Re: two currencies and Korean war

[William F Hummel <wfhummel@xxxxxxxxxxxx>]

Ted Winslow wrote:

>Barkley wrote:
>
>> BTW, I have been aware of this personally.  As
>> recently as 20 years ago, M-T dollars were still being
>> used by bedouins in the desert of Sa'udi Arabia as a
>> medium of exchange.  The Badu were very aware at
>> all times of the world price of silver.
>> OTOH, one for
>> the chartalists, I suspect they were usable to pay taxes
>> there as the Sa'udis were very into silver and some of
>> them would lose huge sums when the silver bubble
>> burst.  The Qur'an asserts that money should be specie
>> and the Sa'udi paper money has silver threads in it.
>> The Hunt brothers had convinced some of them that
>> the world would go on a silver standard.  The current
>> de facto leader, Crown Prince Abdullah reputedly lost
>> several billion dollars in the crash.
>
>These facts contradict "chartalism" in the sense of the claim that the value
>of money as a store of wealth derives ultimately from the tax requirement,
>don't they?  The valuation of silver by the Sa'udis and the bedouins didn't
>derive from its use for paying taxes, rather this use derived from its
>valuation which, as the connection with the Qur'an indicates, had another
>basis.
>
>My understanding is that blood feuds, jus talionis, blood money and bride
>price are still characteristic of many Middle Eastern cultures. As I pointed
>out earlier, in the psychology consistent with the psychological premises of
>Keynes's monetary theory these phenomena are expressions of the same
>persecutory anxiety as the "strong irrational feelings" about money to which
>Keynes points as the ultimate basis of the "desire to hold money as a store
>of wealth".
>
In my view, chartalism refers to the essential role of taxes in a
fiat money system, not a commodity money system.  Precious metals
were commonly viewed as a commodity when they existed as money.

William F Hummel