On Friday, October 3, 2003, at 06:10 PM, FileMatrix wrote:
The supply of gold remains constant; the supply of goods increases. Value
of gold relative to goods increases.
So, you're the big chief of a country. I am the big chief of another. We
have economies that we equally value to 1 ton of gold (which we have in our
vaults).
I am a simple man, George. I do not know what it means to "have" an economy and to "value" it at 1 ton of gold. To me, that sounds like trying to figure out how many angels can dance on the head of a pin.
Honestly, I'm not trying to be cute here, George. I do not know how to determine the "value" of an economy -- I do not even know what that means. You tell me, what is the value of, say, the entire US economy? To me, an economy is just "a whole bunch of people doing stuff." In "my" country, as chief I would stay out of everybody's business -- I would not even _know_ what was going on in "my" economy. For example, if a mother in "my" country hired a tutor for her child, I the chief would never know about it and would never ask to know about it. It's none of my business what a mother does with her money, and I certainly wouldn't deserve a "piece of the action" as modern governments demand.
I do understand one thing. I as an individual can maintain a vault. People can bring gold to me and deposit it into my vault, and in return I will give them gold certificates (receipts) for that gold. Anyone presenting a certificate to me and requesting gold will get it immediately. If enough people trust me, I might end up with 1 ton of gold in my vault. That gold will belong to the bearers of my certificates. It will not belong to me, the chief, and it will not belong to "the country." The gold will not represent the "value" of "my" economy. It will simply be a big pile of stuff in my safekeeping. I could do the same thing with silver, wheat, or any other commodity.
Now you, in some other country, might do the same thing, and end up with a ton of gold in your vault too. Then you get the big idea to print up a bunch more gold certificates representing a ton of gold that you do not have. You will spend these certificates for your own ends, purchasing goodies, space programs, votes (welfare), and what have you. The people getting the certificates will think they can redeem them for gold. When they find out that they cannot, and believe me, they WILL find out, they will be fully justified in ... well, let's just say that very often in history an individual perpetrating this kind of counterfeiting ended up on public display hanging by his neck at the end of a rope.
However, times do change, I'll grant you that. Most people are now conditioned to recognize a particular individual, a "chief," as having the sole power to engage in such counterfeiting. In other words, the chief has the ability to get something for nothing, and the people LIKE it that way. That's because the chief stays busy taking stuff from some people and giving it to others, thus keeping most of the people happy some of the time.
Let me reiterate something George just to be clear. I do not care one whit if any individual, chief or otherwise, prints up a bunch of certificates and declares openly: "These certificates cannot be redeemed for anything whatsoever." And if that individual can then spend those certificates to get maids cleaning his house, gardeners tending his flowers, a personal cook and valet, then more power to him. Maybe I should try it myself. But when that individual forces others to accept those certificates, forbids others from using anything other than those certificates, and requires periodic tribute to be paid only in those certificates, he has earned a public display at the end of a rope. Such people are no different in principle from the thugs portrayed in Martin Scorsese's movie "Gangs of New York," though Daniel Day Lewis' character is far more admirable than that of modern politicians because at least he did his own wet work.
-- Patrick
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