Forum Post: going back to cash
Posted 13 years ago on Nov. 26, 2011, 6 p.m. EST by tmatsch
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This content is user submitted and not an official statement
I have started to go back to paying cash for just about everything! It saves my local retailer money, it makes no difference to my balances, and it cuts the bank out of a cut of every transaction I make!
I think this should be strongly pushed as a policy to send the major banks a message.
Cash withdrawals from the lobby and/or the ATM are free and must continue to be so. Otherwise, there will have to be some way to demand payment from an employer, or even Social Security, in some form so as to bypass a bank account and therefore bank fees!
Maybe the banks will go back to making money from reinvesting our deposits like they used to do! Otherwise, why deposit?
Loans should only be taken out for something like a house. And maybe a car if you're desperate. Everything else you should pay for.
Agreed. And I urge everyone else to do the same. My rationale in doing this, however, has to do with a much bigger picture than merely to cut out the middleman (bank) in many transactions. It's a well-known fact that the ultimate goal of the 'money masters' is to eliminate currency altogether at some point in the future, hence the proliferation of plastic in the form of credit AND debit cards. The dream of a 'one world currency' is also one of the pieces of this puzzle. Once a single world currency is established, it's one easy step to eliminating physical money entirely. Imagine the dire implications of this. All money would essentially be virtual, binary digits in computer databases. If you think the banks have too much control over the economy now, imagine a day when, with the flip of a switch, all accounts could be frozen. You could never close your bank account because there would be literally nothing for them to give you. Not to mention the possibility of some sort of natural or artificial disaster that wipes out one or more of these databases. I can see it now: "What? Sorry Mr. Jones, we have no record of you having an account with us." There are other factors as well, but I'll save those for another day.
"Give me control of a nation's money and I care not who makes her laws." Mayer Amschel Rothschild
They have convinced us that loaning is borrowing and borrowing is loaning.If I give you a NOTE promising to pay for a car. By holding that Note you are LOANING me money. Look at your so called money it says Federal Reserve Note. It is money owed to our government by the Federal Reserve BANK. No one including our government should ever pay interest on a NOTE. It is a scam of epic proportions. The central banks of 165 countries use this debt slavery to create NOTES and pay interest. Those dollars, as long as they are NOTES, the problem will not go away. States can charter banks that are not required to involve themselves in the Federal Reserve System. All federally chartered banks have no choice. States also have the right to coin money. This would decentralize currency and make it competitive.
If we want to achieve a situation in which currency actually represents goods held by those who print it, we must do away with government monopoly on the printing of currency. OR demand that governments hold assets to back up their currency.
The FED is not a government agency they want people to think they are FEDERAL in this case is a brand name. It is a bank their are no banks in the constitution. 3 branches of government only.
Fiat currency could work as long as it is spent into the economy instead of borrowed into existence. The supply of money should be regulated by the census, always keeping enough money in circulation to prevent significant inflation or deflation. Think of human labor as being the fuel for an engine, the currency is the oxygen. Private interests manipulate inflation and deflation to increase their own wealth. Whatever else we do, the FED needs to go. Our money maybe should be kept in a bank, but never created by one.
If you are a chicken farmer and I come to you and say "I'll trade you this piece of paper in exchange for one of your chickens." You would ask why you should accept the piece of paper. I would tell you that you could trade it to someone else for something, and that they could trade it to someone else for something, etc. Now, this works until someone tries to trade the paper back to me. Since I don't produce anything except the paper, I have nothing to trade in exchange for it. The paper isn't worth anything except your ability to pawn it off on someone else. I may make it easier for you to do this by declaring that the paper is "legal tender" but it can't be traded back to its creator (me) for anything other than more paper.
If currency is created in excess of goods that it can be traded for (which must be owned and held in reserve by its creator), that's when we start to run into problems. Inflation is the result of me (the currency printer) trading you currency which doesn't represent anything in larger and larger amounts (which I have to do as soon as you realize that I can) for the same goods. You then charge all your customers more for the same goods because they are trading you the same currency I am trading you. They raise the price of their goods because they need to be able to afford your goods, and on and on it goes. The difference between the currency that they trade to you and the currency that I trade to you is that they have to work for it while I can print it at my whim.
With your above solution where government prints currency in response to the size of the population, I would ask you "How is that currency to be introduced into the economy?" If it is introduced in the method I described above, the problem I described above will be the result. Even if it is introduced via any other method, eventually there will be a certain amount of currency in the marketplace and a potential for more goods to be produced. If government may not print more currency (because the population has not increased) and more goods are produced than the currency can represent, then you end up with a situation in which there are goods that can not be sold.
Have you ever played the game Minecraft? It's essentially a sandbox game where you're in a completely destructable world made of blocks. There are different types of blocks which have different properties and complex structures can be built. There's an add-on for Minecraft called iConomy. It allows you to have currency on your server which the players can trade to each other via chat commands. I played on a server in which the owner of the server gave every new player 100 of these 'dollars'. It was incredibly difficult to get anything large-scale accomplished because everybody wanted to work on their own projects. The incentive to help somebody else with their project should have been these dollars, but it was not. Why? Because nobody had a way of making more. Everyone wanted to hang on to their dollars in case something worth spending the dollars on (which could never be regained except through trade) came around. I eventually created a TNT (a valuable commodity on our server :) factory which far surpassed that of anyone else. I could sell a stack (64) of TNT for 1 of these dollars. My goal, of course, was to demonstrate to the owner of the server that his plan of limited currency would never facilitate trade and would eventually end up with one person owning a majority of that currency and a society in which division of labor did not occur. I succeed within a month. After that he added another add-on in which players could trade blocks they mined/found/crafted/etc to an NPC-run 'shop' in exchange for more 'dollars'. This allowed people who had wanted to engage in large-scale projects to do so in exchange for the 'dollars' offered by those who were to oversee the project. These dollars represented goods that they could be exchanged for which were held in reserve by the issuer of the dollars (the NPC).
It is this principle that will protect the value of currency. Not 'private ownership'. Not 'government ownership'. But currency backed by value.
Introduction into the monetary system could be done through public spending. A road or a school gets built. A teacher or a policeman gets paid. The fiat currency like your TNT may have no real world value but it is backed up by productivity and created debt free. As I am sure you know. The fiat money we are using now is borrowed into existence at interest. Since the FED is the only source of money, more must be borrowed to pay the interest resulting in even more debt....... it never ends.
Yes, but you've ignored the problem that is created when anyone creates money that is not backed by goods owned by the creator of that money. When 'public spending' occurs, the government prints bills (which represent nothing) and then exchanges them for the work of the people who build the road. The government then owns the road (ideally). However, the road cannot be subdivided and exchanged for the dollars which now exist in the economy. Let's assume that someone manages to amass an equivalent amount of dollars to the original cost of the road. If the money is to be backed by the value of the road, the government would have to exchange ownership of the road for the dollars. If the government chooses not to turn over the road to the person who returns the government's dollars, what did those dollars initially represent and what do they represent now? I say that they did not initially represent anything and that they continue to represent nothing if the government refuses to exchange ownership of the road for the original cost. If someone accepts those dollars in exchange for building a road, what they are accepting is nothing in exchange for their effort. What anyone who accepts those dollars later from the people who built the road gets is nothing in exchange for their goods. Now the people who built the road have something (the goods) and the people to whom the dollars were exchanged hold nothing. They must then pass those dollars along to some other sap who will have to pass them along to someone else.
A similar (and more obvious case of trading nothing) occurs when the government issues bills and gives them to teachers in exchange for the work of the teachers (or policemen). The teacher is paid but the government doesn't get anything in return. The dollars cannot be exchanged back to the government for what they represent because the government doesn't gain possession of anything through the trade. In order for the teacher to survive, she is dependent on the goods that others produce. She must trade the dollars to others who have produced goods in order to live. The same situation that occurs at the end of the last paragraph is the result.
I argue that it is only those who have goods who can print currency that has value. And only so long as the currency they issue is backed by goods which they hold in reserve and which that currency can be exchanged for. If I own 10 chickens and print 10 dollars, each representing the value of a chicken, then trade one of them to you in exchange for a bottle of milk, you can only receive your chicken (what the dollar represents) if I keep one in reserve. So long as that dollar is out and about in the world, I must keep a chicken in reserve to insure its value. But when the government prints currency based on population size, it does NOT own the population, and it cannot back its currency by anything that it does own. Thus, the value of the dollars must be produced by farmers, industrialists, restauranteurs, etc. The government, in that case, receives (or not) ownership of things which have value in exchange for something which does not. When the government does not receive ownership of something in exchange for the dollar, it causes the value of that dollar to drop even further.
Now for a long time under such a system, it will appear to work fine. Until there are so many dollars in circulation that the price of goods rises to the point where they are no longer affordable, or the limitation of currency prevents trade which would have otherwise occurred.
You propose gold as a standard for money? Let us agree then that money needs to be exchangeable for real goods. Why should gold or silver or any other single commodity be accepted as THE standard for money. By letting a few people decide what our money is based on we allow the few to control our currency. Our current system is fiat on that we both agree obviously. How do we find balance? It is obvious to all that currency needs to be decentralized. How do we do this without concentrating wealth into the hands of the people that have large supplies of gold and silver obtained through or fiat money system? If they own the basis for our money it is not any different than our current system. The rich will inflate our currency by buying gold and deflate it by selling it back. They have tricked us into thinking loaning is borrowing and borrowing is loaning.
I have 10 ounces of gold. I set aside 2 ounces to convert to paper money. These two ounces are always available on demand. Not fiat. You accept them for payment for goods or services. I still have 8 ounces. Now you spend them,and so on, they are used and reused. I then flood the market with gold. Supply and demand dictates that your 2 ounces now buy less since the value of gold has dropped due to an increased supply. Who has the most gold right now and how did they get it? Think. The same rich pricks that own the world now will own it tomorrow on a gold standard. they have been playing this game for 1000 years we are just now catching on. If not public fiat money? Then at least don't base money on a single commodity.
I am not suggesting that money be based on a single commodity necessarily. I would ask you though, through what means would you flood the market with gold in your above example? I think the answer to this question will make it impossible to arrive at the conclusion that my 2 ounces worth of gold is worth any less.
"Who has the most gold right now and how did they get it? Think." Central Banks and Governments hold the most gold right now. They got it by trading paper for it. They were able to do this because governments enforced the idea that the paper could be traded for goods. People forgot that what the paper was supposed to represent was goods held by its issuer.
Money need not be based on gold. It does need to be based on something which is of value to a large percentage of the population. I say let anyone who has durable goods for trade print money which represents those goods. They will only succeed in getting people to use their currency if they can prove, over time, that they will hold those goods in reserve and exchange them freely and conveniently for the currency if asked to do so. Let people know that their currency is worth something and what it is worth. That is the only way they can make intelligent decisions regarding expenditures (of money, but more importantly, of their time).
Competitive currencies would work. If more gold floods the market more people will be able to print currency. Sudden increase in currency with out an increase in production results in the currency becoming inflated. Buying less with the same amount. If gold were as common as lead it would be worth what lead is worth. Keeping large supplies in reserve and introducing it to the open market would cause it's value to go down. The rich pricks would just play the same game they have always played. Competitive local currency is probably best.
The best answer. I support this. Thanks for your post
The above is the method by which currency would come into existence under Capitalism. If government is barred from interfering in the economy (at the most basic level: it's currency and what that currency represents), the above becomes possible.
Sorry I use a credit card , pay it in full every month and get a lot of money back every year.
I see your logic, but the people who are making that easier for you are going to destroy the future of your kids.