From: "John Zube" To: "Greg Flanagan" References: <000e01c0907a$28afe5c0$b50c2642@b1z8p2> Subject: Re: monetary creation Date: Thu, 8 Feb 2001 15:35:46 +1100 Organization: Libertarian Microfiche Publishing MIME-Version: 1.0 Content-Type: multipart/alternative; boundary="----=_NextPart_000_00D7_01C091E4.CE857E40" X-Priority: 3 X-MSMail-Priority: Normal X-Mailer: Microsoft Outlook Express 5.00.2314.1300 X-MimeOLE: Produced By Microsoft MimeOLE V5.00.2314.1300 This is a multi-part message in MIME format. ------=_NextPart_000_00D7_01C091E4.CE857E40 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable ----- Original Message -----=20 From: Greg Flanagan=20 To: John Zube=20 Sent: Wednesday, February 07, 2001 7:19 AM Subject: monetary creation Hi John, I would like our e-mails on the topics we discussed to be posted on my = discussion group. I value your opinions and I think that others would = also be interested. Do you want me to add your name to the discussion = group? You can join the eGroup I started recently at = libertocracy-subscribe@egroups.com and send your e-mails on issues and = political ideals to it if you want.=20 There's just a few people on it now. I would like our discussions of = free nations, monetary policy, etc. included to get others involved and = so they will be in the archives so that when more people join in the = future they can read about those ideas. You can also post info about = your project. I would like to post the following e-mail to the group if = you would like to participate in the discussion there. Please let me know. JZ82: The day has still only 24 hours for me & I have to allocate = those hours I can dedicate to freedom subjects among many current = projects. I do not need and cannot cope with additional ones. Filling my = ON PANARCHY encyclopaedia and completing my alphabetized monetary = freedom handbook will keep me busy for a long time still. You wrote: Thus the progressives among the Reservation Indians ought to aim also, = perhaps even mainly, at their own "wampum", their own exchange media, = clearing and short termcredit facilities, utilizing any value standard = that they perceive to be better than the paper standard of the Canadian = or U.S. dollars. If Amerindians started printing their own money on reservations thugs = from the Treasury Department would shut them down very quickly, because = the Constitution decides what rights people can and can't have and = reserves to itself the power to print money. I put my faith more in = cyber currency and other anonymous currency schemes that have been = proposed as the most realistic method for defeating fiat money and with = it the power to tax and regulate. The most important territory then = becomes data havens, which is another battleground for personal freedom = that states are fighting to prevent becoming a reality.=20 JZ82: Red Indians, in reservations, have a better chance to get away = with an "open" monetary freedom experiments than outsiders. That = naturally depends upon their initiative, willingless to learn enough = about this option and upon the existence of certain minimal = pre-conditions for a local monetary exchange economy within a = reservation. They may have come close to the trading in "obs" (obligations, only = memorized) reported in one of the SF stories by Eric Frank Russell. Yes, in concept money is simply and IOU, a promissory obligation that = keeps tabulation on trades. I wrote about that concept in "Cryptic = Money" = http://www.libertocracy.com/Policy/economy/money/cryptic_money.htm and = how the privacy and sovereignty of the minds of individuals in keeping = track of voluntary trades can be extended to encrypted cyber currency = which is really just the digitizing of personal memory of transactions. = Such digital money is really just pure information. JZ82: Possibly, any encryptation attempt will mobilize Fed = intervention even faster! They might confiscate any computer using it. One of the most simple forms of "money" would be paper-book-keeping or = electronic book keeping of credits and debits in local shops, initially = in terms of US dollars.=20 Now, how far are they or are they not exempted from U.S. taxes? = =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= What are minimum requirements for the development of monetary freedom = in some reservations?...Initially, only these surplus produce and = products could serve as a cover for the issue of the own currencies. In = the beginning, imported goods could not be paid for with the local = currency but only with the currency of the outside. ...Once the internal = economy has reached a degree of productivity and surpluses as well as = exports to the outside, then the local currency could also be used = somewhat to pay for imported goods and services. I believe that any property of value can be used to back money just as = collateral backs a bank loan for an IOU. Gold and other precious metals = are most useful because they retain universal value which only = fluctuates slightly, but other properties can also be used as a base for = money as long as there is a system in place to guarantee the money in = circulation by always having enough property as collateral to back the = money or by insuring the money in case the value of the property backing = it declines below monetary face value.=20 JZ82: This is an ancient fallacy. A currency is "current" or liquid = only because one can purchase goods and services in daily demand with = it. Gold coins are liquid as hoarding options and for various industrial = uses of the metal they contain. A "money" that represents ore in the = ground, a railway line, a building, agricultural land or shares, etc., = is not liquid because it cannot be turned conveniently into ore, a = railway ticket, a building brick, a few square feet of land etc and few = people would want it or need it for that purpose. Their "currency" has = to be able to buy their local bread and butter and these providers have = to be obliged to deliver them for it. In other words, other people will = have to give such a "currency" some current value. These are the people = providing the real cover and they should be the issuers themselves. But = I do know that this "land bank" error is deeply ingrained and = wide-spread and it will take a prolonged intellectual battle and many = references to defeat it. Here and now I will not try beyond the above = hint. a local currency, or even several, could come to soon pay for all = willing and productive labour within the reservation and would soon be = spent for the goods and services of reservation people and thus assure = the sale of the products in its shops and that of the services of = tradesmen and professionals - to the extent that such private notes or = clearing certificates are readily accepted - and not outlawed by outside = influence, continuing a monetary imperialism, colonialism or despotism. Money creation and exchange should be an open business like any other. = If I want to issue money with my picture on it that says I owe you $100, = that promissory note would only be good initially with people who = actually know me and trust me, in which case the IOU would have no real = value as a medium of exchange beyond person to person trust. But if I = had a monetary broker issue money in my name where the broker required = me to have collateral to back the money and insurance to insure the = value of the money in case my property loses its value, then the money = would have universal value as long as the monetary broker is reputable. = Brokers themselves would have to be insured so that a person who accepts = money that comes from a specific broker knows that the broker is insured = by a company that guarantees the value of the money. Insurance companies = to insure money would also want to make sure that the money doesn't = inflate, therefore they would refuse to insure anyone who is responsible = for inflating money. In such a free market, those brokers who have a = good reputation for issuing money backed with guarantees and the track = record of managing money creation to avoid inflation would get a lion's = share of the market and their money would become the preferred currency. = But this would not prevent anyone else from creating money also, it = would be adopted to the degree that people trust it.=20 I'll have more on this later. JZ82: The business to express capital assets in transferable = securities consists in issuing suitable medium and long-term security = certificates, shares, bonds, mortgages etc. Naturally, issue freedom for = such issues should exist, too. That falls under full financial freedom. = Monetary freedom is much more confined, namely to those assets suitable = as immediate "redemption funds" for every token holder. They do not = want, every day, to invest in some of the other guaranteed and insured = capital investment - but in whatever their consumer hearts and minds = desire, daily or almost daily. =20 Neither brokerage nor insurance are the optimal terms for the = note-issuing business. Local shop associations, including local service = providers, would be optimal issuers for shop currency with shop or = service foundation. Your type of money could not stand this kind of = competition for long. Anybody could test the quality of a local currency = simply by presenting it in a local shop. As simple as dipping your foot = into water to find out whether it is warm enough. That practice would be = backed up by full publicity on the issue business and the current = exchange rate of a local currency against other exchange media and other = value standards.=20 No money "creation" is involved but merely the transformation of = semi-liquid assets (daily wanted consumer goods and services) into quite = liquid assets, by the providers themselves - and their associations. = They do not need the money of others for their local trading but others = do need what they have to offer. To the extent that an individual is = sufficiently known and trusted, he could, naturally, also issue his own = individual clearing certificates, always dependent upon voluntary = acceptance at par by others. But why should all potential acceptors, = interested in the consumer goods or services that he can supply, want to = invest in whatever capital assets he has? I am not interested in the = capital assets of my grocer but in what goods he has to offer me. If I = want to invest in his business, I do so otherwise, e.g. buy a share in = his company. Insurance companies could issue their own scrip, just like brokers do, = within their own sphere. But their scrip could hardly become general = local currency. It would have use mostly only among their customers. I also have a newsletter you can subscribe to at = libercratic-news-subscribe@egroups.com =20 All further news on your libertocray project does interest me, even = though I would be unlikely to contribute texts, apart from making mine = on microfiche available. However, I have long determined that I cannot afford to subscribe to = anarchist and libertarian periodicals. I cannot even afford to exchange = with them on a one for one basis with my microfiche, since that would = mostly waste the few (100) microfiche duplicates, that I do get = initially made of each issue and since I would not have the time to read = an additional 200-300 periodicals.=20 regards,=20 Greg =20 The best wish of all: PIOT (or whatever YOU want to call it!), John ------=_NextPart_000_00D7_01C091E4.CE857E40 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
 
----- Original Message -----
From:=20 Greg=20 Flanagan
To: John Zube
Sent: Wednesday, February 07, = 2001 7:19=20 AM
Subject: monetary = creation

Hi John,
I = would like our=20 e-mails on the topics we discussed to be posted on my discussion = group. I=20 value your opinions and I think = that others=20 would also be interested. Do you want me to add your name to the = discussion=20 group? You can join the eGroup I started recently at libertocracy-subscribe= @egroups.com and=20 send your e-mails on issues and political ideals to it if you want.=20
There's just a few people on it now. I would like = our=20 discussions of free nations, monetary policy, etc. included to get = others=20 involved and so they will be in the archives so that when more people = join in=20 the = future they can=20 read about those ideas. You can also post info about your = project. I=20 would like to post the following e-mail to the group if you would like to participate in = the=20 discussion=20 there.
Please let me know.

JZ82: The day has still only 24 hours for me & I have to = allocate=20 those hours I can dedicate to freedom subjects among many current = projects. I=20 do not need and cannot cope with additional ones. Filling my ON = PANARCHY=20 encyclopaedia and completing my alphabetized monetary freedom handbook = will=20 keep me busy for a long time still.
 
You wrote:
Thus the progressives among the Reservation Indians = ought=20 to aim also, perhaps even mainly, at their own "wampum", their own = exchange=20 media, clearing and short termcredit facilities, utilizing any value = standard=20 that they perceive to be better than the paper standard of the = Canadian or=20 U.S. dollars.

If Amerindians started printing their own money on reservations = thugs from=20 the Treasury Department would shut them down very quickly, because the = Constitution decides what rights people can and can't have and = reserves to=20 itself the power to print money. I put my faith more in cyber currency = and=20 other anonymous currency schemes that have been proposed as the most = realistic=20 method for defeating fiat money and with it the power to tax and = regulate. The=20 most important territory then becomes data havens, which is another=20 battleground for personal freedom that states are fighting to prevent = becoming=20 a reality.

JZ82: Red Indians, = in reservations, have a=20 better chance to get away with an "open" monetary freedom = experiments=20 than outsiders. That naturally depends upon their initiative, = willingless to=20 learn enough about this option and upon the existence of certain = minimal=20 pre-conditions for a local monetary exchange economy within a=20 reservation.

They may have come close to the trading in "obs" (obligations, only = memorized) reported in one of the SF stories by Eric Frank=20 Russell.

Yes, in concept money is simply and IOU, a promissory obligation = that keeps=20 tabulation on trades. I wrote about that concept in "Cryptic Money" http://www.libertocracy.com/Policy/economy/money/cryptic_money.htm=  and=20 how the privacy and sovereignty of the minds of individuals in keeping = track=20 of voluntary trades can be extended to encrypted cyber currency which = is=20 really just the digitizing of personal memory of transactions. Such = digital=20 money is really just pure information.

JZ82: Possibly, any encryptation attempt will = mobilize=20 Fed intervention even faster! They might confiscate any computer using = it.

One of the most simple forms of "money" would = be=20 paper-book-keeping or electronic book keeping of credits and debits in = local=20 shops, initially in terms of US dollars.

Now, how far are they or are they not = exempted from=20 U.S. taxes?

=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D

What are minimum requirements = for the=20 development of monetary freedom in some reservations?...Initially, = only these=20 surplus produce and products could serve as a cover for the issue of = the own=20 currencies. In the beginning, imported goods could not be paid for = with the=20 local currency but only with the currency of the outside. ...Once the = internal=20 economy has reached a degree of productivity and surpluses as well as = exports=20 to the outside, then the local currency could also be used somewhat to = pay for=20 imported goods and services.

I believe that any property of value can be used to back money just = as=20 collateral backs a bank loan for an IOU. Gold and other precious = metals are=20 most useful because they retain universal value which only fluctuates=20 slightly, but other properties can also be used as a base for money as = long as=20 there is a system in place to guarantee the money in circulation by = always=20 having enough property as collateral to back the money or by insuring = the=20 money in case the value of the property backing it declines below = monetary=20 face value.

JZ82: This is an ancient fallacy. A currency is "current" or = liquid=20 only because one can purchase goods and services in daily demand with = it. Gold=20 coins are liquid as hoarding options and for various industrial uses = of the=20 metal they contain. A "money" that represents ore in the ground, a = railway=20 line, a building, agricultural land or shares, etc., is not = liquid=20 because it cannot be turned conveniently into ore, a railway ticket, a = building brick, a few square feet of land etc and few people would = want it or=20 need it for that purpose. Their "currency" has to be able to buy their = local=20 bread and butter and these providers have to be obliged to deliver = them for=20 it. In other words, other people will have to give such a "currency" = some=20 current value. These are the people providing the real cover and they = should=20 be the issuers themselves. But I do know that this "land bank" error = is deeply=20 ingrained and wide-spread and it will take a prolonged intellectual = battle and=20 many references to defeat it. Here and now I will not try beyond the = above=20 hint.

a local currency, or even several, could come to soon pay for all = willing=20 and productive labour within the reservation and would soon be spent = for the=20 goods and services of reservation people and thus assure the sale of = the=20 products in its shops and that of the services of tradesmen and = professionals=20 - to the extent that such private notes or clearing certificates are = readily=20 accepted - and not outlawed by outside influence, continuing a = monetary=20 imperialism, colonialism or despotism.

Money creation and exchange should be an open business like any = other. If I=20 want to issue money with my picture on it that says I owe you $100, = that=20 promissory note would only be good initially with people who actually = know me=20 and trust me, in which case the IOU would have no real value as a = medium of=20 exchange beyond person to person trust. But if I had a monetary broker = issue=20 money in my name where the broker required me to have collateral to = back the=20 money and insurance to insure the value of the money in case my = property loses=20 its value, then the money would have universal value as long as the = monetary=20 broker is reputable. Brokers themselves would have to be insured so = that a=20 person who accepts money that comes from a specific broker knows that = the=20 broker is insured by a company that guarantees the value of the money. = Insurance companies to insure money would also want to make sure that = the=20 money doesn't inflate, therefore they would refuse to insure anyone = who is=20 responsible for inflating money. In such a free market, those brokers = who have=20 a good reputation for issuing money backed with guarantees and the = track=20 record of managing money creation to avoid inflation would get a = lion's share=20 of the market and their money would become the preferred currency. But = this=20 would not prevent anyone else from creating money also, it would be = adopted to=20 the degree that people trust it.

I'll have more on this later.

JZ82: The business to express = capital assets=20 in transferable securities consists in issuing suitable medium and = long-term=20 security certificates, shares, bonds, mortgages etc. Naturally, = issue=20 freedom for such issues should exist, too. That falls under full = financial=20 freedom. Monetary freedom is much more confined, namely to those = assets=20 suitable as immediate "redemption funds" for every token holder. They = do not=20 want, every day, to invest in some of the other guaranteed and = insured=20 capital investment - but in whatever their consumer hearts and=20 minds desire, daily or almost daily.  

Neither brokerage nor insurance are the = optimal terms=20 for the note-issuing business. Local shop associations, including = local=20 service providers, would be optimal issuers for shop currency with = shop or=20 service foundation. Your type of money could not stand this kind of=20 competition for long. Anybody could test the quality of a local = currency=20 simply by presenting it in a local shop. As simple as dipping your = foot into=20 water to find out whether it is warm enough. That practice would be = backed up=20 by full publicity on the issue business and the current exchange rate = of a=20 local currency against other exchange media and other value standards. =

No money "creation" is involved but merely = the=20 transformation of semi-liquid assets (daily wanted consumer goods and=20 services) into quite liquid assets, by the providers themselves - and = their=20 associations. They do not need the money of others for their local=20 trading but others do need what they have to offer. To the extent = that an=20 individual is sufficiently known and trusted, he could, naturally, = also issue=20 his own individual clearing certificates, always dependent upon = voluntary=20 acceptance at par by others. But why should all potential acceptors,=20 interested in the consumer goods or services that he can supply, want = to=20 invest in whatever capital assets he has? I am not interested in the = capital=20 assets of my grocer but in what goods he has to offer me. If I want to = invest=20 in his business, I do so otherwise, e.g. buy a share in his=20 company.

Insurance companies could issue their own = scrip, just=20 like brokers do, within their own sphere. But their scrip could hardly = become=20 general local currency. It would have use mostly only among their=20 customers.

I also have a = newsletter you=20 can subscribe to at libercratic-news-s= ubscribe@egroups.com  =20

All further news on your libertocray project = does=20 interest me, even though I would be unlikely to contribute texts, = apart from=20 making mine on microfiche available.

However, I have long determined that I cannot = afford to=20 subscribe to anarchist and libertarian periodicals. I cannot even = afford to=20 exchange with them on a one for one basis with my microfiche, since = that would=20 mostly waste the few (100) microfiche duplicates,  that I do get=20 initially made of each issue and since I would not have the time = to read=20 an additional 200-300 periodicals.

regards,
Greg   
 
The best wish of all: PIOT (or whatever YOU want to call it!),=20 John
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