Should the gov't have a monopoly on money creation or should the people have the right to create money?

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Should the gov't or banks have a monopoly on money creation or should the people have the right to create money? For example, should Joe Smith be able to mint his own coins and use them to buy goods and services?

LysanderSpooner's picture
LysanderSpooner
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Jul. 31, 2007 4:01 pm

Comments

Progressives-don't waste your time on this thread! Worry about progressive issues!

DynoDon
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Jun. 29, 2012 10:24 am
Quote DynoDon:

Progressives-don't waste your time on this thread! Worry about progressive issues!

Progressives- Don't think about real issues. Like how the monetary system transfers money from the poor to the rich. It's a minor issue. Worry about other things.

LysanderSpooner's picture
LysanderSpooner
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Jul. 31, 2007 4:01 pm

I like idea of local money that local retailers and service providers would be willing to accept. I don't see how you could do it nationally. Only banks seem to have that priviledge. A credit card is really just a private banks version of currency. They get to give out money that doesn't exist in exchange for Federal currency and interest. It's quite the cat's meow.

Bush_Wacker's picture
Bush_Wacker
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Jun. 25, 2011 7:53 am

LS, read David Graeber's DEBT, then report back to address this question. Over and out until then. And turn in your Ron Paul economic reading list. It is making you dumber.

drc2
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Apr. 26, 2012 12:15 pm

All bank problems boil down to the profit motive. Rather than breaking up the TBTF banks into smaller, (hopefully) more controllable pieces, we should eliminate their fundamental problem, the profit motive. And, what better way to eliminate the profit motive, than to put banks under total government control, i.e. ownership? asks Mitchell in

http://rodgermmitchell.wordpress.com/2012/03/31/the-end-of-private-banki...

Money is a national resource and is best created and controlled by qualified government servants as a utility.

pshakkottai's picture
pshakkottai
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Jul. 11, 2011 11:27 am

What is money?

Garrett78's picture
Garrett78
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Sep. 3, 2010 9:20 am

Money, then, is credit and nothing but credit. A’s money is B’s debt to him, and when B pays his debt, A’s money disappears. This is the whole theory of money.

from

http://moslereconomics.com/mandatory-readings/what-is-money/

pshakkottai's picture
pshakkottai
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Jul. 11, 2011 11:27 am

No.

Lincoln just used paper, and turned it into greenbacks. With that paper he funded the Union Army and won the Civil War.

This is the reason conservatives always freak out about 'printing paper'.

Money is whatever we want to pretend money is.

As long as A will accept it from B, it's money.

Leave the Fed out of it and there is no debt involved.

Just look behind you often when you're out at the Theater.

anonymous green
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Jan. 5, 2012 11:47 am

How about me creating some money and exchanging it for your worthless Treasury notes.

Send me a thousand of them, I'll send you a thousand of my creations .I'll even hand-draw them on the finest note-pad paper I can find. Do you prefer a raunchy bright pink or a pale, subdued blue?

Retired Monk - "Ideology is a disease"

polycarp2
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Jul. 31, 2007 4:01 pm
Quote anonymous green:

As long as A will accept it from B, it's money.

The Greenbacks were backed up by Legal Tender Laws. I do agree with you that money is what two parties voluntarily agree on.

LysanderSpooner's picture
LysanderSpooner
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Jul. 31, 2007 4:01 pm
Quote polycarp2:

How about me creating some money and exchanging it for your worthless Treasury notes.

Send me a thousand of them, I'll send you a thousand of my creations .I'll even hand-draw them on the finest note-pad paper I can find. Do you prefer a raunchy bright pink or a pale, subdued blue?

Retired Monk - "Ideology is a disease"

It's not that simple. If you plan on creating money, you're going to have to use a commodity. You are also going to gain a reputation for honesty. Meaning, the weight you stamp on your coins will have to be consistent. Only then will your money be widely accepted.

LysanderSpooner's picture
LysanderSpooner
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Jul. 31, 2007 4:01 pm

Greenbacks didn't weigh more than paper and ink.

The only reason for money with 'weight' is so that A can corner the market for the material that B forges coins out of.

With A and B in a conspiracy, you get what you have today. Only C, D, E, etcetera, suffer.

You monkeys keep typing. Shakespearian tragi-comedies weren't built in a day.

Thank God digital paper has replaced the real thing, Or the world would be barren, thanks to your priceless advice.

anonymous green
Joined:
Jan. 5, 2012 11:47 am
Quote LysanderSpooner:
Quote polycarp2:

How about me creating some money and exchanging it for your worthless Treasury notes.

Send me a thousand of them, I'll send you a thousand of my creations .I'll even hand-draw them on the finest note-pad paper I can find. Do you prefer a raunchy bright pink or a pale, subdued blue?

Retired Monk - "Ideology is a disease"

It's not that simple. If you plan on creating money, you're going to have to use a commodity. You are also going to gain a reputation for honesty. Meaning, the weight you stamp on your coins will have to be consistent. Only then will your money be widely accepted.

This would be funny if you weren't so serious. Are you aware that this was how paper money began. Do you have any historical sense of how this game ends, in every case?

Phaedrus76's picture
Phaedrus76
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Sep. 14, 2010 8:21 pm

From about 1630 until the early 1800s, Cannabis hemp was legal tender in America. The Founding Fathers paid their taxes with weed.

We should do this again.

JTaylor's picture
JTaylor
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Mar. 19, 2012 2:04 pm

The Federal Reserve works in partnership with the U.S. Treasury to issue currency. All other units of government, private entities and individuals are users of the currency.

The government creates money by minting coins, printing cash and issuing reserves. The private banking sector creates money by creating loans and bank deposits.

The Federal government cannot "go broke". It is inaccurate to compare it to households, companies and local governments, which are all users of money and can go bankrupt.

The major constraint on currency issuers (sovereign governments like the U.S.) is inflation. It behooves governments to manage the money supply prudently in order to avoid impoverishing their citizens through devaluing the currency.

The debt of a sovereign currency issuer is default-free. The issuer can ALWAYS meet debt obligations in the currency that it issues.

Because the Federal government is not a business or a household it should NOT manage it's balance sheet for it's own benefit, but in a way that most benefits the private sector and encourages private sector prosperity, productivity, innovation and growth.

The Federal government can NEVER run out of money.

Bush_Wacker's picture
Bush_Wacker
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Jun. 25, 2011 7:53 am
Quote JTaylor:

From about 1630 until the early 1800s, Cannabis hemp was legal tender in America. The Founding Fathers paid their taxes with weed.

We should do this again.

Some of us see that money doesn't grow on trees, but on weeds.

Real Tea, Real Party.

Smugglers and criminals, the kind that actually made America great, once, a long time ago.

Of course, this is exactly why the Manchurian Americans fear US.

The Stalk Market Report, July 29, 2012

anonymous green
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Jan. 5, 2012 11:47 am

All currency is a store of value doesn't matter what it is gold silver iron and paper. The government decided it was more efficient for our economy to run on paper money. The problem is the store of value in our currency is being diluted by fed purchase of bonds flooding the market with cash.

Commonsense461
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Jul. 2, 2012 9:48 am
Quote Commonsense461:

All currency is a store of value doesn't matter what it is gold silver iron and paper. The government decided it was more efficient for our economy to run on paper money. The problem is the store of value in our currency is being diluted by fed purchase of bonds flooding the market with cash.

You are complaining that in a cash starved society which we have now due to so much cash being hoarded by the few, the government is putting too much cash into the country? The government is simply fulfilling it's obligation to the country but it's the cash hoarders and money manipulators who are upsetting the apple cart. In order to deflate prices it's really now in the hands of the hoarders. The government can't stop fulfilling it's obligation because a few people at the top of the food chain are controlling our economy.

Bush_Wacker's picture
Bush_Wacker
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Jun. 25, 2011 7:53 am

Bush-wacker wrote:

The debt of a sovereign currency issuer is default-free. The issuer can ALWAYS meet debt obligations in the currency that it issues.

poly replies: That's both true and untrue. The U.S. can always issue currency to pay its debts. It could even stamp out a few trillion dollar denominated platinum coins, hand them over to the Fed and pay-off Fed-held debt. They would disappear into Fed vaults and never enter the economy. Debt would be cancelled. Government has the Constitutional authority to do that. The Founding Fathers weren't twits.

That idea was proposed by World Class Economist Michael Hudson, among others, during the so-called U.S. debt crises debates.

However, we have this notion that first government has to have someone willing to loan it money before it can issue an I.O.U. and create money based on the debt.

It's a bit wacky, but that's how we do it. We didn't always do it that way.

U.S. Colonial Governments simply created and spent money into existence in an amount sufficient to maintain the flow of goods/services. No more. No less.

That worked very well until the Revolutionary War debased the currency. England flooded the colonies with counterfeit currency. That didn't help.

The idea that Sovereign Governments have to go into debt to issue their own currency is a bit absurd. Banksters, of course, instigated the practice with the founding of the Bank of England by private shareholders many centuries ago. with the blessing and profit-sharing of the Monarch.

Even when annual tax revenues/expenditures are in balance...governments have to finance themselves in advance of the tax collections. The military, etc., won't wait until April first to collect their paychecks. National governments operate a year behind revenue collection.

When the national government was founded, it didn't have a penney...yet had expenses to pay until tax revenues began coming in. It's operated a year behind ever since. instead of following the tradition of the American Colonies, it followed the tradtion of English Banksters. Ditto the French Republic, the Spanish Republic, the Italian Republic, the Irish Republic, the Greek Republic, etc.

Borrowing in order to create sovereign national currencies has become tradition..... though economically it's proving not to be a very sound tradition.

Retired Monk - "Ideology is a disease"

polycarp2
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Jul. 31, 2007 4:01 pm
Quote Bush_Wacker:
Quote Commonsense461:

All currency is a store of value doesn't matter what it is gold silver iron and paper. The government decided it was more efficient for our economy to run on paper money. The problem is the store of value in our currency is being diluted by fed purchase of bonds flooding the market with cash.

You are complaining that in a cash starved society which we have now due to so much cash being hoarded by the few, the government is putting too much cash into the country? The government is simply fulfilling it's obligation to the country but it's the cash hoarders and money manipulators who are upsetting the apple cart. In order to deflate prices it's really now in the hands of the hoarders. The government can't stop fulfilling it's obligation because a few people at the top of the food chain are controlling our economy.

If you have a orginional bottle of jack Daniels and try and share it by diluting it with water in a 40 gallon drum u have ruined its value foe everyone.

Commonsense461
Joined:
Jul. 2, 2012 9:48 am
Quote Commonsense461:
Quote Bush_Wacker:
Quote Commonsense461:

All currency is a store of value doesn't matter what it is gold silver iron and paper. The government decided it was more efficient for our economy to run on paper money. The problem is the store of value in our currency is being diluted by fed purchase of bonds flooding the market with cash.

You are complaining that in a cash starved society which we have now due to so much cash being hoarded by the few, the government is putting too much cash into the country? The government is simply fulfilling it's obligation to the country but it's the cash hoarders and money manipulators who are upsetting the apple cart. In order to deflate prices it's really now in the hands of the hoarders. The government can't stop fulfilling it's obligation because a few people at the top of the food chain are controlling our economy.

If you have a orginional bottle of jack Daniels and try and share it by diluting it with water in a 40 gallon drum u have ruined its value foe everyone.

you have no clue what you are talking about

Bush_Wacker's picture
Bush_Wacker
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Jun. 25, 2011 7:53 am

We all know money is a state of mind,and we all know government is a state of mind. These ideas are universal in our minds,so the only logical way to present them is thru laws that all can have a "say/vote" on. Money should be control and created by "all",the same for government. Any other option would have to be GOD. All others have "fail"!

tayl44's picture
tayl44
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Jul. 31, 2007 4:01 pm
Quote LysanderSpooner:

Should the gov't or banks have a monopoly on money creation or should the people have the right to create money? For example, should Joe Smith be able to mint his own coins and use them to buy goods and services?

If the banking system was competitve, and everyone knew the owners, then I don't see why you couldn't have bankers create their own currency.

But banking is dominated by a few small firms, and no one knows the owners. I would say that the banks would use this uncertainly and collusion to rip people off, or take more advantage of them. At least when the government allows too much money, we can all see the inflation rate, and if people get pissed they can vote the president out of office. Like they did with Carter.

Dr. Econ's picture
Dr. Econ
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Jul. 31, 2007 4:01 pm

In order to get Reagan? OOOppps! Democracy in action? I think the Hostage Crisis and the treason about the October Surprise had more to do with Carter being shafted, but the GOPimps also play dirty with the economy, as we see now in full frontal. Your basic point, Dr., is on point. I love the idea that "the government" is some foreign entity compared to "the people." Allowing private monied interests to run the money system ought to frighten anyone who cares about freedom, much less the idea that governing ourselves might matter.

drc2
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Apr. 26, 2012 12:15 pm

If didn't hace FDIC people would pay attention to where they put their money.

Commonsense461
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Jul. 2, 2012 9:48 am

It would be nice if the president really was the president,but the real president is the "American Mafia". The people who give "a deal you cannot refuse". The John Perkins "Economic Hitmen" (book) give a good idea of who and how they operate. We cannot solve a problem until we see it the right way.Our politics has become laws pass down by the crime lords,obey or pay the price! We need to wake up. If there is no FDIC,there is no banks!

tayl44's picture
tayl44
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Jul. 31, 2007 4:01 pm

There are privately created currencies -- but they need to be backed up by assets (e.g. Goldmoney).

Also an IOU is money if you trust the borrower or the one making the loan has the power to collect (e.g.your local bookie).

microsrfr
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Apr. 15, 2012 5:43 am

You want an example of what happens when "the people" are allowed to "create money" ? I've got one for you ... derivatives !

Look at the mess those damn things have caused !

miksilvr
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Jul. 7, 2011 12:13 pm
Quote microsrfr:

There are privately created currencies -- but they need to be backed up by assets (e.g. Goldmoney).

Also an IOU is money if you trust the borrower or the one making the loan has the power to collect (e.g.your local bookie).

Absolutely wrong, Linda.

Greenbacks, which again, funded the Union Army and won the Civil War, were just paper.

It was their acceptance as money which gave them value.

Faith in this great Country gave them value.

anonymous green
Joined:
Jan. 5, 2012 11:47 am
Quote LysanderSpooner:

Should the gov't or banks have a monopoly on money creation or should the people have the right to create money? For example, should Joe Smith be able to mint his own coins and use them to buy goods and services?

Well the government is democratic and it is the people so your question poses a false dichotomy. The problem right now is that the government DOESN'T print money. A private bank with virtually no democratic oversight prints the money and look at all the problems that causes. I don't see how proliferating that problem into hundreds and thousands of private banks would make anything better at all. Currency would become virtually meaningless.

ah2
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Dec. 13, 2010 10:00 pm

Post #30 is a good example of money getting value from a state of mind. Post #31 is very good example of how money lose value from a state of mind.

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tayl44
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