What is Money?

[elected4ever]

e4e, well then I'll be happy to relieve you of your burden whenever you find yourself carrying any of them...

e4e, I claimed that, "Requiring a gold standard inflates the value of gold by fiat" to which you replied:

Regardless of some inscrutable particulars, the law of supply and demand determines value, and if a government requires gold to back its currency, the government thereby significantly increases demand and limits the supply of gold as a commodity. So e4e I don't know how you could disagree that requiring a gold standard would inflate the value of gold. And that would happen by fiat, that is, by the word of a government official, or a constitution, requiring a gold standard.

-Bob Enyart, KGOV.com

p.s. Just read your post #132 e4e. Sure I'd love for you to clear up the confusion arising from Newman's post, but can you also address this claim of mine that a gold standard inflates the value of gold by fiat?

In an earlier Post I showed that the gold standard is the standard of currency mandated by the constitution of the United States. My or your opinion of whether or not it should be has no standing.

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures is the exclusive obligation of the Congress of the United States should it decide to exercise that obligation. Even if they had decided not to article 5 of the constitution mandates that the state pay its bills with gold of silver. Necessarily gold and silver coin.
Article 1 Section 8-------To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;
article 1 section 10-------make any Thing but gold and silver Coin a Tender in Payment of Debts;

It is unconstitutional for the congress of the United States to delegate that power according to The United States Supreme Court but sense when has a supreme Court decision stopped congress from doing any thing.

It is lawful for congress to enact a Central Bank but is it unlawful for that bank or for congress to permit that bank to coin money or regulate the value of that money.


The Coinage Act , passed by the United States Congress on April 2, 1792, established the United States Mint and regulated the coinage of the United States. This act established the dollar as the unit of money in the United States, declared it to be lawful tender, and created a decimal system for U.S. Currency.

The dollar was valued at

371 4/16 grain (24.1 g) pure or 416 grain (27.0 g) standard silver
There was no gold valued at a dollar only $20, $10, and $5 increments with specifications for each.
In 1859 a gold $1 coin was added making the ratio of silver to gold 15/1 and then 16/1.. The point being that what ever else is true. The dollar is a specific amount of gold or silver. For example in 1932 we are told that gold was 34 dollars an oz. But that is impossible. What ever the 34 something or other is it cannot be gold because the value of a dollar is a specific amount gold or silver.

I have in my possession a set of Walking Liberty Silver bullion coins. According to the 1985 coin act they are legal tender. To day thay are wort on the market over 30 Federal Reserve Notes each. At a minimum. The government tells me that they are worth just 1 dollar each if I use them as legal tender. The only law that establishes the value of a dollar is the 1792 coinage act as amended from time to time. The value is not what they are worth because FRN are not dollars. The gold and silver coins are not inflationary. The are the staple by which you can judge the worthlessness of the Federal Reserve Note. You see, it is impossible for the dollar to inflate. It is impossible for the gold or silver to change form. No monetary value has ever been placed on gold or silver dollars. Only the amounts prescribed by congress has changed.

If you have a silver dollar in your pocket I will give you a a Fed Reserve Note for it. If you have a $50 gold double eagle in your pocket I will give you 50 Federal Reserve notes for it. Fact is, unless you have picked up a silver dollar or a double eagle from some where I would venture to say you have never had a dollar in your pocket. There is no where in federal law where congress has defined a Federal Reserve note as a dollar. You are just like the rest of us. You never buy anything with a dollar.

 

[ghost]

Do us all a favor Bob and read through the entire thread before responding further

I'm not a banking expert, but I'd say this request might not happen until he reads it :chuckle:

 

[elohiym]

I'm not a banking expert, but I'd say this request might not happen until he reads it :chuckle:

:chuckle:

Thing is, he's responded to some posts at the end of the thread. Yesterday he did. So I figured maybe he'd see that and take the advice. :idunno:

 

[drbrumley]

Happy New Year guys.

 

[Nydhogg]

so he goes out and buys a junker car on credit, committing himself to paying $100 a month for a year.

Why the Hell would anyone get a loan for a thousand bucks?
You can get family or friends to lend you that much without interest and without any sort of collateral.

Worst case scenario, you work one month and you buy the damn car .



I'm not saying a grand is spare change, but it's certainly not a significant amount of moolah either.

 

[Stripe]

Supermarkets aren't monopolies, and they don't have different rights on making produce than anyone else.

That's true.

Only banks don't have to give equal consideration, but get to collect both principle and interest, driving us into deeper and deeper debt, which is now factually un-payable.

Right. So it sounds to me like the problem isn't the system, its the enforced suppression of any and all competition.

Which is probably what one side is defining as the system.

 

[Stripe]

Why the Hell would anyone get a loan for a thousand bucks? You can get family or friends to lend you that much without interest and without any sort of collateral. Worst case scenario, you work one month and you buy the damn car . I'm not saying a grand is spare change, but it's certainly not a significant amount of moolah either.

:doh:

Learn to read, dude.

 

[elohiym]

So it sounds to me like the problem isn't the system, its the enforced suppression of any and all competition.

Which is probably what one side is defining as the system.

Do you agree that inherent to the franctional reserve system is banks lending their credit, not their money?

Keep in mind, when a bank "lends," its liabilities increase. What it is "lending" is a bank liability. That is what the Federal Reserve Bank claims, that bank liabilities are the money banks lend. And that is equivalent to claiming that banks lend their credit, not their money.

 

[Bob Enyart]

Regarding counterfeiting gold coins, Granite is correct of course...

Technically incorrect; you could indeed counterfeit them both (ever see somebody in a period piece bite a coin after being handed one? There's a reason for that).

And so I updated that sentence in the OP to this:

[Updated sentence thanks to Granite:] Since no one can create gold, it was especially difficult to "counterfeit" money without it being detectable (like by biting a coin, weighing it, etc.)​

I'd suggest The Creature From Jekyll Island if one were to be interested in the "particulars" of the Fed.

Granite, back when that book was first published, we had dinner at a friend's house with Griffin and I eventually interviewed him in studio about the Fed.

My conclusion that I had been wrongly convinced into opposing fiat money and fractional banking was not something that came lightly or without first studying, and even embracing, the alternative. I'd even written a novel of a few hundred pages that the first thousand readers praised, that had exposing of the fiat money as a major theme, and as a result of believing I had been deceived, we pulled that novel, called The First Five Days, off the market for a decade, but we've recently released it with a caveat similar to the OP included in the text.

-Bob Enyart, KGOV.com

 

[Nick M]

Bob is a full blown Marxist of the progressive persuasion.

You hide in closets and eat little children.

 

[Bob Enyart]

Just a question for Elo - Is it possible that fractional banking, while not inherently evil, has had many men use it for ill-gotten gain? Is there any way in which fractional banking would work if people were not so corrupt?

Stripe, your question brings up a great observation made by Thomas Sowell and others, that:

"Blaming an economic crisis on greed is like blaming a plane crash on gravity."​

Your question can be restated:
Is there anyway that business would work if people were not so corrupt?
Is there anyway that contracts would work if people were not so corrupt?
Is there anyway that _______ would work if people were not so corrupt?

Any system of money must be effective (provide accountability, to God and man), and then efficient (convenient to keep down the actual cost of the accounting).

I think that the only true answer to this lies in a fundamentally Christian worldview:

Human beings function best living in freedom constrained by God's criminal justice system to properly punish and therefore deter crime.​

-Bob Enyart, KGOV.com

 

[Bob Enyart]

Stripe asked elohiym to explain his claim that fractional banking is inherently evil, and here was his reply:

1. Monopolies are inherently evil and immoral.
2. It is inherently unstable.
3. It always results in economic slavery.
Do we really need any more reasons?

Okay guys...

Monopoly & Immorality: Fractional banking does not require a monopoly, and multiple private businesses can issue shares or bank notes, and compete in the marketplace for customers based on the desirability and stability of their currency.

Government cannot justly usurp authority not granted to it, and God has never granted governments authority to stop two newspapers from merging (so as not to create a monopoly), etc.

It is therefore inherently immoral for a government to usurp the authority they claim to break up private companies, or to refuse to allow them to merge, etc.

So, monopolies are not inherently evil, but the government using force to prevent monopolies is unjust.

If IBM functions like a monopoly and is too unresponsive to the marketplace, then while this solution has virtually no chance of succeeding let a couple guys named Steve working in a garage come up with an alternative computer company, and then let them become the wealthiest U.S. tech company and rule the world for a while

Instability & Economic Slavery: For this let me repeat my early comment about general trends in worldwide economic prosperity before and after fiat money:

Most successful: Newman, what is your standard by which you would rate the effectiveness of a currency? U.S. criminal justice lawyers say we have the best system in the world, when we actually have among the highest violent crime and incarceration rates in the world, so that what they really mean is that we have the highest paid lawyers in the world. The ultimate standard by which to judge anything is God's principles, and apparently you and I disagree on the application of those principles to the subject of money, which I believe is an accounting of transferable incomplete transactions. So, as an indirect indicator of how successful fiat versus metal money is, consider that unarguably, throughout the millennia of gold and silver currency, the numbers of people living in poverty swelled tremendously worldwide into the billions. Of course economics are affected by countless factors, but the monetary system is one leading factor. And while poverty rates are admittedly difficult to quantify, during the modern age of fiat currency, irrefragably people have been climbing out of poverty at rates unheard of in human history, reducing the extreme poverty rate by hundreds of millions of people just from 1980 to 2000, from about 40% of the world living on $1 a day to 20% of the world. What today we call hard times, the vast majority of people who could only spend gold or silver would have called fabulously wealthy. And it only slightly helps your case to credit our modern physical wealth to industry and technology, etc., because industry and technology are greatly harmed by unjust economics, and their flourishing is an indication of an effective (i.e. accountable) monetary system. So, as indirect evidence Newman, you can best argue that the gold standard is more successful than fiat money if you ignore the actual poverty and wealth of billions of human beings.​

-Bob Enyart, KGOV.com

 

[Nick M]

You mean aside from the fact that it disregards the biblically appropriate model of monarchy in favor of an elected executive leader...

... and establishes a legislature, the very nature and purpose of which is to "change the law," something the Lord repeatedly rebukes Israel for doing and which is thus also completely inappropriate and unbiblical...

... and which, itself (the constitution) is even designed to be rewritten repeatedly, which begs the question - if it was moral (or right) when it was written, and it's been changed about two dozen times, how much less moral/right is it today? Or was it immoral/wrong then, and has become more and more moral/right up to this point? Or maybe the whole, ever-changing evolution of it is a wash, in the end? It infuriates the Lord when we make laws that are contradictory to His established example, and when we have the kinds of laws He wants, it infuriates Him all the more when we then go and change them repeatedly...

... and which generally establishes various democratically-based institutions in our government, which are fundamentally humanist in nature and assume the inherent goodness of the masses, in contradiction to the biblical understanding that, at any given time, the majority are in rebellion against God...

Despite the strong Christian principles of many of our founding fathers, they were terribly lacking in their understanding of Christian biblical theonomy, primarily because of their near-obsession with ancient, pagan Greek philosophy which they often placed over biblical teaching. The system was doomed from the beginning, and the only reason it did so well for so long was because America was a morally conservative, predominantly Christian-based culture. But inevitably, our system taught people that they, the citizens, can force the government to change to suit their own selfish desires to dominate and take from their neighbors. Alexis de Tocqueville rightly warned us that our system would come crashing down when our citizens figured out that they could change the government so that they could take their neighbors in order to give to themselves:

"The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money."

"A democratic government is the only one in which those who vote for a tax can escape the obligation to pay it."​

Doomed from the start, because overall, our system is designed to be rewritten by democratically-elected representatives of the mostly-wicked masses, so that our system of governmetn is inevitably degraded more and more, over time, and overall our system of government and our laws are a tutor... a tutor that teaches its citizens false and immoral principles, leading people to a sense of entitlement and a generally depreciated value of human life. Well-intentioned, but doomed from the start, and today we are reaping the whirlwind.

REPUBLIC, n. A nation in which, the thing governing and the thing governed being the same, there is only a permitted authority to enforce an optional obedience. In a republic, the foundation of public order is the ever lessening habit of submission inherited from ancestors who, being truly governed [by monarchy], submitted because they had to. There are as many kinds of republics as there are graduations between the despotism whence they came and the anarchy whither they lead.
["The Devil's Dictionary" by Ambrose Bierce]​

:first:

For the new year, even though he posted this a few days back. I love America, but our government design is anything but the best.

 

[Bob Enyart]

In addressing Granite, who with e4e, has criticized me for not unquestioningly accepting our U.S. Constitution, I'm glad elohiym you linked to 1 Peter 2:13 which commands us to submit ourselves:

"to the king as supreme..."

It wasn't too long ago that I read in this thread the claim that the Constitution (and foreign treaties) were Supreme. While I much prefer basing our arguments about a proper form of government on Scripture rather than on our Constitution itself (which then becomes merely a circular argument), But per my own request, we should leave discussions of God's form of government for another time and place.

I find it hard to believe that he would flagrantly oppose the principles of 1Pe 2:13 and Rom 13:1-2. That he would want a new Constitution is one thing, but for him to defend acts contrary to our existing Constitution as moral would be another. I don't think he would do the latter consciously.

This kind of supreme commitment, to a side-deal arrived at by dozens of men compromising over many weeks during a hot, muggy Philadelphia summer, strikes me as misplaced. Constitutions among men are human agreements that may or may not contradict God's principles. What if, elohiym, you found out that the Constitution itself was inherently unconstitutional, so that it fundamentally contradicted the constitutional rule of law? Would you then have to re-evaluate all the bedrock principles of economics and government that you hold? For me, those principles arise from studying God's word, and then judging our constitution based upon His eternal principles, not vice versa.

And of course I teach that we must adhere to God's principle in Paul's letter to the Romans that as a general rule we should obey the governing authorities (remembering of course the many heroes in the Hall of Faith in Hebrews 11 who justly disobeyed the governing authorities). I've taught that not only in our verse-by-verse Romans study, but in our God's Form of Government seminars, and as a theme of my outreach. But there is no governing authority that is telling me that I cannot advocate the freedom-based, private-enterprise-based, system of money that I advocate. And if there were a governing authority trying to censor me from this advocacy, it would be usurping authority not granted to it within the just functions of government authorized by God.

Oh, and by the way, the government notwithstanding, I'm reasonably certain even personally, you wouldn't want to censor me from attempting to make principled arguments for fractional banking.

-Bob Enyart, KGOV.com

 

[Nick M]

"Why is the Federal Reserve Bank regulating the value of money not a "yikes" in your opinion?

If the libertarian hero Ron Paul ran the Federal Reserve, and not that communist Ben Bernanke, according to the laws "necessary and proper" written that say money will be based on credit and not gold, I don't think anybody would complain.

Then again, some complain no matter what.

 

[Nick M]

They increase the liability by giving you money to buy a new car (out of thin air). The matching asset is your promise to pay it back. I don't understand what's wrong with that. The money created out of thin air is exponged when you actually pay it back. What's wrong?

That is why the American standard of living is so much higher than the rest of the world, and we did it in 200 years, where as the rest of the world had 4500 or so. We pulled them out. Including western Europe.

 

[elohiym]

I'm glad elohiym you linked to 1 Peter 2:13 which commands us to submit ourselves: "to the king as supreme..."

And I am disappointed that you are either not seeing my points or intentionally dodging them.

This kind of supreme commitment, to a side-deal arrived at by dozens of men compromising over many weeks during a hot, muggy Philadelphia summer, strikes me as misplaced.

Your comment doesn't address why those men decided to not grant the federal government the right to emit bills of credit. You are dodging my point, as you dodged my points in posts #18 and #33. And you have failed to provide any evidence for your claim that banks create money when they make loans to, counter my evidence that they don't create money when they make loans. So far we have your opinions verses my facts. :yawn:

Constitutions among men are human agreements that may or may not contradict God's principles.

And when they don't contradict God's principles they are binding on Christians, as I have stated numerous times on this thread already. What you need to do is tell us if not allowing the federal government to emit bills of credit contradicts God law or not? That is the point you seem to be dodging.

What if, elohiym, you found out that the Constitution itself was inherently unconstitutional, so that it fundamentally contradicted the constitutional rule of law?

Now you want to talk Constitution instead of Tonga, but you dodge my points regarding the specific right to emit bills of credit. :dizzy:

Your question is irrelevant to the discussion and my point.

For me, those principles arise from studying God's word, and then judging our constitution based upon His eternal principles, not vice versa.

Try addressing the point, Bob. :yawn:

 

[elohiym]

Bob claims banks create money when they make loans.

The Federal Reserve Bank claims banks lend other depositor's money when they make loans.

If you go to the Federal Reserve Bank's educational website you can download the publication Banking Basics.

Banking Basics...states on page 6:

"Where do banks get the money to lend? They get it from people who open accounts. Banks act as go-betweens for people who save and people who want to borrow. If savers didn’t put their money in banks, the banks would have little or no money to lend. Your savings are combined with the savings of others to form a big pool of money, and the bank uses that money to make loans. The money doesn’t belong to the bank’s president, board of directors, or stockholders. It belongs to you and the other depositors. That’s why bankers have a special obligation not to take big risks when they make loans."

In posts #18 and #33 I explained exactly what the banks are doing based on their own bookkeeping entries.

Bob will not address those points in those posts, or perhaps he simply lacks the understanding to address them. He only has said he disagrees with post #18 without addressing the points, and he ignored those same points in post #33.

This is not a discussion; it's a travesty. And a waste of time.

 

[elohiym]

Monopoly & Immorality: Fractional banking does not require a monopoly....

Fractional reserve banking may not require a monopoly, but it is presently a monopoly on the issuance of legal tender. And it's not a legal monopoly. When you properly condemn the current system, I'll regain some of the respectof you I lost in this "discussion." For now, you appear to be defending immorality, justifying it with ideals that don't exist.

Government cannot justly usurp authority not granted to it...

Then why are you not condemning the emissions of bills of credit by the federal government? Why are you not condemning the federal government making those emissions legal tender? Why are you not condemning the federal government for delegating to private banks what they are not authorized to do or delegate? :idunno: You don't address those points.

Instability & Economic Slavery: For this let me repeat my early comment about general trends in worldwide economic prosperity before and after fiat money:

...because industry and technology are greatly harmed by unjust economics, and their flourishing is an indication of an effective (i.e. accountable) monetary system.

I already countered your points in post #127. The current monetary system fails by your own standard.

Rather than continuing to repeat the same idealistic comments, can you join us in the real world and address the counter-points to your claims?

 

[elected4ever]

Bob Enyart ------ Any system of money must be effective (provide accountability, to God and man), and then efficient (convenient to keep down the actual cost of the accounting).

Show me Bob, where I am directed to ignore the law of the country of which I am a citizen. Or for that matter where any Christian is directed to ignore the law of the country in which he lives. I do not believe God or Jesus or the Apostles has ever given such a directive. I thing you have made up that directive out of whole cloth for your own convenience. I am beginning to believe you are just one lawless individual.