From: "E. ALLEN SMITH" <EALLENSMITH@ocelot.Rutgers.EDU>
Date: Mon, 27 May 1996 15:17:54 +0800
To: hfinney@shell.portal.com
Subject: Re: Children's Privacy Act
Message-ID: <01I56FGPW4PW8Y4ZUF@mbcl.rutgers.edu>
MIME-Version: 1.0
Content-Type: text/plain


From:	IN%"hfinney@shell.portal.com"  "Hal" 24-MAY-1996 22:08:34.83

>In a way, our position is like those revolutionaries who are convinced
>the government is evil, while the populace mindlessly goes along with
>the status quo.  Terrorists inflict terror largely to force the
>government to crack down, raising popular awareness of its oppressive
>nature, and fostering revolutionary feelings.

	This has some interesting analogies in the area of currency, and
promoting privately-backed currencies. We want privately-backed currencies
because they won't have the political motives (e.g., Senator Harkin holding
up Greenspan's confirmation because Greenspan doesn't produce enough inflation
for Harkin's voters' liking) to have inflation that governmental agencies do.
But that doesn't mean that inflation of _governmental_ currencies isn't a
good thing from our viewpoint (so long as we're invested into non-governmental
currencies and other investments); it encourages people to switch.
	It is also interesting, in the same area of thought, to take a look at
the effects of the inflation-indexed bonds that the Treasury Dept looks to be
coming out with soon. If there's enough inflation for people to be interested,
and those people trust the government, then people will move their capital from
more liquid areas (e.g., bank accounts) into these (as well as from existing
governmental bonds). This reduces the value of money, since less people want to
hold it in liquid form (for one thing, if inflation is a concern, you might as
well go ahead and spend money) and there is more of it in that liquid form -
democratically-elected governments that get this money are going to spend it or
use it to reduce taxes. That means the rate of inflation will increase...
meaning the government will have to pay out more on the bonds, and those
buying the bonds (or, preferably, moving to other currencies) will increase.
Such bonds are normally created by governments with high inflation rates -
usually prior to a hyperinflationary collapse. It's an interesting question
whether this is cause or effect - likely both.
	-Allen