TITLES, POSSIBLE ONES, THAT CAME TO MY MIND SO FAR:

MONETARY FREEDOM, TERMS, DEFINITIONS, IDEAS, ARGUMENTS, -COUNTER-ARGUMENTS, EXPERIMENTS, PROPOSALS, REFORMS, REVOLUTIONS,- THEORIES, EXPLANATIONS, OBJECTIONS & PREJUDICES AGAINST IT, -STEPS TOWARDS ITS. - An alphabetized notebook of words, ideas, -notions, definitions, explanations, arguments, distinctions, facts, observations, predictions, beliefs, refutations, dogmas, -economic laws, arguments, objections, etc., all helping to lead- us towards full monetary and financial freedom.
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Alphabetized notes on competitive paper monies "as good as gold, which only monetary freedom could supply. ---  SNIPPETS, NOTES & QUOTES TOWARDS FULL MONETARY FREEDOM.
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How to stop inflation and end mass -unemployment and depressions from one day to the other. - Try to- refute this, if you can. Otherwise, do act upon this information -and become monetarily emancipated, too. - J. Z., n.d. & 29.5.97.
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A - Z of FREE BANKING. Attempts to define -and explain aspects of monetary freedom and monetary despotism- alphabetically, with some cross references. An open book, not- copyrighted, inviting and welcoming corrections and supplements- from anyone. Also a list of literature and addresses of interested individuals and organizations. To serve as a handbook -and clearing centre for views on this subject. Ultimately, to -include ideas, plans and projects on how to best and most easily -introduce monetary freedom for all who desire it for themselves. -- J. Z., n.d., 28.4.97.
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PERSONAL NOTES & SOME QUOTES ON MONETARY AND FINANCIAL FREEDOM. I do usually prefer rather to talk to myself and write for my own benefit than trying to talk to or write to people who do not share my interest in such subjects. Moreover, I have come to rather let them seek me out and my offers on monetary and financial freedom and other rights and liberty and peace writings than try to seek them out. I am quite willing to let whatever there is already of the information revolution work for them and for me, without any extra effort by me. - J. Z., 24.5.97. (Well, since then I have tried to push, also largely in vain, not only the microfiche self-publishing and reading option for libertarian writings but also the floppy disk and CD-ROM publishing and reading options for such literature. - J.Z., 16.9.02.
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Talking to myself and to imaginary -discussion partners about monetary freedom in attempts to clarify- doubtful points and counteract popular errors, absorbing as much -wisdom as possible from others on this, through quoting them-e extensively and ordering this compilation merely by- alphabetisation under catchwords.
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Alphabetical Entries, rough notes, some quotes and comments towards a free banking- handbook.

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AN ALPHABETIZED COLLECTION OF NOTES AND QUOTES ON THE ROAD TOWARDS FULL MONETARY AND FINANCIAL FREEDOM. - J.Z., 30.8.02.
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How to stop inflation and end mass -unemployment and depressions from one day to the other. - Try to- refute this, if you can. Otherwise, do act upon this information -and become monetarily emancipated, too. - J. Z., n.d. & 29.5.97.
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The following are some notes & quotes accumulated, over a period, and here transcribed, with some re-writing and additions. They are later to be integrated with previous alphabetized notes on free banking. Ten to hundred times that number of entries, from a variety of advocates of monetary freedom and xyz more sources than I have available to me, would be required to come closer to usefulness as an alphabetized handbook on aspects of monetary freedom. For now this very limited compilation, mostly of my own and still flawed views and expressions  on this subject will have to suffice. I am not prepared to work all of the next years on in or for whatever remains of my life, although I consider this topic to be very important. It is, after all, only an aspect of all individual rights and liberties and of comprehensive panarchism and tolerance.

Nevertheless, the whole topic of monetary freedom is already too large for a systematized treatment in a single volume and such a volume would either remain largely unread or lead to more misunderstandings than comprehension.

Thus, I believe, it should be broken up into manageable alphabetized segments with cross references. A number of handbooks on banking have attempted to do so - but, most of them, without including the ideas, terms, practices and experiences of free banking and concentrating merely upon what the laws permitted or prescribed in this sphere and what was approved by the ruling school of monetary despotism.

The final aim is an alphabetized encyclopedia on free banking, including a directory, comprehensive bibliography, abstracts and review collection, with many different contributions on the same subject by various contributors and based on the full and permanent publishing of all relevant texts, cheaply and permanently, in an alternative medium.

Open entry for all kinds of well reasoned contributions on any related subject is one of the conditions to attain this publishing aim. Microfiche, floppy disks and, more so, CD-ROMs, DVDs & the upcoming Blue Light CDs, with 27 Gbs each side, have more than enough space for this, even if websites do not.  - J.Z., 25.8.02.

For collaboration with Thomas Greco it is to be considered whether multiple files are to be kept: For example, for:
1. His version of explaining terms,
2. My own version of FB terms
3. One version we both can agree upon
4. An open input version in which all such explanations or comments are included, from anyone.
On the other hand and at least initially, not such file separation might be undertaken.  - J.Z., 26.8.02.

The length of several entries shows that for each term perhaps at least three different explanations should be given: A very short one, a more detailed one and a lengthy explanation. Also: Sufficient cross references should be added.

To be included or extracted for this compilation:

1) Comments added in all PP cover sheets.
2) Comments made in letters and articles in digitized FB files on disks.
3) Comments in Ulrich von Beckerath's books, drafts and correspondence.
4) Comments in manila folders on fb subjects.
5) Relevant entries from the Slogans for Liberty files.
6) Translation of a previous German A-Z compilation.
7) Previous English A-Z compilations on free banking. (Only this has been done so far.)
8) Extracts from the writings of Dr. Walter Zander and Prof. Heinrich Rittershausen.
9.) Extracts from e.g. PP  41, 19 A & C  & all other monetary freedom writings in the LMP series.
10.) Extracts from correspondence, with e.g., de Fremery, O'Donnel, Greco, Carnaghan. -

WARNING: These notes are so far quite insufficiently proof-read and edited, sorted out, cross-referenced and not indexed at all. No attempt has been made to eliminate repetitions and flawed terms. Not enough time and thought has been spent upon choosing the most appropriate catchwords in front of an entry or to separate notes under different headings.

Introduction
The accumulated wisdom, experiences with,- arguments, refutations of arguments and proposals and ideas and -theories, speculations, hypotheses etc. on money cannot, I believe, be- sufficiently expressed in a few pages or, sufficiently, in short dogmatic- statements. (Nevertheless, such attempts should always be made, from "Slogans for Liberty" to one page explanation attempts, platforms or manifestos. When they are sufficiently backed by readily accessible and much longer explanations then they can do some good.)
Here only a few personal notes and selected quotes on -monetary freedom and monetary despotism are offered, -alphabetized, appealing for corrections and supplementation by anyone interested, preferably via disked entries in RTF or e-mail.
My- memory and attention span are rather limited. I can't easily or -at all remember the ideas and arguments of previous pages,- chapters or of whole books. But what I can remembers, dissect and -reassemble, sometimes in different ways and details, are -particular points of view, terms, ideas and arguments. These I -can somewhat deal with, piecemeal, point by point. Their -alphabetical arrangement, under catchwords, for reference -purposes and later re-writing or editing, correction and supplementation, whenever I feel like it, are an aid intended -primarily for myself. If, alternatively, they remain spread,- unsorted and forgotten for years, over hundreds to thousands of- slips of paper, clippings and papers and in numerous manila files, or texts in my microfiched series or online, or numerous books and journal articles, mostly not readily accessible, then their thought contents is not as readily accessible -to myself, for my own purposes, or for others, as I wish it to be. -
I do hope that such an arrangement, rather than a- systematic treatise, which I have only rarely tried to provide, -will help others, too. They do not have to remember the whole monetary freedom- system or read and study a whole and systematic book on it. They can tackle entries that -interest them and follow up related points, if they want to,- without having to read the whole book, laboriously, page by page,- chapter by chapter, thus, possibly, getting turned off and -forgetting most of what they have read, because it was not of -primary interest to them.
Moreover, I do intend to offer this manuscript -as an unfinished work, one to be gradually improved and- supplemented by any of its readers who have something to- contribute to it or believe that they do.
The errors on money and -related subjects are almost as important as the truths are, for -so far they have dominated our beliefs and actions in this sphere. So all of them should be registered and refuted, as best- as we can at present. That is a job much too large for a single -person to tackle. But, it does not matter how many pages the -total effort will take. The more people participate in this -co-writing and co-editing, the better. Microfiche, floppy disks,- text only CD-ROMs and other modern media have all the pages and- volume space required, and this at prices almost everyone could- afford.
If the publication would have to be done by a- conventional publisher, at his risk and expense, then, if- interested in this work at all, he would, probably, have to -insist that it be confined to no more than 500 pages. - In this- open and participatory format it might finally come to 5,000 or even 50,000 pages. Never mind. Not all would want to possess and use the unabridged version. And this, in print, could not be updated often and cheaply enough, except, perhaps, in editions that are merely computer printouts from the latest digitized version. But everyone would be- free to offer his own abridged version, if he likes to do so.
-No one has the time and energy to read all the writings on money. In them one usually finds are endless repetitions of basic truths and, still more -numerous, endless repetition of basic errors. Here the -basic truths could be gradually compiled, explained, proven and popularised and the- basic errors stated and gradually be confronted with the best -refutations so far found for them.
For style and good English -and always correct spelling and punctuation, as far as my own contributions are concerned, look somewhere else. -Likewise, for a comprehensive handbook on banking and finance and -all their terms and practices. This effort is confined to monetary- and financial freedom notions, ideas, proposals and practices and errors on these subjects.
-Help me, please, to catch most of these truths and refute most of -these errors, in as concise, convincing, popular and interesting- way as you can manage. If you have, for instance, some relevant jokes to offer, -to lighten the reading load, by all means, do so to. If you can- chop up my often all to long sentences into clearer and shorter- ones, by all means, do so, under your own name, or offer clear- abstracts of what I tried to say.
Never mind some repetitions on this important -subject. They are as likely to occur as they occur in oral- discussions. Any truth needs repeated statements to finally sink into enough heads. Refutations, too, need frequent- repetitions, since errors are almost forever repeated, again and -again. Microfiche etc. do have space for numerous repetitions. Easy -reading and concise versions can be provided later by anyone who -can and will do so. - J. Z., 23.4.97.
SUBJECTS NOT YET DEALT WITH: They should at least be included, -in catchwords, with an appeal for contributions to them.

DIFFERENT VERSIONS OF THE SAME ARTICLES MIGHT BE OFFERED LATER: -1. A short version. 2. A medium sized best version so far -compiled or found. 3. The complete treatment, at lengths that are -often boring to many and with many repetitions, too. Articles to- complete monographs. But full books merely to be referred to, with details on -where they can be accessed, if they are rare titles.

That I have often repeated ideas, arguments and wordings here does not worry me but that, most likely, I have still missed out on good expressions of facts, ideas and arguments or included errors and wrong observations of my own - does. So point out all flaws to me and find and state better and more accurate expressions in your own terms and also in terms that would help to make others understand the issues better. -J. Z., 25.5.97.

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ABC AGAINST NUCLEAR WAR: It contains some entries which might be- worthwhile including here. (Formerly in print only in PP 16-18, then microfiched in PP 16-18. Now digitised as PP 16 & 17.)
ABILITY TO PAY & FREE BANKING: When you are buying the markets -are open, it's when you are selling that you find the markets- closed. - Klahn's law of marketing, in a letter by Robert W.- Klahn, in ANALOG, 7/95, p. 312. - Free banking can turn each- large supplier of wanted consumer goods into a large scale money--issuer and buyer of the goods and services of others, rather than -entering into a competition with them for the scarce, exclusive- and forced currency of monetary despotism. Your own money issues -will also act like advertising leaflets and drive potential- customers into your "net" - by inducing them to return your money -to you, claiming the promised and available consumer satisfaction -from your stores. You would only have to market your own money and not your goods and services directly and exclusively only for- a monopolised money. To market any useful additional money is- much easier than to market any goods and services. And your own -money would inevitably return to you in payments. What more could- you ask for than such freedom, practised alone or in more -suitable local associations? - J. Z., 19.3.97.
ABILITY TO PAY & INABILITY TO PAY, BOTH UNDER MONETARY FREEDOM- AND UNDER MONETARY DESPOTISM, SHOULD BE SEPARATELY CONSIDERED: -...
ABILITY TO PAY & INTEREST RATES: The ability to pay ANY interest -rates or not is often more important than the fact of either -high or low interest rates. High interest rates do not matter as -much when sales are easy to achieve, profit margins are high and- do not merely represent, to a large extent, high inflation rates. -Low interest rates are not an encouragement to take up loans and to- increase production when customers are missing, sales are low and -factories work only at a fraction of their potential, while -unemployment is high. Nor do low interest rates CAUSE inflation -or do high interest rates CAUSE a deflation. To judge the economy- and economic developments only by interest rates, especially only -the interest rates for monopoly and forced currencies, is almost -as one-sided as is phrenology, in trying to determine a person's- capabilities and character merely from the shape of his skull. -- J. Z., 22.4.97.
ABILITY TO PAY & UNEMPLOYMENT: Unemployment will be reduced to a minimum only once ability to pay or to clear is maximised, developed to its natural limits, which consists in the ability and readiness of people to offer productive labours and services in return, at market rates. - J. Z., 25.9.93, 24.5.97.
ABILITY TO PAY, IOU'S & CLEARING: Pay your debts with -acknowledgments of your debts. And back up your debt certificates- with your ability and readiness to supply goods, services and -labour for them. Fully acknowledge your own debt certificates -when offered to you in payment by anyone, at any time (when they -are currency, not capital debt certificates). Choose whatever- value standard unit is acceptable to you and your creditors and do -price all your offers in these units. Then, by accepting your- IOUs back, from anyone, you will have cleared what you owed to- others against what some others owed to you. And neither of you- will have had to own or use a single gold or silver-coin in the- process - as a means of payment or cover or guarantee. Such coins,- in the hands of others, freely rated and traded, would just be -your reckoning units, for your means of payment, not your means -of payment themselves. To that extent you would be independent of -their availability to you, in coin form. - J. Z., 30.9.94, 17.4.97.
ABILITY TO PAY:  Freedom to pay your debts with whatever means of -exchange medium or clearing process and value standard is acceptable to your -creditors, be they your employees, your suppliers, your -financiers or your bank. - J. Z., 18.4.93, 15.4.97.
ABILITY TO PAY: Desperate sellers of goods and services, as well -as unemployed and underemployed should cease to think that their- only rightful and sensible action would be to consider themselves- as "hunters" for the scarce "game" of a government's exclusive- and forced currency.  Instead, they should consider themselves as rightful and potential buyers first, who could freely and widely- purchase, when they have no government monopoly money at all or -are short of it, - with assignments upon their own readiness to -immediately supply wanted goods, services or labour for all the notes that they issued. Especially if at least locally -they combined their readiness to accept their own token money at -par from anyone. Then, and to the extent that they could thus offer a convenient and attractive enough local currency, they- could first "import" and then, and automatically, balance their -import expenditures by "export" in which their issued money- tokens stream back to them in payment.  They would thus have made -possible extra sales and jobs and would even have been able to- anticipate their returns from them. To prevent them from engaging -in such self-help steps is a great wrong and one they do not -always have to put up with. At least under certain circumstances -monetary revolutions are not only desirable but possible and one might even say obligatory. - As -Ulrich von Beckerath used to say: Combined purchasing power is- one of the potentially largest and yet least appreciated- revolutionary powers in this world. It can e.g. be used to -purchase the enterprise one works in and to supply oneself with -jobs and sales. - J. Z., 19.11.92, 14.4.97. - It does not only apply to combined savings but also to combined issues of currencies, that oblige only the issuers. The acceptors are thus offered the combined redemption capacity of the issuers, with their goods, services and ready and willing labor. - J.Z., 5.9.02.
ABILITY TO PAY: It should be limited only by one's ability to -supply wanted goods, services and labour in exchange. Under -monetary freedom this readiness to supply consumer goods and- services that are in daily demand, could be easily monetised by- these suppliers and their associations, thus supplying a common- local token currency or ticket money (goods warrants, purchasing- certificates, IOUs, clearing certificates). Thus they could come -to pay and clear their ways without the help of any exclusive or- forced paper currency and without possessing a gold stock between -them, that would be large enough to mediate all the exchanges -they can and want to make between them. - J. Z., 6.12.92, 30.4.97.
ABILITY TO PAY: The ability of most people to pay their debts, -to find employment or sell their goods and services, does become -greatly improved once they become free to offer to pay for all -their expenditures with their own optional money, freely rated -against an agreed upon value standard, which is also used in -pricing out their labour, services and goods. They should not be- forced to ask for and accept only the government's monopoly money- or non-cash payments ultimately based upon it. Their own money, thus -issued by them, would inevitably return to them. Only they would -have to accept it at any time at par. The combination of several -potential issuers of private money tokens, e.g. in a shopping- centre's  bank of issue association, would make their alternative -private or cooperative exchange medium even more acceptable, as a- local currency, to many if not most of the local people. Territorial government stands helpless before the economic crises which their -monetary and other economic despotism has caused in the first- place. It does not see or admit its own mistakes - but has- outlawed monetary self-help steps. Thus something like a monetary -revolution is required to get rid of its monetary despotism. Such- revolution requires a prior sufficient monetary enlightenment, one -not offered by governmental educational institutions and also a- careful choice of opportunities for it and timing and speed of -execution, so that its successes would be rapid and-, under sufficient publicity, overwhelmingly convincing. Then politicians and judges would no longer dare to suppress monetary freedom self-help steps but, -rather, jump on this band wagon. Those already fighting any- oppressive government, somewhere in the world, would, naturally, not greatly add to the -penalties that their despotic government would want to put upon them, if they -made use of monetary and financial freedom steps to finance their -resistance or revolutions or insurrections properly and overcome -the existing crises, whether deflationary, inflationary or- stagflationary. Thereby they could win with greater certainty,- faster and with much less bloodshed. Dozens of revolutionary -attempts occur every year in the World. The revolutionaries are, as a rule,- not monetarily enlightened and thus the fighting and bloodshed- becomes prolonged and even when they win, the economic problems -they suffered under will not be solved by them when they only -know the rules of monetary despotism and thus will practise them -again. - J. Z., 19.6.93 & 15.4.97.
ABILITY TO PAY: The unused and undemanded ability to pay and to- clear, via privately or cooperatively issued money tokens and -cooperatively organized clearing facilities, upon the unused own ready-for-sale goods and service -potential depends, is enormous - and still largely unknown in every -country. Otherwise, inflations, deflations, stagflations, mass -unemployment and unwanted and not merely accidental poverty could- be done away with within hours or days at most - while- governments do not even foresee their total abolition within years- or even decades - and continue to stumble around in the dark, -causing much wrong and damage with their "activities" and "measures", unaware that and how they caused most major social -problems in the first place. Alas, the billions of victims of- monetary despotism have so far shown little awareness of its- existence and desire for its replacement by monetary freedom. The- situation is as bad as in the Dark Ages, where religious -tolerance was not appreciated or in the times of slavery, when- most slaves would rather be masters but very few slaves wanted -the abolition of slavery and all too many "free" people were opposed to the abolition of slavery. - J. Z., 29.7.96, 19.3.97, 28.8.02.
ABILITY TO PAY: Under monetary despotism the ability to supply wanted goods and services is not equalled by the ability to pay, because it is artificially separated from it. Under monetary freedom the two are naturally combined. The producers and traders can issue sound money to sell all the goods and services they do offer between them, at market prices, to those who want them, because they do, directly or indirectly supply their customers and clients with the exchange media to purchase their goods and services. - J. Z., 27.6.89.
ABOLITION OF MONEY & ABOLITION OF PROPERTY & ABOLITION OF FREE -TRADE & FREE ENTERPRISE: Many consider this kind of utopia still -to be an ideal. They do not distinguish e.g. between the abolition -of the money of monetary despotism, the abolition of all monopoly -property, e.g. in land, or public utilities, the abolition of government ownership of its whole territory and of all its -inhabitants as tax slaves, military and brain-washing slaves, the- abolition of the protectionist variations of international trade- and the abolition of privileged or monopoly enterprises, - from- the optional, competitive, cooperative and voluntaristic alternatives of monetary freedom, self-managed and cooperatively- owned and run productive capital, free trade and free market- alternatives and the limited territorial State options from the -almost unlimited options of panarchism or voluntarism that are all -based on exterritorial autonomy for all volunteer communities, in -which they could even practise freely all their anti-capitalistic -and anti-individualistic ideals - at their own risk and expense. - I, too, would find the abolition of all forced and exclusive- currencies very desirable and that of all special privileges, -grants and subsidies granted by governments to some of their- subjects, at the expense of others. And I would not want to see any form of government to government "trading" and "enterprise" -continued otherwise than at the expense of consenting victims. - -From the wrongful application of the property rights principle to -property in people, slavery, all too many descendants of former- slaves or serfs seem to have inherited an emotional aversion- against all property claims, even quite rightful ones. Perhaps -there is something physical remaining in their genes, an -inherited memory of their ancestors standing on the auction block, as -slaves, at a slave market. Our present economic system has -not made it easy for them to acquire and maintain productive- property and to profit from it. The class warfare mentality, the- split into employers and employees and the anti-industrial- warfare between them for their "right shares" in the added value- of production, has coloured most of their thinking and their- actions. But from the admitted and so far all too neglected evils- and wrongs of the State paper money of monetary despotism and of -the scarcity problems with any forced and exclusive rare metal- currencies, one should not conclude that all kinds of monies must be alike despotic and difficult to attain. The situation would be- completely different under freedom to issue, clear, accept,- refuse, rate and discount alternative currencies, with legal- tender confined to the issuer and his own notes. Least of all -should supposed enemies of property discard "self-ownership" and -self-management and cooperative ownership options and render -themselves the helpless victims of central planners,- decision-makers and owners of themselves and of all other- "public" property. Without monetary freedom all the other rights -and liberties and opportunities were incomplete and one's -potential could not always be fully realized. One restriction and -suppression led to many others. The full release of all creative -energies (Leonard E. Read) can only be achieved when monetary freedom is realized, -too. Otherwise we all live in nation-wide prison-yards, confined -to the productive and exchange activities permitted to us  and- which we can manage to arrange with the exclusive and forced- prison currency provided by the authorities of this prison. That- situation does, often, provoke strong anger, even destructive and- riotous behaviour and terrorist and mass murderous actions based- on the "principle" of collective responsibility. Then scapegoats -are sought and prosecuted or even brutally abused and murdered as supposed culprits: supposed conspirators, members of other races- and religions or nations, as immigrants and settlers and- competitors for jobs and business opportunities. - Money,- property & trade must be liberated rather than abolished or -suppressed. The forms in which they presently do exist do not -really deserve their names. However, volunteer communities should- be at liberty to keep them for themselves, as long as they are -not forced upon any dissenters. - J. Z., 17.4.97.
ABORIGINES' BANKS OF ISSUE: There is much more to independence -for Aborigines than ownership of land, traditional life-styles,- dances, languages, arts and crafts activities and the primitive- and limited trades they engaged in across the continent, access -to alcoholic drinks, drugs and government schools and hand-outs at the expense of taxpayers. - If they started to organise their- own banks of issue and provided jobs for themselves in this way,- the governments would have a very hard stand in suppressing this -self-help effort and would be more likely to grant them- exemptions from monetary despotism or even repeal these laws when -other ethnic groups would thereupon claim the same liberties for -themselves. Voluntary taxation for Aborigines could also- become a popular issue, when the same people declined, at the- same time, to accept any further handouts at the expense of- taxpayers. Fully self-employed and not forced to pay taxes to- governments that they do not want for themselves, their combined purchasing power could be large enough to commercially acquire more land than has -already been granted to them. Actually, per head of the- Aborigines population in Australia probably much more land- already available to them than is to any other ethnic -group or to the average Australian. Admittedly, this land is often among the least fertile land and they and it are still under all too many government restrictions. But how much could really free people achieve even upon- such land? Compare the development of Hong Kong and of some areas of Israel. - J. Z., 27.5.97.
ABSTRACTS COMPILATION OF ALL MONETARY FREEDOM WRITINGS:
ABSTRACTS: Should be asked for of all monetary freedom writings -and schools of monetary freedom thoughts.
ACADEMIC WRITINGS ON MONETARY FREEDOM IN RECENT YEARS: Some -modern economists have finally rediscoverd some aspects of -monetary freedom, especially since Hayek wrote "Choice in -Currency" and "The Denationalisation of Money", in 1975 & 1976.- But even these are usually still far behind the monetary freedom- theories and practices offered decades e.g. by Ulrich von -Beckerath since World War I. - J. Z., 7.11.96.
ACCEPTABILITY OF MONEY, REJECTABILITY, REFUSABILITY,- DISCOUNTABILITY, READINESS TO ACCEPT FOUNDATION, MARKET RATING,- LEGAL TENDER, SEPARATION OF VALUE STANDARD & EXCHANGE MEDIA -FUNCTION: Currency cannot be acceptable unless it is -rejectable. Liberty to use or refuse it is essential to -desirableness. - Ezra Heywood, Hard Cash, 7. - Money should be optional, refusable and discountable, in its exchange medium function as well as in its value standard function. Only the issuers should always be obliged to accept it at par with their nominal values. - J.Z., 6.9.02.
ACCEPTANCE VS. REDEMPTION FOUNDATION: When paper money is not -redeemable (by the issuer in gold) then it will suffice, in -order to preserve the parity of the paper money with gold, to -arrange for the acceptance of the paper money like gold money - by -institutions which sell goods in daily and general demand. (Such institutions are e.g. the taxation department - when it "sells"- tax receipts, the railway, the P.O., and shops which owe -something to the bank issuing that paper. Their indebtedness may- arise out of the discounting of sound commercial bills and the -corresponding contractual obligation to accept the notes of the -bank like gold money. Naturally, in all such cases, the bank must- concede its debtors the right to pay back all their bank debts- with that paper money as soon as they receive it, at par,- regardless of the exchange rate of the paper money.) -  Ulrich- von Beckerath, 25.1.52.
ADDRESSES OF MONETARY FREEDOM SEEKERS, INDIVIDUALS & -ORGANIZATIONS:
ADVANTAGES OF MONETARY FREEDOM: Advocates of monetary freedom, like myself, claim that the competitive supply of exchange media would end any currency or cash famine, and could do so quite rapidly. If not effectively repressed, it would drive unsound exchange media and value standards, like most of the government paper money and its associated paper standard, out of circulation. - Moreover, the free choice of value standards would lead to a wide acceptance of the best one (or best ones, most widely - J. Z., 14.9.02) -  most likely a gold weight unit for account that is based on a free gold market, free private coinage, and gold redemption almost completely transferred to the free gold market and to gold-weight-unit pricing of goods and services, with private and optional exchange media being kept at par with their nominal gold weight value or close enough, in general local circulation and strictly at par when returned to the issuer in any payment. It would also lead to the rating of all exchange media against this standard and would thus prevent inflation, even when some exchange media would still and temporarily suffer a small discount. - Over-issues would then be to the obvious and rapid disadvantage of the issuer and not any longer, as at present, to his advantage. - With this monetary freedom, all the illiquid capital of a short term nature, especially working power and consumer goods and services, soon to be used or consumed, could be fully mobilised in monetary form and thus much easier exchanged and with less transaction costs. That is what the money of monetary freedom can do, has done wherever, whenever and to the extent that it was allowed to and will do also in the future, with or without the use of computers and the Internet. It should be the equivalent of labour, goods and services ready for sale, especially of consumer goods and services in daily demand and labour for their production and should facilitate their exchange. - The money types arising under monetary freedom would be very closely tied to this labour, service and goods basis, could not exceed it, i.e. could not inflate the money circulation and thereby the prices beyond this cover. One of the main safeguards would be the right of everyone to refuse to accept suspicious means of payment - like you would refuse my cheques or IOUs - knowing my financial situation. Full publicity for private issues and free and rapid clearing for all such tokens which went astray, would be essential features of the system. No fraud or coercion would be practised any longer in this sphere. - The most suitable issuers would be associations of retailers of consumer goods and services that would use the variety of goods and services they offer between them as a redemption fund for their local currency. These stocks and this service potential form anyhow and in all cases the short term backing of any currency, even of a gold coin currency. Fully mobilised, this capital could provide the sound exchange medium and the additional sales required to employ all the unemployed. In a city like Sydney, thousands of millions could thus be mobilised almost instantly for turn-over and wage payment credits, at all stable gold prices. - So far the retailers have not bothered to explore and state their issue potential and to demand that they be freed to utilise it, to their own advantage, that of the unemployed and of the rest of the economy. - J. Z., 1985 & 21.5.97. - To that extent they are not retailers in the same way as employers are not employers as long as unemployment exists. - J. Z., 14.9.02.
ADVERTISING COSTS WILL BE REDUCED: The rapid and automatic -reflux of this private currencies to the issuers, to be redeemed -in their goods and services, seeing that they have no other value -and only a limited circulation period, turns them also into -advertisement leaflets and reduces the need for advertising the -goods and services, thus making extra competitive price -reductions likely. There will also be less need for advertising -than under monetary despotism where free competition is confined -to a struggle for scarce and exclusive forced currency. - J. Z., 3/97.
AGGRESSION & MONETARY DESPOTISM:
AIRLINE MONEY: Air transport, at least in some countries, and- internationally, is to a large extent replacing shipping, railway- and road transport. Thus it could, like other transport -facilities, issue its own competing currencies, mobilising more- of its so far unused capacity, while helping to provide sound- supplementary currencies. - Air lines are considered as rich and -powerful but, under monetary despotism they are still struggling and many have failed, if not government subsidised or granted- privileges. Nevertheless, so far and as faras I know, no struggling airline has seriously considered becoming a note or service -certificate issuer and used its influence upon government- legislators to permit such self-help actions. - J. Z., 22.4.97, J.Z., 7.9.02..
AMERICAN OPINION, June 1983, contains an article of free banking -interest, critical of Social Credit.
ANONYMOUS MONEY, CENTRAL BANK MONEY, PUBLICITY ON ISSUERS & THEIR READINESS TO ACCEPT FOUNDATION, LOCAL MONEY VS. CENTRALIZED OR WORLD MONEY:  If I had a choice, I  would not readily trust and accept any money of which the issuers or acceptors remain anonymous or remote (like money of a central bank) and which relies upon compulsory acceptance and compulsory value, in combination with a monopoly for its issue. Such monies deserve, instead, extreme distrust and refusal to accept them whenever possible and other and better payment arrangements can be achieved. Central banks do not provide the goods and services consumers need. So why should they be entitled to issue claims to them? Any electronic currency has purchasing power towards those of the local suppliers who do accept them in payment or, for supplies from distant places, only to the extent that the additional transport costs and delays are considered to be acceptable. But for the required supplies from local suppliers it would be much more sensible to accept a local currency issued by them. For these neither a central bank currency nor an electronic world currency is required. The currency issues of distant issuers, which only they and their distant debtors have to accept, both of them unknown to me, have some value to me only if I can exchange them, at an acceptable rate, at a local money exchange bureau. They are not ready cash for me. The real backers of any sound local currency tokens are the local providers of goods and services, who have issued these tokens. Their readiness to accept them would also be sufficiently publicized. Acceptance in distant localities, by suppliers unknown to me, would not be good enough for me for most purchases. What value have "tickets" to performances for me when issuers, times of performances, their kinds and their locations are not known to me or too far away from me? Who in the world or in a country can rightly issue liquid claims to all the goods and services of a country or the world? The very concept is absurd. What can I know about the soundness of the issues of the central bank of a country or of the issues of a world bank or European Bank issuing notes? Historical experience rather teaches their unsoundness, at least in the long run. But I can easily become familiar with the soundness of the notes of a local shopping centre. - J.Z., 17.6.01, 26.8.02.
APHORISMS ON THE MONEY PROBLEM, by Ulrich von Beckerath, 1932, in- BANKWISSENSCHAFT, also in PP 587/588: - The question whether one- could utilise non-interest bearing, long-term loan certificates -and mortgage bonds in small denominations, e.g. "Wagemann Money", -"Feder Money", etc., as a means of exchange, could perhaps be put -into the following formula: MONEY IS A MEANS OF TRANSPORT. It- serves to overcome spatial distances. With money one exchanges -values that do already exist in the present. The exchange of -harvested grain for clothing, household goods and hay forks is- done through MONEY. - MONEY is necessarily interest-free. Both- justifications for interest, namely a) difference between future- and present services and b) a just share for the creditor in the- production of the debtor, do not apply to MONEY. - The notes- issued by a note-issuing bank or clearing bank are, by their very -nature, clearing certificates (settlement scrip). As such they -should not remain in circulation as long as possible but, -instead, disappear from it as soon as possible. - To oblige any- issuing centre (Zettelbank, note-issuing bank) to exchange its -clearing certificates at any time for metal, is not only -superfluous but harmful and contradicts the nature of this paper--money as a clearing certificate (or settlement scrip). - The interest rates charged by a note-issuing clearing centre are not- interest but fees. Insofar, a properly conducted issuing centre- operates INTEREST-FREE. Only when any customer of the -note-issuing centre delays the clearing (settlement), does the -bank charge INTEREST FOR LATE PAYMENT. This interest is something -quite different from clearing, although both are CALLED interest- and are ACCOUNTED as interest. (It is more in the nature of a contract fine. J. Z.) - Credit instruments that are FORCED INTO -CIRCULATION, like e.g. interest-free mortgage bonds in small- denominations, must lastly DESTROY credit. They amount to putting- warehouses on wheels and wanting to drive in them. That is- POSSIBLE but the goods storage business is thereby ruined -- although it appears, at first, as if one had solved two problems -with one stroke. It reminds of the famous rifles that were to be- at the same time useful as umbrellas, telescopes, lances and tobacco pipes. But they were somewhat IMPRACTICAL. (Lombard loan -certificates do often represent present goods, in large -quantities, that are kept out of the present market in the -expectation of future price rises. If such certificates are -monetised then, obviously, the present purchasing power is -increased but the present goods offered on the market are not- correspondingly increased. - J. Z. ) - Inflation is impossible -without forcefully equating future services with present ones. -Many do not realize this as yet. - Interest bridges differences- in time. It makes possible the just exchange of FUTURE services- with present ones. Between the present and the future neither- TRANSPORT takes place nor CLEARING. Consequently, to bridge the -present and the future is not a task for a CLEARING INSTITUTE- like a note issuing bank (Zettelbank). - Indeed, a credit -instrument with a properly certified interest claim, does have a- value in the present and can thus be exchanged for other, present- goods. Such a credit instrument (mortgage bond, annuity- certificate) is even the natural means of payment for goods that- exist in the present but are not PRODUCED in the present, e.g., -for REAL ESTATE. For this reason, mortgages are often used as- means of payment in REAL ESTATE PURCHASES. But goods PRODUCED in the present do require scrip as means of payment (notes or -clearing cheques), if the producer wants to consume the- equivalence in the present. If he does not want this but wants to- consume only in the future, then the proper means of payment is, -again, the credit instrument, e.g. the standardised mortgage -bond. - Feder wants to create a means of circulation that at the -same time bridges differences in SPACE and in TIME. That can NOT- be done. (A sound commercial bill does it, to some extent, in a- limited circulation sphere and only for a short period. Moreover, the bill debtor has immediately a corresponding quantity of goods -for sale, payable in banknotes, with which the real bill had been- discounted. - J. Z.) A railway has to overcome e.g. the distance -between Berlin and Hamburg as fast as possible, if it is a GOOD- railway. But if, at the same time, it is to act as a STORAGE facility, too, then it can no longer serve as a means of- TRANSPORT.
APHTONIOS' SCHEME: Various ways of filling it with monetary -freedom proposals.
ARBITRATION SYSTEM FOR WAGE DETERMINATION UNIONS, NATIONAL WAGE CASES, INFLATION, WAGE INCREASES, STRIKES, COLLECTIVE BARGAINING, VALUE PRESERVING CLAUSES: National wage case decisions raising the general wage level can act inflationary.  - You can try to demand money, to steal it or rob it, try to order people like employers to pay it, or to extract if from consumers via increased prices but what you will in effect achieve is no more than people are able or willing to supply. An employer has always the option to dismiss you instead of paying you a raise. If he is not allowed to dismiss you then he might not be far from bankruptcy. The taxpayers can only support so many otherwise bankrupt enterprises for a while. Nor will you be able to force consumers to pay for goods that are overpriced due to your wage demands. If it were really possible to arbitrarily increase wages by more or less judicial decisions of arbitration courts, then we should demand of them that they each entitle us to demand a million dollars every week as our rightful wage, to maintain us in style. Why be satisfied with anything less. And if they cannot provide us with a wage increase of one million then they, by their decision, cannot even provide us, on their own, with a wage increase of a single cent. - However, we tend to overlook this reality under a system of monetary despotism, which distorts not only our paper value standard and monopoly means of exchange, but also our vision or understanding of it. The arbitration system can "allocate" wage increases only when they are paid in additional forced currency, directly or indirectly. Their purchasing power would soon tend to be only the same as the former wage - and it might even amount to less. We might also lose our job in the process and the employer might be driven into bankruptcy, because the monetary despotism does not supply all employers evenly and all potential customers for him with sufficient of its scarce monopoly money, not even in times of galloping inflations, when prices and wages might race far ahead of the fast inflation rate. Usually the arbitration system's  wage increase decisions and the "wage gains" through anti-industrial and coercive union actions are only responses to an inflation that has already increased many or all prices and has left wages behind, at their formerly fixed nominal rates. Then, while no more than an adaptation to the past inflation is achieved and no indemnification is offered for the inflationary losses in the meantime, the unionists and arbitration court supporters want to be praised for the merely nominal wage increases that supposedly were due only through their actions. If they were getting out of the way and individuals, in their wage contracts, could propose and contract value preserving clauses, then their purchasing power might thus not only be preserved but even be increased, corresponding to their own contributions to increased productivity. Union and arbitration court monopoly "actions" prevent this kind of self-help and self-promotion. They also tend to prevent the spread of productive cooperative enterprises, with no wage problem and personal subordination that is not warranted by a job. - J. Z., 24.3.97.
ARMAMENTS, ARMS RACES & ALL KINDS OF MILITARY SPENDING DO INEVITABLY LEAD TO INFLATION: A popular view. It is true only if all such spending is "financed" by the government's printing presses for forced and exclusive currency. Without legal tender and the issue monopoly, it could not take place. Attempts to finance it then by additional paper money issues would depreciate this paper - but not sound value reckoning, and lead to more and more people totally rejecting government paper money issues. Under financial freedom they would then also effectively refuse to pay taxes to such a government and could not be forced to subcribe loans to such a government. Under monetary and financial despotism this kind of war promoting exploitation can, indeed, take place. This is one more good reason to abolish this despotism. - Before the Prussian wars of 1864, 1866 & 1871 Prussia was also well armed but it did not inflate its currency and could not because it had not given it legal tender, not even for the financing of these wars. But it did introduce legal tender for the conduct of WW I and maintained it, most of the time (a short period of the Rentenmark of 1923/24 excepted, I do not know exactly when that was ended ), for WW II and the "liberating" Allies maintained this monetary despotism for the old RM and their occupation marks, to June 1948 and then tolerated it for the new DM ever since, i.e., a totalitarian and communist money system even for supposedly anti-communist States that were sometimes in armed conflicts with communist States.  - J. Z., 24.3.97.
ASSET CURRENCIES OR TURNOVER-CREDIT CURRENCIES? Some notes by J.Z. on an exchange between Don Werkheiser and Theo M, March 23, 1990. Houses and note issues upon them: Assume the asset of a house, estimated to be worth $ 180,000 and notes issued upon that asset, valued, coming nominally, only $ 120,000. - Seemingly, and in the eyes of some, these notes are then "well covered". In reality, they are only small and standardised mortgage bonds that do not even pay interest. Only the house owner would be morally obliged to accept them - if and when he wanted to sell the house. Others would accept them from him only if they are potential investors or buyers of that house. They would have to be tempted by the offer of interest.  Why should any shop owners or businesses accept such notes from such an issuer, if they are not interested in buying his house or investing in claims to it and no interest is paid and if there are no ready acceptors for such notes? What could they do with them now? Who would be contractually obliged to accept them from him? Why should they act as brokers for such mortgage bonds? There is a difference between mortgages and sound bills of exchange and between mortgage letters (or bonds) and banknotes based upon real bills. The difference lies in the securities offered, the value of a house vs. daily wanted consumer goods and also in the time factor that is involved. For the house-currency there is only a very limited readiness to accept (in case of the sale of the house) by the single issuer. The shop-foundation and short-term debt-foundation of banknotes, on the other hand, is offered by many acceptors and they offer a great variety of daily wanted goods and services. They offer something useful to the note holders, immediately or soon, a considerable and sufficient choice. The house owner would hardly want to sell his house brick by brick etc., after wrecking it first,  nor would he find many buyers for such a limited offer - or takers for his thus "secured" mortgage bonds. What an honest house owner, issuing notes "covered" by the value of his house, should explicitly declare on his "banknotes" is something like the following: "I want you to give me the values I want now, for these, my notes. But I am not willing to give you, with these notes, the values you want and might be able to get from me now - apart from the value of the house, which I have not even placed on the market as being for sale. All I offer you with my "house notes" are small mortgages secured by the market value of my house. I do not even offer to accept my notes e.g. in rent-payments to me, in case I were to let this house to you, which I do not intend to do. I do not offer you any interest payment for the period that will pass until you manage to fob of these mortgage letters upon other victims with capital, goods, services or labour that they do want to thus invest. I merely rely on your good faith, trust and confidence, for which I can offer no other basis than that the total present market value of my house, which is not ready for sale now, is larger than the total number of notes that I have issued upon this value. So, they are not altogether value-less but more than "covered" by their visible and properly estimated "security" and "cover". - If  I were to issue notes for the total value of my house and if I were to set a date for its sales and if you had managed to accumulate all these notes in your hands and would want to buy my house, then I would be obliged to hand over the title to it, in return for you handing over to me all these notes. But, since I haven't made this sales offer, I do entirely rely on your unfounded trust and confidence that these notes do have their full nominal and free market value now, equivalent to the sales price of my house, if and when I would sell it. I also trust that you will be ingenious enough to fob them off unto others, also believing in the possibility of "asset currencies", thus passing on the problems of immediate redemption for these notes to them. - I cannot say why I prefer to call these notes my "banknotes", fully covered by the value of my house, instead of mortgage bonds or mortgage letters." - Money in the own eyes is not automatically money in the eyes of others, no matter how confident the issuer is or the person who assumes that he is a potential issuer for banknotes. One should try to think through every issue and reflux, every cover and redemption and security, step by step, taking all the liberties and rights involved in consideration, all the special and general interests of all the parties involved. Then one will find that it is not just a matter of a "unilateral issue" into "circulation", a "single convenience action", as Don Werkheiser called it, but that a "mutual convenience action" must be involved, in which potential acceptors would only accept what they want to accept and to the extent that they do want it and only at times that they do. That means, in practice, that a free and informed market, made up of all the potential acceptors for such notes, would largely refuse them and the few who would accept them would greatly discount them, so much so, that a potential buyer of the house could very cheaply buy up these claims and with them, if they came, nominally, to the value of the house, could make a for him very cheap bid for that house. The issuer, if he had persisted in issuing these mortgages in spite of their great discount, would have got only whatever values he would have been able to buy with them, at their discounted rate. - J.Z., 17.9.02.
ASSET CURRENCIES: Asset currencies have been proposed and tried -out again and again, largely without awareness of their- historical precedents and failures and of the inevitability of -their failures. See: LAND BANKS, REAL ESTATE AS COVER FOR- CURRENCIES, BONDS & GOVERNMENT SECURITIES AS COVER FOR CURRENCIES. The issue principles and practices of financial -freedom are different from the issue principles and practices of  monetary freedom. They should not be mixed up. In both cases one- deals with valuable properties. In both cases the transactions -should be voluntary. In both cases free market rating should -apply and in both cases value preserving clauses or value -standards should be applied and expressed in them and in prices, wages, rents etc. Ready for sale consumer -goods and services, through suitable claims upon them, could be used for subscriptions to capital securities, rather than the latter being wrongly used as a the basis of currency issues. Capital securities can and should be issued upon capital assets. Notes for apples and meat, mortgages for houses, shares for factories. Security issues can be -sold for cash or clearing certificates. Currencies or clearing certificates can be used to buy capital securities. But this limited and in each case to be voluntarily agreed upon exchange still does not make them -identical, in the same market, among the same people, which each a full substitute for the other, immediately, among all people. Capital securities have their special markets and their separate circles of sellers and buyers. Securities represent rather land, bricks & timber and -steel, hardware - machinery, resources or the expectation of providing them and of benefiting from them in the future.- Currencies, on the other hand, represent goods, services and- labour for immediate use and consumption and already produced- & sold at least to wholesalers, on the road to retailers or already -waiting for sales there. Next year's birthday or x-mas isn't -today's birthday or x-mas. One should keep the two apart. Time- differences do matter as you will notice when you are separated -from your beloved ones for 3 months or 3 years. Future values are not -present values. Present values are not future values, although -the two are related and can be somewhat interchanged, at the -prices and costs involved. Consumers who want a currency for -today's and next week's purchases, do not want, instead, a security -for a future capital value, although sometimes, and to some -extent, they want such values, too. In some heads a real block exists against such distinctions. They imagine that only useless -hair splitting is involved. It would help if the experiences of a -number of sound banks of issue for turnover-credit banknotes were -put side by side with banks of issues that issued bank bonds, -mortgage letters and shares and if these were also compared with -the experiences of banks that tried to turn assets like land,- private shares, government loan certificates, into currency, -immediately useful for consumer shopping, although they would be- given no exclusive currency status and legal tender power. A- fourth table might indicate the experience with asset currencies,- where the assets became irrelevant because the paper supposedly backed by them were in reality only accepted because they were -given exclusive currency status and legal tender power (forced -acceptance combined with forced value. - Then the different -recorded experiences might speak for themselves and suffice to -convince. - J. Z., n.d., 30.4.97.
ASSET CURRENCIES: Assets have no real currency - except e.g.-, among brokers, financiers and real estate agencies - and those- who happen to be in the market for some assets, for a while and to some extent, with a fraction of their earnings. -- J. Z., 23.4.97.
ASSET CURRENCIES: Just because the laws have allowed them or even prescribed them in some instances, and this, sometimes, under the misnomer of "free banking", does not make them  right, honest or economically sound and efficient or competitive under conditions of full monetary freedom. Modern views on this are nothing better than a revival of the old "land bank" schemes, by which the issuers attempted to foist fractions of mortgages upon the population as if they were and could be a sound currency. This particular fallacy was often refuted in the literature. But the general asset currency notion is still very much alive and all too widely practised by central banks. They even accept government "insecurities", or investments in tax slaves, as assets. When such issues are monopoly issues then the issuers can get away with them for all too long - for people often accept bad forms of money if that is the only one which is made available to them or permissible for them. But under monetary freedom no one would be obliged to give any real purchasing power to any such currencies, by accepting them for his goods, services and labour. They would, as currency, have no more status and ready acceptance, far less par acceptance, than have mortgages, bonds, shares and other securities have in most daily exchanges for most people. I.e., they would not be currencies. They would be useful only on the capital market, which embraces only a fraction of all buyers and a fraction of all their purchases and sales. That is the main reason why they cannot be sound currencies in local circulation. Their circulation sphere and volume is all too limited. They are not tickets or vouchers to daily wanted and ready for sale consumer goods and services. That is an essential requirement even for gold coins. - J. Z., 25.12.88, 16.5.97.
ASSET CURRENCIES: The only assets which asset currencies could- effectively move are capital assets and capital securities. E.g., -mortgage letters can move large mortgages, which otherwise would- not be as easily transferable. But asset currencies do not -represent and cannot, therefore, easily transfer ready for sale- goods, services and labour. These require currencies based upon- them. - Only when all other currencies are effectively outlawed -can any monopolistic asset currency somewhat replace them, in- spite of its unsound foundation for currency purposes. Rather -than doing without monetary exchanges altogether, people would -then even accept an asset currency - up to a fraction of all the -capital assets, without responding to the asset currency issue -with inflated price and wage demands. (These price and wage- increases would not indicate a dearness of goods and labour but a depreciation of the forced and exclusive "asset currency" imposed -upon them. - J. Z., 6.4.94, 24.4.97.
ASSET CURRENCIES: To try to turn capital assets like raw- materials, premises, and machinery or the capital securities that -represent them, directly into currency, supposedly useful for the- current purchase of consumer goods, is a great mistake because at -the same time no equivalent consumer goods and services are -provided by the issuer to redeem them with. The holder of the -certificates could only force the issuer into liquidation and- then claim his share in raw materials, premises and machinery - -but few would want to acquire them. On the other hand, if there -is someone prepared for a take-over bid for the business of the -issuer, then such issue attempts would be very much welcomed by -him, for this scrip would rapidly depreciate in a free market and- could thus be bought up very cheaply and used in the take-over -bid. A few such experiences, well publicised, will serve as a- deterrent.  But that does not mean that there should not be full -freedom to issue financial securities, too, which quite clearly -represent capital assets and are bought up and traded by people -interested in capital investments. To reduce this kind of mix up -of capital securities with turnover bills and notes, the issue -departments for both should be as far as possible kept separated because- for people have fallen for the errors of "asset currencies" again- and again and they have often been embodied in banking laws.
ASSET CURRENCY: An unsound turnover currency system is not- sufficiently remedied by there existing, in case of its -bankruptcy, some securities for the benefit of its creditors. Its- function is not to provide such an ultimate guaranty or backing- for its currency but, rather, to provide for its currency a ready -backing right now, especially by short term securities and by the- ready for sale goods, services and labour which the issuers of -the short term securities have to offer to the holders of the -banknotes of the bank. Only such turn-over function and security- and guaranty and convertibility arrangement or cover can keep a- currency sound and current, by exerting a sufficient daily demand -for bank notes, to keep them at par with their nominal value. (A sound reflux.) If- the issuing banks do not provide such an instant cover, security -and convertibility and no one is instantly obliged to accept all -the currency issued by the bank, i.e., if there is no instant- demand for it but only the distant redemption via the capital securities, then such a currency must inevitably depreciate. --J . Z., 6.4.93, 27.5.97.
ASSET CURRENCY: Just because the law has permitted or even -prescribed it in some or many instances does not make it rightful- or economically sound and a desirable and predictable practice -under monetary freedom. "Modern" views on this are often merely a- revival of the ancient "land-bank" and "assignat" fallacies that -have been refuted by their practice and several scientific -studies. - J. Z., 8.4.97.
ASSET CURRENCY: See: APHORISMS ON THE MONEY PROBLEM.
ATCOPS : Roger Young, in TC144p43 reports that ATCOPS is alive -and well and in its 20th year.
ATKINSON, EDWARD, Pamphlet, title unknown, referred to by TANDY,- Voluntary Socialism, p. 103, stated on a legal tender act : "...-an act by which bad money may be forced into use so as to drive -good money out of circulation." - All correct versions of- Gresham's Law, with their author, title and date of publication,- preferably also page reference, are wanted by LMP, towards a -monograph on this subject. - J. Z., 12.4.97.
AUDITOR, Periodical published by WESTRUP, ALFRED B., for free -banking. At least 2 issues appeared. I have not seen any yet. -- J. Z., 28.4.97.
AUSTRALIAN MADE, BUY AUSTRALIAN! - If you want to sell Australian- goods, services and labour, then monetise them freely and thus -spend their value even in advance, before they are sold for this- kind of privately or cooperatively issued competing currency. - -Australian made goods, if up to world standards and at world- prices, are good enough for such currency issues, too, for international trading. If they- were not then there would be something wrong with these -recommendations. Why should Australians be foolish enough to buy- Australian goods and services and labour, if they were of- inferior quality or offered only at excess prices? - J. Z., -6.10.93, 1.5.97. - If you spend Australian paper money overseas then there is only one rational use for them, namely, to use them in payment for Australian exports. Competing Australian clearing certificates that are redeemable only in Australian goods and services, freely market rated, refusable and obligatory only for their issuers, also time-limited, would be more obviously balancing imports with exports. See the writings of Prof. Edgard Milhaud and of Ulrich von Beckerath on this subject. - J. Z.,
AUSTRALIAN MADE, BUY AUSTRALIAN: Permit the owners of all- "Australian Made" goods to issue goods-warrants and purchasing -certificates as well as clearing certificates based upon combined- goods and service offers, for goods and services that are in daily -demand by consumers, and allow wages, salaries and other debts to- be paid in them, if the acceptance is voluntary and then, to the- extent that such alternative monies will be readily accepted, the -purchasers will buy goods made in Australia with money freely -made and freely valued, accepted and spent in Australia. To the extent that such- private vouchers, in money denominations, can be freely issued,- they will stream back with much greater certainty to the issuer -and his debtors, for their goods and services and labour, than -any rare metal coins or legal tender money spent by them. They -will be busy and employed and achieve sales to the extent that- they can issue their "tickets" and get them readily accepted.- Moreover, they are morally entitled to thus offer their own -property in a monetised form. No government owns them and their -property and stocks and services and labour for sale. Thus no -government is morally authorised to issue assignments upon their -property, for which, in the act of issue, it has to give nothing- in return but a scrap of printed paper and the option to use this -in payment of tax tributes which it extorts from its tax slaves. -Government cannot provide such a soundly based money. It can only -requisition, with its paper money, the real redemption fund for -any currency in any country, one that belongs to the producers- and traders themselves: the ready for sale goods, services and -labour. - The Australian nationalists should seriously consider -how free and independent they are when they are only allowed to buy their goods, services and labour provided by Australians with -the monopolised and forced paper money by a single privileged and -legalized despotic institution in Australia, its central bank,- called the Reserve Bank. - Why should all Australians, for all- their economic activities, have to depend upon its good will and- abilities - if any - and this in spite of all the evidence that- speaks against any central bank? - When and to the extent that- Australians can issue their own competing and optional -currencies, they will, inevitably, "buy Australian!" - The same applies for competitively issued international clearing- certificates that can only be used, after imports have been paid- for with them, to purchase Australian export goods. - With government paper money, often under a controlled exchange rate,- and with foreign central banks mad enough to hoard such notes, as "-foreign exchange reserves" or foreign private citizens being -inclined to hoard such notes, because they are better than the -still more inflated paper currency of the own government, the -reflux of such paper money as purchasing certificates for- Australian goods, is much less certain. - To speed up the reflux- and make it more regular, all internal and external clearing- certificates and goods and service-warrants should also be given- a limited life span only, for 3 months to 12 months at most, thus -appealing to the self-interest of the holders to redeem them in- Australian goods, services and labour within that period. -Alas, -this kind of "buy Australian" with competing Australian monies,- is not yet popular. - Help to make it so. - J. Z., 5.10.93,- 24.4.97.
AUSTRALIAN OWNED? Because something is "Australian owned" or "produced in Australia" or "bought in Australia", following the command: "Buy Australian!" - does not mean that it is cheaper or better than other businesses or goods or that Australia, as a whole, benefits more from such enterprises, purchases and sales than it does from others. If, instead of buying from an Australian owned firm, you buy from a foreign owned firm in Australia or one overseas, then you do, thereby, enable that foreign firm, whether situated in Australia or overseas, to buy the corresponding values from Australia. And these values, sold to foreigners, and paid with by the return of the Australian paper currency, would then be proudly claimed as Australian export achievements! (They are objectively achievements, like any other sales, but in contradiction to the insistence upon buying only Australian goods.) - If the owners of Australian enterprises were not free to sell them to foreigners, i.e., if most of their potential buyers were excluded, then they would thus be robbed of part of their property rights. Each foreign owned firm means: This firm has not been given away, stolen or occupied but SOLD by an Australian, who managed to get a higher price for it than other Australians were willing to pay him. Should his property rights be overlooked? Should he be penalised, taxed or should the buyer be boycotted? His property belonged to him, not to the nation. Those Australians, who did not buy it, did not offer more for it than a foreigner or foreign company did, have no right to complain. Every transaction that is free and voluntary, i.e., as a rule for mutual benefit (apart from some errors or misjudgements or frauds on one side or the other), is right, thereby, and the nationality of the seller or buyer, or their race or religion or sex or age or ideology should have nothing to do with their trade or exchange. Nationalism, statism and borders should be entirely excluded from economic and moral considerations, as irrelevant, if not outright, wrong, harmful and anti-economic. If any Australians can make a better deal with foreigners than with other Australians, let them. The total of all earned economic satisfactions in Australia would be increased thereby - even while the number of dissatisfactions based upon ignorance, prejudices and myths would also be increased.  Mercantilism and State Socialism were and are wrongful and harmful utopias. Only those individuals who voluntarily subscribed to them should have to suffer under them. - PIOT, J. Z., 22.5.97, 15.9.02.
AUSTRIAN ECONOMICS ON MONEY: Austrian economists often asserted -that the interventionism with currencies consisting in legally -establishing an exclusive and forced currency would not matter -at all if that were only done for gold coins and gold- certificates. They could not do any harm, or so they believed, said and wrote. They could not be -arbitrarily multiplied and thus would be the only exchange media- and value standards that should be permissible and that should -also be legally enforced as exclusive exchange media and value- standards. They did this under the assumptions that prices and- wages would be infinitely, fast enough and completely enough adaptable to any changes that might occur in the quantities of- gold available for monetary transactions or to changes in the -monetary demands for gold. - This belief is dogmatic for them, fixed idea.- They do not bother to check it against the facts. They ignored -the numerous reports of currency shortages and currency famines.- They ignored the ten-thousands of reported cases of the issue of emergency- ,token- and truck-money, hundreds of years after the invention of rare metal coins and gold and silver- certificates and even the millions of incidents in which people in their exchanges were being -reduced to primitive barter transactions - although, somewhere, -the same quantities of gold and silver did still exist. Nor did -they consider the different effects which falling price levels- have upon all sellers & buyers, to the extent that the buyers can -postpone purchases, as opposed to fallen prices, e.g. due to some -technical innovations. (Even here some buyer restraint results,- e.g. in the purchase of computer hardware, in the expectation of- even further price falls in spite of continued improvements in -the hardware.) They do overlook the stickiness of prices and- wages. They do overlook the numerous contracts which nominally- express debts over a time period and which debtors would find it -hard to fulfil with severely deflated currencies, which they -would find it much harder to earn, in the same nominal quantities,- while the prices for their goods, services and labour have been- deflated. - If gold and silver were so abundant and so useful,- there would also exist the possibility to provide them in weight- units for the black market and have black market transactions -finally take over the whole market. But that hasn't taken place,- either. By now many people may never even have seen a gold coin. -Then there is the fact of trade having existed even among- Australian Aborigines, across the continent of Australia. However, -gold coins or nuggets or dust did not become currency among them,- either. The distribution of gold standard gold coins and- certificates was rather limited to a few of the more developed- countries. In others they were hardly ever seen, not even coined- out in mini-weights, for very depressed monetary prices. Nor do -most Austrian School economists seem to be aware as yet, that -clearing underlies all money transactions and that pure clearing -transactions do not require any gold coins or gold certificates- at all to become possible and wide-spread, even though they might -prefer to use gold weights as their value units. Blinded by their dogma on "-convertibility by the issuer, upon demand of the gold certificate holder", they remained blind to the -possibilities and functioning of the real bills doctrine or -banking principle and their functioning even without- metal convertibility, even after their banks were declared failed and- bankrupt, because they could not longer redeem their notes fully -in gold. The clearing function involved in the real bills- doctrine or banking principle, continued to function for a while, -because the debtors of the bank exerted a strong demand for the -notes, which enabled them to pay their debts to the banks. - The -minds of the Austrians were so focused on the metal convertibility or -non-convertibility of notes only, that most of them and -probably some of them still, overlooked the much greater -significance of legal tender - and the harmlessness and- self-limitation of banknotes not covered in gold but soundly-I ssued only in turnover credit transactions that are soon- self-liquidating. How often have they been aware and to what- extent are they aware now that without legal tender and the money -issue monopoly one cannot inflate a currency in a market that- enjoys monetary freedom and uses that freedom in freely competing- exchange media, clearing avenues and freely chosen and competing- value standards?  Held back by their limited money model, as they- are by their limited government model and limited defence model, -they have not extended their thinking to the full range of -monetary freedom, of free societal options and of libertarian and- anarchistic defence and war prevention possibilities. Anyone who- thinks that he already knows enough cannot be taught any more, as -long as this illusion persists in his or her head. - J. Z.,-26.1.94, 1.5.97.
AUTHORITY, AUTHORITARIANISM IN MONEY, MONETARY DESPOTISM, CENTRAL -BANKING, EXCLUSIVE & FORCED CURRENCY, PROUDHON : The fundamental,- decisive idea of this Revolution is it not this: NO MORE -AUTHORITY, neither in the Church, nor in the State, nor in land,- nor in money? - Proudhon, General Idea of Revolution in the 19th- Century. - Alas, in his practical proposal he always spoke only- of THE Bank of the People, not of banks of the people. - Maybe he spoke and wrote in this way because he had only a particular model for mutual banking in mind, the one for which his drafted his bank statutes. It would have been quite inconsistent for him as an anarchists to demand a monopoly for his Bank of the People. Alas, not all of his papers and correspondence seem to have been published as yet. That would help to settle this question. - J. Z.,-15.4.97.
AUTOMATION, ROBOTS & UNEMPLOYMENT: Many people believe that there is a link between automation, robots and unemployment, that people would be replaced from their jobs by machines, robots and automation and could not find new jobs. - "Japan, for example, has about 400,000 robots installed and a declared unemployment rate of 2 1/2 %, while Australia has about 1800 robots and a much higher unemployment rate. - The Australian Robot Association estimates that 118 robots were installed in this country last year. This number is too small to have had any significant impact upon unemployment. - In the past two years, IBM reduced its workforce by 90,000 jobs, Boeing by 28,000 jobs, and Digital Equipment Corp by 27,700 jobs. But few, if any of these jobs, were lost because employees were replaced by machines. Rather, according to a recent survey by Ms Trudy Bell, published in the engineering journal IEEE Spectrum, the job losses were due to factors such as the dwindling market for mainframes, diminished military orders brought about by the end of the Cold War, and reduced purchasing because of the global recession." - Michael Kassler, Survey explodes myth of the link to jobless queue, THE AUSTRALIAN, 5.10.93.
BALANCING THE ECONOMY THROUGH MONETARY CONTROLS OR MANIPULATION: The good intention is to keep goods production and service offers in balance with the money issued. Some attempt to adapt the money circulation to the increased goods and service offers and others want to adapt productivity to the currency they make available. Most think only in terms of a centrally managed, exclusive and forced currency and would not allow free and competitive or cooperative issue and reflux arrangements to keep the goods and service side automatically in balance with the money side, through market forces, i.e., free enterprise, free trading, free contracts, free acceptance or  refusals of currencies and free pricing for them, under full publicity for all details of issues and reflux arrangements. Under monetary despotism all these balancing attempts never succeed fully and for long and they cannot do so because almost all the automatically regulating indicators are stopped and no one is fully informed of what is happening and thus many false decisions result. Under monetary despotism the exchanges tend to be limited to those this despotism permits to occur and this often only under great difficulties, too. Despotic central banking and its forced paper standard, maintained by attempted quantity controls ("open market" sales or purchases of securities by the issuer, discount or interest rate policies, credit restrictions or grant of credits and increased spending via the note printing presses) can never sufficiently supply all the exchange media needed, everywhere and by everyone, nor keep those supplied sufficiently stable for long. It is an unbalanced and unbalancing system. It is so mad that in some instances it has led to "valorisation (i.e., the burning, plowing under or other destruction of crops) in order to artificially keep their prices up because, under monetary despotism and all too often, goods, labour and services cannot be sold at free market prices and the prices attainable under that despotic system might sometimes not even cover the costs, either, because they are too much deflated or, sometimes even because they are already inflated. (I have almost absolutely stopped getting hair cuts by a barber, many years ago, ever since their charges went above $ 1. That is not necessarily a rational response but it is an economic response.) That price controls and subsidies have sometimes misled producers to produce more, at artificially high prices, than the market really wanted at these prices, does, naturally, not help, either. Nor can stockpiling of such artificial surpluses, by governments, at the expense of the taxpayers, help in the long run. The economic indicators should never be artificially and coercively falsified - if equilibrium is to be maintained as much as is possible in human affairs. Neither the goods side nor the money side is to be artificially manipulated if trouble is to be avoided. - J. Z., 24.3.97, 30.8.02.
BANK CHARTERS, MONETARY DESPOTISM, RIGHT TO BANKING: Their (-bank charters ) effect is to give to individuals the advantage of- two legal natures - one favorable for making contracts, the other -favorable for avoiding the responsibility of them, when made. (-Spooner, Constitutional Law 21.) Spooner argues that all banking -charters are unconstitutional for they violate the natural right -of all men to make free contracts. Moreover, the legislature, in- granting special favors to some and none to others, abuses its -powers. - Charles Chiveley, introduction to Spooner, I/27.
BANK FAILURES: Those, who are all too readily and undiscriminately- prepared to accuse past and present banks of bank failures, have -usually not distinguished e.g. between 1.) Failure of the- issuing bank to redeem its notes upon demand fully and to their- nominal value in rare metals, or, nowadays, in legal tender money- or even in government insecurities.  2.) Failure to cover notes- issued and current deposits granted, by means of short term and- self-liquidating securities that represent goods produced and- already sold and on the road to consumers, 3.) Failure to provide -sufficient clearing facilities or debt foundation for all notes -to keep up a strong demand for them, that could keep them at par- until they are withdrawn in the final settlement or payment. 4.)- Failure via dishonesty, corruption or embezzlement among the -bank's officers. 5.) Failure due to malinvestments, large ones,- in unprofitable enterprises, so large in relation to the whole -bank business, that this single failure could send it broke. The- lending risk was then not sufficiently distributed, in accordance with insurance principles. 6.) Failure -through lending short term or medium term funds on long terms,- instead of only on the terms they were deposited on. 7.) Failure in- such cases to make contracts that would allow them such -investments but also allow them to postpone repayments until they -would be liquid again and in the meantime only offer to pay-out-s in bank-bonds, transferable ones, that would cover the remaining- outstanding loans. 8.) There are also various other forms , e.g. -"option clause" notes that would cover the risk of any temporary -illiquidity in normal business, when debt and credit terms and amounts do not exactly enough equal each other. 9) Failure of- other banks than the central banks of issue due to the -inflationary, deflationary or stagflationary policies of a -central banks. 10) Failure to sign up a credit insurance policy -for the ordinary risks of lending or undertaking sufficient- self-insurance precautions, alone or in association with other -banks. - J. Z., 11.4.97. - Runs on banks could have been prevented or greatly reduced in many ways. For instance, by starting a list for those who wanted to withdraw their money, in which those on the top of the list would have the top claim to monies received in payment of debts to the bank. The banks could have offered limits on the amounts of cash withdrawable immediately, without notice. Or it could have insisted on having been given sufficient notice for all withdrawals. (In the meantime, it could have accumulated the funds from repayments and by reducing further lending.) There is not fixed limit for the kinds of contractual safety clauses that could have been agreed upon. To promise something to all that could never be fulfilled if all suddenly claimed what was promised to them, was always wrong and bad business practice, even though, in normal times, they could get away with this for considerable periods. Generally speaking, banks and bankers do mostly not really comprehend the sound business of banking, or the "banking principle". Like politicians, they do engage in many wrongful and harmful practices, and, due to insufficient competition from alternative political and banking systems, they go on and on with their wrongful and harmful practices, all in accordance with all too widely spread popular prejudices, supported by supposed academic experts. Can one teach them to proceed morally and rationally in spheres where they imagine themselves to be experts? You try it! - J. Z., 5.9.02.
BANK ROBBERIES & OTHER CASH ROBBERIES: There would be less cash robberies under free banking because quantities of local cash that have thus gone astray are much harder to dispose of and at the same time much easier to trace than is, e.g., an exclusive legal tender paper currency or rare metal coin currency, that can be spent all over a large country. The same applies to forgery attempts. Moreover, freely competing currencies are likely to have only a short circulation period. Thus "hot money" cannot simply be hidden for a long period and then spent relatively safely. It would no longer be valid currency by them. If, after a robbery has occurred and the robbers got away, any strangers or locals were suddenly to spend large amounts of the stolen local currency, even if the numbers of the stolen notes were not known, they would immediately become suspects. - J. Z., 21.3.86, 16.5.97.
BANKERS & MONETARY FREEDOM OR FREE BANKING: You can no longer- bank on bankers. They will neither give you the highest interest -nor credit when you need it most, nor can they protect you from inflation or from credit restrictions and deflations, nor -from direct tax raids by governments, nor from the prying eyes of bureaucrats. They have let themselves be deprived of the business- of note issue and have let the capital market become -over-regulated. They know by now almost nothing about sound note -issue techniques nor do they show any interest in them. They help -the government to "invest" part of your savings in governmental- "insecurities", which you or your children and grandchildren then have the honour, -later on, to repay in parts, out of your taxes, or  in depreciated -currency. They have become mere agents for the government's -despotic monetary policy. You can rely on them only in one respect: They -will firmly resist, together with the government, all your- attempts to go into competition with them, opening competitive -and note-issuing banks and clearing centres, practising sound -free banking principles and all aspects of financial freedom. - J. Z., 12.7.78, -24.4.97, 8.9.02.
BANKERS OF THE OLD TYPE TO BE MOSTLY EXCLUDED FROM FREE BANKING & LAWYERS & POLITICIANS AS WELL: Their remaining privileges and the  mystique that surrounds banking still, in all too many heads, including those of most bankers and central bankers and economists, has allowed some or even many ignorant, stupid, prejudiced, careless and irresponsible bankers to get away with all too much, at other people's expense, while continuing to enjoy prestige, high earnings and high retirement benefits, no matter how many people they harmed or wronged. - Some people got even so disgusted with the false notions that most bankers entertain on bank note issues that they proposed that future note issuing centres should explicitly exclude anyone who had previously occupied any executive position in the banking world, unless they could prove that they were among the few exceptions in this business. The same might be said about lawyers and many of the brokers of our times. - That politicians should be totally excluded from this business seem self-evident, at least to me. No kind of confidence trickster, demagogue or power addict is suitable for it, while he persists in this kind of career and at least until he has been completely rehabilitated, as e .g., Auberon Herbert was. - I do know that there are SOME honest lawyers around - but what do they know about monetary freedom principles and practices and what opposition have they ever shown to monetary despotism? - If there are such exceptional people among them then they should not be kept out. - The free banking business, like the computing business, should be largely left to its fans, not to its enemies or disinterested, ignorant or prejudices people or those with a looter mentality. Luckily, the ones who are already in the business of providing consumer goods and services are also, through their local associations, the most suitable among all the potential issuers under monetary freedom and the ones who, apart from the unemployed, have the greatest possible interest in gaining and enjoying the benefits of monetary freedom. They would not need any politicians or lawyers- except in defence against the oppressive actions of other politicians and lawyers.  - J. Z., 15.5.97.
BANKERS, CREDIT & MORAL CHARACTER: Bankers perform the function- of the commercial virtues by demonstrating and advancing the -pecuniary value of a good moral character. - Henry Meulen, THE -INDIVIDUALIST, 10/75. - With their demand for securities or -guarantors for loans, governmental guarantees and deposit -insurance, bankers have either betted only on a sure thing or- have become so careless to lend even to despotic foreign governments, not only some wasteful and inefficient large private corporations. Their own government would not allow them to fail, regardless of the huge number of bad debts they managed to "expertly" acquire. They do no- longer have to be good judges of business opportunities or of good- moral character. A successful fraud was a often a better investment for -them, at least temporarily, even if, finally, he cheated the bank itself. Personal loans have -become only a very small fraction of the total loan accounts. In judging their security the assessors of personal loan- companies were, for many decades and probably still, much more competent. Bankers also refused the mini-development loans now -becoming popular in underdeveloped countries, although they have- a very low risk. The student loans, while self-administered, had- also a better chance of being repaid than most bank loans had and- have. - The number of bankers who really understood the note -issue business and who conducted their deposit and savings -accounts quite honestly has always been rather small. They were -mostly more gamblers and high risk taking speculators than sound- investors, at the expense of their note holders, depositors - or -the taxpayers. - The insistence of bankers on securities for- loans has been satirised by the remark: "Bankers lend money only -to those who can prove that they do not need it". - Moreover, the -fact that a special insurance is required for cashiers does also -seem to indicate that those who employ them are not good in- assessing their moral characters, either. - And how many bankers -do you know who have anything sensible to say on inflation,- deflation, stagflation, legal tender, the money monopoly,- devaluation or re-valuation? - Mostly the good reputation of bankers is as unearned as that of politicians is. - J. Z., 18. 4.-97.
BANKING PRINCIPLE: For me it is hard to comprehend how long two -(or more) different scientific schools of thought can co-exist, -side by side, without their differences becoming settled, or,- worse still, how representatives of especially the ruling school- of thought can simply ignore the facts and arguments advanced by- their critics, as the currency school did, largely, versus the- banking school and as is still being done today by various groups of "gold bugs" or "100% dollars". - Admittedly, much of the thinking of the free banking -school was flawed, too. E.g., many of its members did, unnecessarily and without- sufficient justification, adopt the obligation for rare metal convertibility for the issuer, although the banking principle or the real bills- doctrine indicated already the real cover involved as the only- cover required. - It is often not just one or two different views- that are mostly or habitually ignored but sometimes hundreds, if- not thousands. E.g., there are hundreds of different crisis -theories and types of socialism. Nevertheless, most write on- crises and socialism as if only their own favourite example of -them did exist  and were possible or worth talking and writing- about. How often have primitive notions on trust or confidence in currencies, as one of their basic requirements, been- thoughtlessly repeated, without mentioning the reflux and clearing foundation that is involved in short-term turnover -loans, which do not have to be covered by gold stocks at all but -are, like all debts and credits, clearable. There remain so many -unsettled questions among freedom lovers, e.g. limited- governments vs. anarchism, territorialism vs. exterritorialism, -abortion vs. right to life, mercenary defence vs. militia- defence, nuclear weapons strength and deterrence, vs. nuclear -weakness and all the possible failures of nuclear deterrence. The -money, currency, credit, clearing and value standard discussion -is full of arguments still unsettled by libertarians and- anarchists.  - J. Z., 31.7.82, 24.4.97. - It is high time to tackle all these differences of opinion fully and systematically and draw their balance sheets. -  Our very survival may depend upon it. - J. Z., 8.9.02.
BANKNOTES AS "CUT UP" REAL OR SOUND COMMERCIAL BILLS FOR GOODS ALREADY -PRODUCED & SOLD & ON THEIR ROAD TO THE CONSUMERS: Just -because SOME paper claims can in bill discounting be exchanged -into bills or banknotes suitable for temporary and local -circulation - and a short term later be withdrawn from -circulation, in payment for the real bills they were issued upon, -and then, preferably cancelled, rather than issued again in new- transactions (thus facilitating the control of the circulation,- issues and their reflux, e.g. by numbering and issues of series-), does not mean that ANY kind of paper claim can be thus and successfully discounted, especially not mere financial bills,- speculative and long term securities, or notes representing -speculatively warehoused commodities, not available on the -present market. Only goods, services and labour ready or very- soon ready for sale, can give a real and immediate purchasing -power to any kind of currency. Without it no currency is more -than a speculative security certificate that may or may not be -ultimately redeemed, one day, with interest, or that may lose its- value fast. No one is obliged to redeem it with his ready for -sale goods, services and labour - although at any time some fools -or speculators can probably be found to accept some such notes- for a while. A free market will not value them as currency at all or not for long and not at par. Seemingly, many issues had no -other foundation than long term securities or assets - because -the other foundations were overlooked or not reported. In these -cases the own capital of the bank or the private "securities" or- "government insecurities" deposited, were nothing but an ultimate -guaranty or insurance funds in case the currency had no other and sounder -foundation and did fail.  Especially their other debt, credit and -clearing foundations were all too often overlooked, although- without them all banks would have immediately failed, i.e. would- have been driven into bankruptcy and closure. That sound money is- merely a clearing certificate and does need no other value -than the acceptance or clearing readiness of its issuers, acceptors and users, -for the payments of all their debts and the receipt of all debts -owed to them, is even today not yet generally seen. Only -Professor Heinrich Rittershausen has based his unfinished work on -monetary theory upon this insight. And it is hinted at or implied- in all the writings of Ulrich von Beckerath and the monetary- writings of Dr. Walter Zander.
BANKNOTES, CURRENCY, COVER, REDEEMABILITY, CONVERTIBILITY INTO GOODS & SERVICES, AS OPPOSED TO CONVERTIBILITY OR BACKING BY SECURITIES, PRIVATE ONES OR EVEN GOVERNMENT "INSECURITIES": Banknotes and other exchange media should mainly represent the consumer goods and services that are already produced and offered for sale now. To that extent they should be merely "cut up" or discounted "real bills" or sound commercial bills or equivalent securities. They should not represent "cut up" or discounted capital assets, not wanted by most consumers at all or right now, or not to the extent that they are offered. The capital values, offered as "backing", might also be merely speculative. They might, in many instances, not even be ready for sale on the capital market but only may become ready for sale some time in the medium or long future. And they do not offer ready for sale consumer goods and services now, in form of ready or current claims against them. In some instance, they might be warehouse certificates, representing goods or mere raw materials, still to be processed into wanted products, that are currently not offered on the market at all but, rather, withheld from it, in the hope of higher future prices. Thus, instead of increasing the supply of wanted consumer goods and services, the backing for such currency is speculative, not ready for consumption but rather withheld from production or consumption. And yet the issuers of such "currency" believe that on a competitive currency market such exchange media could be kept at par without anyone being obliged to deliver any wanted goods or services at market prices for them. Somehow the notion of a monopoly and legal tender currency seems to have crept in, that would force the providers of goods and services to accept even such a badly founded currency, without sufficient reflux, if they want to engage in monetary exchanges at all. - J. Z.,9.11.88, 15.5.97.
BANKNOTES: How many wrong or only partly correct theories exist- on their origin, nature and function? See BANKING THEORIES & FREE- BANKING THEORIES, BANKING PRINCIPLE, REAL BILLS DOCTRINE, -CURRENCY PRINCIPLE. - I hold that all of them should be listed- and either proven or refuted. The same terms have all too often -different meanings for the banking traditions in different- countries and for different authors. Whenever such terms are used -then the origin or definer ought, perhaps, to be included in- brackets or the different definitions should be offered in a -numbered list and. whenever the term is used, then the meaning should- be indicated by its number being added in a bracket. - I hold- with Ulrich von Beckerath that banknotes should mainly represent -the consumer goods and services offered for sale now, within their private, -voluntaristic and competitive payment circles or payment- communities. Therefore, no "currency" should be issued that- merely represent "cut-up" medium or long term securities or- commodity or real estate capital values, whose medium or long- term value is merely speculative and whose equivalent is anyhow- not immediately available in form of ready for sale consumer goods and services and labour, at least not by the issuers of- such "asset currencies". Why should the issuers of capital- securities be allowed to thus dispose of goods, services and -labour of others, without the consent of the owners or providers- of these goods, services or labour? And why should these -providers accept such "currencies", when they are not prepared to -invest in the capital market?  There is, indeed, room for small- and standardised shares, bonds and other securities, but only in- the capital market, not in the currency market. The two should be kept quite apart, in theory and in practice. A mortgage bond or a- share does not have any immediate purchasing power. It does not- oblige any storekeeper or department store or shopping centre, -bus company, petrol station etc. to accept it, unless such- acceptance is contractually provided for. And then these -readiness to accept declarations would form the real and -immediate cover or foundation or reflux option for such -banknotes. But why should such providers depend upon others -supplying them with notes - when they could issue them -themselves? - Free after MFNL&MF 3/4, Feb. 89, & 8.4.97.
BANKRUPTCY AVOIDANCE VIA CLEARING OPTIONS: Enterprises that are- still basically sound but merely have a cash flow problem, under -conditions of monetary despotism, with its deflations, inflations- and stagflations, depressions, recessions and credit- restrictions, should be set free to offer, in settlement of their -debts, clearing certificates, in easily transferable money- denominations, that entitle the bearer to obtain from the debtor -his goods and services at par. Debtors should also be at liberty -to set up a common clearing house for this purpose, mutually guaranteeing their repayments and they should be free to offer -these certificates at a discount, that is attractive to their -creditors, while these certificates are not accepted at par -in general circulation. - With that liberty most of these debtors- would not have got into their precarious cash flow situation in- the first place. But once in it, they could trade themselves out -of it. Moreover, their creditors could get the full value of -their credits repaid to them, even if that required a larger- quantity of somewhat discounted clearing certificates. The right -of creditors to demand legal tender cash (or, as formerly, silver or gold coins ) in -payment, although that was not especially agreed upon in private contracts, should be abolished. All debtors and creditors should- be set free to enable them to pay and be paid as far as is -humanly and economically and monetarily possible, via clearing- options. If we consider that money itself is never the ultimate- objective but that it is merely a means to an end and that, with the curtain of the physical appearance of exchange media removed, in a thought-experiment, then not only the large number of non-cash transactions that do take place, invisibly for most people, but also the much smaller sums of cash transactions to merely achieve a mutual exchange for goods, services and labour for other goods, -services and labour. Only some limited time delays are involved in these exchanges. (Exchanges over longer periods are involved when some of the goods are capital values and their capital securities.) ANYTHING that facilitates this process,- through the technique of monetary exchanges or through clearing -exchanges or any other non-cash payment alternative, that can- satisfy debtors and creditors alike and that makes it easier to- satisfy both of them, should be set completely free. It would then become -obvious that, to the extent that an unemployed, a tradesman or- professional or a shopkeeper, could put into temporary -circulation his own notes, or clearing certificates or electronically accounted clearing credits, buying with them his requirements, he -would automatically, although indirectly, supply himself with- work or sales. His spending would cause his earnings, instead of-, as today, his spending would require first that he obtain scarce and- exclusive currency for it, somehow, in a considerable struggle for them, by offering his goods and services in -a market for such exchange media that is restricted through the coercive and exclusive- currency of monetary despotism. - J. Z., n.d. & 30.4.97.
BANKRUPTCY LAWS: "Would BANKRUPTCY LAWS be permissible in a -libertarian legal system? Clearly not, for bankruptcy laws compel- the discharge of a debtor's voluntarily contracted debts, and- thereby invade the property rights of the creditors. The debtor- who refuses to pay his debt has stolen the property of the -creditor. If the debtor is able to pay but conceals his assets, -then his clear act of theft is compounded by fraud. But if the -defaulting debtor is not able to pay, he has STILL stolen the -property of the creditor by not making his agreed-upon delivery of the creditor's property. The function of the legal system- should then be to enforce payment upon the debtor through, e.g.,- forced attachment of the debtor's future income for the debt -plus the damages and interest on the continuing debt. Bankruptcy- laws, which discharge the debt in defiance of the property rights- of the creditor, virtually confer a license to steal upon the- debtor. In the pre-modern era, the defaulting debtor was -generally treated as a thief and forced to pay as he acquired -income. Doubtless, the penalty of imprisonment went far beyond -proportional punishment and hence was excessive;" (even when he was a fraudulent debtor and cheated people for millions? - J. Z.)- "but at least the old legal ways placed responsibility where it -belonged : on the debtor to fulfil his contractual obligations -and to make the transfer of the property owed to the- creditor-owner. One historian of American bankruptcy law, though a - supporter of these laws, has conceded that they trample on the -property rights of the creditors." - Murray N. Rothbard, The- Ethics of Liberty, 142. - Here is Rothbard at his best, in -exposing a wrong. Alas, he does not conclude that the willing- debtor ought to be enabled, as far as possible, to clear his debt by clearing, in the interest of the debtor and the creditor alike, even -if, for this purpose, he could offer nothing but his own monetised IOU's,- based upon his own continued goods and service offers and even if -these would suffer a considerable discount, so that he would have -to offer correspondingly more of them to make up the total debt, accounted in a sound value standard. - Rothbard would be likely to- condemn such issues as mere fraudulent "fiat money" issues, even- if such a payment were acceptable to the creditor or to an- arbitrator that debtor and creditor had agreed upon. Thus,- Rothbard, instead of making debt settlement easier via the right -to clearing debts, would make the debt settlement harder to -impossible to achieve, by insisting upon debt payment only in -gold metal or 100% gold-metal-covered gold certificates. These the debtors are often -unable to obtain at all or in the required quantities and whenever needed and that -would apply also to his own debtors. Thus the debt settlement is -prevented rather than promoted. (To a large extent the bankruptcy laws were passed in recognition of such facts, such payment difficulties, even for quite honest and efficient debtors. - J. Z., 8.902.) Indeed, Rothbard assumes that, in- case of a shortage of gold, all prices, expressed in the exclusive -gold currency, would immediately fall correspondingly, so that- gold payments would continue to be as easy as before, due to the fallen gold- prices. Here he overlooks the often pointed out "stickiness" of -prices and wages and the fact that in prior centuries and in some respects even in our century, barter transactions still persisted- because gold prices never fell far enough to mediate all- exchanges monetarily. Moreover, he overlooked, like most other- economists, the different psychological effect of falling prices- vs. fallen prices upon potential buyers who do have some money -reserves which they do not have to spend immediately to survive. Falling prices- discourage buyers. Only fallen prices encourage them. Thus- falling prices lead to further falling prices, preventing for a-long time the price adaptation that Rothbard expected and predicted. In the meantime millions of unemployed and- ten-thousands of bankrupt employers ask themselves: How did we -get into this? Has Rothbard any sound advice to offer to use? All- he would tell us is: Reduce your wages and prices further. He -wants to confine our exchanges to his favourite exclusive and- forced currency, which we are short of, precisely at a time when- there is an abundance of real cover: consumer goods and- services, ready for sale, for alternative optional and market--rated currencies of our own, which we might even, to do ourselves- and Rothbard a favour, denominate in gold weight units as their -value standards and would readily accept as if they were- corresponding gold coins. But such self-help steps would be- condemned as fraudulent by Rothbard and as an unjustified- "expansion of fiat money". - He was a radical and helpful thinker, -in many respects, but not in all. Regarding money, he remained a -monopolist by prescribing "only gold" (or 100% gold covered certificates) instead of "only government- paper money". - In other words, Rothbard's ruling on bankruptcy- and on an exclusive gold currency (however competitively- supplied), would assure more bankruptcies and would not help- debtors and creditors to get the remaining debts settled, unless- they can manage to settle them in gold metal or 100% covered gold--metal certificates. - Nor does Rothbard offer clearing as a- solution. Mutual debts that can be cancelled, cleared or settled, -obviously do not require, for this kind of non-cash payment, any- gold coins or gold certificates, except for the balances -remaining. And the settlement of these can be postponed. - The clearing might well use a gold weight unit as a standard of- value for accounting purposes.  But that was not considered by- Rothbard or would not have satisfied him. He went on insisting on -gold coin or 100% covered gold certificate payments. - Or did I miss some of his writings? Did he anywhere concede the -possibility of non-cash gold value payments (using all kinds of -other means of exchange at their gold weight market rating) in -settlement of debts expressed in gold weight units? Sometimes- e.g., custom duties were so fixed and so paid. - Did he report any -complaints by debtors and creditors about such gold weight unit- accounting and clearing and payment transactions that made the -means of payment used optional? - He fruitfully pondered most- aspects of liberty but did not spend sufficient time and thought-energy- on this one. -  J. Z., 25.4.97
BANKRUPTCY RULES, See: FUTURES DEALINGS WITH CASH. See: -CLEARING.
BANKS & THEIR FEES & INTEREST PAYMENTS: You may earn the highest bank returns if you can manage no longer to go to the banks or to return to them. - More and more alternative payment methods are coming up. E. g., postal money orders are now sometimes cheaper than bank transfers. They are also not subject to taxes, like your bank deposits. Some traders, advertising on TV, allow you now to pay them through your telephone bills. Cash payments still give you the chance to arrange for discounts in all larger purchases. Unless you can establish your own or freely choose among free banks of issue and investments, you are often advised to avoid them if you want to save money. Alas, they have become paymasters for wages and salaries, which puts all too many funds at their disposal, for which they often pay an interest below the inflation rate. Your money in the bank is no longer safe. To some extent it has become the bank's money - and that of the tax department. Draw your own conclusions from this. Gain your independence from them. Use them only if you must. Safe as a bank has become a misnomer. They do not even guard themselves sufficiently against bank robbers. Nor do they offer you banking secrecy. They report to the tax department - and to who knows else. - J. Z., 11.11.92, 16.5.97.
BANKS OF ISSUE, NOTE-ISSUING BANKS: DO THEY NEED CAPITAL? Banks of issue need sense not size, sound issue techniques, not capital, sound value standards, and competition with other banks of issue, not government guaranties, self-management, not government supervision and controls. - J. Z., J. Z., 4.4.89,16.5.97.
BANKS UNDER MONETARY DESPOTISM: Banks today are not free and competitive, private or cooperative enterprises but, largely, from the central bank to the smallest bank branch at the corner, government controlled, regulated and mismanage institutions, even though they remain formally in private hands. Just consider the flood of laws and regulations on them. The "economy" of fascism and totalitarian communism should not be equated with that of a free enterprise and free exchange or capitalistic or market economy. Nevertheless, for all the mistakes of government banking, currency and credit policies, forced upon all, "capitalism" and the "market economy" and the "profit motive" and "private property" are usually blamed, even in a sphere where they do least of all exist. - J. Z., 28.7.93, 24.5.97. - See: CENTRAL BANKING, MONETARY POLICY, CURRENCY POLICY, CREDIT REGULATION.
BANKS, CREDIT OR LOAN POLICY & THEIR DEMAND FOR SECURITY: A- Banker is a fellow who lends his umbrella when the sun is shining- and wants it back the minute it begins to rain. - Mark Twain,- 1835-1910.
BANKS: Alternative names: Debt-shops. - Ezra Heywood, Hard-Cash, 7.
BANKS: Apart from the Central Bank all banks are now reduced to- being merely dealers in the nationalised exchange medium and its -forced paper "standard". Even in these limited dealings they are -highly regulated. Likewise, in their options to issue and deal- with capital securities. They are mere shadows of free banks. But, -at the same time, they are privileged banks, insofar as entry into -the business of banking is also highly restricted by legislation -and governmental compulsory licensing schemes. They and the note- acceptors are kept in a monetary kindergarten and thus are kept- ignorant and irresponsible in monetary matters. - J. Z., 4.9.86,- 29.4.97.
BANKS: Some banks really lock your money away from you. I- noticed in Los Angeles, near Union Station, a branch of the Bank- of America. It is only open on 3 week days and then only from- 11.30am to 2.30pm, at least that was its schedule indicated on 20 -Dec. 1990. And this in a country where many shops, e.g. photocopy- shops, are open 24 hours a day! - J. Z., 16.4.97.
BARTER IS NO SUBSTITUTE FOR FREE CLEARING & FREE MONETARY -EXCHANGES: Only free clearing and full monetary freedom can -fully employ all people willing to work, at their highest -capacity and skills and can make them prosperous and independent.- - J. Z., 27.7.83, 17.4.97.
BARTER, MONEY & CLEARING: Any money transaction is essentially- an anonymous and multilateral barter or clearing transactions,- one spanning time and distance, in which goods, services and labour -are exchanged for goods, services and labour. - Any attempts to -issue monies that are not based such turnovers are condemned to failures. But debts that are shortly due can keep money issues -based upon them at par with their nominal value, so that they, -too, are considered as acceptable in payment for daily wanted- consumer goods and services. Both, the goods and service cover- and the short term debt foundation, do establish a strong demand -or "reflux" for the money involved, that keeps it at par with its- nominal value expressed in some or the other value standard. For -money issued upon long-term assets there exists no strong enough demand or -reflux right away and continuously. It will occur only once that debt is soon due. -In the meantime, no supplier of daily wanted goods and services- is obliged to accept it, if he has not issued it. - J. Z.,-5.12.90, 16.4.97.
BECKERATH, ULRICH von, 1882 -1969. See: ACADEMIC WRITINGS ON- MONETARY FREEDOM IN RECENT YEARS. See also his numerous writings, listed in my main website: www.acenet.com.au/~jzube
BECKERATH, ULRICH VON, 1882-1969, See: GERMAN SCHOOL ON MONEY. See the main literature list of LMP.
BECKERATH, ULRICH von, 1882-1969. From ca. 1913 onwards, possibly -already from 1908, he has, more thoroughly than anyone else that I- ever heard of, knew or read about, explored and described the -monetary freedom options. Alas, most of his correspondence before- 1943 has been lost with his library in an air raid on Berlin. -Recipients of his letters and papers from before that time, who- preserved them, should make themselves known to me. I would like -to microfiche his whole correspondence, to the extent that it- is or becomes available to me. - J. Z., 9.4.97.
BECKERATH, ULRICH von, Monetary Freedom teachings. See e.g.: -Aphorisms on the money problem, 1932, in BANKWISSENSCHAFT. Also -in PP 587/588.
BECKERATH, ULRICH von, See: ECONOMIC & HUMAN RIGHTS ASPECTS -IGNORED BY MOST MODERN AUTHORS.
BELIEF SYSTEMS ON MONEY: There are thousands of different- articles of faith and prejudice and unfounded assumptions and -assertions, fallacies and false arguments on money. Most are as -false or misleading as the religious ones. Only a systematic and- an alphabetical register of all of them, together with their best -refutations so far out, could show us the ways out of this -labyrinth or avalanche. So far it has not yet been compiled and- all too few people have shown any interest in such a project. - -J. Z., 18.7.96, 20.3.97.
BIBLIOGRAPHY OF MONETARY FREEDOM WRITINGS. Draft in PP 1022. Ask- for further contributions and translations. Ask for permissions -to reproduce still copyrighted material at least on microfiche, floppy disks and CD-ROMs & websites.
BILL DISCOUNT, SOUND COMMERCIAL BILLS VS. UNSOUND "FINANCIAL" BILLS, REAL BILLS DOCTRINE, BANKING PRINCIPLE, CIRCULATION CIRCLES, LEGAL & JURIDICAL "RIGHT" OF CREDITORS TO DEMAND PAYMENT IN RARE METALS OR OTHER CASH: For a long time the payment of sound commercial bills, was ultimately enforceable in gold or silver coins, although, in most cases they were rather settled by clearing or payment in bank notes for which they had become the common basis for issues. Banknotes, under the real bills doctrine or banking principle are nothing but cut-up sound commercial bills, in standardized, easily recognizable and convenient denominations, that can circulate easier than the commercial bills themselves (which are largely acceptable only among merchants and bankers) and these small and even bills are finally used to redeem them. For all too long it was ignored that the right of creditors to have commercial bills redeemed in gold is quite unnecessary to preserve their value and that of the bank notes issued upon them. Their redeemability in banknotes and the short term debts that are involved, are quite sufficient to assure a corresponding reflux of banknotes from the short term debtors of the commercial bills. The bills were usually issued by wholesalers to employers, their suppliers, in payment for goods already produced and sold to them and on the road to the retailers. The employers, paid by the wholesalers with commercial bills, got these bills discounted into banknotes at a bank of issue. With these notes they paid their workers, suppliers and profits and then the notes streamed to the shops for goods and services and from them to their suppliers, largely the wholesalers, who redeemed their bills with the notes thus received. The whole is easier to describe and comprehend graphically, than in words. I have done that in PEACE PLANS 41. Still better charts of this payment circle would be welcomed by me. The right of creditors to demand payment in rare metals or rare legal tender paper money has done much more harm than good and has only secured recurrent payment crises. That right should be confined to quite optional contracts and even then, seeing that dealings in futures and their risks are involved, withdrawal premiums for the withdrawal from such obligations should also be agreed upon. Only then will the risk of such claims be reduced to acceptable proportions. It this risk remains quite unrestricted by withdrawal premiums and competition from suppliers of alternative exchange media and value standards, then it can lead to the rapid and prolonged collapse of the non-cash transactions, all dependent upon a minimum but quite regular and always available supply of cash. If cash supply sinks below this minimum, then numerous non-cash transactions are no longer possible and lead thus to a much larger demand for cash and this precisely when cash is already in short supply. Then some cash can only be attained by postponing the payment of bills and by dismissing workers and by ruthlessly collecting debts, payable in cash, even if that leads to the bankruptcy of the debtors and to emergency sales prices. Only the quite competitive supply of cash, in all its possible and desired forms, can prevent and end such money shortages, which, by the way, also lead to a collapse of the prices of capital securities because fewer shares etc. are bought and enterprises that can no longer easily sell their goods and services are reduced in their market values and cannot pay dividends or interest or only much less. Thus the right to demand rare metals or other exclusive currency from a debtor must be replaced, in the general economy (apart from some payment communities which religiously adhere to the cash payment obligation voluntarily, at their own risk and expense), by the right to demand clearing, in stated value standards, but accepting any kind of usable exchange medium or clearing certificate - but only at its market rated value expressed in the agreed upon value standard. To my knowledge Ulrich von Beckerath, 1882 - 1969, was the only economist and writer who clearly saw and described this problem and its solution. If you know of others and their writings, please let me know about them. - J.Z., 27.9.02.
BLACK LABOUR OR BLACK MARKET LABOUR: In Freiburg, Breisgau, on 4 March 93, I saw the van of a painter with the inscription: "Ohne Schwarzarbeit mehr Arbeitsplaetze." (Without black labour more jobs.) - Presumably, this professional painter would object against you yourself painting your own house, inside or outside, or getting your friends or family members to do so. Certainly he is opposed to untaxed underground contractors and does not like to take up such opportunities himself, although in his job it would be easier than in most others. He seems to count as productive labour only his own professional work. - Nor does he mention that largely rightful tax evasion and evasion of excessively high social security and accident levies are involved. Just because he is heavily taxed, he wants others to be taxed, too. Just because he loves bureaucratic interventionism, he would like others to be so enslaved likewise. He would count only officially created or recognized jobs as jobs, not private ones. Presumably, according to him, once all of us would be in untaxed and unregulated black market jobs, trading on the black market, we would all having no jobs at all. He did not put his foot into his mouth, but, as a painter, on his van - was sure to find many other fools to support him. - J. Z., 24.5.97.
BLACK MARKET PRIVATE CURRENCY ISSUES: To what extent are they -possible? - Already now, sometimes and unofficially, other national- currencies are substituting largely for inflated national -currencies, e.g. the U.S. dollar internationally and the German -DM in some European countries suffering more than Germany under- inflation. - Full exploration of the extent to which the black -market might make possible not only barter and some limited- monetary exchanges (using the money of monetary despotism, or- forcing exchange, or gold or silver coins and bullion) but, -instead, at least some kinds of monetary freedom and free -clearing exchanges that could, potentially, become so extensive -that they could introduce a free market, for the first time, a- fully free market. LETS founder Michael Linton believes his -system to be capable of this. I don't. -  He seemed more -reasonable in his papers than in person and in his talk, although -he is a smooth and popular speaker. -  J. Z., 7.4.97.
BONUS PAYMENTS & WAGE & SALARY INCREASES IN THE MONIES OF MONETARY FREEDOM, AS INTRODUCTORY STEPS TOWARDS FULL MONETARY FREEDOM: Issue the next Christmas bonus or extra salary payment or salary increase to employees in the own store currency or in the store currency of all employers doing the same. Employers would benefit by paying this expense in their goods and services - instead of having to sell these first for scarce legal tender notes. Knowing this, they might even be willing to pay a higher gratuity of this type in this form. - A fringe benefit would be that both, employers and employees, would become accustomed to dealing in private notes. - A single issue of that type, existing only temporarily, might altogether escape the notice of the authorities and thus legal prosecution. If not, then it would greatly reduce the penalties involved. - When an association of shops issued this temporary shop currency, the individual shop would receive the notes as a loan, to be repaid in goods warrants or in cash - in case, by chance or by insufficient competitiveness, one employer would not receive sufficient of these goods warrants back to repay this debt with them. - The same could be done for demanded wage increases, which they employer could not afford to pay in legal tender but could well afford in his own shop foundation money. The wage increase to the builders of Roseland's Shopping Centre, in 1964 (in Sydney, then the largest shopping centre in the southern hemisphere), was a precedent for this. This made possible the completion of the building in time, and a corresponding additional cash flow from its opening day on.  Since this agreement with the unions broke a number of laws - by doing the morally and economically right thing, the case was hushed up. - Such issues might be considered as a pilot project for a monetary revolution, one to stop unemployment and end inflation - by paying all wages, salaries and profits and other expenses in shop currencies and by using a better or several better standards than the government's paper standard in the shop currency and to express all prices, wages and salaries and other debts. - J. Z., 1985 & 21.5.97.
BOOK MONEY, CREDIT MONEY & CASH : By means of bank or book money or credit or deposit accounts all cash can be multiplied up to tenfold by all banks. - Pop opinion. - Wouldn't the banks love that? Under competition they should then be able to pay their depositors much more or charge their debtors much less. But do they? - Is there no honest accountant left in the world who is able and willing to point out these "created" super-profits?  How can any rich people be prevented from becoming such bankers and as easily multiplying their riches? - J. Z., 28.3.97. See: CREDIT CREATION, CREATION OF CREDIT & MONEY, DEPOSIT INFLATION.
BOOK MONEY, MONEY CIRCULATION, QUANTITY THEORY & INFLATION: - The price effects of cash increases becomes multiplied through book money that is nominally based upon the increased cash. - As a rule everything and everybody gets blamed for inflation - with the exception of the real culprits, the central banks, their money monopoly and the legal tender legislation. - If "creative" book keeping could make the bookkeepers rich then everybody would want to become a bookkeeper and banker. Why work at all, if values can thus be merely created on paper? - We could then become a nation of book keepers and bankers. Why bother then to produce anything. We could all live on consuming our multiplied book values. - The same illusion is involved as is involved in the mere printing of paper money. Now we can express money values electronically and computers could multiply electronic symbols endlessly, without limits. But could they "create" a single cent of additional purchasing power for anybody, through electronic fiat or unilateral action or declaration, not based on any goods or services offered, ready for sale, without depriving anyone else of that one cent or without arranging a fair trade that is of mutual benefit to all the parties involved? -  J. Z., 2.4.97. - See: CREATION OF MONEY & CREDIT, DEPOSIT INFLATION, QUANTITY THEORY,MONEY CIRCULATION.
BOOKS WANTED LIST, perhaps integrated with FB bibliography.
BRANCH BANK CLOSURES: Let the major banks close as many local- branches as they like, in their cost-cutting attempts, but do allow -the local people to establish not only their own local savings,- current account, deposit and clearing banks but also note-issuing -banks, quite free from Local Government, State and Federal- Government legislation, regulation and jurisdiction. This would- mean an end to depressions, mass unemployment and inflation in -all the localities where this self-help freedom would be -practised. - J. Z., 8.11.96, 19.3.97.
BRAY, JOHN FRANCIS, Labour's Wrongs & Labour's Remedy, Leeds,- 1838, also advocated a particular kind of labour exchange,- different from that of Robert Owen. Further details are wanted- and the whole book for microfiching. - J. Z., 20.3.97.
BRECKENRIDGE, R.M., The Canadian Banking System, 1871-1890, N.Y., -MacMillan, 1895, defended the right to issue as the common right- of all. - According to Wells/Scruggs, Towards Free Banking, p. 1. -- Westrup may also refer to him. Alas, I have not yet been able- to obtain this book by Breckenridge for microfiching in my- monetary freedom series. - J. Z., 26.4.97.
BRONFENBRENNER, MARTIN, THE CURRENCY-CHOICE DEFENCE: I have got -myself a copy of this article from CHALLENGE, Jan/Feb. 1980, pp- 31-36 and fiched it in PP 803. Already its sub-title seems to- contain a disastrous misconception or wrong definition: "If any -means of exchange, not only dollars, were considered as legal -tender, the market would be left free to provide for monetary- stability." - It is one of the main objections against free- banking that, if everybody were free to issue money (and here, -usually, legal tender is presumed), then everybody could -cause an inflation. This is quite true. However, B. probably -meant here merely the lawyer's excuse for legal tender, namely,- that your are legally entitled to offer it in payment but not -necessarily that the other party is obliged to accept it at all- or at face value. In most cases, this harmless sounding term is- interpreted quite differently by legislators and courts, e.g.:- "Mark equals Mark", no matter how depreciated it becomes, $ equals $, even when its value is down to cents and mere paper currency, -by government fiat, is declared to be the equivalent of gold--certificates. The worst interpretation and most wide-spread practice is: monopoly money with compulsory acceptance and compulsory value. As such it is the- precondition for inflation, deflation and stagflation. Alas, only- very few textbooks see it as such. How many more monetary -catastrophes are required before enough people begin to realise -the nature and effect of legal tender legislation and- jurisdiction? - J. Z., in a note for MFNL, & 30.5.97.
BUCK PASSING & THE BUCK STOPS HERE: These terms could acquire a- completely new meaning if applied to monetary freedom. Those who -have realized the importance of their monetary independence might -say, to those who offered them the monies of monetary despotism: -Your buck stops here: It cannot buy anything from me. I refuse- to accept it in payment. But I have assumed the responsibility to -produce and offer my own means of exchange and sound value -standard and am prepared, on that basis, to honest trading with- anyone at any time. (They could and should issue their own "bucks", based upon their readiness to supply wanted labor, services and goods for them, and these bucks would then stream back to them in payment, i.e., their own bucks would stop there, where they started from. - J. Z., 10.9.02.) - They would no longer pass on the buck of -responsibility to the government to supply them with sufficient -sound value standards and exchange media or welfare hand-outs. They could and should so opt out of "the war against the poor". They would rather -supply themselves with productive work and trade opportunities by -their own independent monetary and financial efforts. From hand-out recipients they could turn into free people paying for their wants and needs with their own currency, redeemed by their own ready for sale goods, services and labour efforts. - J. Z., 27.5.97, 10.9.02.
BUDGET, BALANCED & INFLATION: A balanced budget would stop inflation. - A popular opinion. - But what would stop inflation if no government were willing to balance its budget. As experience teaches us, this is mostly the case. Either it increases taxes or forced loans at the expense of future tax payers or it taxes us via inflation. It has the powers to inflate, in legal tender and the issue monopoly and will sooner or later and most of the times abuse them. A shortfall in its budget is no more than a motive. It does not give it the weapon to inflate a currency. If you have a shortfall in your budget then you cannot cause an inflation because you cannot turn your IOUs into legal tender and an exclusive currency. Honest or moral minds would not engage in crimes. Honest and moral governments would not engage in inflation. But then who has reasons to think that governments are honest and moral as a rule? So, should we grant them any means to engage in an inflation and ourselves no rights and liberties at all to end or prevent one? - J. Z., 28.3.97. - The "balanced" budget of most governments today includes the degree of "deficit financing" or inflation that they planned for! - If it is balanced through government borrowing then this means that the government has further extended "investments" in tax slaves. - J.Z.,  30.8.02.
BUDGETS OF GOVERNMENTS & THEIR BUDGET POLICIES: Government- budgets indicate the way governments are going to spend YOUR- money, not THEIR money and also by how much they are going to -inflate the currency EVEN FURTHER, INCREASE YOUR TAX BURDEN, even- more so and PUT YOU IN DEBT, to an even greater extent and against your will. -Then they do have the cheek to ask you to praise them for- this and to vote for them. - J. Z., 18.9.92, 1.5.97.
BUDGETS OF GOVERNMENTS: They indicate how the loot is to be -increased, at the expense of the tax slaves and how it is to be -distributed among the politicians, the bureaucratic empires and- their favourites. - The whole tragicomedy is treated not as a -farce or a crime but put on the same moral level as a private or- company budget that only honestly disposes of the own and honest earnings. -Calling a wolf a sheep does not turn him into a sheep. Calling a- robber a benefactor does not turn him into a benefactor. One can -rightfully distribute handouts, investments and subsidies and- loans only from the own property. We should as much as possible -avoid using the misleading or cover-up or obviously dishonest and- false terms that governments want us to use to be able to continue fleecing their victims with their consent. - J.Z.,-25.9.91, 27.4.97.
BUDGETS, SUPPLEMENTARY BUDGETS, TAXES & INFLATION: Once can restrain an inflationary trend by introducing a supplementary budget which brings increased taxes. - Popular opinion. To the extent that it would introduce whatever is sound in tax foundation, this might be achievable for the government's paper money circulation. But for all other spheres. into which legal tender and monopoly currency is forced, it is wrong. To the extent that all free and competitive money issues are suppressed and coercively replaced by government paper money, these sphere are already inflated by that paper money.  They would accept tax foundation money only to the extent that they needed it for the payment of these tributes. Any excess beyond that is already forced into it because people do need some money, have to accept it, have to accept it at par and are not allowed to replace it, discount it or reject it. How much government money could circulate under free market conditions, without the issue monopoly, without legal tender and without taxation and by governments without a territorial monopoly? Only voluntary contribution and subscription monies issued by voluntary and only exterritorially autonomous communities could then remain in the sphere of the former governmental forced currency. They would be in free competition with all privately or cooperatively issued alternative currencies. - J. Z., 6.4.97. - Even when annual budgets are replaced by bi-annual or quarterly budgets, monetary despotism would remain, with its inflationary, deflationary and stagflationary effects but instead of annual stop and go policies we would have half-yearly or quarterly ones. And the adaptation would and could never be as accurate as would occur naturally and freely under monetary freedom. The victims of monetary despotism and taxation should also ask themselves whether they should be taxed to make up for the inflationary spending of governments, through additional legal tender issues, suffer extra taxes to make up for the mistakes of politicians and their central banking system,  i.e., taxed to make up for the inflation tax. If a gallows currency is not introduced (Hanging those responsible, finance minister and central bank president, when they have, once again, depreciated the forced and exclusive currency), then perhaps another response would somewhat help: Reduce the real purchasing power received by all politicians and bureaucrats at double the rate at which a currency is inflated! That might give them a vested interest in not inflating their paper currency. At present they have a vested interest in inflating it. - J. Z., 6.4.97.
BUSINESS SECRETS: Among other things, in a sound alternative- issue, clearing and credit system, there will be no business- secret. Either it will not be assumed to be necessary and- justified or it will not be planned in, right from the beginning -of competitive issues or current and clearing account services. I -would also predict that issuers or account keepers who would not - claim "business and privacy secrets" in this respect, would -be more successful, i.e. more used, than the other ones would be.-  - J. Z., 3/97. See : SECRECY.
BUY AUSTRALIAN (GERMAN, ENGLISH, AMERICAN, etc.): If -Australian money consisted of a number of competing Australian -currencies, all of them truly based on Australian goods and- services, then and automatically, all spending of it would lead- to corresponding sales of Australian goods and services, by -redeeming this money in the Australian goods and services it is -based upon. Even if some bought only imported goods with such- currencies, they would inevitably stream back to pay for the same -amount of Australian exports. - It is also true that even the central bank's State paper money, when used in paying for -imports, has ultimately no value for the foreigner than by being -returned to pay for Australian exports. But there is not time -limit on this kind of paper money, as is on private "ticket" -money. Moreover, foreign central banks, in their foolish grasp -for and accumulation of "reserve currencies", might retain a not- yet too depreciated state paper money for years to decades. This -would mean that for these periods we would have got the imports -as interest-free loans. But our central bank might not- sufficiently replace these notes, hoarded in foreign countries,- perhaps also by private citizens, which may have reasons to trust their own government's paper money even less. Consequently, the- own circulation of exclusive and forced currency might become- correspondingly deflated. Such a diminished reflux of Australian notes might also -boost the primitive notion of "buy Australian!" - Compare also a -hypothetical payment of imports with gold coins. They would not -necessarily or at all return to us for Australian exports, immediately or soon. The whole world market would be open for -them. Only according to the "law of fluctuating gold quantities"- would they ultimately tend to return to an Australia whose gold -prices for goods would have become lower than those on the world- market, because of a gold deflation (assuming gold to be an -exclusive currency). If, however, we are free to issue at any time as many exchange media as we need for our transactions and -also free to choose e.g. a gold weight unit as our value -standard, then, although our gold stock would be reduced, our- gold weight unit prices would not be. Only actual payments in -gold coins would become rarer. - Anyhow, this kind of model of an- exclusive gold currency, that once spent does not return- automatically to the spender, still spooks in the heads of people- long after gold coin circulation has disappeared and makes people -jump to wrong and protectionist conclusions like: "Buy- Australian!" - J. Z., 29.9.93, 25.5.97. - Did you ever hear or see a good refutation of this stupid little slogan, from any Dr. or Prof. of economics or any commentator in the mass media? It is endlessly repeated in advertisements - without being accompanied or followed by any criticism that I am aware of. Oh the power of the great lies, myths and prejudices - while there exists no encyclopaedia to systematically collect and publish their best refutations sufficiently. - J. Z., 8.9.02.
BUY AUSTRALIAN, AUSTRALIAN MADE: If Australian consumers were- free to accept and spend, rate or refuse and also, as producers- and traders, to issue and offer and pay with their own printed or -coined assignments upon their own goods- and service offers, in- their own tokens, in standardised and convenient money -denominations (different in appearance from any other money -issues), and using for these alternative exchange and clearing- media any value standard that pleases them, as long as it does, -then they would come to automatically buy Australian goods and- services to a large extent. Their money would have no other value -or use for them. Moreover, it would often enable them, in the -first place, to do so, by this very freedom to issue and use their issues as their means of payment. Moreover,- then they would be able to obtain or issue just as many sound- means of payment as they would need for all their transactions -and would no longer be misled, defrauded or cheated, exploited- and taxed, restricted and held back by the despotic monetary- policies of the central bank: the Reserve Bank, with its forces -and exclusive paper currency, given legal tender powers (-compulsory acceptance and compulsory value, no matter how much -it has been depreciated). Nor would they be rendered unemployed- by being forced to sell or work only for this exclusive and- forced currency, although it has often been inflated, deflated or -stagflated and has never managed to supply all of them with- exactly the quantity of sound exchange media that they do need- for their purposes. No central bank can achieve that. Free- competition and free cooperation would work its wonders, here, too, if allowed to do so. Under freedom the good money would -drive out the bad, as it should, by rights. - J. Z., 19.11.93,- 24.4.97. - By the way, any private currencies, redeemable in Australian goods and services only, if they were used to pay for imports would, in the hands of any foreigners, have no other value than as a purchasing medium in Australia. Thus, these imports would also lead to the purchase of Australian goods. With government legal tender getting into the hands of foreign merchants this return is less certain. They might then end up, for many years, in the safes of foreign central banks, as "foreign exchange reserves". - J. Z., 7.9.02.
BUY AUSTRALIAN. "Buy your kid a job: Buy Australian".- "Australian Made" or: "Made in Australia" and : "Buy Locally!": -Give a rational and new meaning to these slogans. Mobilise your own ready-for- sale goods-, service- and labour supply capacity monetarily. Pay, -as far as you can, i.e., as far as you can find voluntary acceptors for them, with your own assignments or clearing -certificates or IOU's, or purchasing vouchers, goods warrants- and service scrip - upon whatever you have to offer, in money -denominations, but avoiding the money terms and standards of the -government - due to its despotic monetary laws. All your local- spending with these would, inevitably (apart from the actions of- collectors) come back to you in form of extra sales. If, -instead, you spend government money then it might never come back -to you or to your local community. - But be not satisfied with -whatever you can achieve in this way. At least discuss completely -free clearing and note issues in your local community, as a- theoretical possibility and a self-help action as soon as you- could legally or safely do so. - In the meantime, issue your -tokens and mutually accept them at their agreed upon values, even -if none is stated in them. (only "bucks", "units" or "notes" or "points"). But you are already free to issue gift- vouchers in money denominations and there are, in cities, shop- currencies for consumer credits. Try whether you could issue them outside of consumer credits, especially in wage payments to young -people out of jobs. At least start thinking and discussing such- options and their consequences. Do not let yourself be disabled,- fleeced and exploited by the central bank and its paper money any -longer. End your self-caused ignorance of your monetary freedom- options. If your monetary freedom remains effectively suppressed-, then at least protest, e.g. by putting signs in your shop windows-: "If a local currency could be freely issued in this community, -I would be one of the first to welcome it and readily accept it. -I do not like to be dependent upon the government's paper money, -with its inflations, deflations stagflations, credit--restrictions, sales difficulties, numerous bankruptcies and mass -unemployment as a consequence!" - Even while you are not yet free -to issue your own sound money and drive with it unsound monies out of circulation, including the government's, at least talk -about sound and alternative money options, with your neighbours,- family members, friends and acquaintances. That is more important- for you, in the long run, than talking about the weather, your- sicknesses, your kids and your favourite sports teams.  - J.Z., -22.3.93, 27.5.97.
BUY AUSTRALIAN: Australians would inevitably buy largely- Australian made goods if only they were free to issue and accept -alternative and competing local, private, cooperative and- optional currencies that are based on local goods and services- ready for sale. - A cinema owner who can pay for all his expenses- with tickets will have no trouble getting his seats "sold", simply by the -return of the tickets to him, in payment for the seats he offers for his performances. - Why bother to export anything at- all when we are only willing to buy Australian goods? - What, then, could we do with the sales proceeds from our exports? - J. Z.,- 27.9.93, 29.9.93 & 24.4.97. 8.9.02
BUY AUSTRALIAN: BUY YOUR KIDS A JOB! BUY AUSTRALIAN, -UNEMPLOYMENT & IMPORTS & MONETARY FREEDOM. - Buy your kids &- yourself a job by buying locally, Australia-wide and -internationally - with your own "Australian-made" money tokens -and clearing certificates based on your own goods, products, services and labour. The government is quite unable to manage -this Australian job, for you. - J. Z., 19.4.93. - On the contrary: It has outlawed such self-help steps! - J. Z., 6.9.02.
BUY AUSTRALIAN: This popular slogan makes sense only as an- advice to let all national and local purchasing power be directly- based upon Australian labour, services and goods, in the form of- competitively issued alternative currencies, optional and market--rated, which the issuers would merely have to convert into their- goods and services, upon demand. - As for external trading: Once Australian clearing -certificates, redeemable only in standard Australian export- goods, like wool, liquid gas, coal, wheat, meat, etc., are freely- used and accepted, to pay for imports, then, indirectly, they buy, through the- foreign buyers and consumers, Australian goods and services, when these clearing- certificates are returned to Australia in payment. They have no other value and thus will be used in this way.  - Generally,- I would say: Buy Australian goods only if they are cheaper or -better or do, for some other and personal reasons suit you more. Otherwise, buy- foreign goods that suit you. Sooner or later, even the- Australian government's paper money will return to Australia to -pay for its exports. It has not other value for foreigners. (Apart from being hoarded as "foreign exchange" in some central bank. Sooner or later most foreign governments will spend that foreign exchange reserve as well. But the time delay involved may be considerable. But then and to that extent, and for this time, Australia would actually have been able to buy and use foreign goods and services - just for the price of getting deposited in the vaults of these banks some scraps or printed paper. Thus it would have received a foreign loan, interest free, in goods and services for this period. A real disaster this! - J.Z., 8.9.02.)  So- when you buy imported goods you do buy Australian goods indirectly. -To that extent the slogan is senseless. But when your A $ is not -as much depreciated as the currency in a foreign country then -private persons there and its central bank might use it to hoard, -thus introducing a time delay, in which no corresponding demand for Australian goods and services arises. This is one of the many- defects of forced and exclusive currencies. Their hoarded notes are not easily, fast and efficiently replaced by new issues. This is already a- sufficient reason to exclude them for import payments. Private, competitively -and cooperatively issued international clearing certificates are- a good substitute for them. Professor E. Milhaud and Ulrich von- Beckerath have described their principles and practices. - Buy- Australian is just a modern version of mercantilism and of the- dogmatic statement that the own money should stay in the own- country, before the truths of Free Trade were at least somewhat- realized for a few decades. Now, with such notions, we are back to the wrongful, harmful and expensive- morass of protectionism. - J. Z., 27.7.93, 24.4.97, 8.9.02.
BUY AUSTRALIAN? The only way how buying from yourself and your -neighbours can be assured is by issuing your own exchange media as far as possible, i.e. buying as many of your requirements and- paying as many of your debts with them as possible. They would,- obviously, have no other foundation than your own readiness to- accept them in payment of your goods and services and for this- they would inevitably return to you. Buy with your own local- currencies, which only oblige you and they will inevitably return -to you in payment for your goods and services, like any other -IOU. Monetize your own goods and service supply capacity. You do- not even have to be an Australian nationalist to do so in your- own interest. As far as Australian imports are concerned: See to -it that they are paid for with competitively issued assignments -to Australian export goods and services. Then, obviously and inevitably, corresponding exports will follow these imports,- obviating your nationalistic slogan appeal. - J. Z., 27.8.95,- 19.3.97.
CANCELLATION OF SHOP CURRENCY OR OTHER CURRENCIES THAT HAVE RETURNED TO THE ISSUERS: Sound money would rather oscillate than circulate permanently. (Rare metal coins and some cheap metal money substitutes excepted, for purpose of small change.) It would be issued, frequently or constantly, as required, and frequently to constantly return in payment to the issuer. As turnover-credit money, not intended to be hoarded but to be spent, in its reflux, it might have only a limited "circulation" or oscillation period. As such, upon return it should be cancelled, rather than issued again, for the still remaining stretch of that period. To replace it by newly issued other paper currency is easy and cheap enough. This would also facilitate the control of the reflux of each series and quantity of such money that is issued. To prevent forgery (a risk greatly reduced for oscillating money with a limited circulation period and circulation are and acceptance foundation) these competing notes, too, would be consecutively numbered. The return of all numbers of a series could then be easily checked - and forged notes rapidly discovered. Whatever current issue and reflux details the issuer may want to publicize, also whatever special advertisement, he could include on each new batch of notes issued. The frequent renewal of notes would also be more hygienic than notes that have been in the hands of hundreds or thousands of people. And their texts would be more legible than that of much handled notes. For savings purposes notes with a limited circulation period could be exchanged into wanted securities.  - J.Z., 27.8.02.
CAPITAL REQUIRED FOR BANKS OF ISSUE? Banks of issue require-n either a saved up capital of their own, nor investments by -others not a guaranty capital in case of their liquidation. What -they do need is at least a leased office, office equipment a -trained staff, a printer's credit and an issue and reflux -technique and agreement on it with the local businessmen, who- provide the "cover" and "redemption fund" and "guaranty capital"- with their goods and services, which they have ready-for-sale,- and an agreement with local employees, suppliers, tradesmen -and professionals to be paid in the notes of the bank of issue,- at least as long as it stands at par with its nominal value. -Moreover, full openness of all transactions and publicity would be needed for all its issue details, in order to dispel ignorance, prejudices, distrust and slander. In other words,- monetary freedom is only possible within sufficiently enlightened- circles. - J. Z., 3/97.
CAPITAL SECURITIES VS. CLEARING CERTIFICATES: See : APHORISMS ON- THE MONEY PROBLEM.
CAPITALISM WITH & WITHOUT MONETARY FREEDOM:
CAPITALISM, LAISSEZ FAIRE, FREE ENTERPRISE, FREE MARKETS, FREE TRADE, FREEDOM OF CONTRACT, MONETARY DESPOTISM & MONETARY & FINANCIAL FREEDOM: Too many advocates of economic freedom have only a limited horizon or blinkered view of the economic freedom potential. They fix most of their attention on a few economic liberties and interventions and ignore major ones, like a free and competitive supply of exchange media and free choice of value standards, and fully free clearing rather than imposed obligations to deliver gold, silver or legal tender in payment of debts, although these are obvious alternatives to the ruling monetary despotism of today. Without monetary freedom all other economic liberties are greatly devalued. And financial freedom requires also not just some degree of deregulation and liberalisation or denationalisation but a complete freedom alternative to financial despotism: freedom to issue, free international and internal exchange rates, free transferability of all capital, absence of taxation, absence of imposed regulations, absence of monetary despotism. Under full financial freedom any normal working person in a developed country could become a multi-millionaire through his old age security savings, productively invested, credit-insured, at the highest interest rate obtainable, not subject to inflation, interest regulation, taxation, forced loans, social security levies etc. - If that fact, calculation and tabulation becomes wide enough publicised: The government prevents us from becoming millionaires, by honest labours and investments, then we will have a bloodless revolution pretty soon. - Likewise, once the hundreds of millions of unemployed come to understand that monetary despotism keeps them unemployed and that monetary freedom could provide full employment for them, within hours to days, almost every present government will be shaken in its foundations if not overthrown - unless it jumps fast on this bandwagon. - If for truths like these a proper ideas market existed already, then we could benefit from them very soon. But so far not even one in a thousand is interested in such an ideas market, even among the free marketeers! - J. Z., 4.12.85, 9.5.97.
CASH HOLDINGS, QUANTITY THEORY, CIRCULATION SPEED & A VARIETY -OF COMPETING MEANS OF PAYMENT & CLEARING: When there is a variety of different means of payment and not- everyone but only issuers and their debtors will be under- obligations to accept a particular one of them, one might come to expect that cash holdings, in a variety of exchange media, might- increase in total. But that need not be true. It would, firstly, -be counteracted by the right of refusal towards means of exchange -for which one has little or not use at all. Then there would be -those who accepted some notes only because they had a discount- and because they could rapidly spend them at the issuer for wanted goods -or services, due to the discount. -Then there is the limited circulation period of most privately -issued means of exchange, which assures their fast reflux, before -that period is expired. One would also have the option to issue -one's own exchange media and thus largely refuse to accept any or -many other currencies. Then there is the effect of the better -monies driving out the bad ones, so that only a few good ones -would survive in general circulation, those which are widely -acceptable, at least locally. - Exchange media that one would- have to keep in one's wallet for a long time, before one had an-y opportunity to use them, would rarely ever get into and get stuck in a- wallet. People can learn to distinguish between good shares and attractive girls and wallflower girls. They could also go for -bargains and sound values in currencies and avoid the rest. -- Another general effect of monetary freedom might be that cash -holdings would be reduced because money would be less scarce. -One would find it much easier to sell for payments in sound  & -competitive currencies than for monopoly money - and one could- also issue one's own or one's own clearing certificates. Credit,- on a sound value basis, would also be easier to obtain. Thus the -need for cash holdings, for emergency situations, would be reduced. Under a sound currency system most people would also be -better covered by insurance arrangements against emergencies. - -J. Z., 29.3.93, 27.5.97.
CASH PAYMENTS & GOVERNMENT ATTEMPTS TO ELIMINATE THEM: For tax-"-reasons" and in the pursuit of its drug war, governments are more -and more on the road to eliminate cash payments altogether. They wish to have all non-cash transactions becoming visible to them-, on their computers and accessible to their  form of legalized -looting. Unless we can sufficiently Privatize our computerised- exchanges, we will thus become more and more exposed to Big -Brother, his exploitation and abuses. I am in favour of our doing- away with government cash and non-cash transactions, government -taxes and subsidies, government guarantees and "insurance" -schemes, altogether, in all spheres, at least for volunteer- communities which  know and want to arrange their affairs in a -more just, non-exploitative and convenient way, one that does not- endanger them and their property and exchanges. - J. Z., 3/97.
CASH PAYMENTS VS. NON-CASH PAYMENTS. In recent years most wages -and salaries were also paid directly into bank accounts only and -spent from there via cheques and credit cards, without using- cash. Thus the proportion of cash habitually kept available, in- normal times, and formerly necessary for most wage and salary payments, becomes a smaller and smaller fraction of all the -non-cash means of payment at any particular time. When, -nevertheless, by law and juridical decisions, every debtor- remains obliged to pay in cash upon demand by a creditor, then a- large crisis factor is thereby built into the payment system,- especially a monopolised and regulated one, that would require- considerable time to provide any extra cash that is wanted and- that may even be legally prohibited from providing it. - J. Z., 3/97.
CASINO MONEY: Casino money is also possible and, to some extent,- already practised, if only to ensure honesty among a casino's -employees. So, the customers of a casino usually have to buy -first the casino's own token money before beginning their games in it and they have to redeem their winnings, if any, in-to outside money, before they leave.  Is casino money as taxed,- regulated and mismanaged as government money is? Is it ever -inflated? Is it ever deflated? Or is even a stagflation avoided- in it? - J. Z., 19.3.97.
CENTRAL BANK POLICIES TOWARDS COMPETING CURRENCY ISSUES: Survey, -country by country, with relevant legal cases cited and -abstracted.
CENTRAL BANKERS & THEIR WISDOM OR LACK OF IT REGARDING THE CAUSE- & CURE OF UNEMPLOYMENT: "Bankers wash their hands of jobless", by George Graham of the FINANCIAL TIMES in Jackson Hole,- Wyoming", taken from a column in THE AUSTRALIAN, 30.8.94, from which I- extract the following quotes which speak for themselves or,- rather, against the central bankers and their "experts": -"Central bankers from 19 countries gathered here at the weekend -at the invitation of the Federal Reserve Bank of Kansas City in- the shadow of the Grand Teton mountains to discuss unemployment- and came away with the reassuring message: it is not their -problem. A bevy of academic economists agreed that most of the- high unemployment rates in industrialised countries was -attributable to structural factors - principally the way the- Welfare State distorts an unemployed person's incentive to work -- and not to the cyclical demand factors which are within a central -bank's power to influence. - Heads nodded piously in the audience -as Paul Krugman, a professor at Stanford University, said it was- now all but universally accepted among academic economists, -though still suspect to politicians and journalists, that there -was a natural rate of unemployment. A central bank could expand- demand and push the actual rate of unemployment below that level -but only at the expense of accelerating inflation.... This is- music to the ears of most central bankers, who have long been -defending themselves against the accusation that they are buying -lower inflation at the expense of higher unemployment...."
CENTRAL BANKING & COMMUNISM, EAST & WEST: Totalitarian communism in East and West, go on and on, at least in the following forms: the monetary despotism of central banking (See point 5 of the platform of the Communist Manifesto), territorialism, taxation, welfare statism, collective decision-making on war and peace, armament and disarmament, international treaties, economic policies, migration and trade, labor, housing, roads, transport, buildings, libraries, postal services, policing, research and education.  Collectivist mass murder preparations are also very much "scientifically advanced." Their targets: the masses of the people, rather than their Big Brothers and "statesmen".  (By comparison the mass murder camps of the Nazi regime were primitive.) Dozens to hundreds of millions of people can now be murdered by "great leaders" and button pushers in minutes to hours, largely in automated ways. And such powers are hardly questioned at all . To that extent communism hasn't fallen but gained an almost universal victory over public opinion, public actions and public institutions. Naturally, all the problems inevitably associated with these communistic institutions go on and on. - J.Z., 26.8.91, 24.8.02.
CENTRAL BANKING & FORGERIES: The central banks print more of -their depreciating currencies, because their issue monopoly and - legal tender power allows them to do so, than all the criminal- forgers in their countries do. Alas, they can't be accused of -forgeries since one can hardly forge one's own notes. But they do -certainly operate under false pretences, namely their pretended- willingness and ability to prevent deflations, inflations and stagflations. Central banks also pretend to be able to help governments out of their -financial difficulties without depreciating their forced and -exclusive currencies. - J. Z., 8.11.92 & 15.4.97.
CENTRAL BANKING & INTEREST RATE POLICIES : Central bankers, other -bankers, financial journalist and economists nowadays and as a -rule to not seem to be able to think of and propose anything -better than putting the interest rate or our despotic monopoly -money either a few notches up or down. - J. Z., 3.10.96.
CENTRAL BANKING & ITS FALLACIES: I would like to see a book -written with this or a similar title, including the best refutations of these -fallacies so far found. For easier recognition and referencing these fallacies should perhaps not only be alphabetized under- catchwords and indexed and cross-referenced but also be numbered. -I would welcome any such manuscripts or essays or drafts of them- for microfiching in my series. The ultimate book on this subject- would have to result from collaboration. For no one has access to- all the monetary freedom writings - or would have time to read -them and extract them sufficiently. The literature on monetary -despotism, defending it or regarding it as self-evident or -beneficial, is much more plentiful than the rich literature on- monetary freedom (largely hidden from public view). When I- looked for writings on central and free banking at the State Library of NSW, back in 1959 or 1960, I found ca. 400, a -bookshelf full, discussing approvingly only central banking and- no work critical of it at all. Then I thought that I might get- around to extract their main arguments systematically and to have -the time, energy and knowledge to gradually refute most of them.- Now I know better. Each individual, even with the best of will,- can only do so much. If I had tried this task on my own, to the- exclusion of any other, I might have only provided another- Don-Quichote fight against the wings of a windmill. - J. Z., -8.4.97.
CENTRAL BANKING & LEGAL TENDER, FORCED CURRENCY, MONEY MONOPOLY: By legalizing the monopoly and coercive powers of the central bank we have given the government a blank cheque drawn on our earnings and our property, in form of its legal tender (compulsory acceptance and compulsory value) paper money or requisitioning certificates or forced currency. It amounts to a camouflaged tribute system because it is not recognized as such by the majority of the population, persuaded that the central bank would be for the common good.
CENTRAL BANKING & MONETARY DESPOTISM: "Under government- patronage the monetary system has grown to great complexity (*), but- so little private experimentation and selection among alternative -means has ever been permitted that we still do not quite know what -good money would be - or how good it could be. (**) Nor is such- interference and monopoly a recent creation: it occurred almost- as soon as coinage was adopted as a generally accepted medium of- exchange. Though an indispensable requirement for the functioning- of an extensive order of cooperation of free people, money has -almost from its first appearance been so shamelessly abused by -governments that it has become the prime source of disturbance of -all self-ordering processes in the extended order of human cooperation. The history of government management of money has, -except for a few short happy periods, been one of incessant fraud -and deception. In this respect, governments have proved far more -immoral than any private agency supplying distinct kinds of money -in competition possibly could have been. I have suggested- elsewhere, and will not argue again here, that the market economy- might well be better able to develop its potentialities if government monopoly of money were abolished." (Hayek, 1776/78,- and 1986: 8-10.) - HAYEK, F. A., The Fatal Conceit, 103/104. - (*)- This complexity is built upon simple despotic foundations: Note- issue monopoly & forced acceptance and forced value or legal -tender for the notes. The rest is more or less only -window-dressing and false pretences. - (**) Illegally numerous -monetary experiments have taken place. But precisely because they -were not legal and not supported by most scholars, they did not last long enough and the records of- these experiments are rather incomplete. Moreover, they were -never fully gathered together, translated into the major- languages and then fully explored theoretically. But scholars -like Ulrich von Beckerath, in a life-long effort, have come as- close to such an exploration and to sound theoretical -conclusions based upon them, as an individual, largely on his- own, could. - J. Z., 27.5.97.
CENTRAL BANKING & NATIONAL INDEPENDENCE: National independence -does not mean e.g. a national central bank or currency board but, rather, the independence of a nation and of all its citizens from -any central bank and any other centralistic, monopolistic,- despotic and territorial institutions. - J. Z., 5.9.92, 22.4.97.
CENTRAL BANKING & THE MONEY ISSUE MONOPOLY AND LEGAL TENDER -POWER: If the central banking system and its paper money were -really so efficient and popular as the government presumes it to- be then it would not need any monopoly and regulatory powers nor- any legal tender power to achieve a ready acceptance of its paper -money. - Then it could also continue on and on, at the risk and -expense of voluntary victims only, as many churches and sects did -and do. - J. Z., 26.3.93, 27.5.97.
CENTRAL BANKING & THE REDUCTION OF ITS FORCED & EXCLUSIVE- CURRENCY TO A COMPETITIVE & OPTIONAL TAX FOUNDATION MONEY ONLY-: How fast would the central bank's forced and monopolised- currency disappear or become reduced to a relatively harmless and- even (to the tax slaves) somewhat helpful tax foundation money- (while these tribute payments are still tolerated), once it- were subjected to free competition from several sound, private -and alternative currencies that are optional and market rated- against sound alternative value standards, freely chosen, too?- How fast could the State paper money be abolished or so reduced?- - Almost overnight, if this monetary revolution is well thought- out and prepared by enough people. The sooner the better. - J. Z.,-19.8.92., 23.4.97.
CENTRAL BANKING : It is absurd to speak of a free market, free- enterprise, free competition, free exchange, free trade, under -the monetary despotism of a central bank and its exclusive and- forced legal tender currency, not to speak of the other privileges and powers granted to it. - J. Z., 23.9.92, 14.4.97, 6.9.02.
CENTRAL BANKING DECENTRALIZATION: Somewhat decentralized central banking is still central banking and not free banking. - J.Z., 26.8.91. - Classical instance: The Federal Reserve System of the U.S. - Some have misread the FED so far that they think it is a private & capitalistic bank. Some still remain unaware of its legal tender and of its monopoly power, although they have handled its money often enough and have experienced the result of its actions. The Federal Reserve Act of 1913 and all its amendments, is so badly publicized that I have come across a copy of it only once, in the hands of a Social Credit advocate. The issue monopoly clause of it was so well hidden that I could not find it in a hurry. That may have been intentional or the result of the usual bureaucratic bungling even in drafting legislation. - J.Z., 26.8.02.
CENTRAL BANKING, ACCOUNTS OF OUTLAWED GROUPS: Somewhere and some- years ago I found a hint that a central bank has been instructed- to stop payments of the accounts of all outlawed groups. Thus, -merely by one of an avalanche of interventionist laws, which no -one has the time to fully peruse, any group could be outlawed and -its bank accounts confiscated. The abuse potential of this power -against political opponents is immense. Are ordinary criminals,- who committed crimes of violence, treated as severely? Are- criminals in office so treated? - J. Z., 1.5.97.
CENTRAL BANKING, CENTRALISM, MONOPOLISM, THE POWER OF IT : The most important, centralistic and monopolistic economic institution of the Australian Federal Government is its Reserve Bank. - We want to break its stranglehold on the economy - not by destroying it but by depriving it of its privileges and powers, by introducing free and decentralised competition against it. Thereby we could overcome the depression, unemployment and inflation it has caused. - Try exchanging without money and you will soon find out how large your dependency on the central bank and its exclusive currency has become. - Allow any employer to offer, in payment of wages and any employee to accept any other exchange medium that is agreeable to him. Do not force both to deal only in a monopolistic and also rapidly deteriorating and otherwise mismanaged exchange medium and value standard. Let's have the exchange media as competitively supplied as knives and forks are - and we will have no shortage of them, either. - With sufficient sound exchange media, sound value reckoning, free pricing and when no job or trade is closed to anyone by any monopolies, then unemployment could be done away with within hours to days in almost all cases - by people who understand and are free to apply the monetary freedom techniques. - J. Z., 1985.
CENTRAL BANKING, COMMUNISM, VOLUNTARISM, PANARCHISM, MONETARY FREEDOM: The communist central banking system, as well as the communist system as a whole, like any other system or belief-construct, should be confined to volunteers only and that requires exterritorial autonomy or experimental freedom for all communities. - J.Z., 23.9.99, 24.8.02.
CENTRAL BANKING, EURO-CURRENCY, WORLD BANKING, INTERNATIONAL- MONETARY FUND (IMF) & MARXISM, COMMUNISM, STATE SOCIALISM OR STATE- CAPITALISM, MONOPOLISM & ANTI-MONOPOLISM: Central Banking, in -its national, Euro-currency and World Banking ideas and practices, exemplifies of the central Marxist error that to defeat "monopolies"- (usually quite wrongly defined) you ought to establish,- instead, a nation-wide, European or even world-wide monopoly,- rather than abolish all monopolies and introduce free- competition for all productive, creative and free exchange- activities. - J. Z., 14.8.89, 29.4.97.
CENTRAL BANKING, INFLATION, PAPER MONEY, RESERVE BANK OF AUSTRALIA, AUSTRALIAN DOLLAR AGAINST US DOLLAR: How much longer will it take "our" official "guardian" of "our" currency to reduce the value of the A $ to 1 cents in U.S. currency? It has already brought the value of the Australian dollar down to 47 US cents. And that comparison does not even take into account how much the US $ has been depreciated in the meantime, by the same method and kind of institution. Against the former value of the US $ the A $ may already be down to 1 US cent! - J.Z,, 1/10/01, 27.8.02.
CENTRAL BANKING, INFLATIONS & PRICE DEVELOPMENTS: Central banks are destroyers of the values of their currencies. Just compare the price history. - J.Z., 31.3.02.
CENTRAL BANKING, LEGAL TENDER & ISSUE MONOPOLY: Was there ever a- large-scale and persistent paper money inflation, inflating the -whole price and wage level, without these three pre-conditions?- Economists and historians should be able and willing to check -these relationships out. If the finding is that there was not and there cannot be such an inflation, by the very nature of monetary- exchanges under freedom, then these findings should be publicised- and lead to resistance against monetary despotism. - J. Z., -15.4.97. - Can they really call themselves economists and historians if they do not engage in such surveys?
CENTRAL BANKING, LENIN & COMMUNISM: Lenin knew it. He said that- establishing a central bank was 90% of taking over a country. - -James P. Hogan, Mirror Maze, 315.
CENTRAL BANKING, MONETARY EXPERIMENTATION, DEVELOPMENT & FREEDOM: -"Like morality, law, language, and biological organisms, monetary- institutions result from spontaneous order - and are similarly susceptible to variation and selection. Yet monetary institutions- turn out to be the least satisfactorily developed of all- spontaneously grown formations. Few will, for example, dare to- claim that their functioning has improved during the last seventy- years or so, since what has been an essentially automatic- mechanism based on an international metallic standard was -replaced, under the guidance of experts, by deliberate national -'monetary policies'. Indeed, humankind's experiences with money- have given good reason for distrusting it, but not for the reasons commonly supposed. RATHER, THE SELECTIVE PROCESSES ARE -INTERFERED WITH HERE MORE THAN ANYWHERE ELSE: SELECTION BY -EVOLUTION IS PREVENTED BY GOVERNMENT MONOPOLIES THAT MAKE- COMPETITIVE EXPERIMENTATION IMPOSSIBLE." - HAYEK, F. A., The Fatal -Conceit, 103/104. - Alas, government interventionism with -exchange media, clearing and value standard had begun, many -centuries before. Hayek admits this in his next paragraph. They -have, in almost every sphere, prevented or suppressed spontaneous- development into the best forms possible for particular times,- people and circumstances. For instance, the intervention with- "truck" payments went on in Europe for ca. 500 years and did not -permit them to develop beyond some primitive and still very -inconvenient forms. However, even these were often the only- "payment means" that employees could readily offer and neither the -employers nor the employees cared much then - or now, about how- such private payment options could be greatly improved and made even very attractive, superior to the coins of the realm or the- paper monies of central banks. - J. Z., 27.5.97.
CENTRAL BANKING, MONEY DEPRECIATION, "GUARDIANS" OF THE CURRENCY: Central banks are not "guarding" their nationalized paper money currency against depreciation but, thanks to their monopoly and legal tender coercive power, they are systematically and regularly depreciating them - while suppressing any competition against their misrule and abuses. - J.Z., 28.4.02.
CENTRAL BANKING, MONEY DEPRECIATION, CENTRAL BANKING POWERS &- ACTIONS: How, when, how often, by what means and why, do central- banks, not private forgers or issuers or "creators" of money, depreciate national currencies? Do they report all the relevant -facts and powers and consequences to the general public? Do they- promote monetary enlightenment and emancipation or, rather, -monetary ignorance, prejudices, myths and outright lies? - J. Z.,-8.11.92, 15.4.97.
CENTRAL BANKING, MONEY MONOPOLY, MONETARY DESPOTISM, GOVERNMENT,- TRUST & CONFIDENCE: A currency entrusted to any government is -usually as good as lost. - J. Z., 27.1.93.
CENTRAL BANKING, NOTE ISSUE MONOPOLY, REFLUX: Using  a central bank's banknotes it is often easy to get credit paid in them - but hard to pay it back because these notes, once spent, do not return automatically to the spender. E.g., tax collectors and other users, in other localities and industries do "waylay" them. Trade becomes a struggle for a scarce exclusive currency that is well supplied only in those channels favoured by the central bank system and governments spending its notes after first extracting them from almost everyone or simply printing them. Self-issued notes or notes locally issued in association with others would return to the issuer or issuers, soon. - J. Z., 13.5.87, 9.5.97, 13.9.02.
CENTRAL BANKING, REDUCTION OR INCREASE IN UNEMPLOYMENT BENEFITS, -THEIR TRANSFORMATION FROM GIFTS INTO CREDITS & THE DEGREE OF -UNEMPLOYMENT: The Reserve Bank (central bank of Australia) -proposed to reduce unemployment benefits in order to reduce- unemployment. While it is true that one can get almost any degree- of unemployment that one is able and willing to pay for, the abolition of involuntary unemployment, in total, should remain- the aim. But, the central bank is the main culprit with regard to -unemployment although subsidies, price controls, wage controls, -coercive unionism, collective bargaining, etc., do also play a -role here. Typically, the Reserve Bank did not propose the -reduction or abolition of its monopoly, privileges and regulatory -powers, as means towards the abolition of unemployment. Most of -its directors and employees probably still imagine that it could- reduce rather than cause and increase unemployment. Nor did it- propose the transformation of the unemployment benefits from- gifts into credits, a thought which ought not to be way-out for -any bank. But then only the central banks have access to the note- printing presses for their exclusive and forced currency. With -that power, they do not seriously consider the alternative of- permitting employers to pay and employees to be paid in- alternative and competing currencies. - To sort out the moochers from the genuinely unemployed, I would rather propose an -increase in unemployment benefits but, at the same time, make -them repayable by the unemployed, even if he might have to sell -his house and car for this purpose. Moreover, he should see to it -that his family members and friends do guaranty his repayment, if -necessary. That will tend to spur them into accepting almost any -job they can get and looking for any job opening. That would also induce them to accept lower wages or salaries. But it would- still not suffice to induce most of them to ponder monetary and- financial freedom as the main cure for unemployment. With the -gambling spirit probably still rather large among the unemployed, -too, perhaps it might be worthwhile to get them involved in a- prize competition for the best ideas, not so far refuted in- literature and practice, to end unemployment. Let them seriously- search for such ideas and practices. Let us say that there are 1- million unemployed in Australia (there may be, governments tend- to understate the case). Then, if every unemployed just -contributed 1 dollar a month, there could be monthly prizes- of 1 million for the best idea of the month. The scheme could- even be judged by the unemployed themselves, voting on each- scheme, with its pro and con, as compiled by them. To simplify -the voting process, one could use the jury system. 12 of them- would have to agree, unanimously, on the best proposal for the- month. Such jury sessions should be publicised as much as -possible. Let the finding and proving the cure for unemployment -be the job, as far as possible, of the unemployed themselves -- and of anyone really interested in this question. - The news on -the Reserve Bank proposal was aired on radio news on 13 Dec.-1993. - J. Z., 23.4.97. - I may be the only surviving member of -the Berlin Society of 1952 to Fight the Causes of Unemployment. -It had much to say on this subject which is new still to most- people, even to those who consider themselves to be experts on -this subject. See the details in my  PEACE PLANS series, all on- microfiche. - J. Z. - Later I suggested somewhere that half of the money so collected should be used for the prize money for the best proposal and the other half for the collection, ordering and publishing of all these ideas and opinions in the cheapest media, e.g. on microfiche, floppy disks and CD-ROMs, even paying some of the unemployed for full-time work on this library, archiving, editing and publishing project. As Ulrich von Beckerath frequently remarked: Combined purchasing power is one of the greatest and also one of the least utilised forces in the world. - J. Z., 7.9.02.
CENTRAL BANKING: "Small is beautiful, wrote Prof. Schumacher, and -by this three-word aphorism, acquired more fame than by his big -books. Cannot our politicians and economists see that the -principle applies to banks as well? When this truth glimmers in on -them, they may discover that it was state interference that gave -us bank monopoly, and so gave rise to all the other monopolies." - -Henry Meulen, THE INDIVIDUALIST, 6/78, p. 27. - See: -DECENTRALISATION, MONEY MONOPOLY, NOTE ISSUE MONOPOLY.
CENTRAL BANKING: A central bank, like a monarchy or a monopoly -post office, may, sometimes, be reasonably well run for a while,- within its inherent limitations. However, in the long run and for -most cases and times, it is a recipe for planned or unintended disasters. -- See e.g. Kurt Schuler's writing on the Currency Board version of- a central bank and Prof. Heinrich Rittershausen's attempt to make -the best of this evil through his teachings in his work: Die -Zentralnotenbank. - J. Z., 30.8.93.
CENTRAL BANKING: An engine for inflation and mass unemployment- and trade depressions and one that often manages to combine both,- inflation and deflation, to "achieve" stagflation. - But- legislated into power and upheld by monetary prejudices, it -remains in force to dispense its wrongs and evils, in all -countries. - J. Z., 10.2.93, 14.4.97.
CENTRAL BANKING: Central banking is the Golden Calf worship of -today. It offers no benefits but only disasters. But when has -that ever deterred any worshippers anywhere? - J. Z., 29.12.92.- - See: MONETARY RELIGION, MONETARY DESPOTISM.
CENTRAL BANKING: Do nothing, be nothing & dissolution are the -best 3 policies for any central bank. However, they still have- some penalty lessons to teach to their VOLUNTARY victims and we- should give them that chance. - J. Z., 7.4.94, 24.4.97.
CENTRAL BANKING: It is based on self-interest of governments,- that of politicians, bureaucrats and their lobbyist favourites, -very contrary to the public interest. Otherwise the victims would- not put up with its powers, monopoly, coercion, meddling, fraud -and false pretences. It is the most powerful economic institution -in every country. However, since it is legalized and has a whole -statist faith as its backing, it goes on and on and is not judged -on its merits or rather demerits but upon the utopian and State- socialistic dreams that are involved in it. To this faith it does- not matter that almost all facts speak against it, since central -banking was established. It even allows totalitarians like Lenin -to gain power and maintain themselves in power. It even allowed a -madman like the German emperor Wilhelm II to start and continue WW -I and allowed Hitler to finance WW II. - Nevertheless, we are not -supposed to criticise this "holy" institutions and to try to -replace it by free, cooperative and competitive ones. Nay, rather -have WW III & IV & V and more totalitarian regimes for further- decades. That, in the minds of most people, seems easier to bear -than the job of tackling the problems created by monetary despotism and studying the -solutions of monetary freedom. - If I were a visiting alien and- looked at this all too wide-spread mentality, I could understand- if such an alien would say to himself: I have the power to wipe out- this insect pest on Earth - why shouldn't I use it? Perhaps,- after a few million years, the cockroaches or butterflies might -turn into something better! - J. Z., 19.8.92, 23.4.97. - But then this would apply "collective responsibility" on an even larger scale than the present war on "Iraq" does, rather than holding Saddam Hussein individually responsible for his government's actions. For the latter approach one does not need any large military forces or any war. - J.Z., 7.9.02.
CENTRAL BANKING: National central banks have led to as many- disappointments as national governments have, national post- offices, national railways and national roads. Have any -nationalised industries been successful under their motto: "Not- for profit but for use"? Have they achieved consumer satisfaction -at less than market prices? Their subsidised prices should not be -quoted here - without adding the subsidies that are involved. -How many centuries of central bank failures do we have to suffer- under before we finally abolish central banks? Price controls- were tried, again and again, quite in vain, for 4,000 years. So -were inflationary and deflationary policies by monetary- despotism. One feature, the suppression of all kinds of truck--payments and truck payment notes, was applied over at least 4- centuries and in emergencies, caused by the government's monetary- despotism and in spite of numerous legal and juridical- prohibitions, employers and employees had to resort to this -self-help means again and again. - If politicians, their experts- and the whole community will not learn sufficiently from such -failures, then at least we should set free all the minorities of- people who believe that they have and can apply a better system,- at their own expense and risk. We should grant them the same -experimental freedom that we grant to scientists, artists, -technicians, biologists, agriculturists etc. Otherwise monetary -science and practice will stagnate under the rule of monetary -despotism, possibly for further centuries, if not thousands of- years. - J. Z., 19.8.92, 23.4.97.
CENTRAL BANKING: The central bank, through its issue monopoly -and legal tender power, has coercively and parasitically inserted- itself as a third party into almost every economic transaction, -exploits almost all of us to its own advantage and at the expense -of our rights, liberties, security, property and earnings, -keeping the economy unbalanced, throwing it from one crisis into -another and provides us only with the illusion that a uniform- currency would be a great benefit for us, and the illusion that -it and only it could manage to provide a sound currency, although -it has never delivered one so far but has destabilised the- monetary system as much as possible. This system is legally -upheld, no matter how wrong,  mismanaged and uneconomic it is for- the whole economy and each of its participants. Those in charge -of it seem to have adopted the motto of a French king before the -French Revolution: "L'etat, c'est moi!" and: "Apres nous la- deluge!" (I am the State! - The great flood will come - but only- after me!) -That any person with great powers could become so- corrupted and conceited is humanly understandable. But that- people and even scholars put up with this, not only for years but -for decades, for generations, is not as comprehensible. Most -totalitarian regimes have by now been overthrown. The rest might follow, soon. However, we have established and retained their -most totalitarian institution  everywhere, even in the supposedly- free West! - I, too, am human, but this is all too inhumane and- alien to me. - J. Z., 18.4.93, 2.5.97.
CENTRAL BANKING: The management of money has not improved its- quality. - Sir Ernest Benn, The State the Enemy, cover. - He- should have said: Centralised and coercive management. He might- have added: It has not managed to provide the correct but for- each day fluctuating required quantities, either. Instead, it -over-supplied or under-supplied its exclusive and forced- currency for all too long, almost as a rule. - J. Z., n.d. &-15.4.97.
CENTRAL BANKING: The very cheek of the central banks of- governments, forcing themselves as a monopoly mediators into every -monetary exchange transaction and into every value standard -measurement within a country and this with a very inferior and- fast depreciating means of exchange and a rubber band and- manipulated value standard that is close to the worst of all- which have ever been imagined and practised. And with all this -they still pretend to be able and willing to sufficiently supply- the market with exchange media and with a sound currency. It is -like a highwayman monopolising crime in a country and then- pretending to be a crime fighter. Could anyone possibly have- accumulated more disqualifications for the job of supplying a sound value standard and sufficient exchange media, than have the- central banks, in every country? - J. Z., 19.8.92, 23.4.97.
CENTRAL BANKING: There is not a single good reason to confine -monetary, clearing or credit competition or cooperative -credit and monetary arrangements to international competition- between central banks, their exclusive and forced currencies, for- whole national territories and their exclusive and enforced paper -"standards" only. That is like considering politics only from the -point of view of despotism and economics only from that of -command economies. Those with as limited horizons should only be- free to limit their own horizons and actions within their own- limited spheres  and associations, not the horizons and actions of others who do -leave them alone. - J. Z., 18.3.97.
CENTRAL BANKS & COMMUNISM, CENTRAL COMMITTEES OF DIRIGISM OR THE CENTRALLY PLANNED & MISMANAGED ECONOMY: Economically, the central banks are the worst central committees of the communist movement. - J.Z., 5.8.91.
CENTRAL BANKS AS "GUARDIANS" OF GOVERNMENTAL PAPER CURRENCIES: The governments' central banks are reducing the value of their paper currencies almost all the time (at different rates), although they are supposed to guard their currencies against depreciation. - J.Z., 20.12.01. - As usual, governments achieve the opposite of what they aimed to achieve by their legislation, "measures" and "policies". In addition, central banking has achieved and maintained large degrees of involuntary unemployment over long periods and the persistence of some involuntary unemployment even during its "boom" periods. It has made all economic crises worse. It has also prevented the ending and prevention of depressions, deflations and inflations by the self-help methods of monetary freedom. Regarding financial freedom and at least in countries like Germany, it has also outlawed value-preserving clauses or made them conditional upon permissions granted by the central bank, which are almost never granted. However, the customary, traditional or legislated exclusive currency condition of metallic currencies, and of metallic redemption currencies and lack of clearing knowledge, techniques and facilities, had also caused frequent and persistent deflations before central banking arose to its present dominant position. - J.Z., 26.8.02.
CENTRAL BANKS, INFLATIONS, DEFLATIONS & STAGFLATIONS: Is there- any central bank that has existed for several years or decades,- and that has not yet caused inflations, deflations and- stagflations several times - while blaming others for its actions- and their consequences? - J. Z., 19.8.92, 23.4.97.
CENTRAL BANKS, UNABLE TO FULFIL THEIR SUPPOSED FUNCTION OR ROLE: -Central banks do not know and cannot do anything better than- fluctuate, almost constantly, between inflation, deflation and- stagflation. Having removed competition and market rating and- full publicity for their issues and practices (compare- especially their secrecy on the date and extent of planned -devaluations), they are thrown back to fiscal policies, open- market sales or purchases of securities, the insecurity of- government securities, enforced claims upon the holdings of other- banks, legal tender and their monopoly position, the observance- of foreign exchange rates, and their stock of redemption funds -in rare metals, securities, insecurities and foreign exchange) -and the regulatory power they have over the interest and discount- rate, to more or less mismange the exclusive and forced currency- entrusted to them. Almost all of them can point out only to- decades of mismanagement, due to misjudgments and to their- failures to attain stable currencies, a booming economy and full- employment. A few have managed to keep their deflations, inflations and stagflations within bounds, for a few years, one- never knows for how long they can manage to do so. And, even in -these cases, monetary freedom would have supplied rightful and- better monetary services. Thus one would expect sufficiently -enlightened victims of this system - if they can be bothered to- take an interest in it and to study it and alternatives to it, to -ignore, outlaw or overthrow this despotic and harmful regime. -Except a few of its directors and employees, we are all wronged -and harmed by it. But it does do well enough by them. - J. Z., 2.8.94,-17.4.97.
CENTRAL BANKS, UNEMPLOYMENT, SALES DIFFICULTIES, DEPRESSIONS: The central banks are so useless that they cannot even make use of all willing and available labor and skills, of all the services and goods offered for sale, of all the machines, workshops and offices available for productive efforts, not even for 8 hours a day, far less for 24 hours a day. - Instead, in their helplessness, ignorance and prejudices, the juggle with interest rates, play with selling or buying securities and offer promises, while almost continuously, apart from their credit restrictions, depreciating their paper money currency. In the absence of free market rating for their paper money against a sound value standard, of well run tax foundation for their cash and of and optional acceptance and of competing internal currencies, they do not know how much more or less to issue of their forced currency and where and when they ought to do so.  - Nor are they able and willing to systematically study the alternatives to their own rule, although, surprisingly, some of their employees have managed to publish some papers on free banking in some of their periodicals.  So, at least, not all of them do systematically suppress all freedom of expression and information in this sphere. But under the present conditions of monetary immaturity, from top to bottom, they do not have to do so, either, to maintain themselves in power. -  However, one can also charge most opponents central banking with having insufficiently studied the alternatives to it. -  J.Z., 22.4.01, 24.8.02.
CENTRAL BANKS. SHOULD THEY BE ABOLISHED OR DESTROYED? Maybe the- Tamil Tiger terrorists of Ceylon are not so dumb as most other -terrorists tend to be? According to ABC radio news on 1 Feb. 96, -suicide bombers attacked the central bank in Colombo, Ceylon.- Alas, in their attack ca. 100 people were killed. A night time- raid, preceded by a warning, might not have cost any lives. There -was no report on how much the bank and its ability to function- were destroyed. No such raid would be as helpful as private and -cooperative note issues could be - and refusals to accept the -central bank's currency any longer. - J. Z., 1/2/95.
CENTRAL BANKS: Central banks for communists and other central bank adherents only: They deserve to get what they want, in self-inflicted punishment. - J.Z., 27.5.01, 26.8.02.
CHEAP MONEY: The cheap money of monetary freedom is different- from the cheap money of monetary despotism. It would not and- could not lead to inflation and unjustified economic investments.-- J. Z., 1.12.96. Its production and acquisition would be cheap. -It would be relatively cheap to get it accepted in your local -community. And it would have a cheap, easy and fast reflux to -you, for its redemption into the goods and services that are the basis of your issues. You would not have to pay a monopoly -interest rate for exclusive and forced exchange media provided by -a monopolistic and coercive central bank. Your own money would be- cheaper and better for your purposes and those of your customers.- - J. Z., 20.3.97.
CHEAP MONEY: To attack some monies as "cheap" money is a rather -cheap attack. Neither cheapness nor expensiveness is decisive for -money but, rather, its usefulness, soundness, competitiveness,- free market rating for it, refusability, discountability,- availability or unavailability, the ability or inability to supply- it oneself or in association with others, its acceptability to- sovereign consumers, at least locally, e.g. in wage payments., and, quite basically, its rightfulness or honesty, its degree of "optionality" or "voluntarism" or "free choice" or "competition", as opposed to coercion, intolerance and despotism. -Indeed, some alternative currencies, that CAN be as good as gold- coins, although not convertible into gold coins by the issuer but -only on the free gold market, are cheap to produce, compared with- gold coins and gold certificates. But that does not turn them -into cheap and nasty money. Indeed, central banks that can pump -their forced and exclusive currency into circulation, almost -without limits, will find their paper currency cheap to produce- and circulate - until the last stages of the inflations they do -so cause or until other effects of inflation begin to matter considerably, e.g. the results of price controls -and rationing, the cessation of credits on a paper money basis, and finally even the severely increased printing costs for the notes-. To that extent its "cheap" money can very often- become very expensive for a government. It might even be overthrown, if not immediately, by a crackpot like Hitler & Co,- who tried it in 1923, but, largely as a result of this inflation-- and the subsequent monetary crisis of the Great depression, by -the same crackpot dictator, 10 years later. Money that is very -expensive to obtain and with which an economy cannot be fully- supplied, can reduce that economy to degrees of barter and to -emergency sales prices. In such situations, and until normal- marketing conditions for goods, services and labour are restored, -the availability of some form of cheap money, even if it is not- ideal money, would be widely welcomed. But governments in such- situations make neither the own exclusive currency sufficiently -accessible nor do they permit or encourage unofficial competitive- supplies. (On the contrary, in the last years of the Weimar Republic the suppression of alternative currencies reached new heights in legal and juridical comprehensiveness.) Once the "cheap" (despotic) money of monetary despotism has- expropriated creditors (including all wage and salary and- pension recipients) by the millions, a rather costly treatment -for them, the value of that currency will finally come close to- zero and to total refusal to accept it. Already in the meantime- many people will resort largely to primitive barter. - The money of -monetary freedom is physically cheap to produce, too. Only some -forms of it are believed, by their supporters, to require gold- treasures, circulating gold coins and convertibility into gold. Others can do- without that, even while continuing gold weight reckoning and would thus be much cheaper to provide. The cheapness of aluminium- via modern production methods has not made it valueless but much -more widely useful and used. - One should also distinguish between the low -production costs and high production costs of money tokens and -low and high purchasing power of them. Low production costs for -monetary freedom issues do not mean that they have to have a low- purchasing power. And high production costs of notes during a -galloping inflation does not meant that they do have a high- purchasing power, even though their denominations are very high.- The largest German RM note of 1923 was 100 billion RM, worth then- only ca. 7 pounds sterling. Poor people, with a few dollars or -pounds, could then live in luxury in Germany, although their -foreign exchange paper money was also very cheaply produced. - In- general, the mere production costs of sound exchange media should- be as low as possible and their purchasing power should be as -high and stable as possible. - J. Z., 13.1.94, 1.5.97.
CHEQUES FOR CLEARING ONLY: They do not have to be covered by -legal tender savings or deposits or gold or silver reserves and -do not have to be redeemed in any rare metal. It is enough if -they are useful enough for clearing settlements, i.e. if the -cheque account holder gets enough credits written into his cheque- account from the sales of his goods, services or labour, which -here, too, form the real cover for the value of his cheques.- Without them his cheque account would soon run red. - J. Z., 3/97.
CHEVALIER, MICHAEL, French economist who opposed the note issue monopoly - according to Rist.
CHILD LABOUR, CHILD LABOUR LAW, UNEMPLOYMENT & MONETARY FREEDOM: -Child labour, voluntary and unexploited, should be part of a- child's learning process and could make a child financially independent of its parents at an early stage, which would help to avoid much -friction and frustrations between the generations and also among parents in nuclear families. When -unemployment is wide-spread then children and juveniles are kept out of the labour -market by compulsory schooling and "protective" child labour -laws, like minimum wages, set about the market level for their work contributions. (In the average case, not in individual cases. Under freedom of contract for wages many able and willing young people could earn much more than their present minimum wage. But now neither they nor their employers are given the chance to find out how productive they can be.) When labour is still very unproductive and insufficiently- supplied with capital and also forced to be sold only for a -forced and exclusive currency, then the income of a family was- often insufficient and so the children had to be sent work to -work. Now they are not allowed to and their time is taken up by -compulsory school attendance and imposed homework so that for much of the rest of the time they try to escape into games, entertainment and play. (Just like adults, who are bored or stressed by their job situations.) Neither of these are- very educational and a good substitute for giving children the -chance to become early-on involved in various self-supporting -labours that are self-chosen and naturally educational. Under full employment they could change their jobs every -week, if they wanted to, to give them a more varied although not a- very deep experience with them - but they might find their true vocation in- this way. That they should no be exposed to great risk to life, -limb and health is self-evident. Parents and guardians should- have a veto there. Under monetary and financial freedom parents would, as a rule, be able to earn enough to support their- children and they would remain their guarantors and guardians and- not forced, by their poverty to send their children to go to work just to earn -enough money to help support the family. Most would see the value- of unforced labour for their children. Moreover, then there would- be many more part-time jobs. A few hours of work a day and some- days a week is more bearable for them than 40 hours or more a- week. Furthermore, upbringing and education loans would be much- easier to obtain and easier to repay later, by the parents or the- children or both.  One child charity asks currently for $ 1 a day -to support a child in an underdeveloped country. I feel certain -that FREE children, ECONOMICALLY FREE, and that would also require full monetary and financial freedom, would be able to earn much more than $ 1 in no more than- 1-4 hours of daily work, if allowed to do so and most of them- would tend to learn more from this than they do now in schools (in their "12 year sentences"). At -the same time, competing schools and education systems, could be -made much more attractive for them, give them a choice and their -lessons could also be paid for by the children themselves, so low could they be, if they were- organized e.g. under the monitor system of Joseph Lancaster. High -school and university students, being already literate (only somewhat literate, under present  government schooling), would find it much easier to support themselves through part-time work,- with chosen stretches of full time work between stretches of full- time studies. Learning is more and more becoming a life-long -process, anyhow, for all, since the job skills and knowledge -required are continuously changing, too. The fixed, long and compulsory school years are a form of unjustified enslavement for- children and one of the major causes of juvenile delinquency, -escape into drugs and alcohol, mind-numbing and hearing-damaging -music and of unnatural friction between children and parents. It -also does most children good when they are not only disciplined- by parents and teachers but by job, trade and market requirements,- as spenders of their self-earned money etc., becoming as early as- possible self-responsible instead of delaying that more and more.- How many of them are e.g. killed on the road, because the driving- option was withheld from them until they were almost 17? I would -like to see a statistics comparing country children, who often- drive tractors etc. on their parents farms, much earlier, with -the driving records of city children, forcefully kept from- driving until almost 17. For any suppression of natural urges -there is always a price to be paid. Their internal control and naturally learned self-control is- much more preferable then the controls imposed by compulsory school attendance and government run or regulated schools. - 4.5.97. - J. Z., 13.9.02.
CHILD LABOUR: Why are most kids not productive most of the time? -Because we are prepared to subsidize their idleness, although- there would be plenty of jobs for them in house and garden,- industry, business and agriculture, all voluntary, part time, -market rated, if all restrictions upon their creative and -productive activities, including taxation, licensing, labour -laws, wage controls etc., were abolished. Only their guardians -should be free to set rightful limits upon their activities. - J. Z., 16.3.97.
CHILDREN AS FREE BANKERS?  To what extent would they be immune -from the penalties for infringing the money monopoly that would -fall upon adults?  Could they be penalised at all? Would their parents be? Could children be -trained for such freedom actions? (That would certainly be more rightful and useful than training them in the use of automatic weapons, as some regimes do. -  J. Z., 10.9.02.) Would they be interested enough -to try? - One should try to write a primer, interesting and- understood even by children, on this option. It should point out -the connection between  unemployment and child abuse and youth -suicides, the especially high rates of unemployment among young -people, the educational options of free child labour, the- economic independence they could acquire as such bankers and as -children whose jobs would be made possible by such a bank. Their -right not to be taxed in their productive efforts should be- stressed. A bill of rights for children should be attached. The -project should be discussed with children, e.g. on the Internet,- to which many school children now have access. J. Z., 2.3.95 & 27.5.97. - See: START-UP OPTIONS, OLD PEOPLE'S BANK OF ISSUE,- WOMEN'S BANK OF ISSUE, ABORIGINES' BANK OF ISSUE, RED INDIAN -BANKS OF ISSUE, IN RESERVATIONS, NEGRO BANK OF ISSUE?
CHINA, UNEMPLOYMENT: "Hong Kong Bank says in its latest CHINA- MONTHLY REPORT that labour problems in the country have worsened- but have only recently drawn major concern and attention. - The -bank estimates that there are between 10 million and 20 million- redundant workers in the State sector, with another 120 million- in rural areas - figures which are growing each year." - Robin Brombi, "Bank warns on China's soaring unemployment." A photo -accompanies the article with the inscription: Searching: Some- of the 25,000 students who applied for 1500 jobs in Zhuhai zone. -- THE AUSTRALIAN, 24.4.94. - How can one raise interest in the- monetary freedom options in mainland China, or at least in- Taiwan? Could only a revolutionary army be interested in them? If -it could supply deserters and POW's almost instantly with -productive jobs then it might not have much fighting to do. -- J. Z., 27.5.97. - Even our defence department should be interested in "armies" of unemployed, for another Hitler, this time with Chinese features, could turn them into conquering armies. Moreover, if we could supply any number of deserters and refugees very rapidly with productive and self-supporting jobs, by utilising especially all monetary and financial freedom options, then we would not have to fear any conscript armies or hordes of refugees. - J. Z., 10.9.02.
CHINA: 200 MILLION UNEMPLOYED: "China admits 200 m people unemployed." Headline in BANGKOK POST, Wednesday, March 3, 1993, p. 18: Peking, (UPI) - A government-run newspaper admitted yesterday that China has more than 200 million unemployed and called on the government to replace its failed social welfare policies with neo-classical economic solutions to the growing problem. - The official ECONOMIC DAILY asserted that misleading government figures are covering up whopping unemployment figures equivalent to more than one-sixth of the nation-wide population.... No statistics were given on the national working-age population, but 200 million unemployed could translate into an unemployment rate of as high as 30% if western statistical methods are used.... The Ministry of Labour has officially admitted to only a 2.3% unemployment rate nation-wide for the last few years, but these figures have long been considered suspect by outside experts.... But most of the unemployed are made up of farmers, who migrate by the hundreds of thousands into cities to look for jobs. ..." - That is like the population of 4 large nations. Add their dependants! What a bankruptcy declaration for a communist regime, a supposed dictatorship of the proletariat. With all the political and economic powers imaginable in its hands, it still does not manage to employ and thus, according to its notions and practices, exploit as many unemployed. Even the millions of political prisoners in the forced labour camps and the dozens of millions of supposed "class enemies", which the regime previously murdered, have not prevented such an enormous failure rate. - That many unemployed does automatically suggest: Why do as many people, mostly intelligent and productive people, do not employ each other, i.e., produce and exchange as best as they can? What hinders them, apart from their ignorance, increased by the miseducation system of the regime? - Admittedly, in China they do encounter not only monetary and financial despotism but more than the usual other economic interventionism. Obviously, when the government is not able or willing to employ them, they ought to be free to assert their right and liberty to employ themselves, as best as they can and this independent of any government laws, policies, measures, institutions, especially the monetary, financial and trading and taxing laws of their government. As many people, the equivalent of several large nations, ought to be able to arrange for division of labour and free exchanges among themselves, if not forcefully hindered to do so, and thus to employ themselves fully and productively and even prosper. Naturally, there ought to be no hard and fast borders around them. They should not be reduced to a ghetto existence. In other words, they should also be free to trade with "outsiders", to mutual benefit. Self-employment to mutual benefit and among themselves is only suggested here as a thought-model to break through the mentality that either the central government "provides" jobs or private employers do or one is completely helpless and must remain unemployed. China has a long tradition with various monetary experiments. It's copper tael currency, using copper by weight as an accounting unit, has for centuries helped Chinese to become independent in their value standard reckoning from the depreciated standard their governments provided. Private and competitive note issues go back, according to one book in my possession, to about 1300 AD - but were suppressed by the paper money despotism of the ruling Mongols. - The communists make of talking about production for use, not for profit. But they do not enable these 200 million to produce and exchange for their own use and to profit thereby. They should not be forced for their production and exchanges to use the forced monopoly money of the Communist Regime which has made and kept them unemployed - and exploited and oppressed for so long. Allow them to pay taxes with their own currencies - if they cannot avoid tax payments at all. - With as many Chinese producing and exchanging independently from the regime, even the communist regime could benefit much more internal and exterritorially autonomous economic communities, practising free enterprise, & free trade internally and externally, under the practices of full monetary and financial freedom, than it has benefited, over the last few decades, from trade with Hong Kong. The communist regime, in its own interest, has tolerated this trade with a much freer Hong Kong, on the basis of a territorial separation, until now, when the treaty with the U.K. runs out and has promised to continue its economic liberty. It has also permitted various industrial and free trade zones (a little bit liberated from its economic despotism) in its domain, out of sheer necessity. Hong Kong, when it was leased, was a largely rocky, mountainous and infertile area. It showed something of what people can do, if only somewhat set free. Instead of a territorial liberation let there be a personal one, based on exterritorial autonomy for volunteer communities - starting with those the regime is helpless to help. - Naturally, this would and should ultimately have political consequences, too. - I for one would favour allowing them to produce or purchase arms for their defence against continued aggressions and interventions by a government that has made and kept them unemployed. Allow them to trade freely with the world and to refuse to trade , if they want to, with the Communist Regime, which kept them largely enslaved but would not even supply them with the life support of slave labour! They should be free to refuse to pay taxes to Peking and to levy any, if they want to, only for their own purposes. They should be free to declare their political independence, too. Also, to federate freely, if they want to, with all other more or less free Chinese communities in the rest of the world - and all other somewhat free communities. -  Once they have learned to support themselves by their own labours, in a division of labour and free exchange process, then an army or self defence force or militia of millions of members, serving voluntarily and part time, a real "people's army", could serve for their self-defence, protecting their liberties. Among its rightful aims should also be full exterritorial autonomy for all the remaining communists and socialists and other ideological groups, all based completely on the free choices of sovereign individuals. That is not a declaration for a permanent civil war or party struggle but a declaration for a quite tolerant and permanent peace option, offering to everyone the government or free society of his or her dreams. It would be the analogy to religious liberty or religious tolerance but this time in the political, economic and social (ideological) spheres. Chinese had much experience in the last 2 centuries with exterritorial or personal laws. Alas, these were, mostly, unilateral options for foreigners only. Chinese, unilaterally, could make them multilateral, for all kinds of Chinese groupings and for all kinds of foreigners, not only in China but in the rest of the world. (As the oldest continuous culture, with the longest economic, political and social experience, they should and could take the lead in this sphere. - J.Z., 16.9.02.) - If the communist regime tried to suppress their self-help and autonomy efforts and defeated them in China, allow them to retreat to any other country, there going on to employ and support themselves, rather than becoming burdens for others as refugees under other regimes that also cause mass unemployment. They would probably gain much international sympathy if they formally declared their secession from the communist regime - but, at the same time, did not engage in any revenge or repression measures of remaining communists in their areas or spheres of influence but allowed them to continue to do their things to themselves, at their own risk and expense. On that basis they could minimise resistance against them and maximise the chances for Chinese people anywhere to become liberated, as far as they want to become liberated.  - Any "nation" (The Chinese want is largely an involuntary conglomerate, too!) which has an unemployment rate of 20%, assuming a Chinese population of 1,000 million, as the above quoted article suggested, is already in a potentially revolutionary situation. The Nazis rose to power on ca. 10% only. Obviously, friends and relatives of these 200 million victims and self-liberators would sympathise with them. Once monetarily and financially liberated, they could offer amnesty and jobs to the conscripts sent to fight against them, provided only that they either desert, let themselves be taken prisoners or declare themselves neutral. - Chinese people, if not lorded over by ideological fanatics, could also establish various self-management and cooperative production and consumer coop enterprises, very different from the governmental ones, with all individual and group incentives and rights maximised, rather than subjected to externally imposed bureaucratic rules, so that the best ideas of alternative forms of socialism and communism (There exists even something that calls itself "libertarian communism"!) could, on a voluntary basis, be realized by themselves and among themselves. In practice it would be found, I believe, that the best forms of "socialist" self-management practices are not greatly different from the internal best business practices of what has been called "free market capitalism", with its property, profit and free enterprise incentives, which were, alas, only realized in the "free" countries for a minority in every enterprise, instead of for everybody, from the messenger boy to the to manager. - J. Z.,24.5.97.
CHOICE IN CURRENCY COMMISSION, Exec. dir. Joe Cobb, 325- Pennsylvania Ave., S. E., Washington, DC 20003, USA, T.-202-226-7850. (1986).
CIRCULATING MEDIUM: A forced and exclusive currency hardly -deserves the name of a "circulating medium". - J. Z., 2.7.96. It -is rather forced, like a requisitioning certificate, into the -hands of helpless creditors, including all wage and salary and -pension recipients. - Something that circulates only under -coercion does not circulate under its own steam. It would be -rejected under freedom. - J. Z., 19.3.97.
CIRCULATION CHARTS: See my 11 pages on this in PEACE PLANS 41.
CIRCULATION OF FREELY ISSUED SOUND EXCHANGE MEDIA, ESPECIALLY UNDER THE REAL BILLS DOCTRINE OR BANKING PRINCIPLE: Verbal description of the circulation process involved: 1.) The employers have received the services of their employees and produced, using their capital (raw material, machines, premises, etc.) and with this labour, equipment, raw materials etc., the produced goods which they would sell to wholesalers. - 2.) The employers would be paid in commercial bills of the wholesalers, or other short term debt certificates, instead. -  3. These they would then get discounted, into private goods warrants or bank notes by the issuing centre of the local shop association or a bank operating on the pure banking principle or real bills doctrine. - 4.) With these notes or goods warrants the employers would pay the wages of their employees and their suppliers. They would take out their own profit in this way, as well and, after a corresponding tax reform, pay their taxes with them also. (Otherwise the State, as long as it is still allowed to raise taxes, could raise only as much in taxes as it made sound tax foundation money available for current and near future tax payments.) - 5.) The wholesalers would have received the goods and given their commercial bills in return, obliging themselves to repay their bills when they are due in goods warrants, or get them settled by clearing.  They would sell the goods to retailers, usually not for cash but upon the short term promises of payment given by the retailers, to pay them for the goods in goods warrants or banknotes within 1-3 months. 6.) The retailers, between them, would receive the goods from the wholesalers, and would be obliged to repay them in goods warrants or banknotes in the near future. The additional goods they could thus offer, together with their stocks remaining from previous deals, would constitute the ready for sale cover of the goods warrants or bank notes issued by the issuing centre of the local shop association or the local bank of issue. 7.) The retailers would sell their consumer goods to the employees for the goods warrants or banknotes and would thus be enabled to repay their debts to the wholesalers. 8.) The employees would have given their labour, would have been paid in local goods warrants or banknotes and would have spent their earnings in the shops. 9. The issuing centre had discounted the commercial bills, or the equivalents, of the wholesalers, presented to them  by the employers, with its own goods warrants, or notes, keeping the bills as a short term security. Lastly, the wholesalers would have been paid for the goods supplied to the retailers and thus enabled to redeem the bills of exchange, that were discounted and kept by the bank. All these deals could also be transacted via non-cash accounts, deposit or cheque and clearing accounts, credit cards or purely electronic transactions. -  All members of the issue association or bank, at least as debtors of the banks of issue, would have to oblige themselves to accept these certificates in payment. Especially the employees, if they want to be employed, should not exclude such payments, as they have long been accustomed to do. But they might rightly state that they would only be prepared to accept these alternative means of payment if and while they are locally accepted at par, in the shopping centre and, e.g., in their own consumer cooperative and in the canteens of the employers. Their wages having been contracted in sound value standards, they would insist upon being paid correspondingly more - in case the local currency would ever be depreciated. - If they insisted instead upon being paid in some or the other exclusive currency, which the employer could not or not as easily and sufficiently obtain, they might lose their jobs or their pay would have to be reduced. - To make this form of payment initially more attractive, a wage and salary increase might be readily offered if they accepted it in this form of payment. - Once the notes or goods warrants have been used to redeem the short-term securities - upon which they were issued, which would represent goods produced and sold, the circulation process would be closed. Not a single gold- or silver coin would be required for it and not a single legal tender note. Then this process could be repeated over and over again. - For the service cover that is locally offered, the circulation system would be slightly different. The independent tradesmen and professionals involved could get their own bills discounted by the retailers' issuing centre - up to the amount of their service potential and average trading during the next short term period. By paying their suppliers, profits and wage bill in goods warrants, they would put them into circulation. By accepting them in payment for their services, they would be enabled to withdraw them and repay their IOUs with them. - Instead of joining the local note-issuing bank or issuing centre of the local shop associations, the service providers, tradesmen and professionals, could also establish their own issuing centre. They might include e.g. transport services, restaurants, amusement centres, educational services etc. - Local people would decide whether they would be prepared to accept 2 or more such local currencies. - The issues of the goods and service warrants would merely provide the necessary turnover credit. They would not and should not be issued to provide medium or long term capital loans - because that would not assure their rapid enough return to the issuing centre. If issued for longer periods, they could depreciate. But they could be used, like cash, to subscribe to term deposits, bonds and shares and to pay out medium and long term loans and, later issues, could be used to repay these loans etc. - This use of monetary freedom would mean that due to our private local issues (alone, or, preferably, in association with others), we would no longer have to scramble for a chance to sell our labour, services and products against a monopolistic and more or less scarce exchange medium issued by a central banking system. Instead, we would be enabled to pay with our own notes or the notes of our association and thereby we would assure that our own notes or those of your association would come back to us and our association - to pay the goods and services we have to offer, alone or together with them. - To the extent that we have valuable goods and services to offer and do offer them at competitive market prices,  and that others have valuable goods and services to give in exchange, also at free market prices, we would then be enabled to exchange them, independently of the monetary policies and mistakes of any government. All our issues would automatically flow back to us to be redeemed in the gold-weight-values expressed in our goods and services. (If we had accepted these as our value standards.) All our earnings and contract earnings and debts would also be expressed in sound value standards as reckoning units. - An instance of a single issuer, however unlikely and rare such instances might be: A barber, to the extent that he would be able to circulate standardised hair cutting tickets, would not have to be afraid of being out of work. They would, inevitably, stream back to him to be redeemed by him through his services. If he were to spend the same amount of government cash, it would not necessarily stream back to him or not fully. - Without this freedom, employment opportunities are, indeed, tied down to the supply of legal tender. Under monetary freedom, they are only limited by your willingness to give your productive labour and services in exchange for those of others. In fact, under monetary freedom you could anticipate your earnings, spend them with your own notes or clearing certificates and then work, earn them, be paid in them and thereby finally pay off what you bought with your standardised IOUs or those borrowed from your local shop association. Naturally, you would always have to accept your own notes in payment for your own work. Likewise, the notes of your creditor, since you could use them immediately to pay your debt to him. (I am speaking only of short-term turnover credits!) - Compare this self-liquidating issue, acceptance and reflux system with the issue of e.g. gold or silver coins or the circulation of legal tender paper money notes. These coins and notes are not as effective in providing work for you because - whenever you pay with them, they do not necessarily return to you, or your association, or not soon enough or with sufficient certainty. Instead, they may flow to anyone else in the country or even, temporarily, into foreign countries. - Private notes, promising redemption in the goods and services of the issuer - and his associates - have the essential capacity for a rapid and regular reflux, i.e. they must stream back to the issuer, if they are to have any value for the holder, and will thus provide corresponding sales and employment for the issuer. To that extent they are like tickets. That could and should be formalised by giving them only a limited circulation period, 3 - 12 months at most. - If they happened to suffer a small discount in general circulation and all the rules of a sound issue technique would have been obeyed, then these notes and their discount would disappear, with them, rapidly from circulation. Debtors of the issuing centre would not only accept them at par for their goods and services when anyone buys something from them, but would go out of their way in attempts to buy them up on the market for exchange media, using other means of payment, and gladly acquire them thus at a discount. If a debtor would thus be enabled to buy such notes at 1% discount and could with them repay, on the same day, his debt to the issuing centre, he would have made a 1 % profit on this day, amounting to an annual profit rate of 365%. That would be so attractive that the discounted notes, and with them their discount, would soon disappear from circulation. (Provided only the issue and reflux technique had been quite sound.) Potential customers of the stores of the issuing centre (if it is a shop association) would also love to acquire such notes at a discount - in order to carry them fast to these stores to be redeemed in goods and services at par. In other words, a discount for a sound goods warrants issue could not last long and would not be large. But, if a discount were considerable and persistent then something else would happen. People would mostly refuse to accept the notes altogether. Only a few would continue to accept them, at a considerable discount - to the extent that they could still use them against the issuer. In other words, the issuer could no longer issue more notes or only at a loss. The loss would occur because he could issue them only to a few and at a discount whilst he would have to accept them again at par and immediately. - J. Z., 1985 & 21.5.97. - For graphical descriptions of the circulation process for optional and freely issued exchange media that are based upon shop or service foundation see my drafts in PEACE PLANS 40. In the writings of Ulrich von Beckerath you will also find many much shorter and clearer verbal descriptions of this process. - I have not yet got around to extract them all and all his numerous other important remarks upon monetary freedom, which he studied, pondered for over 60 years and wrote about for at least 48 years. Alas, most of his writings are still unpublished, even on my microfiche, in German only and untranslated.  - J. Z., 14.5.02.
CIRCULATION OF MONEY: "Strictly speaking, money does not 'circulate' : it is exchanged against goods. When the turnover of (*) money increases, the turnover of goods increases correspondingly." - Henry Hazlitt, Where the monetarists go wrong, THE FREEMAN, Aug. 76, p. 76. (*) Here I would insert: "good" or "sound". - If money is just turnover-credit money then it could and should, perhaps, upon every return to the issuing centre, be cancelled, instead of being issued out again into circulation. This would facilitate the control of the issue. It would correspond to the cancellation of the real bills the issue was based upon.  It would make e.g. the issue of new series more frequent and thus give less opportunities for forgers. It would correspond to the use of tickets, mostly just once. And it would become necessary - once one has found the limitation of the circulation period to be useful or advisable. The discovery of forged notes, with the same numbers, would be facilitated, too. Theoretically, one could take down the numbers of returned notes before one issued them again. But when another note appears with the same number, it would not always be clear or easy to determine which of the two notes is the forged one, in the absence of the first one that was received and re-issued again. - Thus Ulrich von Beckerath advised to follow the old practice of the Bank of England and to clearly cancel all returned notes and keep them as a record. - In that case notes would have only a very short and temporary circulation, it could be called that at all, and would, instead, oscillate, with each new oscillation: issue and reflux, being undertaken by a new series or new set of numbers of an old series. - J. Z.
CIRCULATION OR OSCILLATION OF MONEY? Not all kinds of sound money -need to "circulate". Various private notes might be issued and,- shortly afterwards, stream back, like stamps, tickets and gift--vouchers or tokens. The more it is issued merely upon the -"security" of the goods and services that any money is usually -"redeemed" in, every day, by consumers, according to the note--holders' wishes and needs, among the choices offered to him in his -payment community, usually the local shopping centre, the more- will the issues be the accurate equivalent to the goods and- services for sale and wanted, at market prices. Then, with any -increase in output, that can still be sold at close to the old prices, or -with any increase in the total of all prices asked for and which- the consumers would be prepared to pay, if only they were sufficiently supplied with purchasing power, the additionally -required purchasing power could be issued by the suppliers. The -money would be issued and would stream back fast, in the quantities required, to be redeemed in its goods and service-s cover. More could not be issued than is required for this, for- then it would be discounted - and the issuer would still have to- accept it at par and wants to stay in business, rather than being -boycotted for not keeping his exchange media sufficiently at par -in general circulation. - Henry Hazlitt may have had something- similar in mind when he wrote, in "Where the Monetarists Go -Wrong", THE FREEMAN, August 1976, p. 76: "Strictly speaking, -money does not 'circulate': it is exchanged against goods. When -the turnover of money increases, the turnover of goods increases- correspondingly." - I would rather say: When the turnover of -goods money or goods warrants or purchasing certificates -increases, the turnover of goods increases correspondingly. - J. Z. MFNL 3/4. - Money is here like oxygen in the blood circulation: Continuously issued by the issuing centre, it is earned and used up by the consumers, in their working lives, and replaced again and again by the issuing centre, e.g. the local shop association. A clearer image is probably provided by comparing them with transport tickets or other tickets. They, too, oscillate rather than circulate permanently. They are continuously replaced by new issues when they have achieved their intended turnovers. - J.Z., 5.9.03.
CIRCULATION PERIOD, LIMITED, FOR COMPETING CURRENCIES, TO SPEED UP & ENSURE THEIR SUFFICIENTLY FAST & COMPLETE REFLUX: The possibility of a discount, as a warning signal, is a necessary factor in this payment system. It is a sign that something might be wrong with the issue or its reflux and that some counter-action is required. For instance, if it happens, the issuers might arrange for a special sale to speed up the reflux of their notes. They might also charge a higher fee for short term loans they grant in their own currencies, for wage payment purposes or increase the discount rate when they discount sound commercial bills of their members. Another option would be to shorten the reflux period for all newly issued notes, until they have achieved a reflux period which would keep their notes at par. E.g., if they used a reflux period of 10 years, then many of their notes might become discounted because they are not rapidly enough streaming back to the store in repayment. A reflux period of 1 day only (like for cinema or theatre or sports events tickets) might maximise reflux but would be rather inconvenient for a local currency. Thus, somewhere between at least a week, if not a fortnight and 3 to 12 months, is the optimal circulation period for any competitively issued exchange medium that is to retain its par value while it changes hands locally. Ulrich von Beckerath ascribed the limited circulation period to a proposal by Prof. Edgard Milhaud. But it merely corresponds to the limited circulation period for most sound commercial bills of exchange. It also can satisfy the anti-hoarding aspirations of Gesellians, without burdening the note holders with a special tax upon their notes or the obligation and bother to affix stamps to them. It would, moreover, express the nature of most alternative currencies as ticket money, transport vouchers, clearing certificates etc., for time limited, i.e., perishable goods and service capacities. A reflux of notes that is assured only in 1 to 10 years  is no more useful to most sellers of goods and services than is a rain, coming only every 120 days to 120 months is to an agriculturists. - And even for hardware goods the owners and sellers do not want irregular but as far as possible regular sales. Naturally, especially with regard to this, it would be a mistake to issue large quantities of a local currency and all of it with the same expiry date. Instead, the expiry dates should be staggered, best perhaps from the day of issue, perhaps by date-stamping previously printed notes only once they are issued. What is possible for transport tickets should be possible for these paper token monies, too.  - J. Z., 11.3.89, 28.11.92, 16.5.97.
CIRCULATION QUANTITY: How can one determine for any particular- time and place and condition the right quantity of exchange -media. In the same way as the right quantity of any products and- services is determined, i.e. by free pricing. When sound exchange -media are freely chosen and publicly rated against each other and -the competing exchange media against them and against other -exchange media, then the exchange media will either be at par -with their nominal value (their value standard units) or below- or above par with them. If below par, or at a discount, they will -be less and less issued and more and more refused or discounted.- Thus they reach the limit of their circulation. If they do -circulate still at par or even above par, then further issues are -possible and desirable. Free market rating for exchange media, -sound value standards, and full publicity make the circulation- determination automatic. We would no more suffer shortages of the- media and of sound standards, than we do suffer shortages of pens- and rulers, milk and litre measures, wheat and kg weights. Any- despotic attempt to determine for others the right quantity of -exchange media or clearing transactions and of supposedly ideal- value standards for all their transactions, is condemned to- failure, like all other attempts at central planning and -direction or experiments with command economies. - J. Z., 3/97. See : LIMITS FOR -ISSUES.
CIRCULATION SPEED OR RAPIDITY, NUMBER OF TURNOVERS OF A CURRENCY,- DEGREE OF HOARDING, DEGREE OF CASH HOLDINGS: A rapid circulation -is not as important, mostly, as a certain and full circulation is- - of all goods, services and labour, mediated by money tokens and -clearing. Only monetary and clearing freedom, combined with free- choice of value standards, can achieve that. This freedom can -also make issuers and acceptors largely independent of the -quantity of hoarded exchange media, since they can be easily replaced by additional issues, should a currency shortage occur.- Moreover, competing exchange media, to assure their reflux, will -usually be given a limited circulation period, too, like -commercial bills and cheques and tickets. However, in their own -interest, issuers of sound and private or cooperative turn-over currencies, will see to it that their issues will return to -them, in payment for their goods, services and labour, as soon as -possible. To the extent that electronic clearing and account -checking has become possible, payment and clearing can become -almost instantaneously. Quite possibly, people who do some of- their shopping still for cash but only weekly or fortnightly, -would be quite satisfied with a local shopping currency, to the -extent that they want to and can spend it, that is valid only for -a week or a fortnight or a month, and to the extent that they can and want to satisfy their requirements from local suppliers. The circulation of alternative -media of exchange will also tend to be speeded up whenever and- wherever they have suffered a discount. For then the holders will- want to spend them fast - and can be sure of getting them -accepted at par only by the issuer. Even while a discount does -not occur, the system must provide for the possibility of a- discount. The slightest discount, perhaps only at money- exchange offices or in wholesale trading, sends an important signal to- the issuer: discontinue further issues, while the discount exists and before it become noticeable in general circulation and -thus gives us a bad name. The same self-interest would also induce the issuers, if self-given or adopted issue statutes do -not already oblige them to do so, to use other means of exchange- to purchase the own ones, especially when they are anywhere- traded at some discount.  Any money that is essentially ticket -money or clearing money, does not have, as a rule, any trouble- with its circulation speed. Nevertheless, additional reflux -arrangements could be provided for it. E.g., debt repayments in- other exchange media could involve payment of a small penalty or -a fee for the conversion of exchange media which one is not obliged to accept, because they are not the own. The prices might -then be market in the own exchange medium at par and in other -media "plus 1-5%". That would also speed up the reflux of the own -exchange media. Furthermore, loans might only be made within the -vicinity of the centre of issue. Nor should the total amount lent -to any one business come to a large fraction of the total- issue, thus involving too large a percentage of the issues of a centre in the always possible failure of that particular business. To -"suck" the own notes back to the issuing centre, in payment of -debts, like with a vacuum cleaner, the issuing centre might -oblige all its debtors to accept its own notes and to indicate -their readiness to so accept them by large signs in their shops- and offices. Daily note exchanges and clearing between centres of- issues will also speed up the reflux of notes or clearing of -accounts. Electronically clearing could even occur almost instantaneously.  - J. Z., 14.12.93, 1.5.97.
CIRCULATION, PRODUCTION, DISTRIBUTION, CONSUMPTION, MONEY, TURNOVER -CREDIT & TURNOVER CLEARING OR TURNOVER EXCHANGE MEDIA, CAPITAL & -THE ECONOMIC PROBLEM OR CRISES:  "The economic problem is in- reality not a problem of consumption or of production but a -problem of circulation." - Dr. Bank. Date? Source?  See: EXCHANGE -MEDIA, FREE EXCHANGE, MONETARY FREEDOM, FREE BANKING. - Which economic problem? Are consumption and production really problematical? Does money really have to circulate permanently? What does have to circulate? Are economic crises due to insufficient "circulation" of capital or of exchange media? Doesn't during an inflation at least one thing circulate too extensively, namely the government's forced currency? All such general phrases and explanation attempts do not sufficiently explain the realities but rather distract from them. - J. Z., 9.9.02.
CLASSIFICATION OF WRITINGS ON THE SUBJECT, in form of charts, -especially of details of exchange media and value standards -proposed, stressing good points and errors still involved.
CLASSIFICATION SCHEME FOR EXCHANGE MEDIA AND VALUE STANDARDS: The -literature on the subject is too extensive. Tabulations of the -historic and proposed exchange media and their characteristics -and, likewise, of value standards should be drafted, amended and gradually filled out in a collaborative process. False premises, -observations, conclusions and theories involved in them should be -pointed out, as well as the literature defending and attacking -each position taken. No copyrights should be claimed. But each -contributor should sign his statements.  Giving each statement a -number would make referrals more easy. - J. Z., 16.3.97.
CLEARING  A clearing transaction does not need ANY quantity of- exchange media nor ANY quantity of value standard units, beyond -the one unit adopted, e.g., an ounce of gold. It can operate well- enough with book keeping and electronic accounting only, in- figures, expressing purchasing power in multiples or fractions of -the adopted value standard units, e.g. of an ounce of gold. The- value of the value standard chosen is in no way changed by changes in the number of clearing transactions, in the same way- as the sizes of the meter, the weight of 1 kg, the volume of 1 -litre, are not changed at all with the number of transactions -that use these measures. To affect the purchasing power of a -medium of exchange its nature of exchange medium must be legally- and coercively combined with a fictitious abstract or paper value- "standard", the exchange medium and this value standard must be -exclusive and forced ones (compulsory acceptance AND compulsory -value, at its nominal value) and people must not be free to- express their prices, wages, salaries etc. in sound alternative -value units. Then, indeed, quantity changes in such forced -currencies do affect prices, wages etc., which have to be priced -out in this "standard" and have to pay paid in this "exchange- medium". - J. Z., 4.1.0.91, 27.4.97.
CLEARING & COVER, LIQUIDITY VES. SECURITIES, CASH VS. CAPITAL: To the extent that any kind of money is a clearing medium (Actually any kind of money is basically a clearing medium, a counting token, whether its material is cheap, expensive or electronic, for a multilateral and anonymous and automated clearing process.) it does not need a "cover" at all. It either represents a debt or a credit and all of these cancel each other out, at least over a period. However, instantly or soon clearable debts and credits should be distinguished from those settled only over medium to long term periods. For instantly or soon clearable debts and credits money tokens and accounts are suitable. For medium to long term debts and credits capital securities are the suitable issues. In any somewhat free economy some cash exchange media (or non-cash payment accounts) are all the time turned into capital securities or capital securities into cash or bank accounts, but only to a limited extent, one voluntarily determined by savers and investors. Capital securities are not suitable "covers" for cash nor is cash a suitable cover for securities. Most cash is needed to buy goods and services, not capital securities and capital securities do represent real productive capital & future earnings opportunities and, as such, do not need a cash cover but merely some cash operating funds. Their main purpose is not to represent cash but to earn cash by the production of wanted goods or services. The fact that most of the time sound capital securities can be relatively easily turned into cash does not make them equal to cash. Sometimes, for instance, they are hard to sell or only at a loss. With sound cash it is different in normal times, only emergency situations excepted, when real goods and services are often preferred to cash. Both are valuable in their spheres, promoting the transfer of values, but that does not make them identical or sufficiently interchangeable for all purposes. The main purpose of cash, or corresponding liquid bank accounts, is to pay for daily living expenditures and frequently occurring minor debts. Try to pay for them with shares, bonds, treasury notes or mortgage letters! In a perfect clearing system we would not need any physical or electronic money tokens at all. All debts and credits could be cancelled without them. Only some suitable value standards would have to be agreed upon by the participants. Bad debts would have to be born as losses by some - and unearned gains by others - or would be covered by insurance premiums that had been paid by the traders. - J.Z., 13.3.02, 24.8.02.
CLEARING AND EXCHANGE MEDIA OR MONEY: Almost all sound exchange -media, which do not, like gold or silver coins, carry their- subjective and market determined commodity value in themselves, -are essentially merely clearing certificates for an anonymous and- multilateral clearing process, which they facilitate and simplify- by their very nature. But it lies also in the very nature of free -clearing that it does not inherently depend upon any QUANTITY of -exchange media or any QUANTITY of value standard units but merely -upon a sound enough value standard that is agreeable to all -concerned and that is merely used for clearing, accounting and- reckoning purposes, but that does not have to be supplied and -used as a means of payment or cover or reserve, in quantities and values that are equivalent to the free clearing transactions that could- be carried out without any exchange media. To maintain the value -of an adopted value standard unit it is not required that it -becomes demandable as a physical means of exchange in by every -creditor. It suffices that some transactions in this metal take -place, which conform its market value against exchange media and- value standards of another kind and that such trades are regularly and publicly reported. While it can do no harm if debtors well -supplied with gold quantities remain free to offer them in- payment, even gold coins should not be turned into legal tender -- except perhaps within private payment communities whose members- agreed to so accept them. - The clearing nature and value reckoning nature of money is -essential. The rest is an unnecessary although sometimes- convenient formality. No monetary policy or theory should ever -ignore this fact. Then it will not be lead to wrong conclusions -or towards monetary despotism. - J. Z., n.d., & 30.4.97.
CLEARING AND INTEREST RATES, SHARES AND TICKETS, SAVINGS & -TURNOVER CREDITS: An extension of clearing merely indicates- easier sales and a greater total turnover. It does not directly- indicate or represent a corresponding increase of medium and long--term capital becoming available. Additional turn-over clearing -can only reduce the short term turnover credit interest rate. To -affect the capital interest rates, clearing certificates and- notes must, like money now, be saved up and invested on medium or -long terms. Tickets to a cinema are just turnover media, too. One -cannot buy the cinema with them, directly. But if one had bought -e.g., a large block of tickets for a large party and for one or -the other reason the party is turned off, then one could negotiate with the cinema, offering to sell it back the block of -tickets, either for other forms of cash or for one or several- shares in the cinema. If the cinema is certain to be able to sell -the tickets again, before the performance, then it will be -amenable to either buying them with other means of exchange or,- perhaps, with some shares in the cinema. The time span, -motivation, ownership, function of shares and circulating notes -is quite different. They circulate for different periods and- among different people and are used for different purposes, even -when both are issued, somewhat circulating and ultimately- somewhat redeemed, at least during liquidation of a business. To- try to turn capital assets like raw materials, premises, and -machinery or the capital securities that represent them, directly into currency, supposedly useful for the current purchase of- consumer goods, is a great mistake because at the same time no -equivalent consumer goods and services are provided by the issuer -to redeem them with. The holder of the certificates could only- force the issuer into liquidation and then claim his share in raw- materials, premises and machinery - but few would want to acquire -them. On the other hand, if there is someone prepared for a -take-over bid for the business of the issuer, then such issue- attempts would be very much welcomed by him, for this scrip would- rapidly depreciate in a free market and could thus be bought up- very cheaply and used in the take-over bid. A few such- experiences, well publicised, will serve as a deterrent.  But -that does not mean that there should not be full freedom to issue -financial securities, too, which quite clearly represent capital -assets and are bought up and traded by people interested in- capital investments. To reduce this kind of mix up of capital- securities with turnover bills and notes, the issue departments- for both should be as far as possible kept separate, for people -have fallen for the errors of "asset currencies" again and again- and they have often been embodied in banking laws.
CLEARING AND MONEY & THE QUANTITY THEORY OF MONEY, MONETARY -DESPOTISM & TICKET MONEY: When you consider money merely as a- clearing facilitator, not as a commodity, then the quantity of- goods, labour and services that people possess or can will offer, in exchange for the goods, services and labour of others, has no other limit than these goods, labour and service readiness themselves and the- quantity of "money" available becomes irrelevant, because under fully developed and free clearing no money would be required at all. Only for -some minor payments would some form of physical clearing -certificates, which might be called money, still be convenient,- more convenient than formal non-cash transactions, no matter how- computerized. Under free clearing, essentially not needing any- money tokens or money commodity at all, in quantities -corresponding to the sum total of the cleared goods and services, -but possibly using e.g. a gold weight unit as a value standard to -price all goods, services, labours and contracts. The value standard unit that might be used in all the accounting and clearing of the free exchanges might not even exist at all or might not be traded at all within that clearing community. E.g., gold value trading in Sydney might use- the market price of that gold weight unit in London, Zuerich or- N.Y. for its own value measuring purposes. Some clearing or payment -communities might be satisfied with a value standard less stable -than gold or discover and use one that is even more stable. -Freedom of choice, here, too. No exclusive and forced value- standard (except by private contracts, binding only the- contractors) and no exclusive and forced exchange media and- clearing avenues (except within voluntary payment communities).-Under free clearing the number of transactions might increase or- decrease. The total value of transactions might increase or- decrease. This would not influence the standard of value used or- depreciate or increase the value of the clearing avenue - or of -clearing certificates. To try to put a quantitative limit on- clearing certificates or mere turnover credit notes would amount to -forcing people to limit their production and their exchanges when- there is no justification or need for this at all. An issue or -circulation limit would then amount to a rationing system for the -whole community for goods, services and jobs. No more could then be- offered and traded than is prescribed or permitted by the monetary despotism involved. - The -quantity theory of money makes only some sense for an exclusive -and forced currency that is issued beyond the limit at which, -under freedom, it would have been accepted at par with a sound- value standard. Then it can be arbitrarily multiplied and thus- depreciated, while the goods and services at the same time cannot -be as much multiplied and would, even by multiplication, not- necessarily be depreciated in their value, either. For instance, -if a baker bakes 10,000 loaves of bread instead of merely 1,000 a -day, and if he finds buyers for all of them, then the value of the -bread for each of the buyers would not be depreciated. Nor would- the money or clearing medium be depreciated because at least for -these turnovers ten times as many money tokens or clearing -certificates would have to be used. The need for monetary- exchanges is, essentially, a need for clearing exchanges in a- very convenient form. If that is kept in mind, then we will avoid wrong conclusions on varying quantities. A community is enriched,- not impoverished, when its money and clearing system enable it to -exchange more goods, services and labour efforts, quite freely- and easily. The money and clearing transactions would be increased - and so -would be the goods, services and labour turned over. - The best -method would be to transform, as far as possible, all ready-for--sale goods, services and labour into exchange media or clearing- certificates or clearing accounts (using sound value standards), to the extent that this can be done without turning the par-value of such shop currency into a deterring discount. (If one can judge by the experience with sound tax foundation money then shops might even be able to monetise not only their current stocks but their turnover for the next 1-3 months. Much would depend on current terms for earnings and timing habits for consumer spending.) -Then any quantity of goods, services and labour could, with their -help, be easily exchanged for those of others, in a division of labour- and free exchange process - in a free market that would include- monetary and clearing freedom. The need for money is merely a need for clearing or for complete freedom to exchange, using the- best and easiest available means, those accessible, in self-help -steps, to every productive and honest persons. As Ulrich von- Beckerath used to say: Allow people to transform their NEEDS -into effective monetary DEMAND, but only to the extent that they -are prepared to supply, ready for sale, goods, services and- labour. - Then and with their "ticket-money" (or goods, labour or service warrants), they can satisfy their -needs, to this extent and the others can use these tickets- against him as an issuer, to the extent that he is able to supply -their needs. That would amount to production for use and profit -at the same time. Useless tickets would be refused. Tickets that are only marginally useful would be discounted or refused, thus limiting their circulation. The tickets would -have an automatic reflux to the issuer - and would serve as- advertisements at the same time. Ticket money! That's the -ticket! - J. Z., 26.4.97, 8.9.02.
CLEARING AND QUANTITY OF MONEY: Full clearing freedom  (as well- as the freedom to issue and to rate and discount or to refuse- money tokens, be they "real" money or "merely" sound money substitutes) when -fully thought through and applied, at least in thought- experiments, demolishes the notion that a certain quantity of -money is absolutely necessary and that it ought to be fixed, e.g. -to the GNP, as calculated by some, or increased at a fixed rate, -or tied to the population, the price level, a corresponding gold--reserve etc. etc. People need only freedom to clear and to- account in value units chosen by them or accepted by them or even -established by them, not any exchange medium or any particular -quantity of any exchange medium. However, once exchange media are -seen as media to facilitate clearing, then as many of these media-s as those people involved in the clearing find convenient to use,- should be freely issued and accepted by them and cancelled after -their use. Nobody can rightly prescribe for others how many of- such more or less advanced private "cash" or clearing or ticket -certificates they should be allowed to issue and accept. That -would be like prescribing to them how much they should produce -and exchange. The subjective value theory applies here, too,- quite apart from property rights and the right to make private -contracts. No monetary theoretician or technician, expert or -reformer or authority has the right to prescribe to them how they -are to settle their exchanges and to promote them to the utmost -and what means and processes they are to use for them. In fact-, there exists no one and no one may ever exist who knows best what- is best for all other people in all situations or even some of -them. Even if he did exist, he would still not be entitled to -force other people to become happy or rich in the way he thinks -they ought to go. If they do adopted him, individually, or as a group, as their medicine man or guru, then that is their affair -and risk, indeed, also their right and part of their liberty. - J. Z., 3/97.
CLEARING AS THE PRINCIPLE & PRACTICE BEHIND ALL MONETARY -EXCHANGES & HOW IT COULD BE CARRIED OUT MORE PURELY & EASILY,- for all but minor transactions :
CLEARING BANKING, DEPOSIT BANKING, CURRENT ACCOUNT BANKING, CREDIT CREATION? CREDIT EXPANSION? MONEY CREATION?  - A) AMONG BANKS WITH OR  B) WITHOUT OWN CAPITAL & CAPITAL RESERVES, C) AMONG BANKS THAT PROMISE RARE METAL OR LEGAL TENDER REDEMPTION, D) AMONG BANKS THAT DON'T MAKE SUCH A PROMISE, E) SUCH BANKS REGULATED BY A CENTRAL BANK & F) SUCH BANKS NOT REGULATED BY A CENTRAL BANK & IN FREE COMPETITION WITH EACH OTHER: Preliminary notes. This is a very muddled-up subject. All kinds of different definitions and premises, arguments and conclusions abound. It is difficult to work oneself through the jungle they form. Even when one manages to hack temporarily a path through it, much of the jungle remains, right and left and the path is soon overgrown again. I have seen some famous libertarians and free marketeers repeating a few of the most popular errors and prejudices in this sphere. All the errors and myths in this sphere, often combined in Social Credit notions, are a great obstacle to monetary freedom. - For mere current account or clearing banks no bank capital or reserve would be required at all. It would merely administer the accounts of its clients, more of less efficiently. Ideally, even its customers would not have to deposit any cash, gold or credits from other banks there. Its bank customers could just start with it "ab ovo": Each just opening an account there, with a zero credit and would contract to use this account for all his trading with the other customers with this bank. For the sake of simplicity let us assume that this is the only bank that they would use and that this would bank would mediate all their trading, i.e. that there would be no trading by them with the rest of the country or the rest of the world. We could assume this to happen either on the local level, on the national or even at the international level. Let us also assume that the participants have agreed upon a sound standard of value for their pricing, all their trades and their accounting at this bank. Let us also agree that they would use their accounts only for their daily turnovers, not as a savings and investment account. (Here certain precautions could and should be taken: Those building up too much of a credit balance would, at a certain point, either have to forfeit them or to purchase, with all the excess amounts, bank bonds or fixed term deposits. These amounts, and these alone, could then be used for corresponding loans to members. On the other hand, all those who built up too much of a debit balance, would have to pay up the excess debt in their own IOUs, in convenient denominations and with a discount to be settled between the bank and its debtor, perhaps through arbitration. The debtor would have to accept these IOUs at par from the bank or any of its customers. In other words, he would be forced to undertake a discount sale towards all who offered him his IOUs. For all customers some leeway would have to be determined in their debts and credits on this account, in accordance with their kind of business and their normal turnovers. - So much about possible abuses and difficulties of this system. ) -  Normally, the members could then settle all the debts and credits arising out of their current trading among themselves, without any other means of exchange, merely by assigning account credits or account debts to each other. They could do so by cheques (cheques for clearing only), by orders to the banks, by passbook entries, via credit cards or any other convenient means. Among these might be standardised clearing notes of the bank, in convenient money denominations, which would promise nothing else by the bank than acceptance at par on all its clearing accounts. When giving such certificates to any account holder, his account would, naturally, be proportionally reduced or put into debt. - To assure their use for clearing only, not for credits, these clearing house certificates should be given only a short life-span or circulation period. In essence, each payment through this bank would be an instruction to the bank: Debit my account by xyz and credit A with xyz. They would use these payment instructions (whichever payment method or means is used , in payment of any goods, services and labour received. Naturally, they could do that only towards all those willing to accept these transfers, clearing certificates, etc. at all and at par or at a mutually agreed upon discount. - The total of the debts of the members would exactly be proportional to the total of the credits of the members. There would be no left-over capital amounts which the bank could lend out, on medium or long term, with or without consent of the account holders, apart from the above-mentioned (in brackets) purchases of bank bonds or fixed deposits. - Now, it is very important to note that their turnovers would not be confined to any level, to any maximum totals. If they can manage to produce and sell more to each other, then all their mutual debts and credits will simply become correspondingly larger. Goods, services and labour being priced in sound value units, likewise the accounts and the transfer orders, the fact of there being many more payments would merely meant that there are many more exchanges. Millions instead of hundred-thousands, billions instead of millions - IF people could increase their productivity and exchanges by that much - or just in accordance with the increases, or decreases, that take place at any time. Thus, apart from fluctuations of prices from the goods, services and labour side, no depreciation of these means of payment or clearing would take place. They could increase their turnovers a hundred-fold or a thousand-fold and there still would not be an inflation. Simply as much more would be exchanged. Their self-chosen value unit, e.g. a gram of gold, would not be depreciated by so many more turnovers using it. (Under a computerised accounting system even a number of freely agreed upon value standards could be utilised, with ease, among the members. By 1990 a major Australian Bank, like Westpac, was prepared and, apparently permitted, to keep accounts not only in Australian dollars but also in gold weight units.)  None of the account holders could demand payment in gold grams of all the clearing credits he had accumulated and the bank could not demand of its account debtors payment in gold grams, but merely payment in his own and also gold-weight valued IOUs, perhaps only with a fair discount, and then his acceptance of his own IOUs, from anyone to whom the bank or its customers might have transferred them, at par, as if they were gold grams in the stated quantities. - Naturally, bad debtors could go bankrupt in this system, too, although not due to a faulty payment and clearing system. They picked the wrong trade or did not conduct it properly or got careless in some large transaction or wasted capital and earnings instead of improving their business, etc. Many other problems than payment problems, do require many other solutions. If they accumulated too much of a debt and had to pay this back in their own IOUs at such a large discount that they could not recover their costs, then they would be out of business, soon. The charges levied by the bank on the clearing accounts it holds, would include an insurance premium to cover this risk. - Seeing that all these accounts are only intended as turnover and clearing accounts, and perhaps also as an insurance premium, to cover bad debts, those who accumulate large debits on their accounts and do so for more than a few days, might be charged a considerable interest rate as an additional inducement to reduce their debits fast. - One kind of low prices would be avoided by the system: emergency sales prices due to money shortages. - Depending on the tax situation, the clearing bank accounts might be open to inspection, et least to potential buyers and sellers, who then could, perhaps even by phone, verify for instance the current clearing account status of the buyers. - The members of this bank would all, ultimately, and more obviously than usual in monetary transactions today, pay for all their purchases with their own goods, services and labour. The accounts and their figures at the bank would just keep track of all these free exchanges - and facilitate them in a monetary or ideal clearing way. Their own accounts would be deducted and those of their suppliers credited or they would be credited with whatever their customers paid them through this system. The bank would charge a small percentage of the total turnover as its fee. The members would at any time have to let their own debts be accounted against themselves. These deductions would be made with or without their consent, if any genuine debt is involved. - They might also be put under obligation to use any outside means of payment received towards the abolition of their account debt at this bank. (The bank would then sell this "foreign exchange" to those who had built up a large credit with it and wanted to use it in this way.) The bank would explicitly and publicly state: These accounts have not been established through cash deposits, rare metal coin reserves or a reserve fund made up of some capital assets. They do not entitle to any cash withdrawals or rare metal redemption. They are merely current and clearing accounts. The clearing bank merely helps to transfer the mutual credits and debts of its customers and keeps account of them. It does not grant any credits and cannot grant any credits from these current accounts. However, to the extent that some of our account holders want to make some of their credits on their accounts contractually available, for medium and long term credits, it would be willing to mediate these, too, amongst its customers. - To that extent such a bank would be safe from any time risk and means of payment or ability to pay risk or difficulty. (Naturally, sickness, accidents, catastrophes, insufficient business sense or business mistakes excluded. Thus the bank might insist that its customers insure themselves, as far as possible, against such risks.) - Such clearing and "deposit" banks (of current trading credits transferred from others of its customers) should be open to inspection by their members, or representatives of their members, but do not constitute institutions that threaten the payment and value accounting situation in any country. On the contrary. Without legal tender, subject to a free market rate against a sound value standard, these means of payment or clearing could not depreciate from the money side - unless they had picked a value standard that was not really as sound as they thought it would be and at the first sign of this they could change over to a better one. The elasticity of the system would be unlimited. It could precisely fit all the output of and trade in wanted goods, services and labour (among its members). It would not distort exchanges but, instead, greatly facilitate them. For small transactions, not worth any writing efforts or electronic checks and transfer costs, such a clearing bank could issue token coins whose only foundation would be their ready acceptance at par in all its clearing accounts. To avoid the charge that thereby it would "levy a loan from the public" or "create money out of nothing", it could be quite correct on this, too, and debit each of its accounts with e.g. $ 30 (or the gold gram equivalent) and pay out that amount to each of its customers in small coins, less the cost of producing them. - The general assumption for such a service is, naturally, that monetary despotism could not effectively outlaw & suppress it. - Secondly, such a clearing bank should, naturally, possess no monopoly and should be free to clear with all other clearing banks. - This is as simple a free exchange system as I can imagine, free of all the ordinary flaws and wrong assumptions and imposed requirements, supposedly necessary controls and safeguards. Mind you, I have not described a savings and short to long term credit bank. The credits mediated by this clearing bank would be explicitly confined only to those means which the own customers would make explicitly available for this purpose, with all loans to members confined to these means and their terms. Credits invested and lent out should be kept in separate accounts. They would not have to be run by a separate department of the bank, although it would probably appoint one or several investment specialists if there were many such funds available for investments. - One should add, that the loans given by the bank would be given only by its credit transfers and they would also be repayable by those credit transfers. Terms and interest rates would have to be haggled out among lenders and borrowers, with the bank merely acting as a mediator. It might e.g., publish the funds available and under which conditions they are available and the funds wanted and under what conditions they are wanted and then act as a broker to achieve as many mutually satisfactory agreements between these customers as possible. Part of the interest payable would serve for credit insurance purposes. In this uncomplicated model I see no need for any outside interventionism or any suspicion that the bank or its customers would thereby be given any special opportunity to cheat or defraud others, to "create" any money or value out of nothing, to appropriate what really belongs to others, a chance to deflate, inflate, stagflate, or tax the economy, to speculate at the expense of others, to establish a monopoly or any coercive power to intervene with any productive or creative activities, with any individual rights or liberties. It would be a contractual self-help project. I see no need or justification for government control or supervision or guaranties for such institutions. They would and should operate quite separately from the government, more independently than the present churches and sects are from them. Ideally, they should not be subjected to any taxes & licences and regulations and official supervisory boards and inspectors at all, either. However, once governments began to operate as competing business organizations and for voluntary customers only, then they and their members should be free to open clearing accounts there, too, or establish their own clearing banks. - When dealing with all other models and notions of deposit, note-issuing, savings and investment banks, we should, first of all, keep this simple model in mind and check whether any added features are really rightful and necessary or, rather, wrong and self-defeating or risky and distorting, leading to panics, failures, booms and busts or would be too inelastic and deceptive or coercive or all of these combined. - What would happen, e.g., if any credit established in such a simple clearing bank did go astray and were used as a credit in some other banking institution, which might consider it as a valuable foreign exchange and, based upon it, using it as a reserve and blow up its deposit volume or note circulation in an inflationary way. - Imagine that the other banks would do so. Would our clearing bank have to be blamed for their actions? Would it suffer from this? To make it easier to answer this questions, let us assume that our clearing bank, instead of establishing clearing certificates or accounts with gold gram value accounting, had possessed some  gold coins and issued gold certificates and that these gold certificates would have got into the hands of some other banks of issue and were there used as "currency reserve" for a fractionally covered and over-issued currency that is monopolised and made legal tender. Would you, then, blame the gold weight clearing bank for the wrongs and mistakes of that foreign central bank? If not, then you would have not right toblame the gold clearing bank, either, when its credits were somewhere else so used. - But, we should also consider that not only the credits of our clearing bank would go astray but, those of other banks, too. Our clearing bank could insist upon note exchanges or mutual clearing and thus get the own credits back, soon. If, as we assume, our clearing bank adheres to stable value reckoning, i.e., does not engage in an inflation, with its clearing media and all the prices of its customers would continue to mark their market prices etc. out in the agreed upon stable value units, while all around it central banks would engage in monetary inflations. Then, most likely, many more foreign exchange media would be offered to it than notes of its own would have gone temporarily astray - by arriving at central banks in other countries. So our clearing bank could easily pay for the return of its credits, even before their stated validity has expired. The exchange rate for the foreign currencies would fall and the clearing bank would tend to refuse them at all if it would not need them to buy back its own exchange media or debts gone astray.  If central banks began to imitate is value standard reckoning, then this would also not impose any risk for our clearing bank. A mere clearing or accounting standard can be shared with an unlimited number of other people. Nor would the establishment of clearing credits at this bank by foreigners or even foreign central banks bring any risks or problems. The accounts are for clearing purposes only. No gold or cash withdrawal claims can be raised. They can only be used for purchases or sales among the members, the more, the better. Loans to foreign governments would no more be granted by it than to the own - unless the own government would turn into a bank robber against it, using all kinds of pious or cover-up or confidence trick phrasing in the process. Naturally, this system could not function freely and without frictions and problems if it were forced to use a fiat paper money standard (forced currency: compulsory value & compulsory acceptance), were subject to quantity regulations on the totals of its turnovers, had to redeem all its debts upon demand in gold coins or legal tender paper money, had to keep part of its accounts with a central bank, were severely taxed or not permitted to freely clear the accounts of its customers, had to turn over any foreign exchange received at a fixed rate, payable in legal tender, to the central bank, had to purchase government "insecurities" or private capital assets. Freedom from all acts of monetary and financial despotism is presupposed. Its business is the liquidation, balancing or settlement of debts of its customers, payable for the sale of goods, services or labour, or their purchase, i.e. daily turnovers of what holds body and soul together in a society based upon division of labour and free exchange. It would not make any promises it could not keep - if not governmentally prevented from doing its job. Up to the limits of the productive and trading capacity of its members, to provide goods, services and labour to each other, it could increase its business turnover, total of accounts, total of debts settled, its short term clearing credits granted. Both terms, "overdrafts" and "credit expansion" are misleading here. The customers started with a zero account and did not have to deposit any rare metals or legal tender to establish at first a disposable credit account. They might merely have a personal debt limit on their clearing account, as is also practised with credit cards. Such a bank would not and could not "expand credit" but its customers might increase their exchanges among themselves and grant each other credits, timed one, through the mediation of the bank. - But it could become involved in international trade clearing to the extent that it could issue, with the consent of exporters among its customers, clearing certificates upon their ready for sale export goods, sell these, via account transfers to importers among its customers, to the extent that these can use them to pay for their imports, and could stimulate the rapid returns of these clearing certificates in payment for the export goods, which would redeem these clearing certificates. - I try to deal here with economics not with anti-economics or neocomics, as Dr. H. G. Pearce used to say. To grant credits to foreigners would, again, be a matter for its customers. The clearing bank would only help in the process. By allowing foreigners to pay with clearing certificates upon their export goods, to the extent that the clearing bank's internal importers would accept these, it could, in most cases, make the granting of credits to foreigners by the own exporters,  unnecessary. In other words, it would act like a bench (origin of the work bank) or special market for the transactions of its customers. This market institution would neither have the power nor the interest to inflate, deflate or stagflate the transactions of its customers but, rather, to make them as easy and fast as possible. All accounts would represent real goods (services and labour included) and real sales. Or the bank would anticipate sales of its customers, who are ready to sell, by allowing them to spend themselves into debt, up their personal limits. The bank would EXPRESS or RECOGNIZE that turnover credit of one of its debtors. It would not CREATE it. The acceptors of the clearing bank's transfers would CONFIRM that turnover credit by their acceptance of the transfer at par. No arbitrary credit "creation" or "money creation" would be involved. Its turnover credits would not promise any more than could be delivered at anytime: the ready for sale goods, services and labours of its debtors. Especially gold or silver coins or legal tender would not be promised. - Those who would not merely desire the par value of the clearing bank's clearing accounts, clearing certificates or tokens with their nominal gold weight values, but, instead, gold metal of the corresponding weight total, instead, would be referred by such a clearing bank to the free gold market, especially its local representatives, with access to all the gold reserves in the world - and the best knowledge of the clearing bank's par value and the par value of any other local currencies that might exist aside it. The clearing bank itself should not be in the gold metal storage and trading business. That is a business for other specialists. The only connection would be the gold weight value unit used by it for accounting and clearing purposes only. - If the clearing bank were paid in gold coins or gold certificates it should use these to buy back its certificates from whoever wants to buy gold or gold certificates with them. If it saw its accounts or certificates suffering a small discount somewhere, then it should make such gold coin and gold certificate exchanges especially then and there. But it should not accumulate any gold coin and gold certificate "reserves" for this purpose or promise to supply them upon demand. To that extent its proclaimed fractional gold "cover" would be expressly "zero"! It would only promise clearing AT GOLD WEIGHT VALUES. No one would be granted any right to claim gold metal from it, except in the deals in which it sells all gold coins received for its certificates, at par. All foreign notes and credits received would also be used to speed up the reflux of its own clearing certificates and account credits of foreigners.
CLEARING BANKS & NOTE ISSUING BANKS : Clearing banks are the same -as note issuing banks in principle. Only the metal redemption- does not apply to them. - Ulrich von Beckerath, in- correspondence. - That applies only to clearing banks that- operate by clearing only, not to cheque banks, that authorise -their cheque account holders to withdraw either a rare metal -deposit or legal tender, upon demand. - J. Z., 7.4.97.
CLEARING CERTIFICATES & CAPITAL SECURITIES: See: APHORISMS ON- THE MONEY PROBLEM.
CLEARING, CLEARING HOUSES, CLEARING PROCESS, CLEARING- CERTIFICATES: ARE THERE BETTER NAMES FOR IT, NAMES MORE EASILY- UNDERSTOOD, LESS LIKELY TO BE MISUNDERSTOOD? - Mutual settlement, -balancing of accounts, set-offs, mutual payment adjustments,- mutual , writing off of debts, mutual cancellation of debts, -non-cash payment, trade-off money or methods, transfers of accounts only, book money settlement, balancing of debits against- credits, numerical money, symbolic money, accounting money. In -German: Abrechnung & Verrechnung. Perhaps from other languages more suitable- terms could be taken?
CLEARING, CREDITS & DEBTS ON SHORT TERMS: Short term credits and- debts that represent turnover transactions amount mainly to -clearable credits and debts that would and could almost always be -settled by clearing, if only the creditors were not given the -authority to demand cash payments instead and would not, sometimes, be inclined to demand them. Thus the assumption or -legal presumption that all short term non-cash credits, deposits -and cheques are to be claimable in cash ought to be done away- with and replaced by a right to clearing only, in as convenient- and just a way as can possibly be arranged by private and- monetised notes and clearing certificates. Capital savings should -not be used to finance such turnover credits. They are -unnecessary for them. Such transactions are inherently -self-liquidating if only no form of monetary despotism interferes -with them. - J. Z., 7.12.92 & 15.4.97.
CLEARING: A man who can properly clear his own labour services and products against those he wants, is no longer unemployed. His danger would rather be over-employment - since the wants of most men are rather unlimited. - J. Z. 7.8.75
CLEARING: Clearing needs no official organization or regulation -nor any official or private funding - no more so than e.g., -postage stamp or coin exchanges for collectors do. But what it- does need is freedom to organise itself under its own statutes,- independent of all repressive legislation, regulation & jurisdiction. - J. Z., 19.7.91,-26.4.97.
CLEARING: If it is true that all exchanges can be settled by -clearing and, lastly, are settled by clearing, even if only- indirectly so, with the help of currencies, paper monies or coins -or banknotes, then there is INHERENTLY no need to give such- clearing media any other backing or cover or redemption other -than their clearing function. At the same time, seeing that- clearing means the cancelling of mutually owed debts, it is -obvious that forced and artificial values for clearing media- would distort clearing transactions and so would the compulsory -acceptance of such fiat currency and legally turning it into the- exclusive coin and note currency for a whole country. Thereby, -and inevitably, the monopolist and coercer could shed his own -debts, by unilateral action and authorise all other debtors to do -the same, to the extent that this monopolist has inflated his- currency. Creditors and debtors ought to be freed to agree upon sounder value standards - and means of payment - that suit both of them. Through private and free clearing and note issues we should make ourselves independent of the wrongful, flawed and limited options that are the only ones which the governmental central banking system offers us. Free choice of exchange media, clearing facilities, credit instruments and value standards, all of them optional and market rated - except for their issuers, towards whom a juridical legal tender should apply, since they ought to recognize and accept their own debt certificates at par from anyone. Everything else would be fraudulent. - J.Z., 7.9.97, 10.9.02.
CLEARING: Let's clear the air about clearing. With people free -to clear their labour, services and goods, all ready to be- supplied, for the labour, services and goods of others, there -could be no unemployment or underemployment or sales difficulties -for any labour, services and goods that are still wanted at- market prices. All being supplied with either sufficient sound- exchange media or clearing avenues, to facilitate all these -desired exchanges (settled, even when paid in "cash", simply by a convenient form of clearing-), all could be cleared against each other, provided only that- all people concentrated on supplying labour, services and goods -that are wanted rather than on those that are not wanted or not -at prices that would more than cover their production costs. -Moreover, under this condition, all ready for sale labour, -services and goods could be liquidified & then utilized as purchasing -power - redeemable in these wanted things. Whoever puts any -obstacle in the way of the free and competitive private or- cooperative supply of sound exchange media or of clearing avenues -and banking institutions and payment centres, does thereby assure -unemployment, underemployment, depressions, inflations and- stagflations. While a single and very efficient clearing centre- for the whole world could, theoretically, arrange for all possible and desired- exchanges, keeping all willing to provide labour, services or- goods busy, producing them and exchanging them through this clearing centre, it remains true that coins and paper notes, do facilitate clearing-, e.g. in the purchase of a newspaper or a book. Thus, -fully freed clearing should always be accompanied by the free -issue of optional and market rated and competitively issued -exchange media in form of paper notes and coins. The sum of clearing exchanges and the total circulation of notes required -can be no more rightly and efficiently prescribed or limited than- could be the sum of labour, services and goods which people are- able and willing to provide for each other in a division of- labour process that depends upon free enterprise, free exchanges- and free trade. All attempts to centrally manage and limit- exchange media and clearing facilities have led to abuses and- economic crises. Only full monetary freedom can prevent them - as- far as is humanly possible. - J. Z., 3/97.
CLEARING: We are all each other's debtors and creditors, with- the totals of debts and credits exactly balancing each other.- Consequently, if only we organized a perfect clearing system -between us, one not disturbed by any legally or juridically- authorised demands for rare metal cash or monopoly- paper money that is legal tender, then we could clear all our transactions. All the notes- we would still use for the sake of convenience need be nothing- more than clearing certificates to facilitate this free exchange -via free clearing. We should no longer tolerate any law, regulation, juridical decision or administrative authority which -prevents this from happening freely, naturally and fast, doing- away with and preventing all monetary crises, especially inflations, -deflations, stagflations, with their involuntary mass unemployment, expropriations, bankruptcies due to this despotism, general impoverishment and their trends towards despotism, terrorism, civil wars, and wars. - J. Z., 24.7.93,- 24.4.97, 8.9.02.
COIN AND MONEY COLLECTION HANDBOOKS: They should be perused and- partly abstracted or extracted for precedents.
COIN OF THE REALM OR LEGAL TENDER PAPER MONEY: Allow people to- pay and be paid in other monies than the "coin of the realm" or -the government's exclusive and forced currency - and most of our -economic problems would be over. - J. Z., 1989, 8.4.97.
COLES/MEYER SHOPS IN AUSTRALIA AS POTENTIAL ISSUERS: Their -annual turnover according to news of 2.8.93, was 15 billion.- (Currently around 20-20 billion A $'s. - J. Z., 12.9.02.) Assume that they could keep in circulation ca. 10% of this. This- would mean that at any time they could issue and keep in- circulation A $ 1.5 billion worth of their own shop currency. This -amount alone suggests they should take an interest in this aspect- of their own business. Moreover, if they could issue that much of -their own currency - assured of its reflux in sales, then their- total turnover could probably be increased considerably. Moreover, they- might also use a stable value standard in their currency and in -their pricing, thus making their own notes still more widely- acceptable. Furthermore, they could grant wage payment loans with -them, to that extent of their "shop foundation". Such extra short term loans could- greatly contribute to reduce the current unemployment,- officially above 800,000, unofficially probably considerably -above that number. (By exerting an extra demand for productive labour and also turning over more goods and services than before. - J. Z., 12.9.02.) Unemployment for young people is sometimes as -high a 20 - 40%, depending upon the location. But they are not -interested in or free to ask for payment in shop currencies and- the potential issuers are not free to offer them such payments. -- J. Z., 30.4.97.
COLLECTIONS OF MONEY TOKENS AND PRIVATE ISSUES: It could start- with the hand books for coin and money collectors but could be- supplemented, for research purposes, with good photocopies of- other specimens, not mentioned in these.
COMMITTEE FOR MONETARY RESEARCH & EDUCATION: Seeks to promote the -public understanding for monetary processes and the vital value -of a healthy monetary system for a free society. Pamphlet series, newsletter MEN & MONEY. Pres. Elisabeth R. Currier, POB 1630,-Greenwich, CT 06 836, USA, Tel. 203-661-2533.
COMMODITY MONEY, REDEMPTION, COVER & CONVERTIBILITY TERMS SHOULD- NOT ONLY BE APPLIED TO RARE METAL CURRENCIES: These commodities -are not the ones consumers usually want but only in-between- commodities or arrangements in attempts to assure that their -holders or claimants can get the satisfaction in the commodities -and services they really want. Originally, there seemed to be no -better way, than this important step-up from primitive barter. -But since then, in millions of transactions easier, cheaper and -more direct means have been found and used, illegally or legally, -to achieve consumer satisfaction, to balance the variety of- commodities and services with a variety of commodity and service- vouchers, and in thousands of cases the interest in value -preservation has also been served by rare metal commodities not- serving as exclusive or even frequent means of exchange but,- merely, as value standards, by weight, in more or less free- exchanges. For free transactions the barter value of gold can be- abstracted whilst the reckoning or accounting value of gold--weight units can be preserved. For this purpose gold does not- have to be physically present. Nor does it have to physically back up each transaction, nor do even gold certificates have to be -backed or covered by gold or be redeemable or convertible by the -issuer himself. He has only to see to it that his "paper gold"- remains at par with its nominal gold weight value. Then the- convertibility of his notes or certificates can then be transferred to- the world wide gold market, embracing all gold stocks and all- current gold production. Most of the commodity money advocates -never dreamt of such a huge redemption fund for their supposedly- ideal gold standard currency. They considered only the tiny -fraction of the total which their kind of commodity currency -issuers could mobilise for their purposes. Goods warrants with -local shop foundation could liquidify most currently wanted goods- and services while still preserving gold weight pricing and- reckoning, independent of the local supply of gold. When private, no-exclusive or forced paper money has been supplied, which is optional and free market rated but kept at par with its nominal gold weigh value, then it is "as -good as gold" and it was usually preferred to gold as long as- people expected this goodness of paper money to be continued.- Monetary freedom would permit gold coin and gold certificates,- whether 100% or fractionally covered, for all voluntary payment -communities and at their risk and expense. After having been long outlawed, they would probably blossom for a while but then shrink in their occurrence and volume, -in free competition with cheaper and better alternatives, which -would preserve what is good in rare metal currencies and certificates but would eliminate their drawbacks. Say's Law would- then get fully realized: All suppliers of daily wanted goods and services, suitably associated, could then -issue the required purchasing power for them to achieve the sale- of their goods and services within a normal consumption period. - J. Z., -22.4.97, 7.9.02.
COMMODITY MONEY: Commodity money, as usually understood, in form- of gold, silver, platinum or copper coins and of certificates- that are 100 % or, quite openly, only fractionally covered by- them (preferably with precautionary redemption clauses that would- cover the risk of sudden redemption demands), represents just a -few of the numerous options for monetary freedom. Sometimes and quite without justification or necessity, such issues would be granted legal tender status. - If it is so -good, why insist upon it being legal tender? And it would still constitute an exclusive or monopoly currency, unless freedom to issue & use other kinds of exchange media and value standards is introduced. If it is so good,- why insist upon such a privilege? It would limit value accounting -to these standards and this in the face of hundreds of different- value standards that have been proposed and that are believed in- - at least by some. It would also limit exchanges to those that can -be covered by ready availability of these commodities. It would mean that a few or even one selected commodity only would have to -cover the exchanges of all other commodities, as well as of all services, not- merely as mere standards of value but as means of payment, too.- This means the establishment of a very tight bottleneck for all- transactions. Prices in exclusive rare metal currencies went- never so low that the available rare metal coins sufficed to make -monetary transactions penetrate universally, everywhere. Even -primitive barter continued to exist, to a considerable extent, even in developed countries, even into the 20th century, at least in some- spheres, with e.g. some agricultural workers being partly paid in- wheat, potatoes and firewood. Under monetary freedom the ultimate- redemption fund that most currency holders are interested in, -namely, ready for sale goods and services, in millions of- varieties, would be the kind of commodities that would back and redeem or- provide the convertibility for the most common, competitive and optional monies of monetary freedom. Once these have been -widely issued and accepted, rapidly streaming back and being replaced by new issues, and when they have a relationship to commodities like gold, or other rare  metal weigh units, only as their accounting- and clearing value units, in the competitive notes and- certificates of private currencies and in the prices of all goods,- services and labours, then the idea of confining all exchanges to those coverable by rare metal commodities will come to appear ridiculous. To take an example from today: Do you -imagine that railway, bus-, cinema or lottery tickets or postage -stamp, to preserve their value and to measure it accurately, would -have to be convertible, by the issuer, at any time and upon -demand, into a rare metal? Neither does a shop foundation money- need such a cover to give it value - measured e.g. in gold grams- and keeping it at par, in a free market, with such a value,- perhaps even above par (among those who do not want to carry gold- coins around or do not want to confine their earnings to those -that can be paid in 100% covered gold certificates). All other -ready for sale consumer goods (commodities) and even daily wanted consumer services should be considered -as suitable "commodities" for redemption, cover & convertibility,- by those desiring it. And the specialized convertibility desires- of some, who do want to turn their "tickets" into rare metals, should be referred to the greatest -redemption and convertibility fund of all, namely the free and- world-wide market for gold and other rare metals. Notes that are- locally accepted at par with their nominal gold weight value can- also be used to purchase gold metal from a local representative- of the world-wide gold market. Even now most banks do also sell- gold coins to investors or collectors, but not because they are legally or juridically obliged to do so. They are not. - 1.8.94, 17.4.97, 7.9.02.
COMMODITY RESERVE STANDARD OR CLASSICAL GOLD STANDARD? MONETARY FREEDOM: Competition would provide better money than- would government. I believe we can do much better than gold ever -made possible.  Governments cannot do better. Free enterprise,- i.e. the institutions that would emerge from a process of- competition in providing good money, no doubt would. There would -in that event also be no need to encomber the money supply with -the complicated and expensive provision for convertibility which -was necessary to secure the automatic operation of the gold- standard and which made it appear as at least more practicable- than what would ideally seem much more suitable - a commodity -reserve standard.... - Hayek, Denationalisation of Money, 83.
COMMUNISM & CENTRAL BANKING: Communism lives on, e.g. in central banking, also in compulsory taxation and the collectivist ownership claim upon "national" territories that I call "territorialism". It is also preserved in "protectionism", social insurance legislation, legislation on industrial relations and in numerous other State interventions with the economy and our work and private lives, even in the supposedly non-communistic or even anti-communistic countries. But the worst aspect is central banking. From it either the other evils arose or have greatly grown through it. Since it is preserved by a faith it cannot be abolished or effectively outlawed. But what is achievable is tolerance for dissenters, freedom for them to opt out of central banking and to do their own things for themselves, i.e., making use of monetary freedom, as part of the whole range of exterritorial autonomy options for volunteer communities or of freedom of action or exterritorial autonomy or minority autonomy. Since popular majoritarian faiths are not directly challenged by it, as they are e.g. by terrorists, and since monetary freedom is not appreciated by most, that is an aim that is attainable, even as a "fool's" liberty. It can also be claimed under the right to make mistakes, at one's own expense and risk. So much about freedom of action contrary to central banking beliefs. But that does not mean that central banking should no longer be intellectually attacked. One of the most promising attacks in our times could very well be to point out its communist connection, unknown to most of the victims of state schools or state controlled educational institutions. Even those who can't be bothered to study monetary freedom options might thus come to reject central banking as a mainstay of what remains of totalitarian communism, even in most supposedly free Western countries. - J. Z., 11.5.97,14.5.97.
COMMUNISM, CENTRAL BANKING AND LEGAL TENDER: Why did and do all -supposedly anti-communist parties and non-communist parties -support both central banking and legal tender even after the fall -of most communist regimes and economic systems? Why is that- system still preserved in the countries supposedly liberated from -communist regimes? Karl Marx and Engels in their platform in the- Communist Manifesto of 1848: "5. Centralization of credit in the -hands of the State by means of a national bank with state capital- and an exclusive monopoly." In an 1848 leaflet this was further- clarified in point 10: "A state bank the paper money of which is -legal tender, will replace all private banks." - In the Communist -Manifesto they called their programme themselves one of "despotic -inroads on the rights of property and on the conditions of- bourgeois production, by means of measures, therefore, which -appear economically insufficient and untenable." - So, why is- this despotic, insufficient and untenable system still legally -and coercively upheld everywhere and hardly even criticized? -- J. Z., 20.3.97.
COMMUNISM, COLLECTIVISM, MONETARY DESPOTISM, CENTRAL BANKING, STATE SOCIALISM, RUSSIA & THE "FREE WORLD": The institutions and conditions of Russia as well as those of the supposedly free Western world will remain largely collectivistic and communistic as long as the coercive and monopolistic central banking system and its monetary despotism are upheld. - J.Z., 26.8.91.
COMMUNIST MANIFESTO & UNEMPLOYMENT: Did you ever read the 10 Points Platform in the Communist Manifesto? - It was expressly drafted to create an economic chaos, by economically untenable methods - a disorder in which the Communist Party could flourish and finally take over power. - Its point 5 runs (from memory): "Centralisation of credit in the hands of a State bank with State capital and an exclusive monopoly." A leaflet that followed soon after explained that the intended exclusive currency was to have the legal tender characteristic. - We know by now and through bitter experience that neither the ALP nor the LP or CP nor the DLP have a workable employment programme. If either of them had it, it would be firmly in power. All of them, in spite of some lip service to anti-communism, support at least point 5 of the Communist Manifesto, i.e. a system expressly designed to create disorder and further the cause of communism. They do not even apologise for this but consider their behaviour as self-evidently justified and necessary. - The supposed anti-monopolists in the main parties did thus establish the largest and most dangerous monopoly of all, the money monopoly. - All Western and, supposedly free and anti-communist governments did legalise this communistic (or state socialistic or State capitalistic) proposal and outlawed all free market alternatives. (I find this communist idea in almost every mind and, almost, "under every bed" - and more or less hotly defended by most of its adherents.) - Frederic Bastiat once said: "Society Is Exchange."  If this statement is correct then the socialists and other dictocrats, who raised exchange difficulties in this form and others, are thereby and to this extent revealed as anti-social elements, as enemies of society. - Full employment is something NO government can PROVIDE. Not even a libertarian government could. A libertarian government (severely limited government) would just leave the unemployed free to supply themselves with work - and to take all the monetary, financial and organisational steps required for this purpose. At most it would provide advice and would see to it that none of its own measures would continue to create and maintain unemployment. - J. Z., 1985 & 21.5.97.
COMPETITION UNDER MONETARY DESPOTISM & UNDER MONETARY FREEDOM : -Instead of a severe competition (which has given competition a -bad name in public opinion) among suppliers of labour, goods and services, largely free to compete with each other as such- suppliers, for a monopolised and thus scarce or unreliable or- depreciating exchange medium, upon which all their exchanges -depend but which was, obviously, not competitively supplied,- nevertheless, under monetary despotism - there would be, under -monetary freedom, the easy competition of not only supplying- one's own goods, services and labour competitively but, also,- competitively supplying money tickets for their acquisition and- use and for paying all one's debts with them, to the extent that such money tickets or purchasing vouchers etc. can be issued at -par with their nominal values (expressed in whatever value -standards are found acceptable under free choice of value -standards). Not only the goods, services and labours could be- almost endlessly varied, as wanted, but the means to pay for them -could be, too, by those who have the wanted consumer goods, -services and labour to offer. Each certificate would only have to -offer that degree of variety of local goods and services -as its redemption fund which would induce potential acceptors to -accept it at par. Thus severe competition in goods, labour and- services supplies would be ended through an easy competition in- the supply of goods-, service-, and labour vouchers, issued by -their local suppliers, within the limits of their supply and- labour capacities. No more monetary bottleneck or excess friction -would result. Each supplier could also supply the purchasing -power to turn over all his supplies and could do so over and over- again. The quantity of goods, services and labour could be freely -brought into balance with the quantity of purchasing media for- them, by the providers themselves, rather than by outside -monopolists, who have other priorities and even contrary -interests to these suppliers and no rightful claim to dispose of- the goods, services and labours of others by means of exclusive- and forced currencies. Monetary emancipation would fully realize -or emancipate competition, too, as well as free cooperation on a -free market. - J. Z., 14.4.97.
COMPUTER OR ELECTRONIC MONEY, PRIVATELY SUPPLIED AND MANAGED, FOR -CLEARING PURPOSES ONLY: This kind of clearing money would have -to be hacker proof. Forgery would also have to be prevented. -Ideally, a computer of a participant would be permanently -connected to this centre. All his spending should provide his identity, assured by scanning, codes, pass words,- whatever. The system should also be pre-programmed to sound an- alarm at the account holder's computer and a security check- computer at the clearing centre, whenever any tampering with an- account seems to occur, e.g. by repeated tries to hit upon a code- number, flawed scanning etc. E.g., the credit card, holding the -phone clearing credits of a participant, might be associated with -a beeper that would indicate to the card holder any attempt to -spend from his account. Then he should have the option to press a -button leading to the message at the clearing centre: I am not- trying to spend anything now. Apparently, a fraudulent attempt is -in process to use my account. - Then such payments attempts, -at the expense of others, without their consent, should not be- completed until the matter has been clarified via checks with the account holder. Whoever made the attempt to break into an account- and rifle it, electronically, should also become automatically- and electronically traced and identified. - We may not be there- yet but we might not be very far from that situation, either. I- am less worried about this than about governments, especially tax-d departments, getting access to this kind of private trading.- Security against this should become close to 100% before I would- prefer that system to cash payments. - Some claims have already -been made for a large degree of security for private payment channels. I do not know how true and how costly these security- avenues are. - Perhaps as an experiment, libertarians and- anarchists could set up such a system among themselves, for the- exchange of printed, disked, microfiched, on-line literature or- literature compilations on hard disk drives, ZIP disks and -CD-ROMs of the cheapest kind, that offer only text files. -Expensive multimedia are not necessary to convey essential -freedom information. - I still think that e.g. 5,000 active -microfichers in the world, producing and reading microfiche actively, could use their fiche between them to set up a clearing -bank, using a microfiche of acceptable quality of reproduction and -legibility, as a value standard unit and also quantities of them, -as media of exchange. If each participant deposited a few- duplicates of his issue at that central bank of freedom- microfiche, then he could there get a corresponding credit, in -form of the other freedom microfiche that he wants.  The centre -might also act as a literary agency for the participants and- offer their fiche for sale, directly, on a commission basis or by -mediating subscriptions. Thus it could cover its costs and make- some profits - provided only that microfiche would have been- already as widely accepted as that. Indeed, that might never -happen, in spite of all the advantages this medium offers. But -the potential is there.  - J. Z. - 1.5.97.
COMPUTERISED MONEY MARKET DEALS, INTERNET MONEY: How sound can they be, or how soundly can you judge the currencies involved, if all you see and can know about them, through the computers, are figures on a screen? All face to face evaluations, knowledge of particulars, trades, goods and services involved are abstracted in the process. Moreover, the prices quoted are often prices artificially and wilfully manipulated by governments to give a wrong impression. Such money manipulations can occur, as despotic actions, almost at any time and at any degree. The monopolise and forced currencies traded, as well as those which are offered on the Internet, are all too separated from goods, services and labour exchanges and their conditions. The exchanges and exchange media offered by monetary despotism and to a large extent also those offered only electronically, via the Internet, are all too anonymous, not immediately visible, touchable or testable. Too much has to be accepted upon legal commands, faith, advertisements and reputations. It is almost as if one considered only the markets established by powerful criminals, organized crime, pirates, highwaymen, with their loot, their fiat money, their requisitioning certificates, their regular and irregular tributes and levies, and from them tried to judge the economy in general and come to rational decisions. Indeed, the government securities traded in the money markets are investments in tax slaves. When and where and to what extent these tax slaves will finally rebel or simply refuse to pay or evade or avoid taxes can't be safely predicted. To the extent that credit claims to cash or gold are traded, and lead by its system to of an immense non-cash payment and clearing structure, upon a comparatively small gold and legal tender basis, with creditors entitled to demand rare metal cash or legal tender paper money (of which there is never enough to pay all the current non-cash payment and clearing claims), the whole system is very unstable and subject to panics and collapses at any time. Consider also the huge stocks of U.S. paper dollars hoarded all over the world because the other national currencies are, usually, even worse. As soon as the other national currencies improved or became more stable than the U.S. dollar, then these huge amounts might suddenly flow back to the U.S., leading there to a strong paper money inflation, since there they still have legal tender purchasing power. Who can predict when that will happen? - The whole embodies all the uncertainties of the old court watchers, the Kremlin watchers of recent decades and of the Washington and Tokyo watchers etc. - While the government is still despotically involved with finance - this market cannot be free and sound, either. - J. Z., 12.4.97, 18.5.97.
COMPUTERIZED MONEY SYSTEM: Can any electronic system, no matter how extensive, and how often it is changed or reformed, but a full substitute for the inventiveness, creativeness and ingenuity of free participants in a free market for exchange media, value standards, foundations, clearing and credit methods etc. and the subjectivity of values for different people or is it merely another instance of the "one size or one utopia fits all" notion? Especially libertarians should be wary of computerizing all their transactions, making them thus more or less open to government snooping with the most expensive and extensive decoding equipment, software and manpower resource for that purpose. While in a quite free market computerization would offer many advantages, under the rule of territorial governments it also offers many disadvantages. Computers, software and their networks are not and may never the panacea that many people expect them to be. I find that indicated by the way libertarian computer users neglected and still neglect e.g. their microfiche, floppy disk and CD-ROM publishing options for libertarian literature. -J.Z., 27.8.02.
CONFIDENCE & TRUST: The present banking system of monetary -despotism does not deserve the maintenance or restoration of -confidence or trust but, rather, the solid establishment of -permanent doubt and distrust and the replacement of this -despotism by the individually chosen alternatives of monetary freedom. - J. Z., 15.3.97.
CONFIDENCE: An honest currency is not a confidence game or -trick. It can be as honestly offered and accepted  as goods and- labour services can be. - And its quality could be as rapidly- checked: E.g., would it be accepted as "as good as gold", or at- its other par value, to a different standard used in it, in the- next shop or service station? If it is, any suspicion, distrust- and lack of confidence would be rapidly dispelled. - One might -even say that it is a self-interested confidence game of -advocates of an exclusive and either 100% or fractionally covered- gold certificate currency, to insist that "confidence" would be -required for banknotes. Such nonsense is simply thoughtlessly copied, from one author or lecturer to another, over generations.  - J. Z.,- 61.11.91, 26.4.97.
CONFIDENCE: Confidence as the basis for the value of a currency?- Nowadays you can only be confident that a government paper- currency will NOT be redeemed by the government issuer (or its- central banking system ) in gold or silver or by any private bank- forced to deal only in the government's forced and exclusive -currency - or forced and exclusive currencies of other -governments. - You can also be confident that you can pay your -taxes with it and that the government will mostly back you if you -use its currency to cheat your creditors with it for part of your -repayment obligation.  At most you remain somewhat free to try to purchase with it, at current paper prices for gold weight units, -and often taxed, gold on a somewhat free gold market. - J. Z.,- 16.3.97.
CONFIDENCE: Only that confidence is needed for a currency, to be -widely enough accepted, at least locally, that consists in the -assurance that one can buy with the currency all one's wanted- consumer goods and services and pay one's debts with it. When -this confidence is assured then it comes close enough to a -certainty. A further guaranty by the issuer: a promise to -deliver gold or silver for the currency, too, upon demand, is- then not required and thus metal redemption will be renounced by- competitive issuers and not asked for by most users of such a- currency. If they really want to buy gold, they would remain free -to do so on a free gold market. - J. Z., 16.3.97.
CONNECTION, THE, PUBLISHED BY ERWIN S. STRAUSS: On and off it- discusses monetary freedom options, too, e.g. Dio in TC141p48,- Jim Stumm in TC142p29. Stumm, in TC133p115 sees Gresham's Law- correctly: Without legal tender & money monopoly, good money- drives out the bad. Some of the usual objections are raised by D.- Ust, in the same issue, p. 52. Strauss offered some comments to -them in TC134p6. I marked 3 free banking contributions in TC143,- on pp 8,9, 38/39. - I would like someone to provide me with good -photocopies of all such contributions for microfiching. - J. Z.
CONSIDERATION FOR OTHERS: A system of monetary despotism is hardly considerate towards the rights and liberties of others. It does not learn from its mistakes. It does not allow its victims to opt out from under it. It does not permit competition by others. It is the product of totalitarian fanaticism. Under the pretence of providing the greatest possibly public services it manages to provide, actually, some of the greatest possible public disservices and this not only for a moment but, for years and decades even, and this with the consent of most of its victims, while suppressing the free actions of a few enlightened individuals and groups, that could clearly show up its wrongs and defects. - J. Z., 11.5.97.
CONSPIRACY THEORY AND CREDIT-, MONEY- AND DEPOSIT "CREATION": To- assume that all accountancy and trustee companies and directors of -banking coops are unanimous members in an international conspiracy, to "cover up" an endless "creation" of deposits and- credits out of thin air, goes a bit too far for me to take on- credit or faith, just upon the assertion hot air or written assertions that such things would- occur. Some accountants have written detailed reports to prove -that such frauds and cover ups do not and cannot occur (although- many other culpable acts do happen), and that we have here -merely one segment of the many sectarian and popular beliefs on -money and credit. - J. Z., 3/97.
CONSULTANCY OFFERS FOR MONETARY FREEDOM EXPERIMENTS:
CONSUMER COOPS & MONETARY & FINANCIAL FREEDOM:
CONSUMER PRICE INDEX: How can one achieve the transformation of -a politically determined and correspondingly fraudulent CPI to- one or several ones that are economically determined? Full -publicity on the details of its determination would be essential.- Without them one cannot criticise its foundation. A debtor, as -large as the government, with its CPI committed payments, should- not be permitted to manipulate the CPI under the pretence of- properly measuring the inflation which it causes in the first- place through its monetary despotism, and thus, too, diminishing- its debt burden through unilateral and fraudulent action, under- the pretence that it would fully undo the inflationary effect, at- least at annual intervals, for some people, so "protected". (That would leave, for instance, the losses through the degrees of weekly and monthly depreciations, for those receiving regular weekly or monthly payments, like wage and salary recipients.) -Naturally, the abolition of monetary despotism would be a more- fundamental solution. But honestly compiled indexes, well -publicised, could be among the first of the required steps to -reveal monetary despotism for what it is. - One wonders why the- creditors of the government, so defrauded, do not speak up and -defend their interests. Also, why supposedly free economists do -not speak up against this fraud. - How much does the government -owe its CPI indexed creditors, every year still, after it fraudulently determined the CPI in its favour? - We do let- governments get away with all too much, against our own -interests. J. Z., 14. & 18. Dec. 93, 2.5.97.
CONSUMER PRICE INDEX: How honest or dishonest is e.g. the- Australian Consumer Price Index (CPI)? E.G. Superannuation -payments are determined by it. Personally, observing the prices -that I have to pay as a consumer, I was always of the opinion -that it understated the inflation rate - because that was -opportune for politicians and saved them money in indexed- payments. I was also assured by several economists that in the- determination of it, in Australia, some price controlled items were- intentionally included. That is an obvious absurdity and wrong and fraud. To -measure inflation one should use only prices that are not- controlled, or artificially kept low or perhaps subsidized.- Details on which of hundreds to thousands of possible indexing -methods are used in Australia to determine its official CPI, are -not known to me. Unfortunately, the mass media and associations of employers, employees, retailers and wholesalers not- supplying or sufficiently publishing independent and other CPIs, to my knowledge, that would help to throw doubts upon the official one.- - J. Z., 6.7.91, 30.4.97.
CONSUMER PRICE INDEX: The official CPI seems to be an at least -annually repeated malicious and self-interested lie of officials- entrusted with its calculation and application. It harms -millions, whose incomes are thus wrongly indexed in the inflated -and forced currency of the government. The culprits involved seem- to remain anonymous and immune from prosecution and even from -public censure by genuine economists. So far no investigative journalist has tackled -this fraud, as far as I know. No one has been brought to court -for it, as he should be, by a class action. The top rulers and- politicians do not depend upon CPI increases. They seem to- legislate salary increases for themselves and various perks -almost as they please - and then even cheat in their declarations -on their recoverable expenses. When one was recently found out,- an Australian Senator, he first blamed mere accounting mistakes.- But, apparently, there were dozens of them and almost all in his -favour. (No full reporting on this took place but the matter is- supposedly under full police investigation.) When he pointed out -that most of his colleges did the same, he earned their wrath, risked his future and was called a traitor. Indeed, he betrayed their -all too common frauds and dishonesty. They did not like that. -But this hue and cry is likely to be soon over and the rorts will- go on and on, in one form or the other, usually far beyond an -honestly determined CPI, which they have so far not managed to- provide for poor retirees like myself. The State Superannuation- Fund, to which I was forced to contribute at least a minimum amount -annually, was once bragging that it provided cheap, i.e. very low- interest housing loans to other than public servants. The -representatives of the thus "insured" remained silent. Moreover,- the employer's half of contributions were not paid together with -mine, earning interest over the years, but, in nominal and- depreciated amounts, only when I retired, after 28 years.- Economically, these contributions were part of my wages and as my- wages, if invested, would have earned interest over almost 3 -decades. Another fraud in this old age security system that is -passed over in silence by most. At least part of this -superannuation fund's accumulated reserves had, probably, to be -invested in government insecurities - repayable largely by the -same people in form of taxes, although in depreciated money. -Rorts upon rorts. And at the same time quite honest and safe old -age security arrangements are outlawed and the existing systems -are frequently interfered with and taxed and regulated contrary -to the interests of the thus "insured". I was not at liberty to- opt out of that system, while I remained a public servant in NSW -and to adopt an alternative old age security option not government regulated and controlled. Even if I -had been allowed to opt out, all the others would be just as much meddled with and -none of them was free to offer value preserving clauses, except -to the extent that it was also investing in CPI indexed government securities. Flawed as this CPI is, to the advantage of -the Fund, or its favored borrowers, and to my disadvantage, at least I am somewhat protected by -it against the results of further inflations of the Australian governmental paper dollar. What is misnamed social or old age- "security" has actually forced many people into involuntary -poverty, who, under full monetary and financial freedom could- have become rich in their old age on no higher contributions than -they were forced to contribute to achieve a low pension or -superannuation in their old age. Never trust any government to -get or do anything right. - J. Z., 30.4.97.
CONVERTIBILITY: Convertibility is a safeguard necessary to -impose upon a MONOPOLIST, but unnecessary with COMPETING -suppliers who cannot maintain themselves in the business unless -they provide money at least as advantageous to the user as anybody- else. - Hayek, Denationalisation of money, 84. - Some have argued -that there would be a competition to provide the best possible- convertibility and that would be a 100% convertibility by the issuer upon demand of the note holder.  But, under free- competition it would surely revealed that the ultimate liquidity- or guaranty that people would like to receive upon failure of a -bank of issue is less important to the current value and use of a- currency than is its acceptability for goods and services in -daily demand. Consequently, and in order to save the outlay for a -gold redemption fund, many issuer would proclaim merely that they -are always ready to provide for convertibility of their notes -into goods and services that are in daily demand but that they would not supply themselves their equivalent value in gold- weights, too. Instead, they would merely price their goods and- services and their debts in gold weight units and accept their -own notes at par with their nominal gold weight value (and other -notes only at their gold weight value in a free market). In- other words, they would only try to preserve the par value of -their own notes with gold weight units but without obliging -themselves to supply the gold weights. Those who would then rather -than collect their goods and services at par with them, purchase -gold with them, would be referred not to any stocks of gold- that the issuer might posses, for other than currency purposes,- but, instead, to the greatest gold reserve & redemption fund of all, that of the- whole world, of all of mankind, the one available to all buyers of- gold, to all fans of convertibility, metal cover, gold value guaranties and redemption, namely to the free gold market. They cannot demand more than that -the notes which they hold of any issuer are accepted there at par (or as good as gold). With- the maintenance of that par value the rightful obligation of the -issuer would be ended. Nor would the issuer be obliged to- maintain the par value of his notes outside the locality where he- issues them as turnover or clearing media. He is not under any -obligation to maintain them at par in the whole world. At the- place of issue no only the issuer but most of the whole local -trading community would treat his notes as good as gold and so- would the local gold sellers. But, ultimately, only he would be obliged to accept them at par from anyone and that would tend to keep it locally at par in other transactions as well. What more can one rightly ask for -from any as convenient paper means of exchange than -its local purchasing power and value being at par with its nominal value? It would- then be considered as superfluous and unnecessarily expensive to -try to provide each note holder with a 100% or fractional gold metal redemption -fund as well. Those who do not offer it and declare that they will not so -cover their notes, would win out in free competition. Their -prices will be lower and their exchange media and their value -standard will be just as good or even better and less subject to fraud and deception and runs upon the remaining gold hoard of an issuer. - J. Z., 18.4.97.
COOPERATIVE BANKS OF ISSUE:
COPYRIGHTS FOR MONETARY FREEDOM WRITINGS: Seeing the -catastrophic consequences of monetary despotism - and how often -they occurred and for how long, should we still insist upon- copyrights for all monetary freedom writings, when this might- obstruct their publication or republication? Or should we try to- promote their duplication and publication by any means, in any- medium that we can afford, fully aware that at least at this- stage it would be almost impossible to acquire any riches or even -to recover the costs of such publishing efforts? Or can you -imagine any such writings becoming best-sellers, soon?  - J. Z.,- MFNL&MF 3/4, 2/89.
COPYRIGHTS RENUNCIATION FOR MONETARY FREEDOM CONTRIBUTIONS, AT -LEAST UNTIL THIS BASIC LIBERTY IS FINALLY ATTAINED :
CORRESPONDENCE ON MONETARY FREEDOM:
COSME, PARAGUAY, Cooperative Colony, had a Labour Exchange Bank, -according to TIMES, Aug. 31, 1897. Source: A. Menger.
COST-PUSH & WAGE-PUSH INFLATION: These notions are based on the same fallacies as those of the wage-price-spiral. They ignore the monetary factor or assume merely the degree of monetary mismanagement that is normal for monetary despotism, in which politicians depreciate the currency in the effort to maintain their own power by buying votes with inflated paper money (inflation tax) and with other taxes founding their "government-spending" programs. - J. Z., 24.3.97, 30.8.02.
COST-PUSH INFLATION: In the strict sense, there is simply no -such thing as a 'cost-push' inflation. Neither higher wages nor -higher prices of oil, or perhaps of imports generally, can drive -up the aggregate price of all goods UNLESS THE PURCHASERS ARE -GIVEN MORE MONEY TO BUY THEM. What is called a cost-push inflation is merely the effect of increases in the quantity of -money which governments feel forced to provide in order to -prevent the unemployment resulting from a rise in wages (or- other costs), which preceded it and which was conceded in the- expectation that governments would increase the quantity of- money. They mean thereby to make it possible for all workers to- find employment through a rise in the demand for their products. -If government did not increase the quantity of money, such a rise -in the wages of a group of workers would not lead to a rise in -the general price level but simply to a reduction in sales and- therefore to unemployment.- Hayek, Denationalisation of money, 75.-- See : WAGES, PRICES, QUANTITY THEORY, INFLATION.
COUNTERFEITING  The biggest counterfeiters have been- governments. - Jack Allen Horrigan, article "Inflation Island",- 10/1971. - One can hardly "forge" one's own notes but, under -legal tender and the money monopoly, one can multiply them, still -force these multiples into circulation and thus depreciate them- and drive up all prices expressed in them. In each transaction -the creditors are not cheated out of the whole value, as by the -use of a forged note, i.e. an entirely invalid payment, but- instead, merely by the inflation percentage. - Advocates of -monetary freedom should try to avoid inaccurate terms. They- should leave that activity, as a monopoly, to the advocates of monetary despotism and attack these lies and false pretences with- properly expressed truths and correct terms. - J. Z., 18.4.97.
COUNTERFEITING & INFLATION OF LEGAL TENDER PAPER MONEY: If you- do it it's illegal. - From a Workers Party leaflet: Something's- Wrong in Australia. - A forger does not forge his own notes but -those of others. At most he could water down his stock or issue -more of his own notes secretly than he has promised to do or recorded as having done. But all his notes would still be -genuine. Only their value would be reduced. Not a single one of- them could be declared to be a total forgery and quite invalid,- although the purchasing power of all of them would be reduced. --J. Z., 19.4.97. - Alas, I had subscribed to the same error myself,- when I wrote on 14.11.73 : If you want to engage in- counterfeiting legally, join the central bank.
COUNTERFEITING, FORGERIES: Counterfeiting is a crime which politicians -monopolise. - Stormy Mon, TC121, 29.7.84. - CAN one "counterfeit"- one's own notes? - The issue-monopoly of central banks and the -legal tender coercion and monopoly of its nominal paper "value- standard" are by themselves criminally wrong and harmful enough- without adding the false charge of "counterfeiting" the own -notes. - When other governments counterfeit the notes of the own -governments, or when private forgers do so, or when private banknotes are forged by criminals, then that is- counterfeiting. - J. Z., 2.8.89, 29.4.97. - The wide circulation area and long circulation period as well as the uniform appearance of government paper money makes large-scale and prolonged forgery of it easier and more difficult and slower to find out. - Thus some people predicted that some day government currencies might become destroyed through forgery. Usually they manage self-destruction well enough on their own. - J. Z., 9.9.02.
COUNTERFEITING: When Block discusses counterfeiters, even his- economic arguments falls apart. His protestation that paper money -is already counterfeit is irrelevant. The counterfeiter, whether -government or private, is an aggressor, defrauding others of -rightful value. The real crime of the counterfeiter is not that- he copies worthless government notes but that he passes on his -own worthless notes to innocent victims. To say that government -theft justifies private theft is an argument worthy or the New- Left, not a self-styled defender of liberty. -  Sharon Presley,- where? when?
COURT CASES AGAINST MONETARY DESPOTISM? - I think them too costly -and having much too low  chances for success. Most likely only -the lawyers would benefit. The time and energy involved for the -litigants and the costs, would be better spent upon research,- studies and publishing efforts. - J. Z., 7.4.97.
COURTOIS, French economist who opposed the note issue monopoly - according to Rist.
COVER & REFLUX ARRANGEMENTS THAT ARE POSSIBLE & ADVISABLE :
COVER & RESERVES: Security provisions or guaranties in case of- bankruptcies, when the circulation efforts of banks of issues -have failed, should be distinguished from securities, safeguards,- covers, reserves, clearing and reflux arrangements that limit- the quantity of exchange media issued, assure demand for them,- make certain that they stream back to the issuer and preserve, as -far as humanly possible, the par-value of the notes with a sound- and acceptable value standard. These latter precautions are -necessary to the sound functioning of alternative, optional, privately or cooperatively issued local currencies. When these precautions have all been taken, then the former precautions for the day of liquidation of the note issue -business, would not be necessary at all - at least not for such sound banks -of issue. (What kind of "securities" would be necessary for banks -that issue capital securities is another question. Some might -merely issue securities to make the real capital assets - as well- as capital expectations of their customers  - more liquid and- transferable, as liquid as one can make capital securities. They can't be made as liquid as currencies have to be - upon this- foundation alone.) - Back to note issuing banks and e.g. shop -associations issuing local currencies with shop foundation: -Unlimited liability for the directors of such banks would not cost- anything, could not do much harm and might do some good. Also -some common sense rules, like a limited area for loans and- circulation, a limited circulation period, the obligation to use -other exchange media received to purchase the own notes at par, -the acceptance of other exchange media only upon payment of a- small fee, whenever the own notes have suffered a small discount, -publicity for all issues, the stopping of further issues upon any -but a trivial and temporary discount, contracts with the debtors -of the issuing bank that bind them to acceptance at par, the -discounting with notes only of "real bills" (sound commercial bills) or their equivalents, -that are short-term and do represent goods already produced and sold- and on the road to the retailers, if not already in the- retailers' shops. - A currency is accepted as a "current" -currency, at least as a local currency, not because in case of a- bankruptcy the creditors would be able to resort to a guaranty -fund but because there is a current use for it, either for the -note holder himself, or indirectly, through a current demand for -it by others, for their consumer satisfactions and other debt -obligations. This and the final readiness to accept them, in debt -repayments to the bank of issue, and its debtors, who would- mainly be suppliers of goods and services in daily demand, and -the demand for the notes to pay wages, salaries, and one's own -profits etc. with them, constitutes the essential debt, demand, clearing, -reflux or shop foundation for sound local currencies. Without it- even gold coins would only be of some use to some. If these few -could not convert some of their gold coins readily into food,- drink and shelter, they would perish. Without this shop -foundation small money tokens would be no more useful than e.g., -shares are as means of payment. - Which other local covers -than shop foundation could and should be mobilised by a single or- competing local currencies? E.g. the services of professionals -and tradesmen, also that of local restaurants, pubs, coffee--shops, all kinds of eateries, entertainment centres, bus- companies, taxi services, the local rail connection, and the local rate -credits, and fees, legally granted to or extorted by the local government, the local- suppliers of gas, electricity, water, sewage and garbage disposal -services. As long as any shortage of exchange media is still- perceived or expressed in a premium for local exchange media over -their value standard, no monetary payment sphere, which could -issue its own sound exchange media, should "poach" all its means of -exchange requirements from those who have provided their own- media of exchange for their own purposes. Custom and ethics on -this might, one day, become as strong as e.g. the condemnations of -cheating are, when gambling. If you can help yourself in this respect, -then you ought to help yourself in this respect. Mature adults- mostly feel strongly the urge to become self-supporting, not a burden -upon anyone else, if they can help it at all. (Welfare States have greatly diminished that feeling for self-support and self-responsibility. - J.Z., 8.9.02.) That aspiration- should become extended to becoming monetarily independent as far- as possible and convenient to do so. Naturally, nobody would be -obliged to issue personal notes that could have only a limited- local circulation among a few and that only at a considerable- discount. But as soon as proper discounting facilities are- locally established, combined with proper clearing services, then- even individual issuers of IOUs, known to be honest, industrious and productive, could issue their own IOUs, in standardised- denomination, not for general circulation, but bring them to a -local discount or exchange office to get them there exchanged into one- of the local currencies. That discount or exchange office would- then have the task to put these IOUs into the hands of the few- who, with them, would want to purchase the goods and services of -the issuer of these IOUs. Upon purchase, they could then present -these IOU's in full payment at their par value to the issuer, themselves or through their bank - for at least- towards the issuer any note must have, juridically, a full legal- tender, i.e. debt-dissolving power at its nominal value. The- issuer cannot rightfully and unilaterally repudiate such a debt. If he tried to-, then he could be criminally prosecuted for fraud. - J. Z.,-25.4.97.
COVER FOR MONEY ISSUES: As money cover can serve anything that- is found acceptable by well informed acceptors of a paper money -in a free market. - J. Z., 77 & 97.
COVER FOR NOTE ISSUES: Goods already sold to wholesalers or -retailers are a better cover for notes than merely speculatively- warehoused goods of manufacturers or speculators, withheld from -sales in the hope for higher prices coming up or of goods -that are can be sold not for normal market prices at all but- merely for emergency sales prices, i.e. at huge discounts and, -possibly, only at a loss. That there can be "illiquid" goods, -stored in hopes of future buyers, I know only all to well - as the- producer and distributor of libertarian and anarchist microfiched literature. -- My microfiche have certainly not yet acquired currency or- bestseller status and are not even suitable as yet for inclusion in e.g. LETS exchange lists, for lack of demand for them and not -yet included in many literature exchanges, bibliographies and abstracts. - Microfiche are -illiquid assets and others than libertarian microfiche publishers and readers, like myself might not -even consider them as assets at all. - But they do last and are available upon demand while, apparently, much of the Internet- information stays there only temporarily and only a fraction of -the temporary appearances is so far being archived by some,- probably of all whatever it may offer in the monetary -freedom sphere, so far. - Only some literature and address lists- have reached me so far from that source, thanks to some -correspondents - and some disks which my systems won't accept or -read at all! - J. Z., 4.7.91 & 12.4.97.
COVER: See: APHORISMS ON THE MONEY PROBLEM.
CPI & INFLATION: The official CPI (Consumer Price Index) is intentionally full of misleading figures, because the government has a vested interest in not letting it represent the real and much higher inflation rate. It is obliged to pay CPI-indexed pensions and the real inflation rate would make a bad impression high during elections. - It also has largely pre-empted the market for other price-index calculations. If they are compiled at all, by compilers not salaried or subsidized by the government for their labors, then the government largely sees to it that their divergent figures are not widely enough publicized. The mass media do not want to offend the government, which is one of their biggest advertisers. I would like to see a tabulation of the official CPI rises over the last few decades, side by side with the real prices of some of the standard consumer goods and services for the same periods. Not even the rise in the A $ note and coin circulation is regularly announced, nor are the rising figures for both, for the last few decades, put together and published. It is much easier to defraud people who are kept in ignorance. - J.Z., 23.1.01, 27.8.02.
CPI: See : CONSUMER PRICE INDEX.
CREATION OF CREDIT & CHEQUES: The creation of credit is made possible by issued cheques not being redeemed immediately. - Popular opinion. - If and to the extent that this would be possible, we would than have a part disposal of cheque account funds by the banks, for a short time, without consent of the cheque account holder and at his expense and risk, not a "creation of credit" out of nothing. - The total circulation seems temporarily increased but each of these seeming increases is followed by a corresponding decrease. Moreover, the very delay in cheque credit availability to the receiver of the cheque, still 5 days in Australia as far as I know, in spite of computers and considerable competition between banks, does slow down the spending of the cheque credit correspondingly and thus balances out the "multiplication" of means of payment that may be temporarily involved, if banks disposed of these funds for these periods. The basic rule still applies: The same amount cannot be spent by two people at the same time. One should also take into consideration that the establishment of a cheque account, 100% covered in cash, has correspondingly hoarded cash. And this cash becomes then mobilised or may be demanded from the recipient's cheque account, only after a cheque is issued and credited. In other words, a considerable hoarding is involved - to facilitate cheque payments, which should be taken into consideration when one imagines that cheques would multiply means of payment, not only facilitate payments. - The "mysterious" nature of the seeming" creation" of cheque credits "out of nothing" lies in the very nature of the clearing process, if one considers merely the payment side of it and not the goods and service side, which is thus cleared. Assume 1000 cheque account holders in a self-sufficient economic community, each with $ 1000 on their cheque account and all producing for each other, and providing each other with goods, labour and services, all that they require and are capable and willing to supply to each other. Within that limit of their physical capability, willingness and productivity, each of them could spend their whole cheque account every week or even daily and, nevertheless, in the average, all would end up with ca. 1,000 on their accounts again, through the goods, services and labour they would have sold to the others. Since real exchanges of wanted goods, services and labour would be involved, no price increase would have taken place even when, from one week to the other or within a day, they would have bought double as much from each other in this way than they had in the week or on the day before. Their account total of 1 million value units would not have been increased by a single value unit. All their cheque-mediated transferrals from their accounts, would, in the average, have their equivalent in cheque payments received from others. The used cheques would be cancelled and new cheques would be issued all the time, to be cancelled in their turn. The cheque credits transferred would be mutual, not unilateral. They would represent genuine trades and exchanges not robberies or embezzlements or "creative" financing. Each account would be liquidified by cheques but not multiplied. But the number of possible, desired and agreed upon exchanges could and would be easily multiplied in this way, limited only by the ability and willingness to supply wanted goods, services and labour. - Since many costs are fixed, regardless of the number of transactions that take place, an increase in transactions could even lead to some price reductions. Certainly the kind of extremely low prices happening in emergency sales or bankruptcy sales, would become much rarer under such a system, especially, when all the participants would renounce any claim to cash payments and declare themselves satisfied for all their transactions with the mutual clearing of their cheques through their clearing house cheque accounts. - In a world where natural science knowledge is not yet general or wide enough, in which still many still believe in a God as a loving father, in a devil or in demons, in which libertarian gold bugs consider all means of payment not made of gold or 100% covered gold certificates, one should not be surprised when this clearing process is by them interpreted as a "creation of credit" out of nothing or "out of thin air". - Thin air is, by the way, not nothing, either. Otherwise people living in high altitudes could not breathe. And even a vacuum is not something that can be produced or found very cheaply on the surface of this planet. That is one of the reasons why some industrial processes could be profitably carried on in space. - I guess this kind of discussion of pop notions on the subject will have to be carried on until quite striking and convincing refutations have been formulated. - J. Z., n.d. & 29.3.97, 31.8.02.
CREATION OF CREDIT & MONEY? Credit or notes are not created "out- of nothing" and do not only require paper, ink and printing -presses. As a rule, credit certificates, banknotes and- clearinghouse certificates are not "created out of nothing" but -are temporarily produced IN EXCHANGE for other kinds of credit--notes or assets which are less suitable for general local- circulation. These exchanges of bills, unsuitable for general- circulation, into bills that are suitable for at least local- circulation, represent clearing processes in progress and the- movement of already produced goods, that are already sold, at -least to wholesalers, if not already to retailers. And these goods are the real -redemption fund for such notes and cut up bills, as they are for -any kind of currency. Such turnover credit or bill discount is- not given for nothing but only to genuine producers and- suppliers. And it is necessary to provide sound wage and salary- payments to workers and employees, which they bring to the -stores, spend them there, so that they stores can repay their -debts to the wholesalers and these redeem their real bills (or -equivalent short term debts) to their suppliers. Such clearing -notes and clearing house notes, by their very nature, do -not need any rare metal cover at all to keep them at par with- their nominal gold weight face value. Their par value is assured by a strong reflux or demand for them in debt repayments. If the -debtors cannot pay their debts they are thrown out of business. -This is a strong enough incentive for them to serve others with- their goods, services and labour for banknotes and clearing house -certificates (or with equivalent book or electronic accounts). This -kind of money can always be freely and competitively issued to -the limits of its goods, services and labour cover - and not -beyond it. Readiness to accept a money in payment for daily- wanted consumer goods and services and in payment of any other -debts due, is a sufficient cover for any sound exchange medium.- The best value standard for any kind of exchange medium,- purchase and sale, for any kind of traders, at any place and time- is precisely that which they consider to be the best or good -enough for them, as long as they do. No third party has a right -to prescribe a standard for them, which they do not like or- distrust. - Especially labourers and employees must be free to- accept "cut up real bills" and employers must be able to offer -them to them in payment and stores and store associations must be -free to issue them and to accept them and to pay their debts with- them - on via their bank accounts at banks of issue. - The free- exchange of one type of paper claim for other kinds of paper- claims, more suitable for their purposes, does not amount to a- creation of some value out of nothing but merely to a -transformation of one suitable resource and matter into another one, one- claim, into another. It does not interfere with transactions. It- does not cheat and defraud or confiscate but facilitate. It- increases transferability of goods, services and labour and of exchange media like real or sound commercial bills. It is -transferability which gives any goods, services and labour their -market value. In a division of labour economy we all depend upon -it. The easier any value can be transferred, the higher its- exchange value will be to its owner. No exchange medium needs -universal acceptance or is universally accepted. It takes brute- and wrongful force to make a single paper money acceptable in a -whole country. Competitive and private and non-coercive and freely market-rated paper exchange media need only a sufficient- local acceptance to be a good enough local currency, that can -locally widely circulate at par. In the next town or market it- may already have a discount. So what. That applies also to all -national forced currencies, whose legal tender and monopoly end -at a national border. - Compare the circulation charts in PP 41.
CREATION OF CREDIT, CENTRAL BANKING, CONTROL OF MONEY, MONETARY CONTROLS, SOCIAL CREDIT: Private creation of credit is inflationary and must be controlled. For this central banking is required. - A monetary despotism and social credit notion. - Before central banking, with its note issue monopoly and legal tender, was introduced, there was never any evidence for this - and afterwards, the only one that could "create" money was the central bank. Credits not granted in additionally issued legal tender (or short term or instant claims to legal tender  are just credit TRANSFERS, mediated by banks or by other private contractors, and as such they cannot have any influence on prices and wages, no more so than any clearing transaction could. Consumer goods and services are still largely paid for in legal tender cash - and only the Central Bank can legally multiply that. There are, indeed, many credits that are ultimately, upon demand, to be paid in cash. All credit transactions are speculations over time on the availability of that cash. When it does not become available, the credit collapses to a fraction of its former volume. It required, for its granting, as well as its repayment, the availability of cash or of claims to cash. Especially when payment through clearing options is not generally recognized as an alternative, i.e., when the creditor's legal and juridical claim to payment in cash is continued - and the cash supply remains monopolised.  No creditor can create his credits out of thin air. None of them is a magician. But myths that are widely believed in are hard to kill by mere facts - in economics, or what passes for economics, as well as in religion or in "political science". How can one prove the non-existence of something that does not exist? - All credits are limited at present by the creditor's right to demand cash in repayment. And debtors who are not cheats know that they do have to somehow acquire the cash - or claims to cash - or try to acquire them, to repay the credits received, if they do not want to be driven into bankruptcy and few want that. Once this legally demanded cash backing for all credit and non-cash payment contracts does fail or is insufficient, then, credit collapses correspondingly - and even more cash is wanted from then on for many to all transactions that were previously carried out without cash.  During such currency famines - under a money issue monopoly and a manipulated value standard, in which all prices and wages are marked, prices and wages tend to fall in a deflationary way and there is then a negative feedback effect involved: While lowered prices encourage buying, falling prices discourage buying. Thus, once a deflation has set in and is not stopped by the introduction of monetary freedom, much more money hoarding takes place than usual - as much as people can afford to hoard, and the effect is that a deflation accelerates. Only those purchases are still undertaken by most that they cannot avoid. Those lucky enough to be in possession of considerable cash stocks can then acquire otherwise expensive capital goods very cheaply, and may do so in the expectation that sooner or later the inflation will end and that they can then sell these capital goods much above the forced sale prices at which they acquired them. - Prices marked in stable value units are not influenced by the amounts of cash or credit available. But they can become reduced through the deflations made possible by monetary despotism. When they are marked in unstable and manipulated "value standards" then they participate in all the instabilities and manipulated effects of that "value standard". - All cash transactions have a large clearing "overhead", 10 to 20 times as large as the amount of cash available, because they are easier and faster to arrange and, in normal times, they can, upon demand by the creditors, be changed into cash, because in normal times this is rarely wanted - because the clearing and non-cash-payments are so convenient. Whatever effect this "overhead" is presumed to have upon prices (I would deny any, since real exchanges are behind most of the payments, if not zero sum speculative games), have already taken place. For centuries the non-cash transactions have far exceeded the cash transactions. More credit than the market requires and can be paid, in normal times, ultimately and upon demand in cash, cannot be created out of nothing or upon a too tiny cash basis. Debtors do indeed often defraud their creditors, spend or waste what they have been granted in loans and become unable to repay. But such cases do not blow up the total volume of credit. Instead, they make more potential creditors more careful in granting further credits. Such cheats, well publicised, rather lead to a degree of voluntary credit restriction by the potential creditors, i.e. their cash holdings and current account or deposit holdings tend to increase. Whereupon then many wrongly conclude that no deflation has taken place because there is an abundance of short-term funds accumulated at the banks. Part of these may be frozen - with the banks unable to pay them out in cash (because they had lent them out on long terms) - and part of them being kept there intentionally because the deposit holders want them there and because the banks see no liquid and secure enough investment opportunities for them, while sales and orders are down. At the same time private cash holdings, by those who have altogether lost their faith in banks, would increase as well. - J. Z., n.d., & 29.3.97, 31.8.02.
CREATION OF CREDIT: "Creation of credit or money by the banks leads to inflation. Banks can create credit or money out of nothing or can multiply any deposits or money they receive by a factor of ten. - Popular opinion. - 1.) Credit is not created by any bank but, rather, through the mediation of a bank, given by its customers, its depositors, to the extent that they do not dispose themselves of their deposits for their own purposes and, especially, to the extent that they grant the bank time deposits or buy its securities for a certain period. - 2.) Inflation could take place only when there is "refinancing" by the central bank with newly printed legal tender money (when under free market rating and monetary competition it would suffer a discount and widespread refusals to accept), in case the first, secondary and following depositors want to utilize their deposit accounts for their payments at the same time. But then we would have a coercive inflation of paper money and not "credit creation". When not supported by fictitious deposits from the central bank or additional fiat money issues by it, private banks can only transfer and not multiply accounts. For each credit they have to account an equal debt, for each debit an equal credit. As long as their computers do not malfunction - and correct bookkeeping checks would soon reveal that, no multiplication of credits takes place and a corresponding multiplication of debits would soon be protested by the victims. Credit and money creation by private banks is entirely imaginary, a false doctrine of Social Credit ideologues. - Without this "refinancing" by the Central Bank, when any private bank has over-extended itself, e.g. by wrongly investing short term deposits in medium to long term loans, or in other cases of fraud, embezzlement or careless investments in the irresponsible spending of some more or less despotic foreign regimes, or in the wasteful projects of the own governments, corresponding bankruptcies would and should occur. Banks should never give their short term or instant withdrawal creditors the impression that they could at any time fully withdraw their funds - in all cases in which they have been invested, at least in parts, in illiquid funds. - But if there is an agreement between short term depositors and a bank that specifies that their money is repayable only e.g. in instalments, as it becomes available from the repayment of loans, i.e., as soon as possible, then no run can and will take place and the transaction can be honest on both sides, with spare funds, from the repayments of due loans, used as best as they can be used. I doubt that under free competition such banks would be very successful but, at least, they would avoid the term or timing risk. Medium and long-term loans should always be financed only by corresponding medium and long term deposits or savings, best by the issue of corresponding securities. Otherwise, the banks would sell to the short term depositors only the illusion of having liquid funds while they have in reality only a claim upon the medium and long term debtors of the bank. If the governmental bank supervision or governmental juridical system and governmental auditing or government approved auditing system worked, then such abuses would not be possible in most cases or on a very large scale or for long. But, in the absence of fully free banking they are likely to occur often. - Money or credit can no more be "created out of thin air" than can anything else - except the constituting elements of thin air and even that process is not cheap. (Example: Nitrogen production out of the air for fertilizer production.) - Credit cannot be created by cheque issues, either. In Germany cheques must be presented within 8 days. Receivers of cheques use them fast for credits on their accounts and do not leave their accounts idle as a rule. People are not only savers but spenders. Borrowers, especially, are more spenders than savers, at least when spending their loans productively, to enable them to repay them when due and to make a profit in the process. When workers or clerks are paid in cheques then they do not, as a rule, put most of the amounts received into savings accounts. And if they did this on medium or long terms, then such savings could not act in an inflationary way, either.  When banks rightly or wrongly assume that call-deposits will continue to increase then many of them will be misled into investing part of these total deposits into other than short-term liquid funds. A liquidity risk is thereby taken up, not an inflation risk - unless the central bank helps them out, with additional legal tender paper money issues, whenever they need it in one of the inevitable future liquidity crises that will then occur. - No one but the central bank can increase the cash or near cash purchasing power of an economy under monetary despotism and only this tends to increase legal tender prices when legal tender is inflated. - To the extent that non-cash transactions can be freely settled by clearing, without being suddenly disturbed by cash demands, for which no equivalent cash exists, genuine exchanges are settled by clearing, in which the clearing settlement always is equal to genuine transactions. Then, under sound value standard reckoning no inflation can take place because the clearing settlement is always equivalent to the purchases and sales of the goods, services and goods involved. But if all prices, services and labour are coercively priced-out in an inflated fiat "value standard" then all clearing transactions, that also use that fiat standard, are also participating in its depreciation - but, merely genuine exchanges of present goods, services and labour, do not CAUSE this depreciation although they participate in it PASSIVELY. - If banks could create credit and money out of nothing then they would possess divine powers. But even the world was not created out of nothing, or was it? What those believing in credit and money creation do not seem to understand is the time factor involved in credits. Over a long period many more loans are granted and become due than is available in cash at any particular time to pay all of them. A cash amount of $ 1,000 may well serve to repay 3 or more different loans at different repayment dates.  But what they might refer to is the dishonesty or negligence of banks borrowing short and lending long. Most business men try to keep at least a small and positive balance on their accounts for emergencies. If the banks do not respect that requirement sufficiently then this can lead to the demand deposit owners one day finding out that they have no have money at the bank that is ready to be paid out to them in emergencies, or that they can dispose of with cheques, but that, much against their intentions and trust, the possess, in effect, merely something like a mortgage, bond or share - a part of the long-term investments by the bank of their short term funds or on demand deposit claims. Even though such bank actions may be habitual, going back to the tradition of fractional reserve gold certificates and although it may be quite common and legalized practice, somewhat insured by central banks demanding minimum deposits with them, it is still basically a dishonest, negligent and false business practice. That central banks, when the minimal deposit with them is not enough to cover withdrawals at the bank that borrowed short and lent long, are insufficient to cover their obligations, then issues additional legal tender note to cover this wrongful and careless action, means that then it is the central bank, once again, which causes an inflation, not the original and wrongful lending short term deposits, without the explicit permission or instruction of these depositors, on long terms. Without this inflationary backing of this practice by the central bank, the holders of "on demand" deposits would simply find out that they do not longer have such deposits but merely long-term claims against the bank and its long term debtors. The use of terms like "money creation" and "credit creation" does not explain but rather cover up such relationships. - One of the major troubles of this kind of dishonesty, carelessness or fraud is that the central bank might refuse to cover this flawed borrowing and lending process by additional note issues, while upholding its money issue monopoly. Then a currency famine would result without its natural cure or preventative being a permitted. Cash being already short and supposed cash deposit having become illiquid, i.e., long-term investments, more and more cash will be asked for . The non-cash payment sector will shrink fast, since they still grant creditors the right to demand cash and thus the demand for cash will greatly increase while the supply is already short. - The cure lies then in abolishing the right to demand cash and replacing it by the right to demand only clearing. In this clearing certificates issued by the debtors must be negotiated at terms satisfactory to both sides. And the cash shortage should be overcome by the issue of exchange media based on ready for sale goods, labour and services. - Otherwise all economic transactions will come to shrink to a fraction of their former extent. -  J.Z., 3/97 & 31.8.02. - See: TAYLOR, DAVID; MEULEN, HENRY; SOCIAL CREDIT.
CREATION OF CREDIT: Credit creation is possible because the owners of bank accounts do not dispose over all of their accounts at any particular time. - Pop opinion. - Every embezzler has the same notion, hopes that he will not be found out or not before he gets away safely. But he still does not create anything by his "creative bookkeeping" but merely steals, defrauds or embezzles. If the whole bank engages in this then it is still not a creative act but merely stealing. If it "invests" these funds in lottery tickets or horseracing tips, or medium or long term investments without consent of the owners of short term funds, short term or immediately and without asking them for permission, giving them the impression that their on-demand deposits remain immediately withdrawable, then this is still not "creating" values but defrauding others of them. To the extent that the long term investment of on-demand deposits is, otherwise, sound, they could then ultimately be repaid from the winnings or repayments of the long term loans and dividends from them, when these payments are finally made, but the on-demand deposits could not be immediately paid out (except in additional notes produced by the central bank, if it is prepared to cover this fraudulent action). Otherwise, the hopes and expectations of the depositors of the on demand deposits cannot be instantly fulfilled. The depositors may still imagine they do have these funds at their disposal - while others have already disposed of them. These imagined credits should not be added to the wrongfully and long term "invested" ones. The total of credits has not been increased. On the contrary, such "investments" frequently lead to losses, so the account holders and the bank may end up with less than they had before. Other gamblers or betting addicts, or suppliers of those who were thus wrongly granted credits and spent them wastefully rather than productively, would benefit correspondingly. - While at any time an honest cheque drawer (or one not granted a current account credit - which has its own inherent limit in the current funds available from others) cannot spend, in cheques, more than the amount on his account upon it, he may, in the average, in his usual business, get so many cheque payments into his account, as a result of his sales, that within a short period, based upon these cheque payments to him, he can spend much more than the average account balance through this account. But he can do this only through him buying and selling real goods, services and labour in this way as others buy real goods, services and labour from him in this way. That "credit creation" would be involved in this is nothing but a creative fiction. - J. Z., 29.3.97.
CREATION OF CREDIT: If banks could create money and credit out- of nothing, I would like to be a banker under these conditions,- and so would almost everybody else. Why doesn't everybody make use of -this opportunity? An Aladdin's Lamp for everybody! Nobody need to -produce or sell anything any more to acquire purchasing power. We- could simply multiply it at will and live all from -the proceeds, a form of unearned income! Please, tell me, why do the banks still ask you to- supply them with your savings, to deposits them with them and why do they mind if you withdraw them from them? Under the asserted- conditions they would not need you and your savings at all. They could e.g. input- a single dollar of their own and multiply it endlessly, with- only the trouble of spending the riches thus gained by them. - -That such beliefs can still be widely held in our century is almost unbelievable. - J. Z., 5.7.94, 18.4.97.
CREATION OF MONEY & CREDIT: De nihilo nihil. Lucretius, Ueber- die Natur, I/149. (Aus nichts wird nichts. Nothing grows from -nothing.)
CREATION OF MONEY: But you can't MAKE purchasing power. You can- only TRANSFER it. - Terry Arthur, 95% Is Crap, 209.
CREDIT & BANKERS: Credit is extended only to 90 year olds who come -accompanied by their grandparents. - Note I saw years ago on a -cash register. - J.Z. - Have our present banks really practised the common sense rule: No credit to those who are not credit-worthy and credit to all who are? - Have they managed to utilising the "banking principle" to properly finance turn-over credits with their own banknotes? At present they seem even unable or unwilling to incorporate all kinds of fees and insurance premiums in a single interest rate. Moreover, even their extensive use of computers has not enabled them to reduced their charges and fees but has rather driven them up. - They still take 5 days to credit you with the sums of a cheque you deposit with them. - Even small credit unions are often able to undercut the service charges of large banks or to pay higher interest to depositors. - Their inabilities, unwillingness or bureaucracy has also been a great aid in the growth of numerous other kinds of finance companies. - J. Z., 7.9.02.
CREDIT & CLEARING SUPERSTRUCTURE, BUILT UPON A SMALL CASH FOUNDATION: HOW DID IT ARISE? WHY WAS IT CONTINUED OR WHY WAS THE RIGHT OF CREDITORS CONTINUED TO DEMAND CASH INSTEAD OF CLEARING? There was never enough cash around, or could easily be produced, under current legislation, customs and beliefs, to mediate all wanted and possible exchanges. There were never enough sound or unsound physical exchange media, currency, coins or banknotes etc., provided for this. Under a monopoly or oligopoly for their supply nothing else should have been expected. Moreover, there were risks and costs involved in transferring large amounts of cash. So, for a long time, at least for trading between experienced merchants various negotiable instruments were utilised instead of cash. They were nominally and when due still payable in cash. But in reality most of them were settled by clearing of such debts and credits against each other, in internal as well as external trading. This kind of trade and payment facilitation goes back at least to the time of the crusades and, most likely, much further. Whatever cash was available was utilised largely only for wage, salary and tax payments. With regards to the large formal cash obligations arising out of e.g. sound commercial bills of exchange, cash was kept only for the settlement of the usual small balances remaining, after clearing, and, perhaps, in many cases even these were settled by short-term IOUs, which went into the next clearing. This extensive clearing became traditional, customary, habitual and influenced monetary thinking and is still present in the current right of creditors not to demand rare metal payment but payment in the exclusive and forced governmental legal tender money. The total volume of non-cash transactions is usually ten to twenty times that of cash transactions. Thus all non-cash transactions could not be readily paid in cash, instead, if this were demanded. The full potential of clearing and clearing certificates and electronic settlement of mutual debts is still not being realized but insistence upon the right of creditors to be paid in cash, upon their demand, instead of via clearing or non-cash payments, as usual, remains upheld with, often, disastrous and prolonged consequences. The long experience with banknotes that were 100% or fractionally covered by rare metal coins and the right granted to the note holders to demand their full redemption at any time, continued this practice and the theory behind it - and it led to frequent runs and monetary famines, under fractional covers, when as a result of suddenly increased cash demands the volume of non-cash transactions was rapidly diminished and the demand for cash rapidly correspondingly further increased. But even in normal times, the cash demand right of creditors limited the number of transactions that could be carried on via clearing, to a limited multiple of  the normal amounts of cash reserves and the normal demands upon these. Trade, exchange via clearing, could not proceed, without limits, beyond these cash reserves, while the right to demand cash, at any time, remained. And they could not, as gold coins, and were not, as monopoly paper money, always and rapidly enough increased in volume, in a sound way, to satisfy a rapidly increased demand for cash. The possibilities of unlimited clearing of due debts against due credits were theoretically realized only by some, during the 19th century and are still not fully realised by most people, even experts, today. Thus many of the libertarian money reformers merely want a return to gold and silver coin circulation and banknotes, or electronic accounts that are fully redeemable in rare metals. Under full monetary and clearing freedom, the non-cash options available to merchants, already for a long time, would be extended to the man in the street, especially to wage and salary payments to employees and their consumer spending, which would mean, in the absence of a "right to cash", the possibility of an unlimited growth of the volume of exchanges. At the same time, the clearing certificates used or clearing accounts, could become as convenient, at least for local sales and purchases, as are cash notes and cash cheque accounts now. - J. Z., 6.9.02.
CREDIT & MONEY CREATION & TOKEN MONEY & EMERGENCY MONEY, DEPOSIT -INFLATION, CREDIT EXPANSION, etc.: In system of the forced and- exclusive circulation of legal tender paper money and the limited -non-cash transactions that can be built upon this, always under- the risk of sudden legal and juridical cash claims going beyond normal cash requirements, the resulting chronic- shortage of rare metal cash (sometimes even merely a shortage of small- change cash, so incapable was the centralised issue in many cases),- as well of legal tender paper money cash, at least in some circles of the economy, led always to degrees of sales difficulties for goods, services and labour. These have- persisted, to some extent, even in "normal" or "boom" times. Traders, manufacturers and desperate employers have always felt forced or -induced to try to bypass the prohibitions and supplement the- cash money supply somehow in more or less primitive and advanced ways,- with token money and emergency money issues, accommodation papers -etc. For the alternative was bankruptcy or unemployment. (One of the easiest and soundest way to extent the cash supply for wage payments by employers was to get their sound commercial bills, representing their sale of goods to wholesalers, discounted by a bank in banknotes. Even though the real bills were nominally payable in rare metal coins, as well as the bank notes issued, in reality most of the discounted bills were either settled in clearing against other bills or paid for in the bank notes issued, and to that extent neither the real bills nor the banknotes issued for them in their discount, required any gold redemption. What the bank notes required was the shop foundation, i.e. the readiness to accept them for wanted consumer goods and services, rather than for gold coins. The retail shops could pay the wholesalers with the banknotes and the wholesalers used them to pay their bills issued to the employers, their suppliers. The employers used the banknotes to pay wages with and also their suppliers. They could not have paid wages with large and uneven commercial bills, due in one to three months. Thus the non-cash payment options were extended as far as they could, -but always under the risk of the imposed (customary and- prejudice supported) delivery obligation of debtors for cash, upon demand- by creditors. (The banknotes were usually not legal tender and, for a long time, were not considered to be cash, again out of the prejudice in favour or rare metal redemptionism that considered only rare metal coins to be real money.  Even forced and exclusive legal tender, while not extremely short supplied or rapidly depreciated,  remained widely and for long times- preferred to all too primitive, not only to other dishonest substitutes for it. -The private substitutes for official coins or paper money, no matter how rightful and efficient -they were already, at least sometimes, were never sufficiently -studied in the official literature and lectures. Nor were they- granted experimental freedom and thus the chance for gradual -development and improvements. Only the prohibitions against them -were more and more developed, detailed and improved, until they wove so- tight a net that it seems almost impossible to find a legal way- out of this monetary despotism. The government was almost never -blamed for its monetary despotism or, if at all, then usually too- late, after it had done all too much damage, for months and even- years. And it found apologists even decades after and these form -the majority everywhere, still, even among the professionals, the -supposed experts. In ten-thousands of ways did practical men try -to get around the money monopoly and its effects, without -theoretical understanding or it and of its inevitable consequences and without understanding all the monetary freedom alternatives. -Often they did not even realize their limited self-help actions were- illegal, because they could not imagine any government being so -evil or misled or ignorant to have anticipated and be willing to- suppress their self-help attempts and thus to have outlawed them by very- detailed legislation. Ignorance in this sphere (promoted by- governmentally arranged or supervised and examined and certified miseducation) -is so great that Big Brother is always appearing as the shining -hero while Big Business and Big Labour are cast as the villains.- Under these conditions government money, even though unsound, was- usually much more widely accepted and sought after than it would -be under freedom conditions. Usually just a better and different management of monetary despotism was demanded rather than its abolition  Even under the supposedly best -management of central banks monetary crises, inflations and deflations persisted or got worse and more prolonged, -and people had either to give up or try to help themselves, via- various token money, emergency money and clearing arrangements,- no matter how outlawed these were. In that situation all kinds of- unsound schemes could also temporarily flourish and spread, -before they were suppressed by the government. Even now sound- issue and reflux principles and practices remain largely unknown -and unpublished, even within the circles of money reformers and- among these even among those few who do favour one or the other degree- of monetary freedom - whilst condemning others. Sound money and- credit arrangements require a development period in practice and- also a preceding or following development of monetary, clearing and credit- theory. That was never granted under the official religion on -money, clearing and credit. Under these conditions most of the theorising and illegally practising monetary reform sectarians never reached sufficient enlightenment-. - J. Z., 14.4.97, 6.9.02.
CREDIT BANKING: It is possible without fractional gold reserves- or short sales of gold, without the risks of runs upon gold -metal or legal tender cash or reserves of legal tender at a- central bank. Matter of fact, it works best when purely based on -credits and debts and their free clearing, using any value -standard which the participants find acceptable for their -accounts. There is no fixed limit for the total productivity of -people, at least not in the long run, in spite of obvious present -limits, due to presently known and accessible resources, -scientific knowledge and technology and available capital. But -under full freedom each can only exchange the products and -services of his own productivity for those of others. That is his- present limit. Credit merely bridges some time spans, during- which he can develop his potential. But, apart from insurable- risks, all credits and debits cancel each other. And a small-insurance charge on all transactions can cover that risk. We- should credit all participants in credit-money transactions with -the ability to select for themselves better value standards,- under freedom, than governments provide them with under monetary- despotism. See: ISSUE LIMITS, CIRCULATION, LIMITS, REAL-BILLS-DOCTRINE. - J. Z., 3/97.
CREDIT CARDS & CLEARING: As easily portable proof, or easily -and automatically checkable proof, of the existence of an account -with a more or less regular income and a credit remaining, it -makes the acquisition and carrying of large amounts of cash- unnecessary. But it does not as yet make its holders independent -of the supply of cash, as a pure clearing account would. Cash- spent with the cards has to be replenished with legal tender from -bank accounts or by cash. So far they are spending accounts- rather than accounts to directly receive non-cash payments from -others. A pure clearing account would have to have that facility- and should be made independent of cash by not being redeemable in- cash upon demand of the credit card holder, when he has acquired- a positive balance. Moreover, so far to high costs were- associated with the use of most credit cards, thus I rarely found- it convenient for myself to use them, except when travelling, to- withdraw cash now and then. With cash I could usually make better -bargains. It is, as someone once said, "a poor man's credit- card." - But the varieties of credit cards in existence are a -good precedent for a multiplicity of competing currencies and -they could become ID's for pure  clearing accounts. The smart -cards could even carry the balance and all recent transactions- electronically. I see no great advantage for them as cash cards,- except e.g. in the use of automatic ticket machines, turnstiles- and in public phone payments. If government supplied coins were -not relatively scarce, and prices for e.g. rail transport and phone use would not be frequently driven up through inflation,- i.e., could be paid with standard coins, then these cash cards -would be less popular. - If you could pay everything with a -credit card and received all your payments in a credit card- account, then cash would not be necessary at all. Alas, under -present conditions, it would then become still harder to avoid- paying tributes to the tax gatherers. So far they find it much -more difficult to trace cash notes, even their own numbered ones.- Sooner or later they will use computers to do that, too, removing -that cash payment advantage. - J. Z., 1.5.83, 4.5.97.
CREDIT CONTROL: Credit control by governments? The sheer -impertinence of it: A robber organization setting itself up as- controller over something as voluntaristic and productive as- credit! - J. Z., 12/84, 18.4.97. - I would like to control the- credit of governments - and have the right to control my own -credit and accept the private credit arrangements I like. - J. Z.,- 12/74. - Credit control is in principle as much an interference -with individual liberty as sex control would be. - J. Z., 30.5.75.- - The use of the term "control" in the expressions of "experts" -and of the man in the street is OUT OF CONTROL. It serves as a- cover for almost any kind of despotic meddling and mismanagement, -always under the pretence that thereby "everything is under control!" -- Only self-control is real control. Human beings that are- controlled by others are no longer free men but puppets or -marionettes that dance more or less to the tunes of their -masters. - Granting them what is supposed to be "THE" vote, but- which disfranchises them in most important respects, does not- change the situation much. - Without full monetary freedom and of the -right to secede from the State and to become exterritorially- autonomous, together with other secessionists, also the right to bear -rightful arms for rightful self-defence and to organise in- volunteer militias for the protection of individual rights, and the full spectrum of the other basic individual rights,  man is not enough in control -of his own fate. - Monetary emancipation is a very good starting -point. Let us individually vote government paper money out of- existince and sound alternative currencies and value standards -in! - J. Z., 18.4.97.
CREDIT CREATION OR SOUND BILL DISCOUNTING OR CLEARING?: What is usually called "credit creation" is -nothing but false pretence, fraud or robbery." - J. Z., 5/73. - When -only short term credits are involved, that are self-liquidating, -like in the discounting of real bills, then merely an advanced -form of clearing takes place, spread over a short period, in- which the IOU of the buyer, being unsuitable for general- circulation, is "cut up" or temporarily replaced by small bills, -suitable for circulation, with which workers, retailers and, -finally, wholesale buyers are paid, who redeem with them their -IOU or real bill, which they gave to the manufacturer and which -the manufacturer got discounted at a sound bank of issue. Who really gave the credit here was the manufacturer, for the payment- of the goods he delivered to the wholesaler, products that are thus on their road to the -retailers and the consumers. He merely got the IOU or the bill of exchange, he drew upon the wholesaler, TRANSFORMED, by the bank, -into a more suitable means of payment, especially for paying his- wage and other suppliers' bills for his production. That -transformation is "creative" only insofar as any artist -transforms some materials in one way or the other, -to make them more suitable and attractive. It is in neither case- of a "creation out of nothing". - To say that it is "created out of- thin air" is misleading, insofar that valuable elements, like oxygen, -nitrogen and helium are precisely thus produced. - J. Z., 18.4.97. - Not is the term "thin" being appropriate in this connection, since neither mountain or near-space nor sea-level air is used for this purpose. - J. Z., 7.9.02.
CREDIT CREATION, MONEY CREATION, DEPOSIT CREATION, SOCIAL CREDIT-: To Robert de Fremery: Your own preferred monetary system is -based on some of the premises of Social Credit people - followers- of Major Douglas' teachings. They are split in many different- schools and sects but  do share some common premises or prejudices and false observations, especially that on the supposed- "creation" of money and credit out of nothing. It is- fundamentally and especially false when ascribed to those private -banking institutions, which are otherwise privileged but not in -this respect. "Ex nihil nihil!" ("Nothing comes from nothing!") -Even the greatest artist, chemist, physicist or biologist cannot- create something from nothing. He can only reshape and rearrange- existing materials in a better way. When the government "spends" -its additionally printed legal tender notes, then it does not -create anything, no more so than an officer of an occupation army- does, who issues "requisitioning certificates" in a supposed- "payment". I.e., he appropriates the values of others. He doe s-not "create" new values. When a cheque forger forges cheques, he- does not "create" anything, either, but, instead, wrongly -appropriates some money that rightfully belongs to others. When a -government issues directly or indirectly its currency notes,- those needed to finance its spending as well as those which an -economy has to have, in the absence of monetary freedom, as some form of money, even if it is a monopolized money, then it does- not create and offer something that is currently wanted, to the -extent that it is supplied, but it rather makes war on many to- most of its subjects and charges them the costs of this warfare -under all kinds of illusions, lies and false pretences. It -requisitions rather than produces. It can rightfully act only for -those of its peaceful citizens who have given their consent to -all its actions. And that is often only a small minority. Least- of all is it able to provide peace, justice, prosperity, freedom,- security and stability. Parodies of each are offered instead and- contraries. Please consider: For many decades now we have seen the growth not only of privileged commercial deposit and savings- banks but also of cooperative and credit union banks, even banks -specially of and for women and for the ecology and conservation -movement. How happy would all these people be, and how fast their -banking enterprises would have grown, if they had "discovered" -that merely by putting on the hats of bankers, they could, thereby, -suddenly and arbitrarily multiply their deposits, at will, between them, "creating" wanted values and becoming rich, "out of- thin air". How nice it would be for them if they could "create" -most of the funds they need for a new car or a new house in this- fashion! How come all these millions of cooperative people did- never discover THESE supposed banking advantages and privileges -for themselves? Are they so dumb or blind? Berthold Brecht must- have had a similar prejudice in his mind, when he suggested, in- one of his left-wing propaganda writings: "Do not rob a bank! -Start a bank!" - If that kind of "something for nothing" scheme -were possible, then everybody, especially the already rich and- powerful, would love to get into the act and all barriers against -it would have been broken down, long ago in their general rush for unearned riches. How come so many rich people, skilled- businessmen and entrepreneurs and innovators are still satisfied- with making an average of 5 - 15% in interest and profits on- their productive capital investments, when they could thus, and- much faster, multiply their riches without any effort or ingenuity- or investment and risk? What could hold them back or away from- this supposed "pot of gold at the end of a rainbow"? - I have- reproduced 2 books critical of Social Credit ideas and also some- writings by David Taylor. A third book title of this kind did once see but did not buy. - J. Z., 3/97.
CREDIT CREATION: Credit is never created but merely -transformed. Goods and services capacities are liquidified, -freely transferred in liquid form and finally settled against -each other in clearing all the claims arising out of turnovers of- goods and services (including labour).  - J. Z., 5.10.88 &-15.4.97.
CREDIT CREATION: There is no room or possibility for "credit--creation" in a monetary freedom scheme. It does not even exist in- the present system of governmental monetary despotism and- government privileged banking - although many other mistakes are -made in that system, many wrongs committed and many abuses do- occur there. Government monetary and financial activities are- never "creative" but, rather, confiscatory. - But can one prove that something non-existent does not really exist or exists only- in the imagination of some? That is as impossible as to "prove" -the non-existence of God or the Devil or of  "evil spirits" or of fairies.
CREDIT CREATION? Many merchants do offer their goods on credit,- with payment due only in 30 days, and without interest, at least- for 30 days. Often such offers go now for much longer periods, -even 6 to 12 months, interest free, if instalments are paid and- often without an initial deposit. This also might be called a- credit "creation", offered upon private initiative, offered quite -publicly and to many members of the public. But what is actually- offered on credit is the goods of the seller, which he could also -repossess upon non-payment. If it were true that privately- "created credits", seemingly out of thin air (but here granted in- goods values transferred, to be repaid later, on agreed terms, in- cash or non-cash), were inflationary, then all such actions would -be inflationary. In reality, they indicate rather a deflationary- conditions, in which sellers are desperate for cash and do not- flee into goods but still want money, even when the full money- payment is postponed for a long period and even when no interest is- paid. At the same time, the government inflation may go on, so -that, in combination, we have here a symptom for a stagflation. -Closer still to home: If you were to grant me a credit in form -of your literature, postponing repayment for it and if I were to -grant you a credit in my literature, mostly microfiche,- postponing payment for it, would we then have to add up both -these credits as our contributions to the existing money-inflation? Or would exact equivalents of valued goods-deliveries- exist? Could not out mutual debts, be completely cancelled, if -they happened to come to the same amounts, without a single cash- or non-cash Australian or U.S. dollar being set into motion in -the process, even without effecting the statistical GNP, although -both of us might feel information-enriched? - Would any woman, -who in a baby-sitting exchange accumulates some baby-sitting credits against other participants, thereby contribute to the -supposedly credit creation and credit inflation? - If you are- short of cash, so short that you cannot buy a beloved grandchild- a present, and promise to buy it later, after your next pay day- and he grants you a credit for this, does he thereby contribute -to the supposed "credit creation" and "credit inflation" or would we -rather have a deflationary situation, at least one confined to you? - Try to envision a private bank of issue, one designed and for discounting short term real bills or other promises to shortly pay for goods received, or for keeping current accounts with cheque and clearing facilities and imagine it as having the worst possible intentions- but, at the same time, not enjoying the privilege of legal tender for its notes, or- the chance to hide its over-issues, in the absence of a free -market for exchange media and value standards and also not-enjoying the privilege of keeping as "business secrets" the facts- of its short term cover and reflux arrangements and of the number -of its notes in circulation at any time and of the degree and- speed of their reflux.  Under such free and open conditions its- notes would very soon get a discount upon any over-issues and would then encounter -wide-spread refusals, that will extend to its future issues, too,- which it might have reckoned upon. Any holder of its notes, with a- wad of them in his hands and, finding that he has no debts to pay -to the issuer nor that there is anything he wants or can purchase- with them, because there is an insufficient "readiness to accept" -foundation for them, especially, an insufficient shop foundation, -might find his own wad of notes depreciating in his hands and cursing himself to have accepted so many of them merely upon- confidence or trust in them, which were very much misplaced. But- few will be so foolish to accept many notes from such an issuer. -Notes they do not know or are suspicious of, or against which- their friends have warned them, or the mass media did, will- simply be refused. His only remaining option will be as a- creditor with a claim against all the remaining assets of such a -fraudulent issuer. The same applies to any cheque account credits- obtained with such a dishonest bank. If the courts were just, efficient and competitive, the "banker" involved would loose his -car, his house, the shirt on his back and would be forced, for a-long time, to work in possibly menial jobs to pay his restitution- obligations. But it is unlikely to come to many such cases. They -were rare even in the cases of "wildcat banking" (with all the -flaws and fraud options of metal redemptionism), as several -recent researches have shown.  Already William B. Greene, in his- classical work "Mutual Banking", pointed out, the notes of- supposedly failed U.S. banks, unable to fulfil their formal gold-redemption obligation, often continued to circulate at par, until- all the local short term debts, they were based upon (in- discounting), had been settled by paying them with these notes.- Some circulated even at par beyond such short term periods, kept- at par by longer running debts with their reduced current demand- for notes. Via the repayments of debts to the banks the notes- disappeared from circulation and no note holder was economically- harmed by notes thus kept at par, even though he did not get any- gold coins from the issuer. He could have got them, if he wanted- to, on the free gold market. Under freedom conditions a- unilateral "creation" of credit, deposits or money, at the expense of others, is even less likely or possible than it is- now. - J. Z., 3/97.
CREDIT EXPANSION & INFLATION: Credit expansion is as much inflationary as e.g. paying public servants with additionally printed paper money. - Popular opinion. - If you grant somebody a credit from your bank account, in a consumer or an investment credit, with your own funds, or those entrusted to you for this purpose, then you do not multiply means of exchange and do not drive prices up but use he existing exchange media and do trade or sell over time, as usual, hoping to make a profit in your sales on terms, as well as in your sales for cash or cheques. - No creditor who wants to get all his money safely back, plus a profit, will be expansive with his credit.(But if he is allowed to gamble with the money of others …) - When a savings and investment bank or a current account and cheque bank grants a credit, then they tend to do the same as you would do - only on a larger scale and for more people at the same time (provided they are honest and competent). Through its mediation - and for the fees and charges involved, creditors and debtors still do their things for each other but, usually, anonymously as far as their total payment transactions are concerned. They are aware only of their face to face and order and invoice trade relationships, not of the mutual settlement process behind them. When "credit" is granted via additionally issued forced and exclusive currency, printed for this purpose, or via government "spending" in additionally printed legal tender, then and then only and to that extent, can the general price level be permanently increased, i.e. inflated, because these price increases are the only defence left to the recipients of these "payments". (I still remember, in times of rapid inflation, my public service salary being paid in freshly printed notes, still with consecutive numbering, i.e., having come straight from the note-printing presses of the central bank. This happened for several consecutive months. Alas, I did not keep a record of these payments.) - What is overlooked in the very term "credit expansion" is the fact that at the same time a corresponding "debt expansion" is involved. The "expanded" credit cannot be created out of nothing. It must mobilise already existing funds and assets. Otherwise the recipients could not spend these loans. E.g. a furniture or car sales firm might mobilise thus part of its unsold stock, cramming its warehouse or parking space. And the debtor, for each repayment or part-repayment of his debt, must correspondingly restrict his purchases. In the whole notion of credit expansion, if no inflationary expansion of the legal tender circulation is involved, then all the fallacies of "credit creation" or "money creation" are involved. - Even if in reality a "credit expansion" were possible, it would always only be temporary, not permanent. A paper money inflation is reversed only exceptionally - and then also with catastrophic effects. But a credit expansion is always and automatically reversed by the repayments of the "expanded" debts, which would have to correspond to it. It is negligent, to say the least, to speak only of a supposed "credit expansion" and not of the accompanying "debt expansion." Prices might then rise at most temporarily - to decline correspondingly when the credits are repaid. But any expansion of the paper money circulation would be permanent. However, I would deny that a real "credit expansion" can take place - otherwise than in the imagination of some. Just because one coins a word for something does not mean that the reality will automatically and certainly conform to that new word. Otherwise, I might say: Abracadabra: Turn into a frog, NOW! - and you would turn into a frog - or whatever I had wished you to turn into. - When debtors can't repay their creditors then both tend to go bankrupt and nothing but a myth remains of "credit creation". Only in a system of monetary despotism can practices arise which some interpret as "credit expansion" or "credit creation" but which, in reality, are fraud and coercion of quite a different kind than the one imagined. - It is particularly absurd when under the system of monetary despotism some of its victims, namely private bankers, forced to deal only with the forced and exclusive currency of the central bank, are then accused of depreciating the currency of the central bank by their manipulations - while the central bank is assumed to be a defender, protector or stabiliser rather than an inflationist of its currency. - No decrease in the percentage of hoarded funds for the granting of credits should be termed a "credit expansion". -   See: INTEREST, DISCOUNT RATE, OPEN MARKET POLICY, CENTRAL BANKING, CREDIT RESTRICTIONS.
CREDIT EXPANSION? Attention should remain focussed not on the dishonesty involved in fractional reserves used to promise 100% redemption at any time, while much of the cash or deposits is lent out, but, rather, upon the additional turnovers so achieved, which could also have been achieved merely by honest clearing, using no exchange media, or actual deposits at all but merely sound value standard accounting. To the extent that this happens, the supposed credit- or money- or deposit-expansion or "creation" merely represents more trading and does not disturb the total balance between exchange media and goods, services and labour exchanged. There is also a time factor involved. If the first depositor really leaves much of his deposit, in practice, not by the terms of his deposit contract, on long terms with the bank and if the bank then dishonestly lends that money out, e.g. on short terms, several times, and is several times repaid, then the total of these loans and their repayments, seems to some to indicate a credit expansion, one that is unjustified. But others see a) the repayments and b) the additional turnovers thus achieved. The same dollar, over a short to long period, can change hands hundreds of times, promoting exchanges of hundreds of dollars worth of goods, services and labour, without being thereby depreciated. Naturally, sound value reckoning rather than paper standard reckoning and free market rating of exchange media against the sound value standard and the option to refuse and exchange medium and resort to a competing one, would help in this process. Monopoly status, compulsory acceptance and compulsory values do disturb all exchange relationships and cover up essential details that are required for sound and self-regulating issues and reflux of the issues. - When short term deposits are invested on long terms, when fractional reserves only exist but promised are 100% redemption at any time by the issuer, upon demand of the note holder, then there is much talk about the dependency upon confidence and trust while, in such cases, distrust would be deserved and correct. No one should be allowed to get away with promising more than he can fulfil, with the excuse that merely confidence and trust in his actions were ultimately lacking. - The central banks try to reduce this malpractice by insisting that the banks keep part of their cash or demand or short term deposits with the central banks. I do not know whether they pay the banks - and thus the depositors - interest on these accounts. Certainly, that interest would not be earned through the most productive investment of these funds. Nor do I know what the central banks usually do with these accounts, i.e., whether they keep them frozen or lend them out on short terms - or even on long terms, especially to governments, since they are more or less at liberty to print exclusive and forced currency cash when calls for cash are made upon them. - When it keeps these bank reserve accounts frozen, then it would have initially issued these amounts, with compulsory value and compulsory acceptance - and then compulsorily retired them, for at least prolonged periods, from circulation. When, instead, used for government spending and then compulsorily withdrawn by taxes, the money is usually not frozen (apart from inefficient and too slow handling of government accounts, that leave funds unused for prolonged periods and can thus cause deflations) but spent again, since governments are rather inclined towards spending more than they do coercively extract or confiscate. - To the extent that banks are forced to keep reserves with the central bank they can, almost without risk, lend equivalents of these amounts out on long terms, since the central bank could always back them in cash. To that extent the dishonest practices of long term lending out of short term funds deposited by one's customers, is encouraged rather than discouraged by these reserve deposit practices. The central bank would then be an accessory or even an abettor or guarantor for such dishonest actions of the banks, supposedly under its supervision and control. - Tempted by its option to issue more additional legal tender notes in "repayment" of these reserve accounts, when needed by the banks, the central bank may also be tempted to lend out the reserve amounts on long terms, most likely to the government. Then, when the reserves are called upon and paid out in additional forced currency notes of the central bank, this guaranty against credit expansion will guaranty an actual inflation. - If the central bank paid no interest on these "reserves", then the banks would have to charge correspondingly more on their other loans or pay less to their depositors. - By the way, I have still to find a clear statement by any bank on how it can justify the large differences between the interest rates it pays and those it charges. In the age of computers these differences seem to have become larger rather than smaller. - Let us assume, instead, that the banks were free to issue bank notes and clearing certificates for turnover credits. Then the volume of their issues would tend to rise and fall with the requirements of trade. More goods and services would be produced and sold, at least to wholesale traders, and the debts of the wholesale traders to the producers would be monetised upon the banking principle or real bills doctrine, temporarily, by notes more suitable to circulation, until the short term debt falls due and is repaid in the notes or clearing certificates (or deposit accounts) issued upon it. That would not be a process that could unilaterally increase the exchange media out of proportion to the goods production, sale and consumption, but reduce it to the offer and use of means payment corresponding to the quantities and values of the services, goods and labour supplied. Under stable value reckoning, optional acceptance, freedom to refuse acceptance, freedom to discount a suspected or really over-issued exchange medium, and with only the issuer obliged to recognise and accept his own exchange media at par with their value standard, enough exchange media could be freely issued, not over-issued, and the repayment obligations involved would keep them at par. Over-issued exchange media could not be forced into circulation and could not be given a forced value. They would all remain clearing exchange media, even if the clearing were not instantaneous but spread over 30-90 days. These currencies or current account deposits or clearing accounts could be as elastic as they would need to be. When no one is legally or juridically or customarily obliged to supply rare metal coins or, likewise monopolised, legal tender paper money cash, while all he can offer by his own efforts are often only efficient means of clearing, then the risk of inability to would largely be removed. - Instead or using the clearing process for turnover loans, which can provide out of itself, via sound bank note issues and clearing certificates, all the exchange media required for it, bankers do now usually grant turnover credits out of savings invested with them. Such practices are based on the old models of bills of exchange redeemable in rare metal coins and of rare metal deposit certificates, with all their inherent risks of cash payment disability, while the clearing payment ability would have remained undiminished. By now we should be able to think and act beyond these models and to reckon in gold weight values without having to own or pay in a single rare metal coin. - When rare metal deposits are required then the depositors should be prepared to pay the costs of keeping them, 100%  of them, in storage or mobilising them only via 100% covered and redeemable rare metal certificates and in case of fractional covers then only with any of several precautionary clauses that would abolish the risk of a run. When bankers and depositors would have to agree upon such clauses and contracts that would remove the occasional impossibilities of fulfilment and replace them by a number of options that remain possible for mutual satisfaction. (For instance, the bank might pay out its deposits in banknotes with a clearing foundation only, based upon acceptance by the bank in all payments due to it. - J.Z., 14.9.02.) They could reduce repayment or withdrawal claims by requiring timely notice of withdrawals, limiting them to the amounts becoming available in repayments or allowing only fractions of the deposits to be withdrawn immediately. Whenever bankers and their customers realize that they do not need rare metal stocks or legal tender paper money to trade, then they should be free to provide and use their alternative means of exchange and clearing options, both using alternative and freely chosen value standards. Then bankers would not need any rare metal coins or legal tender paper money cash or cash accounts of that type to finance any turnover credit loans or current exchanges. - When the savings and investment market is quite free, then bankers and customers should also be free to determine the terms and to remove any term risks by their contracts, apart from the insurable risk of bad debts not due to money the monopoly and its manipulations. Any risks the bankers take, in speculative investments, should be, quite openly, done only with funds entrusted to them for this purpose. To assure that, full freedom of contract, full publicity and full personal liability should be introduced and the futures risk involved in all payment contracts should be clearly stated and withdrawal premium and the clearing alternative for all such contracts should also be pointed out. Confinement to monopoly exchange media, an exclusive value standard, privileged banks, restricted clearing options, to coin and legal tender cash redemption models should be abolished as a constitutional, legal and juridical imposition (except among exterritorially autonomous volunteer communities). Upon contract and at the own risk and expense any payment system, from internal monetary despotism to full monetary freedom, should become permissible for voluntary payment communities, at their own risk and expense. - J. Z., 5/97. - We should be given the chance to learn as much as possible from the mistakes and errors of others. - J. Z., 14.9.02.
CREDIT EXPANSION? Those believing in almost unlimited credit expansion as a result of every credit granted by one deposit bank and the credits then being deposited in another bank and serving as a cash security basis for much larger credits there, do forget that people do not borrow and pay interest on their loans in order to leave the money in the bank. They borrow to spend the money, and this rather sooner than later. Further, most of what they spend is not ending up in savings accounts of others but is spent on current consumption of those who supplied them. However, the clearing effect, which does not need any quantity of exchange media at all but merely a sound enough value standard, does often give the impression (if all the turnovers achieved by clearing, are added up), that an expansion of deposits or of currency has taken place. - REFERENCES TO SOCIAL CREDIT REFUTATIONS in the PEACE PLANS series: 2 books, by F. J. Docker & John Lewis, in PP 1042. Criticism of Social Credit ideas can be found also in PP 242, 656, 740, 793, 906 & 1074. See also under John Logan & David Taylor. - J. Z., 21.5.97.
CREDIT INFLATION? Isn't it strange that people frequently speak of a credit inflation but rarely of a credit deflation caused by repayments of credits?  Actually, during inflations debtors are more eager to repay their debts in inflated money than they are to repay them with sound money. Should we call this a deflationary phenomenon? One quite common in the middle of a raging inflation! Without free market rating of currencies we have no reliable measures to find out whether the circulation is oversupplied with exchange media or under-supplied or just sufficiently saturated. A real inflationary effect of what has been called "credit inflation" can only result with legal tender currencies, issued not only in short term loans but spent into circulation or in medium and long term loans, i.e. without sufficient reflux arrangements to balance the issues at any particular time and thus maintain their value. When a medium can legally be forced upon anyone, not only the issuer, then there is frequently not enough reflux to the issuer, even when the State or its central bank is the only issuer and reflux arrangements are as high as the current direct and indirect taxes are. The inflation tax acts otherwise. It gradually or destroys the purchasing power of the exclusive and forced cash in the hands of everyone, without most people becoming fully aware of this destruction. All they notice, to some extent, is the rise of all prices expressed in this medium - and that their medium and long-term debts are remaining nominally the same and that interest rates are rising. - J. Z., n.d., slightly revised.
CREDIT INSTRUMENTS: See: APHORISMS ON THE MONEY PROBLEM.
CREDIT INSURANCE: It can be a real insurance business only for ordinary business risks, spreading them among its subscribers or premium players. It cannot insure anyone or all participants against the risks of inflation, deflation and stagflation, due to arbitrary and at least in their degree unforeseeable government interventions and in their total harmful effects these are much too large to be insurable risks. It can also not insure against the abuse of this cover by careless investment bankers and companies that think that they can skim off the high profits of extremely risky investments and let the insurer (or involuntary taxpayers) bear all their losses. To prevent that effect the insurance companies must examine the credits to be insured more thoroughly than those lenders do, who want their credits insured. - J. Z., 24.3.97. - See: Deposit Insurance. - When incompetence, carelessness and corruption waste or make money "disappear" by the millions and billions, as has happened too often in recent years, then this is simply not an insurable risk. Only a much better, more public and much faster and thorough accounting and court system prevent or reduce such losses or recover much of the funds that went astray.The hierarchical forms of enterprises do also multiply, maximise and prolong such abuses and so does the relationship between employers and employees, capital owners and employees, managers and shareholders.  - J.Z., 30.8.02.
CREDIT OR DEPOSIT EXPANSION OR CREATION & THE RISK OF INFLATION- & DEFLATION: This kind of expansion or "creation" is nothing -more nor less than the "expansion" of non-cash transactions upon- a limited amount of available cash (in form of rare metals or legal tender), while all non-cash credits or deposits are still- claimable in cash upon demand by a creditor. In all cases the- on-cash transactions could actually stand on their own, without -"cash" backing by 100% or fractional reserves. The cash would -merely be used as accounting units or value standards. It would- not be required as means of payment, since clearing can, in most -cases, provide that much better. But while creditors are legally and juridically authorised to demand cash, when a debt is due, rather than merely a settlement by clearing, this possible and sometimes more than usually actualised demand exists as a risk factor for  the -additional non-cash, clearing and short-term credit and debit payments that have become customary upon a relatively small cash basis. Thus the non-cash or clearing side of the economy could only grow somewhat but could never grow, on its own, to the requirements of- trade, to finally cover all possible and desired turnovers. Via the cash demand option for creditors it remained still tied -to the old-fashioned (rare metal coin) or modern cash (legal tender by a monopoly issuer) redemptionism. The cash -demands of creditors fluctuate and thus affect the much larger non-cash transactions built upon them - and thus can lead to cash and credit crises, while the cash supply is monopolised & thus slow to expand and while the larger volume of non-cash transactions depends upon the available cash. E.g., -when a bit more cash than usual and than expected and -anticipated, was suddenly demanded, a large overhang of possible -and desirable credit, deposit or clearing transactions had to be- withdrawn or became illiquid and their collapse increased the- demand for cash further and that additional cash demand, when cash was already short-supplied, led to further -collapses of non-cash transactions because of that legal or -juridical claim granted to creditors. That currency famine risk could be -largely abolished (apart from abolishing the issue monopoly for cash) by not -granting creditors the right to demand cash and replacing it by a- right to demand clearing only. (This in as convenient a form as- possible, including private IOU issues in money denominations -that only oblige their the issuer and, by contract, his debtors.) - In the extreme case of a thought example, all immediate and short-term payments could have become have become payable only through a very efficient clearing system. Cash might thus have become as unusual or absent as are now gold coins in most transactions. Under these conditions the sudden introduction of the right to claim cash would certainly lead to difficulties, not foreseen by the well meaning dogmatists who wanted to introduce e.g. an exclusive and 100% covered or coined gold standard currency. The very extensive and free exchange economy, based on clearing, would then largely collapse. Fractions of such a general collapse occur through the still habitual, legal and juridical authority of creditors to demand cash and the fluctuations in these cash demands, especially for wage and salary payments and consumer spending. -There is another risk factor in the non-cash or clearing payment sector, -while it uses for all its payments not only optional cash demands by creditors for an exclusive cash exchange medium but also the exclusive and forced paper money standard of the central bank.- (Formerly the more or less depreciated coin of the realm.) Then, and to the extent that they do so or are compelled to do so, these transactions participate in the depreciation of that exclusive and forced standard. But the clearing transactions, no matter how large they are, do -not cause that depreciation. For short term transactions, if that depreciation is not yet very rapid or even galloping, it does not matter greatly. But it does matter when considerable time periods pass before a payment is due, still to be made by using the exclusive and depreciated value standard. Using a sound value standard and if their productivity permitted it, clearing would permit them to double, treble or increase tenfold their turnovers paid for by clearing, without depreciating that sound value standard used in all their clearing exchanges. Simply more goods and services would be produced and turned over, through a higher volume of clearing transactions. But no corresponding increase of prices and wages would take place, one corresponding to the higher volume of clearing. Greater productivity and ease of clearing exchanges would rather tend to increase wages, salaries and service charges while lowering the prices for consumer goods. If they physically could, people could via automation in production and clearing in exchanges, -increase their turnovers a hundred-fold or a even a thousand-fold. Always -assuming that they would not have to pay up, upon demand, in scarce gold coins or exclusive -government legal tender. But these additional exchanges, on their- own, and by their quantity, could not depreciate the forced and -exclusive value standard of the government, or any other, but sound value standard adopted but they might -INDICATE A DEPRECIATION THAT HAS ALREADY TAKEN PLACE, when a depreciating value standard is still being used.  People -might then finally find out that they could do better for themselves by choosing themselves one or even several different but -sound value standards, those which they prefer for their own contracts. Consequently, they -might do all their clearing with that or these. As means of -payment they would have already by-passed the government's paper money.- They would already have excluded it as means of- exchange. - What would be left to the government paper money -would be a much reduced circle of voluntary acceptors or cash notes and coins -of the government that could readily circulate - but only among among- taxpayers and other debtors of the government. And these voluntary acceptors of its notes and recipients of its spending might become further reduced to voluntary state members by reducing its service supplies and charges as well to free competition by other organizations in the same territory, among people who have opted out and re-associated quite voluntarily and under exterritorial autonomy. All governmental or central bank notes would then be reduced to their own voluntary payment circles, used for their spending, their budget items only and their voluntary taxes or subscriptions. Under full competition governments would be reduced to exterritorially autonomous volunteer associations, competing like e.g. insurance companies, for customers, and to the volume of transactions they can build up under competitive conditions. And that smaller -circle of acceptors would reduce the circulation options for any -government to its own backing or cover or reflux, to its "tax foundation" or clearing foundation, i.e., to its -market value. When a government had previously, due to legal- tender and the issue monopoly, over-issued and forced its currency -at least potentially (seeing the extent of non-cash transactions -even now) into every channel, it would then be excluded from -most private circulation channels or payment communities and from what ever "official" payment circles  other volunteer communities have established for themselves. For its remaining economic or anti-economic activities the former volume of its circulation would be too large. The- quantities that it could formerly force upon others, would no -longer be accepted or needed as exchange media. That would mean- it would depreciate and could pay for goods and services of those -outside its payment circles only at inflated prices, even while- the same goods and services, if paid for in competing, optional private exchange and clearing media with sound value standards, would remain priced at- the same level. (Apart from changes at the goods side.) Obviously, this would also be a situation in -which the former territorial and exclusive Central bank's issue monopoly and other privileges and- its legal tender would not longer be enforced or fully -enforceable in the private and cooperative self-help and free- clearing and value accounting sector of non-members. The blame for any- depreciation of its currency would then lie entirely on the side of the issuers and acceptors of the State- paper money. It would be the bad money that would be driven out -by wide-spread refusals to accept it at all or by discounting it- down to its remaining foundation, e.g. to tax foundation, while -that would still exist and be enforced. The government could- then no longer use the goods, services and labours of all people -within its borders as its redemption fund. They would express -their monetary demands in other, better and safer ways,- independent of the government and would reject its paper as means- of exchange and as standard of value as far as they could. The -freer private and cooperative clearing would become, independent- of a territorial  government's cash and its legislation and paper standard- and their manipulation, the more likely would sounder value-s standards be adopted, too. - One should also take into -consideration the short-term turnover credit transactions, in- which creditors are satisfied with being paid within 7 to 30- days. (Under present stagflationary conditions they are often -satisfied by being paid, interest free, after 6 months to 2 years only.) -Such short term credit settlement should also be considered like -the "instant" clearing settlements. After all, all transactions, -even credit card and cash transactions, do take time, especially if one includes pick-up and delivery as well. If ready sellers are prepared to grant more time then it should be up to -them. (The delays that are involved even in consume shopping do have their equivalents on the current mass production and distribution side and, also, in the delays in receiving payment for production and distribution activities and for the spending of earnings received from them. Not all these earnings are, usually, instantly spent. Mostly the consumer spending is spread over a period, the period of wage or salary payments. Thus the balance between the exchange media issued and the ready for sale consumer goods and services could also be spread over a short period. - J.  Z., 6.9.02.) However, the more widely monetary and clearing freedom will be -practised, the less there will be a need to postpone payments for -purchases and the easier it will become to obtain real credits, -for medium and long term investments, on a stable value basis, with these term credits paid and repayable as well in shop foundation money circulating only for a short period. -The whole process might be gradual or proceed in steps. At first only private alternative exchange media and clearing certificates might be introduced. Then monetary emancipation might be advanced further against the remaining government paper money. For instance, taxpayers might insist on their -taxes being determined in a sound value standard and so might public servants for their salaries and other groups of wage and salary recipients and other groups of creditors. Then tax payers might insist upon the -acceptability in tax payment of their private clearing -certificates and clearing or money tokens, but only at their market value. Moreover, they would then begin to insist -that depreciated government paper money be accepted at the tax- offices at par with its nominal paper value, while they, not being its issuers, would refuse -to accept government paper money at par with its nominal value -whenever it had been over-issued or refuse to it altogether in all their -transactions. But at present the government has their throats -still in the sling of its exclusive and forced currency and can- pull that string tighter or depreciate its paper value standard at any time.- It will also always tend to blame private exchangers and- their exchange media and channels and their value standards, and speculations in them, for the depreciations that -follow over-issues of its own exchange media. - J. Z., 14.4.97, 6.9.02.
CREDIT REFERENCE BUREAUS, CREDIT & PRIVACY, INFORMATION REVOLUTION, COMPUTERS & CREDIT REFERENCES: Australia-wide credit reference bureaus were planned in 1989 and also opposed under privacy claims. - Those with a good credit rating want it rather known than hidden. Those without debts will not be interested. Only those with a bad credit record have a motive for hiding it as much as possible.  All their potential creditors have an interest in finding out how good and reliable their potential debtors are. Not debtors have a right to cheat their creditors. The general economy will be better off if bad debtors become known as such. That would lead to less bad investments, fraud, embezzlement and waste of scarce capital. If debtors are wrongly treated by one credit reference bureau then they should be able to set up their own in competition, supplying all the evidence required for their credit-worthiness. If there is no single credit reference bureau and compulsory register in it and if there is also the option for a debtor to see the record on himself and to make comments and refer e.g., to more accurate reports in other credit reference bureaus, then few debtors would have any right or cause to complain. - The most accurate records would probably be compiled by a bureau which not only supplied credit references but also engaged in credit insurance. Then it would have no interest in providing a good reference to a bad debtor and a bad reference to a good debtor. On the contrary. - When there are competing credit reference bureaus then the more accurate ones will also get a larger share of the total business. Uniformity, centralisation, a monopoly for a credit reference bureau for the whole of Australia are not required. E.g., debtors might come to declare towards their potential creditors that such and such would be their credit reference keepers. And a special credit reference bureau might then be established that would point out how reliable the references of various credit bureaus have been, in the past, according to the reports sent in by creditors. - Alas, credit bureaus can only supply information on honesty and ability, not on the disabilities that are the results of government interventionism, especially monetary despotism and compulsory taxation and changes in taxation laws & regulations.  - J. Z., 13.3.89, 15.5.97.
CREDIT RESTRICTIONS ARE A MEANS TO FIGHT INFLATION: - A popular opinion. - What ought to have been restricted, long before credit restrictions are officially undertaken, is the issue of government monopoly money with legal tender and that very often to inefficient and dishonest debtors, sometimes on a vast scale, and sometimes also to very wasteful governments. When, as a result, many private and public debts become bad debts, then general credit restrictions are sometimes imposed, while monetary and financial freedom remain suppressed. This means that then honest and efficient or productive debtors will get less credits than they need, i.e. the economy will be forced to shrink, while dishonest and inefficient debtors get some or even all of their debts cancelled and depositors lose some or all of their deposits or taxpayers are forced to subsidise bad debts or the losses made in grating them. Reckless loans ought not only be restricted but done away with altogether. Sound loans should be expanded to their optimum, rather than restricted. Naturally, this should not be done on the bases of an almost continuously deteriorated value standard but at least under general use of value preserving clauses, better still, under competitive sound currencies only. - In the absence of free market rating for sound and competing currencies there is not obvious limit that prevents over-issues. Thus the forced currency leads always either to deflationary, inflationary or stagflationary effects, at least in some sections of a national economy. To apply it evenly means quite different situations in different parts of the country of segments of its economy. Those which were over-supplied with exchange media may be thereby reduced merely towards a normal supply of exchange media. Those which were already under-supplied with them, as agricultural areas, for instance, often are, would be even more deflated than they were already before. Honest and productive debtors and sound credits to them should never be restricted. Dishonest and unproductive debtors should never be granted any credit and unsound types of loans should also not be made. But when loans are granted upon "connections", "reputation", "power", or supposed "securities", often quite speculatively and negligently, in millions and billions, without even thoroughly inspecting the account books of the debtors, what otherwise can one expect than large accumulation of bad and largely uncollectable debts? - To try to reverse a prior inflation by deflationary steps does not undo the wrongs and damages of inflations but adds the wrongs and damages of deflations. And the restriction upon sound credits does not undo the damages done by the granting of unsound credits. Credits granted and taken only in the expectation of further inflationary price rises, which would enable debtors to repay their loans with more and more worthless paper money are also fundamentally unsound and ought not only to be restricted but abolished and prevented. Nor should governments, at the expense of tax payers or depositors, ever bail out dishonest or incompetent debtors or those who granted bad loans. Credit restriction should be complete in all the monies of monetary despotism : exclusive and forced currency. They should no longer be permitted in or imposed on any transaction. - Trying to counter the effect of a previous inflation of forced and exclusive (legal tender) currency by its deflationary reduction via credit restrictions, while at the same time not permitting any competitive currencies, is like driving over a pedestrian and then trying to revive him by reversing over him. - If that example is too gruesome for you : Envision how easily it is to squeeze out a toothpaste by hand and how difficult, without special equipment, to reverse the process. - One of the major wrongs of credit restrictions or credit squeezes is that ALL credits will be reduced, directly by government authorities or upon their pressures, not only those of governments and their authorities, although these were the only or major offenders, and not only foul credits by sound ones as well. -  J. Z., 28.3.97, 30.8.02..
CREDIT RESTRICTIONS, RECESSIONS, DEPRESSIONS, DEFLATIONS, SALES DIFFICULTIES & SELF-HELP AGAINST THEM: The best answer to credit restrictions is to provide your own honest and efficient note issue and credit institutions, and means of payment and value standards and turnover credits paid in them or in establishing pure and free clearing facilities for this purpose, legally, if it can be done, illegally if it must be done, in rightful self-help efforts and in the realisation of basic economic rights, never mind that governments have so far not recognised them. - See: MONETARY FREEDOM, SELF-HELP, MONETARY REVOLUTION, RIGHT TO SUPPLY ONESELF WITH WORK AND SALES. - J. Z., 1985 & 21.5.97.
CREDIT SQUEEZE: See : CREDIT RESTRICTIONS.
CREDIT, ESPECIALLY TURNOVER CREDITS. IS FUNDING ALWAYS REQUIRED?- Your system would permit credits only with already pre-existing -monetary funds, with savings that are invested. Such notions were natural for advocates of a an exclusive rare metal currency- or of 100% covered certificates of gold, silver or platinum or of any other commodity-based currency, based on e.g. stored coal or wheat reserves. In this whole host of -opinions, preconceived notions and convictions, the clearing- options are usually overlooked, especially in the sphere of turnover--credit. These options have been extensively discussed by Ulrich- von Beckerath, Prof. Heinrich Rittershausen and Dr. Walter-Zander, to speak only of the most advanced representatives of the- German monetary freedom school, particularly with regard to the -inflation, depression and mass unemployment risks of the present system.  (I have tried to illustrate the turnover-credit and- clearing money issue options in my circulation charts in PEACE- PLANS 41, to supplement their theoretical texts and those of- others.) Turnover credit, like medium and long-term production- credits, also benefits from a sound value standard, preferably -one chosen or agreed upon by the participants, but it does not -need any external provider of exchange media or any uniform and- externally prescribed value standard. It can provide its own -self-liquidating and inflation- and deflation-proof clearing -media or banknotes and did so, traditionally, for a long time and- well, limited or interrupted and sabotaged, sometimes, only by -the prejudice in favour of metallic reserves and redemptions. It -could have functioned much better and undisturbed without these- unjustified and unnecessary impositions, "precautions" and -"reserves" or "guaranties". Especially under full freedom of- choice of value standards, if the participants are sufficiently -enlightened on this and on the freedom to issue and refuse to accept or to discount (or to- free-market-rate or price) any currency (that was not issued by them or which they are not, by contract, obliged to accept at par) and thus are habituated to compare & choose, rationally and well informed, all exchange media and -value standards. These two should not be coercively and- monopolistically combined because then the pricing mechanism of a- free market cannot function with regard to them. This tradition -is sometimes known and described as the essence of the "banking -principle" (especially in Beckerath's writings, and in the -English and US tradition as the "Real Bills Doctrine". Alas, it, -too is largely still misunderstood even by most "free banking" -advocates, even 200 years after this principle and practice was -seriously but not yet fully discussed. I had a long  exchange- with Kevin Dowd on this, which I will not repeat here. It is -filmed in my series. Considerable controversy on this subject- exists still. Most of it overlooks some monetary freedom -traditions or options. I will here only shortly describe, in one -instance, what is involved. Even after centuries sufficient- enlightenment in this sphere is still as rare as it is e.g. on -free trade, land reform, cooperative production, rightful- revolution and liberation and defence efforts: Assume a local -productive and exchange and payment community, free to help -itself and insufficiently supplied with government cash currency -to pay all wages and to enable all potential customers to pay for -their wanted and needed purchases, e.g. a depression condition. -Under freedom the local factory owner, for instance, who might- employ most local people, would be free to sell his goods, as -usual, to a wholesaler, for a short term promise to pay, which -the wholesaler hopes to make good by the sale of the goods to -retailers. So he pays the factory owner e.g. with a sound -commercial "bill of exchange", sound, because it represents a -real commercial transaction, a sale of goods already produced and -on their way to the final consumer. But the factory owner cannot -pay his labourers or his suppliers with this large bill. It is a single -certificate for a large amount owed to him. So he needs it- "broken" or "cut" up into small bills, in money denominations, -running for the time until the large bill is due. Thus he takes -the large bill to a local bank of issue, which does provide this- service for him. For the bank's discount of the bill it does not require -any savings or rare metal gold reserve. It can and should- "discount" the large bill by exchanging it into its own -standardised and typified bills or bank notes, in money -denominations. (It should not utilise any exiting legal tender -paper standard for this, for then it would be involved in any -inflation or deflation of that paper standard, by the third party "authority".) Now, neither the large bill nor the small bills -need carry any promise to pay gold coins or bullion or government- currency but merely the promise to accept them in clearing and -payments like ready cash - using such and such a value standard, -one agreed upon. With this discount the employer gets the small- bills or notes he can use to pay his labourers with. (If these -are not prejudiced against any private payment alternatives, -misled by their union functionaries, as usual.) Alternatively, -he can establish corresponding deposits at the bank for them,- which they can dispose of with cheques or credit cards. Those- hesitant to accept the alternative private bills or deposits could be informed and shown easily that the local shops are ready- to accept them like ready cash. Perhaps an insufficiently -prepared group of employees hesitates or refuses at first such an- alternative payment. Then someone might be sent by them, -immediately, to the nearest store to try this new payment method- out, while the others still wait, refusing to accept the- alternative banknotes or accounts until their messenger returns. -He could be back within minutes with his important message: It's -as good as cash at the nearest local store! Thereupon the -labourers will be, most likely, willing to be paid in this way,- or so we will assume here. As usual, they will spend their cash -or cheque accounts fast, mostly in the local stores. These return -the notes, directly (or indirectly via their bank), to the- wholesalers, to pay with them for their previous or new orders.- The wholesaler uses the notes - or the corresponding account at -the bank, to redeem his large bill of exchange, now held by the -bank against him. Then, ideally, all the small notes and the -large bill should be cancelled. They have fulfilled their -functions. This process can be endlessly repeated and paralleled -by other such turnover-credit facilities or, accordingly applied, -in other circles, too. Such bills or notes will be readily- accepted, at least locally, only if and while they are running at -par with their nominal value, e.g. a certain gold weight unit, -initially probably the government's paper or rubber "standard".- They will be and should be widely or altogether refused should -they suffer a considerable discount, making further issues -impossible or costly to the issuer and beneficial only to his- remaining debtors - if he has not contractually obliged them to- always accept his notes at par. Obviously, they do not require a -gold cover or reserve or redemption by the issuer in order to -function well enough. Such a single issue transaction does not- describe sufficiently the mutual dependence between local firms -and others. But, historically, it has often happened that notes -of well known local firms were locally circulating like ready -cash. Some of these local firms did even later turn into local -banks of issue. - The law in most countries and most- theoreticians and reformers would not permit a local payment- community such a freedom or freedom for essentially similar -mutual clearing experiments. Almost all -rely on father State or Big Brother doing his best and on his best being good enough. Even at their best they are mostly not good enough, nor can they be, for several -inherent reasons. To illustrate one of these, shortly, Ulrich von Beckerath used to say: A single bakery cannot supply a whole- country sufficiently with fresh bread, either. For more arguments on this see under CENTRAL BANKING. The banking -principle or real bills doctrine, as applied above, is not -and cannot be inflationary - if a sound alternative value- standard is used. If, uncritically, an inflated government -standard is used, then it would, naturally, participates in the- general inflation - but not by adding to it. Remember, it merely -mediates local genuine, wanted and necessary exchanges. It is -self-liquidating. It does not put additional notes permanently- into circulation, by giving them a fictitious, exclusive and- forced tender "value" but it sees to it that the issue is in- correspondence with the goods produced and already sold to the -wholesalers and on their way to the retailers or on their shelves-, waiting for the consumers and also that these additionally- issued notes, achieving additional turn-overs, are extinguished- again, soon, with the consumed products. Often they may already- disappear from circulation or their representation in deposits,- before the worker - consumers have used up all the perishable -food items they may have bought with these private notes or- accounts. Without this option to provide wage payments, the factory owner might have to close the factory, the wholesaler -could not redeem his bill, the retailers might  go bankrupt, the- workers would go hungry - to the extent that the governmental- central bank system does not supply the local community- sufficiently with cash - or clearing facilities. Even in the best -of times under the despotic central banking system a number of- manufacturers and wholesalers and retailers do go bankrupt merely -because of the unjustified and unnecessary frictions and- difficulties introduced by this anti-free-exchange system. -Tradition and sound theories insisted that only sound commercial -bills be so discounted, because they are self - liquidating, not "financial bills" or long-term or habitually extended bills,- because these would at least postpone their redemption, for a- longer period and would be much less certain to be redeemed by -their debtors at all. FINANCIAL bills, if discounted with- banknotes that are  not covered by gold reserves,  would- inevitably lead to a depreciation of these bank notes (unless -they are given the legal tender privilege and can thus drive up-prices) in a market in which they may be freely rated, refused -or discounted against sound alternative value standards and other -currencies. Their "reflux" is not assured, in time. The same -amount that was issued is not soon due, exerting a corresponding -immediate demand for the notes. Moreover, they do not represent -additional goods added to the market, which act as their -redemption fund. On the contrary, they exert an additional demand- for the pre-existing goods, thus driving prices up. Only already -sold goods, ideally consumer goods, not stocks of presently- unsaleable ores or grains, or ready for sale goods (of shop--associations acting as note issuers) can form a rightful and- efficient basis for private currencies, local or shop currencies, -that are truly "current" and readily acceptable because of this -foundation or "readiness to accept" for daily wanted consumer goods and- services. All other kinds of issues are mostly attempts to thus -acquire the goods and services of others without immediately offering them goods and services which they do want. Assignments -upon accumulated wool or wheat or coal stocks or blocks of land- have only a speculative value to some consumers, with some -capital to invest, more or less speculatively, for prolonged -periods. They cannot satisfy their "current" or "currency" -requirements and they do not oblige those who have ready for sale- goods and services to offer. Only when the issuers are -monopolists will the suppliers of consumer goods and services be- more or less forced to sell for such monopolistic issues, if they want to participate in monetary exchanges at all. - The "Real- Bills Doctrine", as practised above, does not fulfil the- requirements of Rothbard's "100 % Gold Dollar" or of Robert de- Fremery's "Population Standard." But it can satisfy the exchange -requirements of a local community, no matter how productive or -unproductive it may be and quite independent of the payments- system desired by a State, State federation or world federation. -No monopoly for such issues is needed nor any coercive powers but- merely the right of the believers in them to practise them among -themselves. To prevent forgeries or discover them sooner and to -keep better track of the issues, returned bills used to be -regularly cancelled or destroyed. But in order to save printing- costs this practice was largely discontinued and the same paper--bills were issued over and over again, as long as they lasted, in -new such limited and self-liquidating issues. Beckerath suggested -a return to the cancellation practice after the reflux. He also-suggested a limited and short circulation period for the issue of- each series. Now there exist even automatic machines that check -for forgeries. Duplicate numbers in short and often issued series- of notes, that circulate only shortly and locally, in most -instances, before they return, would be very rapidly discovered by -the use of such machines. Then, in many instance, the forger -could be traced very rapidly, too. - J. Z., 3/97.
CREDIT, HONESTY, GOOD & BAD MONEY: No man's credit is as good as -his money. - Ed. Howe, 1855-1937. - A man's credit may actually- be much better than the scarce and exclusive currency that he is- forced to use. - Alas, he is so far not free to express his good -credit in his own exchange media, nor are honest alternative note -issuing banks at liberty to do this for him. - The saying applies- only to good money cash, which is usually, but not always, preferred to credit -arrangements. - J. Z., 18.4.97.
CREDIT, ULTIMATELY GIVEN IN GOODS, SERVICES & LABOUR: Credits are ultimately given in goods, services and labour, made available for an agreed upon period via certified claims upon them, which, by rights, should be issued or subscribed by the owners of the goods, services and labour. - J. Z., 30.4.97.
CREDIT: You should not be surprised when not getting credit in -this world. Credit is monopolised and tied to an exclusive and -forced currency, beyond which it cannot be much extended upon a- free clearing basis as long as this monetary despotism remains in- existence. As long as creditors are authorised to demand payment -in legal tender cash, it cannot be extended as far as free clearing transactions could and should be, to multiply production and exchange, using sound value standards for honest accounting of- the values of all trades. Under completely free clearing neither -inflation nor deflation nor stagflation would be possible. All -debts and credits would be only different sides of the same- coin. All could be settled against each other, for all turnover- transactions, for which payment is immediately due or within a short period.  - J. Z.,- 22.8.76, 18.4.97.
CREDITWORTHINESS IN THE EYES OF PRESENT BANKERS: Customer: "How- do I stand for a five-thousand dollar loan?" - Bank Manager: -"You don't - you grovel!" - THE LION MAGAZINE, quoted in READERS' -DIGEST, 9/86, p.97. - Is this only a joke or is there at least- some  truth in it? - J. Z.
CRIMINAL MONEY ISSUES: The issue of monopoly money or of money that -is otherwise coercive and confiscatory or fraudulent towards third parties, who -have not contracted for it or were not at liberty to contract, for- themselves, payments in alternative and better currencies and may- not freely refuse or discount the monopoly money, is quite wrong, -even criminal and harmful. - J. Z., 1.2.96, 20.3.97. - That, at the -same time, it does provide a uniform currency for a whole territory, cannot make up for its -wrongs and the harm it does. - J. Z. 20.3.97.
CRISES & MICRO-ECONOMIC DECISION-MAKING & MONETARY FREEDOM: Micro-economic- decision-making is the primary device for keeping crises on a -micro-level. - Gary North, THE FREEMAN, 2/74. - Especially the -micro-economic decision-making of monetary freedom! - J. Z.,-7.7.94.
CRISES, GOVERNMENT & MARKETS: Crises, as opposed to simple- scarcity, result from market disruptions; and the only sector of- society which possesses the power to disrupt a large market is -the government. - Henry G. Manne,  REASON 4/74. - Crises are -unknown in an unhampered free market economy. - Dick Sabroff, THE-FREEMAN, May 74.
CRISES: First governments, by coercive interventions, cause crises, while coercively suppressing self-help measures that would prevent or end crises, and then, under the pretence of fighting or managing or mitigating crises, they do, instead, by their methods of monetary despotism, make them worse and prolong them, sometimes into a total collapse of a monetary economy. Then they do have the cheek (impertinence) to do this while blaming others for the results of their actions. Alas, their victims usually accept their excuses and blame price extortionists, exploiters, capitalists, financial conspirators, coercive unionists, greedy landlords, speculators, foreigners, immigrants etc., i. e. people who do nothing else but protect themselves as best as they can against a government caused inflation. - J. Z., 17.10.89, 16.5.97.
CRISES: See: ECONOMIC & HUMAN RIGHTS ASPECTS IGNORED BY MOST -MODERN AUTHORS.
CRISIS MANAGEMENT: To most of the ruling bastards this seems to -amount to: Manage affairs in a way that the crisis is kept going- or even increased. - J. Z., 3.4.95. - Not only communists have- often tried to make an existing crisis worse and to prevent- genuine reforms, in an attempt to gain or maintain power thereby. -- Politicians are always ready to declare an emergency and then to -demand emergency powers for themselves, to deal with the crisis.- (Compare Pres. Bush's "war on terrorism" then extended to "war against the Taliban forces in Afghanistan" and now to the planned "war against Iraq", not against its despotic ruler, after the 9/11/01 terrorist attack on N.Y.C. and Washington, an always upon the same wrongful principle that the terrorists apply in their actions, namely: collective responsibility, and upon the same "ideal" that they hold, namely exclusive territorial rule.) As a rule the crisis persists, in spite or because of their -efforts, even much longer, as a result of their "counter-measures" - and the emergency powers tend to be continued afterwards or not completely abolished. The extreme -case of this is indicated by Randolph Bourne's statement: "War is the- Health of the State". Compare the growth of the "New Deal"- statism under D. Roosevelt, which was extended, at least in- parts, from the Great Depression to today. - In most instances -"crisis management" means "crisis mismanagement" and "crisis- prolongation", largely through prevention of common sense and -economically effective and morally justified self-help steps. - -The only thing that monetary and financial despotism, in -combination with other forms of central planning and dirigism or -dictocracy, can manage to supply is - one crisis after the other, -in which they can always demand  and all too often are all too-readily granted, more power to themselves, in spite of a -continuing record of failures for all their A-Z "reforms" and "measures" and "plans", which repeat all the old wrongs and- mistakes over and over again - but under ever new cover-up names -and propagandist "justifications" and "explanations". But- sometimes they do reveal their empty-headedness, e.g. when they- merely hope to reduce mass unemployment and rapid inflations by a- few degrees in a few years, or when they have nothing else to -propose but changes in the budget and in the official interest -rates. Thus, obviously, they neither see nor admit the real causes -and possible cures.  - J. Z., 25.4.97, 8.9.02.
CRISIS THEORIES: Decades ago over 140 were listed once,- somewhere. Probably many more do exist. They are so numerous that -all should be listed - and confronted with the facts and contrary -theories as far as is possible, in order to enable the patient -researchers to finally sort the wheat from the chaff. - J. Z.,-19.3.97.
CRISIS: A Greek work for judgement or penalty of nature. - Dr. -H. G. Pearce, one of the few Georgists who was a clear advocate of -monetary freedom, too. I reproduced some of his writings but not -yet the manuscript of his Introduction to Economics, being the -notes to his lectures at the Aquinas Academy in Sydney, for a few- years. - I still seek the hand-written final notes for this book- manuscript, which was incompletely duplicated without them. --J. Z., 18.4.97.
CURRENCIES & GOVERNMENTS: The dishonesty, coercive and -monopolistic nature and the vested interests of governments are -today largely expressed also in their forced and exclusive- currencies, their depreciations, stagnations and manipulations. --J. Z., 25.1.90, 29.4.97.
CURRENCY BACKING BY ALL KINDS OF VALUABLES, WEALTH, CAPITAL & -ASSETS? - Not all real values and capital assets are a really -good or sufficient cover for sound currencies. - Our health is very valuable to us, but we can hardly turn it into an acceptable backing for our- currencies. Our ecology is most important for us, so are sunshine- and rain-bringing clouds, but they are a bit hard to coin. We -have valuables like large stamp and coin collections and can even -sell them for much - but we can hardly turn them into local or -national currencies. Each productive individual, is worth- hundred-thousands of dollars in a somewhat developed economy, in -the course of the decades that he is productively active,- sometimes even millions. But we can hardly turn this, our -personal capital asset, into an immediately useful currency, no more so than "the" labour hour. It -happens to embrace goods and services we will only produce in -years if not decades. They are not on the market as yet. Just try- to issue and circulate the total production of your life's- productive efforts in form of a personal currency right now? How -many acceptors would you find? And at what discount rate? If you were a recognized genius or -inventor, film star or pop star, you would find a few fans and- sponsors accepting your notes. But what could they buy with them?- Your autographs? - At most you could anticipate your near future -earnings through private clearing scrip or through share certificates and bonds. - What we can somewhat -monetise right now are our labour and services capacity now, and during the- next few days and weeks - no more. - It is true that all capital -assets have some value in a free market. One can even sell them -for currencies available on the market.  But one cannot -effectively turn them directly into currency and give them- thereby much purchasing power towards daily wanted consumer goods -and services. But one can SELL them for the currency of others, -IF others are prepared to buy them. - Currency is not like the -leaves of grass on a beautiful lawn, although that lawn is also a- capital asset. Nor can it be grown, like leaves on trees,- although trees are also valuable assets. It is only capital -securities that can freely mediate capital transactions, and it is only soundly issued (as well as re-called, in a natural reflux) -currencies that can mediate the daily turnover of consumer goods and- services quite naturally, rightfully and effectively. If asset "currencies", without a monopoly and legal -tender power, were issued side by side with shop currencies and- service vouchers and clearing certificates, they would have some -value only among some investors. But no provider of goods, services and labour or creditor of short term debts would be obliged to accept them. These -providers would, under freedom, rather issue their own sound- currencies. Why should they give any purchasing power to -thoughtlessly issued "asset currencies".  Not much of any asset- currency could be put into circulation. What is the recipient to -do with it? Extract some bricks from the building of the bank- which issued it? Claim some wheelbarrows full of dirt from the- farm which had monetised its capital value? Cut off some wires from the transmission wires, or take a turbine apart of an -electrical power plant that had not issued notes acceptable to -pay electricity bills with, but had, instead, issued an "asset- currency" based upon its valuables, like dams, turbines and electricity cables? Capital assets -have value only among users and buyers of capital assets. - If, on top of soundly issued currencies, based on consumer goods,- services and labour, daily ready for sale, all capital goods were -suddenly transformed into money denominations, why should anybody- but investors accept them at all? The daily wanted goods, -services and labour would not be increased by this multiplication- of private notes. Thus they would not be exchange media for such goods. All you could buy with them would be the capital assets -they were issued upon. No one else would have to accept them or -value them when he is already supplied with sound exchange media- for his purposes. Thus they would greatly depreciate below their -nominal value and that would lead to their almost general -rejection - except among some speculative investors, who might, -by purchasing them very cheaply, get some capital assets very cheaply. - Historically, I know of no instance where it was ever- successful as an asset currency. Almost all vastly inflated -government currencies were fully covered - by government- "securities". That did not secure their value. Ultimately, not even -their issue monopoly and legal tender power could secure them -acceptance. Asset currencies are not rally currencies but just a- few among the numerous misconceptions on money, currency,- exchange media etc.  - J. Z., 12.2.86, 2.5.97.
CURRENCY BOARDS: I see in them only a variation of central- banking. They may be the best form that central banking can take -but that would not be enough for me. Morally and economically -acceptable to dissenters would be only such currency boards which -confined their activities to the voluntary payment communities- which believed in them. Since the faith in monetary despotism is- still very popular this would give them a very wide sphere to -act in, at least for a while. More and more the successful -monetary freedom activities would deprive them of their followers- and participants - through one-man monetary "revolutions" or secessions. - -J. Z., 22.4.97. - The statutes for any competitive and- voluntaristic currency board should carry a preamble like the -following: We do no longer recognize the rightfulness of -monetary despotism via any central bank over any groups of- dissenters. We do not claim a territorial monopoly for our -transactions and powers. Our uniform exchange media will -be exclusive only for our members (provided they agreed on this) and accepted at their face value- only by contract. And these contracts can be terminated, at least- at frequent intervals. Our exchange medium and value standard is- legal tender only within our payment community and towards its issue centre. - J. Z., 22.8.93,- 22.4.97, 7.9.02. - See ON PANARCHY in the LMP PEACE PLANS series. See: -CENTRAL BANKING, MONETARY DESPOTISM, TOLERANCE, MONETARY FREEDOM, -FREE BANKING.
CURRENCY MANAGEMENT & CENTRAL BANKING, MONETARY POLICY, MANAGED- CURRENCIES:  Whether inflation, deflation or stagflation or a -temporary and relative boom prevails, it always means merely that the government or its central bank is still in charge of the- controlling position in the economy and that, sooner or later, it- can and will mismanage it even more, although, perhaps, otherwise -than it did before. Mismanagement is inevitable in any system -that is not foolproof, that is monopolised, coercive and without -free pricing or the discounting and rejection option of competing currencies, one that has no -competition among different note issuers and no stable standard to measure its exchange media- against it. It might try to impose circulation limits - that are ever increased, again and again. It might try to counter an evil -like inflation with deflation - only to arrive, most of the time, -at a degree of stagflation. It has not inherent limitations. It is, in this respect, like- an unlimited government. To be fully limited, all government- services and disservices and charges for them must be refusable -by individuals. The same applies to the money of monetary -freedom. All but the issuers themselves must be free to refuse it-, as well as free to issue (print) and offer alternative exchange media -and value standards, if they can find any takers for them. Only -monetary freedom can provide sufficient quantities of exchange -media and sufficiently stable currencies. To each the exchange -media and value standards of his or her dreams and to each the -government or free society of his or her dreams. Central- management of an exclusive and forced currency means mismanagement most of the time in most countries. Only -accidentally and then only for short periods, does it hit upon -the supplies that are correct, at least for its particular -circulation channels. (Not necessarily for all of a national economy.) Others it cannot correctly supply at all.- Imagine trying to supply everyone with sufficient fresh water from a single dam in a large country, or with sufficient electric -power from a single electric power station. Similar difficulties- exist for any centrally managed currency and it is high time that- they are recognised and abolished together with the whole central banking as an imposition upon a whole country and all its people and all its trading.  However, -central banking would not have to be prohibited or outlawed. It- would be enough to open it up to fully free competition or to reduce it to the members of a volunteer community that is only exterritorially autonomous.  -- J. Z., 14.12.92, 29.4.97, 9.9.01.
CURRENCY PRINCIPLE: Its advocates are still predominant among -money reformers and advocates of degrees of free banking.- Moreover, they still misunderstand the "banking principles" (-several versions do exist) and the "real bills doctrine" -involved in some of them. Partisans of both schools still believe -that they have already refuted each other. How could that -controversy be finally brought to a successful conclusion. It is -about time, after nearly 200 years. First step would be a- complete publication of all their relevant writings. Secondly: -All their arguments should be confronted. Thirdly, all needed -additional arguments, so far left out, should be added to the- debate. Fourthly: This might perhaps be best done via flow chart- discussions on paper or with the aid of flow chart computer -software on computers.  - J. Z., 9.4.97.
CURRENCY REFORM OF THE GERMAN UNIFICATION: The one on one exchange rate of one West Mark for one Ost Mark was absurdly wrong and false. The wages thus paid in the same amounts in West Marks were no longer earned by the sale of goods and services. Most people in the West and in other countries refused to buy these goods and services, as being of inferior quality, while the wage and salary earners spent their West Marks, no earned by them but credited to them, not for the goods and services of Eastern Germany but large on those of Western Germany. With many less sales for their own goods and services, many to most employees had to be dismissed. The unemployment benefits working couples got, in West Marks, made them economically much better off than they were before, when earning only East Marks and so they did not mind becoming unemployed but rather went on an extended holiday through Europe. By rights they should only have been paid with claims upon the goods and services they had produced. That would have been a strong incentive to produce more and better goods and would have largely solved the sales problem for their output. As it was, they were, to a large extent, made unemployed and turned into welfare recipients. To the extent that their wages were thus subsidized and the production of largely unwanted goods and services went on, the collapse of the enterprises they worked in was only postponed. Their goods and services could only be sold at emergency sales prices. Moreover, for decades, the work ethics in Eastern Germany was largely absent. For instance, bookshops that were run in West Germany by 1-3 people, were run in East Germany by ca. 12-20. Inefficiencies in other jobs was probably corresponding. After all, all of production and exchange was bureaucratically run. This change-over was not a change over from a state socialist economy to a market economy but from one kind of state socialist economy to another kind of state socialism, although not as totalitarian. But in one respect statist centralism was even worsened: The former two central banks became one. The very limited currency competition between East Mark and West Mark was eliminated. The natural connection between earnings and labor was even more separated than it was before. Those employees, who continued "working", did no longer work to satisfy consumers among their countrymen but to receive hand-outs from the West instead of earned wages and salaries. Moreover, these additional payments in West Marks, also legal tender monopoly money, as recommended by the Communist Manifesto, led to an accelerated inflation of the West Mark. Could their products and services still be sold to anybody in the world market? Possibly to people in underdeveloped countries, if claims upon these goods and services had been issued and utilized, at free-market exchange rates, to purchase goods from underdeveloped countries, that could not afford the quality goods of West Germany and did not have the purchasing power in their own currency, at free -market rates, to buy these goods in West Germany, not had they earned enough West Marks by sales the West Germany, to pay for imports from West Germany in West Marks. However, if they had been paid in East Marks, redeemable only in East German goods and services, and this at an exchange rate favorable to them, then they could have become customers for East German goods and services, leading to corresponding exports. These goods and services could have been sold - even if only at emergency or low quality prices, instead of remaining largely unsold. And the earnings thus achieved should have been shared as wages, salaries, returns upon capital and for suppliers. Productivity and earned wages and salaries would have fast risen from low levels to higher and higher levels. Capital could have been obtained in sufficient quantities with e.g. gold clause guaranties and tax and regulation exemptions, to utilize the numerous productivity increase opportunities from a low level of output to a standard high level of output. And employees would have had to pull their socks up, with the elimination of most bureaucratic featherbedding for them. Then they would soon have become as productive as the employees in West Germany. The "currency reform", as practised, prevented the natural adaption and development of the East German economy. It amounted to State socialism, the mixed economy type, of the Western model. - J.Z., 1990, 27.8.02.
CURRENCY REFORMERS, INTOLERANCE & MONETARY DESPOTISM: Most are -like statist tax reformers, i.e., they just want to replace -one monopolistic and despotic evil by another. - J. Z., 19.8.92.
CURRENCY SHORTAGES & CURRENCY FAMINES: They and their effects- are largely denied by theorists of the Austrian School of- Economics. They assume that the price mechanism will completely- and immediately adjust to any reduction of credit and cash and- thus render them completely harmless. Historical experience has- refuted this notion, in practice, thousands of times. -Ten-thousands of times, if one includes all the issues of- emergency monies and trader's tokens, as well as the truck -payment and truck payment tokens that occurred in monetary history and that are pretty well documented by coin and money- collectors. - Generally, one cold simply refer to the proverbial- "cursed hunger for gold" which does not indicate any saturation- of the circulation with gold coins to mediate all desired- exchanges. One could refer to the often complained about "greed- for money", which would hardly exist if it were always easily to -be obtained in any market, just by offering one's goods, services -and labour for it. The phenomena of the several "gold rushes" did- also indicate that the world was not yet sufficiently supplied with gold so that hundred-thousands braved hard circumstances and -worked hard and often in vain for small returns, always hoping- that, like a few others, they might finally strike it rich. -Lotteries, gambling and betting do also indicate a kind of- persistent currency famine and the lack of faith in most people that -they can ever earn enough ready cash through honest and -productive efforts - under present circumstances. - J. Z., MFNL-3/4 & 8.4.97.
CURRENT ACCOUNT, TRADING, CHEQUE BANKS OR CLEARING BANKS: -Apart from the difficulties which monetary despotism can cause -them, via sudden cash demands, when all due credits are demandable -by the creditors in cash, regardless of the cash supply of the- debtor by the monopoly issuer, all such institutions should be-able to settle all their accounts against each other. (The losses due to the minority of unable or fraudulent debtors could be- covered by the insurance fees that are part of the interest rates or due to special credit insurance arrangements. Extensive incompetence or corruption in the lending institutions, running up debts by the millions to billions, until these criminals are found out and stopped, cannot be covered by insurance. Incompetence or dishonesty among auditors cannot be insured against, either.) To each credit -there would be a corresponding debt. To each debt there would be- a corresponding credit. The total balance of all debts and all credits -should come to zero. They should balance each other out - unless- there were some mistakes make in the book keeping or electronic -accounting. Furthermore, to the extent that clearing transactions -are almost instantaneous, they do not suffer, as a rule, under a- depreciating value standard. Moreover, if the law does not- prohibit this, they would be free to adopt whichever sound value -standard pleases them most. And with regard to the profit margins -involved, in the average, for the participants, a slight- variation or loss in the value standard, reduced to that fraction -of the loss that occurs in the period of the almost instant or -very short term transaction, comes to very little. Furthermore,- to the extent that such clearing transactions represent real- exchanges of goods and services (or of debts representing goods- and services exchanges), the increased number of freely arranged clearing -transactions does not drive prices up but merely indicates more- trading, not "overtrading" or "over-production" or -"over-consumption" and it cannot reduce the value of any value- standard - merely by using it, in accounting and reckoning, more- often. - However, trouble will occur when some clearing accounts,- so far reckoning in a sound gold weight clearing standard only, can suddenly be closed- down by the creditors with their legal or juridical demand that debtors pay them in gold or legal tender, -although the clearing system may not and need not possess even a single gold coin or gold bar or any legal tender cash. When not gold or cash redemption is demandable but merely a gold clearing standard then, even when no gold coins or bullion were available in e.g. Germany, all such German transactions could still use the gold price of Zurich, -London, New York or Tokyo for all their gold-clearing transactions. Any clearing system can be prevented from -operating freely by the creditors being authorised to demand the -pay-out of all or any of their clearing credits in cash,- regardless of how much or how little cash is currently available -to that clearing system or made available to it by its debtors. -It is one thing to be allowed to pay in (acceptable and sound- cash), if one possesses it,  and quite another thing to be allowed to demand cash (sound or -unsound cash), or, for debtors, to be obliged to pay cash, when the debtors do not possess it, cannot easily obtain it and can offer only clearing options. A clearing-house or clearing bank should always remain free to settle all -its debts by clearing ONLY. Only when it can no longer do this,  -then it should be driven into liquidation and the creditors- should then be free to try to extract whatever credits or cash -they still can manage to get from the clearing house, not from its remaining debtors. For these debtors,- again, should not be obliged to provide any cash - as long as they- can still provide acceptable clearing options. Only if they cannot do this, either, should one be able to drive them into bankrupcy with one's cash or clearing claims against them. -  J. Z.,-11.4.97, 5. 9.02.
CYCLES, ECONOMIC, CRISES, BOOM AND BUST PERIODS, INSTABILITIES, -FLUCTUATIONS, IMBALANCES: Economic cycles are largely the result -of economic interventionism, especially monetary despotism. In- former centuries, without a world market and abundant transport- facilities, natural catastrophes could lead to local starvation. -Now only economic, political and military or revolutionary- interventionism can provide for such artificial poverty and- starvation periods, keep them up and prevent their abolition, -sometimes at the price of the lives of millions. Under true free -market conditions, including full monetary and financial freedom, free trade, free property rights and free enterprise, economic- cycles would largely disappear and natural catastrophes could soon be overcome for their survivors. Only price fluctuations -would remain, e.g. corresponding to harvest or demand -fluctuations, e.g. due to fashions. Nature as an enemy becomes -more and more bearable. But when one's own government and foreign -governments and all their military, education and tax slaves and -all their bureaucrats are turned into enemies of peaceful and -productive persons - then the situation of the latter becomes often- desperate. Once they come to realize that monetary and financial- freedom can be used as their Archimedean leverage, then they could- soon emancipate themselves from all internal and external- oppressors and exploiters. E.g., then they could make their -separate peace with millions of military slaves sent against -them, setting them free to support themselves productively,- within a short time, in the country against which they were conscripted, much against their will, in order to conquer it for their masters. Monetary and- financial freedom ideas could be exported into the heads of -revolutionaries everywhere, who do fight any despotic government. But- first we have to come to generally realize that monetary and -financial freedom options and techniques are rightful and valuable services -and also an exportable or commmunicable ones. - J. Z., 4.12.92,-29.4.97.
DEATH PENALTY FOR THE REFUSAL TO ACCEPT DETERIORATED GOVERNMENT PAPER MONEY: Governments could not, of course, pursue the- practices by which they forced bad money upon the people without -the cruellest measures. As one legal treatise on the law of money- sums up the history of punishment for merely refusing to accept- the legal money: "From Marco Polo we learn that, in the 13th -century, Chinese law made the rejection of imperial paper money -punishable by death, and twenty years in chains or, in some cases- death, was the penalty provided for the refusal to accept French -ASSIGNATS. Early English law punished repudiation as- LESE-MAJESTY. At the time of the American revolution, -non-acceptance of Continental notes was treated as an enemy act -and sometimes worked a forfeiture of the debt." - Hayek,- Denationalisation of Money, 28.
DEBT CRISIS, ABILITY TO PAY & INTEREST RATES: In most cases it- should be seen as a means of payment problem that requires, for -its solution, monetary-, clearing- and financial freedom. - In- most cases the per head debts, of a private or a public kind, are- not so high that they would be really unpayable. Payability of- private debts is usually already calculated into them. Once -public debts are considered to be too high by tax payers, they -should not only see to the repeal of all compulsory taxation laws -but also to the repudiation of all public debts. The only indemnification for all the losers in this case would be on an -equal basis with all present taxpayers, through their share in- the remaining public capital assets. Investments in future tax- slaves, all too long considered as acceptable, as formal slavery- was for all too long, and as the education and military slavery- still are, all to widely, should no longer be considered as -morally justified and enforceable assets or credits. - Payments of debts with -the own clearing-, goods- and service-vouchers would also be much- easier and more honest in most cases than would their payment in- exclusive and depreciated legal tender paper money. - The degree of the interest "burden" or "exploitation" involved in monetary- despotism would also disappear with it. For turnover--credits it could be reduced to close to zero. For longer term- credits on an agreed upon stable value basis, more secured -through monetary freedom repayment options, it would also tend to -become reduced. Full employment and the permanent boom- conditions that would be made possible by monetary and financial -freedom, would also increase savings and their offers in form of -investments, which would tend to reduce the interest rate. An -interest rate reduction is also to be expected through credit -insurance, no longer subjected to the extra risks of monetary- despotism. - But, at the same time, many more highly profitable- investments in innovations, including self-management -innovations, would take place, that would drive the interest rate -up, without being a burden to the debtors. If fixed interest -rates were largely replaced by rates that are "partnership- earnings" of "pre-done labour" in extra profits made, then the difficulties in paying -even high interest rates would disappear because they they would- merely be a share in high earnings. - J. Z., 13.1.93.
DEBT CRISIS, INTERNATIONAL DEBT CRISIS, LOANS TO GOVERNMENTS, -REPUDIATION OF GOVERNMENT DEBTS, GOVERNMENT GUARANTIES OF FOREIGN- LOANS, DEVELOPMENT: "First, there is no serious doubt that the -bankers of this country from 1973 on have made a lot of- incredibly stupid loans. These loans are never going to be -repaid. The debtor developing countries now owe a staggering $ 2- trillion." - Indemnifying the Debt - A Special Kind of Fraud,- MULTINATIONAL MONITOR, Washington, July 86. - Firstly, not only- "the bankers" are involved but State guaranties for foreign loans -and often also straight government to government loans and these -mostly on a mere paper money basis, i.e., repayable, if at all, in -inflated currencies. Moreover, all the bankers involved are -privileged, by special legislation, protected from competition- and via governmental deposit insurance at least to some extent- against the results of some of their own worst mistakes and dishonest actions. - What can one expect in such a situation? -- Private and government loans to governments ought not to be -repaid, since they are immoral investments in future tax slaves. -In principle, they are morally no better than former investments in slaves -were, bought from African slave owners and then used, largely or -mainly in the Southern States of the U.S., as enslaved plantation -labourers. Alas, I have not heard many of their descendants protest against tax slavery, too. - Now consider the figure- given, assuming it to be correct. I would estimate that at least- 2, if not 4 billion people are involved in developing countries.- Thus this debt comes to only $ 500 - $ 1,000 per head. If all -these funds had been productively invested, then their repayment-s should not really have been very difficult, especially if spread- over a number of years. But this would also have required, among- other things, that their sales problems for goods, labour and- services would have been solved via monetary freedom. They could- have repaid their international debts e.g. with clearing- certificates based upon their export goods. - J. Z., in old MFNL- notes, & 30.5.97.
DEBT FOUNDATION & CLEARING: Since clearing is the essence of any -monetary exchange and since all clearing is the mutual- settlement of debts, any money has, in essence, a debt- foundation. It does not need any other foundation but only a- value standard chosen, contracted or provided by the- participants. - J. Z., 28.5.95, 16.3.97.
DEBT FOUNDATION: All debtors, to enable them to pay all their- debts more easily, should become free to offer in debt settlement standardised assignments upon their own goods and service- delivery capacity. None should be driven into bankruptcy before -this potential is exhausted. Creditors would not be obliged to- accept them at par, as if they were legal tender, but remain free- to accept them only at a market-rated or arbitration-determined -discount, so that both parties can be satisfied with the debt -settlement. The automatic legal and juridical assumption that a creditor may demand (if not, in our times. gold or silver coin or certificates to them, that "right" has already been abolished)- government legal tender currency should not be upheld, -unless it has been especially agreed upon in advance. Since -creditors are also debtors at the same time, in many ways, no- one-sided interest or privilege is involved here but just a -facilitation of the payment and clearing process that was often -interrupted  by inherently unwarranted demands for cash which the -old system of monetary despotism could not sufficiently and fast -enough satisfy whenever the non-cash payment system partly broke -down and thus, & quite suddenly, the demand for cash was increased, precisely when cash was already somewhat short and this lead to the part-collapse of the non-cash payment system. Sooner or- later the debtors' clearing certificates and those of other local -providers of goods and services will become recognized as local -currency cash, which is in some ways more risk free and more- helpful to attain and maintain local boom economy conditions. especially when enough of these potential local issuers combine their capacities and issue, between them, their own local currency. - -J. Z., 19.3.97.
DEBT MONEY OR DEBT-BASED MONEY UNDER MONETARY FREEDOM: For the- purposes of this discussion one should distinguish between short--term debts arising out of goods and services exchanges and medium- and long term debts that represent existing or hoped for capital -assets or even debts imposed upon tax slaves, confiscated assets,- forced loans etc. As an advocate of monetary and financial -freedom and free exchange,  one can advocate the monetisation of- the former, the issue of capital securities upon real or expected -capital assets but not the monetisations of wrongful capital -claims against the victims of imposed tributes, called taxes.- (However, as long as taxes are still tolerated, one should- insist that these forced payments become as far as possible- facilitated by the mutual clearing arrangements involved in sound tax foundation money, rather than extracting means of payment -from other payment communities or imposing unlimited, -monopolised, legal tender tax foundation money upon the whole- economy as an exclusive and forced currency. The least unjust and - east harmful tax foundation money would be one that would use a- sound value standard and that would be optional, refusable and- discountable in general circulation but would have full legal- tender power towards the issuer, i.e., there and there only, compulsory acceptance at- par with its nominal value, no matter how much it had become depreciated in general circulation. (That would constitute a strong disincentive for over-issues and also lack of opportunities to engage in them, since the potential acceptors could discount them.) - Monetary freedom promotes and utilises currency based on short term, private or -cooperative and voluntarily undertaken debt and credit arrangements, arising out of the -production and sale of consumer goods, also debts based on- readiness to supply services and labour, as opposed to the- so-called "asset currencies", based on capital assets, under the- wrongful assumption that such valuable assets could also give -currency value to currencies supposedly based upon them, instead -of merely a capital market value to capital securities like shares, bonds, mortgages -etc. - Under full freedom the suitable debt foundation money, -e.g., shop foundation and railway or bus money, would drive out of- circulation the bad debt foundation money, based upon capital -assets for which there is only a relatively small demand among most consumers with their currency. To maximise the -transferability of both consumer goods and services and of unused- or under-utilised labour, this kind of readiness-for-sale can and -should be "monetised" with its kind of competing currencies, -ticket money, purchasing or goods vouchers, clearing certificates- etc. To mobilise, as far as possible and desirable, the -transferability of capital assets and their accumulation and- repayment, for purposes of production and development credits, -the corresponding financial securities should be freely issued- and marketed, i.e., not among ordinary consumers, in most -instances and for most of these secur