From: kris@bsg8.Corp.Sun.COM (Kris Skrinak)
Newsgroups: alt.politics.libertarian
Subject: Re: Gold Standard? No!
Date: 16 Dec 1992 01:32:14 GMT
Organization: Sun Microsystems, Inc.
Distribution: world
Reply-To: kris@bsg8.Corp.Sun.COM
NNTP-Posting-Host: bsg8.corp.sun.com

In article 13480@unlv.edu, bright@unlv.edu (Paul Conte) writes:
> >In article <liqedgINNra@jethro.Corp.Sun.COM> kris@bsg8.Corp.Sun.COM writes:
> >
> >>The assignment of a value to the dollar, in gold or any other commodity
> >>(oil), would be arbitrary. This arbitrary assignment would place
> >>restrictions on the free flow of other commondities on which it
> >>depends, namely interest rates and other currencies, and would interupt
> >>the market just as all other government-imposed restriction do.
> 
> The problem is that the U.S. government has a monopoly on the printing
> of money.  If banks, corporations, whatever, were allowed to print
> their own money, we could have a competive market in currency.  There
> would be exchange rates just as there are now with foriegn currency.
> This would reduce currency to the level of an apple, a pear, a cow, or
> whatever else one would want to trade with or for.

The existence of a monopoly and the printing of money are irrelevant.

The demand for US Dollars as a commodity fluctuates. Why do you think
businesses trade currencies and currency futures?

As a commodity the demand for US dollars fluctuates, and, based on the
supply, as measured usually by M1-3, the supply fluctuates. This, by
the way, is not done by printing more currency. It is done by lowering
the rate at which the Fed. lends money to member banks.

There is of course a separate supply and demand scheme for gold.

Because the two are commodities, with two distinct sets of causes for
supply and demand, the arbitrary binding of one price to the other will
have no effect, except hindering trade in the free market.

Currency is a claim, just like a title, stock certificate or any other
legal document. There is not a dollar in existance for every claim on
property or service in the world. In fact, anyone with a claim to an
above-average amount of material knows that only a small percentage of
that claim is held in currency, hopefully the smallest in their
portfolio as currency bears no interest.

It actually takes a degree of intellectual detachment to regard the
dollar for its real worth (nothing) to appreciate its role in the
economy, which is why it facinates me the Liberatarian Party has the
gold standard written in its platform. It facinates me because most
liberatarians I know are smarter than your average Republicrat. It's
kind of embarrasing.


> By the way, does money printed by the government truly belong to the
> person who at some point in time has it in his pocket?

Question Reworded: Does the claim to goods and services in the economy
truly belong to the person who at some point in time has it in his
pocket?

Answer: When was the last time someone said to you, "I'm sorry, we
don't accept US dollars in cash OR credit."

- Kris Skrinak

------

"This is the best of all economic worlds. We are getting a pickup in
economic growth with no pickup in inflation."

	- Donald Fine, Chase Securities (Wall Street Journal, Dec. 12, 1992)
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