From: "John Zube" To: "Thomas H. Greco, Jr." References: <01f701c234f3$9f144c00$d650c043@v4dq1> <000701c24f3c$40a85180$553ecacb@e1d9k7> <008a01c252ae$24f63ea0$399db3d1@v4dq1> Subject: 020904 Greco, No. 2 of a batch of 7 Date: Wed, 4 Sep 2002 10:47:55 +1000 MIME-Version: 1.0 Content-Type: multipart/mixed; boundary="----=_NextPart_000_0003_01C25400.86DF27A0" X-Priority: 3 X-MSMail-Priority: Normal X-Mailer: Microsoft Outlook Express 6.00.2600.0000 X-MimeOLE: Produced By Microsoft MimeOLE V6.00.2600.0000 This is a multi-part message in MIME format. ------=_NextPart_000_0003_01C25400.86DF27A0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: 7bit Dear Thomas, these are just transcripts of some notes that go back years. In going through them, I had to correct not only format errors but also numerous typos and spelling mistakes, as well as errors in my expressions. Quite a few will remain, for the time being, as are many repetitive thoughts and many quotes that may have to be eliminated. But as raw material such a compilation can be helpful, or so I believe. Can one arrive at a short and convincing monetary freedom proclamation that many to most of the money reformers would be willing to subscribe to? Are they tolerant and well enough informed for that? Think of how long it took, and how much bloodshed, to convince many - by far not all as yet, of the rightfulness and benefits of full religious liberty. We are still far from having achieved the same kind of tolerance or freedom of action or experimental freedom for political, social and economic systems, and this in spite of the obvious rightfulness and usefulness of this alternative approach to the remaining problems. But the effective introduction of large degrees of monetary freedom, somewhere, and its maintenance there until its benefits and rightfulness would become quite obvious and sufficiently reported, could become "the thin edge of the wedge". The time and place for this should be carefully chosen and the participants carefully prepared. Another "open conspiracy". Think how productive freedom loving money reformers could become - if only they made full use of all the alternative media options. Some have gone overboard in their love of the Internet and expect all monetary reforms that are desirable merely from this technology. That is no better than expecting all desirable monetary reforms only from the invention of coinage or of note printing. You know what evils both have led to, if the freedom factor remained ignored or wilfully suppressed. What is so tempting about monetary freedom is, that once it is introduced, somewhere, successfully, for a while, and also sufficiently and intelligently publicized, it would act almost like a universal solvent for numerous other problems that are seemingly unconnected with it. To that extent it is like a huge gold reef, still unknown, that could lead to an enormous "gold rush" rather fast. Every day many people die or suffer, indirectly all for lack of monetary freedom and its generalized principle: exterritorial autonomy for volunteer communities, i.e., experimental freedom or freedom of action for all creative and self-responsible actions. PIOT, John ===================================================== ----- Original Message ----- From: "Thomas H. Greco, Jr." To: "John Zube" Sent: Monday, September 02, 2002 3:05 PM Subject: Re: 020829 Greco Re Free banking, compilation of notes, No 1 of a batch of 7, coming to about 2.5 Mbs > Dear John, > You continue to amaze me with the amount of output you produce. > Thank you for your latest contribution to the effort. > > I have been traveling the whole summer. My tour has taken me to about 25 > states plus 3 weeks in Europe -- Portugal and the UK. It's been a productive > trip, networking and collaborating with old friends and > colleagues along the way. > I'm still on the road, right now in Colorado, staying with another friend. > I'm gradually making my way back to Arizona and expecting to arrive sometime > around September 5 or 6. > > I hope to settle in and get some writing done, as well as making progress on > my websites. > Tom ------=_NextPart_000_0003_01C25400.86DF27A0 Content-Type: application/msword; name="FBcompi2SORrtf.rtf" Content-Transfer-Encoding: quoted-printable Content-Disposition: attachment; filename="FBcompi2SORrtf.rtf" {\rtf1\ansi\ansicpg1252\uc1 = \deff0\deflang1033\deflangfe1033{\fonttbl{\f0\froman\fcharset0\fprq2{\*\p= anose 02020603050405020304}Times New = Roman;}{\f2\fmodern\fcharset0\fprq1{\*\panose = 02070309020205020404}Courier New;} {\f16\froman\fcharset238\fprq2 Times New Roman = CE;}{\f17\froman\fcharset204\fprq2 Times New Roman = Cyr;}{\f19\froman\fcharset161\fprq2 Times New Roman = Greek;}{\f20\froman\fcharset162\fprq2 Times New Roman Tur;} {\f21\froman\fcharset186\fprq2 Times New Roman = Baltic;}{\f28\fmodern\fcharset238\fprq1 Courier New = CE;}{\f29\fmodern\fcharset204\fprq1 Courier New = Cyr;}{\f31\fmodern\fcharset161\fprq1 Courier New = Greek;}{\f32\fmodern\fcharset162\fprq1 Courier New Tur;} {\f33\fmodern\fcharset186\fprq1 Courier New = Baltic;}}{\colortbl;\red0\green0\blue0;\red0\green0\blue255;\red0\green25= 5\blue255;\red0\green255\blue0;\red255\green0\blue255;\red255\green0\blue= 0;\red255\green255\blue0;\red255\green255\blue255; \red0\green0\blue128;\red0\green128\blue128;\red0\green128\blue0;\red128\= green0\blue128;\red128\green0\blue0;\red128\green128\blue0;\red128\green1= 28\blue128;\red192\green192\blue192;}{\stylesheet{\nowidctlpar\widctlpar\= adjustright \fs20\lang2057\cgrid=20 \snext0 Normal;}{\*\cs10 \additive Default Paragraph = Font;}{\s15\nowidctlpar\widctlpar\adjustright \f2\fs20\lang2057\cgrid = \sbasedon0 \snext15 Plain Text;}}{\info{\title }{\author John = Zube}{\operator John Zube}{\creatim\yr2002\mo9\dy4\hr10\min26} {\revtim\yr2002\mo9\dy4\hr10\min26}{\version2}{\edmins1}{\nofpages70}{\no= fwords56485}{\nofchars321966}{\*\company Libertarian Microfiche = Publ.}{\nofcharsws395396}{\vern71}}\paperw11906\paperh16838\margl397\marg= r397\margt397\margb397=20 \widowctrl\ftnbj\aenddoc\makebackup\formshade\viewkind4\viewscale101\view= zk2\pgbrdrhead\pgbrdrfoot \fet0\sectd = \linex0\headery1440\footery1440\colsx709\sectdefaultcl = {\*\pnseclvl1\pnucrm\pnstart1\pnindent720\pnhang{\pntxta = .}}{\*\pnseclvl2 \pnucltr\pnstart1\pnindent720\pnhang{\pntxta = .}}{\*\pnseclvl3\pndec\pnstart1\pnindent720\pnhang{\pntxta = .}}{\*\pnseclvl4\pnlcltr\pnstart1\pnindent720\pnhang{\pntxta = )}}{\*\pnseclvl5\pndec\pnstart1\pnindent720\pnhang{\pntxtb (}{\pntxta = )}}{\*\pnseclvl6 \pnlcltr\pnstart1\pnindent720\pnhang{\pntxtb (}{\pntxta = )}}{\*\pnseclvl7\pnlcrm\pnstart1\pnindent720\pnhang{\pntxtb (}{\pntxta = )}}{\*\pnseclvl8\pnlcltr\pnstart1\pnindent720\pnhang{\pntxtb (}{\pntxta = )}}{\*\pnseclvl9\pnlcrm\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}\pard\plain = \s15\qj\sb120\sa120\nowidctlpar\widctlpar\adjustright = \f2\fs20\lang2057\cgrid {\f0\fs24=20 AAAAA Possible title for these 8 compilations, in combination: AN = ALPHABETIZED COLLECTION OF NOTES AND QUOTES ON THE ROAD TOWARDS FULL = MONETARY AND FINANCIAL FREEDOM. - J.Z., 30.8.02. \par AAAFBcompi2.397SOR \par ARBITRATION SYSTEM FOR WAGE DETERMINATION UNIONS, NAT IONAL 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 pe o ple 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 =20 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 dem a nds. 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=20 s tyle. 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 rea l ity 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 addition a l 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, becaus e 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 formerl y 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=20 n ominal 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 b e 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 coop erative enterprises, with no wage problem and personal subordination = that is not warranted by a job. - J. Z., 24.3.97. \par ARMAMENTS, ARMS RACES & ALL KINDS OF MILITARY SPENDING DO = INEVITABLY LEAD TO INFLATION: A popular view. It is true only if all = such spendi ng 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 n o t 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=20 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 =20 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=20 o f 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 tota litarian and communist money system even for supposedly anti-communist = States that were sometimes in armed conflicts with communist States. - = J. Z., 24.3.97. \par BALANCING THE ECONOMY THROUGH MONETARY CONTROLS OR MANIPULATION: = The good intention is to keep goo ds 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 =20 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 ent e rprise, 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 a n d 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 th o se 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 =20 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 f o r 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 desp o tism 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 th e y 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 subsidie s 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 taxpay e rs, 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 manipulat ed if trouble is to be avoided. - J. Z., 24.3.97, 30.8.02. \par 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? U nder 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=20 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. \par BOOK MONEY, MONEY CIRCULATION, QUANTITY THEORY & INFLATION: - The = price effect s 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 an d 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 boo k 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 co m puters 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,=20 r eady 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 CIRCULATIO N. \par 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 o r 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 mo t ive. 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 c r imes. 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=20 t o 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 h as further extended "investments" in tax slaves. - J.Z., 30.8.02. \par BUDGETS, SUPPLEMENTARY BUDGETS, TAXES & INFLATION: Once can = restrain an inflationary trend by introducing a supplementary budget = which brings increased taxes. - Popular opinion. To the exten t 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 f r ee 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 thes e 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 ma r ket 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 communitie s 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 quar t erly 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 a s 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 issue s , 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 presiden t , 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 inflate d! 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. \par COST-PUSH & WAGE-PUSH INFLATION: These notions are based on the = same fallacies as those of the wage-pri ce-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 pa per money (inflation tax) and with other taxes founding their = "government-spending" programs. - J. Z., 24.3.97, 30.8.02. \par CREATION OF CREDIT & CHEQUES: The creation of credit is made = possible by issued cheques not being redeemed immediately. - Popular = opinio n. - 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 n o thing. - 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=20 a s 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 =20 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 h o arded 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 =20 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 =20 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 p r oviding 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 accoun t 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 woul d 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 millio n 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 ne w 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 wo u ld 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. - Sin c e 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 beco m e 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 acc o unts. - 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=20 1 00% 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 alt i tudes 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=20 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. \par CREATION OF CREDIT, CENTRAL BANKING, CONTROL OF MONEY, MONETARY = CONTROLS, SOCIAL CRED IT: 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 wa s 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 ba n ks 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 =20 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=20 f raction 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 =20 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 =20 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=20 d ebtors 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 b a cking 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 c u rrency 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 encou r age 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 d e flation 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 expecta t ion 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 availa b le. 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". =20 - 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 =20 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 spe c ulative 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=20 n othing 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 potent i al 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. Whe r eupon 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 l o ng 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. \par CREATION OF CREDIT: "Creation of credit or money by the banks leads = to inflation. Banks can create credit or money out of nothing o r 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 t h emselves 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=20 n ewly 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 p a yments 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 m u ltiply 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 corr e sponding 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 ba n k 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 =20 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 w h ich 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 =20 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 wou l d 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, th e 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 go v ernmental 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 =20 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 issue s , 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 spender s 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 =20 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 =20 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 ine v itable 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 equ a l 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 la b our 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 C A USE 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 an d 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 =20 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 fo r 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 disp o se 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 th o ugh 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 basi c ally 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 addi t ional 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 =20 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=20 i ts 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 =20 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 c a sh 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 increa s e 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 si d es. 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. \par 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 t hat 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=20 s tealing. 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 =20 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 re p aid 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 prepa r ed 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 d i sposed 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 =20 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 d r awer (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 m a ny 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 an d 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. \par CREDIT EXPANSION & INFLATION: Cre dit 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 en t rusted 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 \'85 ) - When a savings and investment bank or a current account and cheque = ban k 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 s t ill 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. W h en "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 in c reased, 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 numb e ring, 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=20 a t 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 f i rm 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 inflati o nary 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 mo n ey 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 =20 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 =20 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=20 w ord. 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 "cred i t 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 abs u rd 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 manipula t ions - 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: IN TEREST, DISCOUNT RATE, OPEN MARKET POLICY, CENTRAL BANKING, CREDIT = RESTRICTIONS.=20 \par 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 infla tions 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 =20 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=20 c urrencies, 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 b e 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=20 t ax 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=20 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. \par CREDIT INSURANCE: It can be a real insurance business only for = ordinary business risks, spreadin g 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 =20 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 t h e 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 Insur a nce. - 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 t h orough 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 empl oyees, capital owners and employees, managers and shareholders. - J.Z., = 30.8.02. \par 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 th e 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, =20 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 re s tricted 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 p r eserving 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 deflat i onary, 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=20 m edia 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 producti v e 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", =20 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 debt s ? - 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 unsoun d 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 bu t 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 : ex c lusive 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,=20 w hile 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 ha n d 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=20 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..=20 \par CREDIT SQUEEZE: See : CREDIT RESTRICTIONS. \par DEBTORS & INFLATION: The debtors win by an inflatio n. - Popular opinion. - "For the sake of completeness, one should also = mention that they have also disadvantages from it. Those renting flats, = for instance, have only an advantage for a limited time. At last the = creditors, rightly, fearing a continuing in f lation, are no longer prepared to lend their money for building flats on = long terms. This is compounded by the fact that most tenants are at the = same time also creditors. The employers, e.g., owe them wages and = salaries. The advantages they derive as tena n ts are thereby neutralized. The debtor has the advantage only once, in = the beginning. In all his attempts in the future, to obtain a loan, it = will become more and more difficult for him to obtain it, especially if = value protecting clauses are not permitte d. - U. v. Beckerath, n.d. - Rents and interest rates will also rise - = and so will all prices for consumer goods and services which all debtors = will need, as before. And in a stagflation all do lose, obviously. - J. = Z., 29.3.97.=20 \par DEFICITS, BUDGETS DEFICITS CAUSE INFLATION : One might as well say = that the deficit in the budget of a bank robber causes bank robberies. - = J. Z., 24/3/97. \par DEFLATION IS THE WORST POSSIBLE ALTERNATIVE TO INFLATION & THIS = MAKES SOME DEGREE OF INFLATION ACCEPTABLE. - Popular opinion. - It assumes also that there are only the hard options: Inflation or = deflation, and that both can be ended only in "hard" ways and not in = "soft" ways. - I would rather say that a monetary system which = continuously fluctuates between inflation and deflation and which often has both together, in stagflation, is unacceptable for = moral and rational people. - J. Z., n.d. \par DEFLATION, DEPRESSION, RECESSION, CRISES: The moderation of = inflation was accompanied by a recession that raised unemployment to 6 = %. This was u navoidable: I know of no nation at any time that has been able to stop a = serious inflation without a recession, and generally a severe recession. = - NEWSWEEK, 15.3.71. - See: HARD OPTION, SOFT OPTION. - Perhaps it is = usually unavoidable under the present s y stem - i.e., as long as free banking and its automatic monetary = adaptation are outlawed. Interferences with the free market just don't = work smoothly. - J. Z., n.d. - Compare my Sep. 1976 16 pages booklet: = THE SOFT OPTION, in PP 19, now attached to my main website. - J. Z. \par DEFLATION, INFLATION & STAGFLATION: Inflation and deflation are = opposites and thus cannot coexist in the same country and at the same = time. - Popular opinion. - In stagflations they do. Stagflationary = effects are found in many galloping i nflations but are usually not recognized as such. E.g. when cashiers = line up before a central banks opens, so that they can act as fast = couriers for the wage payments required for daily wage payments - fresh = from the printing presses. - Deflation and infl a tion are insofar not opposites as both are despotic interventions with = payment, clearing, credit and value standard measurement agreements. - = J. Z., 29.3.97. - During the big German Inflation of 19144-1923, in the = end most printing shops in German were b u sy printing notes and could still not keep up with the demand for them, = since prices jumped ahead of the note printing capacity, in the = expectation of further depreciation. In the end the printing costs came = to about 48% of the rapidly decreasing purchasi ng power of the notes. Employees were given time off in the middle of = the day, so that they could spend their earnings before they had further = depreciated. - J. Z., 31.8.02.=20 \par DEFLATION: "Every price rise can be safely and sufficiently = countered by reducing=20 the note circulation." - Popular point of view. - You might as well say = that when you have become obese by over-eating that you can then simply = reduce your weight by eating less. Ask those who have that problem = whether they find it easy to adopt this simp l e advice. Also ask a unionist whether he is as ready to accept a wage = reduction as a wage increase and a shop owner, whether he as readily = decreases his prices and as fast, a she is ready to increase them. - J. = Z., 24.3.97. - And if you have the misfortun e to drive over and kill someone, try to revive your unfortunate victim = by reversing over him! - Rejuvenation is still largely only a dream and = a hope. - Not all processes are easily reversible. - J.Z., 30.8.02. \par DEFLATION: All the wrong and misleading state ments on, explanations and cures of deflations, depressions and mass = unemployment and of all their euphemisms, like recessions, that have = been proposed or tried out, should be sufficiently recorded, in = alphabetized listings, with the best evidence and arg u ments against them that have so far been found. It was, I believe in the = German "Zeitschrift fuer das gesamte Kreditwesen", in the fifties that = an article appeared that listed over 140 different crisis theories or = hypotheses. With world under-employment a n d unemployment having reached by now ca. 1 billion people directly, and = their dependants indirectly, it is high time that we should take it = seriously enough for such a collaborative effort. Otherwise we might = still be stuck in the ignorance and prejudices that cause depressions, deflations, stagflations, recessions and = inflations - in another 100 or even 200 years. - J. Z., 29.3.97. (In = Henry Meulen's THE INDIVIDUALIST, there is a reference to two estimates = of the total number of crisis theories.) \par DEMAND &=20 PRICES: Demand must be held down so that prices don't go up any more. - = Popular opinion - Demand and prices are best and also self-controlled = when governments are kept away from all note printing presses and = monetary issues and value standards except thos e few associated with its own VOLUNTARY & COMPETITIVE exchanges that = optional governments (only exterritorially autonomous, for their = voluntary members) might still manage to sell to their willing victims = or customers under CONSUMER SOVEREIGNTY that is ext e nded to GOVERNMENT SERVICES as well. - One cannot hold a fictitious, = fraudulent and forced monetary "demand" down when governments remain = legally authorised to print and force upon unwilling creditors their = exclusive and forced currency via an issue monop o ly, associated with legal tender (forced value and forced acceptance), = i.e. when government alone is removed from all market restraints and = this in the most important economic sphere, upon which all the others = depend. - It is absurd to try to discuss this =20 topic apart from the question of monetary despotism. - Demand control is = as absurd as price control. Both amount to people control - and to = uncontrolled controllers. Who guards the guardians? The guardians of the = currency are out of control - precisely be c ause they were appointed as exclusive guardians for currencies that = should never be exclusive and enforced. - Hold down the issuers of = exclusive and forced currencies. Repudiate all such issues totally - as = an essential part of a general tax strike agains t our overlords - the greatest criminals and parasites. - J. Z., 2.4.97. \par DEMAND FOR LABOUR & WAGES: To fight inflation one should reduce the = demand for labour. - Popular opinion. - Why authorise anyone to = interfere with free contractual relations between e mployers and employees? All the interventionist laws and authorities = that were established in this field are the result of the prior = interventions of monetary despotism. By further measures of monetary = despotism one will not abolish the previously & legal l y established wrongs and evils and their consequences. Demand for labour = should not be confined to the government's fiat money. Labourers should = not be so foolish as to demand to be paid only in "the coin of the = realm" or in a forced and exclusive currenc y , which is either inflated or deflated or stagflated. Free enterprise = and free consumer choice in currencies and value standards. Then one = will not have to fight inflation - because it simply will not occur. - = Imagine that the government would be the only =20 issuer of shares and bonds upon all industrial assets. Then, too, either = under-issues or over-issues would have to be expected. We should not = entrust our labour remuneration, our property, our wealth, our = exchanges, our security, our peace, our health or=20 a nything at all to any government, judging by the historical and present = records of all governments in these spheres. Least of all should we = appoint it as an organiser and guardian of all our monetary exchanges. = For in this way it has failed and wronged us even more than in all others. - J. Z., 2.4.97.=20 \par DEMAND: An over-full demand for labour acts inflationary. - Popular = opinion. - How else could an "over-full" demand for labour ever come = into existence except through a central bank and its legal tender pape r money? - Why allow anyone to establish a forced demand for labour by = fiat - while preventing the monetary mobilisation of all ready-for-sale = goods, services and labour by the owners of these goods, services and = labour? - My salary was quite a few times=20 p aid for with notes fresh from the printing presses, still with = consecutive serial numbers. Why allow anyone to do that - without him = offering, at the same time, equivalent and wanted goods, services and = labour in return? Why allow anyone to unilaterally i s sue money tokens as claims upon the goods, services and labour of = others? Why be so foolish to grant him a monopoly, too and his tokens a = compulsory acceptance and forced value - and to suppress, at the same = time, all sound, honest and competitive money i s sues? Under legal tender and the issue monopoly we will never and can = never KNOW whether the money circulation is sufficient, just right for = the moment or over-full, because such a despotic money removes all = self-regulating factors. It leaves no "divisio n of powers" or "checks and balances". It outlaws free contracts, = self-help, self-responsibility, property rights, free trade, free = enterprise, free exchange and free pricing in its sphere. And then it = wants to set up "laws", "rules", "controls", "regulati ons", upon such a wrongful and harmful and shaky "foundation", without = even discussing that "foundation". - J. Z., 2.4.97.=20 \par DEMAND: He could not put an extra resource demand on an already = fully employed economy without producing inflation. - Dr. Paul A. Sa muelson, on his advice to president L. B. Johnson, THE NATIONAL TIMES, = 26.4.l71. - An abuse of the term "demand" is involved that is associated = with monetary despotism. In a free exchange economy demand is only = established by monetised readiness to delive r wanted goods, services and labour. Such a readiness does not exist for = the government's forced and exclusive currency, apart from government = services paid for with paper money that has a sound tax foundation. For = all other exchanges the government's pape r money is an intrusion of a third party with its monopoly money, which = prevents the private exchangers from producing or using currencies of = their own. It is, in its first issue, and in its continuing issues, a = confiscatory or requisitional act that has n o thing to do with free exchanges. As for the quantity of forced and = exclusive currency, that would act inflationary: Under forced acceptance = and forced value that is not known via refusals and discounting of this = currency, i.e. by its free market rating. W h at remains to its acceptors are only rises in the prices of their goods, = services and labour which tend to express the deterioration of this = paper money indirectly but not very accurately, either. Moreover, this = depreciation by flooding the market with mo n opoly money does also create deflationary and stagflationary effects. = Even the degree of unemployment and of full employment are not = accurately observable and measurable under these conditions. A degree of = unemployment always tends to remain under central i sed and monopolised note issue, especially when it is at the same time = subsidised by "unemployment insurance" and this unemployment, under = pressure by potential voters and the political "representative" system = becomes then a pressure and motive for anothe r Keynesian spurt of inflationary issues. During a galloping inflation = the unemployment caused by it becomes large and becomes again a motive = to inflate more and more, to the limit of the capacity of the note = printing presses. Samuelson's unchecked premise =20 is thus the continuance of the existence of the exclusive and forced = currency of monetary despotism. - This abuse associated with fiat money = is not possible under monetary freedom. Under it only private resource = owners (of resources daily in demand by ave r age consumers) can issue monetized claims or IOUs upon these resources, = to the extent that they find voluntary acceptors at par or close to par, = who use them to buy the goods, services and labours that they want of = them. Then and thus they would do nothi n g but facilitate a goods, services and labour exchange among their = providers to the limits of their productive ability, readiness to = supply, serve and labour. Such IOUs would always be fully covered by = goods, services and labour and they could not become=20 o ver-issued and cause a general inflation of prices, fees and wages = reckoned and contracted in stable value units. At most some issuers = might make some mistakes in their issues, which would lead to a = temporary discount of their issues and their issues only =20 and to their widespread refusal in general circulation. If they made = such mistakes repeatedly then their further issue attempts would = encounter general refusal and they might be driven into bankruptcy, = losing all their property. However, under full public i ty for all details of private and cooperative money issues, it could = rarely come to that state of affairs. Then small and well publicised = disagios or discounts would make further over-issues impossible. His = remaining debtors would tend to profit, at his e x pense, unless they are contractually obliged to accept his notes at par = - up to the limit of their indebtedness to him. But no matter how = depreciated the notes of his further issue attempts might become, they = could not inflate the general price level, ex p ressed in stable value units, since his notes, without legal tender, = would not have a forced value and forced acceptance, except towards him. = At worst he might issue himself out of business, home, car and all other = private possessions, which would have to =20 serve as redemption goods in bankruptcy proceedings against him. But = under monetary enlightenment, combined with full publicity on monetary = issues, it would rarely come to that. E.g., a plumber, a barber and a = cinema owner would find it difficult to get m o re of their service tokens into circulation than corresponds to the = quantity and values of their services which local consumers want. The = same applies to any combination of local suppliers and their combined = private or cooperative issues. Issuers and acce ptors would only have to watch the market rates for local currencies. = They would not have to become involved in macroeconomic statistical = measuring attempts and decision-making for others. - J. Z., n.d., = 2.4.97. \par DEMAND: The government has a duty to control=20 excess demand in the economy. - Popular opinion. - First it asserts = that it has a right and a duty to flood the economy with its paper = money. Then it asserts that once that money is in your hands and = depreciated, it ought to control your spending of this =20 money, which you and not the government earned. In other words, it wants = to hold you responsible for its actions and calls this its duty. Its = only rightful duty in this sphere is one of hands off - off any forced = and exclusive currency and of all private=20 a nd cooperative currencies that are issued in its stead. Competing = exchange media are always tied to their goods, services and labour = backing and thus cannot establish an "excess" demand for the goods, = services and labour of others. They rise freely and fa ll with them, having a steady reflux to the realisation in their = "redemption" values, offered by their issuers. \par DEMAND-PULL INFLATION, DEFINITION: "When too much money spending is = chasing after a limited supply of goods producible at full employment = and max imum plant capacity, the resulting bidding up of prices is called = demand-pull inflation. Demand dollars "pull up" prices. Economists know = how to handle old-fashioned demand-pull - you stop turning the monetary = printing press. That is, the Federal Reserve=20 s lows down the rate at which it lets money supply grow. We, the public, = find ourselves with less currency and demand deposits and with less = savings deposits and with less values in our common-stock and other = asset holdings. Eventually, we spend less when o u r liquid balances get depleted relative to the soaring costs of living. = Reinforcing this tight monetary policy and keeping it from raising = interest rates sky-high and precipitating Wall Street and Main Street = financial panics and crises, is the modern too l of stabilising fiscal policy...." - Samuelson, THE NATIONAL TIMES, = 26.4.71. - Legal tender is, again, presumed to be inevitable and, = likewise, the issue-monopoly. It is like discussing despotism without = discussing any alternatives to it, democratic votin g, military insurrections, revolutions etc. - J. Z., 2.4.97. \par DEMAND-PULL INFLATION: It is absurd to attempt to discuss this = apart from legal tender and the issue monopoly for the central bank, = i.e., only from the position of monetary despotism. - Under mone tary freedom each issuer can only try to establish a circulation for his = notes by providing sufficient reflux for his notes - their streaming = back to the goods, services and labour he offers for them. Then his = goods, services and labour pull his notes bac k to him, for he is the only one who has to accept them at par at any = time from anyone. They have no other value. He exerts a demand-pull for = them, with the satisfactions he offers to his potential customers. And = they exert a monetary demand for his goods=20 w ith them, corresponding to all of his issues. And this demand-pull for = his goods etc. pulls his notes also out of circulation. Legal tender = notes, on the other hand, with an exclusive monopoly for their issue, = and for monetary circulation, under its compu l sory acceptance and value, tend to remain in circulation and to be = over-issued, with each additional over-issue tending to drive up, even = further, all prices and wages that are, under these conditions, = compulsorily expressed in its depreciating paper "val u e standard". The monies of monetary freedom have no political pull, = there is no fiat giving them any demand power over the goods and = services of others. Only the own readiness to supply and satisfy = consumer needs can give a value to the own currency, can=20 t urn it into a currency that is voluntarily and readily accepted, at = least as one competing local currency. Only if its goods, service and = labour backing is very well organized can it become an almost exclusive = local currency in practice but it can never b ecome a legally exclusive local currency. Open entry for other potential = issuers would remains. - J. Z., 2.4.97. \par DEPOSIT INFLATION: If deposit inflation were possible, both = depositors and deposit bankers would only be too glad. Their assets = could me multipl ied without any efforts on their side. Then under competition between = deposit banks, the banks should be able and willing to pay a tenfold = increased interest rate. In reality, my deposit interest rate on = deposits up to $ 5,000 (in the average, on my savin g s and cheque account, is presently only 1/2%. This does neither cover = the inflation rate of at least ca. 3% nor does it cover all the charges = and taxes I am forced to pay on my account. And my bank was close to = broke a while ago and may go broke still.)=20 - Compare all the nonsense said on the supposed CREATION of money and = credit. Even the government, when, due to its constitutional or legal or = juridical powers, issues a monopoly and forced currency, by its own = unilateral fiat, does not really create somet h ing valuable but, rather, prevents the establishment of sound = alternative currencies and value reckoning and partly expropriates all = those whom it thus forces to accept its official requisitioning = certificates as if they were real and well preserved money , with a sound value standard and based upon extra and wanted services = and goods provided by a government. - J. Z., 24.3.97. \par DEPOSIT INFLATION: See CREATION OF MONEY, CREDIT, DEPOSITS. - Banks = can lend out 10 times as much money as they receive in deposits=20 and can thereby cause an inflation. - Popular opinion. - They wish that = they could. They know that they can't. - The only bank that could do = that in every country is that country's central bank because, quite = wrongfully, it has been given a monopoly on th e issue of paper money and also legal tender powers for its issues. - The = superstructure of non-cash or clearing transactions is based on a small = amount of cash and it may give uncritical observers the impression of a = multiplication of exchange media, whic h , based upon the same amount of goods and services, and its exclusive = and forced currency status, could drive up all prices and wages that = have to be contracted and expressed in it. But clearing and non-cash = transactions are representing genuine exchanges =20 and, as such, additional exchanges cannot drive prices up. Only when = they, too, have to be expressed in an exclusive and forced currency, = which is inflated, do these exchange prices become correspondingly = inflated, too. One should distinguish cause and ef f ect here. - The second misleading impression that many people have and = mix up with monetary circulation, is that of the numerical excess of the = total of medium and long term loans and of their repayments, over the = cash in circulation. Moreover, at any tim e in a somewhat developed economy there are many more non-cash or = clearing transactions than there are cash ones. Precisely because the = legal right or creditors to ultimately demand cash from all their = debtors, this system functions well enough as long as=20 o nly a few make use of their claim to demand cash. Then a relatively = small amount of cash and or current accounts (demand deposits) allows a = multitude of short-term turnover credits, non-cash or clearing payments = to take place. Likewise, then a small amoun t of cash and demand deposits permits, over a period, the payment and = repayment of much larger medium and long term loans than the amount of = cash circulating at any time. Instead of comparing the total of all = timed loans and loan repayments, one should onl y compare the total of today's due loans and repayments with the total of = the daily available cash and current account or clearing repayment = options. Over a long period the same cash or clearing certificate or = clearing account or electronically accounted d o llar can settle hundreds to thousands of dollars of debts without the = daily circulation being multiplied and without driving prices and wages = up. Every day, every hour, only as much cash and clearing options are = required to settle all debts due on that da y or by a certain hour. But when cash-redemptionist "thinking" or = thoughtlessness is still very strong, i.e. the assumption and the legal = and juridical right of creditors persists to demand, at any time, a debt = settlement in cash (rare metal coins, gold ce r tificates or legal tender), rather than by settlement or clearing, = while, in normal times, much more is settled cash-less, i.e. by = clearing, then a risk and panic factor is built into this situation. = Each credit becomes then a futures dealing in cash and=20 e ach sudden growth in the demand for cash can set off further cash = demands at in place of more and more of the normal non-cash = transactions. Then, whatever amount of cash is available will not = suffice to satisfy the increasing demands for cash and the mono p oly cash supplier can, usually, not supply the additional cash required = when and where it is needed. - One should not try to discuss this topic = without referral to a survey of the increase in cash circulation of the = central bank's forced and exclusive pap e r currency over the last few decades, a survey of the correspondingly = increased prices and wages, compulsorily expressed in this currency, and = one of the normal total of daily non-cash transactions and their growth = over the last decades. And one should ad d to that the fact that legally and juridically the much larger amount of = daily non-cash transactions is claimable by the creditor, upon his whim, = in legal tender cash. Then it becomes clear that this monopoly system, = with its inbuilt cash claims, is prone =20 to inflations, cash panics or currency famines, quite suddenly, = extensively and repeatedly. - Even if the monopoly issuer were able and = willing to rapidly satisfy any cash demand of creditors with = additionally printed notes, as legal tender these notes wo uld tend to stay in circulation even after the cash crisis is over. The = deflationary crisis would thus be "overcome" only by an inflation, as = soon as the amount of non-cash transactions is back to normal. - J.Z., = 2.4.97. \par DEPRECIATIONS, DEVALUATIONS, INFLATI ONS, DISHONESTY AND MONETARY POLICIES OF GOVERNMENTS: Now, there are two = types of "dollar shrinkages" - official ones and unofficial ones. On = December 18,1971, and February 12, 1973, we had two official ones called = "devaluations": The former was 8.57 % an d the latter 10 %. Almost daily, as the dollar shrinks in value, causing = prices to appear to be going up, we have unofficial devaluations. When = the government reported, for instance, that the Consumer Price Index for = '74 had risen by 12.2. %, it should hav e reported that government monetary policy has "shrunk" the dollar by = another 12.2%. But by asserting that prices had gone up rather than = accurately reporting that the dollar's value had gone down, the = government is able to mislead the public as to what is =20 really going on. - Schiff, The Biggest Con, 35. - Add to this, that the = CPI is determined by a government institution and this is under constant = pressure by the government to "measure" with it less inflation than does = actually take place, e.g. by includin g price-controlled items. That is one kind of scandal, happening at = least in Australia, which no "investigating journalist" has so far = bothered to investigate and publicise. - J. Z., 24.3.97. See: MONETARY = POLICY, CONSUMER PRICE INDEX. \par DISAGIO OR DISCOUNT O F NOTES, CANCELLATION OF RETURNED NOTES ETC.: A temporary and small = disagio of otherwise quite healthy and competitive medium of exchange, = i.e., its free pricing and market rating in a free market for exchange = media and a lasting and practically irreversi b le deterioration of a monopolized and coercive (legal tender and central = bank issued) currency by the government are two very different things, = The sound disagio, a free price effect or discount in a free market, = will drive the competitive exchange medium =20 to wherever or to whoever will have to accept it at anytime at par, = i.e., at their nominal value. It will thereby remove these exchange = media from circulation having sped up the reflux to the issuer. In the = process it will have brought about corresponding =20 sales of goods or services, if not a speedier repayment of a debt to the = issuer. Insofar it would be harmless for the holder, as longer as the = issuer remains in business and able to deliver his goods and services or = has some outstanding debts. - It was lo n g practice at e.g. the Bank of England, that returned notes were = destroyed and replaced by new ones. This might still facilitate checking = series of issues and their reflux. But their electronic scanning and = accounting might make this less necessary. The r e flux of the discounted notes will make them disappear and with them = their disagio or discount, as long as they remaining offers of the = issuer remain solid and wanted. The debtors of the issuing centres might = also be obliged to accept their notes at par, a t least to the extent that their debts or due or soon due, so that they = could immediately settle their debts with them. - An artificial and = legal inflation, depreciation or devaluation of an exclusive and forced = currency is quite another matter. Although b y means of it and temporarily, the sale of goods and services will also = be furthered, this happens only under illusions, false guidance and = reckoning, and at the expense of all those receiving payments in such a = currency. Prices rise not evenly but unevenl y . Prices for the same goods become even more different in different = shops. In chains stores price increases often differ in their different = branches or even sales rooms. Buyers notice such differences rapidly; = even women and children show skill in finding =20 price differences for the same goods in different stores and go for the = relative bargains. The urge to purchase is spurred more by simultaneous = price differences in the same locality than through generally low = prices, that are everywhere the same. In an e x treme case, I saw once one particular kitchen knife offered in the same = department store, at 3 different locations and at 3 different prices. = Through the unequal rise in inflated prices, the sales in those stores = which have least adapted to inflation are=20 i ncreased most. Their stocks are then rapidly depleted and lead to = reordering. But that will usually be possible only at higher prices. - = What is most important in all this is that a naturally occurring disagio = in a competitive and market rated currency i s temporary and does not expropriate anyone. Each holder can still = present his note to the issuer at par and thus the disagio in general = circulation will rapidly disappear, together with these notes. = (Generally, exchange media with a discount are widely re f used, their issue is either stopped or greatly reduced and the = circulation of the discounted notes is rapidly reduce via reflux to the = issuer at par. - J. Z., 30.8.02.) But when legal tender forces notes = into circulation and they remain nominally of equal =20 value in debt payments, although already depreciated, and they have = depreciated because their reflux is insufficient, then they tend to stay = in circulation and their depreciation tends to increase more and more = and can be continuously forced upon every cr e ditor in the country by his debtors. A temporary disagio of a healthy = paper money in general circulation, will not prevent or reduce long-term = stable value investments and the production of long lasting goods. It = will also not reduce the turnover of daily wanted consumer goods and services but, temporarily, even speed it up. = - J. Z., transcript of p.11 of some undated notes slightly revised, = 24.3.97. \par DISCOUNT POLICY & INFLATION: A sound discount policy of the central = bank can stop inflation. - Popular opini on. - It is easy to inflate a legal tender currency by several hundred = or even several thousand per cent p.a. but it is not so easy to stop or = reverse this over-issue of forced currency by increasing the discount = rate to several hundred or several thousan d per cent. - Usually the discount rate of the central bank is raised = only somewhat and only after the central bank has already over-issued = its legal tender or fiat money. But no degree of deflation or credit = restriction can make any degree of inflation ha rmless. It can only add to the difficulties already created by the = inflation. Stagflation is one frequent result - the inflation goes on = and so do the depression and unemployment. - See my old German notes on = this subject. - J. Z., 2.4.97. \par EARNINGS DRIFT,=20 WAGES & INFLATION: The key, long-term objective must be to cut out = "earnings drift", which is the rate at which over-award payments = accelerate. - Pop opinion or opinion by "experts". - They would be = harmless, non-inflationary and just if they merely repre s ented increases in productivity. - J. Z., n.d. - Wages can only "drift" = upwards, beyond their productivity and nominally, when paid in exclusive = legal tender. If productivity and total exchanges remain the same and = the central bank does not issue addition a l legal tender notes, where do the additional notes come for, to pay for = the "earnings drift"? - Whenever sense and comprehension are lacking, = another senseless word is coined as a cover-up or merely verbal = "explanation" or "justification". - J. Z., 2.4.9 7. \par ECONOMIC GROWTH: Economic growth policies amount to a positive = anti-inflationary policy. They embrace technological and scientific = developments, education, training, labour mobility and adaptability, tax = concessions, subsidies, protectionist policies etc . - Economic growth may somewhat hide inflation but does not abolish it. = Economic development or growth does have the tendency to reduce prices. = When at the same time inflation is just large enough to prevent that = price reduction (in the average) then we =20 have no reason to assume that no monetary inflation of all prices has = taken place. They have been inflated above their market level by keeping = them artificially at their former nominal level! - J. Z., 29.3.97. - See = : INFLATION, DEARNESS, PRICE INCREASES, GOODS SIDE, MONETARY SIDE. \par EUROPEAN CURRENCY: Economic hopes ride on single currency. - = Headline in THE AUSTRALIAN, 5 May 92, of an article on European = currency, by Wolfgang Munchau. That proposal is as irrationally hopeful = and bound for disappointments as e.g. that of a single monarch or uniform or type of biscuit, bread, = breakfast cereal, jewellery or shoes for all of Europe. Free trade can = be realized without it and other wrongs of artificial borders can also = be done away without it. Metric measures hav e unified Europe for a long time but haven't prevented any economic = crises or wars, either. - J. Z., 25.3.97. \par EUROPEAN CURRENCY: Those who really want a European currency should = be satisfied with freedom to coin and account in full weight gold coins = or silv er coins (or any other value standard they prefer) and in OPTIONAL & = COMPETING private and cooperative paper note and clearing house = certificate issues that that are refusable, discountable, market rated, = well publicised in each detail of their issue and =20 reflux and tend to circulate, mostly, at par with their nominal value or = close to it. They might also arrange for one such paper currency which = all European governments would be prepared to accept at par in the = payment of all taxes and dues to any governm e nt or governmental authority, e.g. a European railway or postal network = and electricity and gas supply network. But to force any kind of = "European currency" issued by some upon whatever limited cover or = backing or reflux they can manage to establish for i t , if any, and to give this "currency" a compulsory acceptance and value = claim upon all goods, labours and services of the dissenters to it, will = be and remain an absolutely despotic act and would, most likely, lead to = even more and larger abuses than any=20 of the European national currencies did. - J. Z., 24.3.97 & 30.8.02. \par EXCESS DEMAND HAS TO BE SHAVED OFF: Pop opinion by those in favour = of monetary despotism. - First they put excess forced currency into = circulation and then they artificially withdraw it,=20 both with catastrophic effects. It is as if we were given unwanted and = unneeded blood transfusions, which dangerously increase our blood = pressure and then, suddenly, when our bodies have somewhat adapted to = this intrusion, as best as they can, we are sudd e nly bled, against our will, no matter what this would do to our bodies = in the short or in the long term. The best way to shave of excess demand = would be to do altogether away with the money of monetary despotism, its = beliefs, principles, lies and myths, i t s institutions, powers and legislative and juridical backing, its = measures, programs, cures, reforms and actions and leave in its place = full monetary freedom - and also the knowledge of how to make the best = possible use of it. - J. Z., 29.3.97. - See: DEM AND, CENTRAL BANKING, MONETARY DESPOTISM, STABLE PRICE LEVEL, MONETARY = POLICIES.=20 \par EXCHANGE RATE CONTROL & INFLATION: "If one holds the foreign = exchange rate stable, then inflation will be prevented." - Widespread = error. - Compare PRICE CONTROL. Forcefully c ontrolling an official exchange rate cannot and does not stop any = inflation taking place. It can only obstruct it being fast revealed = through its falling exchange rates. One might as well try to stop a = fever by fixing the indication of a fever thermometer below the fever degree. - J. Z., 24.3.97. \par FOREIGN EXCHANGE CONTROL: Through foreign exchange control one can = prevent or stop and inflation. - Popular opinion. - This has been tried, = in vain, for decades and no one who understands the real cause of = inflatio n will try to fight it, end it or prevent it in this way. This type of = price control is as vain and self-defeating as all others are. Rather, = control the government's note printing presses, by repealing the legal = tender and the exclusive currency status o f its paper money in general circulation. Only the government should have = to accept its own paper money at par (with any sound value standard, if = it has one, or at its nominal value), in all payments of dues and taxes, = expressed in its own "value standard) =20 or against a sound value standard, if that has been instituted. The = forced INTERNAL EXCHANGE RATE of and the FORCED ACCEPTANCE for its = currency, due to its legal tender and monopoly, is the real cause of = inflation and without removing it all other measure s are at best only palliatives. - Free market rating and free competition = and freedom to refuse the government's currency in general circulation = and free choice of value standards ought finally to be at least = discussed, then understood and introduced - to=20 end inflation, without a fight, without any further despotic "measures". = - J. Z., n.d., 2.4.97. - See: EXCHANGE RATE CONTROL, DEVALUATION, = REVALUATION, PRICE CONTROL, INFLATION. \par FOREIGN EXCHANGE RATE: As long as the foreign exchange rate remains = stable ther e is no reason to fear inflation. - Wide-spread opinion. - This is = obviously not true as long as there is no quite free exchange rate for = foreign exchange. Central banks still manipulate or try to manipulate = the foreign exchange rates and for this they u s e their hoards of rare metals and of foreign exchange which they should = not have been allowed to accumulate and keep in the first place. Even = when there is a freely floating rate for foreign exchange, then its = "stability" might merely indicate the fact th a t other governments do likewise follow Maynard Keynes' proposal for a = slow inflation and this to the same degree. - To me it seems absurd to = maintain in all countries manipulated, exclusive and fored currencies = and then to try to measure and stabilise the i r values by observing their exchange rates against each other. Our = misrulers may even have "gentlemen's" agreements to inflate their = currencies to the same degree and thereby hide their inflations from = those who have their eyes and minds only on the forei g n exchange rate. The foreign exchange rates and their fluctuations are = poor substitutes for free market rating for every governmental national = currency and for free competition against it from other, private or = cooperative national or local currencies. -=20 The kernel of truth in this notion consists in this that at least = towards other national currencies the own national currency has, as a = rule, no legal tender value at all nor does it have a monopoly in the = world's currency market. - J. Z., 2.4.97. \par FREE BANK ING & INFLATION: Free Banking would lead to inflation. Everybody could = then cause a general inflation by over-issues of his notes. - Popular = opinion. - Nobody's notes would then be legal tender in general = circulation. Only the issuer would have to accept=20 t hem at any time at par. The issuers would obliged themselves - not = others. People who know that some issues may be over-issued or who = merely suspect them or do not know them, would simply refuse them - as = they do now unknown or unwanted or suspected ticke t s to performances they do not even want to attend, or shares they do not = want to invest in. - Inflation of private money tokens would be as = impossible as inflation through cinema, theatre, bus or railway tickets = or postage stamps - or through the over-iss u e of uncovered cheques, or unsound shares, bonds and mortgage = certificates. Why? Everyone is free to refuse to accept them. They are = directly tied to their cover. And no one is forced to use any of them as = his value standard. People can go on reckoning an d accounting and pricing and contracting in value standards of their own = choice, which they do trust. Thus their prices are not blown up when = somebody else over-issues his tickets. - J. Z., n.d. & 2.4.97. \par FREE BANKING, PRICES & INFLATION: "Private money is sues would inevitably increase the circulation, being added to the state = paper money, and would thus increase prices." - Monetary freedom would = permit prices and wages to be expressed in relatively stable and freely = agreed upon value standards, rather tha n in the paper value "standards" of the State's forced and exclusive = currency. Thereby they would become relatively stable or at least = independent of the government's inflationary or deflationary policies. = It would also lead to a refusal or discounting of=20 t he government's paper currency, now reckoned in competitive and more = stable value units, in which prices and wages are marked out. Thereby = the value of the circulation of state paper money would be reduced, = reckoned in these relatively stable and optional =20 value units. The better and competitively issued money would take its = place. But it could increase the total circulation only to its optimum - = not to the potential of the printing presses, precisely because it would = be optional, i.e. refusable, and market - rated, too. Upon depreciation the depreciated issues would be discounted = or refused and thus could not increase the circulation and they could = not increase the prices and wages that are still marked in relatively = stable value units. Only reckoned in the d e preciated, discounted and widely refused paper currency would they be = increased. But no one would be forced to reckon in it - except the = issuer, who should still have to take it at par from anyone, any time. - = J. Z., 24.3.97. - This means that seeming ove r -issues, that are still covered by his credits and goods and service = supply capacity, and expressed in discounts of the exchange media issued = by him, would rapidly disappear, by these issues being cheaply bought by = those who owe him money and those who ca n and want to purchase the goods and services that he has to offer. In = all these cases he could and would have to accept his notes at par. Thus = the discounted notes and with them their discount would tend to rapidly = disappear. - J.Z., 30.8.02. \par FREE BANKING, LOCAL CURRENCY, INFLATION & FIAT MONEY: A local bank could conceivably = flood a local region with unbacked fiat currency.... But these do not = last very long. People discount the value of these fiat bills, or else = make a run on the bank vaults." - Gary No r th, THE INDIAN LIBERTARIAN, Aug. 15, 1971. -One cannot "flood" a local = circulation with one's own currency when one depends upon voluntary = acceptance, acceptance at par and on the actions of one's competitors, = too. Fiat money that can be refused or discou n ted is, obviously, not fiat money. What he meant was probably money not = redeemable in rare metals. But if it is not redeemable in rare metals = then nobody will bother to make a run on the bank's vaults, either. If = it is redeemable in local goods, services=20 a nd labour then any run upon these would be very welcome. - Any = competitively issued local note issue would, right from the beginning, = have to find voluntary acceptors. And to find many of these when people = are used to other means of exchange and are suffi c iently supplied with them, would be difficult to impossible. He should = also have clearly stated that people can only discount a local currency = if it is not legal tender. And if it is not legal tender, then it is not = really a "fiat" currency. He wrongly as s umes that the issuer must redeem or ought to be able to redeem his notes = with rare metals and that every other note issue, even when every note = would be tenfold covered by ready for sale goods, services and labour, = as well as by short-term debt certificat es of borrowers, would be mere "fiat money". - J. Z., 2.4.97. See: RUNS, = REDEMPTION IN RARE METALS, GOLD STANDARDS, GOLD CERTIFICATES, = BANKRUPTCIES, REFLUX, COVER. \par FREEZE: A freeze of all wages and prices would stop inflation. - = Popular opinion. - It would=20 not stop the note printing presses. Only the abolition of the issue = monopoly and the legal tender for monopoly money could stop the note = printing presses for such money. Freeze the government note printing = presses, and end rather than apply legal tender l e gislation and the note issue monopoly. Then prices can no longer be = inflated by the forced issue, acceptance and value of depreciating money = and prices will no longer have to be expressed in it or paid for in it. = Allow the market to reject bad money and a c cept good monies instead. Otherwise the bad money would force not only = the good monies from the market but would, finally, finally goods, = services and labour from the open market and force them into the = underground or black market. Price control has been=20 t ried, in vain, for over 4,000 years. What makes you believe that it = could work now? Do you believe in miracles? Do you believe that = legislators and policemen can perform miracles? Do you believe also in = whipping waves to make them subside, like King Canut e did? (If he did not merely want to demonstrate the futility of all = such attempts.) - J. Z., 2.4.97. See: PRICE CONTROL. \par FULL EMPLOYMENT & SACRIFICES: Full employment requires sacrifices. = It can only be achieved by slow inflation. This is the sacrifice or=20 lesser evil that has to be chosen. - Popular opinion. - The only = sacrifice that is required to achieve full employment is that of the = prejudices, errors and myths of monetary despotism. - This reminds me = of the bachelor who set fire to his house in order =20 to get warm, when his heater did not function. - It also reminds me of = the ancient Egyptian, Soviet and Nazi approach to full employment: They = achieved it by forced labour or slavery, conscription, oppressive and = exploitative taxation, confiscation etc. S ome people are still foolish enough to praise them for the "successes" = of their methods. - J. Z., n.d. & 2.4.97. \par FULL EMPLOYMENT THROUGH SLOW & FIXED INFLATION: No more than 3 - = 5% annual inflation are required to achieve full employment - and this = is an a cceptable sacrifice. - Popular opinion. - This has been tried, over and = over again, for decades, and unemployment of at least some per cent = still continued - while the currencies were more and more depreciated = and reduced to a small fraction of their form e r value, with value standard reckoning and long-term private investments = destroyed rather than protected. - Will such false employment policies = also be pursued, in spite of all evidence against it, like religious = dogmas, like price control for over 4,000=20 y ears? - Full employment does not require any sacrifices. It need not = cost anything. It can provide surpluses, extra wages, sales and profits = right away - if only the market is set free in every sphere, especially = in the monetary and financial sphere. Exch a nges of services labour and goods for services, labour and goods - do = not have to be promoted and stimulated. If only set quite free then they = have enough internal and natural stimulants and incentives, also = safeguards and warnings and alternative options . No inflation of forced and exclusive currencies does prevent all = unemployment nor can it prevent (from establishing by itself) some = degrees of unemployment, especially obvious in the later stages, that of = a galloping inflation, or a large degree of unemp l oyment in a stagflation. In Russia today, in spite of an inflation of = hundreds of per cent p.a., the government is still in arrears of wage = and salary payments for months. Sooner or later, as a result of that, it = will either be deserted by most of its ser v ants or even these servants will rebel against it. Sacrificing others, = en mass, without their explicit consent, for what you perceive to be the = public good, is never a rightful or efficient solution to any problem. = Governments have destroyed the lives and =20 properties of hundreds of millions in this century, through their = monetary despotism and its consequences: wars, revolutions, civil wars = and terrorism. It's high time to end their kind of "full employment" = policies and to finally begin on the monetary and financial freedom path to full employment. At least those willing to = risk entering it, with their lives, property, services and labour, = should not longer be obstructed by governmental monetary and financial = "policies". - J. Z., 2.4.97. \par FULL EMPLOYMENT: Inf lation is the result of full employment policies. - Popular opinion. - = That may be the "good" intention of "full employment policies" by = governments - but, alas, never the result. Perhaps we should be grateful = that government fails in this as in everythin g else. Otherwise it would have at least this leg to stand on or could, = to that extent, be intellectually defended. - The tiny kernel of truth = in the assertion is the "theory" of Keynes that demands a slow inflation = to promote full employment. When this is realized then this means that inflation is the result of inflation. A = very good "explanation" that! - J. Z., n.d. & 2.4.97. \par GENERAL PRICE LEVEL: "The general price level should be stabilised. = When there are goods shortages one must reduce the circulation,=20 when there are surpluses, one must increase it." - Widespread opinion. - = The general price level is not of importance to the individual consumer = and producer. His particular price level is. And he will not be happy = when his transactions with his customers are forcefully interfered with because the transactions between others = have changed. Under monetary freedom this kind of monetary despotism = would also be "outlawed" (no longer practised) - for all but its = voluntary victims. - J. Z., 24.3.97.=20 \par GOLD DISCOVER IES & INFLATION: Back in the time of the autonomous gold standard no one = would have blamed John Sutter for starting the 1849 California gold = rush. Still economists agree that the mid-century inflation of world = prices had to be attributed to the burst of=20 g old mining in California and Australia. The price rise after the turn of = the century had to be attributed to Klondike and South African gold = discoveries. - Dr.Paul A. Samuelson, THE NATIONAL TIMES, 26.4.71. - A = very popular error this! - This easy "expla n ation" has been parroted for over a century by people who never closely = watched the development of prices, expressed in gold weight units, over = the decades. The gold discoveries were not only followed by great price = increases but also by long periods of g r eat price decreases, without gold suddenly disappearing from the Earth. = Other explanations of the prices rises that did occur, e.g. bad = harvests, natural catastrophes, wars and inflationary policies by = governments, are simply ignored by such people. See e . g. OTTO SCHMITZ, Die Bewegung der Warenpreise in Deutschland von 1851 = bis 1902, Berlin, 1903, Franz Siemenroth, 443pp plus a large table. This = book was very much recommended by Ulrich von Beckerath. Once I learned = one of its gold price statistics by heart . (I have not yet got around to microfiche it as well. - J.Z., 4.9.02.) = There was no gold weight unit price inflation corresponding to the = additional gold production. Nearly 150 years later and after enormous = further gold production, prices expressed in go l d weight units have, probably, in most cases, not risen at all and in = some cases fallen. E.g., an alarm clock costs probably less in grams of = gold now than it did 150 years ago. A pencil, likewise, and a can of = beans. But the governments' paper money pric es have risen, almost always, sooner or later, in proportion to its = "production" of additional paper money. - J. Z.,2.4.97. \par GOLD PRODUCTION & INFLATION: Gold production leads to inflation. - = Popular opinion. - One might as well assert that steel production or kwh production leads to inflation. - To assert that, especially = decades after the classical gold standard was abolished and when during = most inflations there were severe penalties upon the possession and = smuggling of gold, is absurd. - The current gol d production is always only a small fraction of the total accumulated = gold. Moreover, the total gold treasure tends to increase slower than = general productivity and population. In other words, the per head and = per unit of other goods equivalent in gold wei g ht units tends to decrease rather than to decrease. If there were no = paper money inflation we would see decreases rather than increases in = the gold weight unit prices of goods, while services and labour, due to = higher capital investments per head and tech n ical, managerial and scientific advances, would be increased in gold = weight units and purchasing power towards other goods. The gold = "inflation" effect is entirely imaginary. It is an unjustified put-down = or slander by upholders of monetary despotism. The y can't produce anything better, so the malign gold. The ever increasing = use of gold in industry and arts would alone see to it that the value of = gold would not decline. We do also bury more and more of the gold = production with the teeth of our dead. - J.=20 Z., 2.4.97. \par GOVERNMENTS AS INFLATION FIGHTERS: Governments should fight = inflation. - Popular opinion. - "... the control of inflation and cost = of living rises a job for the Federal Government" - said the Queensland = Premier Mr. Bjoelke-Petersen. - The buck=20 should, indeed, be passed to the federal government and its responsible = federal institution, the central bank, the Federal Reserve System in the = U.S., the Bank of England in the U.K., the Bundesbank inGermany, the = Reserve Bank in Australia etc. These inst i tutions would not need to fight inflation if they were not causing it in = the first place. And once it has happened, it cannot be fought, and = defeated and reversed. At most governments can slow it down and end it = temporarily. They cannot restore the value=20 of a currency which they have depreciated. - To entrust this task to = monetary despots, who caused the problem in the first place, is like = asking criminals and gangster leaders to fight and control crime. - J. = Z., 2.4.97. \par GREED, PRICE-MAKING, PROFITEERING, W EALTH & INFLATION: The present "attacks" on inflation are not directed = in any way against the greedy among the price-makers. These are people = in the community who set their prices by "WHAT THE TRAFFIC WILL BEAR" = rather than by reference to their real cost s ... Inflation is a measure of the greed of some price-makers. The next = step is to identify the greedy among the price-makers. The most ready = identification is by their rapid increase in wealth. - Popular opinion = in some pop journal. - If the "greed" were=20 d irected towards some sound alternative and competitive currencies, = honest money would long ago have driven out dishonest, exclusive and = forced currencies. No matter how greedy some supposed "price-makers" = are, they cannot, between them, acquire more curre n cy than the government's central bank provides. Otherwise, each of them = might demand more for his output than the total note circulation. = Obviously, such amounts could not be paid to everybody who demands as = much, whether he is an employer or a greedy uni o nist. Only nominally can greedy price demands be satisfied - by flooding = the market with legal tender currency. The force of the greed of = consumers is also underestimated. They tend to look around for the = cheapest or best offers and to boycott those who c harge excessively for goods and services that are no better than those = of their competitors. - J. Z., 2.4.97. \par GRESHAM'S LAW: Bad money drives out the good. - Pop version of this = law. - Yes, if the bad money is privileged, i.e. an exclusive currency = and a fo rced one through its legal tender, with compulsory acceptance at a = coercive and fictitious value. - I, too, could cause an inflation if my = play money were turned into the country's exclusive currency and would = be given a forced value. Under freedom the co n trary is true. The good money would be readily accepted. The bad money = would be fast rejected and thus the good money would drive out the bad = or, the potential acceptors would simply not allow much bad money it = into circulation or not for long. And they w o uld hold its issuers responsible with all their earthly possessions and = with their personal liberty. - The moral system, here, too, is the most = beneficial one. And the immoral one is self-defeating via inflation, = unemployment, depressions, poverty, stagfl ation and ultimate bankruptcy even revolutions, putsches, military = uprisings and wars. - J. Z., n.d. & 2.4.97.=20 \par HARD WORK OR EVEN HARDER WORK, MORE PRODUCTIVITY, MORE SAVINGS & = INVESTMENTS & LESS CONSUMER SPENDING ARE THE BEST MEANS TO FIGHT = INFLATION: Pop ular opinion. - As experience has shown, one can increase the money = circulation a billion-fold. Can one also, in the same period, work a = billion times as hard or productively, in all spheres of the economy? - = Why should I work even harder to give the infl a ted currency, issued by someone else, in this case "my" government, some = more purchasing power? Why should government scrip or chits have any = purchasing power at all towards my own goods, services and labour? Why = should I not be free to out-compete the go v ernment's depreciated or credit-restricted currency - by my own note = issues or clearing certificates within my sphere of payments and = receipts? - Why should one work harder and not be paid more, not even in = depreciated currency? Even if, now and then, one ' s wages are somehow adapted to the inflation that has taken already = taken place, in the recent past, one would have lost out in purchasing = power up to the time of the newly indexed wage settlement. Consumer = prices race ahead while wages limp behind. And n e ither the governmental arbitration process nor its CPI can be relied = upon to be just and fair to all concerned, even on day one of new and = imposed new wage "agreement" or "settlement" (which all too often and = usually intentionally, excludes any value-pres e rving clauses). - Harder work and inflation adjustment of wages, now and = then, would not help pensioners on a fixed nominal pension, either, = i.e., which is payable at par in depreciated paper money. Nor would it = help other medium or long term creditors, f o bbed off with depreciated paper money, destroying much of their rightful = property claims. Just allow all producers, traders and employees to = contract in sound alternative currencies of their own and to boycott or = reject or ignore that of the governments=20 a ltogether. Let the governments try to work hard to give their paper some = work value if they can. I doubt that they could. We are not the slaves = or serfs or debtors of governments, or their central banks, although = they try to turn us into such or treat us=20 a s such. - Conveniently overlooked here is also the fact or expectation = that, due to inflation, full employment does, supposedly, occur, i.e. = that all of the nation does work harder or more in the average. Does = this stop inflation? - When such nonsense is =20 uttered, again and again, mostly in the mass media, the mass media fail = to counter it with any or enough truths on the subject, i.e. they fail = in their enlightenment role. - J. Z., 2. 4. 97. - See: WORK, = PRODUCTIVITY, LABOUR, DISCIPLINE, RESTRAINTS, SPEND I NG, GOVERNMENT SPENDING, SAVINGS, INVESTMENTS, INFLATION. - Not only = monetary fallacies are still popular but even as primitive and obviously = flawed notions as: "Buy Australian" or "Buy American!" - as if such = advice, if followed, could achieve additional sales and jobs for all. - J. Z., 2. 9. 02. \par HEDGING & INFLATION: The best one can do against inflation is to = privately hedge one's fortune or income against it, by e.g. going into a = partnership, buying land or shares instead of nominal and fixed income = secu rities (payable in depreciated legal tender paper money) or by buying = gold or silver or other non-perishable or long lasting goods and storing = them safely. One might also go into debt, preferably on long terms, so = that, in essence, one becomes enabled to=20 c heat one's own creditors, including the government, when the loans = become due. - Popular opinion, even the opinion of opinion makers like = Harry Brown, Ralph Borsodi etc. - Indeed, one can try to minimise the = effects of the inflation of a government's lega l tender upon one's own affairs. But one can still not escape many = general consequences of inflation, e.g. the difficulty to obtain credits = on long terms, the high interest rates one has to pay, the effects of = price controls and the rationing it ultimately =20 brings. Moreover, in many countries some or all hedging methods are = outlawed or punitively taxed if uncovered. Under German law, every wage = settlement paid otherwise than in governmental legal tender is ignored = and the already paid employee can demand pay m ent again, in legal tender. Gold transactions have often been penalised, = sometimes with death, and so have private foreign exchange transactions = that were not government licensed. One finds oneself in the same = position as e.g. a deserter or conscientious=20 o bjector in times of war. One is not free but rather hunted or = incarcerated and in some cases killed for refusing to participate in = governmentally organized mass slaughters. Massive disobedience and = desertion, armed and organized, with rightful aims and me thods, is another matter. - J. Z., 2. 4.97. \par HIRE PURCHASE AGREEMENTS & INFLATION: The finance houses are a key = factor in the level of sales in the consumer durable fields such as = motor vehicles and household appliances. The growth of hire purchase and = spend ing on durables played a major part in the previous inflationary booms = in the 1950s. - THE AUSTRALIAN, 11.2.71. - The spread of hire purchase = agreements indicate rather a low purchasing power among the consumers, = who cannot afford to pay cash. - On the on e side it increases for them the total purchase price by fees and = interest charges. On the other hand, as debtors, they benefit from any = inflation that takes place during their repayment period, which makes = the instalments easier for them to pay. And durin g stagflations like the present, we have cases where desperate sellers = offer their goods at discount prices, on no deposit, with the first = instalments months away and interest free for 6 - 12 months. So that in = these cases even the nominal purchase price i s not increased but, rather undercut and zero interest credits are = offered. Thus, from the goods side, the prices are not inflated but, = through many forced sales, even when paid for interest free and on = instalments only, rather deflated. - Like any other c r edit and debt arrangements, hire purchase agreements rather suffer under = inflation, deflation and stagflation than benefit from them or cause or = increase them. - Almost everyone and everything is blamed except the = real culprits, wrong institutions and wro ng monetary policies. - J. Z., 2. 4. 97. \par IMMIGRATION CAUSES INFLATION: So, if the white man would not have = come to Australia then the Aborigines would have had a stable currency? = - Does every deportation of illegal immigrants, regardless of how = productive t hey had been employed or could be employed, increase the value of the = Australian dollar? Does every illegal or illegal immigrant decrease it? = - The mere assertion of a causal connection cannot cause or substitute = for a causal connection. Under monetary fr e edom we could multiply the number of immigrants and employed - and still = enjoy stable competing currencies. Under monetary despotism, no matter = what is tried otherwise, we have stable and also insufficient currencies = only for short periods; never full emp loyment, boom economies and stable currencies for long. The cause is = otherwise and so is the cure. - J. Z., 2.4.97. \par INCOMES POLICY & INFLATION: We need a sensible incomes policy = approach. - Popular opinion. - The only rightful and sensible policy is = to let=20 the productive individual chose his job, trade or profession, the wage = rate or prices offered to him or by him and the number of hours he is = willing to work in that job, trade or profession, and the form of = payment in a stable currency that is acceptable=20 t o him, useful to him and measured in a value standard that he has = reasons to trust. All other incomes policies set by third. parties are = wrong and dictatorial, part of a centralised and planned, i.e., = centrally mismanaged economy, or part of the utopia of state socialism or bureaucratic socialism or state capitalism. - J. Z., = n.d. & 2.4.97. - See: WAGE CONTROLS.=20 \par INCOMES POLICY: We need therefore something new, an "incomes = policy", one that will help us resolve better this vexing conflict = between full emplo yment and price stability. ...Examples of incomes policies range from = the direct wage-price controls and freezes of wartime down to mere moral = persuasion and verbal wrist slaps from the President. Without = recommending outright wage-price controls I do urg e upon the Administration an activist incomes policy - that is, a policy = in which the Government, at times when labour markets are not slack and = demand-pull inflation is not excessive, supplements its fiscal and = monetary policies by actions that discourage =20 price-tag and wage rate increases. - I shall not pretend here that = modern economic science knows how to prescribe an incomes policy that a = jury of informed people can agree will work well... Alas, study of = foreign examples does not tell us how to solve th e problem. - Dr. Paul A. Samuelson, THE NATIONAL TIMES, 26.1.71. - The = only" incomes policy" that is rightful and useful is that agreed upon = between individuals in their choices of careers and jobs and their = employers, those of tradesmen and professionals=20 a nd the customers for their services, that of e.g. retailers and their = buyers, the individual consumers. Each consumer with one dollar to spend = has a dollar vote on the market that expresses his incomes policy for = all those who directly or indirectly suppl y what he wants. The experts and planners do not like them to have this = consumer sovereignty and monopolistically inclined employers do no love = it, either. Any income policies imposed upon employers or employees or = self-employed, by any third parties, woul d represent either unearned incomes or coercive transfer payments or = robberies to make these possible. - J. Z., 2.4.97. \par INDEX CURRENCY AND PRICE LEVEL STABILITY: "We need a currency = stabilised by a price index at a particular stable price level." - = Popular=20 opinion. - What this really means is that some people do believe that = they would benefit from such an index currency and thus they want all = people to adopt it. While morally they do have the right to adopt any of = a possible hundreds if not thousands of di f ferent index standards for themselves, they have no right at all to = force their preferred index standard or any index standard at all upon = any dissenting people, not matter how strongly they believe that others = would "need" it and ought to be included in=20 t heir "we". - Freedom of choice for value standards, too. Indeed, most = government currencies are somewhat managed, too, under the pretence that = governments can and will provide stability in this sphere. What can be = achieved in this political way can be see n by the more or less rapid depreciation of almost all paper currencies = in this and former centuries. Stability can be best provided for when = neither bad nor even sound currencies are not granted any monopoly or = legal tender powers - except the natural leg al tender against their issuer, and when all possible, desired and = practicable alternative private enterprise and cooperative currencies = can freely compete even against the supposedly best one. - J. Z., = 24.3.97. \par INFLATION & CAPITALISM: "Capitalism drives pr ices up." - Popular opinion. Compare: GREED, INTEREST, PROFIT, MONOPOLY. = - In unjust discrimination leftist people tend to blame capitalism for = almost everything and state socialism for almost nothing. What is true = is that it drives up e.g. wages for skil l ed labour to their highest level, precisely by equipping it not only = with training but also with much capital. Only unskilled labour, = unwilling to learn enough, and easily and cheaply replaced by machines, = will have to satisfy itself with lower wages as a =20 result of a kind of referendum among the consumers, whose will is found = out by entrepreneurs. But even while it does increase wages of those = able and willing to handle advanced tools and machines, it is blamed for = paying starvation or exploitation wages.=20 T he fact that demand for labour is generally, quite artificially and = legally, limited by the note issue monopoly, remains widely ignored. By = developing markets and to the extent that it is really free (and this = requires monetary freedom, as well, which sta t ists are not willing to concede or promote) it does, indeed, achieve the = highest prices producers - including employees - can achieve on their = internal and the world market. But it does not allow them to charge = monopolistic high prices because it does not =20 permit legal monopolies but rather introduces maximum competition - = provided only it introduces monetary and financial freedom, too. Without = these it is an incomplete capitalism or a still restricted market. = Wherever its production is quite competitive, e . g. in the production of cheap nylon stockings, ball point pens and = digital watches, it has obviously driven prices down to their lowest = possible level, even when reckoned in already much depreciated paper = money. The latter indicates that capitalism is not fully operative but that statism still mismanages its forced and = monopolistic exchange medium and value standard. - J. Z., 24.3.97.=20 \par INFLATION & COMPULSORY SAVINGS: Some form of compulsory savings = would be an attractive alternative which would probably win public acceptance. - Colin Chapman, THE BULLETIN, 13.2.71. - When the = managers of the central bank have so mismanaged the money issue = entrusted to them, that the currency would be depreciated if everyone = fully spent what he has earned, then these mismana g ers and their supporters want to diminish the effectiveness of that = over-issue upon the price level by depriving those, who earned this = money, of its immediate use. Two wrongs do not make one right. - = Further, an over-issue has already occurred and has a l ready been somewhat expressed in nominally increased prices. To then = enforce savings by everybody, e.g. through the issue of forced loans, = would suddenly reduce the circulation and create a deflation. That could = have catastrophic rather than healing effec t s upon the economy for while individually fallen prices (due to = technological or agricultural progress), do encourage buying, generally = falling prices deter potential buyers from buying right now as much as = they could, in the expectation that prices will =20 fall further. - Furthermore, this proposal overlooks that through = financial despotism banks are already forced to deposit certain = percentages of all their deposits with the central bank and, moreover, = they are often and to a large extent forced to purchas e government insecurities. The same applies to many public authorities = and their savings and especially to superannuation and pension funds. In = all these cases the victims of these forced loans are later forced, as = taxpayers, to repay these loans to themse lves. And all such dishonesty is smugly called "public finance". - J. = Z., n.d. & 5.4.97. \par INFLATION & EXCHANGE RATES: "That inflation has taken place can be = best (or only) be seen in the foreign exchange rates. - A widespread = opinion this but one only partly true. Other central banks, as Keynesians or Friedmanites, might inflate = at the same rate. Only if they do not or against the currencies which = are not or not as much inflated, could the difference be seen. And = exchange rates are influenced by many other f a ctors, too. But generally it is true that when internally free market = rating is suppressed (through legal tender and the exclusive currency = status, that outlaws competing internal currencies), then external = exchange rates, against foreign currencies, wher e the internal legal tender does not apply, can and often do indicate = degrees of depreciation. But, e.g., a free official or unofficial gold = or silver market can do the same much faster and more accurately. So can = a selected basket of commodity prices. But why presume that the internal price control and monopoly for a currency = must continue? Why not abolish it and subject every currency to = competition and free pricing and maximum publicity and let it survive = only on its merits? - J. Z., 24.3.97. \par INFLATION &=20 FEVER: Inflation is a type of fever. - Popular opinion. - It is = certainly indicative of a disease in a currency, the disease of monetary = despotism. One might compare this fever to the action of government = injecting harmful germs into healthy blood streams =20 and thereby artificially inducing a fever. But why grant any government = such abusable power? Usually, the term is used by culprits or their = apologists, to prevent people from looking at the real causes of = inflations. One might compare it to Mafia chieftai ns "explaining" a rise in crime with a rise in dishonesty in the general = population. - See : VIRUS. - J. Z., n.d. & 2.4.97. \par INFLATION & GOVERNMENT SPENDING: Inflation could be stopped by a = reduction of government spending. - Popular opinion. - Government sp ending is non-inflationary as long as it remains within its tax, fees = and loan returns. Only if "spending" is done with newly printed or = coined money, money that is an exclusive and forced currency, due to the = issue monopoly and legal tender, does inflati o n come it and can it result. "Spending" is too good a world for legal = imposition of depreciated money upon all creditors and the enforced and = exclusive circulation of depreciated notes - among people not allowed to = provide honest money for themselves and=20 under no individual or moral obligation to support any wildly spending = government and its budget. - J. Z., 2.4.97. \par INFLATION & GOVERNMENTS: The tenor of most of the submissions was = the admission that there was an inflationary problem and that the = government should do something about it, ... - On industry submissions, THE = AUSTRALIAN, 11.2.71. - The offender is asked to go straight! But he is = left in power over an exclusive and forced currency that is not = criticised, not even doubted or questioned by industry =20 and agriculture and business representatives, whose output and services = are required to give value to any currency and who should rather be in = charge of currencies issued by themselves than expect government = gangsters or "representatives" to run a single=20 currency rightfully, honestly and efficiently for all - although during = all of history that was only done very rarely by them and then, usually, = not for long. - J. Z., 2.4.97. \par INFLATION & HIGH PRICES: "Inflation is caused by high prices. - = Popular opinion.=20 - The reverse is true, even when one reckons in an inflated paper = standard. If the standard of value is sound, then prices remain the same = and an inflated currency becomes depreciated against it, i.e. it is = either refused or accepted only at a correspondi n g discount, while all other optional means of exchange, using the sound = value standard, are still accepted at par. Then the cause and effect = relationship in these cases will become clear very soon. Under an = exclusive and forced currency it remains obscure d for most people, for all too long and for some forever. - J. Z., = 24.3.97.=20 \par INFLATION & LEGAL TENDER & THE ISSUE MONOPOLY: Inflation can only = happen when you or somebody else has the power to legally force all his = tokens upon all others in their country, a t their nominal value, regardless of how valuable or valueless they = actually are. It can never happen when each is only at liberty to issue = tokens which only oblige himself - and his associates - to accept them = at any time at par from anyone, in payment o f debts owed to him or them, or for any of his goods, services or labour = offers, regardless of any discount which they may have suffered in = general circulation. Each will tend to severely limit the total amount = of commitments to supply others at any time t h ey demand it, and most potential acceptors will severely limit the = amounts of such commitments by others, unless they are very convenient = local currencies, with an obvious and believable local shop-foundation. = Even then, they would not accept local curren c y, in most cases, much beyond their immediate or near future = requirements. If they went beyond that then they would carefully check = out the exchange rates of this local currency, perhaps even its rating = in futures dealings and they might unload their exc e ss local currency holding fast at a local currency exchange office, like = tourist do with local national currencies that they do no longer need. = In other words, local currencies would not tend to be over issued and = depreciated. If they were, they would soo n disappear from circulation, driven out by better or excellent ones. - = J. Z., 5.4.97. \par INFLATION & PAYMENT DIFFICULTIES: Without inflation there would be = payment difficulties in the payment of wages and pensions. - Popular = opinion. - With inflation there ar e also payment difficulties in the payment of wages and pensions. Wage = and pension recipients are only partly paid, by being paid in = depreciated money and, since prices tend to race ahead of rapid = inflationary money issues, money is then often so short th a t the government finds it difficult to pay its suppliers and employees. = There is much historical evidence for the reality of such payment = difficulties in spite of or because of monetary inflation. - Strikes = multiply during times of inflation, indicating t h at the ability of employers is not so much increased by inflations that = they can readily give in to any wage demands. - Nor should one assume = that all sectors of an economy are equally supplied with the inflated = currency. The government sector and some pr i vileged private sectors may be over-supplied while, at the same time, = other sectors may be under-supplied. Price adaptations to inflations and = deflations are neither instantaneously nor completely evenly and = proportionate. Both introduce enormous artifici al distortions and miscalculations. - J. Z., 2. 4. 97. \par INFLATION & PRICES: Inflation is caused by excessive prices. - = Popular opinion - Yes, in the same way as fever is caused by a = thermometer indicating a high body temperature! - J. Z., n.d. \par INFLATION & TA XATION: The most effective thing that Mr. Gordon (then Prime Minister of = Australia) could do now to contain the inflation bogy would be to cancel = or suspend the personal income tax concessions he granted in the August = budget. - T. M. Fitzgerald, THE AUSTR A LIAN, 22.1.71. - First the victimised citizens are taxed by the = government-caused inflation and then, when in their only defence left to = them against inflation, they have nominally increased their incomes, = expressed in the depreciated, forced and exclusiv e government paper money, they are to be taxed again, to counter this = inflation! And the politicians have the cheek to call it a "concession" = when they do not collect as much in tributes from you as they did = before! - The only kernel of truth in the above=20 s tatement is that of tax foundation, which Adam Smith did also recognize = in at least one passage of his writings on money in The Wealth of = Nations. A governments optional paper money issues can, indeed, be = balanced and limited in amount by its taxation. Su c h tax foundation money should have legal tender only towards its issuer = and it should also use a sounder value standard than a managed and = usually mismanaged paper standard. Taxes and tax foundation money should = be expressed e.g. in gold weight units and=20 t he government should have to accept its own tax foundation certificates = at their face value even when in general circulation they have got a = discount corresponding to their over-issue. That would reduce the = "spending" power of the government and reduce th e tax burden for the tax victims. Moreover, without legal tender power = and the issue monopoly, government paper could ultimately be altogether = refused in general circulation, so that at last even government = employees would no longer be prepared to accept i t . The more and more worthless bucks should be passed back to the issuer. = Pay to Caesar what is Caesar's! Do not offer him your own honest = currencies in payment- and do not let your incomes, paid in these = currencies, be confiscated by him! Rather go on a w ell organized tax strike, one that includes the total refusal to accept = any government paper money. - J. Z., 2.4.97. \par INFLATION & VOLUNTARY RESTRAINTS: Voluntary restraints by private = industry in new investments in plant, machinery and new office blocks = coul d curb inflation. - Pop & "expert" opinion. - The ongoing inflation is a = strong incentive to borrow long term and invest this money by buying = capital values that preserve their value even during inflations and = then, finally, repaying these loans with infl ated paper money. The suggestion tackles effects, not causes. - Why not = discuss, instead, a voluntary restraint of the institutions of monetary = despotism and their activities - or their outlawry? - J. Z., n.d., = 6.4.97. \par INFLATION AN INFECTIVE VIRUS? Business and farm leaders would follow the union men to the White House within = the next few days to help plan a system of wage-and-price stabilisation = measures which, Mr. Nixon said yesterday, would ensure that "America is = not again inflicted by the virus of runa way inflation". - THE SYDNEY MORNING HERALD, 11.9.71. - Was he really as = stupid or dishonest or misinformed? - J. Z. - See: FEVER.=20 \par INFLATION FIGHTING : Inflation must be fought by various measures. = - Popular opinion. - Why create the legal preconditions fo r it in the first place and then maintain it for over a century? If one = does not introduce an evil or let it grow then one does not have to = fight it. - J. Z., n.d. - If you really want to fight inflation, its = cause, not its symptoms, repeal legal tender a n d the issue monopoly of the central bank and do not grant it any = regulatory and supervisory powers, either. At most it should be allowed = to run the government's monetary system, but only quite non-coercively, = competitively, with government paper money in=20 c irculation only upon whatever merits its voluntary customers would still = see in it. Without compulsory taxation and compulsory territorial State = membership only competing state paper currencies based on voluntary = contributions and their voluntary tax foun dations could remain. No governmental value standard should be granted = any monopoly over a whole territory and allits people any longer. Free = choice in currency and value standards, confining all bad issues to = voluntary victims only. - J. Z., 2.5.97. \par INFLAT ION IS A MATTER OF TOO MUCH MONEY CHASING TOO FEW GOODS. - Popular = opinion. - It would be more correct to say that the coercive and = exclusive money issues of others than the owners of goods, labour and = services, tend to wrongly chase the goods, services a n d labour, upon which they are not and cannot be rightly based and that = they prevent the owners of goods, and providers of services and labour = to issue just as many money token, based upon their goods, services and = labour, as are needed to sell all of them =20 easily, all the time, at market prices, as long as they are wanted. If = one does not make these distinctions between different forms of money, = i.e., especially the money of monetary despotism and the money of = monetary freedom then one will never understand =20 the cause of and cure for inflation. - Honest money doesn't have to = chase goods and services: it represents them. Exclusive currency that is = supplied by others one has to chase with one's goods and services. The = money of monetary freedom one can issue one s elf, based upon one's goods and services and accepts it for one's goods = and services. No chasing is involved. The goods and services are simply = its fundamental cover and redemption fund, its issue and reflux = guaranty. The goods and service side is automat i cally kept in balance with the money side, by the owners and traders of = goods and services themselves. Honest money has no other convertibility = or value or reflux option or foundation than being used in payment for = the assortment of goods, services and la b our upon which it is based, in any private or cooperative payment = community. But it can also be used to purchase gold, silver and platinum = on the markets for these rare metals. Owners of these rare metal = commodities could also issue certificates based upo n and redeemable in these products. But they should not imagine that = their issues could suffice to provide a substitute for all the monies = that could and should be issued based upon and redeemable in all other = daily and frequently wanted goods and services . - Monetary troubles arise only when honest monies are not allowed to = chase bad monies, when wanted goods, services and labour cannot be = turned into optional and market rated currency by their owners and = providers. - J. Z., 28.3.97, 30.8.02. \par INFLATION OUT=20 OF EXCESSIVE WAGE CLAIMS? Inflation arises out of excessive wage claims = of labourers. - Pop opinion. - This view is so superficial that it does = not even include salary claims of employees in the private and public = sector and the higher fee claims of trad e smen, professionals and of the professional con-men, the politicians. = And the supposedly unjustified prices of imagined "price-makers" are = left out, too! - If mere claims could lead to their satisfaction, = regardless of the supply of exchange media, then=20 a nd only then would such assertions be somewhat right. But such things = happen only in fairy tales. Real inflation has other causes - central = banking and legal tender or monetary despotism, i.e. the outlawry of = monetary freedom. No employer has an unlimited =20 wage fund to pay higher wages with. No employer, except the central = bank, has a note printing press, a money monopoly and legal tender = powers. No employer can say to the central bank: You must give me more = inflated paper money so that I can seemingly sati s fy their demands for higher nominal wages. Without the circulation being = further inflated by the central bank, the employer simply cannot pass on = higher wage demands to wholesalers and retailers - for, ultimately, the = employees themselves, as consumers, w o uld resist the higher prices resulting. Not only that, they could not = pay them at all, not even the former lower prices, when they had to be = laid off, in the expectation that at the higher costs, of higher wages, = many less goods could actually be sold. Go o ds do not have legal tender power for the consumers. The production and = trade in mere survival goods and services would go on, although reduced, = too. All the other production and exchanges, made uneconomical or = impossible, through excess wage and salary d e mands, would simply come to a stop. Anyone can price himself out of his = market. As a sovereign consumer he does this to others, all the time, = who try to extort too high prices from him. He goes, instead, to those = suppliers and their wholesalers and manufa c turers with lower costs, including lower wages, salaries and profits. = The free pricing system is a continuous referendum on "just" prices, = wages, salaries, fees and subscriptions etc. - However, to be really = free, it should also include free enterprise,=20 f ree trade and free pricing for optional, competing exchange media and = value standards. Workers and employees will not be fully emancipated = until they are monetarily emancipated, too. - Instead of striving for = nominal wage increases in the exclusive and fo r ced currency of monetary despotism, employees should contract for wages = and salaries that are expressed in sound alternative currencies, that do = preserve their purchasing power and do increase only with the = development of technology, science, of the econo m y and of individually increased higher productivity. And they should = strive for autonomous work group or cooperative production contracts = that would automatically increase their earnings in accordance with = their increased productivity. - The highest wages =20 were for a long time paid in the U.S. and perhaps they are still the = highest there now. But in the U.S. prices were often not higher but = lower. Not the hourly cost of labour is decisive but the labour cost per = unit produced. A very expensive labourer may, =20 due to extensive use of labour saving machinery and good management, = lead to a smaller percentage of labour costs in the total production = costs. In other countries or employments, much lower labour costs may = form a much higher percentage of the unit costs . - Real wage increases should be aimed for e.g. via productivity = increases (leading also to lower prices), sound currencies, free trade, = cooperative production, lower taxes etc. To strive for merely nominally = increased wages, paid for in the government's=20 i nflated currency, is absurd. Foolish wage demands are "satisfied" thus, = in foolish ways, with which only fools will remain content. - If the = government does not inflate its currency and thereby nominally increases = earnings and prices, what happens? Shoe r e pairers may e.g. double their wages or prices. Then, if their customers = were to go on to demand as many repairs from them as before, at the new = prices or wages (highly doubtful), then these customers would have to = reduce their demand for other goods, whos e prices would correspondingly fall. Thus the general price level would = remain unchanged although the shoe repairers would then have gained a = larger share of the total earnings - at the expense of others. But the = most likely result would be a reduction of=20 t he turnover and thereby the total income of the shoe repairers and an = increase in the sale of new, cheap and factory produced and disposable = shoes, which can be produced by unskilled labourers and which are never = repaired but merely thrown out. To that ex tent their increased wage claims would make the shoemakers unemployed. = That has actually happened, to a large extent, not only to shoemakers = but e.g. to plasterers, too. -J. Z., n.d. & 6.4.97. \par INFLATION PSYCHOLOGY: The most important need is to check the de velopment of an inflation psychology, of a tendency for people to = express a growing distrust for money by accelerated spending and by a = chronic process of industrial turbulence in search of wage increases to = offset the dollar's falling value. This would b e a self-reinforcing process: industrial turbulence and wage hosts = promote the deterioration of money's value, which provokes the wage = demands. - The psychological type is the third and worst form of = inflationary pressure, the other two forces in the spira l being the cost-push and the demand-pull types. - T. M. Fitzgerald, THE = AUSTRALIAN, 22.1.71. - In other words, he wants to prevent people from = engaging in the only defensive measures that are left to them against = monetary despotism and he slanders it as a =20 mere "inflation psychology". Any inflating government has really earned = any degree of distrust against its monetary policy. A monetary = revolution against it would be morally and economically justified. Here, = too, the defensive measures are accused of bein g aggressive or inflationary by themselves. He did not demand a stop to = the note printing presses, the abolition of the privileges of the = Reserve Bank and of legal tender for its exclusive currency and of the = monopoly for the issue of notes. - J. Z., 2.4.9 7 . - Unfortunately, only such "experts" find it easy to get their flawed = and misleading views expressed in most of the mass media, even when no = formal censorship has been introduced. Their ignorance and prejudices, = backed up by those of the public, prevent monetary and financial enlightenment even more so than a formal = governmental censorship would. - J. Z., 2.9.02. \par INFLATION PSYCHOSIS & CENTRAL BANKING CONTROLS: "Tighter and more = painful central banking controls are required to eradicate a nation's = inflatio n psychosis." - Pop or even "expert" opinion. - That "psychosis" is the = all too well founded distrust against any government forced and = exclusive paper currency over the last few decades. Without that = monetary despotism and its catastrophic results, cripp ling whole economies and impoverishing all their people, it would not = exist. More of the same does not offer a way out but merely one into = further troubles. Monetary freedom instead of monetary despotism! - J. = Z., 23.3.97. \par INFLATION, A LESSER EVIL? - Inflat ion is the lesser evil compared with deflation, depression and mass = unemployment and mass bankruptcies. - Should we argue at length which is = the greatest evil among cancer, heart disease, AIDS and tuberculosis? Or = should we try to resist or prevent all of =20 them? Inflation is not the opposite to deflation, since it also has = deflationary effect sand can be mixed with deflation and unemployment in = stagflations. Deflations and mass unemployment can also, under monetary = despotism, be used as excuses for permanen t inflations. - J. Z., 2. 4. 97. \par INFLATION, A NEBULOUS ECONOMIC MECHANISM? - In reality it is a = quite simple mechanism but this is hidden in a dense fog of errors, = wrong premises, myths, fallacies, prejudices, misleading terms, wrong = conclusions, false obse rvations etc. - I would rather say that it is an over-issue of money = that is made possible through legal tender and the issue monopoly - = beyond the quantity of money that would be readily accepted on a free = market, and this at par with its nominal value,=20 e xpressed in a sound value standard, if the issue monopoly and legal = tender in general circulation (apart from the natural, economical and = moral one towards its issuer) were absent. - That is my version of = Ulrich von Beckerath's definition. - J. Z., 2.4.9 7. \par INFLATION, CAN IT BE PREVENTED OR IS IT A NATURAL CATASTROPHE? - It = is impossible to prevent inflation altogether. One can only fight some = of its consequences. It is like an earthquake or other natural = catastrophe. - Popular opinion. - So the real culpri ts of this result of monetary despotism would have us believe. They do = not want to be blamed for their flawed and despotic payment and value = measurement system and their actions within it. At most they are = prepared to "reform" their system of monetary des p otism somewhat but never to abolish it. - Without legal tender and the = issue monopoly one cannot inflate a currency, not even with the worst = intentions. For then anyone is free to discount an inflated currency or = to reject it altogether while going on to=20 r eckon and account all one's prices and contracts in sound alternative = value standards. - If inflation is like a natural catastrophe, = inevitable, then how come there were some prolonged periods of stable = currency, e.g. in Prussia, from the Napoleonic wars to WW II? - J. Z., n.d. & 3.4.97. \par INFLATION, CAUSE OR GUILT? WHO OR WHAT IS TO BLAME? Who is to blame = for inflation? - This or that group of claimants, with their = inflationary demands. This or that group of conspirators, financiers, = speculators, unionists, shopkeepers etc. - Popular opinion. - The question should not be "who?" = but "what?" - While the few who can, under monetary despotism, initiate = the process, do have motives, these are not the causes which make = inflation possible. I may have a motive to c a use an inflation but I do not have the power to do so. Neither have you. = I possess neither an issue monopoly for my notes, nor do they have legal = tender power, like those of the central bank. Nor does any bank or = financial institution, subordinated to mon e tary legislation and to the central bank has any such power. One should = not try to assign blame without referring at all to monetary legislation = and legalized institutions and "principles" of operation. - 7.4.97. - = Free people can only oblige themselves t o accept their own notes in payment for their goods, services or debts = owed to them, they cannot oblige others, who are not their debtors, to = accept these notes at all or to accept them at par with their nominal = value. Thus they cannot cause an inflation o f all prices, wages, salaries, fees, etc. that are reckoned and priced = in sound value standards and sound exchange media using such standards. = - J. Z., 4.9.02. \par INFLATION, COMPETITION & LOWER PRICES: Increased competition could = curb inflation, e.g. by legisl ation against restrictive trade practices and by lowering some high = tariff barriers. - Popular opinion. - This would not deal with monetary = inflation but merely with price increases due to goods shortages, in = these cases artificially caused goods shortage s. The correct name for high prices causes by the goods side is = "dearness", not inflation. - J. Z., n.d., 28.3.97. \par INFLATION, CURE OF INFLATION: Like the common cold there is no = guaranteed cure for inflation. - Mr. McMahon, quoted in THE SYDNEY = MORNING HERA LD, 12.6.l71. - McMahon was once federal treasurer and even prime = minister for Australia - and well represented wide-spread ignorance, = myths and prejudices in this sphere. One should rather say that, as for = the common cold and among orthodox doctors, ther e is no cure for commonness or monetary prejudices among treasurers and = prime ministers. On the contrary, to worst of all men, like scum, tend = to rise to the top. Only extremely ignorant and prejudiced voters would = consider such people as if they were fina n cial wizards and great leaders. - There is a guaranteed cure: Repeal or = effectively ignore legal tender and the issue monopoly of the central = bank and thus let good money drive out the bad. Emancipate all people = monetarily, who can be so emancipated. Then =20 at least their exchanges will not longer be distorted or rendered = difficult to impossible by inflations, deflations and stagflations. - = Only one thing is right about the above remark: Within a system of = financial despotism no cure is possible for its evil s . Landsberg, in Germany, after the great 1913-23 inflation, proposed = once a "gallows currency", under which the finance minister and the = director of the central bank would be sent to the gallows as soon as the = currency entrusted to them would be depreciat e d by a certain percentage, let us say 5%. But that is no more helpful = than saying that rulers should fight it out among themselves, in duels, = rather than conscripting and victimising millions of their subjects. = Those, whom the victims leave in power over=20 t hem, will continue to abuse these powers - with the sanction of the = victims. - This kind of monetary ignorance and prejudice is still so = prevalent that politicians at best promise to reduce inflation within = years to decades and not to abolish it and its p r econditions, immediately. - J. Z., n.d., 29.3.97. - They even manage to = speak openly of "inflation-targets" and are not instantly recalled, as = they should be, in the same way as they should be if they talked e.g. = about "mass murder targets" and "torture t argets" and "robbery targets". The latter they usually call "budget = estimates" and the former "Nuclear defence". - J. Z., 31.8.02. \par INFLATION, EXCESSIVE: Some people speak of acceptable and excessive = degrees of inflation as if not every manipulation of the s tandard of value would be excessive. A small sum stolen does still = amount to 100% theft and when a robber only gains a few dollars by = openly violating the property rights and physical security of others, = then it still amounts to a complete act of robbery . - One should also take into consideration what effect a small = percentage of annual inflation has upon all long term investments and = claims, like e.g. old age pension claims, payable in depreciated legal = tender. 40 years of a 2% annual inflation, can des t roy about 80% of the nominal value of a pension payable in paper = dollars. Moreover, inflation rates are not always made up in full, if at = all, by correspondingly increased interest rates. Sometimes at least = some interest rates are reduced by inflation to=20 negative interest rates. Thus, instead of premiums building up an old = age security capital, the value of that capital may be diminished, - = quite apart from the taxation robberies committed against old age = security funds. - J. Z., n. d., & 2.4.97. \par INFLATION, PRICES, PRICE MAKERS, PRICE SETTERS & GREED: Inflation is a measure of = the greed of those in the community who are in a position to set their = own prices for the goods or services they provide. - Popular opinion. - = Even world corporations shave not market =20 power to raise their price in the face of a slackening demand for their = products or of growing competition. The law of diminishing returns = applies even to monopolists. We buy less and less of their overpriced = products and services and more and more of sub s titute goods and services at lower prices. Trades, by their very nature, = are not deals or bargains in which one side is at liberty to set all the = conditions and gather all the advantages to itself, even though, = sometimes, a particular market may be more a seller's market than a buyer's market or more a buyer's market than a = seller's market. - J. Z., n.d. & 3.4.97. \par INFLATION, PROGRESSIVE INFLATION, GALLOPING INFLATION, LIMITED = INFLATION, CONTROL OF INFLATION: An inflation is not necessarily = progressive and=20 runs the full course towards almost complete depreciation. It can be = kept within certain bounds. - In spite of strong political pressures to = continue an inflation, once begun and to dispense and take larger and = larger doses of this "drug", to achieve the=20 s ame effect and in spite of the remaining deflationary pressures = demanding relief by further money issues, not all inflations have run = the full course. Many have been stopped before that. For instance, in = Germany, after 3 inflations in this century, the 4t h inflation, since 1948, has been kept mostly to low annual percentages = and, for some years even, no further inflation took place. Too many = remembered the past experiences with large scale inflations during and = after WW I, that by the Nazis and that by the =20 occupation forces, from 1945 - 1948. Alas, all too often inflations have = only been stopped or reduced at the price of a deflation, with mass = unemployment. The soft option, stopping it without causing even = temporary mass unemployment, is still held to be i m possible, even by most libertarians who are interested in at least = aspects of monetary freedom. I have shortly described that option in = PEACE PLANS 19B: The Soft Option: Monetary Freedom to Stop Inflation = without Causing Unemployment, 1976, 16 pp. It is o ne of the numerous topics still insufficiently discussed among = libertarians, in spite of their significance. -J. Z., 3.4.97. \par INFLATION, RATE OF INFLATION, SLOW INFLATION, STABILITY OF = CURRENCY: The economy is comparatively stable if price rises do not = excee d 4 % in any year. - Popular opinion. - It may be relatively stable, = when compared with rapid or galloping inflations taking place elsewhere = but it does not stabilise long term credit and debt relationships at = all. Imagine the disturbance in the market if =20 length, weight and volume measurements were reduced annually by 4%. Even = a 1% inflation could already destroy all too much of one's old age = insurance claim. This kind of policy is no more honest that the stance = of a thief who steals from many people only=20 s omething of little value every time, arguing that they won't notice it = or will not mind it. Those who watered down milk or fruit juice could = similarly argue: We do little harm. And many polluters would argue the = same. Especially those who disperse radioac tive substances and increase the radiation hazards or add poisonous = substances to our foods. - J. Z., 5.3.97. \par INFLATION, RATE OF INFLATION, STABILITY OF CURRENCY: So long as we = were not inflating as fast as the rest of the world we had no real cause = of alar m. - John Hallows, THE AUSTRALIAN, 12.2.72. - Assume that all the rest = of the world would be inflating at 1000% and we "only" at 100%. Would = this be no cause of alarm? - Do I exaggerate? "Retail prices skyrocketed = 20,000 % between 1945 &1 965". - NEWSWEEK , 5.8.68, on Indonesia. It continued: "The budget has been balanced and = inflation has been slowed down from a gallop to a canter of about 100% = per year." - Isn't it surprising how propagandist choice of words can = minimise the impact of facts upon man's "th inking" or opinions? - J. Z., 4. 4. 97. \par INFLATION, RATE OF INFLATION, TOLERABLE RATES? Inflation at an = annual rate of between 7 & 8% is simply politically intolerable. - Pop = opinion. - It might be, IF people had been used to currency stability = for a long ti me. Not otherwise. Politicians know better under present conditions, = where they themselves and their voters and those who voted against them, = are not yet monetarily emancipated and have no right to vote in this = sphere. Thus they do go on inflating beyond=20 t hese already catastrophic inflation rates - and remain safely in office, = nevertheless, and can even expect to be praised for their nominally = higher and higher" spending" of what does not rightfully belong to them = and has not been voluntarily and individua l ly entrusted to them. - It all depends on how much the politicians have = hoodwinked those they are supposed to represent. A fool and his money = are soon parted. The money of people who monetarily remain fools will = soon be depreciated by those who have the l e gal monopoly and power to do so and tend to do so in their own short = term interest. When someone objects then, with Keynes, they might reply: = "In the long run all of us are dead", or: "Let posterity take care of = itself", or like Louis XIV: The great flood may come after us. I don't care! (Apr\'e9 s nois la deluge!) During the 1913-23 great inflation in Germany it came = to a DAILY inflation rate of 100%, i.e., from day to day the purchasing = power of this paper money was halved. Inflation rates of 30-100 % p.a. = we re quite common for years to decades in South America, Indonesia & = Vietnam and the reduction e.g. of a 70% inflation to a "mere" 30% = inflation was celebrated as an economic and political achievement = already indicative of "political stability". I really wo n der whether a proper survey of the may be 200 "independent nations" now = in existence, would not indicate as high inflation rates among most or = all too many of them. Alas, the mass media do not even publish regularly = and reliably the current inflation rate =20 and that of past years and past decades in the own country, e.g. by a = tabulation of the note and coin circulation year by year, together with = the rise of the wage and price levels, the exchange rates, unemployment = rates, rates of bankruptcies, and of taxe s, as well as of \ldblquote=20 rare metal prices expressed in paper currency "standards" and of the = official and unofficial CPI's. The rate of strikes, revolutions, civil = wars and international wars, as well as terrorist acts, that accompany = or follow monetary despotism , should also be tabulated, not only for one country but for all of = them. Such surveys would daily induce more questions, doubts, demands = and resistance against monetary despotism and its obvious effects. Alas, = the most important facts, ideas and abuses a r e rarely discussed by the mass media and when at all then usually quite = insufficiently, spreading more confusion and prejudices regarding them = rather than light. - In the long run even the smallest degree of = inflation undermines political stability and pr omotes revolutionary or dictatorial conditions. - J. Z., n.d. &5.4.97. \par INFLATION, See : BUDGET. \par INFLATION, SLOW INFLATION TO ACHIEVE FULL EMPLOYMENT? A slow = inflation is necessary to provide full employment. - Popular & "expert" = opinion. - That has been tri ed, under monetary despotism, for decades and has led only to many fast = inflations and a permanent degree of unemployment and sometimes massive = unemployment rates - presently totalling 1 billion unemployed and = underemployed. - You really want more of the=20 same for the next few decades? - J. Z., 6.4.97. \par INFLATION, UNEMPLOYMENT & WAGE CONTROL, THE HARD OPTION: Inflation = can be countered by creating substantial unemployment through various = repressive measures that would restrain wages and salaries. - Popular t o "expert" opinion. - Only one repression is needed, that of the = monopoly for the issue of paper money and the legal tender privilege for = it. Other people, who do not possess such wrongful powers, should not be = blamed, penalised or restricted due to the=20 e ffects of these wrongful powers. Unionised workers might demand a = million dollars as a normal weekly wage. Unless the central bank = inflates the currency to that extent, they will not get it. If you = demanded as much tomorrow, from your employer, then he wo u ld have to give you "the sack" or you would have to resign. The same = applies to e.g. a baker who demanded $ 10,000 for a loaf of bread from = you. He would have to do without your custom and he would be out of = business very fast, having priced himself out o f his market. Instead of trying to back up monetary despotism by further = despotic measures - we should simply abolish it. - J. Z., 6.4.97. \par INFLATION: DEMAND-PULL & COST PUSH INFLATION: If you permit = demand-pull inflation to rage for three years, then it wil l follow, as the night follows the day, that the subsequent periods will = become subject to cost-push inflation. ... In cost-push inflation, we = witness a rise in wage rates arrived at by collective bargaining. Cost = push, or 'seller's inflation', to disting u ish it from demander's inflation, is more than a matter of intransigent = union leaders or impatient rank-and-file strikers. It comes also from = the side of rises in 'administered prices' by large corporations in = their desire to protect their profit margins=20 o r even to improve upon them. - Econo-babble by Dr. Paul A. Samuelson, = THE NATIONAL TIMES, 26/4/71. - To call the issue of exclusive and forced = currency by a government, leading in enforced over-issues or monetary = inflation, a "demand-push" inflation, is a s misleading as calling the "payments" of governments "spending". It is = assumed that a genuine "demand" or "spending" is involved. One might as = well say that the issue of currency forged by private forgers is a = genuine demand - instead of a fraudulent tran s fer of purchasing power from honest people to dishonest people or that = the "spending" of a bank-robber is the equivalent of the honest spending = of his victims. - The fancy terms "demand-push" and "cost-pull" - = inflation are used to cover up what happens f r equently with forced and exclusive currencies, particularly when they = are world-wide used currencies like the U.S. dollar and are not as much = depreciated as most other currencies are, so that they become a currency = hoarding option for other victims of mon e tary despotism. Inflation means the over-issue of notes whose acceptance = and value is enforced beyond the quantity that would be accepted at par = and quite voluntarily if they were not legal tender and monopoly money. = An equivalent rise of all prices to th e total issue of US dollars does not take place today, or not yet, = because many to most of the notes are internally or externally hoarded. = Sometimes by internal authorities, sometimes by internal criminals, to = some extent by foreign banks and foreign crimi n als, to some extent by honest citizens overseas, who trust the U.S. = dollar more than they trust the paper money of their own government. - = Once part of this overhead of over-issued and hoarded dollars is let = loose upon the internal U.S. market, then this=20 p reviously issued excess of notes will tend to drive up prices and wages, = to the extent that it streams back to the U.S. and is there used for = consumer purchases. - But inflation takes not place evenly all over the = economy but unevenly. Some prices and wag e s rise later than others, especially when they are somewhat fixed for a = period, by contracts or government controls. - All types of monetary = inflations are characteristic for the monies of monetary despotism, not = those of monetary freedom. - J. Z., 28.3.9 7 . - without legal tender and the issue monopoly one cannot inflate a = currency, not even with the worst intentions. The supposed = gold-inflations, that are ascribed to periods of great gold discoveries, = are mostly imagined. The total stock of gold accumulat e d over thousands of years was not very significantly increased and = certainly not quite out of proportion with the increased population and = the increase in produce, products and services. If we had prohibited the = sale of goods, labor and services for anyth i ng but rare metal then the somewhat free economies could not have grown = as far as they did. Luckily, the clearing options went far beyond the = available rare metal stocks even before the great gold discoveries in = modern times, so that we were never complet e ly dependent upon the rare metals. Alas, for wage and salary payments we = were, largely, for all too long as we are now dependent upon government = monopoly money, for them, even when they are not paid in such cash put = only accounts of this monopoly money. - J.Z., 30.8.02. \par INFLATION: PROVISION OF A HANDBOOK OF POPULAR FALLACIES ON = INFLATION & THEIR BEST REFUTATIONS SO FAR FOUND OR FORMULATED: Such a = handbook is long overdue. An individual can hardly provide it because he = or she would not have the time to suffi ciently peruse all the nonsense written on this subject and to extract = it for this purpose. The Internet could be used for this purpose and I = would also like those who might be interested to provide me with good = photocopies of their relevant compilations=20 f or a special LMP microfiche issue of this kind. It should be accompanied = by a popularly written article on how to stop inflation's main cause: = monetary despotism (the issue monopoly combined with legal tender: = forced acceptance and forced value) and preve n t it for the future by the introduction of full monetary freedom. - = Collaborators for this project are wanted now. I really wonder whether = the false notions on this subjects are numbered merely in the hundreds = or in the thousands, if not ten-thousands. On l y extensive collaboration can determine that. - Notes towards an = INTRODUCTION for such a handbook, written many years ago: Seeing the = inflation of garbage articles on inflation and the difficulty to sift = the welter of conflicting viewpoints, it is about t i me that an encyclopaedic approach is undertaken. Without sufficient = publicity, showing the real market rate of deteriorated opinions on = inflation, the bad views will flood and overpower the sound ones. Among = a crowd of idiots, shouting at the top of their =20 voices, a wise man will presently not be heard. The remnant of = enlightened economists and students of money would get their chance via = such a handbook. The wrong views, although numerous, would be cancelled = out. Truthful or so far unrefuted statements on=20 i nflation could be specially marked. Other markings would indicate all = the popular views that have long been refuted as such. But they would be = reproduced in full - and with all their best refutations. - Government = or central bank propaganda on money is of t en comparable (given the statist mentality) to giving a forced currency = to flawed or false views on inflation (bad "money") and thus drive out = the scarce truths advanced by a few (the good "money") through numerous = untruths, advanced by the many at most o c casions, especially in the mass media. Something like the popular = version of Gresham's Law is here involved. Thus we ought to get a = sufficiently informed free market and market rating on inflation views = into operation, one that would systematically and pe r manently operate to publicly wipe out the errors, lies, wrong premises, = dogmas and myths in this sphere: A breach for the truths on inflation to = invade the citadel of monetary despotism. The handbook should enable = every lover of liberty to hold his own in =20 any public discussion with any advocate of monetary despotism, at least = as far as inflation is concerned. Extended, into a general handbook on = monetary freedom, it might similarly deal with other monetary freedom = aspects, opinions, arguments ideas and pro p osals and with all relevant and provable facts. - EDITORIAL NOTE & = PUBLISHING SUGGESTIONS: The first draft for such a manuscript, provided = perhaps by a single person or a few, could become tested and perfected = in public debates, like Beta Testing on the I n ternet for new software. In this hundreds, even thousands could = participates with the bits of truths they are able to contribute to this = debate. Everybody is a victim of inflation. Everybody who can, should = therefore try to contribute to such a handbook.=20 D evelop new and better arguments, collect more relevant facts and submit = them to the central compilation and editing office. It does not matter = if the same ideas are expressed repeatedly in different words. The = sorting out and cutting down of the length of =20 the text could come later and even for this the readership of each = version of improved drafts could be invited to add its comments and = evaluations. Towards the end, when the draft is already sufficiently = advanced and edited, and to the extent that it is w a nted in expensive printed copies, advance subscriptions could be = invited. For cheap editions on microfiche, floppy disks, text-only = CD-ROMs and on-line editions, no advance subscriptions would be needed. = Almost everyone would be able to afford them. Short =20 and popular versions of the handbook and pamphlet and leaflets = indicating its essence, should also be drafted and published, by anyone = game to try. Bets might be offered on certain views of inflation, on = whether they could be publicly either proven or dis p roven. If anyone could prove to me that in essence my own views on = inflation are quite wrong, I would gladly pay him or her A $ 100 - but = I doubt that anyone would be able to make me lose that bet. But, the = avalanche of wrong opinions on the subject is s o large that I do not feel confident enough to refute all of them = thoroughly for any particular individual, i.e., I would not be prepared = to bet even $ 10 that I could convince a single individual of them, i.e. = clear out the Augean Stables in his mind (on=20 t his subject) first and effectively and then implant successfully in his = minds a new and clean foundation for his general acceptance of monetary = freedom views. Such results can only be guaranteed by a combined = educational effort - like e.g. the cooperation =20 required to produce this kind of handbook. Are there enough moral and = rational dissenters among the freedom lovers to independently = collaborate in the provision of such an encyclopaedia? Will they be = prepared to forego any copyrights claims on their contr i butions? Any rightful resistance against monetary despotism must first = be preceded by a period of sufficient enlightenment. Knowledge must = precede actions - otherwise the same mistakes will be repeated over and = over again. - J. Z., n.d. & 24.3.97. - Would n't it be nice if bets on the correctness or incorrectness of certain = monetary ideas or arguments could become as popular as the betting on = horse and dog races, which do not decide any questions of considerable = importance to mankind? - J.Z., 30.8.02. \par INTERE ST RATES, DISCOUNT RATES & INFLATION: Interest rates should be raised to = fight inflation. - Popular opinion. - They would have to be somehow = increased, anyhow, just to somewhat make up for the degree of = depreciation of the capital and interest paid, due t o inflation. Alas, one cannot increase interest as easily and to the same = extent that one can multiply a forced currency through the printing = press. When the value of a currency is e.g. halved from day to day, then = even 500% p.a. interest cannot make up fo r it and I believe it never rose above that rate during the Great German = Inflation of 1913-1923. During 1923 even a 500% interest rate was = rightly considered as very moderate by borrowers. Moreover and rather = obviously, no rate of interest increase does au t omatically stop the government's note printing presses and legal tender = powers and the effects of its note issue monopoly for all depending upon = monetary exchanges. - Moreover, it is wrong to arbitrarily increase or = decrease the interest rate for all tran s actions. They should be variable prices for variable services. - J. Z., = 2.4.97. - "Increasing interest rates or tightening money supply can = actually do more harm than good if all it achieves (as was the case with = last year's measures) is a period of stagn a tion in some areas, followed by even greater inflation. Last year is was = the home buyers who were hurt by the drying-up of funds." - J. Z.: = Credits for daily turnovers of goods and services for consumers should = never be artificially restricted, just bec a use excessive credits were granted before - for speculations or = take-over bids, that led to cash shortages or illiquidity - unless one = wants to create mass unemployment in one's cover-up attempt for a = careless loan policy. Sound loans should not be restri c ted to make up for unsound loans.) "... In any case, it can be very = harmful to increase all interest rates, or staunch the flow of money in = essential projects. While it might be highly desirable to curtail = high-rise office developments in Sydney and Melbo u rne, it is most undesirable to restrain the flow of capital to mining = operations and developments or to the establishment of industry in = country areas. A squeeze here would really handicap growth..." - Colin = Chapman, THE BULLETIN, 13.2.71. - While high in t erest rates reduce the incentive to borrow, this does not matter much = when much more inflation is expected. - A government might even be = inclined to lend more of its forced and exclusive currency, straight = from the printing press and earn more interest th e reby - if and to the extent that it can find more borrowers. And the = borrowers may be ready to pay the high interest because they expect to = be able to repay the capital and the interest with depreciated money = from much higher earnings in depreciated mone y . - Moreover, a higher interest rate might induce more potential savers = to save, thus increasing e.g. bank term deposits and the sale of = securities, and the higher savings will lend to higher lending by the = banks so that at least the capital market will n o t be squeezed but rather expanded. - All interference with the market or = any of its prices, including the interest rates, has undesirable effects = and usually effects contrary to associated hopes and expectations. I do = not know of any government policy tha t is 100% effective and non-destructive or preventative for many = productive or creative actions. - J. Z., n.d. & 2.4.97. \par INVESTMENT SPENDING, CONSUMER SPENDING & INFLATION: At the moment = investment spending, not consumer spending, is the major factor in the present inflationary crisis on the expenditure side. - Retail sales are = only growing at an annual rate of 8 % at the moment, compared with about = 20% for investment... - THE AUSTRALIAN, 11.2.71. - Neither can grow, out = of nothing, under monetary despotism , without the central bank making more of its legal tender available. - = Inflationary effects are always uneven upon different parts of the = economy. Those spheres whose prices or wages grow fastest do not cause = an inflation but merely show its effects earl i er. The other sectors follow, sooner or later, sometimes a year or even = two later. The fever symptoms do not cause the fever. The inflationary = price rises do not cause the inflation. They do not even make inflation = worse but are merely part adaptations to it. - J. Z., 2.4.97. \par ISSUE OF MONEY, MONEY MONOPOLY, MONETARY PREROGATIVE, FREE BANKING = & INFLATION: If everyone were free to issue banknotes then everyone = could cause an inflation, i.e., inflation would be inevitable. Thus = money issue must be monopolised=20 and centrally regulated by a sound monetary policy. - Dogma of the = popular religion on money. - If you could issue your IOUs only at 10% = discount and would have to accept them, immediately, from anyone, at = 100%, would you issue many more of them? Moreover , I would no more be likely to accept your IOUs at all than you would be = likely to accept mine at all. Both our IOUs or notes or certificates = would not have legal tender. If everyone could issue legal tender notes = then and only then could everyone cause an =20 inflation. Our cheques are not legal tender. Thus neither of us can = cause an inflation with them. And apart from the regulations of the = Securities Exchange Commission, everyone of us could issue shares, even = in small denomination, 10 cents to $ 1 each. Th e ir issue and even over-issue could only depreciate these shares, not the = shares of others. Our depreciated shares, if we tried to use them as = money, could be freely refused or discounted. They could not drive up = the prices of any consumer goods. The same=20 a pplies to any competitively issued currencies. What made inflations = possible, likely and frequent is precisely the issue monopoly and the = legal tender privilege. They must be repealed or effectively ignored. = Only towards the issuer must legal tender still be applied. Then over-issuers may dirty their own nest, to a limited = extent, but will not be given a chance to dirty the nests of others. = Self-help and self-responsibility in monetary matters, too. - J. Z., = 2.4.97. \par LAND BANKS OR REAL ESTATE AS COVER FOR MO NEY & INFLATION: "As long as money is fully covered by real estate or = other properties there can be no inflation." - This is one of the oldest = fallacies in the history of doctrines on paper money. Many experiments = of this kind were made and to my knowledg e they all failed. Sometimes, under the pretence of a cover by land, as = with the German Rentenmark of 1923, quite different foundations are, = actually established. The Rentenmark had tax foundation and it accounted = in gold values. That permitted it to remai n at par, while it had only a limited circulation. I had also no legal = tender, at least not initially, and so an excess issue could not be = forced into circulation through legal tender while this was the case. = Alas, it was still an exclusive currency and th i s would have permitted over-issues beyond the tax foundation, even in = the absence of legal tender. - A cover in land is not enough because = people buy land only now and then, or via fractions of their income, in = instalment rates, gradually repaying credits =20 for the purchase of land. But they do buy daily wanted consumer goods = and services all the time, with most of their incomes. This is what = their currencies should allow them to do and should be based upon. Any = further cover would be irrelevant or unnecess a ry. When I hold a note "based" on or "covered" by your house, I cannot = redeem it in a brick of your house and mostly I would not want a brick, = either, for it. Why should anyone be willing to offer anything else for = it or why should he be forced to do so ? All issuers of "land-based" notes soon found that their notes = depreciated because they had not sufficient current reflux for them and = the holders could not buy with them what they wanted most and all the = time. That motivated the issuers then to got for=20 l egal tender and an issue monopoly, i.e. a privilege at the expense of = all others. Their victims should not have granted them the sanction of = the victims. - However, the interest coupons on mortgage bonds could, to = a limited extent be used as currency, whe n they would and could soon be transferred into the hands of those who = have pay that interest. And the produce of agriculture (Not the = agricultural capital itself!), in the right mixture, assembled e.g. in = green grocers and other shops, for processed food, =20 can well provide a sound basis for competitively issued local = currencies. But land, agricultural buildings and machines, as well as = future harvests can't be, because they do not constitute immediately = available produce, which the note holders need and wan t for their notes. - J. Z., 24.3.97, 30.8.02. Compare the Assignats of = the French Revolution. They were to anticipate the proceeds from the = sale of lands of the former monarchy, aristocrats and clergy, that were = confiscated and placed on the market, a mark e t already depleted of metallic currency before the revolution and more = so through the revolution, which leads to extensive hoarding and refugee = money crossing borders. Turning the Assignats very soon into legally = "valid" payment claims upon all goods, ser v ices and labuor as well as all capital, did not increase the supply of = goods, labour and services or provided enough sound and trusted exchange = media to mediate all wanted and possible exchanges, but merely led to = the over-issue and rapid depreciation of=20 t he Assignats - helped by their forgery through groups of emigrants. = Refusals to accept them at par, combined with a few curses against those = who tried to force them upon others, were leading to most of the = denunciations of "enemies" of the republic and mo st of the resulting public executions or murders via a guillotine. \par LAND, SPECULATION IN LAND & INFLATION: Land speculation is = inflationary and should be countered by the community's collection of = site rent, i.e. of the unearned value of unimproved land. - S ome, especially most Georgists, consider this to be the most important = factor of inflation. - To the extent that increased land prices reflect = merely an increased land shortage or, rather, an increased demand for = land, due to increased populations, they h a ve nothing to do with monetary inflations. To the extent that increased = land prices indicate inflation, they do indicate that inflation has = already taken place and driven up land prices accordingly. Moreover, = while investments in land, like in rare metals , jewellery and works of art, remain among the few options to safeguard = savings from inflation, inflations will drive up their prices more than = the prices of other goods and services. People use land ownership as an = inflation hedge. Can they be blamed for=20 t his? It is absurd to consider this defensive act as inflationary by = itself, unless one makes the wrong assumption that any price increase is = by itself indicating inflation and contributing to inflation. The high = prices of land during an inflation are effe c ts not causes of inflation. Far less are they the only or the main cause = of the inflationary rise of all prices and wages, sooner or later, even = when they indicate inflation earlier than most other price and wage = rises do. - That the land monopoly, howeve r dispersed among many monopolists, or, rather, oligopolists, permits the = land holders to collect unearned value increases due to their location = and due to community expenditures on services - and due to private = investments nearby, this has also nothing to =20 do with inflation. Employees do also receive unearned incomes, due to = increase in capital investments, technical and scientific progress. They = could earn relatively little if not aided in their muscle and mind use = by tools and machines. Most of their outp u t is due to these aids. Nevertheless, they get usually 85 -95 % of the = value of the output, if one includes fringe benefits and social service = charges on their behalf, after taxes. The tax authorities have become = the major exploiters. Should this "profite e ring" or "unearned income" also be taxed away? All benefit to some = extent from the economic activities of others, e.g. from the division of = labour, from scientific management, from technological and scientific = progress. Should that individually "unearned=20 b enefit" also be taxed away, as belonging to the community, not to the = individual producer, as allocated by free market forces? - One better = alternative to "single taxes" in a single territorial community, with = compulsory membership, would be "proprietary=20 c ommunities" where the proprietor, a private or cooperative company, = collects all the value increases due to the own improvements, in form of = rent charges. - Another option would be "open cooperatives" as proposed = especially by Theodor Hertzka. Many other=20 " solutions" of the "land problem" have been proposed, e.g. the "Community = Land Trust". No particular and presumed solution should be imposed upon = any dissenters. All land reform proposals could and should be practised = only tolerantly, among their true beli e vers and at their expense and risk. - The single tax is neither the only = nor a real solution to the land problem and it is not anti-inflationary = but a measure quite irrelevant to monetary inflation. - The only direct = connection between land and inflation=20 a re the inflationary issues of land banks, which reveal that the = supposedly best cover, namely by land, is just not good enough for the = issue of stable currencies. The value of agricultural land is, roughly, = the equivalent of its earnings power over the ne x t 15 years. That earnings power consists in the value of its produce = during the next 15 years. Obviously, if one issued in form of notes the = present market price of the land, equivalent to the produce of the next = 15 years, then these notes could only buy=20 t he current harvests on the current market, not the future harvests = expected or hoped for. Thus this kind of money would, inevitably, = depreciate. Few are eager to buy land with such notes, too, because = they, too, would have difficulties in selling more agr i cultural products on a market that is frequently flooded by them. Some = crops return less than they cost. The whole agricultural sector, in = spite of special concessions and subsidies and partly because of them, = and because of monetary despotism, is in a cr i sis. - All over, it is a victim rather than a victimiser and exploiter - = at least under present conditions. One might as well accuse newly born = babies of causing inflation by the additional demand for consumer goods = which they cause. Likewise, if your app e tite is strong, then you might be accused of arbitrarily and = unilaterally increasing food prices in an inflationary way! - Check what = monetary inflation really means and distinguish it from price rises on = the goods side or dearness. - J. Z., n.d. & 2.4.9 7.=20 \par LEGAL TENDER: Legal tender is a cover name for a great wrong, even = a great crime. It would be more accurately and honestly described as a = "legal imposition" or "legal requisitioning" or "legal depreciation of a = debt" or as a "part expropriation" or "par t annulment of a debt", or as a "part repudiation of a debt", = corresponding to the degree to which a currency has been depreciated as = a result of the legal tender privilege, combined with the money issue = privilege, which increases the legal tender power b ecause we are so dependent upon whatever money is available to us. - J. = Z., 2. 4. 97. \par LEGAL TENDER: One can inflate a currency even if it is not legal = tender. - Just name a single example of an inflationary effect upon the = general price level of a currency that was not legal tender! - See: GOLD, GOLD STANDARD, GOLD PRICES & = GOLD INFLATION. - Over-issues are indeed possible, as a result of = ignorance among voluntary acceptors and mistakes of issuers. But they = cannot, under monetary freedom, increase the gen eral price level, expressed in other currencies or in other and stable = value units, any more than your own over-drawn cheques could. - J. Z., = n.d., & 2.4.97. \par MONETARY CONTROLS: The exclusive and forced money of monetary = despotism is, essentially, out of con trol - not only out of control by its victims but also out of control by = its issuers and manipulators. They can start, continue and prolong = crises with them but they cannot stop them with it. They tumble = helplessly and ignorant and prejudiced between infl a tions, deflations and stagflations, try to counter inflation with = unemployment, and deflation with inflation, but never succeed for any = length with either and are unable to make all possible, desirable and = wanted exchanges of goods, services and labour po s sible with their exclusive and forced currencies. They suppressed all = natural price indicators and market forces for currencies and have no = substitutes for them. All monetary self-controls are abolished by the = system and political pressures are very stron g for the continued abuse of this system to defraud voters and taxpayers = and all creditors, including all employees and old age pensioners, more = and more. To entrust even further control powers to those already = possessing and abusing enormous monopolistic=20 a nd coercive powers in the monetary sphere is simply absurd. As absurd, = as e.g. the communist project of trying to fight the "monopolism" of ca. = 10 million employers in the U.S. by establishing a single monopoly = employer for the U.S. Indeed, central bankin g , with its monetary control, was an early communist demand (in the = Communist Manifesto of 1848) and, nevertheless, it is still practised in = all "capitalistic" countries. - Alas, opposition to monetary controls = are usually only on the basis of "practicalit y " not morality and the demand is that monetary controls should be ever = more comprehensive, lastly turning all of us into inmates of nation-wide = prisons. In ordinary prisons the purchasing power of inmates is very = strictly controlled, indeed. - "'And monet a ry controls are not much good unless you can control ALL lending'. Says = leading merchant banker Harold Abbott, managing director of the Martin = Corporation: 'It is no use slapping controls on the banks unless you = also can take steps to control hire-purchas e finance companies and others. And to do this the Federal Government = would have to seek new powers which it doesn't have at the moment. The = situation is particularly pointless when you have many of the banks with = large interests in finance houses.' - In f a ct, last year, when the banks and building societies were hit so hard = that it was almost impossible for a couple to get a home loan, the hire = purchase finance companies were lending money at an unprecedented rate - = charging inflated interest rates and mak i ng record profits. Melbourne share broker A. C. Goode makes the point: = 'Monetary controls, if they are to be effective, must be applied to such = an extent as to cause stress and involve an unequal burden - which = usually falls heaviest where it is least des i red from a community point of view.'" - THE BULLETIN, Feb. 13, 1971. - = Note that the controls of monetary despotism and its central banks and = monetary legislation are not criticised and not seen as the main causes = for all monetary and credit problems. The =20 remaining and still somewhat free and unregulated banks and financial = institutions are seen as culprits, just as Social Credit faithful and = communists would see them as the main evils. In "response" to the = enormous monopolies and powers of monetary despot i sm and all the evils they bring with them, not liberation but more = controls are asked for - and the discussion is only what degree of = controls would be practicable or how much they can be increased or = extended. The natural controls of a free market in cur r encies and of voluntary acceptance or refusals or discounts of = currencies and full publicity for all issues and of legal tender towards = the issuer only, are discussed still only by a tiny fraction of all = economists and of all writings on economics and on=20 m oney and banking. - Luckily, even the advocates of further monetary = controls have at least some doubts regarding them: "One problem with = monetary control is that it can have quite uneven effects on different = sectors of the economy. In particular, as our e x perience this last year has shown, it can act with special severity on = the level of new housing starts. It can have unpredictable effects on = confidence, especially in the money and capital markets... = Unfortunately, if you do not apply monetary policy rigo r ously enough it is likely to prove ineffective and if you apply it = vigorously, you run the risk of overkill... Nor are the effects of = monetary policy any more predictable than those of fiscal policy. = Important as they are, fiscal and monetary policies, ev e n when employed in exactly the 'right mix', cannot be relied upon to = achieve to the maximum our major economic objectives of full employment, = external balance, reasonable price stability, economic growth, rising = living standards, and an equitable distribu t ion of income." - The Hon. B. M. Snedden, THE AUSTRALIAN QUARTERLY, = 4.12.70. - Alas, none of our Australian rulers, treasurers, reserve bank = directors or government advisors has so far, to my knowledge, spoken up = in favour of monetary freedom to get us ou t of the destructive labyrinth of monetary despotism. - We suffer already = from a surfeit of monetary controls which, in their combination, = particularly legal tender laws, laws establishing and maintaining the = issue monopoly and outlawing sound alternative=20 v alue standards, like gold weight units on a free gold market, are the = cause of inflation. The avalanche of monetary legislation is so large = that I was so far unable to get a full set of it. Continuously more = legal provisions are added. Some of the acts we r e out of print when I asked for them last time at the federal printing = office and other additional relevant amendments and clauses are = dispersed over numerous thick collections of amendments. No one has = bothered to combine all the relevant legislation in=20 o ne or several volumes and to keep them updated or to update them on = microfiche, on floppy disks or on CD-ROMs or online, as far as I know. - = Thus all of the monetary laws are not even readily in print and cheaply = available. Why should one have to spend e . g. $ 20 for one of several large collections of amendments, when such a = thick volume contains just one amended paragraph of one act on money, = currency, credit or banking? - Thus the law has largely become not only = impracticable and unobtainable but unkno w able unless one visits e.g. the Reserve Bank library - where non-staff = are not welcomed but rather thrown out, or the Australian National = Library. - Some law texts were also withdrawn, although the laws still = applied, simply because changes were expected=20 s oon, although they are not yet enacted into law. A lawful or lawless = legal situation this. - But with all the avalanches of legislative = changes in this sphere, the basic pillars of monetary despotism remained = untouched. Deregulation extended only to the p eripheries of banking and even there it did not go far enough. - J. = Z., 2.4.97. \par MONETARY DESPOTISM: Economists are again looking to means of taking = money out of the control of government altogether. In Hobart Paper 69 = (Gold or Paper?) Professor E. Victor=20 Morgan and Mrs. Morgan re-examine the breakdown of monetary management = since the war and re-assess the case for re-establishing a link between = currency and gold. - Arthur Seldon in Hayek, Denationalisation of Money, = 4. - Alas, the imagination of too many=20 e conomists does not suffice to let them think beyond the paper money of = monetary despotism and the classical alternative of "the" gold standard = that was based on instant convertibility of all paper notes by the = issuer. - The range of monetary freedom optio ns is very much larger. - J. Z., 24.3.97. \par MONETARY DESPOTISM: Within the sphere of monetary despotism there = is not cure for monetary despotism in the same way as there is no cure = for political despotism within the sphere of political despotism. = Monetary fre edom, on the other hand, is basically right, beneficial and healthy and = thus able to provide whatever cures its practice may still require to = remedy mistakes, errors or remaining crimes or temptations or attempts = to commit crimes. It does not lend itself=20 t o abuse as much as monetary despotism does. It maximises = self-responsibility and self-help and this sphere. It is curious that = most egalitarians, decentralists and human rights advocates have so far, = in most cases, accepted this kind of wrongful power qui te without examination and discussion and without protests, even though = it has only pretences no successes at all to offer but, merely instead, = numerous and obvious failures. -J. Z., 2.4.97. \par MONETARY POLICY & DEPRESSIONS: What we should have learned is that monetary policy is much more likely to be a cause than a cure of = depressions, because it is much easier, by giving in to the clamour for = cheap money, to cause those misdirections of production that make a = later reaction inevitable, than to assist the eco n omy in extracting itself from the consequences of overdeveloping in = particular directions. - Hayek, Denationalisation of Money, 79. - Here = he fell back into the old view of the Austrian School that deflations = were only a result or reaction to inflations,=20 a "necessary" but under free market rules, short period of economic = corrections. But the money monopoly does not need this indirect route to = cause deflations. It is inherently deflationary, even in times of = galloping inflations - when prices run ahead of t h e printing presses. A degree of local deflations (in a number of "money = channels") is always present under the issue monopoly of central note = issuing banking, since it does not supply all of an economy evenly with = its notes. Some sectors - especially the =20 government bureaucracy, are over-supplied. Some sectors, especially = small businessmen and agriculture remain under-supplied. Only when all = potential issuers make use of their issue potential to the fullest and = issue up to the stage where their issues begi n to be slightly discounted, at least in wholesale trading, can we expect = the natural deflation of an economy without any money to disappear = sufficiently. Each niche will then be supplied with its own exchange = media - or convenient clearing certificates an d accounts, to the limits of its capacities and needs. - J. Z., 24.3.97 - = See: UNEMPLOYMENT & CIRCULATION & CHANNELS. An analogy: Even if a = country were dead flat, it would require pumps and energy to distribute = irrigation and other water to every section=20 o f it quite evenly or sufficiently, from a single central source. For a = mountainous country this distribution difficulty becomes multiplied. = Moreover, even if rain fell in equal amounts, every week, over all = areas, rivers and lakes would distribute the acc umulated waters quite unevenly and some areas would retain more of the = rainfall than would others. - How easily and cheaply do you find it to = get sufficient credit - whenever and wherever your need it, for your = purposes and projects? - J. Z., 30.8.02.=20 \par MON ETARY POLICY: But to use the control of the supply of money as an = instrument for achieving particular ends destroys the equilibrating = operation of the price mechanism, which is required to maintain the = continuing process of ordering the market that gives=20 individuals a good chance of having their expectations fulfilled. - = Hayek, Denationalisation of Money, 89. - It not only destroys the price = mechanism for other goods and services but, by its very nature, that for = money itself. - J. Z., 24.3.97. \par MONETARY POL ICY: Monetary policy a cause of depressions. - Hayek, Denationalisation = of Money, 79. - I like to distinguish between the optional and = contracted and market regulated monetary policies of monetary freedom = and the coercive and monopolistic and fraudulent p olicies of monetary despotism. -J. Z., 24.3.97. \par MONETARY POLICY: Monetary Policy Neither Desirable Nor Possible: It = is true that under the proposed arrangements monetary policy as we now = know it could not exist. ... Hayek, Denationalisation of Money, 78. \par MO NETARY POLICY: We indeed begin to see how completely different an = economic landscape the free issue of competitive currencies would = produce when we realise that under such a system what is known today as = monetary policy would neither be needed nor even po ssible. - Hayek, Denationalisation of Money, 78. \par MONEY & BARTER: Now, let's take a look at another aspect of the = general economy which upsets the fair distribution of goods and labor - = namely, money, or the medium of exchange. So long as people exchange goo ds for goods and labor for labor - or barter it - the two people making = the exchange can mutually decide what is a fair deal for them. But = barter is clumsy and awkward - it's hard to exchange milk for coal and = dress fabrics for butter. So we use "money" t o represent goods. This makes it convenient and everyone would be better = off for it, IF the money we used accurately represented the goods and = labor we exchange with it. - Mildred Loomis, Moving into the Front Ranks = of Social Change, 63. \par MONEY & CAPITAL: What we want in order to get more of it. - J. Z., = 5.8.76. \par MONEY & FREE TRADE, INTERNALLY & EXTERNALLY: By money inflation, by = import quotas, by "ceilings" we have made it most difficult for the = foreigner to buy our products because all these devices simply r educe his capacity to pay. Need it be pointed out that the only way to = pay for goods and services is with goods and services? That money pays = no part to trade except as a measurement of value? Even as in = transactions between nationals every purchase is ul t imately liquidated with another purchase ,every sale calls of another = sale, so must international transactions be likewise balanced. Minnesota = cannot sell flour to New York unless it buys New York clothing in = return, and Detroit cannot sell automobiles to =20 Argentina unless it is willing to accept payment in either Argentine = beef or in some commodity from a third country which has acquired our = claim on Argentine beef. That is primary. And yet, our mad primitive = isolationism has blinded us to this basic fact=20 of all business. - Frank Chodorov, Fugitive Essays, 352. \par MONEY & GOODNESS: A man's goodness resides in his money, and he who = has no money, deteriorates. - Bornu proverb, quoted by U. v. Beckerath = in PP 9-11, p. 257. \par MONEY & GOVERNMENTS: Governments everywhe re have shown they cannot be trusted with the creation of money. - H. B. = Every, PROGRESS, 9/76. - What governments do is never a creative act = but always a destructive, preventative or distorting, at least a = dishonest act, by being "financed" through taxa tion, inflation, forced loans or by selling certificates on the = enslavement of future taxpayers. - J. Z., 23.3.97. \par MONEY & HAPPINESS: It don't bring happiness but it makes being = miserable easier. - George G. Gilman, Edge - Blood on Silver, p.108. \par MONEY & HAPPINESS: It don't buy no happiness... But it makes misery = a little more comfortable. - G. G. Gilman, Edge: Vengeance Valley, p. = 95. \par MONEY & HONESTY: Honest money is the best policy. - Michael Pilch, = Saving for Retirement, in: "Down With the Poor", p.79. \par MO NEY & INFLATION: Inflation is due to additional money issues. - If = additional money issues merely ended a deflation and facilitated the = exchange of all ready for sale goods, services and labour, then the = effect might be an growth of emergency sales or def l ated prices back to market prices - but this would, obviously, not be = inflationary and inflationary rise of prices. - What kind of money? = Monopoly game money, obviously, has no effect on the general price = level. Nor has casino or prison money. - How come=20 a dditional money suddenly "appears". Is there no issuer for it? - Why can = he impose his additional money upon us? Why do we have to accept = additional inflated money and are not free to refuse it, discount it or = substitute our own competitively issued sound =20 currencies for it? Why are we not free to adopt alternative and sound = value standards that we trust, in our prices, contracts, wage agreements = and discount the government's inflated paper currency against them, so = that this paper money can no longer infla t e our prices and wages? - Most statements on money deserve at least to = be questioned, if not extensive refutations. - People so eager to = acquire more "money" should bother to inquire much more into its nature = and possibilities instead of considering only=20 the monies of monetary despotism.=20 \par MONEY & LIBERTY, SUCCESS: The price we pay for money is paid in = liberty. - R. L. Stevenson, Familiar Studies, p. 138. - We pay for it = with our leisure options. But we can also buy other leisure options with = the money so ac quired. Thus, in balance, our options are often significantly increased = and thereby our liberty. But people who aim at becoming rich and neglect = in this struggle for the current forced and exclusive currency, living, = learning and activities in the freedom =20 struggle, and often promise to become active freedom writers only after = their retirement, do often pay too high a price for the riches they = strive for, even when they manage to obtain them. The successful = struggle for success, expressed in money terms onl y, often indicates a failure of a life. - J. Z., 23.3.97.=20 \par MONEY & POWER: No money, no power. - Frank Chodorov, heading, = Fugitive Essays, 258. \par MONEY & STUPIDITY: The element that makes stupidity shine. - = Russian saying. - Ideally, only the wise people would make money and only the stupid ones would lose it. Then, obviously, the = stupid ones could not shine with it for very long. - J. Z.,16.3.78. - "A = fool and his money are soon parted." - Actually, with OUR money = (earnings and property) the politicians are c l ever enough give themselves the air of wisdom and benevolence - and the = voters are stupid enough to continue to believe in them, continue to = vote for them, while they tax us and mismanage their exclusive and = forced paper currency at our expense. Such stup idities are certainly outstanding or even glaring. - J. Z., 23.3.97. \par MONEY & WAR: Make money, not war. - Slogan by the Peace and Freedom = Caucus of SIL. - At least the German Government expressly prepared for = the financing of WW I by introducing legal tender for its paper money, as demonstrated by the discussions in the German = Bank Enquete of 1908, which led to the introduction of legal tender by = 1910. And there is not voluntaristic way to finance their aggressive war = otherwise than through forced and exclus ive currency and its inflation. They "make" or rather order & get = printed money (forced and exclusive) for their wars. - J. Z., 23.3.97. \par MONEY CIRCULATION & PRICES: Increased velocity of circulation of = money may mean only that the country is producing and consuming more: it = has no automatic effect on prices. - Henry Meulen, THE INDIVIDUALIST, = 6/78. \par MONEY IS NOT EVERYTHING: Always remember, money isn't everything - = but also remember to make a lot of it before talking such nonsense. - = Earl Wilson, R.D. 7/78. \par M ONEY MONOPOLY & CENTRALIZATION: Government power over money facilitates = centralisation. There can be little doubt also that the ability of = central governments to resort to this kind of finance is one of the = contributory causes of the advance in the most u ndesirable centralisation of government. - Hayek, Denationalisation of = Money, 92. - See: CENTRAL BANKING. \par MONEY MONOPOLY & CONFIDENCE: People have been losing confidence in = money because it has been controlled by government. - Hayek, = Denationalisation of Mo ney, 102. - Government money rarely ever deserved any confidence in it = and a money that is largely based merely upon confidence hardly deserves = confidence but, rather an extreme distrust and outright rejection. - J. = Z., 24.3.97. \par MONEY MONOPOLY & REFORMERS : Practically everyone who presumes to comment and propose, re the = present situation, looks upon it more as a CONDITION instead of a stage = of a process of deterioration. As already stated, this process involves = the mulcting of populaces by mans of an ineq u itable system of land tenure, and a diabolical monopoly of the means by = which substantially all cooperative endeavor is carried on, namely the = money-issuing monopoly, which in this country is the Federal Reserve = System. None of the self-styled social fixe rs proposes the eradication of these denials of the essentials of = freedom in economic activity. Practically every one of them is trying to = concoct some scheme to distribute survival-income to the victims. - = Laurance Labadie, Selected Essays, 55. \par MONEY MONOPOLY & STATISM: People who, for all too long, have put up = with absolute monarchism and absolute parliamentarianism, are, = naturally, all too willing to put up with monopolistic post offices, = central banks, railways etc. - J. Z., 3.4.79, 24.3.97. \par MONEY MONOPO LY & UNEMPLOYMENT, THE AUSTRIAN PERSPECTIVE: For one reason or the other = most Austrian economists seem to believe that as forceful interventions = with the medium of exchange and its standard as the money monopoly, = legal tender and central banking policies=20 a re, would have no direct effect whatsoever on unemployment. (The wrong = premise here is that the price and wage levels etc. would rapidly enough = adapt to any artificial reduction of the money supply.) According to = them unemployment is due a) to the still f u rther intervention of wage regulation, imposed upon this interventionist = system and b) results as one of the consequenes of inflation. In other = words, for them, in the sphere of exchange media and monopolies, there = can be a major cause without an effect!=20 - J. Z., 14.4.79. \par MONEY MONOPOLY, CENTRAL BANKING, OUTLAWING OR TAXING FREE BANKING: = As if to place beyond controversy the fact, that the court may forever = hereafter be relied on to sanction every usurpation and crime that = congress will ever dare to put int o the form of a stature, without the slightest color of authority from = the constitution, necessity, utility, justice, or reason, it has, on = three separate occasions, announced its sanction of the monopoly of = money, as finally established by congress in 18 6 6, and continued in force ever since. - This monopoly is established by = a prohibitory tax - a tax of ten per cent. - on all notes issued for = circulation as money, other than the notes of the U.S. and the national = banks. - This 10% is called a "tax", but=20 i s really a penalty; and is intended as such, and as nothing else. Its = whole purpose is - NOT TO RAISE REVENUE - but solely to establish a = monopoly of money, by prohibiting the issue of all notes intended for = circulation as money, except those issued, or s p ecially licensed, by the government itself - This prohibition upon the = issue of all notes, except those issued, or specially licensed by the = government, is a prohibition upon all freedom of industry and traffic. = It is a prohibition upon the exercise of me n 's natural right to lend and hire such money capital as all men need to = enable them to create and distribute wealth, and supply their own wants, = and provide for their own happiness. Its whole purpose is to reduce, as = far as possible, the great body of the =20 people to the condition of servants to a few - a condition but a single = grade above that of chattel slavery - in which their labor, and the = products of their labor, may be extorted from them at such prices only = as the holders of the monopoly may choose to =20 give. - Spooner, Cleveland, Works I, 74/75. - Another aspect is that = this prohibition was passed to protect the bad money issued by the = government from competition by good monies privately issued. - As Ulrich = von Beckerath used to remark frequently: One=20 o f the first revolutionary acts of Lenin was to occupy the note printing = presses in Leningrad. From then on he was the only one able to pay, with = forced and exclusive currency, for all his expenses. His opponents had = to come to him - even to get the money=20 t o pay their secretaries with. All others had not considered the means of = payment problem. He had, to that extent and this fact and action helped = him to win. During the East German uprising of June 17th, the East = German central bank stopped all wage payme nts. That measure may have been more effective than Soviet tanks in = suppressing that uprising. Again, these "revolutionaries" had not = considered the means of payment problem, either. - J. Z., 30.8.02. \par MONEY MONOPOLY, DEPRESSIONS, UNEMPLOYMENT, CRISES, MARKE T ORDER, CAPITALISM: The main result at this state is that the chief = blemish of the market order which has been the cause of well justified = reproaches, its susceptibility to recurrent periods of depression and = unemployment, is a consequence of the age-old government monopoly of the issue of money. - Hayek, Denationalisation = of Money, 14. \par MONEY MONOPOLY, DIVERSITY & CHOICES VS. UNIFORMITY: It has the = defects of all monopolies: one must use their product even if it is = unsatisfactory, and, above all, it preven ts the discovery of better methods of satisfying a need for which the = monopolist has not incentive. - If the public understood what price in = periodic inflation and instability it pays for the convenience of having = to deal with only one kind of money in or d inary transactions, and not occasionally to have to contemplate the = advantage of using other money than the familiar kind, it would probably = find it very excessive. For this convenience is much less important than = the opportunity to use a reliable money t h at will not periodically upset the smooth flow of the economy - and = opportunity of which the public has been deprived by the government = monopoly. But the people have never been given the occasion to discover = this opportunity. - Hayek, Denationalisation of Money, 22. - The same could be said for exterritorial autonomy for = volunteer communities. - J. Z.,24.3.97. \par MONEY MONOPOLY, EXCHANGE MEDIA VS. CAPITAL MEDIA: What, then, is = the remedy? Plainly it is to abolish the monopoly of money. Liberate all = this loanab le capital- promissory notes - that is now lying idle, and we liberate = all labor, and furnish to all laborers all the capital they need for = their industries. We shall then have no longer, all over the earth, the = competition of pauper labor with pauper lab o r, but only the competition of free labor with free labor..." - Lysander = Spooner, A Letter to Grover Cleveland, Works I, 50/51. - Again he mixes = up turnover credits with capital credits. Only the former is directly = freed by monetary freedom. Only indirect l y can monetary freedom, with its full employment and boom economy, = increase savings and with them capital investments and it can preserve = it via free choice in value standards - and multiply it via freely = floating interest rates - representing shares in=20 the extra productivity of additional capital investments. - J. Z., = 24.3.97 \par MONEY MONOPOLY, LABOR & WEALTH: The monopoly of money is the one = great obstacle to the liberation of the laboring classes all over the = world, and to their indefinite progress in wealth. - Spooner, Cleveland, = Works I, 49. \par MONEY MONOPOLY, LEGAL TENDER & GRESHAM'S LAW: Hayek's seminal = analysis goes back to an earlier starting point. He dates the origin of = a government's prerogative to issue a national currency from the time = when money wa s minted from precious metals. What made inevitable the massive abuse by = inflation was the transfer of this prerogative to the unlimited = government issue of paper money with no intrinsic value. At once the = root cause of the debasement of money is revealed =20 as the monopoly power of national governments to compel their citizens = to accept whatever the ruling politicians decree to be legal tender. The = remedy follows from the diagnosis. It is nothing less than permitting = private monies to compete for public favo ur so that stable currencies drive those that depreciate out of = circulation - an apparent reversal, he explains, of the widely = misunderstood "Gresham's Law". - R. Harris & A. Seldon, Not From = Benevolence, 38. =20 \par MONEY MONOPOLY: Abolish state control over the money supply. - = Henry Meulen, THE INDIVIDUALIST, 12/74.=20 \par MONEY MONOPOLY: 1. On the power of congress to lay and collect = taxes, etc., 2. On the power of congress to coin money. 3. On the power = of congress to borrow money. Out of these simple, and apparent ly harmless provisions, the court manufactures an authority to grant, to = a few persons, a monopoly that is practically omnipotent over all the = industry and traffic of the country; that is fatal to all other men's = natural right to lend and hire capital for =20 any or all their legitimate industries; and fatal absolutely to all = their natural right to buy, sell, and exchange any, or all, the products = of their labor at their true, just and natural prices.... The court = says, in EFFECT, that this provision (1) gives =20 congress power to establish the present monopoly of money; that the = power to tax all other money, is a power to prohibit all other money; = and a power to prohibit all other money is a power to give the present = money a monopoly. - Spooner, Cleveland, Works=20 I, 77. \par MONEY MONOPOLY: Although the argument in places is necessarily = abstract and requires close attention, the central theme is crystal = clear: government has failed, must fail, and will continue to fail to = supply good money. - Arthur Seldon, introducing H ayek, Denationalisation of Money, 4. \par MONEY MONOPOLY: Aside from the more strictly economic criticisms = that I will have of this view, we should keep in mind that money, in any = market economy advanced beyond the stage of primitive barter, is the = nerve center of the economic system. If, therefore, the State is able to gain = unquestioned control over the units of all accounts, the State will then = be in a position to dominate the entire economic system, and the whole = society. - Murray N. Rothbard, The Case for a 100% Gold Dollar, 2. \par MONEY MONOPOLY: At this point, according to economic "science", = central banks are instituted to protect the public from periodic = financial catastrophe at the hands of unscrupulous fractional reserve = bankers. Nothing could be further fr om the truth. Central banks are established to remove the limitation on = over issuance that reality places on competitive banking systems. As = early as ancient Babylon and India, central banking, the art of = monopolising the issuance of money, had been devel o ped into a perfect method for looting the general public. Even today = many bankers copy the traditions of the earlier exploitative priestly = hoods and design their banks to resemble temples! Defenses of Central = Banking are simply part of the deception that=20 lies at the heart of all power elites. - Peter McAlpine, The Occult = Technology of Power.=20 \par MONEY MONOPOLY: But if congress had put this prohibition distinctly = in the form of a PENALTY, the usurpation would have been so barefaced - = so destitute of all color o f constitional authority - that congress dared not risk the = consequences. And possibly the court might not have dared to sanction = it; if, indeed, there be any crime or usurpation which the court dare = not sanction. So these knavish lawmakers called this pe n alty a "tax"; and the court says that such a "tax" is clearly = constitutional. And the monopoly has now been established for twenty = years. And substantially all the industrial and financial troubles of = that period have been the natural consequences of the=20 m onopoly. - If congress had laid a prohibitory tax upon all food - that = is, had imposed a penalty upon the production and sale of all food - = except such as it should have itself produced, or specially licensed; = and should have reduced the amount of food, t h us produced or licensed, to one tenth, twentieth, or fiftieth of what = was really needed; the motive and the crime would have been the same, in = character, if not in degree, as they are in this case, viz., to enable = the few holders of licensed food to extor t , from everybody else, by the fear of starvation, all their (the = latter's) earnings and property, in exchange for this small quantity of = privileged food. - Such a monopoly of food would have been no clearer = violation of men's natural rights, than is the p resent monopoly of money. And yet this colossal crime - like every other = crime that congress chooses to commit - is sanctioned by its servile, = rotten, and stinking court. - Spooner, A Letter to Grover Cleveland, = Works I, 76. \par MONEY MONOPOLY: But there is no=20 reason to suppose that the managers of a governmental monopoly will long = function in competitive fashion if the monopoly can be exploited to gain = additional political power. And it doesn't take a genius to figure how = to exploit a money monopoly: just prin t bogus warehouse receipts and declare them to be legal tender; then pass = laws to penalise suppliers of goods or services who refuse to accept the = bogus receipts at face value. Finally, this can be pushed to the point = of issuing receipts based not on the F ULLNESS of the warehouse but on its EMPTINESS instead - the use of the = national debt as the backing for the paper money. - L. E. Read, THE = FREEMAN, 1/75.=20 \par MONEY MONOPOLY: Even if the system had been managed by the greatest = financial minds of the century, it s very premise of central management of money and credit is alien to = economic freedom and contrary to stability. The very existence of a = money monopoly that endows its fiat issues with legal tender force is = antithetic to individual choice and freedom. - H ans F. Sennholz, THE FREEMAN, 2/75. - I would have rather said that = endows its issue with legal tender and thus turns them into fiat money. = - J. Z., 25.3.97. \par MONEY MONOPOLY: Ever since the British Government in 1694 sold the = Bank of England a limited monopo ly of the issue of banknotes, the chief concern of governments has been = not to let slip from their hands the power over money, formerly based on = the prerogative of coinage, to really independent banks. For a time the = ascendancy of the gold standard and th e consequent belief that to maintain it was an important matter of = prestige, and to be driven off it a national disgrace, put an effective = restraint on this power. It gave the world the one long period - 200 = years or more - of relative stability during whi c h modern industrialism could develop, albeit suffering from periodic = crises. - Hayek, Denationalisation of Money, 29. - Under the classical = gold standard even in the somewhat developed countries monetary = economics did not fully penetrate and a considerabl e number of barter transactions did still occur, which full development = of all monetary freedom options would have made superfluous. Poverty and = ignorance were not as fast reduced as would have been possible. = Governments still retained too much power. The=20 r ight of creditors to demand gold from debtors who could only offer goods = and services caused many problems. Even while gold redemption was not = yet abolished in Germany and legal tender not yet introduced, most wages = and salaries were paid in banknotes whi c h granted their holders to demand gold redemption - and if all had = insisted on that, and the merchants upon settlement of all their = numerous claims in gold, the system would have broken down almost = immediately. Gold weight units can work reasonable well a s exclusive value standards or units of account or clearing standards. = But as exclusive means of exchange they are by far insufficient to = mediate the wanted and possible transfers of all the millions of other = goods and services among billions of people. -=20 J. Z., 24.3.97. \par MONEY MONOPOLY: Government is the only agency that can take a = useful commodity like paper, slap some ink on it, and make it totally = worthless. - Ludwig von Mises. Quoted in McBride: A New Dawn, 18. - See: = Paper Money, Legal Tender, Central Banking. \par MONEY MONOPOLY: Government monopoly of money unnecessary. Not so = very long ago, in 1960, I myself argued that it is not only = impracticable but probably undesirable even if possible to deprive = governments of their control over monetary policy. This=20 view was still based on the common tacit assumption that there must be = in each country a single uniform kind of money. I did not then even = consider the possibility of true competition between currencies within = any given country or region. - Hayek, Denatio nalisation of Money, 84. - So little did even he know about the history = and literature of the degrees of free banking that had been experienced = or discussed! - J. Z., 30.8.02. \par MONEY MONOPOLY: Governments have everywhere assumed a monopoly of = the creation of money - and we stagger from financial crisis to crisis. - Henry Meulen, = THE INDIVIDUALIST, 8/73, p54. - The issue of an exclusive and forced = currency is not an act of creation but an act of destruction, = dishonesty, fraud, corruption and robbery. Not such =20 act should be covered up by camouflaging words. - Governments issue = requisitioning certificates rather than true "money". Seeing the imposed = tributes that are involved, this applies even to the best forms of their = tax foundation money - as long a taxation and State membership remain compulsory. - J. Z., 30.8.02. \par MONEY MONOPOLY: Here one should keep in mind that inflation, in its = crudest form, is nothing but an indirect tax. The government, with its = monopoly on the issuance of currency, found it simple to pl ay the role of counterfeiter. It simply paid for the goods it needed = with newly created money.... - Bruce Bartlett, THE FREEMAN, 6/75, p. = 368. - One cannot counterfeit the money one issues oneself, but one can = dilute it, or inflate it, given monopoly and=20 l egal tender power. Only the duplication of the own kind of money, by = others, can be rightly called a forgery. Moreover, they do not offer for = their forged notes whatever limited or sound cover the issuer offers for = his notes that are being multiplied by t he forgers. - J. Z., 30.8.02. \par MONEY MONOPOLY: How comes it that, alike in active and quiescent = countries, we see this relentless rise of prices? I suggest that the = cause is a policy common to all these countries, a policy the importance = of which is hardly r ecognised today: the policy of state monopoly of the issue of money, and = of rigid control over the lending of money. This leads to monopoly and = restriction of industry, and thwarts the natural tendency of prices to = fall. The exposition of this evil has be en the aim of the INDIVIDUALIST. - Henry Meulen, THE INDIVIDUALIST, Aug. = 75, p39. \par MONEY MONOPOLY: How could all exchanges function smoothly as long = as the exchange medium is monopolised? - J. Z., 28.4.79. \par MONEY MONOPOLY: If only one kind of money is permitt ed, it is probably true that the monopoly of its issue must be under the = control of government. - Hayek, Denationalisation, Denationalisation of = Money, 84. - Since the assumption is wrong, we do not really have to = bother about that conclusion. But somebod y who does not pretend to work only for the public interest might be a = better issuer. He may aim to maximise his profit by doing as much trade = as he can - to his advantage and that of his customers. The government = did not really benefit from the inflations , deflations and stagflations it caused. Numerous politicians lost their = jobs through them, too and they could never be certain how long they = would stay in office. Look e.g. at how often Frenchmen changed theirs. = Indeed, I would not like to see a wrongful=20 l egal monopoly in anyone's hands but I do doubt that any good businessman = would make as many stupid and counterproductive mistakes as most = governments have done in the past, or their central banks, when the = money system was entrusted to them. I would also=20 f ear that even the best businessman, with the best intentions, would be = corrupted by as much power. Moreover, even with the best training and = best abilities and best of will, the despotic money system can work no = better than a despotic money system at its=20 b est can. It eliminates competition, its eliminates the creative = potential of others in this sphere. It eliminates free contracts, local = knowledge, the pricing system, the automatic balancing of demand and = supply. Its legal tender prevents it from realisin g soon enough whether it is inflating or deflating. It even produces = stagflations and its notes can never evenly or sometimes not at all = penetrate sufficiently to where they are needed and its investments and = subsidies will, inevitably, frequently fail. We =20 found that authoritarianism does not work well in any other sphere. Why = should we assume that it could in this one? - The one kind of money = permitted might be that of monetary freedom, namely optional money, = market rated, issued by individuals and their a s sociations upon the goods and services they are ready to deliver. - In = that case, most governments could offer very little - and there is no = good reason why any of them should be granted a territorial monopoly for = that little. - PIOT, J. Z., 24.3.97. - On ly forced and exclusive currency should be outlawed. Better still, there = should be no law on the subject, no more so than a law on saucepans, = tooth brushes and soap. - J. Z., 30.8.02.=20 \par MONEY MONOPOLY: It is as good as having a Government licence to = print money. - Roy Herbert Thompson, 1st Lord, 1894-, remark on the = profitability of commercial television in the U.K., made during an = interview in Canada. \par MONEY MONOPOLY: It would be inadmissible for me, in this letter, to = occupy the space that would be necessary , to expose all the false, absurd, and ridiculous pretences, by which = the advocates of the monopoly money have attempted to justify it. (J.Z.: = LMP microfiche have room for these arguments and their refutations. = Submit them, in good photocopies, e-mail or=20 o n floppy disk or CD-ROM in RTF, towards a new book: The Myths of Central = Banking!) The only real argument they ever employed has been that, by = means of the monopoly, the few holders of it were enabled to rob = everybody else in the prices of their labour an d property. (J. Z.: They rarely admitted that, but pretended to act in = the public interest while they really acted against it and in their own = short term interests only. They even pretended to be proper and = trustworthy guardians of national currencies, no=20 m atter how rotten their "fruit" were.) - And our governments, State and = national, have hitherto acted together in maintaining this monopoly, in = flagrant violation of men's natural right to make their own contracts, = and in flagrant violation of the self-ev i dent truth, that, to make all traffic just and equal, it is = indispensable that the money paid should be, in all cases, a BONA FIDE = equivalent of the labour or property that is bought with it. (J. Z.: = From this he should have concluded, that the money issu ed upon capital assets should only be usable to buy these capital assets = with and should in no way pretend to be able to represent the consumer = goods and services of others than the issuer [of the "asset currency"\} , - who may have ONLY his capital assets to offer in exchange.) - The holders of this monopoly now rule and rob = this nation; and the government, in all its branches, is simply their = tool. And being their tool for this gigantic robbery, it is equally = their tool for all the lesser robberies, to whic h it is supposed that the people at large can be made to submit. - = Spooner, Cleveland 42, in Works I. \par MONEY MONOPOLY: IV. The Persistent Abuse of the Government = Prerogative: When one studies the history of money one cannot help = wondering why people should h ave put up for so long with governments exercising a power over 2,000 = years that was regularly used to exploit and defraud them. This can be = explained only by the myth (that the government prerogative was = necessary) becoming so firmly established that it=20 d id not occur even to the professional students of these matters (for a = long time including the present writer) ever to question it. But once = the validity of the established doctrine is doubted its foundation is = rapidly seen to be fragile. - Hayek, Denatio n alisation of Money, 26/27. - The money monopoly is just one of the = outgrowths of statism which is even older, ca. 6,000 years. The = government is dead - long live the government! - shouted and shout the = fools. Even Hayek remained a territorial statist to t he end, even though only in favour of limited governments. - J. Z., = 25.3.97. - He remained unaware of how unlimited territorial despotism = is, generally, although he finally managed to attack it in the sphere of = money. - J. Z., 30.8.02. \par MONEY MONOPOLY: Monet ary management leads to unprecedented inflation. - Ralph Harris, 1984, = p13. - Only if it is the mismanagement of monopolistic and forced = currency of governments. If it is the management and self-management of = privately or cooperatively issued and accepted =20 competing currencies which are optional and market rated and thus = largely self-managed and self-limited, between issuers, borrowers and = other acceptors, then it is neither wrong nor harmful but, rightful and = even dutiful and also extremely useful. It coul d be dutiful insofar, as something so useful should be issued by all who = are capable of it, rather than such potential issuers acting = parasitically upon the issues of other issues. It should be part of the = general self-responsibility and duty to maintain o n eself, without becoming a burden upon others. - J. Z., 24.3.97. - With = the money of monetary freedom and fully developed clearing we could = become monetarily almost as independent and self-supporting as we are = with our own breathing and blood circulation a n d our ability to walk from one place to another. It is even out personal = duty to use our own muscles for this purpose, as long as we are able to. = To circulate our own money, rather than parasitically utilise the = circulation efforts of others, amounts to a similar duty. - J. Z., 30.8.02. \par MONEY MONOPOLY: National currencies not inevitable or desirable. - = Hayek, Denationalisation of Money, 85. \par MONEY MONOPOLY: Nothing can be more welcome than depriving = government of its power over money and so stopping the appa rently irresistible trend towards an accelerating increase of the share = of the national income it is able to claim. If allowed to continue, this = trend would in a few years bring us to a state in which government would = claim 100 per cent (in Sweden and Bri tain it already exceeds 60 per cent) of all resources - and would in = consequence become literally 'totalitarian'. - Hayek, Denationalisation = of Money, 92. \par MONEY MONOPOLY: Now here's the rub. The Government has seen fit for = centuries to tell you what you mus t use for money and also to reserve for itself the sole right of = manufacturing it. Because it can do this, it can obviously determine how = much money is worth in terms of goods. As a simplified and theoretical = example, it could issue every person and every =20 institution in the land with a bonus of pounds exactly equal to the = number that person or institution has already got, and this would simply = mean that everyone swapped twice as many pounds in future for their = transactions; in other words "prices" would do u ble. (I should add that this exact relationship is true only if all = other factors do not alter, which in practice they do, and if the issue = is of a once-and-for-all nature, which it isn't, so that the effect is = greater or lesser than a doubling. - Terry A rthur, 95 %Is Crap, p. 34. \par MONEY MONOPOLY: Of all monopolies that of credit and the = circulating medium is the worst. - Charles A. Dana, Proudhon and his = Bank of the People, -. 63. \par MONEY MONOPOLY: POLITICALLY the broadcasting monopoly may be even = more danger ous, but ECONOMICALLY? I doubt whether any other monopoly has done as = much damage as that of issuing money. -Hayek, Denationalisation of = Money, 23. - The territorial monopoly, considering a whole country and = all its people as the property of a State, may=20 be considered as a still larger monopoly. - J. Z., 24.3.97. - And a more = dangerous one! - J. Z., 30.8.02. \par MONEY MONOPOLY: Professor Hayek's HOBART SPECIAL, and the works of = other economists who are trying to evolve methods of 'taking money out = of politics', should stimulate economists and non-economists alike to re-examine the = first principles of the control of money is civilised society is to = continue. - Arthur Seldon, introducing Hayek: Denationalisation of = Money, 5. \par MONEY MONOPOLY: That money should be fr ee is inconceivable to typical 20th century man. He depends on = government to mint his coins, issue his notes, define "legal tender", = establish central banks, conduct monetary policy, and then stabilise the = price level. In short, he wholly relies on govern m ent regulation of money. But this trust in monopolistic monetary = authority operating through political processes inevitably gives rise to = monetary destruction. It fact, money is inflated, depreciated, and = ultimately destroyed whenever government holds mon opolistic power over it. - Hans F. Sennholz, Inflation or Gold Standard? \par MONEY MONOPOLY: The erection of a monopoly over the monetary = system, Spooner argued, "is the equivalent to the establishment of = monopolies in all the businesses that are carried on by=20 means of money - to wit, all businesses that are carried on at all in = civilized society; and to establish such monopolies as these is = equivalent to condemning all persons, except those holding the = monopolies, to the condition of tributaries, dependants, s e rvants, pauprs, beggars, or slaves." - W. O. Reichert, Partisans of = Freedom, 137. - Seeing so many quotes by many thinkers and writers on = this question, one has to ask oneself, how many more will have to = express themselves along these lines before their a r guments are finally taken up in the general public, influence public = opinion and lead to action against the money monopoly? - J. Z.,24.3.97. = - It is not so much a question of numbers but of where and how often = these opinions appear, in what media and how=20 f requently they are brought to the attention of public opinion. E.g., = Christian ideas and opinions are preached at least on Sundays from every = Christian pulpit. Monetary freedom views are mostly out of sight and = hearing in mass media, book shops, public an d private libraries - with very few exceptions. Even on the Internet = only a fraction of those which have so far been expressed, by some = people, somewhere, in some writings, can be easily and rapidly accessed = there. - J. Z., 30.8.02. \par MONEY MONOPOLY: The government outlaws your own money and forces = its own bad paper money upon you and thereby takes part of your life. - = J. Z., 1.6.76. \par MONEY MONOPOLY: The great monopoly in this country is the money = monopoly. So long as it exists, our old variety of freedom and i ndividual energy of development are out of the question. - Woodrow = Wilson, 1911, quoted by Justice Brandeis, Other People's Money. - Did he = ever introduce a bill to abolish it? - J. Z.,23.3.97. \par MONEY MONOPOLY: The issue of standardised means of exchange - the = most essential of all commodities - must not be monopolised. - U. von = Beckerath, Berlin Programme, p. 16. \par MONEY MONOPOLY: The most fatal restriction upon trade now existing = is the monopoly of the issue of money, the fountainhead of all tyrannies = in the se plutocratic days, and that is where LIBERTY ... must strike first to = strike effectively. - Benjamin R. Tucker. \par MONEY MONOPOLY: The position has become very different, however, = since paper money established itself everywhere. The government monopoly = of t he issue of money was bad enough so long as metallic money predominated. = But it became an unrelieved calamity since paper money (or other token = money), which can provide the best and the worst money, came under = political control. - Hayek, Denationalisatio n of Money, 25. - Exclusive and forced paper money did not establish = itself but was established by despotic monetary legislation. - J. Z., = 24.3.97. \par MONEY MONOPOLY: The power over the people's money is just as bad as = the power over the people's land. - Dr. H. G. Pearce. \par MONEY MONOPOLY: The theory, on which the advocates of this monopoly = attempt to justify it, is simply this: THAT IT IS NOT AT ALL NECESSARY = THAT MONEY SHOULD BE A BONA FIDE EQUIVALENT OF THE LABOR OR PROPERTY = THAT IS TO BE BOUGHT WITH IT; that=20 if the government will but specially license a small amount of money, = and prohibit all other money, the holders of the licensed money will = then be able to buy with it the labor and property of all other persons = for a half, a tenth, a hundredth, a thousand t h, or a millionth, of what such labor and property are really and truly = worth. - Spooner, Cleveland, 36. - The last part contains more than a = slight exaggeration. Emergency sales prices do not fall to a millionth = of their normal free market prices. - Spo o ner's main monetary error was to assume that ALL kinds of property were = right and proper to be freely monetised into currency claims upon ready = for sale goods and services, regardless of the fact that these holders = had not obliged themselves to so redeem=20 a nd fund capital assets and that the capital assets could at best only = produce equivalent additional goods and services in the future but not = immediately. The natural issuers of currency, current for current = consumption needs, are the owners and traders of =20 consumer goods and services in daily demand, not investors of large = capitals hoping to preserve and multiply their capital investments after = considerable periods have passed - and often failing to do so. Future = and hoped for goods are not the same as good s now ready for sale. Land was always one of the worst covers for = currency issues - but it is an excellent one for mortgage bonds on the = investment market. - J. Z., 24.3.97. For each author on monetary freedom = and each of his writings on the subject pages=20 s hould be made readily accessible for viewing former comments and adding = more. - At least CD-ROMs would have space for this. Especially their = most common mistakes and their strengths should be listed and summed up = on these pages, with references to refutat ions and back-ups. - J. Z., 30.8.02. \par MONEY MONOPOLY: This is what "monetary management" really means. In = practice it is merely a high-sounding euphemism for continuous currency = debasement. It consists of constant lying in order to support constant = swindling . Instead of automatic currencies based on gold, people are forced to = take managed (mismanaged, rather! - J. Z.) currencies based on guile. = Instead of precious metals they hold paper promises whose value falls = with every bureaucratic whim. And they are su a vely assured that only hopelessly antiquated minds dream of returning to = truth and honesty and solvency and gold. - Hazlitt, Inflation, 24. - The = paper promises of e.g. a large department store chain, accepted by it = like gold weight units, for prices mark e d in gold weight units, and optional and market rated, would be partly = self-managed by its issuer and its acceptors and partly by publicity and = market forces in general, including competition by other issuers. There = is nothing inherently wrong or inferior =20 in such issues of full weight gold coins or 100 % gold covered = certificates. But they should not be granted a monopoly, either! All the = honesty and solvency that most money users really want and need, in most = cases, is: shop foundation. Competitive manage m ent of optional services should not be equated with bureaucratic = management of monopoly services and legal tender currencies should not = be equated with market rated ones. Gold bugs tend to have their loving = eyes only upon gold or gold redemptionism and re main blind to all other beauties. - J. Z., 24.3.97. - 30.8.02. \par MONEY MONOPOLY: This prohibitory tax - so-called - is therefore = really a penalty imposed upon the exercise of men's natural right to = create and distribute wealth, and provide for their own and e ach other's wants. And it is imposed solely for the purpose of = establishing a practically omnipotent monopoly in the hands of a few. - = Calling this penalty a 'tax' is one of the dirty tricks, or rather = downright lies - that of calling things by false name s - to which congress and the courts resort, to hide their usurpations = and crimes from the common eye. - Everybody - who believes in the = government - say, of course, that congress has power to levy taxes; that = it must do so to raise revenue for the support of government. Therefore this lying congress call this penalty a "tax", = instead of calling it by its true name, a penalty. - Spooner, Cleveland, = Works I, 75. \par MONEY MONOPOLY: We can now understand the situation. In the most = civilized nations - such as Weste rn Europe and the United States - labor is utterly crippled, robbed, and = enslaved by the monopoly of money; and also, in some of these countries, = by the monopoly of land. In nearly or quite all the other countries of = the world, labor is not only robbed an d enslaved, but to a great extent paralyzed, by the monopoly of land, and = by what may properly be called the utter absence of money. There is, = consequently, in these countries, almost literally, no diversity of = industry, no science, no skill, no invention, =20 no machinery, no manufactures, no production, and no wealth; but = everywhere miserable poverty, ignorance, servitude, and wretchedness. - = In this country, and in Western Europe, where the uses of money are = known, there is no excuse to be offered for the mo n opoly of money. It is maintained, in each of these countries, by a small = knot of tyrants and robbers, who have got control of the governments, = and use their power principally to maintain this monopoly; = understanding, as they do, that this one monopoly of=20 money gives them a substantially absolute control of all other men's = property and labor. - Spooner, Cleveland, Works I, 51. \par MONEY MONOPOLY: We have always had bad money (monopoly money! J. = Z.) because private enterprise was not permitted to give us a better one. In a world governed by the pressure of organised interests, the = important truth to keep in mind is that we cannot count on intelligence = or understanding but only on sheer self-interest to give us the = institutions we need. - Hayek, Denationalisation=20 of Money, 100. \par MONEY MONOPOLY: We have no choice but to replace the governmental = currency monopoly and national currency system by free competition = between private banks of issue. We have never had the control of money = in the hands of agencies whose SOLE an d EXCLUSIVE interest was to give the public what currency it liked best = among several kinds offered, and which at the same time staked their = existence on fulfilling the expectations they had created. - Hayek, = Denationalisation of Money, 100.=20 \par MONEY MONOPOL Y: What we must still consider is the effect that power over the supply = of money has had on financial policy. Just as the absence of competition = has prevented the monopolist supplier of money from being subject to a = salutary discipline, the power over mon e y has also relieved governments of the necessity to keep their = expenditure within their revenue. It is largely for this reason that = Kynesian economics has become so rapidly popular among socialist = economists. Indeed, since ministers of finance were told b y economists that running a deficit was a meritorious act, and even that, = so long as there were unemployed resources, extra government expenditure = cost the people nothing, any effective bar to a rapid increase in = government expenditure was destroyed. - Hay e k, Denationalisation of Money, 90. - Under monetary freedom the = exhaustion of resources for the backing of sound currency would be = indicated by the appearance of a discount of optional and market rated = money against its own standard, that of all other mon i es and with that against other means of exchange that are still at par = with their standard and would tend to drive out any depreciated money - = by more and more people simply refusing to accept it at all. Not all = kinds of resources are suitable for the iss ue of money, least of all medium and long term government insecurities, = which are essentially investments in future tax slaves but usually also = exposed to the inflation risk unless they do bear sound index or gold = clauses. - J. Z., 23.3.97. \par MONEY MONOPOLY:=20 Yet it is clearly possible that there is no necessity or even advantage = in the now unquestioned and universally accepted government prerogative = of producing money. It may indeed prove to be harmful and its abolition = a great gain, opening the way for very=20 b eneficial developments. Discussion therefore cannot begin early enough. = Though its realisation maybe wholly impracticable so long as the public = is mentally unprepared for it and uncritically accepts the dogma of the = necessary government prerogative, this=20 should no longer be allowed to act as a bar to the intellectual = exploration of the fascinating theoretical problems the scheme raises. - = Hayek, Denationalisation of Money, 20. \par MONEY OR CASH: The poor man's credit card. - U.S. saying. - = Actually, a number of sellers do now prefer it when you pay them by = cheque or credit card. - J. Z., 23.7.97. \par MONEY, A TRANQUILIZER: I don't like money, actually, but it quiets = my nerves. - Joe Louis, b. 1914. \par MONEY, BENEVOLENCE, GOVERNMENT, SELF-INTEREST, BANKING: Blessed = inde ed will be the day when it will no longer be from the benevolence of the = government that we expect good money but from the regard of the banks = for their own interest. - "It is in this manner that we obtain from one = another the far greater part of those go od offices we stand in need of. " (Mises) - Hayek, Denationalisation of = Money.=20 \par MONEY, CONSENT, MONETARY IGNORANCE & ENLIGHTENMENT: Does a = population have informed consent when that population is not taught the = inner workings of its monetary system and then is drawn, all unknowing, into economic adventures? - Frank Herbert, = The Dosadi Experiment, GALAXY 7/77, P. 68. \par MONEY, CORRUPTION, ECONOMIC POWER & BIG BUSINESS: He that is of = pinion money will do every thing, may well be suspected of doing every = thing fo r money." - Benjamin Franklin, Poor Richard, 1753. - Another, older = version: "They who are of the opinion that money will do everything, may = very well be suspected to do everything for money." - George Savile, = Lord Halifax, 1633-1695. Saville?=20 \par MONEY, DIST RIBUTION: Money distributes itself among the nations, relatively to the = needs of each... being attracted by the products. - Le Trosne, quoted by = Marx, G. B., p. 68. Under freedom to issue one has not to depend upon a = natural and even distribution of rare=20 m etals, which is only a strong tendency but not an immediate practice. = Later it was expressed as the "law of fluctuating gold quantities". But = this was often disturbed through export prohibitions, central bank = hoardings, wars and revolutions, insecurity of highways and property, etc. If gold is not an exclusive currency then = one does not depend on it, either.- J. Z., 23.3.97. See: FREE TRADE, = BALANCE OF PAYMENT, INTERNATIONAL LIQUIDITY, GOLD STANDARD. \par MONEY, EARNING, MAKING MONEY, BUSINESS: There are few way s in which a man can be more innocently employed than in getting money. = - Samuel Johnson, Remark to Dr. Strahan, in Boswell's Life of Johnson, = 1775. MAKING money is better and ISSUING money is still better. = Otherwise, one may waste hours in bad company, f lattering a rich uncle, in order to get one day a higher inheritance. Or = one might lobby a politician for a subsidy or hand-out. - One should not = only distinguish MAKING, TAKING and FAKING money but also ISSUING money. = - J. Z., 23.3.97. \par MONEY, FREE TRADE, L ABOR & CAPITAL: Plainly labor cannot be free, unless the laborers are = free to hire all the money capital that is necessary for their = industries. And they cannot be free to hire all this money capital, = unless all who can lend it to them, shall be at libert y to do so. - In short, labor cannot be free, unless each laborer is free = to hire all the capital - money capital, as well as other capital - that = he honestly can hire; free to buy, wherever he can buy, all the raw = material he needs for his labor; and free =20 to sell, wherever he can sell, all the products of his labor. Therefore = labor cannot be free, unless we have freedom in money, and free trade = with all mankind. -Lysander Spooner, Letter to Grover Cleveland, 51, = Works I. - Note, that here he does here w r ite only about financial or capital freedom, not about monetary freedom, = e.g. freedom to issue, accept, discount, refuse & clear. Nor does he = discuss laborers as potential issuers at least of clearing certificates = upon their labour or as acceptors for sho p foundation money in wage payments to them. But then L. S. never clearly = enough distinguished between capital and currency and did imagine that = all capital could be turned into currency. In this he did not serve the = cause of monetary freedom very well but rather provided a disservice. - J. Z., 23.3.97, 29.8.02. \par MONEY, GOOD MONEY, BENEVOLENCE & SELF-INTEREST: Good money can come = only from self-interest, not from benevolence. - Hayek, = Denationalisation of Money, 100. - Once thing is certain, governments = are=20 less likely to recognize their long-term self-interest in the monetary = sphere than businessmen are. When, like politicians, they have their = eyes mainly on the next election returns, and these are based on = ignorance and prejudice, then facts and truths wil l rarely influence them enough to act rightly and sensibly, regardless of = the votes they can thereby win or lose. - They rather provide a = multitude of bandaids and bandages for the multitude of wounds they have = caused and are still causing by their monetar y despotism. - J. Z., 23.3.97. \par MONEY, GOOD VS. EVIL: It's not that money makes everything good; = it's that no money makes everything bad. - Yiddish Proverb. - Only under = monetary freedom can money make almost everything good and only under = monetary freedom=20 can money make almost everything bad. To use the term "money" for both, = without distinctions, is misleading. At present all of us suffer = directly or indirectly under the absence of the money of monetary = freedom and often under too much or not enough of th e money of monetary despotism.- J. Z.,23.3.97. \par MONEY, GOOD VS. EVIL: Money is in fact the root of much good. - = Paul Lepanto, Return to Reason, 85. - That applies even to the money of = monetary despotism, which, within limits and in the absence of something = b etter, does also somewhat serve as money. But without qualifications one = should make such statements at most only about the monies of monetary = freedom. - J. Z., 23.3.97. \par MONEY, GOOD VS. EVIL: Money is the root of all good. - Ayn Rand, A. = S., 391. - Despoti c money is the root of much evil. Freedom's money is the root of much = good. This distinction between good and evil, rights and their = suppression, should be drawn, too, especially by advocates of individual = liberty and rights, as Ayn Rand was. - J. Z., 23. 3.97. \par MONEY, IMPORTANCE: One should look down on money but never lose = sight of it. - Andre Prevot fl. 1911. \par MONEY, INTEREST IN MONETARY THEORY & PRACTICE: If the football, = golf, tennis etc. crowds familiarized themselves to a minimum degree = with the nature=20 of money, we would not have unemployment and inflation. - J. Z., 2/3/79. = - It would cost them only a fraction of the time, effort and sport they = do now spend on sports. - J. Z., 23.3.97. \par MONEY, ISSUES AS LOANS RATHER THAN SPENDING : THE INDIVIDUALIST has = c onstantly pointed out that a fundamental defect of our system is that = fresh money is not lent to industry, but is spent into circulation. = (Which means that it has not sufficient reflux, especially when it is = legal tender. - J. Z.) When money is issued onl y as a loan, the borrower is obliged to produce and sell goods in order = to repay his loan; and the production of goods therefore keeps pace with = the money issued. (It should be issued not on goods to be produced but = on goods already produced and sold and r e ady for sale in the shops. - J. Z.) When money is spent into circulation = (Forcing requisitioning certificates upon you is hardly "spending"! - J. = Z.), it remains there, subject only to the clawing back in taxes and the = sale of government securities. Neith er the government spending of money, nor the clawing back of taxes is a = trustworthy guide to the need of commerce for money. Hence all our woes. = ... - Henry Meulen, THE INDIVIDUALIST, 8/78, p. 48. \par MONEY, LACK OF IT: Lack of money is trouble without equal. (Faute = d'argent, c'est douleur sans pareille.) - Rabelais, Works, Bk. ii, ch. = 16. \par MONEY, LACK OF MONEY & EVIL: A lack of money is the root of many = ills. - Whittaker Chambers in Buckley's Rumbles, p. 209. \par MONEY, LACK OF: Lack of money is the root of all evil. - G. B. = Shaw, Man and Superman. The Revolutionist's Handbook.=20 \par MONEY, LEARNING, PUBLISHING AND LIBERTARIANS: The love of money and = the love of learning seldom meet. - George Herbert, Jacula Prudentum. - = Luckily, there are at least some exceptions. If peo ple really loved their money so much that they hesitate to invest it in = freedom literature printed on paper then at least some of them should = become interested in reproducing some of their favourite titles on = microfiche only, where a page on a microfiche=20 duplicate may sometimes cost them as little as 0.03 cents per page. = Their purse strings should not be too tight for such opportunities to = promote their ideals on the cheap. - J. Z., 23.3.97. \par MONEY, LOVE OF IT, EVIL & GOOD: The love of money is the root of = all good. - quoted in INTEGRITY, Nov. 71. (I noted down: vol. iv Robert = No. 11, P. 55 but am presently unaware which work this refers to. - J. = Z.) \par MONEY, LOVE OF MONEY: It is the love of money - not money itself - = which is "the root of all evil". - Samuel S miles, Self-help, 364. - One should distinguish the immoral lust for the = money of monetary despotism from the pure and liberating love of the = money of monetary freedom. Otherwise one does not distinguish between = good and evil in this sphere. Even Smiles d id not advocate self-help money issues and self-help alternative value = standard contracts. - J. Z., 23.3.97. \par MONEY, ONLY MONEY? Ever notice than when someone says: "It's only = money", it's usually our money he's talking about? - Al Bernstein, R. = D., 6/77. \par M ONEY, PAPER MONEY & POLITICAL CONTROL: The government monopoly of the = issue of money was bad enough so long as metallic money predominated. = But it became an unrelieved calamity since paper money (or other token = money), which can provide the best and the w orst money, came under political control. - Hayek, Denationalisation of = Money, 25. \par MONEY, POLLUTION OF MONEY & LEGAL TENDER: Stop money pollution by = the government: Stop Legal Tender! - J. Z., 27.10.78, after reading L. = E. Read on the government as "the polluter of money", in "Let Freedom = Reign", p. 7. \par MONEY, PRIDE & DIGNITY OR ABILITY TO PAY ONE'S WAY: Pride and = dignity come from money in the pocket, and not just a hole. - Chris = Tame? (Often I can't read my own handwriting! - J. Z.) \par MONEY, See: UNMONEY, \par MONEY, SERVANT INSTEAD OF MASTER: Let money be the servant, not the = master. - Quoted on radio, 22.10.76. - You can't do this for the money = of monetary despotism. You can do it only for the money of monetary = freedom. - J. Z., 23.3.97. \par MONEY, THE HEALER: There are few sorrows, however poignant, in = which a good income is of no avail. - Logan Pearsall Smith, 1865-1946. \par MONEY, THE ROOT OF EVILS? & INFLATION & DEFLATION: It is not money, = as is sometimes said, but the depreciation of money - the cruel and = crafty dest ruction of money - that is the root of many evils. (The scarcity of = money, due to deflations and these due to the issue monopoly, is also = the root of many evils. - J. Z., 22.3.97.) It destroys individual thrift = and self-reliance as it gradually erodes per s onal savings. It benefits debtors at the expense of creditors as it = silently transfers wealth and income from the latter to the former. It = generates the business cycles, the stop-and go boom-and-bust movements = of business that inflict incalculable harm on =20 millions of people. For money is not only the medium for all economic = exchanges, but as such also the lifeblood of the economy. When money = suffers depreciations and devaluations it invites government price and = wage controls, compulsory distribution throug h official allocation and rationing, restrictive quotas on imports, = rising tariffs and surcharges, prohibition of foreign travel and = investment, and many other government restrictions on individual = activities. - Hans F. Sennholz, Inflation or Gold Standard ? chapter: What Inflation Is. \par MONEY, VALUE & PAPER MONEY: The value of paper money obviously can = be regulated to a variety of principles - even if it is more than = doubtful that any democratic government with unlimited powers can ever = manage it satisfactoril y. - Hayek, Denationalisation of Money, 25. - A government with full = power over money does usually find itself powerless to solve all its = financial problems and to prevent inflation and unemployment. On the = contrary, this power so corrupts it and all its=20 a ctivities, that it causes mass unemployment for prolonged periods, = depressions, inflations and stagflations - and government sees not other = "ways out" than further despotic monetary measures. The monarchs of = money are usually unable to perceive that their =20 monetary and financial problems arise from monetary despotism or = monetary authoritarianism or monetary monarchism. Their very power = blinds them to the realities of it and to the freedom alternatives to = it. - But wonders will never cease: Some Federal Rese r ve Banks in the U.S. have actually published some writings by monetary = freedom advocates among their employees and these have not been fired = for expressing such views! And a former libertarian, Alan Greenspan, has = become the top man in the Federal Reserve =20 Bank board. But its seems that this job has taken so much hold of him = that he has come acts like a monetary despot rather than like a monetary = liberator. It must be admitted, though, that he could not unilaterally = repeal all the laws of monetary despotism =20 or enlighten all its supporters, even if he himself were fully = enlightened on these matters. - To his credit it must be said that under = his reign inflation has been somewhat reduced. - But when it comes to = monetary policies, all he seems to have to offer=20 n ow is either a raise or a maintenance or a reduction of the interest = rate. Has the extensive use of cathode tube computers in his job and = their various radiations damaged his brain? Or have the alcoholic drinks = in his numerous official dinners done their=20 t rick to his brain cells? The smallest quantity of alcohol consumption = does already kill thousands of brain cells. Although we possess many, = their number is still limited and only few new brain cells are ever = grown, as recent brain research revealed. Could =20 a radical advocate of monetary freedom do more in his position? Or would = he simply have to resign? Does he consider himself and his limited = options merely as the lesser evil? Prof. Heinrich Rittershausen once = wrote a classic treatise on the central bank s ystem, in the hope to help achieve the least possible abuses by this = institution. In this he may have partly succeeded - for Germany, at = least for a few of its post-war years, when its inflation was zero or = very low. - J. Z., 23.3.97. \par MONEY, WANT OF MONEY: The want of money is the root of all evil. - = Samuel Butler, 1835-1902. \par MONEY. ISSUE & REFLUX TECHNIQUE VS. TAMPERING: Money that is = tampered with is energy drained to the degree it is manipulated. - Joan = Marie Leonard, THE FREEMAN, 3/77. - No sound issue=20 and reflux technique should be classed as unsound management, tampering = or manipulation. - J. Z., 23.3.97. \par MONEY: Money makes mastery. - Unknown, Liberality and Prodigality, = i, 5, 1602. - Rather, let's master money to set ourselves free. And we = should in this not aim at mastering the money of monetary despotism but = that of monetary freedom. - J. Z.,23.3.97. \par MONEY: The survival of a free market is dependent on the = preservation of a sound money. If sound money is to be restored and our = freedom preserved, go vernment must surrender its monopoly over money and allow gold to once = again serve buyers and sellers in the market as our medium of exchange. = Gold is legal, BUT it is not yet money. - Robert G. Anderson, THE = FREEMAN, 1/75. - Why only one sound money? Did =20 we ever have sound money all over, or only more or less exclusive or = even exclusive forced currencies? Did we ever have a free market in the = absence of full monetary freedom? Why only gold as a medium of exchange = and standard of value? - I have still to s e e e.g. the first demonstration protesting against legal tender, the = central bank and its issue monopoly and not demanding gold as the only = legal alternative. - Why provoke all the enemies of gold? Why not let = them have their thing - while allowing all oth ers to do their things to themselves? Tolerance for all honest or = self-concerne d actions regarding money and finance, too. - To each his = monetary and financial religion - and their consequences. - J. Z., = 23.3.97. \par MONEY: The value of money is that with it=20 we can tell any man to go to the devil. It is the sixth sense which = enables you to enjoy the other five. - W. Somerset Maugham, 1874-1966. - = Even the tax gatherer or the judge or the men or authorities coming to = conscript you, imprison you or kill you? Ce rtainly not in all instances. At most you can hire the best lawyers and = tax consultants and private guards. - J. Z., 23.3.97. \par MONEY: A jackass loaded with gold can climb over every wall. - King = Philip of Macedonia. - It was certainly a cheaper, easier and l ess bloody way to conquer a city. Bribing an enemy general can sometimes = help, too. And so can paying deserters for their weapons and for their = stay with us or in a neutral country, until their country has been = liberated from despotism in a defensive or l iberation war or libertarian revolution. - J. Z., 23.3.97. \par MONEY: A man without money is a bow without an arrow. - Thomas = Fuller, Gnomologia, No. 317. - A man without money has to bow because he = has no arrow. - J. Z., 5.7.82. - Like most analogies, this one limps, too. The target of one's money "arrow" would complain if one = missed him. And when one hits him with it then he is neither wounded nor = killed thereby. But one thing the two have in common: One can = manufacture one's arrows and one's money. But the o ne is a sign of animosity or subjugation and the other of trading or = mutual benefit. The one is a political means, the other an economic one. = Insofar the gap could not be greater. - J. Z., 23.3.97. \par MONEY: A money income is almost essential in a modern econo my. Dreams of happy self-sufficiency on a picture-postcard farm are = dreams of the young and energetic. For almost everyone else, an income = of money is the SINE QUA NON of survival. With enough money, it is = generally believed, people can buy what they need . - James E. McAdoo, THE FREEMAN, 1/76, p52. \par MONEY: A tool to escape the inconveniences of primitive barter = transactions and laborious clearing and to facilitate the clearing of = all debts. - J. Z., 5.4.85, 22.3.97. \par MONEY: All the perplexities, confusions an d distresses in America arise not from defects in their constitution or = confederation; not from want of honor or virtue, so much as from = downright ignorance of the NATURE of coin, credit and circulation. - = John Adams, quoted by Young on Rand, p. 57. In a=20 letter to Thomas Jefferson, 1787. Also in Irvin A. Schiff, TheBiggest = Con, p. 13. \par MONEY: And let us bear in mind that exchange (other than primitive = barter) depends on an honest, trustworthy, circulating medium; this is = an absolute - money of integrity. Fre edom in monetary matters means no political manipulation of our medium = of exchange. - L. E. Read, Having My Way, 82/83. - If the money of = monetary despotism were so bad that one could not exchange it at all for = anything one wants, then it could hardly las t for many days. What makes it bad are especially its monopoly shortages, = its enforced depreciation and the combination of these despotic features = in stagflation, with all their consequences, bankruptcies, mass = unemployment, mass under-employment, even dic t atorships, official and unofficial terrorism, wars and revolutions. But = one should recognize that vast turnovers are even achieved with this bad = money. Much more can be turned over, saved, productively invested and = turned into more and more widely spread=20 wealth with honest and competitive currencies. Alas, too few hunt for = the present bad money rather than ponder the easy availability of good = money and the preconditions for this. - J. Z., 23.3.97. \par MONEY: Can anybody remember when the times were not hard, an d money not scarce? - Emerson, Society and Solitude: Works and Days. - = How many people can remember hard or sound money and money so cheap that = mortgages were offered at between 1 & 2 % - as in Switzerland still = after WW II? - J. Z., 23.3.97. \par MONEY: Everyt hing else can satisfy only one wish, one need; ...Money alone is = absolutely good, because it is not only a concrete satisfaction of one = need in particular; it is an abstract satisfaction of all. - Arthur = Schopenhauer, Aphorismen zur Lebensweisheit, tr. by =20 T. Bailey Saunders. - He was lucky to live in that century in Germany = which had inflation, from the Napoleonic Wars to WW I. - As a = philosopher he should have distinguished between good money and bad = money, forced currency and optional currency, mismanage d currency and self-managed currency, kept well within its natural = limits. - J. Z., 23.3.97. \par MONEY: Fight thou with shafts of silver and thou shalt conquer all = things. - Response of the Delphian Oracle to Philip of Macedon, when he = asked how he might be victorious in war. - Plutarch, Apothegms. \par MONEY: Good money is not impossible. It is merely outlawed. - J. = Z., 23.3.97. \par MONEY: Government prints money and trouble. - David Zube, 2.4.82. - = The printing of money does not do much harm but forcing it into circula tion, via legal tender legislation and an issue monopoly, does, as soon = as that amount is exceeded which, under free market rating and under = competition from other currencies, would still be accepted at par. - J. = Z., 22.3.97. \par MONEY: His concept of money as the economic catalyst. - H. G. = Pearce, in PROGRESS, 3/76, on Henry George. \par MONEY: I cannot afford to waste my time making money. - Agassiz, = when offered a large sum for a course of lectures at a western college. = - Whipple, Recollections of Eminent Men. -=20 Making "a lot of money" or "more money" than one really needs for one's = commitments, would be more correct. Moreover, lectures are such a = fleeting product - the memories of the relatively few listeners being so = bad and their comprehension so often insuffi c ient. It would be more worthwhile to have them permanently recorded on = audio- or video-tape and transcribed on microfiche, floppy disks, text = CD-ROMs etc. and thus permanently available to an unlimited number of = interested people upon demand. Appearance=20 i n a conventional book is usually to expensive and limited, too. - So far = no amount of money can buy a doubled or tenfold increased life-span. = One's remaining hours, days and years are still the scarcest currencies. = What are all riches besides them? - J. Z ., 23.3.97. \par MONEY: If the economists could satisfactorily solve the problem of = the regulation of paper currency, they would do more for the wages class = than could be accomplished by all the artificial doctrines about wages = which they seem to feel bound to e ncourage... - W. G. Sumner, What Social Classes Owe to Each Other. 139. \par MONEY: If the economists could satisfactorily solve the problem of = the regulation of paper currency, they would do more for the wages class = than could be accomplished by all the artifi cial doctrines about wages which they seem to feel bound to encourage. - = W.G. Sumner, What Social Classes Owe to Each Other, 139. - Actually, I = can't think of a single case which economists, by their theorising and = observations and by their influence upon =20 public opinion have ever permanently solved. Collectively, they are part = of the problem rather than the solution. Luckily, there are at least = some real economists among them, who understand the economics of = freedom. The others are only advisers on the reg ulation or management of economic despotism - and thus cause rather than = solve problems. - Paper currencies do not need governmental regulation = but, rather self-management, by issuers and potential acceptors. - J. = Z., 23.3.97. \par MONEY: If there is a shortage in ready cash then there is a = shortage in everything. (Deficiente pecu, deficit omne, nia. - Mangelt = im Beutel die Baarschaft - mangelt's an jeglichem. - Rabelais, Gargantua = & Pantagruel, III, 41. \par MONEY: In view of their (60-year) record, can governments b e trusted to keep any money which the politicians have the power to = tamper with? - Henry Hazlitt, To Stop Inflation: Return to Gold, p. 19. = - Politicians are usually better at keeping (legally or illegally) money = and spending it than keeping it stable an d also in sufficient supply. And they abide usually by a "gentlemen's" = agreement that lets each of them keep the loot they were able to put = aside for themselves. - J. Z., 23.3.97. \par MONEY: It is probably impossible for pieces of paper or other = tokens of a ma terial itself of no significant market value to come to be gradually = accepted and held as money unless they represent a claim on some = valuable object. To be accepted as money they must at first derive their = value from another source, such as their convert i bility into another kind of money. (J. Z.: or goods and services or a = multiplicity of them, up to the note-holder's choice! In the following = he ignores that theoretical possibility and its extensive, although not = universal practice under the remaining mon e tary despotism - and monetary ignorance and prejudices.) In consequence, = gold and silver, or claims for them, remained for a long time the only = kinds of money between which there could be any competition; and, since = the sharp fall in its value in the 19th =20 century, even silver ceased to be a serious competitor to gold. - Hayek, = Denationalisation of Money. - Here he ignores among other things the = extensive and prolonged use of copper weight units or taels in China, in = which they measure rather soundly a grea t variety of depreciating currencies forced upon them. Apart from this = large instance, look up any good guide to private token and emergency = money issues - J. Z., 23.3.97. \par MONEY: It means what money has always meant. A measure of = performance. A symptom of mismanagement. - Sam Nicholson, Scrooge in = Space, ANALOG 8/80, P. 68. \par MONEY: It's different things to different people. Let them have = their way! - J. Z., 5.4.85. \par MONEY: Land is, alone, an unfit fund for a bank circulation. - = Alexander Hamilton, in his repor t calling for a national bank in 1790. - A bank can either or both = circulate a) a currency, with a current value for ready for sale goods = and services, upon which it is as directly based as is possible and = desirable and b) financial securities, that withi n financial circles are freely transferable (but only within them!) and = help to mobilise and finance financial or productive assets. - Only the = produce of land, once it is ready for sale, can provide a good cover for = currency in the hands of consumers. Onl y to that extent can farmers liquidify their assets in form of their own = kind of ready cash. But they should also be free to issue and circulate = e.g. their own mortgage bonds and establish a proper market for them = among all other financial securities. Gove rnments have all too much neglected or even outlawed this kind of credit = option for them. - J. Z., 23.3.97. \par MONEY: Let me give you a tip on a clue to men's characters: the man = who damns money has obtained it dishonorably; the man who respects it = has earned=20 it. - Ayn Rand, A. S., 389. - The man who damns the money of monetary = despotism knows enough about it to condemn it and the man who respects = the money of monetary despotism may not have earned it honestly. On the = other hand, the man who damns the money of =20 monetary freedom does not know what he is talking about and only the one = who respects it has the right to earn it. - Ayn Rand always appealed to = her readers to check her premises - but sometimes failed to do so = herself, e.g. in her condemnation of competi n g governments, in her notion that only "romantic heroes" could run = enterprises successfully and that enterprises must be run = hierarchically. A book is still missing, as far as I know, that lists = all her economic, philosophical and political errors and ref u tes them systematically. Those who do respect her truths should do this = honourable thing towards her untruths and clear their writings of them, = by corresponding comments or appendixes. Microfiche would have room for = all of them. - If you can't find a publ isher or will not microfiche them yourself, send them to me. Regarding = money she went never beyond "the" gold standard, as far as I know. - J. = Z., 23.3.97. \par MONEY: Machlup... speaks occasionally, e.g. (39)p 225, of = "moneyness" and "near-moneyness". - Hayek, Denationalisation of Money, = 47, footnote 2. \par MONEY: Man makes money and the money makes the man. - David Zube, = n.d. - The money of monetary despotism makes for despotism and is an = expression of it. It makes despots and is their "product". The money of = monet ary freedom can make men free and is the product of already somewhat = free men and of the really free men of the future. It can be = self-realising. The more you manage to issue of it, the more free you = might become, like with your other underground economy=20 transactions, if you can manage to escape the oppressors and their = penalties. - J. Z., 23.3.97.=20 \par MONEY: Money answereth all things. - Old Testament, Ecclesiastes, = x, 19. ( ecuniae obediunt omnia. - Vulgate.) - We are mastered by money = instead of mastering i t and turning it into our servant or ready tool. Despotic money spreads = despotism everywhere. The money of freedom spreads freedom everywhere. = Thus we should overcome the former and learn to master the latter. -J. = Z., 6.7.82, 23.3.97. =20 \par MONEY: Money does n ot pay for anything, never has, never will. It is an economic axiom as = old as the hills that goods and services can be paid for only with goods = and services; but twenty years ago this axiom vanished from everybody's = reckoning, and has never reappeared. No =20 on has seemed in the least aware that everything which is paid for must = be paid for out of production, for there is no other source of payment. = - Albert J. Nock. -Consequently, sound money should be based on = production: produce, products, services and lab our. - J. Z., n.d., 22.3.97. \par MONEY: Money enables us to get what WE want - instead of what other = people THINK we want. - G. B. Shaw. - As a state socialist and for a = short time somewhat of an anarchist, he never uttered a monetary freedom = idea - as far as I know. - J. Z., 23.3.97. \par MONEY: Money evolved on the market place in a number of simple = steps. - Robert Howard and John Singleton, Rip Van Australia, 164. - = That is where it should be returned, in order to make it work best for = us and not against us. - J. Z., n.d. \par MONEY: Money has its own rewards. - J. Z., 11.8.78. - It also has = its own penalties - or it should have them. E.g., the government's paper = money penalty should consist in widespread refusals to accept it, in = ignoring it and choosing alternative mo nies or in discounting it down to its real market value, if any. For = free money the above remark about rewards is much more applicable. But, = if e.g. a debtor pays back a debt to a bank of issue in other than the = bank's own currency, then a small penalty m ight be advisable, contracted for in advance. And any mistakes of a free = bank of issue carries the mistake of a corresponding discount of its = notes in general circulation - and this is as it should be. - J. Z., = 23.3.97. \par MONEY: Money is a bearer of options, an instrument of freedom. - = Dr. H. G. Pearce. \par MONEY: Money is a good servant but a bad master. (L'argent est un = bon serviteur, mais un mechant maitre.) - Bacon, Menegiana, ii,296. = Quoting a French proverb. - We are mastered by money (forced currency) = inste ad of mastering it (free enterprise money). - J. Z., 6.7.82. \par MONEY: Money is a good servant, but a bad master. - 17th c., anon., = in Hyman, Quotations, p. 272. \par MONEY: Money is a system of counters by which human beings keep = track of what they have done for each other. - Thomas W. Phelps, THE = FREEMAN, 9/60p4. \par MONEY: Money is an essential ingredient to happiness in this world. = - Alexander Hamilton, Letter to John Laurens, Dec. 1779. - But one is = not necessarily all the more happy the more money one has or acquires. - = J. Z., 23.3.97. \par MONEY: Money is everything that has power of purchase. - MacLeod, = as quoted by Meulen, THE INDIVIDUALIST, 8/77. - Alas, Meulen explored = and discussed in this publication only too few alternatives to the = government's legal tender pap er money and to the traditional gold standard. - J. Z., 23. 3.97. \par MONEY: Money is honey. - from the film : The Producer. - Why = shouldn't everybody be free to produce (issue) or collect it, all kinds = of it being competitively produced and competitively acquired and = consumed? J. Z., 1.2.76, 23.3.97. \par MONEY: Money is important... because OTHER people want it. The = first requirement of a truly useful money is its acceptability. The more = people are willing to accept it, the more useful that substance or thing = is,=20 as money. - Robert LeFevre, Lift Her Up, Tenderly, 174. - The other = side of the coin is it that YOU COULD ISSUE IT YOURSELF! You can ISSUE = it or OFFER it for voluntary acceptance, on the basis of your own = ready-for-sale goods and services, thereby transf o rming these still somewhat illiquid assets into at least locally and = somewhat liquid ones that the local consumers can come to appreciate as = an alternative currency. They want it as money because it increases = their ability to pay based on no more than you r ability to deliver your ready-for-sale goods and services for them. And = you want it, or should want your own money issue, because it would = increase your own ability to pay. In short, not only would they be = willing to accept it but you could offer it! And =20 the "it" might be your own issue. - J. Z., 23.3.97. (Here I implied, = among the own, the issues of e.g. shopping centres, whose shops have a = common interest in having their customers supplied with sound exchange = media. Single shops or individuals could iss ue their own shop currencies or IOUs only to a limited extent, unless a = perfect clearing system would already exist. - J. Z., 29.8.02. \par MONEY: Money is like a 6th sense - and you can't make use of the = other five without it. - Somerset Maugham, N.Y. TIME MAGAZINE, Oct. 18, = 1958.=20 \par MONEY: Money is MADE - before it can be looted or mooched - made by = the effort of every honest man, each to the extent of his ability. - Ayn = Rand, A. S., 387. - The money of monetary despotism does not work as = well. It is the money la rgely of looters and moochers and a means to either deprive honest men = of much of their efforts and many of them are even prevented by it from = using their talents and knowledge and industry at all or fully under = monetary despotism. Only the money of monet a ry freedom, of which A. R. recognized only the gold coin and gold = certificate option, would enable each person to make the money of = freedom or even to issue it himself, to the extent of his ability to = deliver goods, services and labour in return for it. - J. Z., 23.3.97.=20 \par MONEY: Money is neither good nor bad in itself: it depends on what = is done with it. - St. Thomas Aquinas. - Only a bad tradesman blames his = tools. Money itself does not act. Its owners or robbers or pushers do. - = J. Z., 23.3.97. \par MONEY: Mon ey is not capital but stands for wealth in the process of exchange. - = Dr. H. G. Pearce. - From the viewpoint of shop-foundation money and the = Real Bills Doctrine, is rather represents goods already sold or ready = for sale and services ready for sale and de b t payment or clearing options. "Wealth" and "process" are such sponge = words and do not indicate the time limits for an effective currency, = either. A turnover facilitator for consumer goods and services in daily = demand might be a better description. But po ssibly no single definition covers all the options. Dr. Pearce's = definition does not cover properly either tax foundation money or = banking principle banknotes or railway, bus, electricity or petrol money = and not even shop currency. - J. Z., 23.3.97. \par MONEY: Money is the material shape of the principle that men who wish to deal = with one another must deal by trade and give value for value. Money is = not the tool of the moochers, who claim your product by tears, or of the = looters, who take it from you by force. Money is made possible only by the men who produce. Is this what you = consider evil? - Ayn Rand, A. S., 387. \par MONEY: Money is the most important thing in the world. It = represents health, strength, honour, generosity and beauty as = conspicuously as the want of it represent illness, weakness, disgrace, meanness and ugliness. - G.B. = Shaw, Preface, Major Barbara, 1907. - While a tendency in that direction = does exist, the contrary is also often true. - J. Z., 23.3.97. \par MONEY: Money is the symbol of nearly everything that is necessary for man's well-being and happiness.... Money means = freedom, independence, liberty. - Edward E. Beals, The Law of Financial = Success. - However, one does not have to be financially successful or = able to write best-sellers, in order to pub l ish very much on very affordable alternative media. The fact that one = can save very much by them has not yet sufficiently penetrated the = dollar consciousness of anarchists and libertarians, still struggling to = get and keep at least some of their writings=20 i nto conventional print on paper. If they went e.g. for the microfiche = self-publishing option then, with a few thousand producers and users of = them, fiche could, to some extent, become an alternative exchange medium = between them, too, at least for further=20 l iterature and transmittable service exchanges. And with microfiched = literature, produced by a few hundred activists, complete freedom = libraries and information services could be achieved rather soon - and = they could bring about liberty for anarchists and=20 libertarians much sooner than we could expect otherwise. - I am still = seeking more people who do appreciate this freedom option. - J. Z., = 23.3.97. \par MONEY: Money isn't everything - but then neither is anything else. = - The 1975 Down Under Calendar. \par MONEY: Money makes the man. - Aristodemus. (Alcaeus, fragments, No. = 49; Diogenes Laertius, Thales, Bk. i, sec. 31.) \par MONEY: Money makes the man. - Greek proverb. \par MONEY: Money makes the world go round. - Old song text, 1928. - As = far as government money is concerned,=20 it often brings the economy all too close to a stop or at least into all = too many economic crises. And some of these lead to mass murderous = clashes. Only sound money can make a go of everything sound. The = dishonest and coercive money of monetary despotism spoils almost everything to some extent. - J. Z., 23.3.97. \par MONEY: Money originates from men's desire for INDIRECT exchange. = And more, since indirect exchange usually occurs between strangers like = Smith and Jones, money must be an object which is mutually valued. - = Paul Stevens, THE FREEMAN, 1/75. \par MONEY: Money provides a convenient means of comparing the prices of = many different, apparently unrelated, things. You can translate your = resources into money and then compare the many alternative ways of using = thos e limited resources. - Harry Browne, "You can profit from a monetary = crisis." - You can profit still more from helping to prevent it! - J. = Z., 23.3.97. \par MONEY: Money today is the product of a legally established = disorder, abuse, exploitation, deception, fraud and repression. - J. Z., = 10.7.77. \par MONEY: Money was freely "born", invented or discovered or developed = - and everywhere it is in chains - and we, as a result, too. How did = this transformation occur? I don't know in all details. But how could it = rightly b ecome free again? I believe to be able to solve this question. - J. Z., = free after a famous passage in Rousseau. - J. Z., 5.4.84, 22.3.97. \par MONEY: Money, money. It is the devil itself. Certainly a child of = hell. A curse of mankind, without a doubt, for ever yone wants it exclusively for himself. Money is poison, always = dangerous. A great evil in the morning and late at night. I know only = one thing that is worse and that is: when one has none at all! - German = saying. Source unknown. - J. Z. \par MONEY: Money, th' o nly power that all mankind falls down before. - Butler, Hudibras, Pt. = iii, conato ii, 1. 1327. - Why do they fall down before the money of = monetary despotism and do not bother to raise themselves up with the = money of monetary freedom? - J. Z., 23.3.97. \par MON EY: Money, the textbooks say, is the fuel that makes business go. - = Cornuelle, Demanaging America, 69. - But not any kind of money under any = kind of conditions. Despotic money is often money that can bring = business to a halt or cause it large losses and t h at induces it to undertake unwarranted investments, repayable in = inflated currency. Most textbooks fail to distinguish between the money = of monetary despotism and that of monetary freedom. Few of them see = clearly the connection between inflation and legal tender and the issue monopoly. Most merely parrot an oversimplified = definition of legal tender without comprehending its opportunities for = mismanagement and its usual consequences. The same applies to the issue = monopoly. - J. Z., 23.3.97. \par MONEY: No clear d istinction between money and non-MONEY: It also means that, although we = usually assume there is a sharp line of distinction between what is = money and what is not - and the law generally tries to make such a = distinction - so far as the causal effects of mo n etary events are concerned, there is no such clear difference. What we = find is rather a continuum in which objects of various degrees of = liquidity, or with values which can fluctuate independently of each = other, shade into each other in the degree to whic h they function as money. - I have always found it useful to explain to = students that it has been rather a misfortune that we describe money by = a noun, and that it would be more helpful for the explanation of = monetary phenomena if 'money' were an adjective =20 describing a property which different things could possess to varying = DEGREES. 'Currency' is, for this reason, more appropriate, since objects = can 'have currency' to varying degrees and through different regions or = sectors of the population. - Hayek, Dena tionalisation of Money, 47. \par MONEY: No money, no Swiss. (Point d'argent, point de Suisse.) - = Racine, Les Plaideurs. Act i, sc. 1. Originally intended as a gibe at = the venality of Swiss mercenaries, the phrase is now used to indicate = that what one wants must=20 be paid for. - From one or the other quotations book. - As for the = original meaning: One should also have pondered why no trustworthy = soldiers were volunteering, so that one had to hire foreign mercenaries. = That indicates either a flaw in the regime or in =20 the subjects, most likely the former, rather than one in the Swiss = mercenaries. However, if the latter had known about the issue potential = of their own currencies, in their own villages and towns, then they = would not have to hire their lives our as unprod uctive mercenaries for worse foreign governments than their own. - J. = Z., 23.3.97. \par MONEY: Nothing but money is sweeter than honey. - Benjamin = Franklin, Poor Richard, 1735. \par MONEY: Pay a person in his own coin. - 16th century saying. - That = is the "reflux principle" for currencies in a nutshell. - J. Z., = 23.3.97. \par MONEY: Ready money is Aladdin's lamp. - Lord Byron, 1788-1824. \par MONEY: Since there are so many different kinds of money, rightful = and wrongful ones, very useful ones and hardly usable ones, too, we sho uld try to list and number all the varieties and from then on, when we = speak of money, always add the number that refers to the meaning we want = attached to it. If we did so then wrongful generalisations, laws and = observations on money would, gradually, be c ome rarer and our insights on money would tend to increase. The same = could and should be arranged for every other significant monetary term, = e.g. "means of exchange", "standard of value", "legal tender", "tax = foundation", "debt foundation", "acceptance fo undation", "convertibility", "cover", "currency", etc. - J. Z., 23.3.97. \par MONEY: So far from being the root of all evil, money is the acid = test of sincerity. - THE INDIVIDUAL, Oct. 80. \par MONEY: The best things in life cost money. - Bumper sticker seen in = 1977. \par MONEY: The chief value of money lies in the fact that one lives in = a world in which it is overestimated. - H. L. Mencken. - Are all forms = of money over-estimated or only some? And are not also some forms of = money underestimated, those which should be of i nterest to libertarians and anarchists? - J. Z., 23.3.97. \par MONEY: The crying need of the nation is not for better morals, = cheaper bread, temperance, liberty, culture, redemption of fallen = sisters and erring brothers, nor the grace, love and fellowship of th e Trinity, but simply for enough money. And the evil to be attacked is = not sin, suffering, greed, priestcraft, kingcraft, demagogy, monopoly, = ignorance, drink, war, pestilence, nor any of the consequences of = poverty, but just poverty itself. - G.B. Shaw,=20 M ajor Barbara, 1907. - While this remark contains considerable = enlightenment, it does not provide sufficient light e.g. on how sound = money can be provided to all those willing to work for it or insure = themselves for the risks of life, nor how sound money w o uld do away with many causes of poverty or how ignorance prevents it = from coming into existence etc. - It seems to be a detailed description = of many causes and yet it is misleading on its main message and does not = offer a useful solution. The Welfare Stat e and its money and finance system, if one can call it that, were = certainly not the solution to the problems of the poor. It rather = conducted its own kind of impoverishment policies and wars against the = poor. - J. Z., 23.3.97. \par MONEY: The different kinds of money and currency existing are more = lived with or rather suffered under than known and understood. Due to = this adaptation tendency only a few do ever imagine the sound = alternatives which would be possible. - J. Z., 2.3.79. \par MONEY: The nerve of all things. - Demosthenes. \par MONEY: The seven deadly sins... Food, clothing, firing, rent, = taxes, respectability and children. Nothing can lift those seven = millstones from man's neck but money; and the spirit cannot soar until = the millstones are lifted. - G. B. Shaw, Ma jor Barbara, Act iii. - Shaw often defended MAKING money but never = ISSUING it. - J. Z., 23.3.97. \par MONEY: The universal regard for money is the only hopeful fact of = our civilisation. - G. B. Shaw, Preface, Major Barbara, 1907. - It is = not really universal. A nd all too high regard for government money issues is accompanied by all = too low regard for potential private or cooperative money issues. - J. = Z., 22.3.97. \par MONEY: The use of money is all the advantage there is in having it. = - Benjamin Franklin, 1706-1790. \par MONEY: The use of money is all the advantage there is in having = money. - Benjamin Franklin, Hints to Those That Would be Rich. - To be = sure of having or of having the chance to acquire or issue enough money = to use not only today but tomorrow, next year an d in the next decades of one's remaining life, with perhaps something = left over for children and grandchildren, means also usage, also = postponed usage and the possibility of increasing the value of one's = savings. If governments would not interfere, we cou l d all become multi-millionaires through an ordinary working life and = savings and investment programme for our old age. Imagine also, how all = that capital, productively invested, could increase our productivity and = thus our current earnings. - J. Z., 23.3. 97. \par MONEY: There are three faithful friends - and old wife, an old dog, = and ready money. - Benjamin Franklin, 1706-1790, in Poor Richard, 1738. = - The old wife may be faithful but she is not necessarily a friend. = Money in the form of financial securities, no t yet due but transferable into ready money when due, is not exactly an = enemy, either. - J. Z., 23.3.97. \par MONEY: There is no fortress so strong that money cannot take it. = (Nihil tam munitum, quod non expugnari pecunia possit.) - Cicero, In = Verrem, No. 1, se c. 2. - Under monetary freedom few fortresses would be built or could be = maintained and these few, with the money of monetary freedom, could soon = be taken, in many cases without any bloodshed. One can offer deserters a = better pay and career than despots c a n. Thus one can offer them to vote with their feet. What is it worth in = money terms to us when thus one soldier or officer changes sides, using = his individual sovereignty? How should we respect otherwise his = individual sovereignty - and patriotism? See: O n Panarchy, in my PEACE PLANS series. Monetary freedom is just one = aspect of panarchism. - J. Z., 23.3.97. \par MONEY: This definition was established by Carl Menger (43), whose = work also ought to have finally disposed of the medieval conception that = money, or t he value of money, was a creation of the state. Vissering (61), p. 9, = reports that in early times the Chinese expressed their notions of money = by a term meaning literally 'current merchandise". (J. Z. note: They had = "street money", "teahouse money", "rest a urant money", "bordello money", etc.) The now more widely used = expression that money is the most liquid asset comes, of course (as = Carlyle (8) pointed out, as early as 1901), to the same thing. To serve = as a widely accepted medium of exchange is the only =20 function which an object must perform to qualify as money, though a = generally accepted medium of exchange will generally acquire also the = further functions of unit of account, store of value, standard of = deferred payment, etc. The definition of money as ' m eans of payment' is, however, purely circular, since this concept = presupposed debts incurred in terms of money. Cf. L. v. Mises (45), pp = 34ff. - The definition of money as the generally acceptable medium of = exchange does not, of course, necessarily mean t h at even within one national territory there must be a single kind of = money which is more acceptable than all others; there may be several = equally acceptable kinds of money (which we may more conveniently call = currencies), particularly if one kind can be q uickly exchanged into the others at a known, though not fixed, rate. - = Hayek, Denationalisation of Money, 46. \par MONEY: Thus, money is that commodity which serves as a medium of = exchange by virtue of its high degree of marketability. - The task of = discovering=20 WHICH commodity will be most valued by and most acceptable to men as = medium of exchange can only be accomplished through a MARKET... - Paul = Stevens, THE FREEMAN, 1/75. - The market, when quite free, discovers = several means of exchange as well as several g o ods and services. Even the most popular among them do not succeed in = driving out all others. They, too, have their role to play and satisfy = their producers and users enough to go on producing and offering and = accepting and consuming them. Even the best sh ould never have an exclusive, not even the best speaker or writer or = mint master or engraver of notes. - J. Z., 23.3.97. \par MONEY: To the Austrians money is the most marketable good a person = can acquire. - Hans F. Sennholz, REASON, Oct. 71. - Is the money of m onetary despotism really the most marketable good a person can acquire? = Does it really deserve the terms money and marketability? Forced and = exclusive currency may be, compulsorily, the most marketable good in its = country, but it is not the most marketabl e currency in the rest of the world, where and when it is not an = exclusive and forced currency. The money of monetary freedom may be most = marketable only in a locality, as at least one of the local currencies, = but also, through a good clearing system, som ewhat marketable in the rest of the world, although it has only the = optional - and for the issuer obligatory - acceptance foundation. - J. = Z., 23.3.97. \par MONEY: We have heads to get money, and hearts to spend it. - = Farquhar, The Beaux's Stratagem, Act i, sc.=20 1. - Unfortunately, we have not good enough heads, in most cases, to = ponder how to and then to issue our own sound money. Then we could = freely spend it to the extent of our ability to supply goods and = services for it. Ponder the fate of the present one bi llion unemployed and underemployed and then have a heart and really = start thinking about money, not only the money of monetary despotism but = that of monetary freedom, and of the differences that would make. - J. = Z.,23.3.97. \par MONEY: We want it in order to get rid of it for what we want. - Dr. H. G. Pearce. - That could lead to an = interesting Quizz question: What do we want only in order to get rid of = it? - J. Z., 5.8.76. - Alas, if applies to e.g. garbage bags, food and = drink, too. Some would even apply it to spouses, friends and children. - J. Z., 23.3.97. \par MONEY: When I was young I used to think that money was the most = important thing in life; now that I am old, I know it is. - Oscar Wilde, = 1854-1900. \par MONEY: When it is a question of money, everybody is of the=20 same religion. - Voltaire, 1694 - 1778. - Only insofar as most people = simple want enough or more and more even of the worst kind of money. But = when it comes to decide what is the best possible or a good enough kind = of money and how it should be establishe d and maintained then a great variety of religious and sectarian faiths = on money becomes revealed, most of them quite worthless or even wrong = and harmful. - J. Z., 23.3.97. \par MONEY: When you print unbacked money you print trouble. - David = Zube, 3/82. - If it has legal tender. I it is subject to a free market = rate and has no acceptable backing at all then it will be simply = refused, like a very doubtful cheque. - J. Z., 3/82. \par MONEY: Without a trustworthy medium of exchange, the whole economy = falls into shambles. - L. E. Read, Who's Listening? \par MONEY: Would you know what money is? Go borrow some. - English = Proverb. - Alas, practice does not always sufficiently enlighten. = Otherwise, soldiers should be most enlightened people on how to achieve = peace. - Compared with=20 most organized peace activists, they are often relatively enlightened - = but by far not yet enough, in most cases. - Businessmen rather study = salesmanship, accounting, management and the stock market rather than = monetary theory, practice, history and futur ism. - J. Z., 23.3.97. - Another version: "If you would like to know the = value of money, go and try to borrow some." - Benjamin Franklin, = 1706-1790. \par MONEY: Yes, ready money is Aladdin's lamp. - Byron, Don Juan, Canto = xii, st. 12. - Adam Smith called it (its non-cash form) "the wagon way through the air." - Why do most people = rather read, listen to or view the story of Aladdin's lamp than provide = themselves with it, via their own private or cooperative money or by = demanding or accepting such money and seein g to it that it becomes legalized? \par NOTE ISSUE & QUANTITY THEORY: Note issue and inflation have nothing = to do with each other. - Popular point of view. - Yes, in the same way = as the number of mink coats on the market has nothing to do with their = prices and t he quantity of sand available has nothing to do with the price of sand. = - Try your theory out during your next birthday party. Cut the cake into = 20 pieces and then issue 40 tickets for the birthday cake. - J. Z., n.d. = - The quantity theory applies only to =20 exclusive and forced currency. Other, optional and competitive = currencies are self-limiting. They cannot be multiplied beyond the = requirements of trade and cannot drive up the prices and wages expressed = in other and sound value standards and paid for in o t her currencies. At most competing currencies can be depreciated by the = issuers and taken out of circulation by their issuers or be driven out = of it by other people refusing to accept them any longer. An over-issue = of tickets to one cinema does not depreci a te all other tickets. And if I were to issue an avalanche of tickets = with the impression : "This ticket is good enough for nothing or valued = only by fools" - then I could not inflate all prices and wages in a = country with them, unless this country is fill e d exclusively by complete fools. However, if my IOUs were given = exclusive currency status and legal tender then I could cause an = inflation corresponding, sooner or later, to my issues. - The central = banks, which inflate the currencies by their note issues , want us to believe that their note issues have no effect upon prices = and wages that have to be paid for and expressed in its exclusive and = forced currency. But their wish should not be our command or become a = pillar of our monetary faith. - J. Z., 2.4.97 . \par PAYMENT DIFFICULTIES & INFLATION: Payment difficulties can be = overcome by inflation. - Popular belief. Maybe a government's payment = difficulties can be TEMPORARILY overcome in this way but certainly not = permanently, as monetary history has often shown. Bu t payment difficulties of others are not decreased but rather increased = thereby, for most people, sooner or later, especially debtors. For after = they had once cheated their creditors with legal tender "payments" which = were only part payments and part wort h less paper, they will have difficulties in getting any further credit. - = "Payments" in inflated forced and exclusive currency do not constitute a = full and just payment. They are, rather, comparable to "payment" in = requisitioning certificates by a conqueri n g or occupying army, that is unable to pay in cash. - To some extent = payment difficulties are inevitably associated with the system of = monetary despotism. But this system is not inevitable. - The ability to = pay should be increased not by inflationary issu e s of exclusive and forced currencies but, instead, by issues of = optional, competing and market rated currencies that may be freely = refused and discounted and which have to be accepted at their face value = at any time and from anyone only by their issuer. T h en and thereby all ready for sale consumer goods and services and labour = in daily demand could be monetised by such issues and thus easily sold = for them, when they stream back, after having been spent into = circulation by their issuers, who obliges no one=20 but himself by these issues. - J. Z., 2. 4. 97. \par POOR PEOPLE, RICH PEOPLE, INFLATION & INCOME DISTRIBUTION: The rich = get richer and the poor get poorer. - Inflation tends to redistribute = income from the poor to the rich in the community. - Popular opinions.=20 - One should hesitate in uttering such views when one considers that the = poor are usually considered to be debtors while the rich are usually = considered to be creditors. Obviously, during an inflation the debtors = (perceived as the poor) benefit at the exp e nse of the creditors (perceived as the rich). In reality, the rich are = often people that owe much more capital and money than they personally = own, i.e., they are debtors in balance and only to that extent can they = benefit from inflation by defrauding thei r debtors - who are often small savers whose accumulated savings or old = age pension funds are often carelessly invested by banks and financial = institutions, in unsound schemes of rich debtors. On the other hand, = those perceived as the poor, namely wage and =20 salary recipients, are at least to that extent - apart from their = mismanaged savings, invested by others with the rich debtors - the = creditors of their employers (who are often large scale debtors of their = suppliers). To the extent that rich people were f o olish enough to become large scale lenders in inflationary times, = investing in securities repayable in depreciated money, they were = impoverished. To the extent that they were able to borrow more and more, = being obliged to repay their loans only in depreci a ted currency, they were enriched at the expense of their creditors. - = Most financiers do not operate mainly with their own capital but with = that of others, invested with them. To that extent an inflation can = enrich them. Among the main victims of inflatio n are employees on wages and salaries that are fixed for considerable = periods during which the purchasing power of their nominally stable = earnings may be very much reduced, since the prices of consumer goods = tended to race ahead of the wages and of the not e printing presses. All those whose long term claims, no matter how large = or small, are fixed in nominal paper values, become losers, whether they = are or are considered poor or rich or not. Few of the German = multi-millionaires before the 1913-1923 inflatio n were millionaires afterwards. They were not sensible enough for that = for they had no first-hand experience of inflation for a long time and = very few of them had bothered to study other inflations and how they = could somehow protect their fortunes against=20 them. - J. Z., 2.4.97. \par PRESSURE, EXCESS PRESSURE & INFLATION: To stop inflation excess = pressure on the economy must be curbed. - Popular opinion. - This = amounts to another of the camouflaging and misleading terms. The = decisive pressure is that of the note=20 printing presses for turning out forced and exclusive currency - and = that of politicians, given the power of monetary despotism, to "spend" = more, largely in newly printed money. This kind of pressure upon all = prices and wages, fees and taxes, is usually i g nored. By legal tender it is pressed upon all creditors, at its nominal = face value, no matter how much its purchasing power has already been = reduced. The forceful pumping of this kind of "money" into general = circulation, pushes all prices up, sooner or l ater, although unevenly. This is the only safety valve remaining and by = its activity we do usually recognize inflation sooner or later, even = under all kinds of "monetary controls" on top of the basic control of = monetary despotism. - J. Z., n.d. \par PRICE CONTRO L & INFLATION: An inflation can be stopped by well administered price = and wage controls. - Popular opinion. - Your proposal reminds me of an = actual resolution of the town council of Halle, Germany, which outlawed = nuclear explosions within the precincts of =20 the town. That resolution is sure to be a great help when the town is = targeted by a nuclear bomb dropped from an aircraft or by a nuclear = missile or by a suitcase bomb. Try to stop an IBM (Intercontinental = Ballistic Missile) with a stop sign! - We might a s well try to outlaw death. - If you are trying to stop a moving car, = then make sure you also stop its motor or at least put it out of gear. = Otherwise you will be in trouble with your breaking efforts. The same = applies to the motor of inflation: the money =20 issue monopoly associated with legal tender power and this despotic = power then used by setting the government's note printing presses into = motion. A bad motive to abuse these powers will rarely be lacking to = politicians dependent on votes and on bribing v oters with stolen assets. - One of the effects of "price controls" is = that then you can buy e.g. a pound of sugar for the old price of e.g. 10 = cents - but you will have to pay $ 3 for the bag it comes in.=20 \par PRICE CONTROL & WAGE CONTROL: An inflation must be=20 stopped from the side of prices because a wage control would be a = one-sided and anti-social measure. - Popular point of view, especially = among employees. - Price control would, indeed, be a two-sided matter, = since it includes control of the price of labou r as a commodity or service. - Prices, by their very nature, are = uncontrollable. Firstly, not they are controlled, - they do not mind, = they have no mind, but the people charging them are controlled. Price = control is people control. A price is an agreement=20 b etween at least two people. These two people are controlled and enslaved = by price controls - leading to surplusses or shortages. The argument = against wage controls applies as well to price controls. - Actually, = there are not two sides to this. Wages are p rices and prices are wages. - J. Z., n.d. \par PRICE CONTROLS, DISCIPLINE & COURAGE: Price controls need only = national discipline and political courage and then they will work. - = Popular opinion. - That was the opinion of King Canute, too, when he = whipped the wa ves in order to make them subside. - Price controls never worked, even = when there was plenty of discipline (including death penalties) and = courage and determination. French revolutionary soldiers swore in public = to accept Assignats like ready and sound ca s h - but had soon to renounce their oaths when they could not buy bread = and butter with them for themselves, their wives and their children. - = What influence does national discipline and political courage have on = the note printing presses running full stea m ? At best, under the present religion of monetary despotism, politicians = determine to counter a galloping inflation by a radical deflation that = causes mass unemployment and mass bankruptcies. Discipline and courage = are less valuable than comprehension, se n sible actions, rights and liberties in the monetary sphere, too. = Napoleon I & III had the insight and political courage not to attempt = the impossible, namely to control the effects of the note printing = presses running hot, but to stop the cause, the note=20 p rinting presses for legal tender money, producing an exclusive and = forced currency while sound alternative exchange media and value = standards remain suppressed. (Obviously, neither of them comprehended = and applied full monetary freedom.) Popular opinion a n d governmental "experts" have it, between them, that all but the note = printing presses and monetary despotic powers of the government need to = be controlled. - That is like trying to introduce political freedom by = controlling subjects even further than pol itical despotism already does. - - J. Z., 2. 4. 97. \par PRICE CONTROLS: "Price rises today are an arbitrary exploitation of = the consumers which ought to be stopped and could be stopped by price = controls (ceiling or maximum prices)." The fallacies involved in al l price control attempts and the benefits of free pricing are probably = best demonstrated by Dr. Harper's small tabulation of prices at, above = and below the market price level and the corresponding increases and = decreases of demand and the of the turnovers =20 resulting from these factors. Whoever looks at this tabulation and = understands if fully, will never favour any price controls again. - = Moreover, while note printing presses are working hard - to print more = forced and exclusive currency - and while this cu r rency is not hoarded - but forced into and remains in circulation, no = degree and severity of price controls will help to stabilise prices and = keep production going in full. Likewise, no attempt at providing not = maximum but minimum artificial prices or wag e s will help the sellers of these goods and labour to find more buyers, = achieving the sale of all their goods and produce and all their labour = power. Price control attempts completely misunderstand a free monetary = and free enterprise and free market econom y and its regulating system, free pricing for everything, settling all = demand and supply situations as well as possible, to the greatest and = most lasting advantage of all concerned. - Price controls have been = tried for over 4,000 years and always failed. I g norant and prejudices people and rulers, nevertheless, try them again = and again, never learning from history and current failures. As G. Ch. = Lichtenberg once said: People usually presume that it is they who master = the words. But reality is often quite dif f erent and they are mastered by the words they use. The very term "price = control" implies that prices can be effectively controlled. Their terms = and wishes are their command and so they demand price controls and try = to implement them, although they are rea lly impossible to achieve without so disturbing the economy that all are = harmed thereby. - J. Z., 24.3.97. \par PRICE INCREASES, DEARNESS AND INFLATION ARE IDENTICAL: A popular = point of view which does not sufficiently discriminate between them. = Price increases=20 might increase an increase in quality, with prosperous buyers no longer = interested in cheaper alternatives. E.g., when I was last time in = Germany second-hand furniture had no longer any market value in shops. = Even when you put it out on the street, it wou l d rarely be picked up by anyone except garbage removalists. To get it = legally removed, you had to pay for it! - A dearness comes from the = goods side, as a result e.g. of a natural catastrophe or bad harvest or = of e.g. some energy resource believed to be r u nning short or somewhat artificially blocked. Inflation proper can occur = only from the money side and even here it requires compulsory value and = compulsory acceptance - which is involved in despotic monopoly & legal = tender money issues. - Price increases=20 s hould not be mixed up with dearness or inflation. A price increase can = come from inflation or have as a cause a reduction in the supply of = goods in relation to the same demand for them. In the latter case we = have a dearness. A price increase can also be p a rtly due to inflation and partly due to a shortage. Inflation and = dearness are completely different terms with quite different meanings. = Inflation arises exclusively from the money-side while dearness arises = exclusively from the goods-side. When a country =20 does, for instance, treat its medical doctors badly and they are free to = emigrate and much better appreciated and paid elsewhere then, sooner or = later, a scarcity and dearness of doctor's services will result. The = dearness of doctor's services can also re s ult from the artificial restrictions upon the entry of new doctors in = the field. - J. Z., 24.3.97. - Long waiting periods for health care in = public hospitals do also indicate governmental interventions with the = demand and supply process and the pricing it would lead to under free market conditions. - I just received a notice = in which they did not even bother to indicate whether I would have to = wait for 8 weeks or 8 months! - J.Z., 30.8.02. \par PRICE LEVEL, STANDARD OF VALUE & FLUCTUATIONS: "It is better to = stab ilise the price level & to let only the value standard fluctuate than to = let all prices fluctuate only to stabilise the standard of value." - = Popular opinion. - When some people do not trust any particular standard = of value then it should not be forced up o n them. Freedom of choice for value standards, too, not just means of = exchange. If some people believe that some or the other price index is = the best possible value standard for them, then they should be free to = use it in all their transactions. But other s will anticipate that prices and even the general price level will also = fluctuate in response to other effects than monetary interventions and = that these fluctuations ought to be measured, as far as possible, with = the value standard which THEY do trust. V a lue standards are usually selected and adhered to only because they = represent something that fluctuates very little compared with other = goods and services. When people disagree which standard is best for = them then let them choose their own. Even the best =20 possible standard should not be forced upon anyone. The "standard" that = tries to use or establish a "stable price level" is in my opinion one of = the worst possible ones. It ignores e.g., the price effects of natural = catastrophes, wars, civil wars and revo l utions. - Forcefully keeping the prices low in such situations by = correspondingly withdrawing currencies will have catastrophic effects = upon those who participate in that measure. - Under monetary freedom = they will not "have to" make such currency reducti ons nor will they be able to undertake them. Each issuer could then only = reduce his own circulation - and why should he? - J. Z., 24.3.97. \par PRICE MAKERS & INFLATION: The point which is made in THE AUSTRALIAN = ECONOMIC REVIEW is: "PRICE-MAKERS never lose out t o price-takers. And employees are price-takers, whether in their = capacities as employees or consumers." - Pop opinion. - In reality all = people are to some extent price makers and price takers - at the same = time, by their choices as producers and consumers . All appear as buyers and as sellers on the market. All can set price = limits only for themselves, not for others - and others do not have to = take their offers. - J. Z., n.d., 3. 9. 02. \par PRICES AND WAGES, CHARGING WHAT THE MARKET WILL BEAR: A policy of = 'cha rging what the market can bear' is no more justifiable when practised by = business than by unions." - Mr. Snedden, an Australian politician, = probably in the seventies. - Yes it is, in a genuinely free market, = where every supplier of goods, services and lab our is a free competitor, at the local, state, federal and even = international level and the just price is so haggled out for the money = as well as for the goods, services and labour. - J. Z., n.d., & 3.4.97. \par PRICES, DEMONSTRATIONS & RIOTS: Demonstrations and riots can help to reduce prices. (Belief e.g. among students in India = and Indonesia.) - If one can manage to believe that prices are = arbitrarily increased by those in power, who would be at liberty to = lower prices, if only they were not so greedy, then o ne can arrive at this false conclusion, too. - It well demonstrates how = little enlightenment effect free public education has had on billions of = people. - J. Z., 3.4.97. \par PRINTING MORE MONEY", GREENBACK PARTIES, SOCIAL CREDIT ADVOCATES: = "The government shoul d print more money. - Widespread view. - How much should it print? How = does it know when it has produced enough, not enough, or already too = much, under the legal tender and monopoly regime, i.e., when it has = abolished the natural and free pricing for exch a nge media, value standards and contracts and their currency issue and = acceptance limitations? Can the government "create" any money at all or = can it, at best, only mobilise or anticipate its enforced tax credits = and abuse its coercive monopoly position?=20 I ndeed, the advanced economy needs much sound currency or enough sound = clearing avenues. But, does the central banking system provide either = properly and sufficiently? Can it do so? If it could create money out of = nothing, in spite of not being a productiv e but rather a counterproductive enterprise, then why don't all of us = simply live on its hand-outs of paper money, lustily printed by it and = "fairly" distributed to us, regardless of our work output, even when not = working at all? If it could produce values =20 out of nothing, why should we have to bother to work at all? Some Social = Credit people seem to think that work and production would be = unnecessary. We could all live on the "Social Dividend"! - But I look at = it this way: Why should anyone, even a governme n t, be authorised to issue cheques or notes upon our own labour, services = and goods, without our individual consent? Why should we not rather use = our own labour, services and goods, to issue our own currencies, refuse = that of the government and buy with ou r currencies only those government or public services that we really want = and that are supplied to us at competitive prices by competing agencies, = selected by ourselves, individually, in realisation of our consumer = sovereignty? Why should we tolerate tribu te gatherers to live off our property and earnings? Why should we allow = them to dilute these through inflation? Why should we be forced to = accept and use their exchange media and value as the only ones? \par PRINTING PRESSES, STOPPING THEM: To stop inflation one has only to stop the printing presses. - Popular opinion. - The = government printing presses could be allowed to go on running - if only = a) they were no longer allowed to produce a legal tender and thus an = inflatable currency (with compulsory acceptance a n d compulsory value) and b) if the government's paper money would no = longer enjoy a monopoly for money issues but, instead, free enterprises = would be free to compete with it, i.e. allowed to drive out the bad = government money with their better to excellent alternative, optional and market rated currencies, using good = alternative value standards, too. - It is legal tender and the issue = monopoly that keeps the government printing presses running. - J. Z., n. = d. & 3.4.97. \par PRISE RISES & INFLATION: All price rise s are inflationary. - Popular opinion. - Oh the terrible = over-simplifiers, says a French proverb. - "By analogy all women are = people, yet not all people are women, so, while inflation always causes = prices to rise, not all rises in prices are caused by inf l ation." - Source? - Whereas with monetary inflation all prices go up and = in the same ratio with each other (*), other price increases are = 'local', that is to say they are confined to the particular service or = commodity concerned. For instance, if taxes on =20 tobacco, beer or petrol were to be increased, anyone not buying these = commodities would not be effected. (**) - E.R. Riverton, in PROGRESS, = March 72. - (*) at least after a while. (**) apart from the small factor = that is involved in the make-up of all oth e r prices. Non-smokers, teetotallers and non-drivers do not always buy = only from non-smokers, teetotallers and non-drivers and if they happen = to do so sometimes, then their abstaining suppliers do not, as a rule, = always buy from other such abstainers. - Wh a t distinguishes monetary inflation of prices from price rises due to = goods shortages (dearness) is that in the former case the price rises = remain or require the further evil of a deflation to become somewhat = reduced, whilst in the latter case there is an =20 automatic market response that sooner or later leads to a cure for the = high prices due to goods shortages. Namely, the high prices stimulate = production and thus lead rapidly to a reduction of prices, perhaps even = below the former level. - Moreover, most s hortages are merely local. As soon as the goods in short supply can be = freely imported from anywhere in the world, where they are still = relatively abundant, these shortage prices will fall again.- J. Z., n.d. \par PRODUCTION & INFLATION: An increase in the suppl y of exchange media leads to inflation only when the productive capacity = is already fully used. - Popular opinion. - When is a man's productive = capacity fully used? When he works 8, 10, 12 or more hours a day? Is a = machine, a factory's, an office's, a sch o ol's or university's capacity fully used when it is not used 24 hours a = day? Is the productive capacity wasted when every person sleeps in a = single bed, instead of 3 persons using one bed in shifts? - Productive = capacity is a very elastic term. The normal =20 market valuation of a currency would be its market rating a) against the = value standard that it expresses, b) against other currencies, c) = against the value standard of other currencies. - Legal tender and the = issue monopoly suppress that natural market m e asurement and also stop people from refusing to accept a depreciated or = even merely suspect money. Thus inflations become possible. Then one = tries to stop it with unnatural means, further measures of monetary = despotism. Freedom, here, too, is the answer.=20 - The statement overlooks that one can inflate prices only if one is a = monopoly issuer and has legal tender powers. Otherwise prices, wages and = services can be freely marked in stable value units, which are not = depreciated when one issuer mismanages his is s ues so much that they do suffer a discount. The discounted single = currency cannot drive up these so marked prices etc. nor can it drive = sound currencies out of circulation. On the contrary, it will be driven = out of circulation. While its discount is still =20 tolerable, at least to some, it will be accepted by them at the = discount, i.e. it will drive up their prices etc. only in the discounted = currency, otherwise the price will remain the same as before. - If the = statement were true then inflation could take p l ace only if e.g. all enterprises worked 24 hours a day and night, i.e. = in 3 shifts of 8 hours each or 2 of 12 hours each. And they would have = to so work on weekends, too. In reality, most productive equipment is = idle much of the time, even during working=20 h ours. Nevertheless, inflation has taken place and still does. Moreover, = the statement ignores the facts of stagflation, i.e. an inflation = proceeding while many enterprises go bankrupt and there exist mass = unemployment and great sales difficulties. With s uch a primitive and inexact rule no currency can be sufficiently = stabilised. - J. Z., n.d. & 3.4.97. \par PRODUCTION & INFLATION: We should boost production as high as = possible to counter inflation. - Popular opinion. - This, again, wrongly = concentrates on the g oods side only. - Under monetary freedom only those producing additional = goods (services and labour included) would be able to obtain or free to = issue additional money tokens, exactly corresponding to their additional = output, to the extent that there is a n immediate or short term market for it. When thus commodities and money = issues are balanced, then inflation does not occur, i.e. one does no = longer have to "fight" it or try to counter-act a previous inflation by = a subsequent higher productivity. Anyhow,=20 f or fast or galloping inflations this attempt is condemned to failure. It = is easy to increase inflation to from 2% to 20%, even 200% or 1000% = p.a., but economic growth cannot be easily or at all attained at rates = exceeding e.g. 5 - 50 % p.a., except, perha p s, for very short time, when e.g. after a natural catastrophe or = revolution or war one starts again, almost from zero. - The other = wrongful aspect of this situation is that a third party, namely the = government, forces its exclusive currency into circulati o n, parasitic on the labours, goods and services of its subjects. The = government does not provide (apart from sound tax foundation issues, to = the extent that anything based on enforced tributes can be sound, and = the low productivity of state socialised ent e rprises) goods and services or labour for the money it issues and it = does not continuously increase but rather reduce its productivity. Not = only does it rob its subjects by direct and indirect taxes but it taxes = them also through inflation and then it dem a nds that its victims make up for their inflation losses through harder = labour and higher productivity, thus giving the government's paper = requisitioning certificates some more goods, services and labour to = confiscate. I can understand the people who run t h is racket for their own benefit but I cannot understand the consent of = the victims in this case, either. - Actually, due to natural and fast = progress, the prices for many goods should fall. When government claims = it has stabilised the currency, because in =20 the average prices has not risen, then it has already inflated the = currency to the extent that it has scooped off all the benefits we would = have had from cheaper prices due to progress. - Rather than offering the = government more labour, goods and services =20 for its depreciated paper, we should refuse to accept it altogether and = provide ourselves with sound alternative exchange media. Let the = government itself try to give its paper some value and do not allow it = to try to give it some value through compulsory =20 taxation. Organise a general tax strike, too, together with the refusal = to accept the government's paper money. The armies of politicians and = bureaucrats will then have to engage in some self-supporting productive = labours on a free market. And at least al l the public assets they have extracted from us and not yet wasted, or = withheld from us and mismanaged, should be distributed among us. See = PEACE PLANS No. 19 C. \par PRODUCTIVITY & INFLATION: As long as productivity rises in = proportion to the money circulation=20 there is no danger of inflation. - Popular opinion. - If money were only = issued based upon already produced goods and ready for sale services and = labour, and only by those who have them ready for sale, and by their = associations for this purpose, then, ind e ed, it could not grow beyond this natural cover for the natural issuers. = - However, if third parties issue their forced currency or paper = requisitioning certificates upon the productivity of people subjected to = them, then a wrongful tribute gathering is i n volved. That currency is inherently 100% inflated (apart from its = tax-foundation, which is doubtful due to the immorality of compulsory = taxation), since it has no goods and services backing. When it is the = only money permitted, then it is also insofar inf l ated in circulation, as people wanting to engage in monetary exchanges = will be forced to resort to it. Under freedom they would rather trade = using their own currency issues and reject this despotic monetary issue = which they formerly were forced to accept. =20 - Productivity rises would, normally, lead to price reductions. But if = the monopoly bank issues further legal tender, to make up or this = increased productivity, then the prices might not fall, step by step, in = accordance with different degrees of progress =20 but, in the average, remain the same as before. To that extent there = would then also be an inflation of this currency. Increased productivity = should neither be taxed nor inflated away. - Let people be free not only = to produce and to exchange, but also to=20 p roduce, adopt or agree among themselves upon the exchange media, = clearing avenues and value standards for both cash and non-cash = payments. Only then will productivity be in balance with exchange media. = Only then can people's value measuring not be despoti cally interfered with by third parties with their own agenda. - J. Z., = n. d., 3.4.97. \par PRODUCTIVITY & INFLATION: Inflation neutralises itself as it = stimulates production and thereby leads to a balance between money and = goods. - Popular opinion. - This applie s only to a very limited extent, when in some places deflation still = exists and the possible and desired additional exchanges do not occur in = these spheres due to the lack of exchange media. This condition is not = to be overcome by inflation but by a compe t itive supply of sound local exchange media. - Then there is also a = temporary boom effect, while the inflation that has taken place is not = yet recognized as such. Inflated profits and interest rates and wages = are then considered as genuine increases in pur c hasing power, although they may not even make up for the inflation that = has already taken place. So for a while these victims may be cheated = successfully - out of what is their own and they will tend, = nevertheless, to go on working harder than before for=20 a nominally increased but actually not increased or possibly even = decreased return. - Areas or payment circles that were formerly severely = under-supplied with currency will experience a short boom period. So = will all sellers of refuge options for capital:=20 l and, rare metals, art objects etc. But such booms do not make for a = booming general economy but rather indicate a crisis situation. - If the = above assertion were true then no inflation could ever have taken place. = - In reality, the money circulation can, =20 coercively and monopolistically, be increased much faster than the = supply of labour, services and goods could be. E.g., it takes a few = years to breed, bring up, educate and train a new labourer, not to speak = of a new professional. - But, indeed, the Germa n inflation of 1913 to 1923 would not have taken place or would not have = expressed itself in billionfold increased prices, if only we had = bothered to increase our productivity a billion-fold, too. Why didn't = we? - J. Z., n.d. & 3.4.97. \par PRODUCTIVITY, MONEY=20 SUPPLY & INFLATION: Every adaptation of the money supply to increased = productivity is inflationary. Prices should be allowed to fall. - This = is right insofar as a fixed price level is not a rightful and rational = aim. The government's inflation of its curr e ncies has not only prevented productivity-driven falls of many goods = prices but, instead, has nominally increased them. But it is wrong to = say that increased productivity does not require any increase in money = circulation at all. If, for instance, due to=20 t echnological innovations, instead of 100 units at $ 10 each 200 units = can be produced at $7.50 each, then to achieve their turnover in the = first case $1,000 and in the second case $ 1,500 would be required. The = alternative would be not a productivity driv e n but a deflation- driven fall of prices, depression and unemployment. = Naturally reduced prices can well go hand in hand with an increase in = the money circulation. Anyhow, the size of the circulation should not be = determined by attempts to measure product i vity but, rather, by the pricing of exchange media in relation to their = value standard. As long as they can be issued at par, without = depreciation against their value standard, they are not over-issued but = still rather under-issued. Only when the first sm a ll discount arises in at least some spheres, most likely in wholesale = trading, is the saturation point approximated and further issues should = be stopped until this discount disappears again. Issuers will do the = stopping in their own interest and potential acceptors will stop them by refusing to accept discounted notes. - J. = Z., n.d., & 3.4.97. \par PROTECTIONISM & INFLATION: The repeal or reduction of protection = would stop or reduce inflation. - Popular opinion among free traders. - = While it would reduce the pri ce level to a considerable degree, it would have no effect upon the = continuously running note printing presses for forced and exclusive = paper money and its effect upon prices. Changes on the goods supply side = do not nullify changes on the money side. Free =20 Trade would reduce the price level once, in a natural and economic way. = Inflation raises it artificially and continuously, so that the high = price level formerly experienced through protectionism would soon be = exceeded through inflated prices. - J. Z., n.d ., & 3.4.97. \par PUBLIC DEBTS & INFLATION: Public debts lead to inflation. - Popular = opinion. - At most they are a motive to inflate a currency and not an = honourable one. They are never a cause by themselves. One might as well = say that indebtedness or profligat e spending habits leads to embezzlement or bank robberies. - Without = resorting to inflation they would lead to a further enslavement of the = tax payers or to State bankruptcies. - One kernel of truth in this is = the absurd situation of using government debt s as "cover" for the issue of further legal tender notes and calling = this then an "asset" currency. But these assets are not productive = investments but "state insecurities" or investments in tax slaves. - J. = Z., 5. 4. 97. \par PURCHASING MEDIA: Forms of money or money substitutes. - Harry = Browne, You can profit from a monetary crisis, 394. \par PURCHASING POWER, INFLATION & STIMULATING THE ECONOMY: Inflation = merely creates more purchasing power and this stimulates the economy. - = Popular opinion. - It stimulates it int o malinvestments. It stimulates debtors into cheating creditors for a = while - until their credit runs out. It stimulates politicians and = bureaucrats into continuing with their mad spending schemes. It = stimulates numerous strikes for further wage increases . It stimulates people into spending rather than saving. Just imagine the = stimulation of the cinema & theatre and football stadium business - if = the proprietors issued more tickets than they have seats to offer. This = might even stimulate the cheated ones t o start riots - as inflation often does. - Up to a point purchasing power = can be safely increased, as long as there is still a depression, as long = as the means of exchange are soundly issued and competitive and remain = at par with their nominal value expres s ed in a sound value standard. But only monetary freedom can accurately = enough determine this point. Issues up to this point are = non-inflationary. Legal tender suppresses this warning signal internally = and a fall in external exchange rates does not suffic i ently restrain the further issue of legal tender notes internally. - = Only those should be free to offer further purchasing power in notes or = clearinghouse certificates etc., who themselves have further goods, = services and labour to offer to redeem their o w n IOUs, purchasing vouchers etc. in. It is a great wrong to allow any = single institution to print monetary assignments upon the goods, = services and labour of all others and even give it a monopoly and forced = acceptance and forced value standard. The subse q uent uniformity of the means of exchange in a country is not of such a = high value that everything has to be sacrificed to it and that we should = take the subsequent inflation, unemployment, stagflation and obscene = growth of government into out stride. - J. Z., n.d. & 5.4.97. \par QUANTITY THEORY, SHORT TERM DEPOSITS & HOARDING: When estimating = the danger of inflation, one need not include the daily due deposits and = the hoarded amounts of cash. - Pop opinion. - The contrary is true. Any = expectation of rapid price rises will bring many of them out and lead to an acceleration of = inflationary price rises. But it does not make sense to include deposits = that become due only in the medium or long term future in the estimate = of currency amounts that are needed and effec t ive now for the settlement of current or near future debts, most of all = for daily wanted consumer goods, services and labour. If all debts = falling due in the medium of long term future were to be monetized now, = by their creditors, then there would not be=20 s ufficient goods, services and labour cover for them now. The covers, for = these securities will become available only day by day and year by year = in the future. Future values can be "coined" into ready cash or current = accounts only on a very limited basis, =20 without causing depreciation: as a rule only values that will become = available within the next 3 months. And this cover will function only as = long as enough suppliers of daily wanted goods and services will already = now accept such certificates like ready=20 c ash. This is quite common in retail trade, where much is sold on short = term credit, often without interest charges or even deposits. The short = term IOU of good customers is considered almost as good as cash. Their = promise to pay only in 3 or even 30 years =20 is not as readily acceptable purchasing power for the recipient, it is = not currency. Such capital certificates or other debts must be paid and = repaid in currency which has current shop foundation and made is made = available for the lending terms agreed upo n. In currency questions, too, the time factor should never be ignored. = In practice, sellers and buyers do not, as a rule. - J. Z., n.d. & = 5.4.97. \par QUANTITY THEORY: "An inflation is always expressed in an increase = of the general price level. When the price=20 level remains unchanged, then no inflation has taken place." - Popular = opinion. - We do often have no kinetic but merely a latent inflationary = power, e.g. in hoarded money or demand deposits - that can legally be = transformed into ready cash - legal tender . Sooner or later these notes will get into circulation and increase = prices correspondingly. One of the vast hoards of U.S. dollars, not = appearing on the goods and service market of the U.S., are the amounts = hoarded as reserves by foreign central banks and =20 the emergency or alternative currency amounts that are used, or stored, = mainly by the underground economy, in the rest of the world. There are = also huge cash amounts used e.g. in the drug trade. Imagine that the = rest of the world would suddenly introduce=20 o r permit sound currencies and that the war against drugs, which actually = promotes the drug business by making it very profitable to the top men = and allows them to bribe their ways through seeming bureaucratic, = policing, custom duty, parliamentary and jur i dical barriers, in all too many cases, would suddenly come to an end. = Furthermore, central banks and others might discover that they do not = need U.S. dollars as a reserve or cover or convertibility fund for their = own issues. Then enormous stocks of U.S. d o llar notes would flood back to the U.S. market for US consumer goods and = services and labour, etc., and would lead to a corresponding = depreciation of these notes for this real cover would not be = correspondingly increased and the notes would still have leg a l tender and prices, wages and services would be marked out in its paper = standard. - Moreover, the general trend of technical, scientific and = production progress is to reduce the prices of goods. To the extent that = a central bank would issue additional fo rced currency, preventing this natural and developmental price = reduction, a currency would also be inflated. - J. Z., 24.3.97. \par QUANTITY THEORY: "It is impossible for a country ever to have too = much money." - Widespread opinion. - True for well-founded money , soundly issued and with a sound reflux, under competitive conditions, = optional and market rated. Wrong for forced and exclusive currency. = Without legal tender the mere multiplication of a currency can at most = drive up the prices that are expressed in it s paper standard. But when prices (incl. wages) are expressed in a sound = value standard, then not the prices go up proportional to the = multiplication but, rather, the inflated currency goes down, measured = against the sound value standard. (Reckoned in the=20 s ound value standard they remain the same, for all sound and competing = currencies they thus remain the same, only if expressed or reckoned in a = depreciated currency they will go up. Moreover, when there are competing = currencies and the depreciation is cons i derable and persists, then more and more people will refuse this flawed = currency altogether, which means, in effect, that the good money will = drive out the bad and to that extent the quantity theory will simply not = apply. The market will only accept and r e tain the currency that it considers to be good enough and that it needs = for its transactions. More cannot be pushed into circulation without = legal tender and the issue monopoly. The quantity theory applies only to = forced and exclusive currency, not to the =20 money of monetary freedom. It also does not take sufficient account of = the number of transactions that can be conducted without cash - when and = to the extent that creditors do not insist upon being paid in cash. Via = free clearing more and more goods and s ervices can be exchanged for each other, so that nominally more and more = clearing actions or cleared debt amounts exist, without any exchange = medium or any value standard being thereby depreciated. - J. Z., 24.3.97 = & 30.8.02. \par QUANTITY THEORY: Advocates of t his theory often assume that price changes do only take place as a = result of actual monetary transactions or turnovers. But the merely = "spoken" or offered exchanges, every day, on the stock exchanges, as = well as the futures trading, do also influence pric e s, without actual turnover trades taking place immediately. The quantity = theory assumes the existence of monetary despotism and that the = percentage of free clearing transactions remains the same. But assume, = e.g. that electronic clearing transactions were =20 suddenly perfected country-wide or even world wide. Then the amount of = available cash notes or coins would become irrelevant. But, on the other = hand, for each separate issue of a competing currency and for his issue = potential, his goods, services and labo u r effort in relation to his monetary issues, in form of notes, coins, = book or electronic credits or cheque accounts, the quantity theory would = apply, especially under market rated and competive issues. The quantity = of exchange media issued, measured in so m e sound value standard, under the same degree of clearing transactions, = would tend to remain the same (under the same conditions) and it would = correspond to that quantity of goods, services and labour offered by him = and sold for his exchange media (and no t settled by clearing instead). All transactions could be settled by such = free issues, if that is wanted and all such transactions could also be = settled merely by clearing, if that is wanted in a private or = cooperative payment community, i.e., without any=20 q uantity of coined or printed money. But a one-sided and artificial = blow-out of the monetary side, leading to corresponding price increases, = would not be possible, beyond some temporary and small issues, rapidly = leading to discounts or disagios, in the vas t number of cases, where the potential acceptors are sufficiently and = fast enough informed of what is happening in this particular issue = sphere. Clearing houses would notice it very fast if they receive e.g. = too many notes from an over-issuer and he cannot =20 offer them enough of others in exchange. When the transactions are = merely electronic then such an imbalance, indicating over-issues, could = be discovered even faster. Thus over-issues can only be very limited and = temporary. Under-issues, giving exchange me d ia an agio, will also be rare for issuers will tend to issue rather = more, than not enough exchange media for their requirements - until = their exchange media receive the first small discount, perhaps only in = wholesale trading, which might never be noticed=20 b y most consumers. But the news will travel fast among these and = retailers. When the discount is justified, the issues cannot supply = enough goods, services and receipts for debts paid, immediately, for his = notes presented to him, then this would lead to ex t ensive refusals to accept his notes at all. Otherwise his notes would = stream back to him faster than is usual - while he could only issue many = less notes than before, at the time when his notes where still at par in = general circulation. Thus the discounte d notes would rapidly disappear from circulation and thus also the = discount that is published for them. And new issues would, at least for = a while, have only a lower acceptance or circulation. - J. Z., 24.3.97, = 30.8.02. \par REDEMPTION IN RARE METALS: Only gold=20 or silver redemption can prevent inflation. - Popular opinion. - Until = 1911 traders in China largely protected themselves by accounting in = copper "tael" units instead. Others have used other standards. So many = different account units have actually been us e d in the past and so many objections have been raised even against the = best of them and so many prejudices still exist even for the worst of = them that religious liberty in this field or free choice of value = standards is the only solution that would provid e justice, i.e. grant to each his own - until he knows better and chooses = something better. I would predict that for a considerable time to come = gold weight units would be considered by most people the "least evil" = standard, if used as no more than account i ng units, rather than as expensive exchange media themselves, or as = obligatory redemption funds or reserves. Properly issued, upon wanted = goods, services, labour and payment or clearing options, with short term = reflux to the issuer assured, any kind of sc r ap of any material or any kind of account on paper, plastic or in = electronic symbols, can be kept at par with its nominal = gold-weight-value, even if most exchangers do not posses a single gold = coin or gold bullion bar. Convertibility can then be left to w h ere it can be best assured, to a free and well publicised gold market. - = An honestly administered rare metal coin circulation or gold redemption = currency, 100% covered or assured by various optional and agreed upon = withdrawal condition clauses, is just ON E and not the only possible honest currency and value standard option = under full monetary freedom. Since our knowledge of past, present and = future is all too limited, we should never be satisfied with anything = less than full monetary freedom, in all its as pects. - J. Z., 5.4.97. \par RESPONSIBILITY & CURRENCY: A popular proverb has it that "divided = responsibility is none!" That proverb indicates a truth in many cases = but it cannot be applied to currency without qualification. If it is = interpreted to mean, e.g., t hat all issuers should be collectively, not individually responsible for = all of their different issues, covers and reflux arrangements, all the = mistakes they make separately, then this united or collective = responsibility would not maximise but minimise re s ponsibility for the individual issuers. Individual, voluntary and = divided responsibility for money issues, each for his own issues, would = tend to maximise sound issues while minimising and rapidly ending = unsound ones. Moreover, by making competitively iss u ed private and cooperative currencies dependent upon full publicity, = free market rating against each other and their standards, subject to = clearing against each other and, naturally, to voluntary acceptance or = rejection and discounting, practically everyo n e would become involved in supervising and extending or limiting each = note and clearing certificate issue that he is ever using. Consumer = sovereignty as well as free enterprise and freedom for cooperative = enterprises would not be infringed but maximised i n this sphere, and with them the dispersed responsibility of each for = his own actions. \par REVALUATION, INFLATION & DEFLATION: To fight inflation we need a = revaluation of the dollar. - Popular opinion. - Pay attention to what = this implies: Some people are thus=20 to be given the power to change the values in all your debt and credit = contracts. Never mind their excuses. And they do propose to do so = because previously they had already interfered in your exchange = contracts and investments by inflations, which monetar y despotism allows them to undertake quite legally. - A revaluation like = a devaluation is a price and wage control and one for other debts and = credits, too, and it has the harmful and wrongful effects of all such = controls. - Can it be right & beneficial wh e n it raises any currency artificially above its market value or when it = leaves it still below its market value, after previous devaluations? = Should any standard be open to central and monopolistic manipulation, = under all kinds of excuses and pretences, wi t hout the consent of all those involved? Such changes interfere with = everybody's affairs and thus should only be undertaken upon unanimous = consent and that could only be provided within volunteer communities or = voluntary payment communities, each with its=20 s elf-chosen system, and with members free to opt out of them, establish = new ones or join other established ones. - The market price is the only = just and useful price for currencies and value standards. Depriving any = standard, by fiat, of some of its value=20 ( devaluation) or adding by fiat to the nominal value of any standard = (revaluation), is not merely a verbal change or a rightful and economic = measure but an essentially despotic act. Only to the extent that = devaluations or revaluation amount to the official =20 recognition of market values or at least approach the real market values = of currencies, can they be rightful and at least to some extent = beneficial. If they merely allow free market rating for currencies and = free adoption of alternative value standards an d exchange media or clearing options, then we do not need them as = separate measures of "monetary policy" because that would end "monetary = policy", at last, and with it its inherent disasters, mistakes and = misunderstandings and mismanagement. - The market p r ice is the only just and useful price for currencies, their chosen and = accepted value standards and for goods, services and labour. - Only = under monetary despotism and foreign exchange controls do currencies = require from time to time some adjustments to i n flation by devaluations and to deflations by revaluations. But why adopt = such despotic and anti-economic measures in the first place? - Since = barely one in a thousand or perhaps even in a million has a clear notion = of what devaluation and revaluation real l y mean and what inflationary and deflationary effects precede, accompany = and follow them, the despotic manipulators and cover-up experts do get = away with them for all too long. They are only skilful in inventing ever = new and misleading terms to hide their nefarious activities behind them, while pretending that they would be = acting in the public interest. - Alas, we have so far allowed them to = get away with this. They are just the priests of the popular religion of = monetary despotism. - J. Z., 5.4.97. \par SAVING S & INFLATION: A relaxation of the instinct to save leads to inflation. = - Popular opinion. - That is only true to the extent that savings are = merely in the form of cash hoardings. (Governments, for considerable = time, may rely on their victims still hoardi n g their inflated currency, and then complain when these savers become = aware of the inflation, rapidly spend their savings and even go into = debt. - J.Z., 3.9.02.) But savings in a savings bank are lent by the = bank and spent by the borrowers. Furthermore, i t is rather inflation which leads to the rational decision of potential = savers to rather spend their money, as soon as they can, or even go into = debt, than to save and be finally paid back in inflated currency. = Savings will be maximized only under stable c u rrencies. Anyhow, money should be so soundly issued, based on consumer = goods and services and labour in daily demand, that no relaxation in the = saving of any of it could diminish its purchasing power for consumer = goods etc. Whenever a lesser degree of hoa r ding leads to higher spending by consumers and then a depreciation of a = currency appears in higher prices, then this indicates that the currency = was already over-issued or inflated but the inflation was so far latent = or concealed, not out in the open - th r ough consumer spending of it. When turnover credit currency is saved = then it should be deposited in current accounts, from which short term = loans are made, e.g. for wage payments, that promote consumer spending, = or they should be invested on fixed terms=20 so that no unexpected degrees of withdrawals can occur, which would lead = to liquidity crises. - J. Z., 5.4.97. \par SPECULATION & INFLATION: Speculation causes inflation. - Popular = opinion. - Yes, the speculation that most voters and even most = economists will no t pay the least attention to the inscription: "This note is legal = tender" on the money in their hands or ponder the consequences this - = has, together with the issue monopoly, for the stability of any thereby = exclusive and forced currency. They can also sp e culate, therefore, that the victims of inflation will not blame the = central banks, its issue monopoly, its legal tender, and the laws and = lawmakers which upheld this monetary despotism, but, instead, they will = rather blame "speculators", "price makers", " u surers", "bankers", "financiers", "unions", "capitalists" etc. - Any = sound currency could not suffer from any speculation in it. E.g., if a = sound shop foundation currency, competitively issued as a local = currency, by the local shopping centre, were to be=20 s ubject to a speculation, and the speculators were trying to drive its = value up above its nominal value, by paying more for it, they would end = up with a loss, for ultimately the redemption of it at the shopping = centre would only be at par. Those of whom th e y bought the note at above par value, would benefit. And if they tried = to drive such notes below par, by spreading rumours, that they would be = depreciated, then they would find only very few fools who would believe = them and sell them their notes below par , because almost any idiot could take his notes to the nearest shop in = the shopping centre and find out, then and there, that they are still = accepted at par. And if the speculators had acquired them at par and, in = the attempt to drive them below par, sold=20 t hem below par, then those who bought them from the speculators below par = would benefit by the discount - and could immediately present the notes = in payment for their shopping at the local shopping centre, at par. = Again, the speculators would lose. - But t h is does not mean that no speculations with managed and mismanaged = national forced and exclusive currencies do take place and that no = profits can be made with them. Some do, e.g., successfully anticipate = stop and go changes of such currencies or the news o f devaluations, revaluations, credit restrictions or inflations or of = sudden part releases of foreign exchange or gold reserves hoarded by the = central bank (hoarded quite wrongly and unnecessarily) are leaked out to = buddies or agents of the politicians or=20 c entral bank directors involved. Thus very profitable speculative trades = can be made on the money market of monetary despotism - by people so = informed. One could even conclude that no currency should be trusted at = all which does make large speculative prof i ts possible. But even under monetary despotism it is not speculation = CAUSES inflation or deflation (it can't, the speculators do not have the = powers required for this). Rather, the inflations, deflations and = stagflations of forced and exclusive currencies =20 do cause a lot of speculations that would otherwise not take place. It = is with these speculations as with the speculations of the court = watchers of current despots or democratic temporary monarchs. Without = their unjust territorial powers over dissenters a nd apathetic victims, such speculations would not take place. The = actions of the managers of volunteer communities based upon full = exterritorial autonomy would be much more public and predictable, = leaving little room for speculations. - J. Z., 5.4.97. \par SPECU LATION, INFLATION & DEATH PENALTIES: Death penalties for speculators are = a help in fighting inflation. - Pop opinion. - Those who speculate on a = further inflation do mostly bet on a sure thing. They do so in an = attempt to protect themselves against an off i cial and legal robbery through inflation. For this they are sometimes = threatened with the death penalty while those, who actually engage in = the inflation, passed the laws and maintained them, which make inflation = possible and those who praise this kind of =20 monetary despotism, get off free and are, generally, not even accused of = their monetary crimes. Nay, they even are often paid highly, as public = servants and later superannuees, at the expense of their victims. So, = the innocents are to be punished and the=20 g uilty ones are not even to be charged with their crimes against all = citizens? - Speculators are, as a rule, economic benefactors, who = preserve values or stimulate production early, when necessary, to = prevent extreme price fluctuations. They have, as a rul e, more foresight and understanding of the economy than those who rave = against speculators and blame them for crimes committed by others. - J. = Z., 5.4.97. \par SPECULATION: "International speculation against a country's = currency causes inflation." - Widespread v iew, without a basis in reality. It is not mere speculation to predict a = depreciation of any of the forced and exclusive national currencies. Its = depreciation is a virtual certainty and as far as possible every = contract should take it into consideration.=20 B ut the degree of depreciation is never certain. It depends upon the whim = and the mistakes of a particular central banking system and the = pressures which insatiable politicians and lobby groups can put upon its = "independence" and "expertise". You could not =20 speculate with the currencies of monetary freedom without, in most cases = losing in the process. If you overvalue them, you still will ultimately = not get more than their face value from the issuer. And if you = artificially try to undervalue them, then you w i ll have a loss, too and the holders will still be able to get the face = value of the notes in form of goods, services and labour from their = issuers. But the boom and bust fluctuations of centrally mismanaged = currencies do, indeed, encourage much speculatio n in them, which is much like gambling upon which government will next = blunder and do a foolish thing and how great its mistake will be. But = speculators themselves cannot lastingly depreciate any currency on their = own. Some of them will win. Some of them w i ll lose. In sum it will be a zero-sum game - and all participants will = have to foot the costs involved. - Few people would bother to speculate = in soundly issued competitive currencies with their healthy reflux. They = would not provide sufficient profit mar g ins for dealing with them. The clearing of notes against each other, or = their exchange, would largely be done at cost and massively by the = issuers themselves, for all those of their notes which strayed out of = their usual circulation area or sphere. There=20 would not be enough "room" or profit for speculators left. - J. Z., = 24.3.97. \par SPENDING AND INFLATION: Reduce or choke spending to reduce or stop = inflation? - Inflation can be fought by severe monetary and fiscal = policies designed to choke spending by the com munity. - Popular and "expert" opinion, in government circles. - Speak = and act for yourself. Choke or reduce your own spending, not that of = others. The money earned or saved by others is not yours to dispose of = or to direct. - The sheer impertinence of su c h proposals! First the bastards cheat us by inflating the only currency = they allow us to deal in. And then they try to prevent us from using the = currency as we please, and they do this in the pursuit of their despotic = "monetary policies", which are not in =20 our own interests, and always at our expense. - By all means, the = central bank's printing presses should be choked and government spending = should be vastly reduced and even stopped altogether, at least for all = territorial governments, by tax strikes and r e fusals to accept their forced currency. But otherwise we should in no = way be prevented from whatever use we can still make with of a = government's depreciated currency, as long as we can. - Imagine the = response if an employer paid his employees nominally t h e same but in a depreciated currency. Assume also that he had issued = that scrip himself and over-issued it. And then assume that he would try = to prevent his employees from spending all of it, by various monetary = and confiscatory measures. - I think he wou l d be lucky to get away alive! But from "our" governments the majority of = statists seem to be ready to accept (tacitly and unaware of what is = really happening) any degree of crime at their expense. They even manage = to praise their rulers for their despicab l e acts and vote for them again and again. - The productive citizens can = only spend what they rightly posses and earn. They did not depreciate = the government currency but were already harmed by it and all prior = government monetary policies. When they still =20 acquired some private purchasing power, in spite of monetary and fiscal = despotism, then, according to this proposal, they are to be hindered = from spending it! They are not only to be victims in their submission to = direct and indirect taxes and to the infl a tion tax but, subsequently, to be robbed again, by restricting their = spending. They are not given a voice in referendums on such monetary = despotism. It is almost never questioned in parliaments and in the mass = media. They are to milked and sheared again a n d again. - Only government spending is directly or indirectly = inflationary and "financed" via the note printing press and legal issue = monopoly and legal tender. THESE should be choked off, not whatever = spending the victimised citizen can still manage to a c hieve under this system. We should go after the culprits and the wrong = and harmful laws, systems and authorities, not after their victims. The = criminals should be held responsible, not their victims. - It is the = height of impertinence to say to the produc e rs and traders and labourers: You may earn money but you may not spend = it as you please but only as we direct and if we permit you to do so. - = Many countries have so far tried out these wrongful, misconceived and = misdirected "measures", "programmes" and " p olicies"- and naturally, they always failed to achieve their objective = and had to fail - if the objective was not simply an outright further = robbery. - It's like saying to the honest citizens in a community, where = there is a rising crime rat : Be honest!=20 - whilst doing nothing to identify and prosecute criminals. - See under = RATIONING, COMPULSORY SAVINGS, FORCED LOANS. \par STABILITY & PRICES: "We need stable prices."- That is not correct. = What we really need is free and correct prices for every situation, = devel oped in a continuous free voting system between producers and consumers, = indicating rapidly where more scarce capital should be applied and where = it should be saved and rather applied somewhere else. Exchange media = should to that extent be unstable that t h ey can suffer a discount and suffer it quickly whenever a mistake is = made in their issue or reflux. Only thus can their issue limit be = determined and bad monies be driven out by good ones, which are stable = enough to remain under free market rating at par=20 w ith their nominal value or close enough to it most of the time. But = prices, of general goods and services, expressed in as stable value = units as human beings manage to find, invent or agree upon, should be = able to fluctuate according to supply and demand=20 conditions, while expressed in the value standard units all = participating trading partners, including employees and employers, have = agreed upon for their purposes. - See: PRICE LEVEL, INFLATION. - J. Z., = 24.3.97.=20 \par STAGFLATION: "Therefore, when the working p opulation finds itself hit by a tax increase it interprets this, quite = rightly, as a cost of living rise and goes out to make more money to = compensate for the loss. And the result - government-induced cost-push = inflation. This is how you get the internati o nal economic phenomenon of the 1970s - stagflation, the = Keynes-contradicting combination of rising unemployment, economic = slow-down, and advancing inflation. It is significant that in all of the = Western countries so far afflicted with stagflation, the exp e rience in every case has been preceded by government action with the = classic tax-and-dear-money package to combat simple inflation. - John = Hallows, THE AUSTRALIAN, 12.2.72. - There is nothing simple about = inflation except, perhaps, its causes: the money i s sue monopoly combined with legal tender. But even of these seemingly = simple forms there exist dozens of varieties. Anyhow, only the name is = new. The phenomenon of deflationary effects within inflations, = especially prolonged or fast inflations, and of infl a tions of sectors of the economy, within mainly deflationary periods, is = nothing new. Only the seemingly opposite terminology of inflation and = deflation has prevented most from recognising these relationships = earlier and coining a special name for it. - Ce ntralised and monopolised money issue or central banking cannot even = deflate or inflate a currency EVENLY over a whole country. There are = channels and spheres of circulation and they are inflated and deflated = to different degrees. - J. Z., 6.4.97. \par STOP AND GO POLICIES: Stop-go driving, in which we contrive slowdown and = unemployment when inflation is pinching hardest and engineer new = inflationary expansions when unemployment is pinching the hardest, is = not an efficient way to run an economy. - Dr. Paul A. S amuelson, THE NATIONAL TIMES, 26.1.71. - That is the most sensible = remark that I have found of him so far. - J. Z.,2.4.97. \par TAX CUTS, STAGFLATION & INFLATION: Now we have over-reacted, and we = have stagflation as a result. The way to cure it would seem fairly obvious: cut back taxation, and to hell with fears of the = demand-inflation bogyman. - John Hallows, THE AUSTRALIAN, 12.2.72. - = Without market-rating the tax foundation state paper money against some = sound value standard and expressing due taxes also in a =20 sound value standard, tax foundation cannot properly function in its = sphere. It is then either over- or under-issued most of the time, = leading to stop-go policies and these often set in only belatedly, = depending on how early or late the relevant statisti c s are compiled and brought to the attention of the decision makers and = then finally acted upon. Moreover, if this currency is also the forced = and exclusive currency in general circulation then mistakes in it effect = the whole economy. At best, the best kin d of tax foundation money can only solve the payment problems in the = sphere of taxation, which is not a rightful, sound and frictionless = sphere, either. When, on top of this, it is to mediate all economic = exchanges and all economic valuing in a country, i. e . all other payment and value accounting options are suppressed, then = this currency will inevitably be in trouble. It can no more be an ideal = or sufficient exchange medium and value standard for all people in a = country's territory than could any other dec ision could be that has been arrived at via territorial politics. - J. = Z., 5.4.97. \par TAXES, INDIRECT ONES & INFLATION: Indirect taxes are largely = responsible for inflationary price rises. - Popular opinion. - At most = they do differently distribute productive=20 efforts and earnings than does direct taxation. But both reduce = incentives and opportunities to produce and trade and increase shortages = and thereby prices. But neither can inflate a currency. On the contrary, = when the forced note circulation is not incre a sed then any increase of either direct or indirect taxation would rather = have a deflationary effect from the money side. To the extent that any = increased taxation would lead to shortages then dearness would result, = i.e. a shortage and corresponding price=20 increase from the goods side. - J. Z., 6.4.97. \par UMEMPLOYMENT: There is only the choice between unemployment and = stable currency on the one side and full employment and inflation on the = other side. Unemployment is the lesser evil. - Popular opinion. - The = exp erts of monetary despotism have learned to combine the two. We get mass = unemployment, depression and inflation combined. - There is no such = thing as a necessary evil. Monetary despotism is neither right nor = necessary. - When one continues to think only in =20 terms of monetary despotism then one will remain blind to the real = solutions. (Already Karl Marx recognized that. But then, to promote his = communist cause effectively, he went on to advocate monetary despotism, = fully aware of the result. - J.Z., 4.9.02.)=20 M onetary freedom would avoid both, an under-supply and an over-supply, of = sound exchange media and sound value standards in any sphere. They would = be freely provided or agreed upon by the participants in all their = economic transactions to the extent that t h ey are needed, where they are needed and when they are needed. To that = extent the circulation would be completely elastic, as elastic as = production and trade are. They would merely be its monetary and value = accounting equivalents, in standardized and typi f ied convenient denominations which are easy to transfer. - Monopoly, = coercion, price control, mismanagement and deception cannot work = efficiently in this sphere any more than in any other. - J. Z., 6.4.97. = (Unless one pursues the aims of a coercive monopo list - at the expense and risk of his victims. - J.Z., 4.9.02.) \par UNIONS, WAGE DEMANDS & INFLATION: But do not the unions and their = demands for ever-higher wages have something to do with the inflation? - = Popular opinion. - In a free economy all sides will de mand as much as they can get. But if an economy is only free to produce = and exchange with the aid of government forced and exclusive currency, = then neither employers nor employees, independent tradesmen or = professionals, wholesale traders or retail trader s can increase or decrease the money circulation as they please. They = might double, treble or tenfold increase their demands - that will not = lead to extra orders, sales and jobs for them. On the contrary, they = will lose in orders, sales and jobs, because t h e extra demands cannot be paid with the existing circulation of a forced = and exclusive currency. There may be and most likely are political = motives to increase the circulation of the money of monetary despotism, = to seemingly give in to the demand of nomin a lly more and more. But then not these demands are to be blamed but the = system which puts more and more forced and exclusive currency into = circulation, thus blowing up all wages prices, in attempts to keep up = with the consequent depreciation of paper mon ey and, later, demanding even more, in anticipation of further = depreciation of it. These defensive actions should not be blamed but = rather the aggressive actions which caused them. - J. Z., 6.4.97. \par UNMONEY: To begin with, we don't have money any more; we have what = Mr. Schiff calls unmoney. - John Chamberlain on Irwin A. Schiff's The = Biggest Con, in THE FREEMAN, 5/76, p. 312. \par WAGE CLAIMS & INFLATION: An inflation must be fought by refusing = new wage claims by labourers. - Popular and "expert" opinion. - To des cribe this as a "fight" is absurd. It will be the most natural, harmless = and peaceful thing to simply say: "No!" - if someone asks too high a = price for his labour or goods or services, whenever you cannot or will = not pay him wages above the market level.=20 O n the other hand, if you can expect to be able to pay him in ever = inflated money and thus get his labour, services or goods actually "on = the cheap" then you will be able and willing to pay him thus. - Without = the payment sphere being flooded with deprecia t ing means of payment, inflated wage and price claims cannot and will not = be met. Payable wages and prices will always have to be haggled out. But = the haggling should include, in the future, optional, alternative and = competing wage and price payment means, as well as alternative and sound value standards. We should not longer = assume that the government can and will supply a sound currency in = sufficient quantities for all our transactions. - J. Z., n.d., 6.4.97, = 4.9.02. \par WAGE CONTROL IS THE CURE FOR INFLATION: A Popular opinion. - If wages were the only prices, which, obviously = they are not, and if there were no other factors influencing the price = level and the money circulation in which prices are expressed, then they = would be some truth in this. But this is=20 a n entirely hypothetical and unrealistic assumption. - It is also wrong = that any prices can be effectively controlled, downwards or upwards, = away from free market prices, without reducing production and exchanges. = It has been tried, for 4,000 years, always in vain and it is proposed only by those unaware of these failures and = of the real causes of and cures for inflation - and even disinterested = in them. - J. Z., 6.4.97. \par WAGE LEVEL, & INFLATION: When employers can anticipate further = inflation, they do not h esitate to grant moderate further nominal wage increases which, due to = the continuing inflation, can soon be expected to amount to reductions = in the purchasing power of the "increased" wages. Furthermore, due to = the continuing inflation employers can rela t ively easily raise their prices. But it is neither the price rises nor = the wage rises that cause the inflation but the forced growth of the = monopoly money circulation due to legal tender and inclination of = politicians and bureaucrats to further increase t heir public spending and their own perks. - J. Z., 5.4.97. \par WAGE POLICY: Once there is a widespread cooperative or partnership = production, then a wage policy would to that extent simply disappear. = Self-managing producers would charge prices, could not charge more than their market would bear and could not distribute higher = earnings among themselves than they managed to gain. All they could do, = to increase their income, is to cut costs and increase their = productivity and offer more consumer satisfaction with=20 t heir goods or services. The wage system will always lead to = dissatisfactions for employers and employees alike, in the same way as = feudalism led to dissatisfaction between feudal lords and their serfs. = Employees gained some liberties since then but not ye t the liberty to negotiate their wages in alternative exchange media and = value standards, nor have most of them achieved self-management. = Instead, they foolishly strive to be paid more, nominally, in an = exclusive and forced currency that is almost constant ly depreciated and that leads to malinvestments or refusals to invest in = jobs for them, i.e. to mass unemployment, not only in times of obvious = deflations, which are also due to monetary despotism. - J. Z., n.d. & = 6.4.97. \par WAGE RISES & INFLATION: Wage rises=20 are inflationary. - Popular opinion. - Wage pressures are a result of = inflation, not its cause. Wages are just one kind of prices that are all = driven up by inflation. - Measured in any sound value standard, prices = and wages actually do not rise in an infl a tion. They might actually go down. What does definitely go down is the = value of the inflated paper money and just to keep up the purchasing = power of labour, goods and services, they have to be nominally priced = higher than before, expressed in the depreci a ted currency. To blame labour, services and goods prices for the = depreciation of the currency is absurd. Blame should be laid where it = belongs. - The simple facts of the matter are that, despite all the = activity of unions and association, all the work-val ue cases, all the strikes or stoppages, all the over-award payments = gained, the share of the GNP going to the worker has declined. THE = AUSTRALIAN ECONOMIC REVIEW, in its 4}{\f0\fs24\super th}{\f0\fs24=20 quarter issue of 1970, showed that employees' wages and salaries had = decreased over the 15-year period 1955 to 1970 from 63.2% of the GNP to 61.7% of the = GNP. At the same time this smaller share of the GNP was being = distributed to a larger proportion of the workforce, as those classed as = employees - distinct from rentiers and farmers, e t c. - had increased over the same period from 89.6% to 91% - RED TAPE, = Sep. 71, a public service union paper with a corresponding bias. I feel = sure that employer papers would make similar claims for themselves. = Neither discussed the monetary freedom altern atives. Both simply want larger slices of the limited number of small = cakes which monetary despotism has to offer. - J. Z., 6.4.97. - If you = want newer figures - why don't you dig them up?=20 \par WAGE-PRICE SPIRAL: The existence of such a spiral is assumed and it is also assumed that it is endless. Other real factors are ignored. And = it is also assumed that the wage-price-spiral could be arbitrarily = started either from the wage side or the price side and that the issuers = of money would simply be forced to follow=20 i t, quite helplessly. The popular religion on money has many false dogmas = or assumptions like this one. - When too high wages are demanded, for = the existing output and the market conditions for it and when they are = not paid with the assistance of the gover n ment's printing presses, then corresponding sales difficulties and = unemployment would soon result, i.e., the assumed spiral would soon come = to a stop. The general price level cannot be changed through high wage = demands and grants unless forced and exclusi v e currency is added to the circulation - according to the essence of the = quantity theory. Without monetary intervention the wages of some, e.g. = of unionists in bottleneck positions, could only be increased at the = expense of wages of non-unionised labour o r unionised labour in less powerful positions. - When wages rise not = through increased productivity but through more or less enforced wage = demands, i.e. when workers gain a higher share of the pie for themselves = (they already get most of it, in most instan c es) and when this happens under stable conditions (apart from = technological changes, which take place all the time and apart from the = effects of natural or political catastrophes), then the income of the = entrepreneurs, their profits and that of the invest o rs, their interest and dividends, must be dropped correspondingly. Also = prices of the goods produced by the workers would tend to rise. Thus the = price of beer might rise, as the result of higher wages but the price of = champagne might fall, as a result of=20 l ower profits. Prices would shift, from some items to others - but remain = at the same level in the average. But that might only be a short term = result. In the longer run, the reduced profits, interest and dividends = might lead to less investments in that in d ustry and to lay-offs. If the higher wages could be maintained, for = those still employed, then these employees would have to become more = productive, i.e., do more for their wages than they did before. - The = situation is different under monetary despotism=20 w hen there is an artificial intervention. E.g. the central bank replaces = the losses of employers, due to higher wages, by granting the employers = higher and cheaper loans, that are ultimately repayable only in inflated = money. Then they can afford to pay the =20 nominally increased wages - which are soon again reduced in purchasing = power through the resulting inflation and their profit and interest = rates either remain the same or are only nominally increased through the = inflation rate. Without this inflationary b a cking, the assumed wage-price-spiral could at most take some turns and = then come to a stop. It could never drive up all wages and prices beyond = the exchange media available to pay them. It could never drive up all = prices and wages reckoned in sound value=20 s tandards. But if it is combined with internal monopolies for labour (for = trade unionists) and monopolies, internal one, for the production of = goods and services, then unemployment might rise, then the number of = employers and the jobs they can offer is kep t low, but even the inefficient monopoly producers are still artificially = kept in business and they can, on the internal market, sell their goods = at high prices but only to those few who gained the higher wages. The = majority of the community becomes exploi t ed through the artificially high prices or cannot pay them at all or = would have to correspondingly reduce their consumption and all too many = become unemployed - and a tax burden upon the remaining recipients of = higher wages. The wage-price-spiral, under t h ese conditions, does not mean higher prices and higher wages for all but = only for some and no wages and no business for others. Wage increases = and price increases beyond their market values can be maintained, for = the benefit of the few involved, only when protective barriers keep out internal and external competition, e.g. by = immigration restrictions and restrictions on foreign investments. - J. = Z., 24.3.97, 30.8.02. \par WAGE-PRICE SPIRAL: Wages and prices drive each other up and lead to = inflation. - Popular op inion. - Supposedly, this happened since the time of the first wages and = prices, thousands of years ago? So why aren't all wages and prices = increased, without limits, a billion-fold or even a billion = trillion-fold? Why do the wage "trees" and prices do n o t grow up to reach the moon? What hold them back, especially when there = is a money issue monopoly with its legal tender? This monopoly and = coercion can at most increase all wages and prices in an inflationary = way, i.e., merely nominally, to the extent tha t over-issues of the means for paying wages, salaries and prices have = taken place. That is only possible if the issue and acceptance of sound = exchange media remains suppressed. - Since all prices are a type of wage = and wages are a type of price, you might=20 a s well say : wages drive each other up or : prices drive each other up. = - But are you willing, as an employer, to pay ever increased wages and = are you able to do so? Or, as a consumer, are you willing to pay ever = increased prices and are you able to do so ? - Isn't it rather obvious that the exchange media to pay ever = increased prices and wages must come from somewhere? The do not grow on = trees. (But trees can be turned into note-paper and this paper can be = imprinted by a monopoly issuer and forced by him=20 i nto circulation and maintained in it.) Nature does not rain or snow = paper money down upon us. Explore who issues it, what allows him, but = not you, to issue money and what allows him to force his depreciated = paper into circulation, even as an exclusive one . With an issue monopoly and legal tender powers, I, too, could cause an = inflation by over-issuing my cheques and you would be forced to accept = them at par, as if they were sound money. - Why give anyone such powers = - and then blame others for the resultin g abuses? - J. Z., n.d. & 6.4.97. \par WAGES & INFLATION: No matter what action a government takes - no = matter how severely it taxes or how ruthlessly it cuts government = spending - no matter how it seeks to redirect resources if that is what = it wishes to do - it will not be able to beat inflation if wages and salaries rise more = quickly than production. - Demands for over-award payments, for extra = holidays, for additional holiday pay, for shorter hours, can only be met = in one of two ways. Either the amount of goo d s and services produced is increased sufficiently to enable those = requests to be met without inflation - or the requests are met at the = cost of inflation, which ultimately destroys the benefits sought and = leaves us all worse off. - Mr. Gorton, when Prime=20 M inister of Australia. - THE SYDNEY MORNING HERALD, 30.1.71. - He argued = as if the government would not operate and as if the employers could = operate the note printing presses. - There was one of the culprits, = again, asserting: I am innocent! You are to bl ame! - J. Z., 6.4.97.=20 \par WAGES, INFLATION & PRODUCTION: The inexorable fact is that if we = try to pay higher wages without providing an equivalent increase in = production we will have inflation. - Prime Minister Gorton, THE SYDNEY = MORNING HERALD, 30.1.71. - He=20 spoke as if he were an employer and even the only employer of all = Australians. But he did not mention that the Reserve Bank of Australia = is the only institutions that is allowed to provide additional wage = payment means. Without it providing them, others m a y wish for more, may even strike for more, but cannot get them. Even if = they became more productive, the additional goods and services could not = be sold without additional exchange media. - Actually, some employees = could be paid higher wages or salaries a n d production could be cut down, fewer goods could be produced, at high = scarcity prices, which few could afford and many workers could be laid = off and we could have a depression or deflation. Alternatively, with = less workers more goods could be produced an d the attempt could be made to sell all of them for the same amount of = money in circulation - and we would have a deflation. - Do not forgive = them because they do not know what they are doing - but they are doing = it nevertheless. - And their victims are gr anting them the sanction of the victims or different groups of victims = blame each other rather than their monetary despots and their oppressive = mismanagement and institutions. - J. Z., n.d., 6.4.97. \par WAR & INFLATION: War causes inflation. - Popular opinion, same as that of "experts": "War, which we have seen to be the principal = cause of the most dramatic inflations." - Dr. Paul A. Samuelson, THE = NATIONAL TIMES, 26.4.71. - Not every war was financed via an inflation, = e.g. not the later wars of Napoleon I and =20 not the Prussian War against France in 1870/71. - The financial = requirements of large-scale modern warfare may MOTIVATE inflationary = issues by the monopoly issuer, with his legal tender privilege, but they = cannot directly set the note printing presses int o motion. Nor, under monetary freedom, could they cause an inflation. = Monetary despotism is the prerequisite of inflation, in war as well as = in peacetime. - J. Z., 6.4.97. \par WORK, JOBS, UNEMPLOYMENT, EMPLOYMENT, SCARCITY: "Work was scarce". = - Frequent superfi cial observation. What it really amounts to is, usually, that cash or = short term credit, to pay for productive work, as well as for consumer = goods and services, has become relatively scarce, for whatever reason. = This refers, usually, only to the monopoly=20 m oney of monetary despotism and the monetary freedom alternatives are not = taken into consideration. The full satisfaction of all existing needs = and wants does require almost unlimited work, not only for the moment = but for years to come. Just think of the l o ng term obligations in repaying loans for the purchase of land and = houses, the ever increasing consumer expectations and wishes for still = better goods and services or more of them. The full satisfaction of all = these needs and wants requires, even under fr e e market capitalism, with more and more machines, robots and automation, = more and more work, not only for a day but for years to come, to pay for = all these wanted goods and services. However, under monetary despotism, = the supply of exchange media to make=20 a ll these needed and wanted exchanges possible, to the limits of the = willingness and ability of the participants to give their goods, labour = and services in exchange for the labour, goods and services of others, = is not assured. Sound exchange media are the n not constantly and competitively supplied as cheaply as possible and = thus too many transactions that are needed and wanted cannot take place, = i.e., we get unemployment, sales difficulties and bankruptcies as well = as capital losses. Careless language use=20 t hen calls this exchange media shorts a shortage of jobs or of work. = (Another careless language use that annoys me at present is talking or = writing about an attack on Iraq or Bagdad, rather than about the = outlawry, capture or execution of its tyrant, Sadda m Hussein. In consequence, millions of innocent people may be murdered in = Iraq and in other countries, rather than this criminal being brought to = an international court of justice or executed wherever he is, when this = is not possible. The wrong choice of w ords can easily lead to disastrously wrong actions. - J. Z., 31.8.02.) \par }} ------=_NextPart_000_0003_01C25400.86DF27A0--