNTERFEITING: The biggest counterfeiters have been governments. - Jack Allen Horrigan, article "Inflation Island", 10/1971. - One can hardly "forge" one's own notes but, under legal tender and the money monopoly, one can multiply them and still this increased volume of money into circulation and thus depreciate it and drive up all prices expressed in it. In each transaction the creditors are not cheated out of the whole value, as by the use of a forged note, i.e. an entirely invalid payment, but instead, merely by the inflation percentage. - Advocates of monetary freedom should try to avoid inaccurate terms. They should leave that activity, as a monopoly, to the advocates of monetary despotism and attack these lies and false pretences with properly expressed truths and correct terms. - J. Z., 18.4.97, 1.6.11.
COUNTERFEITING: When Block discusses counterfeiters, even his economic arguments falls apart. His protestation that paper money is already counterfeit is irrelevant. The counterfeiter, whether government or private, is an aggressor, defrauding others of rightful value. The real crime of the counterfeiter is not that he copies worthless government notes but that he passes on his own worthless notes to innocent victims. To say that government theft justifies private theft is an argument worthy or the New Left, not a self-styled defender of liberty. - Sharon Presley, where? when?
COURT CASES: I think them too costly and having much too low chances for success, when an attempt is made to uphold genuine individual rights and liberties which a territorial government does not recognize. Most likely only the lawyers would benefit. The time and energy involved for the litigants and the costs, would be better spent upon research, studies and publishing efforts. - J. Z., 7.4.97, 1.6.11. - AGAINST MONETARY DESPOTISM? HUMAN RIGHTS, JURISDICTION OF GOVERNMENT COURTS
COURTOIS, French economist who opposed the note issue monopoly - according to Rist. - No further details known to me at this stage. - J.Z., 23.7.11.
COVER: As money cover can serve anything that is found acceptable by well informed acceptors of a paper money in a free market. - J.Z., 77 & 97. - FOR MONEY ISSUES, ACCEPTANCE FOUNDATION, SHOP FOUNDATION, TAX FOUNDATION, DEBT FOUNDATION, READINESS TO ACCEPT FOUNDATION, CLEARING FOUNDATION
COVER: Goods already sold to wholesalers or retailers are a better cover for notes than merely speculatively warehoused goods of manufacturers or speculators, withheld from sales in the hope for higher prices coming up or goods that are can be sold not for normal market prices at all but merely for emergency sales prices, i.e. at huge discounts and, possibly, only at a loss. That there can be "illiquid" goods, stored in hopes of future buyers, I know only all to well - as the producer and distributor of libertarian and anarchist micro-fiched literature. - My microfiche have certainly not yet acquired currency or bestseller status and are not even suitable as yet for inclusion in e.g. LETS exchange lists, for lack of demand for them and, usually, not even included in many bibliographies and abstracts. - Microfiche are illiquid assets and others than libertarian microfiche publishers and readers, like me might not even consider them as assets at all. - But they do last and are available upon demand while, apparently, much of the Internet information stays there only temporarily and only a fraction of the temporary appearances is so far being archived by some, probably of all whatever it may offer in the monetary freedom sphere, so far. - Only some literature and address lists have reached me so far from that source, thanks to some correspondents - and some disks which my systems won't accept or read at all! - J. Z., 4.7.91 & 12.4.97. - By now at least a comprehensive web archive does exist: http://web.archive.org/web/ - FOR NOTE ISSUES
COVER: See: APHORISMS ON THE MONEY PROBLEM.
COVERS & REFLUX ARRANGEMENTS THAT ARE POSSIBLE & ADVISABLE: Preferably offered in a tabulation.
COVERS & RESERVES: Security provisions or guaranties in case of bankruptcies, when the circulation efforts of banks of issues have failed, should be distinguished from securities, safeguards, covers, reserves, clearing and reflux arrangements that limit the quantity of exchange media issued, assure demand for them, make certain that they stream back to the issuer and preserve, as far as humanly possible, the par-value of the notes with a sound and self-chosen or acceptable value standard. These latter precautions are necessary to the sound functioning of alternative, optional, privately or cooperatively issued local currencies. When these precautions have all been taken, then the former precautions for the day a wide-spread distrust of a note issue and a run on the bank, or of liquidation of a bank's the note issue business, would not be necessary at all - at least not for such sound banks of issue. (What kind of "securities" would be necessary for banks that issue capital securities is another question. Some might merely issue securities to make the real capital assets - as well as capital expectations of their customers - more liquid and transferable, as liquid as one can make capital securities. They can't be made as liquid as currencies have to be - upon this foundation alone.) - Back to note issuing banks and e.g. shop associations issuing local currencies with shop foundation: Unlimited liability for the directors of such banks would not cost anything, could not do much harm and might do some good. Also some common sense rules, like a limited area for loans and circulation, a limited circulation period, the obligation to use other exchange media received to purchase the outstanding own notes at par, the acceptance of other exchange media only upon payment of a small fee, whenever the own notes have suffered a small discount, publicity for all issues, the stopping of further issues upon any but a trivial and temporary discount, contracts with the debtors of the issuing bank that bind them to acceptance at par, the discounting with notes only of "real bills" (sound commercial bills) or their equivalents, which are short-term and do represent goods already produced and sold and on the road to the retailers, if not already in the retailers' shops. - A currency is accepted as a "current" currency, at least as a local currency, not because in case of a bankruptcy the creditors would be able to resort to a guaranty fund but because there is a current use for it, either for the note holder himself, or indirectly, through a current demand for it by others, for their consumer satisfactions and other debt obligations. This and the final readiness to accept them, in debt repayments to the bank of issue, and its debtors, who would mainly be suppliers of goods and services in daily demand, and the demand for the notes to pay wages, salaries, and one's own profits etc. with them, do constitute the essential debt, demand, clearing, reflux or shop foundation for sound local currencies. Without it even gold coins would only be of some use to some. If these few could not convert some of their gold coins readily into food and shelter, they would perish. Without this shop foundation small money tokens would be no more useful than e.g., shares are as means of payment. - Which other local covers than shop foundation could and should be mobilised by a single or competing local currencies? E.g. the services of professionals and tradesmen, also those of local restaurants, pubs, coffee-shops, all kinds of eateries, entertainment centres, bus companies, taxi services, the local rail connection, and the local rates and fees, legally granted to or extorted by the local government, the local suppliers of gas, electricity, water, sewage and garbage disposal services. As long as any shortage of exchange media is still perceived or expressed in a premium for local exchange media over their value standard, no monetary payment sphere, which could issue its own sound exchange media, should "poach" all its means of exchange requirements from those who have provided their own media of exchange for their own purposes. Custom and ethics on this might, one day, become as strong as e.g. the condemnations of cheating are, when gambling. If you can help yourself in this respect, then you ought to help yourself in this respect. Mature adults mostly feel strongly the urge to become self-supporting, not a burden upon anyone else, if they can help it at all. (Welfare States have greatly diminished that feeling for self-support and self-responsibility. - J.Z., 8.9.02.) That aspiration should become extended to becoming monetarily independent as far as possible and convenient to do so. Naturally, nobody would be obliged to issue personal notes that could have only a limited local circulation among a few and that only at a considerable discount. However, as soon as proper discounting facilities are locally established, combined with proper clearing services, then even individual issuers of IOUs, known to be honest, industrious and productive, could issue their own IOUs, in standardised denomination, not for general circulation, but bring would bring them to a local discount or exchange office to get them there exchanged into one of the local currencies. That discount or exchange office would then have the task to put these IOUs or clearing certificates into the hands of the few who, with them, would want to purchase the goods and services of the issuer of these personal notes or money tokens. Upon purchase, they could then present these IOU's etc. to the issuer in full payments, at their par value, either themselves or through their bank. For at least towards the issuer any note must have, juridically, a full legal tender, i.e. debt-dissolving power at its nominal value. The issuer cannot rightfully and unilaterally repudiate such a debt. If he tried to this, then he could be criminally prosecuted for fraud. - J.Z., 25.4.97. 1.6.11. - REFLUX, REDEMPTIONISM, DIS., CLASSICAL GOLD STANDARD, HARD MONEY, REAL MONEY, SHOP FOUNDATION, READINESS TO ACCEPT FOUNDATION
CPI & INFLATION: The official CPI (Consumer Price Index) is intentionally full of misleading figures, because the government has a vested interest in not letting it represent the real and much higher inflation rate. It is obliged to pay CPI-indexed pensions and the real inflation rate would make a bad impression high during elections. - It also has largely pre-empted the market for other price-index calculations. If they are compiled at all, by compilers not salaried or subsidized by the government for their labors, then the government largely sees to it that their divergent figures are not widely enough publicized. The mass media do not want to offend the government, which is one of their biggest advertisers. I would like to see a tabulation of the official CPI rises over the last few decades, side by side with the real prices of some of the standard consumer goods and services for the same periods. Not even the rise in the A$ paper money notes and governmental coin circulation is regularly announced, nor are the rising figures for both, for the last few decades, put together and published. It is much easier to defraud people who are kept in ignorance. - J.Z., 23.1.01, 27.8.02. - CPI: CONSUMER PRICE INDEX, COST OF LIVING, INDEX CURRENCIES.
CRAIG, KEVIN: Banking and Money -- KEVIN CRAIG - "Liberty Under God" Beginning ... - www.kevincraig.us/money_and_banking.htm - Cached - Free Competition in Currency Act Stop inflation, bubbles, and recessions by permitting free market money to compete with Federal Reserve Notes. ...
CREATION OF CREDIT: Creation of credit or money by the banks leads to inflation. Banks can create credit or money out of nothing or can multiply any deposits or money they receive by a factor of ten. - Popular opinion. - 1.) Credit is not created by any bank but, rather, through the mediation of a bank, given by its customers, its depositors, to the extent that they do not dispose themselves of their deposits for their own purposes and, especially, to the extent that they grant the bank fixed deposits or buy its securities for a certain period. - 2.) Inflation could take place only when there is "refinancing" by the central bank with newly printed legal tender money (when under free market rating and monetary competition this money would suffer a discount and widespread refusals to accept), in case the first, secondary and following depositors want to utilize their deposit accounts for their payments at the same time. But then we would have a coercive inflation of paper money and not "credit creation". When not supported by fictitious deposits from the central bank or additional fiat money issues by it, private banks can only transfer and not multiply accounts. For each credit they have to account an equal debt, for each debit an equal credit. As long as their computers do not malfunction - and correct bookkeeping checks would soon reveal that, no multiplication of credits takes place and a corresponding multiplication of debits would soon be protested by the victims. Credit and money creation by private banks is entirely imaginary, a false doctrine of Social Credit ideologues. - Without this "refinancing" by the Central Bank, when any private bank has over-extended itself, e.g. by wrongly investing short term deposits in medium to long term loans, or in other cases of fraud, embezzlement or careless investments in the irresponsible spending of some more or less despotic foreign regimes, or in the wasteful projects of the own governments, corresponding bankruptcies would and should occur. Banks should never give their short term or instant withdrawal creditors the impression that they could at any time fully withdraw their funds - in all cases in which they have been invested, at least in parts, in illiquid funds. - But if there is an agreement between short term depositors and a bank that specifies that their money is repayable only e.g. in instalments, as it becomes available from the repayment of loans, i.e., as soon as possible, then no run can and will take place and the transaction can be honest on both sides, with spare funds, from the repayments of due loans, used as best as they can be used. I doubt that under free competition such banks would be very successful but, at least, they would avoid the term or timing risk. Medium and long-term loans should always be financed only by corresponding medium and long term deposits or savings, best by the issue of corresponding securities. Otherwise, the banks would sell to the short term depositors only the illusion of having liquid funds while they have in reality only a claim upon the medium and long term debtors of the bank. If the governmental bank supervision or governmental juridical system and governmental auditing or government approved auditing system worked, then such abuses would not be possible in most cases or on a very large scale or for long. But, in the absence of fully free banking they are likely to occur often. - Money or credit can no more be "created out of thin air" than can anything else - except the constituting elements of thin air and even that process is not cheap. (Example: Nitrogen production out of the air for fertilizer production.) - Credit cannot be created by cheque issues, either. In Germany cheques must be presented within 8 days. Receivers of cheques use them fast for credits on their accounts and do not leave their accounts idle as a rule. People are not only savers but spenders. Borrowers, especially, are more spenders than savers, at least when spending their loans productively, to enable them to repay them when due and to make a profit in the process. When workers or clerks are paid in cheques then they do not, as a rule, put most of the amounts received into savings accounts. And if they did this, on medium or long terms, then such savings could not act in an inflationary way, either. When banks rightly or wrongly assume that call-deposits will continue to increase then many of them will be misled into investing part of these total deposits into other than short-term liquid funds. A liquidity risk is thereby taken up, not an inflation risk - unless the central bank helps them out, with additional legal tender paper money issues, whenever they need it in one of the inevitable future liquidity crises that will then occur. - No one but the central bank can increase the cash or near cash purchasing power of an economy under monetary despotism and only this tends to increase legal tender prices when legal tender is inflated. - To the extent that non-cash transactions can be freely settled by clearing, without being suddenly disturbed by cash demands, for which no equivalent cash exists, genuine exchanges are settled by clearing, in which the clearing settlement always is equal to genuine transactions. Then, under sound value standard reckoning no inflation can take place because the clearing settlement is always equivalent to the purchases and sales of the goods, services and goods involved. But if all prices, services and labour are coercively priced-out in an inflated fiat "value standard" then all clearing transactions, that also use that fiat standard, are also participating in its depreciation - but, merely genuine exchanges of present goods, services and labour, do not CAUSE this depreciation although they participate in it PASSIVELY. - If banks could create credit and money out of nothing, then they would possess divine powers. But even the world was not created out of nothing, or was it? What those believing in credit and money creation do not seem to understand is the time factor involved in credits. Over a long period many more loans are granted and become due than is available in cash at any particular point of time to pay all of them. A cash amount of $ 1,000 may well serve to repay 3 or more different loans at different repayment dates. But what they might refer to is the dishonesty or negligence of banks borrowing short and lending long. Most business men try to keep at least a small and positive balance on their accounts for emergencies. If the banks do not respect that requirement, sufficiently, then this can lead to the demand deposit owners one day finding out that they have no have money at the bank that is ready to be paid out to them in emergencies, or that they can dispose of with cheques, but that, much against their intentions and trust, they possess, in effect, merely something like a mortgage, bond or share - a part of the medium or long-term investments by the bank of their short term funds or on-demand deposit claims. Even though such bank actions may be habitual, going back to the tradition of fractional reserve gold certificates and although it may be quite common and legalized practice, somewhat insured by central banks demanding minimum deposits with them, it is still basically a dishonest, negligent and false business practice. That central banks, when the minimal deposit with them is not enough to cover withdrawals at the bank that borrowed short and lent long, are insufficient to cover their obligations, then issues additional legal tender note to cover this wrongful and careless action, means that then it is the central bank, once again, which causes an inflation, not the original and wrongful lending short term deposits, without the explicit permission or instruction of these depositors, on long terms. Without this inflationary backing of this practice by the central bank, the holders of "on demand" deposits would simply find out that they do not longer have such deposits but merely long-term claims against the bank and its medium or long term debtors. The use of terms like "money creation" and "credit creation" does not explain but rather cover up such relationships. - One of the major troubles of this kind of dishonesty, carelessness or fraud is that the central bank might refuse to cover this flawed borrowing and lending process by additional note issues, while upholding its money issue monopoly. Then a currency famine would result without its natural cure or prevention options being a permitted. Cash being already short and supposed cash deposit having become illiquid, i.e., longer-term investments, more and more cash will be asked for . The non-cash payment sector will shrink fast, since they still grant creditors the right to demand cash and thus the demand for cash will greatly increase while the supply is already short. - The cure lies then in abolishing the right to demand cash and replacing it by the right to demand only clearing. In this, clearing certificates issued by the debtors must be negotiated, at terms satisfactory to both sides. And the cash shortage should be overcome by the issue of exchange media based on ready for sale goods, labour and services. - Otherwise all economic transactions will come to shrink to a fraction of their former extent. - J.Z., 3/97 & 31.8.02. - See: TAYLOR, DAVID; MEULEN, HENRY; SOCIAL CREDIT, CREDIT CREATION, MONEY CREATION, FIAT MONEY, LEGAL TENDER, MONOPOLY MONEY ISSUES, CENTRAL BANKING
CREATION OF CREDIT: Credit creation is possible because the owners of bank accounts do not dispose over all of their accounts at any particular time. - Pop opinion. - Every embezzler has the same notion, hopes that he will not be found out or not before he gets away safely. But he still does not create anything by his "creative bookkeeping" but merely steals, defrauds or embezzles. If the whole bank engages in this, then it is still not a creative act but merely stealing. If it "invests" these funds in lottery tickets or horseracing tips, or medium or long term investments without consent of the owners of short term funds, short term or immediately and without asking them for permission, giving them the impression that their on-demand deposits remain immediately withdrawable, then this is still not "creating" values but defrauding others of them. To the extent that the long term investment of on-demand deposits is, otherwise, sound, they could then ultimately be repaid from the winnings or repayments of the long term loans and dividends from them, when these payments are finally made, but the on-demand deposits could not be immediately paid out (except in additional notes produced by the central bank, if it is prepared to cover this fraudulent action). Otherwise, the hopes and expectations of the depositors of the on-demand deposits cannot be instantly fulfilled. The depositors may still imagine they do have these funds at their disposal - while others have already disposed of them. These imagined credits should not be added to the wrongfully and long term "invested" ones. The total of credits has not been increased. On the contrary, such "investments" frequently lead to losses, so the account holders and the bank may end up with less than they had before. Other gamblers or betting addicts, or suppliers of those who were thus wrongly granted credits and spent them wastefully rather than productively, would benefit correspondingly. - While at any time an honest cheque drawer (or one not granted a current account credit - which has its own inherent limit in the current funds available from others) cannot spend, in cheques, more than the amount on his account upon it, he may, in the average, in his usual business, get so many cheque payments into his account, as a result of his sales, that within a short period, based upon these cheque payments to him, he can spend much more than the average account balance through this account. But he can do this only through him buying and selling real goods, services and labour in this way as others buy real goods, services and labour from him in this way. That "credit creation" would be involved in this is nothing but a creative fiction. - J. Z., 29.3.97.
CREATION OF CREDIT: Credit or notes are not created "out of nothing" and do not only require paper, ink and printing presses. As a rule, credit certificates, banknotes and clearinghouse certificates are not "created out of nothing" but are temporarily produced IN EXCHANGE for other kinds of credit-notes or assets which are less suitable for general local circulation. These exchanges of bills, unsuitable for general circulation, into bills that are suitable for at least local circulation, represent clearing processes in progress and the movement of already produced goods, that are already sold, at least to wholesalers, if not already to retailers. And these goods are the real and second redemption fund for such notes and cut up bills, as they are for any kind of currency. The primary ones are these bills themselves, for they to have to be paid. Such turnover credit or bill discount is not given for nothing but only to genuine producers and suppliers. The discounting of the Real Bills, using a sound value standard, provides sound wage and salary payment means to workers and clerical employees, which they bring to the local stores and spend them there, so that they stores can repay their debts to the wholesalers and these can redeem their real bills (or equivalent short term debt certificates) they gave to their suppliers. Such clearing notes and clearing house notes, by their very nature, do not need any rare metal cover at all to keep them at par with their nominal gold weight face value. Their par value is assured by a strong reflux or demand for them in the repayment of the short-term debt involved and this repayment is facilitated by the large sum bill being split up into convenient small bills or banknotes in money denominations. If the debtors e.g. the retailers, cannot pay their debts they are thrown out of business. This is a strong enough incentive for them to serve others with their goods, services and labour for banknotes and clearing house certificates (or with equivalent book or electronic accounts). This kind of money can always be freely and competitively issued to the limits of its goods, services and labour cover - but not beyond it. Readiness to accept a money in payment for daily wanted consumer goods and services and in payment of any other debts due, is a sufficient cover for any sound exchange medium. The best value standard for any kind of exchange medium, purchase and sale, for any kind of traders, at any place and time, is precisely that which they consider to be the best or good enough for them, as long as they do. No third party has a right to prescribe another standard for them, which they do not like or distrust. - Especially labourers and employees must become free to accept "cut up real bills" and employers must be able to offer them to them in payment and stores and store associations must be free to issue them and to accept them and to pay their debts with them - on via their bank accounts at banks of issue. - The free exchange of one type of paper claim for other kinds of paper claims, more suitable for their purposes, does not amount to a "creation" of some value out of nothing but merely to a transformation of one suitable resource and matter into another one, one claim, into another. It does not interfere with transactions but promotes them. It increase the ease of the transferability of real values. It does not cheat, defraud or confiscate but facilitate. It increases transferability of goods, services and labour and of exchange media, like real or sound commercial bills, and thereby increases their value. It is transferability which gives any goods, services and labours their market value. In a division of labour economy we all depend upon it. The easier any value can be transferred, the higher its exchange value will be to its owner. No exchange medium needs universal acceptance or is universally accepted. It takes brute and wrongful force (however legalized and excused) to make a single paper money acceptable in a whole country. Competitive and private and non-coercive and freely market-rated paper exchange media need only a sufficient local acceptance to become there a good enough local currency, that can locally widely circulate at par. In the next town or market it may already have a discount. (A foreign exchange rate.) So what? That applies also to all national forced currencies, whose legal tender and monopoly end at a national border. The greater these discounts of falls in the foreign exchange rate are, the faster these exchange media will be returned to their issuers to buy their goods and services with them at their par value. -Compare the circulation charts in PEACE PLANS 41. I also offer them digitized. - & MONEY? - J.Z., n.d. & 1.6.11.
CREATION OF CREDIT: If banks could create money and credit out of nothing, I would like to be a banker under these conditions, and so would almost everybody else. Why doesn't everybody make use of this opportunity? An Aladdin's Lamp for everybody! Nobody need to produce or sell anything any more to acquire purchasing power. We could simply multiply it at will and live all from the proceeds, a form of unearned income! Please, tell me, why do the banks still ask you to supply them with your savings, to deposits them with them and why do they mind if you withdraw them from them? Under the asserted conditions they would not need you and your savings at all. They could e.g. input a single dollar of their own and multiply it endlessly, with only the trouble of spending the riches thus gained by them. - That such beliefs can still be widely held in our century is almost unbelievable. - J. Z., 5.7.94, 18.4.97.
CREATION OF CREDIT: Private creation of credit is inflationary and must be controlled. For this central banking is required. - A monetary despotism and social credit notion. - Before central banking, with its note issue monopoly and legal tender, was introduced, there was never any evidence for this - and afterwards, the only one that could "create" money was the central bank. Credits not granted in additionally issued legal tender (or short term or instant claims to legal tender), are just credit TRANSFERS, mediated by banks or by other private contractors, and as such they cannot have any influence on prices and wages, no more so than any clearing transaction could. Consumer goods and services are still largely paid for in legal tender cash - and only the Central Bank can legally multiply that. There are, indeed, many credits that are ultimately, upon demand, to be paid in cash. All credit transactions are speculations over time on the availability of that cash. When it does not become available, the credit collapses to a fraction of its former volume. It required, for its granting, as well as its repayment, the availability of cash or of claims to cash. Especially when payment through clearing options is not generally recognized as an alternative, i.e., when the creditor's legal and juridical claim to payment in cash is continued - and the cash supply remains monopolised. No creditor can create his credits out of thin air. None of them is a magician. But myths, which are widely believed in, are hard to kill by mere facts - in economics, or what passes for economics, as well as in religion or in "political science". How can one prove the non-existence of something that does not exist? - All credits are limited at present by the creditor's right to demand cash in repayment. And debtors who are not cheats know that they do have to somehow acquire the cash - or claims to cash - or try to acquire them, to repay the credits received, if they do not want to be driven into bankruptcy and few want that. Once this legally demanded cash-backing for all credit and non-cash payment contracts does fail or is insufficient, then, credit collapses correspondingly - and even more cash is wanted from then on for many to all transactions that were previously carried out without cash. During such currency famines - under a money issue monopoly and a manipulated value standard, in which all prices and wages are marked, prices and wages tend to fall in a deflationary way and there is then a negative feedback effect involved: While lowered prices encourage buying, falling prices discourage buying. Thus, once a deflation has set in and is not stopped by the introduction of monetary freedom, much more money hoarding takes place than usual - as much as people can afford to hoard, and the effect is that a deflation accelerates. Only those purchases are still undertaken by most that they cannot avoid. Those lucky enough to be in possession of considerable cash stocks can then acquire otherwise expensive capital goods or consumer goods very cheaply, and may do so in the expectation that sooner or later the deflation will end and that then they can then sell these shares or goods much above the forced sale prices at which they acquired them. - Prices marked in stable value units are not influenced by the amounts of cash or credit available. But they can become reduced through the deflations or increased through the inflations made possible by monetary despotism. When they are marked in unstable and manipulated "value standards" then they participate in all the instabilities and manipulated effects of that "value standard". - All cash transactions have a large clearing "overhead", 10 to 20 times as large as the amount of cash available, because they are easier and faster to arrange and, in normal times, they can, upon demand by the creditors, be changed into cash, because in normal times this is rarely wanted - because the clearing and non-cash-payments are so convenient. Whatever effect this "overhead" is presumed to have upon prices (I would deny any, since real exchanges are behind most of the payments, if not zero sum speculative games), have already taken place. For centuries the non-cash transactions have far exceeded the cash transactions. More credit than the market requires and can be paid, in normal times, ultimately and upon demand in cash, cannot be created out of nothing or upon a too tiny cash basis. Debtors do indeed often defraud their creditors, spend or waste what they have been granted in loans and become unable to repay. But such cases do not blow up the total volume of credit. Instead, they make more potential creditors more careful in granting further credits. Such cheats, well publicised, rather lead to a degree of voluntary credit restriction by the potential creditors, i.e. their cash holdings and current account or deposit holdings tend to increase. Whereupon then many wrongly conclude that no deflation has taken place because there is an abundance of short-term funds accumulated at the banks. Part of these may be frozen - with the banks unable to pay them out in cash (because they had lent them out on long terms) - and part of them being kept there intentionally because the deposit holders want them there and because the banks see no liquid and secure enough investment opportunities for them, while sales and orders are down. At the same time private cash holdings, by those who have altogether lost their faith in banks, would increase as well. - J. Z., n.d., & 29.3.97, 31.8.02. - CENTRAL BANKING, CONTROL OF MONEY, MONETARY CONTROLS, SOCIAL CREDIT
CREATION OF CREDIT: The creation of credit is made possible by issued cheques not being redeemed immediately. - Popular opinion. - If and to the extent that this would be possible, we would then have a part disposal of cheque account funds by the banks, for a short time, without consent of the cheque account holder and at his expense and risk, not a "creation of credit" out of nothing. - The total circulation seems temporarily increased but each of these seeming increases is followed by a corresponding decrease. Moreover, the very delay in cheque credit availability to the receiver of the cheque, still 5 days in Australia as far as I know, in spite of computers and considerable competition between banks, does slow down the spending of the cheque credit correspondingly and thus balances out the "multiplication" of means of payment that may be temporarily involved, if banks disposed of these funds for these periods. The basic rule still applies: The same amount cannot be spent by two people at the same time. One should also take into consideration that the establishment of a cheque account, 100% covered in cash, has correspondingly hoarded cash. And this cash becomes then mobilised or may be demanded from the recipient's cheque account, only after a cheque is issued and credited. In other words, a considerable hoarding is involved - to facilitate cheque payments, which should be taken into consideration when one imagines that cheques would multiply means of payment, not only facilitate payments. - The "mysterious" nature of the seeming "creation" of cheque credits "out of nothing" lies in the very nature of the clearing process, if one considers merely the payment side of it and not the goods and service side, which is thus cleared. Assume 1000 cheque account holders in a self-sufficient economic community, each with $ 1000 on their cheque account and all producing for each other, and providing each other with goods, labour and services, all that they require and are capable and willing to supply to each other. Within that limit of their physical capability, willingness and productivity, each of them could spend their whole cheque account every week or even daily and, nevertheless, in the average, all would end up with ca. 1,000 on their accounts again, through the goods, services and labour they would have sold to the others. Since real exchanges of wanted goods, services and labour would be involved, no price increase would have taken place even when, from one week to the other or within a day, they would have bought double as much from each other in this way than they had in the week or on the day before. Their account total of 1 million value units would not have been increased by a single value unit. All their cheque-mediated transferrals from their accounts, would, in the average, have their equivalent in cheque payments received from others. The used cheques would be cancelled and new cheques would be issued all the time, to be cancelled in their turn. The cheque credits transferred would be mutual, not unilateral. They would represent genuine trades and exchanges not robberies or embezzlements or "creative" financing. Each account would be liquidified by cheques but not multiplied. But the number of possible, desired and agreed upon exchanges could and would be easily multiplied in this way, limited only by the ability and willingness to supply wanted goods, services and labour. - Since many costs are fixed, regardless of the number of transactions that take place, an increase in transactions could even lead to some price reductions. Certainly the kind of extremely low prices happening in emergency sales or bankruptcy sales, would become much rarer under such a system, especially, when all the participants would renounce any claim to cash payments and declare themselves satisfied for all their transactions with the mutual clearing of their cheques through their clearing house cheque accounts. - In a world where natural science knowledge is not yet general or wide enough, in which still many still believe in a God. even as a loving father, in a devil or in demons, in which libertarian gold bugs consider all means of payment not made of gold or 100% covered gold certificates, as mere fiat money and fraudulent, one should not be surprised when this clearing process is by them or others interpreted as a "creation of credit" out of nothing or "out of thin air". - Thin air is, by the way, not nothing, either. Otherwise people living in high altitudes could not breathe. And even a vacuum is not something that can be produced or found very cheaply on the surface of this planet. That is one of the reasons why some industrial processes could be profitably carried on in space. - I guess this kind of discussion of pop notions on the subject will have to be carried on until quite striking and convincing refutations have been formulated. - J. Z., n.d. & 29.3.97, 31.8.02, 1.6.11. - & CHEQUES, MONEY, CREDIT, DEPOSITS, DIS.
CREATION OF MONEY: But you can't MAKE purchasing power. You can only TRANSFER it. - Terry Arthur, 95% Is Crap, 209.
CREATION OF MONEY: De nihilo nihil. - Lucretius, Ueber die Natur, I/149. (Aus nichts wird nichts. Nothing grows from nothing.) &