peter quote..""you need..to prove:

1...whether increased productivity
makes necessary..or desirable..a commensurate increase
in the money supply""

sadly this is enforced by the invention
called inflation of values
that deflates the value..of the medium of exchange

much as out lined here
http://www.onlineopinion.com.au/view.asp?article=12482

to quote..""Surveying..the past 40 years,it is..*not clear
that fiat/money..has fostered price stability..
or lower unemployment,in Australia or anywhere else...''

''Fiat currencies serve as a medium of exchange
and unit of account,..two of the core requirements of money,
but they are a woeful store of value,..the third.''

""Australian prices,..for instance,
have increased
over 800% since 1971....*..""

get that?
thats why,they PRINTED the extra $$$$$'s

inflation is theft of value...we used to buy
a coke for 3 cents[3 pennies]..then get a cent BACK..for the bottle

but..the bankers STOLE the pennies
then gave us..cents

or rather TOOK
9.45 grams of copper
then gave back 2.59 grams

BEFORE DECIDING TO STEAL ALL THE COPPER*
just like they stole..the gold and the silver

when they exchanged a bob..[1 shillings weight of silver
and gave us nickle 10 cent]...then sold the silver
like they sold the gold

but back/to the link

""Along with Nixon,we were all Keynesian now:
expert bureaucrats..would guide the money supply,""..lol

now hold on there
the bankers..who run the fed arnt beurocrats
[thats another lie]

""xpert bureaucrats would guide..the money supply,
interest rates and government budgets.""

bankers arnt beurocrats..!

""national practitioners..of the dismal science
would tame..inflation and unemployment..It was a new dawn.""

theft..then selling the..*real assets..em-ploy-ed thieves

we do need beurocrats
to HOLD stable exchange rates
and we did..till cheating keating..killed our exchange rate

""and,far from guiding wisely,
central banks..in the United States
and Europe fanned the financial crisis.""..+..OZzzz

""2.if it does,whether the economic downside
of that problem..outweighs the upside of the solution""

just think if we KNEW a cow
was ALLWAYS equal to 30 grams of silver.!

not 800$..VIA inflation..!

i say the problem outweighs..any possable upside
of letting the darn bankers..do it ALL OVER..*AGAIN

with their govt/cash bailout
leveraged..into ever bigger debt

""3/..if it does,whether..the political downside does
i.e.whether the power..to create money
could ever be kept safe..

from gross abuses
worse than..the original problem.""

think on it..like this
the treasury honours the govt bonds

bankers lend..from the fed..via REAL/assured asset values

[where did all the treasure in the treasury go]
and who owns it
and who holds it
on trust

AUDIT the fed/the mint..the note printing branch

the farmer has a sheep
how difficult is it to price the true cost of a 'sheep]
its sick..so not worth much

it
as a male so its worth more than a sick one
its femail..thus will give a new sheep every year

and by selling the worthless males..and
keeping the valuable females
you increase
your wealth

not the bwankers bonus

govt gives money to its poor
and disadvantaged and public servants
there is the extra money..if neded

if you cant pay your debt..you serve off your debt with work
or give value that equals the debt...[just like we do when somone goes bankrupt]..ie learn to save for a rainy day

not live on credit
so those who take your cash can repay
back the bank intrest on their debt

""What's wrong with that?""

lets quote the link

"Artificially low real interest rates
subsidised asset bubbles, emboldened bloated banks
and distorted the economy toward debt-fuelled consumption.""

""People put their life savings in shares to escape the inexorable inflation, only to chain their confidence to what used to be the remote gyrations of the bourse.""

then clever bankers said we can LEVERAGE your cash
ie leave us a deposit...and if your shares go UP
you get EXTRA CREDIT..to buy more

and if it goes down
you HAVE TO GIVE US EXTRA CASH

so it EVENTUALLY went down
and we ned to SELLL quickly..to get the cash

when by a better way
you could SELL to govt at set values
and they MAKE the CREDIT..to cover your debt bet

lets let the link have the last word

""It was a false dawn;
economists forgot about politics.

As George Bernard Shaw put it,

if "you have to choose between trusting
the natural stability of gold and..""

ie coin..!
hard cold coin..!

"".the honesty and intelligence
of [bureaucrats and politicians]""

OR BANKERS
OR MONEY GRUBBING MONEY CHANGERS
on commision's

your putting your faithy in faulse PROMISES
trusting the value of the money falls faster
than your debt

inflation is for thieves to steal your last cent
AUDIT THE FED
take back the mint
bring back the coin-age.!

Yes UOG, We need another Ron Paul here in Australia.

Maybe a new party like ASP could straighten up our mess.

As I have studied their policies they surely could do the job.

http://www.sovereigntyparty.info

No response, Arjay? Does that mean you concede what I was contending for, namely, that an increase in population or productivity does not, of itself, justify a commensurate increase in the money supply?

Let us just assume so for the sake of argument. Then it follows that there is no justification for government to have a monopoly license to print money.

All the righteous indignation focuses on the banks. But there is almost no recognition that the banks are only able to do this because government grants them immunity from what would otherwise be illegal. In an unhampered market, any bank who did all this jiggery-pokery would *go broke* and that is as it should be, because *it's against the common law of fraud*.

What induces governments to protect them is
a) governments have had their hands in the till, in terms of debasing the currency, since Adam was a boy
b) clipping coins is old hat; your modern seigneural scamster does it by way of *banking*;
c) governments do it for a share of the loot; they can't do it on their own, and they can't do it through a private bank operating under market discipline of profit and loss subject to the law against fraud.
Therefore governments must grant banks a license to do what would otherwise be illegal. You're not against that.

Thus there is a symbiosis between governments and banks; and a parasitic relationship between them on the one hand, and the rest of the population on the other.

So I entirely agree with your analysis as concerns the Federal Reserve.

But it is no more justified to trust government with a licese to print money, than it is the Federal Reserve. The Feds license is granted by government for gossake.

All the excuses given to justify having such a monopoly license are self-interested nonsense. It does *not*
- prevent recessions, it causes them
- stabilise the economy, it ruins it
- promote full employment, it promotes bankruptcies and high unemployment
- do social justice, it does social injustice.

The downside is obvious.

What's the upside?

Oh Dear, everyone including those on here think that we are in for more
business as usual and the same old economic rules whether by whatever
is your favourite ancient economist's theory.

They were all more or less right in their own time but, wakey wakey the
rules have changed !
Finance is now irrelevant. It is just that finance people have not realised it yet !

Now the rule is, production is tied to energy.
More energy, more production.
Energy Growth = Economy Growth.
Energy zero growth = Zero Economy Growth.
Energy Depletion = Economy Contraction.

These rules apply to the world or to countries.

Live with it !