We have to devise a system of stopping our Govts and the Global Reserve Banks of European origin creating money at will.With just a small inflation rate of 3.5% our currencies depreciate by 41% every 10yrs.The reason for this is that inflation is compounding like interest.Unless you own an asset inflation destroys your earning capacity.

Notice that Kevin had to borrow OS from China to pay for stimulus packages.Get this.We borrowed to inflate our economy for no good purpose.We borrowed for china and bought batts from China that were of an inferior quality.We are paying interest on what could have been generated here.Our own RBA could have created this money and kept inflation under control via interest rates.It is the international agreements with the IMF that prevent sovereign Govts creating their own money to equal their own productivity.This is why the poor countries cannot escape the debt spiral.

In the USA Ron Paul has a great idea of getting Congress to issue a new currency in competition with with the Feds $ which is on the verge of collapse.This currency as I've suggested could be backed by the assets of the US people.ie the govt could issue shares in the national parks,roads land ,even private property,gold ,silver etc.The new currency would then be redeemable in these shares.Since the assets are limited then the money supply cannot outstrip the growth of the economy.

There is no doubt that the present system is both extremely unfair and dysfunctional.These European banks almost got though the carbon taxes for their world Govt.It was there in black and white in the Copenhagen agreement.They want another derivative called carbon credits to make even more money and CO2 will not be reduced one iota.

David feel not affronted by Pericles he is the master of obsfucation.

A house paid for in paper, well money 30 years ago would have cost nothing ore than$40.000 in my village.
Today nothing less than$165.000.
Cash hidden in the ground back then would still be worth $40.000.
John dg do you not understand those who work spend about the same percentages of income as you do?
Your bitterness at your position in life has nothing to do with the threads subject.
Arjay, please bloke,read the links given to you.

Peter Hume, you managed two entire posts without noting my sidebar on the gold issue. I'd appreciate your views, particularly since you went right ahead and continued to talk about "paper notes backed 100% by gold".

You stated that:

>>gold would be as much more stable than fiat money, as the value of gold has been stable compared to the value of fiat money<<

I pointed out that:

"When the US came off the gold standard in August 1971, the price was $35 an ounce. Today it is $1,120. That is a 9.3% per annum inflation rate."

"Fiat money" inflation has been around one third of that level.

So before you say any more about "gold-backed currency", I - and possibly others - would be interested in your defence of gold as a "stable" store of value.

Incidentally, I find your concept of multi-level private currency providers genuinely fascinating. It sounds, on the surface, to be a dream come true for fraudsters and scam artists, but I assume there is some level of oversight and governance, somewhere in the system.

Can you provide any references to where the concept has been explored in depth?

Yabby and Pericles
Unless someone can first show that increasing the money supply creates net real wealth, not just taking the property of A and giving it to B, then any discussion of the relative demerits of the use of sound money is premature.

But you haven’t shown that.

The stock of physical capital is not increased by increasing the supply of money or money substitutes. Are we agreed on that? Yes/no?

And therefore increasing the supply of money or money substitutes cannot stand for an increase in physical capital. Agreed?

Therefore prima facie, without something more, the idea that increasing the supply of money, brings forth extra productivity or other economic benefits is groundless.

To say that increasing the supply of money or money substitutes, by itself, brings forth “innovation”, is therefore groundless, since the innovation does not thereby have the use of physical capital that would otherwise be unavailable. Innovation without access to capital is as available under any regime, as under an inflationary regime. “If wishes were horses, beggars would ride.”

Underlying the inflationist argument is the mere assumption that, in inflation, we have discovered a way to suspend the physical and economic laws of nature in our favour, a magic pudding. We need no longer be bothered by the scarcity of capital: the printing press creates real wealth. It is nothing but a modern-day creation myth. I don’t know how to disabuse you of what is quite plainly a fallacy, other than to point it out to you, or challenge you to provide reason.

It is no advance on the original problem to merely keep repeating the same assumption, which is what Yabby has done.

So guys: on your mettle: how does printing more money or money substitutes create net real wealth?

Pericles, you need to compare the change of value of gold in real terms, not paper terms, versus that of fiat money in real terms. The buying power of fiat money has gone way down; gold has kept or increased its buying power. Do you want the buying power of *your* money to go up or down? Which do you trust more: gold, or politicians promises?

However the problem with fiat currency is not stability per se. I said that to show only that the claims of central banks to stabilise the value of the currency are false. The problem with fiat currency is that it’s highly economically and socially destructive and unethical.

As to your defence of tax as voluntary, don’t make me laugh. I suppose if a man threatens to stab a woman unless she agrees to have sex, so she agrees, then that's her “consent”?

Fiat money and fractional reserve banking are both against the common law of fraud, because they contain exactly the moral, or rather immoral ingredients of obtaining financial advantages by deception. What makes them not fraud under statute, is that the fraudsters and scam artists have control of making statues! Surprise surprise, they declare their own crimes to be illegal; and that is the only point of distinction from other fraud.

And then you have the gall say that a monetary system in which fraud would be illegal, would be “ a dream come true for fraudsters and scam artists?” What do you think the Federal Reserve is? The GFC? The bailouts? The stimulus packages? The IMF? The World Bank?

'they declare their own crimes to be illegal; '

(legal I meant)