From: "Vladimir Z. Nuri" <vznuri@netcom.com>
Date: Fri, 27 Jun 1997 08:47:46 +0800
To: tzeruch@ceddec.com
Subject: Re: new money systems
In-Reply-To: <97Jun26.113748edt.32257@brickwall.ceddec.com>
Message-ID: <199706270040.RAA26241@netcom18.netcom.com>
MIME-Version: 1.0
Content-Type: text/plain




>
>Gold (content) can be counterfeited, which is why it needs to be assayed
>and there are assay marks on gold bars. 

but the sheer beauty of this is that everyone can independently verify
that gold is real by doing independent assays on it. anyone in an
entire population can do so. however when a government controls the money
supply, you are relying on them to govern the scarcity of it, and not
to steal from the population using inflation. gold does not have this problem.
in fact it doesn't have to be gold, it can be *anything*-- platinum, etc.

the key thing is that as people get more of this material, like from mining
or whatever, that the economic cost of this is not low compared to the
existing supply. and, that new additions of this money going into the
system are negligible compared to the total volume. in fact anyone who
asserts "there isn't enough gold in the world to use for money" is 
marvelously ignorant of economic principles, in which it isn't the
volume but the scarcity (lack of ability to create new volume) that matters.

you see, the government can easily create new money. the government is
right now doing this every time it pays money on a bond. the greed of
the population fails to allow people to realize they are losing money
in the long run. it's guaranteed to crash periodically.

>If there is inflation, or even the hint, people will shift from dollars
>(or pounds, or yen) to something that is not inflating.  It would be
>easier to control if they didn't tax you on the inflation (which they call
>capital gains).

it's a horrible problem that virtually all government currencies are 
being inflated by design by the central banks & the governments involved.
this is done whenever they pay money for bonds, more going out than went
in.

>Try spending british pounds at a US fast food restaraunt (at least one
>that is not adjacent to a UK diplomatic building).  Then you will have to
>go to someone to do the exchange and they will charge a fee.  And then if
>you go to the UK and have to change back, there will be another fee.

fees to convert currency are currently quite negligible. and the fee is
in line with the service to do so. multiple currencies act as checks
and balances on each other, in the same way state independence does, or
should, in the US. do you want one mass amalgamation of everything?
so do various people in the UN working for "nwo".. and unifying the
currency is the key means to do so.

>Thus it is not trivial in practice.  If your money was only good for a 50
>mile radius, and you lost 3% in each exchange, going on vacation would get
>very expensive and you would then call for a universal currency, or
>convert into something like it (accepted by every locality very near par)
>before going on vacation.  But if you convert it into a universal
>currency, why not just leave it as that?

in fact you pay a small percent for every transaction you make on a credit
card that is not likely to be much larger than that involved in currency
trader fees.

>Considering the internet is international, exchange is a big problem and
>will get worse as more transactions require foreign exchange. 

exchange problem is merely one of electrons in wires. it's not a problem,
and it doesn't need to be solved. it's already been solved. only those
who wish greater control assert it is a problem, and that it needs to
be solved. they offer a false solution to a false problem. but their
propaganda is working quite well across the world.

>So although I consider autonomy a virtue, I consider trade a greater
>virtue, so local currencies are good only to the extent they promote both,
>and with the problems of currency exchange, I don't see how trade is
>enhanced by local currencies, but am interested on your thoughts on this
>point since you are more familiar with the narrow topic.

the world requires a mixture of independence and dependence. a local
currency is working toward the former, a global currency toward the 
latter. it's not either/or but a mixture situation.

>Yes, but each currency would then have to be exchanged (at a discount!) 
>and that almost every time any transaction occured.  Unless you are
>willing to exchange any amount of currency without making any profit on
>it, not even to cover expenses or fluctuations in value, this won't work -
>it is trivial to convert currency, but it is not without cost.

why should one expect to make a profit merely by exchanging currency?
there will be very low friction rates involved in the transfer. but
in fact what you get with a global currency is the sum of all these
local friction rates, in an invisible format that you can't measure.
which would you prefer? to know how much it really costs you, or to
have the fees hidden so that you have no way of knowing why what you
want costs more than it seems like it ought to?

>You can have state and local tyrants who want to manipulate the money
>supply.  

or worldwide ones. which is more dangerous? furthermore, as I have been
trying to reveal, it is possible to use a money form that is impossible
to manipulate. that is the advantage of gold that world bankers do not
wish the public to know, because it makes them free and soveriegn and
uncontrollable. hence my interest in this and my interest in promoting
it as a key cypherpunk topic.

good questions:

>In sum, I have a set of questions:  1. Why would local currencies be any
>less subject to manipulation than national currencies which suffer from
>inflation and devalutation when the consequences are the same and the
>national level can't resist? 

I am advocating a currency that is "open" in which it is public knowledge
what everyone owns in that currency. everyone can verify how much of the
currency is in circulation. people cannot use it unless they agree to
the "open" requirement. note that this is only the local currency-- a person
could have many assets not measured in it. that is, I could own far more
than is revealed on these public boards.

> 2. If they aren't going to set the value
>themselves, they will have to fix the value "permanently", since if they
>can change the peg, they can manipulate it, but if they fix the value to
>X, why won't real X be prefered to the note denominated in X.

consider a company that releases "iou [x] service" or "iou [x] product".
if there is knowledge about how many ious are out there, people can
judge for themselve the ability of the individual to repay. an individual
who has 1000 "iou" hours is more inflated than an individual with 
"100 iou hours" in circulation.

  3. As
>long as they have to pick X, if several localities pick gold as X, then
>their currencies then become the same, although having different numbers
>(e.g. 31 & change gram notes v.s. 1 troy ounce notes) - why have a dozen
>currencies which are merely different numbers representing the same amount
>of a commodity (except to manipulate later)?

local independence.  a community that is self-sustaining shouldn't be
taxed by a community that isn't, imho. this is the real message of the 
revolution of 1776 and man's century-long desire to escape slavery and tyranny.