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Thursday, August 2, 2007

Federal Reserve Work Permission Points

You shouldn't call Federal Reserve Notes "money". That is an insult to money.

Federal Reserve Notes are not money. A "dollar" used to mean a certain fixed amount of physical gold or silver. Don't call it a "20 dollar bill". Call it a "20 point certificate". Federal Reserve Notes are not "dollars". Federal Reserve Notes are "points".

Fair money is a legitimate tool that stimulates trade. There is nothing intrinsically evil about fair money. Fair money is gold, silver, trustworthy paper promises to pay gold or silver, or barter credits. Any metal coin makes good money, but gold and silver have been the most popular choices.

Metal coins are good money for several reasons. First, the metal coin represents a certain amount of labor value and scarcity value. Second, the metal coin can be melted and used for other purposes. Third, metal coins are fungible; every .999 fine 1 ounce silver coin is equivalent to every other .999 fine 1 ounce silver coin. Metal coins hold their metal value, even if the issuer goes bankrupt.

Trustworthy paper promises to pay metal coins are also perfectly acceptable. As long as the issuer allows others to audit his books, and the paper is backed by actual goods and services, it works. There is nothing intrinsically evil about fractional reserve banking. However, government regulation of banking is evil. In a truly free market, paper promises to pay metal coins legitimately expand the money supply, so that the amount of money equals the size of the economy.

Fair money cannot be controlled by a centralized issuing authority. A centralized issuing authority will never be able to resist the temptation to cheat. Fair money cannot be regulated by a government.

Fair money cannot be involved in a forced taxation scheme. Otherwise, whoever controls the money has undue influence. You cannot have fair money and forced taxation and the same time. Government coercion demanding that taxes be paid in a certain form of metal coin distorts the market. The metal that is acceptable for tax payment becomes overpriced relative to other metals. Without government, metal coins make great money.

Most people think "Money is evil." That is not true. There is no real money legally in circulation anywhere in the world. All current incarnations of money are fraudulent. All the money imposters really are evil. Real money is not evil.

Federal Reserve Notes are really "work permission points". Income taxes mean that citizens must get permission from the government to work. Whenever anyone works, they must pay income taxes. Income taxes must be paid in Federal Reserve Points.

Only a slave needs to get permission in order to work.

Federal Reserve Points are evil because the issuing authority inflates. The benefits of inflation are concentrated in the financial industry. People accumulate Federal Reserve Points by gaming the defects in the economic system. People who actually perform productive work are cheated.

Interest rates are literally the price of work in the present compared to the price of work in the future. The Federal Reserve fixes interest rates at an artificially low level. The Federal Reserve is fixing the value of productive work in the present at an artificially low level. The Federal Reserve is fixing the value of productive work in the future at an artificially high level.

Whenever the government attempts to fix the price of something at an artificially low level, it causes a shortage of that thing. The Federal Reserve and income taxes represent an attempt to fix the price of productive work at an artificially low level. By fixing the price of productive work, the government is causing a shortage of productive work!

Don't insult money by calling Federal Reserve Notes "money". It would help if people started referring to Federal Reserve Notes by their proper name "work permission points". The income tax means that people have to get permission from the government in order to work. Poor people are merely lacking government permission to work. That's why every US citizen is effectively a slave.

2 comments:

Jason C said...

The keyboard is mightier than the sword.

Keep up the fantastic work.

FSK said...

I noticed that you have your own blog now. I found it via Google Analytics' "referring sites".

http://jasoncuadra.blogs.friendster.com/

I have some drafts for many of the topics you mentioned.

This Blog Has Moved!

My blog has moved. Check out my new blog at realfreemarket.org.