Re: Is Money Credit?

["Greg Nowell" <gnowell@xxxxxxxxxx>]

Even under a "gold standard" the primary venue for circulation is deposit
money.  The gold cover in England in the heyday of the gold standard was
never more than 5%.  In Amsterdam's heyday there was a theoretical 1-to-1
gold ratio at the Bank of Amsterdam but this in reality just farmed out the
business of creating liquidity to specialists (real banks) who kept B of A
accounts as their effective reserves.

Capitalism is synonomous with credit-based exchange.

regards,
Greg Nowell

----- Original Message -----
From: "W. Curtiss Priest" <bmslib@xxxxxxx>
To: "Gunnar Tomasson" <gunnar.tomasson@xxxxxxxxxxx>
Cc: "John Gelles" <indexed-savings@xxxxxxxxxxxxx>; "Proceedings of PKT
Forum" <pkt@xxxxxxxxxxxxxxxx>; "List, LWSIDE1" <lwside1@xxxxxxxxxxxxxxx>;
"List, Debt" <debt@xxxxxxxxxxxxxxxx>; "List, Concord Coalition"
<concordcoalition@xxxxxxxxxxx>; "Gang8" <gang8@xxxxxxxxxxxxxxx>
Sent: Monday, June 23, 2003 9:49 AM
Subject: Re: Is Money Credit?


> Gunnar Tomasson wrote:
> >
> > Curtiss:
> ...
> > the "supply" of New Money is NOT constrained by the Factor Cost, which
is
> > ZERO.
>
> Thus the reason that Griffin in "The Creature from Jekyll Island"
> argues the main advantage to pegging money to gold, is precisely
> because it's factor costs are NOT zero.
>
> The human labor, machinery, energy, etc. as inputs just about
> break even at $200-$300 per ounce as the price of gold has
> hovered in the $280 to $300+ range for a while.
>
> As Griffin skillfully describes when it costs nothing to
> make new money (fiat money), there is a strong temptation to
> devise ways of getting more, especially if you are the federal
> government and are somewhere between $6-$44 trillion in debt,
> and you've got obligations backing a debt-ridden country
> from home mortgages to $100,000 savings accounts.
>
> And every country that succumbs to printing its way out of
> debt, devestates the very economy that it needs to pay
> taxes.
>
> Regards,
>
> Curtiss
> --
>
>
>    W. Curtiss Priest, Director, CITS
>    Research Affiliate, Comparative Media Studies, MIT
>       Center for Information, Technology & Society
>          466 Pleasant St., Melrose, MA  02176
>    781-662-4044  BMSLIB@xxxxxxx http://Cybertrails.org