[p2p-research] What is the Origin of our Money Supply?

[Alex Rollin]

Keeping accounts of the "debt" as the amount of money printed is only
a partial 'solution' with an international currency like the dollar.

I would say that the value of the dollar floats with the world's
belief in the beauty of Disney's value, for example, and this would be
an incomplete summation of 'why' the dollar is worth what it is in the
market.

One interesting note to learn from the fractional reserve system is
that people, as in 'the people,' enjoy have a 'count' of some sort of
all the money being printed that supports the foundation of the
ability to produce, or whatever else debt is created for.  I am not
saying this is what actually happens, but, for example...

In bitcoin, you would want to know how many total coins have been
issued, if you thought this was a useful metric.  Same for Brixton
pounds, or other currencies.  To know how much is being created, and
to 'put' that against the GDP or other factors in the system of
choice.

In a certain way, the people of the US are 'responsible' for the debt,
and for the money created...for 'producing value' and paying tax that
pays that debt down.  So, that debt, to a certain extent, is a mark of
our polity, and by our I mean everyone who uses a dollar.

The agreement to use a currency is just as important as the mechanisms
by which it is managed.  The system of creation for the dollar hasn't
changed much, but the mechanism for increasing demand, and the ways in
which the currency is used, have.

I understand that the congressional record of the US states that the
Fed can be purchased for the sum of 450 million, returning the
printing and issuance and regulation of the currency to the US
government, but, because people like it the way it is, it remains
privately held.  One of the unfortunate consequences is that the
ability to print alternative currency is impeeded, and so innovation
in currency is a bit stifled in the US.  This regulation, that the
pairing of a currency to the dollar is illegal, is very similar to our
law for sovereigns.  Specifically, sovereigns are not allowed to 'peg'
their currency to the dollar either, though this is what China, and I
think Ecuador, do.

On Sun, Jul 18, 2010 at 8:12 PM, Kevin Carson
<free.market.anticapitalist at gmail.com> wrote:
> On 7/16/10, Ryan Lanham <rlanham1963 at gmail.com> wrote:
>
>> Lots of smart people in the past didn't understand money and banking.  They
>> said many things about it.  The questions were valid, but no longer are so.
>>  We understand exactly what is going on now.  There are many things
>> misunderstood or even not understood, but the creation and operation of
>> money is not one of them.
>
> I don't think the quotes reflect so much a misunderstanding of how
> central banking works as a difference over its moral significance.
>
> A lot of libertarians object, on principle, to the creation of money
> by a central bank.  My argument is that *if* you're going to have a
> central banking system issuing fiat money anyway, there's nothing any
> *less* statist about enabling banks to loan it into existence at
> interest by tweaking their reserve requirements or increasing their
> reserves through open market operations.
>
> If anything, it would be *less* statist to follow the Social Credit
> route of depositing the new money into existence in citizens' bank
> accounts, or the greenback route of spending into existence an amount
> of money equal to the Keynesian demand shortfall rather than selling
> bonds to cover the deficit.  I say it would be less statist because
> the exact same function would be performed, but without feeding an
> entire separate layer of rentiers at taxpayer expense.
>
> It's analogous to the kind of "libertarian" at venues like Heritage or
> the Adam Smith Institute who thinks it's "less statist" to "privatize"
> functions by outsourcing taxpayer-financed, state monopoly functions
> to nominally private entities.  If the function is protected from
> market competition by state regulations, and the people performing it
> have a state-guaranteed revenue stream, I don't see how their nominal
> "private" status makes things any less statist.  Their essence as a
> branch of the state is just concealed, and the REAL state includes
> another parastic layer of shareholders in addition to state
> bureaucrats.  But for the worst kind of right-wing market
> libertarians, the "free market" just means funnelling state loot to
> nominally private corporate entities like Halliburton.
> --
> Kevin Carson
> Center for a Stateless Society http://c4ss.org
> Mutualist Blog:  Free Market Anti-Capitalism
> http://mutualist.blogspot.com
> The Homebrew Industrial Revolution:  A Low-Overhead Manifesto
> http://homebrewindustrialrevolution.wordpress.com
> Organization Theory:  A Libertarian Perspective
> http://mutualist.blogspot.com/2005/12/studies-in-anarchist-theory-of.html
>
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