LH,

With all due apologies and all respect for your usually scinitllating intellect, your analysis of monetary systems is horse pucky.

Anchoring money to scarce minerals is good in one respect--it makes it a limited system. But it is not the final answer because as an economy grows it hits the glass ceiling imposed by the arbitrary definition of money as limited by a mineral supply.

A unit of money is essentially an idea back by confidence.

The problem is not coming off the gold standard. The problem was not analyzing how to preserve the essential confidence in transactions while allowing the sphere of transactions to grow as far as actual productivity and expanding technology and new resources could grow it, while not allowing anyone to inflate it artificially on some imaginary basis.

It is the departure from reliability that corrupts a currency, not the departure from one or another mineral. Money is real when it represents a confident idea of production. When it represents paper dreams, then it becomes dangerously compromised as it moves away from real value.

Real value comes from manufacturing, from natural resources, and from actual service to others. Money is strong when it reflects only those things. That includes new ideas as a service to others. It includes competent organization, health care, good counsel, education and so on in the service sector.

It does not include paper derivatives with imaginary values added in. But there is no reason to curtail a money supply at less than the value of the economy by anchoring it to a metal. Any more than there is to anchor it to big round stone circles.


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