From: "Perry E. Metzger" <perry@piermont.com>
Date: Sat, 23 Mar 1996 02:09:04 +0800
To: Gary Lee Jeffers <gjeffers@ns.htc.net>
Subject: Re: (X:x)e$ 's other use
In-Reply-To: <9603220839.AA14552@ns.htc.net>
Message-ID: <199603221506.KAA23445@jekyll.piermont.com>
MIME-Version: 1.0
Content-Type: text/plain



I won't enumerate all the economic and technical errors in this
message; they are numerous and this isn't the correct forum. It is my
personal hope that free banking (that is, competitive currency issue
by banks without regulation) will some day again be the rule as it
once was, and that electronic mechanisms will be a portion of the way
that currency works under a free banking system. However, that does
not mean that fractional reserve banking (which isn't even what the
Fed does), debt currency (all notes are debt currency), etc. are
wrong, or that the Fed is a private organization. I'll happily discuss
this in private mail if anyone wishes.

Cryptographically secured electronic money does, of course, provide
the promise to have banks, especially ones outside of the
U.S. regulatory regime, issue their own money and have it freely
circulate even in places like, say, China, or the U.S., where such
money might not be technically legal. However, to do that, it will be
necessary for some financial institution that people have substantial
confidence in to fill this role. Money is partially about trust, and
cryptography can only go so far in convincing people that their
savings are secure. Even encrypted "open books" protocols like the
ones Eric Hughes has proposed can only go so far in preventing
systematic frauds.

Perry

Gary Lee Jeffers writes:
>                     (X=:x)e$ 's other use.
> 
> My dear fellow Cypherpunks,
> 
>    I believe that secret e$'s other use has been overlooked: That is,
> e$ would be a sound money replacement for the corrupt currency that
> every large state in the world currently pushes. Especially if e$
> can be redeemed in something of real value on demand.
> 
>    As some of us know, the U.S. Fed State's Federal Reserve Notes are
> corrupt currency. The corruption is at 5 different levels:
> 
> 1. They are DEBT currency - they are lent into existence and it is
> mathematically impossible to pay off this debt. If you borrow $100, then
> where do you get the interest - say 8% since all FRN's are borrowed into
> existence?. This turns the great majority of Americans into victims. If
> you want freedom for your citizens, you do NOT allow monopoly DEBT
> currency. Note: bankruptcies & good counterfeiting are the only ways.
> 
> 2. Fractional Reserve Banking. That means that the bank can lend out
> several times the money that it actually has. I believe that that is
currently 8 times but that is a rough estimation.
> 
> 3. Fiat money. That means that FRN's are backed by nothing more than the
> willingness of banks to redeem them with other FRN's.
> 
> 4. Private banks with monopoloy privledges issue the currency. The
> Federal Reserve is a private (non-U.S. State) institution with the mono-
> poly on U.S. currency manufacture. The U.S. Treasury prints the currency
> for the Federal Reserve. Other major states have similar arrangements. These
> major banks are properly called Central Banks. To turn your currency
> ownership over to a private Central Bank is monstrous! If the people
> knew what was going on, the U.S. Federal State would be destroyed along
> with the hidden ruling class.
> 
> 5. The Legal Tender Laws. These laws force the acceptance of FRN's
> in the U.S.. "This money good for all debts public and private".
> 
>    Note that the book DREAMS COME DUE made the distinction between money
> and currency. The author used the word money for real money and the word
> currency for false money. It may be the author's private distinction.
> 
>     I suggest that Iran did us a good turn in making and passing billions
> of dollars worth of uncatchable hundred dollar bills: they allowed the
> retirement of billions of dollars of debt for the American people without
> forcing Americans into bankruptcy. In a debt currency economy, good count-
> terfeiting is GOOD! It adds superior counterfeit to the mass of "legiti-
> mate" counterfeit. kind of improves the pool :-)
> 
>    Secret e$ offers the possibility of ridding ourselves of the slavery
> of private monopoly money issue. It would also give us a choice in what
> currency that we would like to use. Another possibility is that due to its
> high quality, it would be used during depressions and would possibly
> even break depressions. Its extremely FLUID nature might also be a pro-
> tection against depressions. It would be a TRUE MONEY and would give the
> people the advantages of true money. Let me emphasize: we do not current-
> ly have REAL money nor do the people of the other major States. We do not
> know what real money is like.
> 
>    Another possibility exists with secret e$: that several different kinds
> could exist. They would all be convertible into each other, of course.
> Major differences?: Different redeemablity schemes, etc..
> 
>    Secret e$ offers more that just the freedom of private transactions
> (as great as that is). It also offers us the power and freedom of true
> money!
> 
> 
> 
> Central power is stolen freedom.
> THE UNITED STATES "FEDERAL" GOVERNMENT HAS NO LEGITIMACY.
> The United States "Federal" Government - We'll be even more American
> without it.
> 
>                                            PUSH EM BACK! PUSH EM BACK!
>                                            WWWAAAYYYY  BBBAAACCCCK!
>                                            BBBEEEAAATTTT  STATE!
> 
>                                            Gary Jeffers
> 
> 
>