Money Myths: Fiat vs. Commodity Money

I also believe colonial scripts is the best way to have a currency. Where the government prints up the money in direct proportion to the amount of trade that is going on. The money is not given as a loan, and it doesn't require the people to pay it back.

However, there is a reason why the founding fathers did not adopt the policy. And that is because of the continental dollar. Where they created/inflated the amount of dollars to the point where it was near useless. That is the reason they tied the money to gold and silver.

The gold standard wasn't our problem. It never was. Fractional banking was the problem. Or as it used to be called - Money changing and usury. Eventually the amount of dollars in circulation had only a small % of it backed in gold. As the dollars were all redeemable in gold, it would only take a small % of the nations cash(like 10%) to turn them in and take 100% of the nations wealth. That is why the gold standard failed. And rather than fix the problem of fractional banking, we instead got rid of the gold standard.

I myself am in favor of colonial scripts type system which you mentioned basically. However, it must be under strict regulations on how the government prints up the money. They can't just keep printing up money as they see fit, they will still be robbing the people of their purchasing power. It should only be issued so that we have neither inflation or deflation.

Also, we should be tax free, outside corporate taxes and newly created money should be used to pay for government. A very limited government, not the oversized, manage your lives government we have today.

You can't have freedom without economic freedom. I think we can all agree the current system is far from economic freedoms.

But I think to confuse people who speak of the gold standard as wanting to walk around with gold coins is a bit misleading. Mostly, they just want an honest and sound monetary system that doesn't lose it's value and purchasing power over time. As such, you should look at the positive things and reasoning behind going to gold and find a way to insure the same concepts are applied to any government created fiat currency.

Of course, making such laws and things are useless when the people themselves do not understand them, nor force the people elected to follow them. The first step IMO to solving these problems is to get the politicians back on their leashes and read the constitution of a document of limited government, rather than a document of limited rights as is done by all parties today.

[edit on 27-10-2008 by badmedia]