A fascinating thread Pericles, the plot thickens!

*It should be entirely for the parties to decide,*

Peter, it is already up to the parties to decide. You are not
compelled to store your wealth in banknotes. You can buy gold coins,
gold bars, silver, oil, farmland, etc, to store your wealth. You
are free to barter those things for things that you would like to
purchase, as long as the other party agrees.

People use money, simply for convenience. Those who use it as a
store of value, are kidding themselves. Money is a means of
exchange, more like a commodity. It changes value, depending on
supply and demand

Yes that's largely true.

But I think money is still the only legal tender for payment of a debt?

And if people forego the use of money so as to avoid what is in effect a tax - inflation - they also forego the many and great benefits that go with using the general medium of exchange, which benefits are the reason why it evolved. They are in effect put back in the position of many of the disadvantages of barter.

There might be something to be said for this if the government obtained for society a great and significant benefit from inflating the currency. But the idea that there is such a benefit, or any benefit from inflation and credit expansion, depends on the underlying fallacy: that inflation the performs, as Keynes said, 'the miracle of making a stone into bread'. The underlying idea is that in inflation we have discovered a way to make something valuable out of nothing. But it doesn't and we haven't. Work and production are the only bases of real wealth. Printing pieces of paper does not create net real wealth and, that being so, there is no corresponding general social benefit for the many general social costs and injustices which are imposed on society by inflationary policies, such as would justify requiring anyone to forego the advantages of using the general medium of exchange so as to avoid the disadvantages of the inflation-tax.

Of course, the mere direct tax effect of inflation on currency users is the least of the problems that inflation causes.

For a powerful summary of the many under-estimated social, economic, cultural, and spiritual destruction done by inflation, see http://mises.org/daily/1570

That's a trick question, isn't it Peter Hume.

>>Pericles Do you think we can increase net real wealth by inflating the currency?<<

It's a bit like asking whether we will improve the quality of Government by paying our politicians more money. The answer can be yes, no or maybe. Always qualified with "but only if other factors are brought into play".

I'm fairly sure you use "inflating the currency" as a synonym for, and interchangeably with, "increasing money supply". The former can be used pejoratively, while the latter can be a simple and straightforward fiscal strategy.

Some obvious answers - none of them particularly useful - would be "no, not if that's all you do", or "yes, if the new money is put to productive use", or "maybe, given favourable international terms of trade".

In technical terms, "that depends".

Obviously, I'm with Yabby on the gold standard furphy.

Gold is freely available to those who wish to convert paper money into a "store of wealth".

What I fail to see is how using the value of a mineral instead of the value of a piece of paper will impact inflation. Would not the underlying "store of value" fluctuate in the same manner as currency?

>>[should] government be able to use a monopoly of the supply of money to inflate the currency<<

That's another "when did you stop beating your wife" question, isn't it.

Should government have a "monopoly" on money supply in the first place? If it should, then it is responsible for the efficient management of that supply.

If you believe it shouldn't, I'd love to hear an alternative.

Make certain you include schools, hospitals, police, armed forces etc. in your response, since they all rely upon taxation for their survival. Unless of course you believe that these can all be supplanted by private enterprise, in a pure "user-pays" paradise.

Which would be ok as far as it goes, I suppose, so long as you implement a Soylent Green solution alongside it.

Peter Hume is correct Pericles.We cannot continue to create money to bail out non productive derivatives.Has this reality escaped your grasp.You are good at distractions but when people nail you down to a reality you skirt around it with ad hominem or a subject change.

So answer the question.How does the creation of more bail out money by our central banks add to productivity and wealth?

It's all topsy-turvy, but when has it been anything else. It now appears the role of government is to tax the people and transfer this tax revenue to big-business in one of the many forms of 'corporate welfare'. Gone are the days such as immediate post WW II Great Britain, where government funds were used to house and educate the populace, provide for the retired and unemployed, and create a national health system. Thanks to the von Hayek/Friedman inspired Ronald Thatcher, the 80s saw the end of government as a social good for which we all paid as it transformed into the collection agency for big capital. Oh well, cannon fodder is all we will ever be, whether we are blown to bits in capital's eternal war, or robbed blind to bail out the latest failure of market capitalism (an economic system said to be the most efficient...which needs war, environmental destruction, usury, and thievery to function). Then we have that Westerwelle nong from Germany and his silly talk that the German welfare system is leading to "latter-day Roman decadence", too true, as an unemployed person I am squandering my benefits on such luxuries as rent (50%), food (15%), phone and utilities (20%), and my filthy habits of smoking and driving a car(15%), and we can't be having that now! (and how I buy birthday and Christmas presents for my nearest and dearest is a mystery, I guess I must have to dine on bread and dripping while I shiver in the dark).
C'est la vie
C'est l'amour
C'est le guerre,
Say no more.