I implore you to seek out fiat money and central banking, and the whole idea of “money creation.” When you learn the truth, your heart will wrench, and you will discover probably the source of many injustices in our society.

By way of exaggerated illustration, I'd rather have the world fed by 1,000 farms rather than 1 farm. The 1 farm can be successful for many years, providing food and profit to farmers and people. Yet it only takes one bad year and everyone is in trouble. People starve. Farmers go bankrupt. Meanwhile, if have 1,000 farms we spread the risk of crop failure and global collapse. Say 500 farms fail. The system still has 500 remaining, making food and profit.

I hope that the free market advocates here will understand my discomfort favor bigger banks, bigger banks without limit. (The “1 farm danger” in free market form) If you can hear “progressives” like me on that, then I will be more open to the dangers of big government. (The “1 farm danger” in government run economy form.)

As it stands now, 80% of the resources are being consumed by less than 20% of the people. That is unjust, idolatrous, wicked, evil, counter to the Gospel message, and anti-Kingdom-of-God. I'm praying for the “1,000 farm model” involving a collaboration among businesses, governments, religious institutions, and non-profits.

Perhaps I'm not understanding the comment people here. But I'm seeing Palmberg and Goudzwaard as advocating the “1,000 farm” economic system more than the comment people.

Those who believe in a free market have no delusions that the free market would bring about utopia. They have a realistic view that life would not be perfect. It seems as though they respect their roles as humans, and they “make do” with the natural resources God has placed within our world. Some of those natural resources are scarce, and have historically become a medium of exchange (i.e. “money”) acceptable by all in a given society, or around the world. In this respect, God created money because God created the resources necessary for humans to exchange goods and cooperate together. For mankind to create this idea that “money” is a man-created (or worse, government-created) entity, is to presume upon God's role of having already created such “money,” believing that a better system can be created.

I love this quote: “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

I can see your point, here. I would remind you, though, that gold is scarce, just like other “precious metals” and things like high-purity diamonds. They are valued because they are scarce, just like anything else. Supply and demand works equally as well with regards to money. When there is more “money,” it is worth less. Should I point out that while crude oil was sky-high a year or so ago compared to the dollar, compared to gold it stayed the same?

The barter system works in emergencies, but once things stabilize, a standard agreed-upon medium of exchange emerges. That medium of exchange can only stay stable if the resource itself is stable. That's why gold and silver have been the best example of a “standard” medium of exchange. It later became expedient to have “gold-backed” money.

Gee I wonder why, when there are entries that in all seriousness use terms like “War of Northern Aggression.”

If you have so much faith in notes issued by private banks, it would be helpful, perhaps, to do a little research on the causes of the Panic of 1837 . Pay particular attention to the way the so-called “wildcat” banks operated. It might also be informative to research why the political party that in the 1790s opposed Alexander Hamilton's proposal for a national bank decided by 1816 that it was a pretty good idea.

Useful on the Fed is William Greider's “Secrets of the Temple.”

As for the gold standard, it's something of a fetishism; there is nothing inherently valuable in gold. The idea that if we tie our money supply to the gold supply, somehow all will be well is simplistic. If for some reason all computers worlwide shut down tomorrow, which would you rather have to barter for necessities: bars of gold or a warehouse full of cigarettes, toilet paper, beer, and canned goods?

First, do you think the world was a better place before the 20th century? Second, what you mentioned is not money creation. It's lending. Money is only created when the Fed buys government securities or financial assets.

Some investment is risky and dumb, but there is no way to have long run economic growth without investment expenditures.

Besides, the biggest reason speculation was “hot” the past few years was because interest rates were artificially low. Had the interest rate been what the market determined, only a very few risk-takers would have been able to afford it, and more often than not they are the ones who speculate for the more beneficial reasons of the market. Again, this all stems back to artificially low interest rates. Only one source for that: federal reserve bank.

Could private banks create gold and silver coin out of thin air? Of course not. Someone must actually mine and refine the ore first, then it must be coined. And even then the mint must have a reputation for coins of reliable metal content for people to trust it and use it.

The word “dollar” is derived from the name of a silver mine (e.g. “thaler”) and designated a coin of one ounce of fine silver. With that, the idea of silver having a value expressed in dollars is bizarre. How much is a one-ounce silver coin worth in dollars?? The answer: One! A one-ounce silver coin *is* (or was) a dollar by definition!

Consider the difference in value of one versus ten actual (silver) dollars compared to one versus ten “dollar” federal reserve notes. How much more difficult would it be to mine and refine enough ore to create ten coins versus one coin compared to changing the printing plate to show “10″ versus “1″ on a super special piece of paper?

The hinderance that comes with the creation of money must be considered in this discussion. Are we to rely on the restraint of politicians? Of the quasi-government body, the Federal Reserve Bank?

If legal tender were gold and silver, as the US Constitution requires by restricting the States to make only such coin tender in payment of debts, said implied legal tender power belonging to the States exclusively as no such power is given to Congress (the power to coin money is not the same as the power to define legal tender), Congress could create new coins as often as they had refined ore available and it would still be tempered by the fact that it is a precious metal that can not be replicated at will.

Let us use gold and silver coin and just divide it into smaller pieces as needed. Then when economic activity increases thanks to some invention of some new technology, the value of money (real money) will actually increase rather than decrease, as with inflation.

The very concept of fiat money and inflation as a tool of economic stimulus is that of a perpetual motion machine, and should be rejected for that fact alone. You can not get something for nothing, and you can not pick yourself up by your own boot straps. It only has the illusion of “working” temporarily, and only benefits those closest to the source of the new money: the self-privileged bankers.

If it was true that inflation could have any real benefit, why not print up enough notes to make us all millionaires? The answer is simple: a million “dollars” would come to buy only a hamburger dinner for four and we'd take our families to McDonald's with a wheelbarrow full of colored paper adorned with Caesar's portrait.

The destruction of this fiat (”by decree”) currency is inevitable as those who believe men are sinners should know. Why on God's earth would you trust a government of man? How could they possibly know how much inflation was “just enough”?

We should have competition in money creation just as we have competition in fast food restaurants and department stores. Free competition will prevent monopolies and will assure purity of content of *precious metal* coin.

I'm still waiting and wondering about the wisdom of betting against yourselves.
Did these people not have money in a bank or a house somewhere?
What were their true motivations?

I am still waiting for families to move back
into the homes in our neighborhoods
that were bought by the speculators who
lost their shirts because they got caught
with the hot potato last.

Last I heard the banks were still auctioning
off homes to the speculators.
The people who were paying my bills were
families with children.
I wasn't making more than I needed to get by but it was enough so that
I could do things for others.
I would l like to see family housing declared no speculation zones from now on. Family housing is a national treasure, it does not belong on the gambling table at the Cassio.

If money is tied to a commodity it has real value. If it is not, it is a fiction, causing inflation (due to the “money” having no intrinsic value, and thus inflating the cost of the dollar against foreign currencies.)

I can't understand how anyone would think that governments, who murdered around 270 million people last century – are more trustworthy “creating” money than people who actually produce something tangible and actually do create money.

Take an extreme case as an example: Zimbabwe's annual inflation rate is now 516 quintillion per cent.

I've seen photographs of public restrooms in Zimbabwe where signs are posted requesting that people not use Zimbabwe currency as toilet paper.

Zimbabwe has 100 billion dollar notes – all because of its feckless leaders “creating money.” Had their money been tied to a commodity – something with real value, this couldn't have happened.

There was a time when global currency was exchanged at about the same rate. Then governments got into the “money creation” business.

It's easy to point fingers at banks, wall street, etc. But corruption is corruption, and the private sector doesn't have a lock on corruption – it's not even in the same league with governments. I suggest that people take a look at GAO reports regarding GAO''s auditing U.S. Government agencies over the past 30 or so years. There are so many billions missing that it's astounding. I don't want any more foxes guarding the hen house…

Also try this link: http://video.google.com/videoplay?docid=-466210...

And I don't grasp how this boils down to me and my ethical choices. It feels as if there are vast segments of our economy that is fundamentally fraudulent–or open to fraud.

Which leads me to my current simple equation for my life. I believe wisdom is the product of a simple morality lived out over time (in obedience and submission). I think we have strayed so far from some matters of simple economic morality that confusion will carry the day. On the one hand we have very sophisticated arguments in which expert opinion ranges all over the map (which to me does not look like, walk like, or talk like wisdom); and on the other hand a confusion that can't even muster a counterpoint. To me, they both look like confusion.

I do not have a spirit of fear–but of power, love and a sound mind. I will attempt to act with responsible stewardship with what is in my hands today–praying for wisdom

As for pragmatism, I think I agree with regards to the “public face” of how to engage in dialogue. Sometimes ideology gets in the way of practical steps toward that very same ideology. For instance, I'm very much in favor of the gold standard, but if I were to run for president next election, that wouldn't be my platform. It would be smaller, baby steps toward that. That's why HR 1207—”Audit the Fed”—is a great first step in revealing the secrecy. I think most libertarians get thrown out of a conversation because of their passion for principles with a disregard for practical steps toward a society that embraces those principles.

I blog, if you're interested: http://www.liveloud.net

As for the gold standard, I had never thought of it in terms of something that God provided as a medium of exchange. It is a fascinating idea, to be sure, one worth more thought. As for returning to the gold standard, I rarely assert the need to do so. I agree 100% with its merits, but as someone who wants to take part in the current debates, we should recognize that some of our intellectual framework can be modified while staying true to basic principles. Libertarians can get into trouble when they (we) let their wonderful idealism get in the way of a more pragmatic political program.

It is likely we have forever gone beyond certain milestones of America’s past, including, unfortunately, the gold standard. I am not conceding defeat, but I’d be happy enough to see the abolition of the Fed, something that would be wonderful for our country and world, including, as you always mention, the poor. Perhaps it will happen in the backlash against the poor monetary and fiscal policy of the past X years.

Thanks for the discussion.