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GOLD, PAPER, OR...: IS THERE A BETTER MONEY?
The Cato Institute ^ | 1-17-03 | David Friedman

Posted on 01/17/2003 8:34:41 AM PST by AdamSelene235

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1 posted on 01/17/2003 8:34:41 AM PST by AdamSelene235
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2 posted on 01/17/2003 8:35:50 AM PST by Support Free Republic (Your support keeps Free Republic going strong!)
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To: bvw; Tauzero; robnoel; kezekiel; ChadGore; Harley - Mississippi; Dukie; Matchett-PI; Moonman62; ...
Food for thought and discussion.
3 posted on 01/17/2003 8:35:56 AM PST by AdamSelene235
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To: AdamSelene235
bump for later.

The fractional reserve fiat system seems to leave a lot to be desired
4 posted on 01/17/2003 9:00:17 AM PST by steve50
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To: steve50
http://www.atrentino.com/PowerPress.html
5 posted on 01/17/2003 9:03:42 AM PST by Davis
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To: steve50
I love Friedman's lucid prose:

A fractional reserve system based on fiat money thus economizes on the cost of producing something that costs nothing to produce; it adds the disadvantages of a fractional reserve system to the disadvantages of a fiat system without adding any corresponding advantages. It makes sense only as a discreet way of transferring some of the income that the government receives from producing money to the banking system, and is worth mentioning at all only because it is the system presently in use in this country.

6 posted on 01/17/2003 9:11:59 AM PST by AdamSelene235
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To: AdamSelene235
for later reading
7 posted on 01/17/2003 9:12:20 AM PST by Semaphore Heathcliffe
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To: AdamSelene235
Salt?
8 posted on 01/17/2003 9:13:04 AM PST by WorldWatcher1
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To: AdamSelene235
The future of money is electrons, we're turning the corner as it is, won't be many more decades before physical representation is gone. Which will be a sad day for those that bitch about "fiat" money.
9 posted on 01/17/2003 9:14:57 AM PST by discostu (Life sucks, humans are fallible, feces occurs... deal)
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Comment #10 Removed by Moderator

To: WorldWatcher1
Your# 8).............Correct!
:-)

5763

GOLD, PAPER, OR...: IS THERE A BETTER MONEY?

YES....
The Godly Christian Sovereign Constitution of The Founding Fathers of The Sovereign U.S.A.

(The us verses them [Light vs. Darkness] Absolute TRUST of TRUTH verses Evil!)

"Salt is good,...if there is a righteous, 'just' , standard AMONG those of the SAME WORLDVIEW."

5763

11 posted on 01/17/2003 9:35:38 AM PST by maestro
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To: maestro
I was kidding (as salt doesn't have the value it once held), but your reply doesn't make any sense to me.
12 posted on 01/17/2003 10:00:39 AM PST by WorldWatcher1
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To: discostu
You say you want a revolution?

Anonymous stored value would cramp the style of overreaching governments. Real, unbreakable privacy for moeny.

I'm not here to debate fractional reserve banking (which has a colorful, to be polite, history) or gold-backed currency. Stored value and currency and banking systems are related but are the same thing. You could have anonymous stored value and gold-backed currency OR "fiat money" as the gold bugs would call it, and you could still set your reserve requirements at any level.
13 posted on 01/17/2003 10:20:28 AM PST by eno_
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To: WorldWatcher1
They 'best' currency used to be a 'handshake'.
14 posted on 01/17/2003 10:28:58 AM PST by maestro
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To: eno_
Nope I'm not looking for revolutions, they're annoying. I'm just watching how things are going. I'm a cash happy guy, I use cash all the time, but even I'm forced to admit I'm a slow adjusting codger. Out in the real world the vast majority of transactions do not use cash. Check, charge, debit, EFT. That's how money gets spent these days (which, BTW, is why I scoff at those wanting paper dollars to be backed by gold, they're behind the curve, we don't even back checks with paper money how in blazes can we back paper money with anything).

The best source of anonymity is volume. With 280 million people generating transactions everyday who really has time to pay attention to how eno_ and discostu are blowing they're money?
15 posted on 01/17/2003 10:35:46 AM PST by discostu (Life sucks, humans are fallible, feces occurs... deal)
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To: AdamSelene235
Most excellent article.
16 posted on 01/17/2003 10:52:57 AM PST by Tauzero
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To: discostu
"Which will be a sad day for those that bitch about 'fiat' money."

How so?

Or are you just spouting off.
17 posted on 01/17/2003 10:54:50 AM PST by Tauzero
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To: Tauzero
One of the "good" things the gold people say we'd get if the paper money was "backed" by gold is that the government couldn't print more money than they can support. Of course since most of the money changing hands already isn't printed by the government because it's not exchanged in that form (insteads it's a check, or credit card, or debit card, or EFT which in the end is what the other 3 wind up being anyway) then this whole "backing" concept is post dated and silly. And once cash is gone completely there won't be anything left for them to demand it be backed. Which, of course, is how things have always been. The only thing that ever "backed" gold was that people wanted it, which is the same thing that has backed and will continue to back every form of currency ever: acceptance as currency.
18 posted on 01/17/2003 11:01:05 AM PST by discostu (Life sucks, humans are fallible, feces occurs... deal)
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To: AdamSelene235; RJayneJ; Nick Danger; Dog Gone; blam; JohnHuang2
I find the debate over currencies to be a bit out of date.

In the big picture, you want no more than two things from a currency: the ability to facilitate transactions and a store of wealth.

Again, in the big picture, you should want to go to the effort to CHANGE a currency system only if you can substantially improve the efficiency of the current medium.

But where are you going to improve upon the current efficiency of transactions? No nation or combination of nations has EVER come even fractionally close to facilitating the quantity, size, and frequency of transactions that are now considered "ho hum" everday stuff to Americans using our current system. Something else is going to make transactions per se vastly more efficient than what we are using today?! I doubt it.

OK, so if not the "facilitation of transactions" angle, then that leaves us with the "store of wealth" angle.

But the problem with making a currency a better store of wealth is that currencies can ALREADY be used to purchase WHATEVER store of wealth one desires.

If you want gold, then your Dollar buys the ugly yellow metal. IF you want land, then your Dollar buys that, too. Wahtever you want, the current currency of choice buys it already; so everyone can already store their wealth in whatever particular venue that makes the most sense for them.

So WHY force a massive currency change onto citizens? What's to gain? Such a switch won't make any great improvement in efficiency in regards to facilitating transactions, and it would hardly provide a more universally accepted store of wealth, since everyone can ALREADY store their wealth in whatever way that they want.

19 posted on 01/17/2003 11:01:08 AM PST by Southack (Media bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)
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To: Southack
But where are you going to improve upon the current efficiency of transactions? No nation or combination of nations has EVER come even fractionally close to facilitating the quantity, size, and frequency of transactions that are now considered "ho hum" everday stuff to Americans using our current system. Something else is going to make transactions per se vastly more efficient than what we are using today?! I doubt it.

This is more a result of the our free society with and technological crown fire than it is a result of our current monetary system.

So WHY force a massive currency change onto citizens?

Nobody is arguing for that. Did you read the essay?

20 posted on 01/17/2003 12:09:56 PM PST by AdamSelene235
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