I agree that Leviathan has to be kept on a strong chain. Making abstraction of the US Constitution only allowing gold and silver (free-floating against each other) as money, the free competition amongst currencies will play out the will of the people. What is not clear to me, is this: how can we perform economic calculations under such free competition of currencies?

Reply from The Daily Bell

Gold and silver would likely become a free-market international standard ...

Hey DB, what are your thoughts on Bitcoin? I think digital crypo-currencies are the future, and will ultimately lead to the downfall of the State. While it's true they aren't backed by anything physical, I don't think that matters... people choose to value them, and all value is subjective (according to Austrian economics).

Wonderful idea. I am sure it is coming to a gold and silver standard. Gee, now they can confiscate everyones precious metals again!

Mark Skousen wrote today "Fed Panics - An Unprecedented, Dangerous Inflation Coming":

Click to view link

What a contrast to what he wrote 05Apr2012,

"Fed is Right not to Launch QE3": Click to view link

@ G.S, ... confiscate

Marc Faber commented on that during an interview on Capital Account, on the RussiaToday TV channel: Click to view link . Not sure that interview is online yet. Marc also spoke on how official China stats on economic slowdown there may be understated (by looking at rail traffic).

Our old friend Ben has launched QE3

Blythe Masters has moved as JPM top silver shorter.

Yippee for gold and silver.

The continued printing or creating by electronic means
truck loads of worthless paper is making the Dollar/Euro
as virtual as Bitcoins.

Certainly values are subjective.

However gold and silver have always been tangible and tradable
Organically elevated to a status of value in different unrelated
civilizations across the world. A truly Globalist currency!

The Irony for the Money Power Elite is they hate us owning gold
and silver that we might measure the worthlessness of their fraudulent fiat.

Far better to crash the west paper for a simple chip to "keep us safe"

The film Trading Places and the old boys having a dollar bet
on the outcome of their manipulation. 1913 the forming of the fed.

Was the bet "We can destroy the value of the dollar 100% in 100years"

Well 98% there and months to go.

Back then gold was fixed at $20.67.

Will that mean when gold hits $2067 the dollar is toast?

Gold could well get there by the end of the year.

Prior to de-monitizating of silver there was the silver standard unit of value. The wealthy banking elite wanted a gold standard and silver was only to be lawful tender for transactions of $5.00. This, of course, destroyed Nevada's economy at the time.
I favor a return to our first Coinage Act of April 2, 1792.

I also favor a return to our first Coinage Act of April 2, 1792 because the penalty for debasing United States minted Coin was death.

Just to be clear, FDR knew that he was going to devalue the dollar against gold.
He ordered all the gold gathered up. He got 10%. Then, he re-priced the dollar.
His gold was worth about 75% more.
"wisdom of Congress ",,, another oxymoron.
"elastic currency",,, yeah, all stretch and no contraction.
"once you give government the monopoly power over money, those in charge will abuse it." Well, gee whiz. Corrupt people will abuse power???

Interestingly, FOFOA argues that GOV won't confiscate gold this time. They confiscated last time because gold was a fixed price and there was lots to be gained by grabbing all of it before devaluation of the dollar.

Alan Greenspan, "An almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions. They seem to sense - perhaps more clearly and subtly than many consistent defenders of laissez-faire - that gold and economic freedom are inseparable,"

Here is a quote even more telling;
"The existence of such a commodity is a precondition of a division of labor economy."
"Division of labor" doesn't really cover GOV "workers" who never actually produce anything. Labor,,, yes///// productivity,,, NO.
Click to view link

The Marxists need an infinitely elastic money supply so that they can bestow unlimited benefits to get unlimited votes from those on bended knee.
For those who can't seem to bend their knees; "From each according to his ability"
Hollande picked up that idea pretty fast.

Not to be outdone by the Marxists, the money powers want you to do a full days work also;
The Troika wants to raise the retirement age to 67 years immediately, cut "lay-off compensation" by 50%, and, wait for it, introduce a 6-day working week, and stretch the working day to 13 hours. In theory, that could lead to a 78-hour working week."
Nothing unrealistic about this,,,, except that there are no jobs in Greece.

The banking cartels don't want to be limited on their power to offer unlimited credit. Basel III is not getting traction.
GOV doesn't want to have any limits on currency expansion.

2 years ago, GATA reported that there was 11,000 tons too much gold in depositories.
Jim Willie recently reported that there was 40,000 tons taken from accounts that were GOV, allocated and unallocated. At a CFTC meeting, a bullion bank admitted that they sell every ounce of gold 100 times. The indications are that the gold has moved to the Far East and Middle-East.

GOV can dictate all the laws that it wants to. It can not dictate confidence.
I suspect that it will fight any limitations.

Saffire29979] the gnomes are carefully quiet about bitcoin. on one hand I understand why they don't want to advertise some immature project as this surely is, but on the other hand its obviously a great example of free market money and the power of internet.

Reply from The Daily Bell

We wrote about it today.

The net is the ultimate forum to hash out ideas both bad and good and arrive at the best "model". I just found a page by Fekete that is 7 years old. The page is educational but, it also shows that the vast majority of the banking industry is unnecessary. This is a real epiphany to me. I never took the time to understand "real bills".

Click to view link

Yikes, this url is 5 lines long. I originally found this paper at 24 hrs. gold but, the left hand side of the paragraph is covered over by a banner.

Click to view link

This url is only 3 lines long. I hope that it doesn't break.

As I posted above, both the Marxists and the bankers want an infinitely elastic money supply. Bernanke and Draghi are in the process of stress-testing the ability of elastic.

As a "neo-Luddite", I seem to be a lone voice in the wilderness. The fact that 52.5 % of Americans rely on GOV for income is a sure sign that GOV created a lot of make-work jobs. Many of these jobs will be ending by the close of Q1, 2013.

There is definitely a huge crash in our future. I imagine that banks will fight real-bills tooth and nail.

I don't see much future in world socialism. A command economy run by banking cartels doesn't have a future either.

I do not know if a return to real bills would bring economic stability. Since real bills seems to bring immediate payment to the producer, I suspect that it brings very little to the non-producers.

As a neo-luddite, I have to espouse social-credit OR systematic culling. Unlike Tibor, I see multitudes of people who are untrainable and would never benefit from retraining. Investigation has proved that a person has to learn most of the basics while they are still young. Once they have passed their teenage years, they just don't have the faculties to learn the basics.

I can't quite support systematic culling. Sterilization yes but, culling no. Denmark, I believe, has proposed sterilization for non-producers. I expect to see this idea more often. Malthus may prove to be right eventually.

The bankers are the uber-parasites. GOV is their enabler. Ghandi said that there is enough for everybody's need but not enough for everybody's greed.
If ALL the parasites were relegated to the income provided by social credit, there would be a lot more to go around. This isn't an accolade for social credit. It is a call for income reduction for non-producing parasites.

There is a huge income inequality. Bernanke has shown the desperation of bankers.

Productivity by diktat has never worked. We will slide along the bottom until motivation is brought back. Jim Rogers sees America having a couple lost decades. Japan seems to indicate NO exit until the bankers are finally smashed.

Either we go to real bills and social credit or the bankers do slash-and-burn of the economy to stay in power.

The original "job" of bankers was to evaluate risk and dole out credit commensurate with risk and reward. Computers already tally your credit score. Computers could do all the rest.

The implementation of real bills along with computer control of credit could be a great solution to the present crisis. I do9n't expect it to have any appeal to all the overpaid people in the banking system.

Reply from The Daily Bell

Hey, Danny B. you're a very smart guy but you've arrived at a bunch of authoritarian solutions. Interesting. Why don't you give such generous concepts as free markets and human action a try? These days you seem pretty contemptuous of your fellow human beings. Too bad.

The "gold standard" is simply not understood. The purpose of the original Federal Reserve Act is simply not understood.

The "gold standard" has absolutely nothing to do with the quantity of gold coin and bullion in existence. Refined gold serves as a standard to measure "quantified" work. When governments set an amount nd weight of refined gold as the standard amount from which aliquot parts are to be derived, they merely set a standard for "price". In other words, the "value" of gold can vary, but the weight of the aliquot parts do not.

While the U.S. Dollar was originally set equal to the silver content of a Spanish "Pillar" Dollar, it was also set equal to the market price of gold in terms of silver. As long as the ratio of gold finds to silver finds remained at the historic ratio of 1:15, the markets worked well enough.

Once that ratio fell out of kilter, and the U.S. Congress fixed the gold/silver ratio, the demise of one or the other to serve as "money", i.e. as the standard of measure, was a foregone conclusion. For many good reasons, gold won out as the standard of measure over silver in the U.S. as well, as in most countries of the world until 1971. Ever since, the entire world monetary system has been represented by "floating" currencies without a standard other than the floating USD servings as the world's reserve currency. It is evident where this has led to... .

As regards the redeemable Federal Reserve Note created under the original Federal Reserve Act, it was created subject to the "Real Bills Doctrine", as had all currency in the United States until 1935. Currency created under the RBD acts as a clearing instrument. The education establishment is curiously silent about explaining the RBD. I wonder why... ???

The irredeemable "Federal Reserve Note" created by the 1935 Federal Reserve central bank is only evidence of a "debt obligation". Circulating irredeemable FRNs amounts to passing around debt obligations. In contrast, RBD currency served to clear consumable items in urgent demand. Any discrepancy in this clearing process amounts to "savings", and it is usually cleared with gold. Since "savings" amount to an average of 10%, the gold reserves required were always available under the RBD, particularly since gold savings were readily invested in interest or dividend earning instruments.

The only reason physical gold was needed under the RBD banking system was to enable "savers" to influence the market "prime" interest rate which was determined by the willingness of the savers to part with their gold savings for an acceptable return.

That the big money center banks had decided to sabotage the Federal Reserve Act of 1913 is evident from the fact that they financially supported the ratification of the 16th, 17th and 18th Amendments, pushed by the "Progressive Movement" and "Prohibition Movement", after it became clear that their supporters in the U.S. Congress were unable to deliver to them the control over the franchise to create the national "Federal Reserve Note" currency.

The NYFRB, almost from the beginning violated the FRA by failing to keep the necessary gold reserves, knowing the U.S. Treasury would not collect the fines for such violation. When in the 1920s the NYFRB engaged in secondary market sales of U.S. Treasury "Gold" Bonds, which was strictly prohibited by the 1913 FRA, the demise of the "redeemable" FRN was a foregone conclusion.

Banking, meaning currency creation, according to the "Real Bills Doctrine" under the "gold standard" was destroyed by FDR's nationalization of the gold holdings of American citizens.

The Banking Act of 1935 changed the Federal Reserve System from a number of regional associations of private banks agreeing to federal government oversight in the creation of redeemable national currency into a federal government agency which issues a national irredeemable currency by monetizing congressional budget deficits, and which determines the "prime" interest rate with the legal involvement of the big money center banks.

It is little realized that academicians benefit tremendously by supporting the existence of "central bank" currency. While 700 prominent business and economics professors issued an open letter in 1933, urging FDR not to nationalize gold, five years later, not a single one of those academicians could be found to speak up against central banking. If government sees to it that academicians who support central banking are readily employed, is it any wonder that most of them wholeheartedly support government central banking?

Professor Antal Fekete of Budapest, Hungary is one of the lonely voices in academia which speaks up forthrightly against central banking and for the REAL "gold standard".

The REAL "gold standard" has nothing whatsoever to do with the "Quantity Theory of Money" which gives justification to currency creation under central banking. Unless the difference between RBD banking and banking by QTM is properly understood, the crafting of a solution, which BTW is quite simple, is politically impossible.

Reply from The Daily Bell

Ingo, you are constantly advocating government involvement in money and land. As a Georgist, you want goverment to own raw land. As a Real Bills proponent you seem for some reason to advocate government involvement in money.

EVERY involvement of government in money is PRICE FIX, ultimately distortive of the product or service Jim Grant does not seem to understand this and neither do you.

If the price is not distorted right away, over time the distortion will take hold. You CANNOT argue against natural law no matter how you try.

Here from Investopedia ...

"Investopedia explains 'Gold Standard' ..."

The use of the gold standard would mark the first use of formalized exchange rates in history. However, the system was flawed because countries needed to hold large gold reserves in order to keep up with the volatile nature of supply and demand for currency. After World War II, a modified version of the gold standard monetary system, the Bretton Woods monetary system created as its successor. This successor system was initially successful, but because it also depended heavily on gold reserves, it was abandoned in 1971 when U.S President Nixon "closed the gold window."

There are similar problems even with a specie standard.

@ DB

"Ingo, you are constantly advocating government involvement in money and land. As a Georgist, you want goverment to own raw land. As a Real Bills proponent you seem for some reason to advocate government involvement in money."

You couldn't be more wrong.

I do not advocate government involvement in currency creation. As to money, the recognized commodity to measure value is GOLD. Do you doubt that... ??? That recognition is not a government edict. It is a universal recognition.

As to weights and measures, I could care less whether the International Bureau of Weights and Measures sets the standard for "price" or the government does,

As for me being a Georgist, I can only say that I believe in the ideas of George regarding the claim to the benefits provided by nature.
Furthermore, Real Bills have absolutely nothing to do with government. As a matter of fact, Real Bills are an anethema to government.

Reply from The Daily Bell

All George made clear was the Anglo-Saxon principles of treating benefits nature bestowed on the human race. It has nothing to do with "owning" raw land. As a matter of fact, LAND cannot be owned, period.

OK, goverment administers land and collects a tax. Sounds an awful lot like ownership.

----

As to money, the recognized commodity to measure value is GOLD. Do you doubt that... ???

Yes for the 1000th time, gold and SILVER are historically money.

-----

as long as the weights and measures are enforcible.

Let people enforce it as they will ...

DB, I have to agree with Bischoff. I don't see an automatic involvement of GOV in a real-bills enviornment.
I also don't agree with investopedia;
"system was flawed because countries needed to hold large gold reserves in order to keep up with the volatile nature of supply and demand for currency."

This is BS. The FOREX trades as much as $ 7 trillion a day. This is liquidated in paper, not metal. The CBs trade in paper and do final adjustments in metal at the BIS. Computerized accounting has superseded written receipts. A barrel of oil changes hands 26 times before it is consumed. You can bet that most of the transactions are just a float.

"because it also depended heavily on gold reserves, it was abandoned in 1971"
This too is BS.
The maintenance of the gold/dollar system depended on an honest, responsible U.S. GOV,,,, another oxymoron.

"Jim Grant does not seem to understand this and neither do you. "
Well, that's quite a claim.
Bischoff has previously demonstrated a comprehensive knowledge of the history and actions of the FED. He reported the very critical detail about Benjamin Strong selling Treasury notes on the discounted secondary market.
Jim Grant also demonstrated thorough knowledge of the FED.

@ DB

DB: "EVERY involvement of government in money is PRICE FIX, ultimately distortive of the product or service Jim Grant does not seem to understand this and neither do you."

BISCHOFF: Government has nothing to do with "Money". You are confusing "Money" with "Currency". "Money" is a commodity, the value of which is used as a measuring device. "Currency" is merely a "Means of Exchange".

Government can create "Currency", but it cannot create "Money". As to "PRICE FIX", if you mean that government sets the weight and measurement of money (the commodity which is money, GOLD) from which aliquot parts are determined, I cannot see how this setting of the standard for "price" can in anyway be distortive.

To the contrary, it is the ultimate of stability. I think you are confusing "Value" with "Price", which BTW is the problem for most people.

DB: "You CANNOT argue against natural law no matter how you try".

BISCHOFF: I am a great believer in Natural Law. The Law of Nature allows that to survive which works. I argue for RBD currency which has proven to work for several hundred years around the world, in contrast to any other currency.

The demise of the RBD currency is not a proof of violation of Natural Law. To the contrary, the goverments' installation of a worldwide irredeemable currency system, which is falling apart after only forty short years of existence, is proof that central banking and fractional reserve lending is abhorred by Natural Law. So, who is arguing against Natural Law... ???

DB: Here from Investopedia ...

BISCHOFF: Your quote from the Investopedia only supports my contention that academic drivel, as reflected in the quote, is myopic when it comes to central banking. My contention is that the "gold standard" is simply not understood, not by the contributors to Investopedia, or by Jim Grant, nor by the DB. I am sorry to say it, but that's a fact.

Reply from The Daily Bell

From the Oxford Dictionaries:

Definition of currency

noun (plural currencies)

1. a system of money in general use in a particular country: the dollar was a strong currency ...

------

mon·ey (mn)

TheFreeDictionary

1. A medium that can be exchanged for goods and services and is used as a measure of their values on the market, including among its forms a commodity such as gold, an officially issued coin or note, or a deposit in a checking account or other readily liquefiable account.

2. The official currency, coins, and negotiable paper notes issued by a government.

------
"I don't know what you mean by 'glory,'?" Alice said.

Humpty Dumpty smiled contemptuously. "Of course you don't—till I tell you. I meant 'there's a nice knock-down argument for you!'?"

"But 'glory' doesn't mean 'a nice knock-down argument'," Alice objected.

"When I use a word," Humpty Dumpty said, in rather a scornful tone, "it means just what I choose it to mean—neither more nor less."

"The question is," said Alice, "whether you can make words mean so many different things."

"The question is," said Humpty Dumpty, "which is to be master that's all."

@ Danny B

I am glad to read your comments which point out the evolvement in your thinking about currency systems and "Money". It is totally refreshing to see how many of the points Antal Fekete makes about RBD currency are finally bearing fruit with others as well. It is much easier to believe his points, particularly in light of what we are presently experiencing with the USD and the EURO as well, as with the FED's QEs and the ECB's fight with Germany over EURO bond purchases.

Good to see you back, Danny B.

Had to break it up

"Why don't you give such generous concepts as free markets"

This is where the Bell and I diverge.

I, of course, read The Fountainhead and Atlas Shrugged.

The free market works fine for me. BUT,

"So when you add 12,673,000 and 87,897,000, you get a total of 100,570,000 working age Americans that do not have jobs.

Yes, there are certainly millions upon millions of working age Americans that do not have jobs and that do not want jobs."

Click to view link

Do the elves believe that a free market would bring full employment?

Do the elves believe that automation has permanently destroyed many job niches?

Do the elves believe that all public assistance should be stopped, reduced?

Our current form of capitalism is very Darwinian. Do the elves believe that a true free market would be any less Darwinian?

There will always be monopolies and cartels. Labor has to compete against machines and people. Labor can't tolerate an interruption in income [food]

America is on it's way down as far as living standards go. A free market will bring us down to global wages in many areas. Do we support the redundant people on the way down or do we cut them loose?

Click to view link

I have no need of authoritarian solutions myself. But, I am thinking of the many millions who have no viable job niche or support.

I've been through the ghettos and aboriginal reserves and Indian reservations and slums in many countries. Our mechanized society casts off millions every year.

GOV absorbs millions in make-work jobs. This is reaching a breaking point.
We can all agree about the wonders of a free market. We must also consider the fallout.

Reply from The Daily Bell

-Do the elves believe that a free market would bring full employment?

If money and industry were left alone by the power elite, if waves of violent fiat money were not poured out of government, of course there would be close to full employment. How else would people live? Some of it might be subsitence farming, but people would still be employed ...

-Do the elves believe that automation has permanently destroyed many job niches?

Of course not. It is fiat money that distorts economies and creates the boom bust cycles and artificial technologies. Do we really need five Iphones. Do you really believe such constitutes a technological advance?

-Do the elves believe that all public assistance should be stopped, reduced?

Public assistance is ultimatly a trap to starve people when the fiat money boom subsides. See how much starvation is going to take place in the next decades. Public assistance is the flip side of central banking - and both, eventually are likely equally destructive.

Also ... anyone who has read us knows we are not Randians.

@ DB

DB: "OK, goverment administers land and collects a tax. Sounds an awful lot like ownership."

BISCHOFF: It may sound an awful lot like "ownership", because the words "collecting a tax" are emotionally laden.

Sober analysis however, reveals that that portion of wealth collected to pay for government is strictly that portion of wealth which is due to the benefits provided by nature, i.e. LAND, and not that part of the portion of wealth created by LABOR or by CAPITAL. In other words, the word TAX merely indicates that the portion of wealth due to the benefits provided by nature is collected for use to run government. The most IMPORTANT aspect of collecting the portion of wealth due the use of LAND (benefit provided by nature)is that it equalizes the application of LABOR and CAPITAL across the board. If Sir Thomas Dale hadn't recognized that principle in 1614, when he saved the settlement of Jamestown, it would never have survived nor prospered under his administration. It turned out to be the model for administering the use of LAND in the American colonies. The Constitution of Connecticut in 1636 and the Constitution of the United States in 1787 reflect these principles.

----

DB: "As to money, the recognized commodity to measure value is GOLD. Do you doubt that... ??? --- Yes for the 1000th time, gold and SILVER are historically money."

BISCHOFF: Gold from the very beginning served as the favorate commodity to measure value. The problem of Gold as currency lay in its relative scarcity. Since the finds of gold to silver finds historically were at the rate of 1:15, silver was suited as money as well, as currency much better than gold. When silver became too scarce to serve as currency, the RBD currency system evolved, and it solved the problem of scarce commodities serving both as "currency" and as "money" at the same time.

-----

DB: "... as long as the weights and measures are enforcible. --- Let people enforce it as they will ... "

BISCHOFF: You surely don't mean for people to "take the law into their own hands"... ??? Why then have common law and criminal law... ???

Reply from The Daily Bell

BISCHOFF: You surely don't mean for people to "take the law into their own hands"... ??? Why then have common law and criminal law... ???

Why indeed?

Click to view link

@ Danny B

"Our current form of capitalism is very Darwinian. Do the elves believe that a true free market would be any less Darwinian?

There will always be monopolies and cartels. Labor has to compete against machines and people. Labor can't tolerate an interruption in income [food]"

BISCHOFF: So much depends on the definition of words used in discussing political economy, that unless these definitions are accepted as part of the dialogue, no conclusions can be reached. Take the definition of CAPITALISM.

CAPITALISM is an economic system. It has nothing to do with Darwin, nor are there different versions of capitalism. There is just CAPITALISM.

An economic system derives its name from the primary factor of one of the three factors of production in the creation of wealth.

Thus, SLAVERY is an economic system where human LABOR is the primary factor of production. This economic system met its demise with the fall of Rome. It was replaced by the economic system instituted by the Roman Church, known as FEUDALISM, under which LAND was the primary factor of production.

The system of FEUDALISM established on the European Continent clashed with the barbaric laws the Anglo-Saxons brought with them to England which they settled upon the departure of the Romans in the 4th Century AD. Anglo-Saxon law considered LAND to be a common, while under FEUDALISM the LAND was "owned" by monarchs through divine right confirmed by the Church of Rome. The question of "who owns the land" and what kind of economic system should prevail on the English Isles was settled between the Normans, invading England from the Continent, and the Anglo-Saxons at the Battle of Hastings in 1066.

The settlers in the American colonies were in essence refugees from the feudalistic system being established in England by the Normans. It was by providence that the Anglo-Saxon system took hold in the American colonies. Nevertheless, impoverished British aristocrats settling primarily in the Southern colonies pushed for the stablishment of a feudalistic system on the North American Continent. The vastness of the lands in America and the ability of indentured labor to flee to freedom by going West made the traditional form of FEUDALISM impossible to establish on the North American Continent. The fallback for those British aristocrats was the establishment of black slavery, enabled by English slave traders. American black slavery turned out much worse than the SLAVERY economic system that met its demise with the fall of Rome.

With the victory at Yorktown by the Americans over the British in 1782, the Anglo-Saxon economic ideas finally won out over the feudalistic approach of controlling LAND by divine right. If you wonder why the U.S. Constitution expressly prohibits the granting and acknowledgement of aristocratic titles, the reason is that the founders wanted to guard against the establishment of FEUDALISM through ownership of land by monarchs based on divine right proclaimed by an establishment church.

The U.S. Constitution required the establishment of a republican form of government for every state which conformed to the Anglo-Saxon economic and political ideas and which is modeled after the Anglo-Saxon shire system. The U.S. Constitution is in essence the premier document which establishes the economic system known as CAPITALISM. Under this economic system, the CAPITAL factor in the creation of wealth is the premier factor.

People always contrast CAPITALISM as an economic system with SOCIALISM, which is a distribution system. There are only two distribution systems. One is known as the "FREE MARKET" which rests on the voluntary discovery of "prices", the other is SOCIALISM which is a distribution system that uses mandates by government. Thus, you can have CAPITALISM as an economic system and SOCIALISM as a distribution system. Depending on the political bent of government, such system is either known as FASCISM or COMMUNISM.

CAPITALISM as an economic system works best when wealth is distributed through the "FREE MARKET", as long as the portion of the wealth which is purely due to the benefits derived from nature is used for the common good.

The arbitrage which turns "use value" into "exchange value" in a free market has no Darwinian aspect to it. Every transaction is voluntary, and arbitrage is the process which leads to the transaction. No mandates are necessary in a Free Market distribution system.

LABOR and CAPITAL always compete. This is very healthy as long as the factor of LAND is properly considered when it comes to the distribution of the wealth created by LAND, LABOR and CAPITAL. That portion of WEALTH which is derived from the benefits provided by nature must come to the common good, if the "Free Market" price discovery process is not to be harmed.

Monopolies and cartels built on the "ownership of land" seek to collect the benefit provided by nature for their own use and not for the common good. It is the basis for achieving "economic power". Economic power does not come from simply being sharp or even ruthless in engaging in arbitrage. Being a "good" businessman has nothing to do with establishing a monopoly or cartel. In a free market setting, monopolies and cartels can only survive with protection furnished by government. As soon as that happens, we are back to government mandated distribution under a political system of either FASCISM or COMMUNISM.

Maybe the current fight in this country is not CAPITALISM versus SOCIALISM, but rather FASCISM versus COMMUNISM. Have you ever thought about that... ???

With an worldwide irredeemable currency system, free markets are impossible. Therefore, the distribution system worldwide today is SOCIALISM. It varies only in degrees from one country to the next, or from one economic block to another. Government mandates in the distribution of wealth are NOW ubiquitous.

As to tolerating an interruption in income, this has to do with the irredeemable currency system which is a "Ponzi" scheme unable to tolerate interruptions, unless it should fall apart.

@DB

DB: "The question is," said Alice, "whether you can make words mean so many different things."

BISCHOFF: That indeed is the question. The dictionaries reflect the meaning of words as they are used colloquially. They do not reflect the definition required for words necessary for use in a disussion about political economy.

Discussion of political economy require words which have a consistent definition across the spectrum. When it comes to "Money" or "Currency", there is not one dictionary which agrees with any other dictionary in its definition of these words.

How can that be... ??? As Alice asked, "how can you make words means so many different things?"

If you don't speak the same language when engaging in a discussion which required exactness in the definition of words, what value is there in the intercourse... ???

Reply from The Daily Bell

It is not merely words that you redefine at will but also facts - such as your insistence, flying in the face of thousands of years of recorded history that gold is money and silver is not.

The reason you insist on this is in order to justify your larger points about Real Bills, the necessity of banking and above all government interference as regards setting standards - by force.

For instance, in normal economies silver almost always seems to trade in tandem with gold. Because of the varying relationships between silver and gold, it is impossible for government to sustain its interference in the market.

You will not grant such points however, instead making statements such as the ratio of silver and gold is 15 to 1 when it has varied far more than that throughout history.

As soon as government attempts to fix ratios or anything else regarding money there will eventually be trouble as natural law is inevitably contravened.