@ DB

DB: "You demand one money just as you demand one accounting standard - as if people were not capable of evaluating more than one measurement at a time."

BISCHOFF: "We have various measurement systems now, i.e. kilo, meter yard, pound, gallon, Imperial gallon, and on and on... .

You are not suggesting that they are all equal when it comes to numerical accounting, or are you... ???

If one the other hand, all different measurements are translated into one measurement for accounting purposes, then you defeat your own argument.

DB: "The logical outcome of such insistence is government interference to ensure single standards. You will then deny, as you have, that governments ought to impose such standards by force."

BISCHOFF: If you insist of treating apples and oranges the same for accounting purposes, your accounting is worthless. The only solution is to agree upon a fixed measurement of one kind or another that everyone will follow. At that point, I do not care whether the standard is promulgated by a French scientific organization or whether any government does it as with the US. Constitution in Section 8 of Article I.

To call me a statist based on that opinion is going a little far, don't you think... ???

DB: "But this is the regular implication of your argumentation nonetheless."

BISCHOFF: You imply that my indifference on who sets the standard for everyone to follow is advocating enforcement by government. How do I imply this... ??? I do maintain that following the standard is necessary to accomodate commerce. However, before I'd advocate government enforcement, I would always advocate self enforcement. Ostracize any offender who fails to follow the commonly agreed upon standard from doing business. Let him starve, if he insist on ignoring the standards. Does this attitude make me a supporter of enforcement by government... ???

DB: "Generally, your arguments are statist, just as the Georgist solutions you espouse are statist, proposing that all land be held in common and taxed by a single authority."

BISCHOFF: You attribute Georgist leanings to me. Let me take this opportunity to set you straight as to my support of the Georgist movement.

I support the philosophy of the Land Value Tax, as set forth by Henry George, to the extent as it coincides with the Anglo-Saxon principles of land use administration which goes back to the shire system in Engand evolving among the Angles, Saxons, Jutes and Friesen settling in post Roman England in the 5th Century A.D.

It was the Anglo-Saxon land use principle installed by Sir Thomas Dale at the Jamestown settlement in Virginia in 1618 which saved the settlement and helped it prosper. It was the rules at Jamestown which were turned into the first Constitution on the North American with the creation of the Connecticut Constitution in 1636. It was Roger Sherman of Connecticut at the constitutional convention in 1787 who saw to it that the U.S. Constitution followed the principles of the Connecticut Constitution.

In his book, "Progress and Poverty", Henry George deals with Anglo-Saxon principles of how to administer lands in such manner as to be able to use the portion of aggregate production, which is strictly due to advantages provided by nature, to be collected and to pay for services commonly enjoyed.

I am not aware that Henry George wrote his book being fully aware of the Anglo-Saxon principles of land use which built the United States. To the extent that the popularity of Henry George has been used by people to create a personality cult, and to take advantages of trusts and donations in his honor, I distance myself from the Georgist movement.

Therefore, you do me an injustice to call me a "Georgist", as that term refers to a cult movement in which I have no part. Futhermore, by labeling me such, you give ammunition to those who inately cling to feudalist thinking and who use the term with which to club me for opposing land speculation and feudalist exploitation. I am not a "Georgist", though I support Henry George's philosophy. If you need to call me anything, call me an "Anglo-Saxon at heart".

As to the land value tax, land value assessment, land recording, LVT collection, eminent domain, etc., etc. your understanding is clearly wanton.

DB: "There is in fact not much in your vision that is free-market or Austrian, though you seem to want to confuse the issue by vaguely - not specifically - endorsing private market solutions."

BISCHOFF: I do not try to confuse anything. I am full square in favor of "free market" distribution. "Free market" distribution is only possible by use of MONEY as an intermediate. Austrain economics is confusing on the subject of MONEY. I do however admire the work of Carl Menger as regards discovery of prices based on utility.

I am sorry, but I am unable to hold up Austrian economics, espoused by von Mises, Rothbard and Rockwell, as well as the DB, as a panacea. The German economists like Rittershausen made sure that the German language writings by "Austrian" economist were properly distinguished from the writings by German econimists by calling them "Die Oesterreicher". I stand with the Germans in making that distinction about economic philosophy promoted by the "Austrians".

Reply from The Daily Bell

"The only solution is to agree upon a fixed measurement of one kind or another that everyone will follow."

As predicted, Ingo. You insist on a single standard that "everyone will follow." It as if you are not at all familiar with F.A. Hayek and the idea of spontaneous organization. Yes, there CAN be more than one solution - and, yes, the market itself can provide ways to integrate those solutions.

Perhaps they have only floated this to get us used to they idea of even more massive currency creation that is already planned.

@ dave jr

DAVE: "I am not arguing against a standard. A standard is required in a market and will happen naturally. Gold as a standard happened naturally. That is good."

BISCHOFF: I am delighted that we are in agreement on this point.

DAVE: "It is only your incessant claim that gold and only gold can constitute money that causes me to question."

BISCHOFF: I have tried to make it clear that only one commodity either gold or silver can have the maximum marginal utility, though I explained that for a period of time silver and gold were set equal in ratio. This claim of a single commodity constituting MONEY is not an idea that originated with me.

Maybe my attempt to explain it leaves you questioning my comments. I don't know that I can much improve on what I already said. Therefore, I leave you to ponder the following quote:

"Money is the measure of commerce... and therefore ought to be kept (as all other measures) as steady and invariable as may be. But this cannot be, if your money be made of two metals, whose proportion ... constantly varies in respect of one another.'
--John Locke (1632 - 1704), English Philosopher

Reply from The Daily Bell

You demand one money just as you demand one accounting standard - as if people were not capable of evaluating more than one measurement at a time.

The logical outcome of such insistence is government interference to ensure single standards. You will then deny, as you have, that governments ought to impose such standards by force.

But this is the regular implication of your argumentation nonetheless.

Generally, your arguments are statist, just as the Georgist solutions you espouse are statist, proposing that all land be held in common and taxed by a single authority.

There is in fact not much in your vision that is free-market or Austrian, though you seem to want to confuse the issue by vaguely - not specifically - endorsing private market solutions.

@ Tom

TOM: "You have yet to discover the difference between price and value."

BISCHOFF: A very astute observation. There definitely is a difference.

I am using another venue to explain the difference in detail. However, from the comments I have made here so far, it should be possible conclude the difference through logical reasoning.

There is a precedence for the trillion dollar coin. The US government printed it own money during the revolutionary war and civil war which resulted in mass inflation. However the Ponzi scheme via the FED would be undermined. This is also why the Treasury does not directly sell Bonds to the FED. A Bank is used as a middleman to give the illusion of authenticity. If one looks at money as Tokens of exchange it puts things into perspective. It is not the actual Value of the tokens so much as the amount of tokens in circulation and yes I understand rare metals create fixed limits of token amounts and token expansion. However, the biggest problems facing Earth at this time are pollution and energy sources. Not everything is a covert conspiracy.

Bischoff: "The only thing that matter regarding the value of gold is the amount of human energy expended in its production. Therefore, gold mined with little human exertion has a lower value than that produced with a greater amount of human exertion. Yet, when it comes to prices, they are expressed in aliquot parts of gold which are constant."

You have yet to discover the difference between price and value.

The platinum coin gimmick is just another hapless distraction/diversion from the real issues - central banking and out-of-control gubmint.

Throughout history, the power-hungry parasite class has incurred astronomical amounts debt that cannot be repaid. They will default. The only question is who takes the lickin' - either the bond holders (whose loans have enabled out-of-control gubmint and who wager that their minion enforcers can rob The People to pay 'em back) through an "honest" default, or by paying back the debt with "money" created out of thin air, which will destroy the currency, wiping out millions of honest, prudent savers.

The only real solution is an "honest" default, which will punish lenders and make it difficult for gubmint to borrow again. Then, the several states must initiate repeal the 16th & 17th amendments and direct their U.S. Senators to repeal the (not really) Federal (with no) Reserve Act. Secession from the union is the only other solution.

Meanwhile, people must protect themselves from the inevitable collapse of global financial Ponzi and central-bank-issued paper/electron currencies by (1) storing non-perishable food, (2) stockpiling firearms & ammo, (3) converting excess financial assets into silver & gold bullion.

Meanwhile, fire all ruling (ElephantJackass) party parasites and vote Libertarian.

This whole thing reminds you of the Bearer Bonds scandal, doesn't it?
Bonds in multi-billion dollar denominations, but actually worthless.
Whether they are real or not... .who knows... .

@ Tom

TOM: "Are we talking labor theory of value here?"

BISCHOFF: We are talking about a labor theory of value, but not the one associated with the writings of Marx and Ricardo. They see prices relating directly to labor value without using MONEY. To them, prices are not discovered through arbitrage, yet discovery of prices is only possible through the use of MONEY by which prices are expressed in terms of aliquot parts of MONEY (Gold).

In your comments, you assume that gold has a price. As MONEY, meaning as the STANDARD of VALUE, gold does not have a price. It has value, but it does not have a price. This is the crucial point to understand.

The value of any good or commodity is directly related to the amount of human exertion (labor/work) invested to create it. It does not matter whether there is a large or small a contribution made by capital to the production of gold. The only thing that matter regarding the value of gold is the amount of human energy expended in its production. Therefore, gold mined with little human exertion has a lower value than that produced with a greater amount of human exertion. Yet, when it comes to prices, they are expressed in aliquot parts of gold which are constant.

Several millenia ago, the amount of human exertion needed to mine and refine a specified quantity of gold was set as a STANDARD by which to measure the expenditure of all other human exertion creating value in production of any other good or commodity.

Since gold miners have to eat, and their only production is the commodity which is the STANDARD OF VALUE (MONEY), they have to determine whether the desire on the part of the public to hold gold is such that they are willing to compensate the gold miners for their exertion with goods and/or services in exchange for gold.

Savings can only be held in gold. If people do not save, the demand for gold maybe too low for gold miners to want to exert themselves to add to an "overflowing" pool of gold. The decision to expend human energy to mine gold in light of the goods and services that can be had for it is totally independent of the "price of fuel", "capital costs" or anything else.

If gold is MONEY and it is, you cannot then talk about the "price" of gold. What is today called the price of gold is really just the inverse of the price of the Federal Reserve Note in terms of gold (MONEY/STANDARD OF VALUE). What I mean by that is that the quote of $1,800 USD for one ounce of gold is really the quote of 1 USD/FRN for 1/1800 of an ounce of gold.

When one looks at it that way, everytime the price of gold goes up, the value of a USD/FRN goes down, which is exactly what one expects from an irredeemable currency.

Reply from The Daily Bell

"In your comments, you assume that gold has a price. As MONEY, meaning as the STANDARD of VALUE, gold does not have a price. It has value, but it does not have a price. This is the crucial point to understand."

This is not a point that must echo through eternity. Some societies may NOT value gold and silver. What is being asserted here is an opinion not a fact. We've asked Mr. Bischoff to make this distinction from time to time. Since he won't, we will.

@ Jet

JET: "Constitutionally speaking, Congress has no power to create money."

BISCHOFF: You are absolutely correct. With the National Banking Act of 1935, the Congress materially modified the Federal Reserve Act of 1913 to turn the Federal Reserve, an association of reserve banks limited to supplying redeemable currency to their member banks against Bills of Exchange and gold only, into a government agency with the same name to distribute irredeemable paper currency created against congressionally voted debt to cooperating banks after the debt had been sold in secondary markets.

Under the original 1913 FRA, the limit to redeemable currency creation was set by the inventory of Bills of Exchange and gold held by a bank.

After the NBA of 1935, the only limit to currency creation rested with the Congress in voting debt, and with the FED central bank in setting the prime interest rate and the reserve requirement for banks in conjunction with Fed Agents who authorized new credit after repayment on previously extended credit was received.

The post 1935 "managed" currency system, which depends on selling debt in secondary markets, had to sooner or later come to its demise. Once the exponential curve of compounded interest on government debt intersected the linear growth of that debt, the irredeemable USD/FRN currency was doomed.

The sad part is that nobody sees the obvious solution. It is the same solution Horace Schacht as Finance Minister in the Weimar Republik applied when the Reichsmark ended up in hyperinflation. He instituted a parallel currency which was redeemable in gold, called the Rentenmark. In very short order, the currency markets sorted out the mess. Had it not been for the political agitation of the Nazis and the Communists to get rid of the Weimar Republik, Germany would have been well out of its economic depression by the mid 1930s.

I would not at all be opposed to resurrecting the original Federal Reserve Act of 1913, except that this time I would not put the Congress in charge of oversight, but give great thought to electing or otherwise creating an oversight body drawn from among average citizens to check on bank examiners, and to assure compliance with state bank charters.

What is required to allow a redeemable currency to return... ??? Only one thing. The Congress has to remove the "legal tender" protection from the Federal Reserve Note given to it in the 1982 Coinage Act. Thereafter, let the new redeemable paper currency, created against Bills of Exchange and gold compete with the irredeemable, debt monetized Federal Reserve Note currency.

You'd be suprised how quickly the number of government employees would shrink. Government employees will become dissatisfied with the purchasing power of their irredeemable FRNs as they have to compete in consumer and durable good markets with the more desirable, new redeemable currency which can only be earned in the private productive sector. This dissatisfaction with payment in irredeemable FRN currency will quickly lead to an exodus of employees leaving the public sector to seek employment in the private productive sector.

This is only one example. A parallel redeemable currency has so many benefits which will let us recover from our current monetary and financial mess that it would take me hours to list them all.

Reply from The Daily Bell

What Mr. Bischoff is saying in this lengthy and dense response is that Congressn eventually provided the Fed with a good deal more latitude regarding money creation. What he is NOT saying, though he knows it, is that this grant of power didn't much matter. The Fed's masters did just what they wanted to do as soon as the Fed was configured in 1913, rules be damned. The illegal money printing that began after the war continued throughout the 1920s, eventually causing a Crash and the Great Depression.

@NAPpy

Have to agree with the Bell, that is a nice site.

Wish I had not been too stubborn to take your advice. Human Action is rather a hard slog for a novice. Didn't get very far. Keep meaning to tackle Man, Economy, and State but since I don't plan to make economics my profession, there is always something else.

Thanks for the advice, I'll try not to be so stubborn, or rude, in future.

Misinformation about economics in general and gold in particular has been with us for a long time. . . http://youtu.be/EQyqvFVe4Y4

Bischoff @ 2:28 pm

"As CAPITAL (WEALTH used in production) reduces the amount of human exertion (work) required to mine and refine gold, the VALUE of gold (MONEY) changes."

Are we talking labor theory of value here? Mining gold involves, more than any other thing, moving ore from one place to another and separating the values from the overburden. This means that the viability of a gold deposit is determined not only by the value of gold itself and the amount of gold present in a ton of ore, but by the price of the commodity necessary to extract that gold from the ore, namely diesel fuel. Many known deposits can't be exploited because the values in the ore are less than the cost of the fuel needed to perform the extraction, not including the purchase price and wear and tear of the equipment used. Gold mining is earthmoving and its profitability is not difficult to determine in a given situation.

@ Dave, Good point re batman comic. Of-course values are subjective
or if you like the amount of gold someone will part with in exchange
for a item. Ok its fiat paper we are forced to use as a images of gold and
silver. The principal remains.

Outside economics what tells me that gold and silver have value is,
The masters of the universe do not want us to have it.
The Bulls*** smokescreen that the Allies slapped the Germans
with punitive reparations to pay for WW I.
True enough, what they don't mention is that a 40%odd theft was
slyly imposed on the British.
How? Simple reduce the silver content in all coin from 92.5% to 50%.
The coin of 1920 was as such.
13 years latter America pulls in gold at shotgun prices,then revalues.
Come 1946 no silver in British coin, by 1967 no silver in almost
any coin in the World. End of another war Vietnam no Gold Standard.
If The Governments don't want you to have Gold and Silver.
You just got to have it.

What kind of security measures would they use on a trillion dollar coin?

These are the kinds of events that illustrate the absurd nature of our world. The fact that this coin is being discussed seriously in any circle is almost mind boggling. What would Camus say?

If I remember correctly, years ago James Dines suggested that the US Treasury write The Fed a check for full payment of debt owed. This could be done with a platinum coin, but paper is cost effective. Turnabout is fair play.

By the way, what's to stop one or more fiat club members from challenging the current fiat leadership?

The Daily Bell is becoming more interesting.

Full blown banana republic status will have to wait:

The US Treasury has said it will not mint platinum coins as a way of averting a looming battle over the country's debt ceiling.

Click to view link

A good idea because it is so absurd that everyone can now see how corrupt the system is? I don't think so. We have passed that point. We keep passing it. If we mint a trillion dollar coin it may well meld into the giant mass of absurdity we have already passed, and be joined by other absurdly denominated coins. The only difference between it and multi-billion mark bills, and milti-trillion Zimbabwayan dollar bills will be its form as a coin, and the fact that it is the first one.

Print more fake money or coin a fake platinum coin, there is zero difference. It's just more currency debasement and governments have been doing that since governments were invented!

I own a few Zimbabwa trillion dollar notes. I will be looking for the rumored Krony. You know, the one with "Get Out Of Jail Free" struck into it.