[ExI] Banking, corporations, and rights (Re: Serfdom and libertarian critiques)

[Eugen Leitl]

On Mon, Feb 28, 2011 at 06:37:15PM +0100, Stefano Vaj wrote:
> On 25 February 2011 18:04, Kelly Anderson <kellycoinguy at gmail.com> wrote:
> > I guess the real problem is understanding the alternatives. There just
> > isn't enough physical gold to run the economy (unless gold were
> > $1000000 an ounce or something... which would make the industrial use
> > of gold prohibitive... which would have its own downsides)
> 
> That money, as a unity of measure, be created out of thin air is fine.
> Kilometers are.

Metrology uses references. In case of monetary units you need the
amount of a current essential commodity (diversified, weight-adjusted,
made resistant to gaming) the monetary unit can buy.

You do not need to stock said essential commodity, so that each
monetary unit in circulation is backed up by thorium, grain, or
light sweet crude. Such reference baskets will ground fiats to a known
potential, and force them be not free-floating.
 
> The prob is when such money is "lent" by a private central bank, for a
> price, to the State which grants it the monopolistic power to do so,
> and yet has to recover through taxes a total amount in capital and
> interest which exceed the total money available in the system.

Another problem is that compound interest is linear semi-log plot, 
while the underlying economy growth isn't. There's a reason why
most religion's sacred texts contain some ranting against usury.

-- 
Eugen* Leitl <a href="http://leitl.org">leitl</a> http://leitl.org
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