Fw: [gang8] Cartalism

[Gunnar Tómasson <gunnar.tomasson@xxxxxxxxxxx>]

Yesterday, Geoffrey Gardiner posted the following to Gang8:

 

[....]  I have come to the following conclusions.

 

1. There are basically two kinds of money, money derived from businessmens' debts, "strong money," and money derived from state debts "weak money.".

 

2. Strong money is driven by assets and by interest.

 

3. Weak money [as in the mediaeval term: monnaie faible - insert] is driven by taxes and by interest on government bonds.

 

4. The growth of the use of weak money is a very recent development in the four thousand+ year history of money.

 

This analysis fits the empirical facts.

 

Weak money can be interest free only up to the limit that the public and the banks need it for liquidity. Any surplus which remains in circulation because taxes are not high enough, must be mopped up by government bond issues. Government attempts to force banks to hold more weak money than they require will always be difficult to enforce, and serve no useful purpose.

 

FYI.

 

Gunnar