I have taken the position that of the two primary issues of money and land reforms, that the voting public citizens can probably more easily understand and grasp the nature of the money fraud that the land and resource swindles. So I have been concentrating more on money reforms for now. But I agree that if land and resource reform does not quickly follow money reforms, or happen concurrently to them, then we will simply be shifting the forms of tyranny, rather than the substance.

The Land Value Tax is indeed critical. I just wish people could understand what a boon this would be to our civilization and our world. Taken in tandem with eliminating the private use tax (interest) on debt-based money, it could transform our planet into a relative “paradise” overnight.

The modern world was born out of social revolutions that broke the back of a tyranny of ‘land lords’. Unfortunately, the new system was soon hijacked by the ‘money masters.’

With the collapse of the monetary system, the ‘money masters’ are shifting their power base into land.

Without LVT, we will soon return to a tyranny of ‘land lords’

IMO, the author of these words has a flawed understanding of both of the basic terms he is using. “Fiat” and “socialism” are both being used incorrectly in the above post.

Nathan claims that: “The socialist view that everyone has an equal right to everything is flawed.” Well of course that view is flawed. It is more than flawed, it is outrageous, and totally unworkable. However, it is not the “socialist view”. It is just as flawed to say that about socialism as it would be to say that the “capitalist view” is that everything should belong to private persons. It’s just not true. The most basic “socialist view” is that the government should own and control ALL of the “means of production”. Variant versions separate the basic components of production into “land and resources” and “labor”. Henry George held that there is a differnce between “land” which no man can create, and labor… and every man should own his own labor. However, there are nearly as many definitions of “socialism” as there people using (usually abusing) the term. What we think is that one needs to go beyond stereotyped “labels” and get into the realm of real ideas and sensible definitions. In other words we need to return from the realm of Orwellian “doublethink”.

The same is true of the world “fiat” which is explained more fully below, or in Ellen Brown’s book, Web of Debt, upon which this blog is based. The word is simply being used incorrectly. The essence of the book is to correct the mistaken ideas about money, currency and wealth that allow these massive money frauds to continue. It particularly exposes the errors perpetuated by the “Austrian School”, Von Mises, Rothbard, Griffin, et al.

Time limits do not allow a complete correction of all of the errors in this post at this time. Perhaps later….

The author of this post also confuses the definitions of “money”, “currency” and “wealth”. Without a basis of accurate and precise definitions no rational discussion is possible.

Also, the idea of gold, silver, or other commodities as money is what got us here (in this economic disaster) in the first place, and is the central mistaken idea Ellen Brown’s book, Web of Debt is written to correct. The author is obviously influenced by the errors taught by the “Austrian School” of Economics.

We agree that the people’s wealth IS being pilfered and plundered by private money exploitation, but it has nothing at all to do with “fiat” money. It has EVERYTHING to do with PRIVATE “fiat” money. “Fiat” implies sovereignty, and privately issued “fiat” money is a contradiction in terms, an oxymoron.

It is the PRIVATE creation of paper or electronic money or currency that is the problem. That is not the same as “fiat”. “Fiat” simply makes currency “legal” and acceptable in payment of government fees and taxes.

How can the full faith and credit of the people of the USA be used to “back” privately created credit-based money? That is the fraud, plain and simple! It is fraud that has been “legalized” by the banksters over time, and most particularly with the “federal reserve act” of 1913 – history’s biggest all time swindle.

Would YOU allow YOUR pledge of credit to back MY IOU (loan)? Of course not. But that is the game the private banksters are playing. THEY (private bankers) create the money in circulation (currency) out of IOUs (loans or promissory notes) and WE (the taxpaying public) guarantee or “back” those “federal reserve notes” with OUR “full faith and credit”.

The “scam” has nothing at all to do with “fiat” and everything to do with the legalized fraud known as “private central banking”. It is the largest criminal enterprise in all of human history – bar none.

We recommend reading Web of Debt as an essential first step in correcting numerous myths and misconceptions about money, or currency. It is these misconceptions (basically propaganda) that allow the crimes to continue.

The LVT could solve most of our financial problems within a few short years… or at least make an enormous start on wealth redistribution in the most painless way possible. That would make a beginning on the lowering of the largest personal fortunes, and a general raising of wages and small business income.

However, I disagree somewhat with your generalization about interest: “Money issued with interest is fundamentally flawed (no matter who the issuer.)”

To date I have seen no persuasive evidence that publicly issued and controlled money would not be vastly more beneficial to the common good and welfare of society than privately issued money, regardless of the interest attached.

With publicly-issued money interest could range from 0 to ??? percent, based on 1) whether it was spent or lent into circulation; 2) spent on infrastructure (public wealth-producing or enhancing assets); 3) distributed to state or local governments for infrastructure on those levels; 4) the risk involved in loaning money into circulation (ex: to private banking or commercial enterprises) or 5) credit worthiness of the borrower and chances of default. There are other issues that could and would affect interest rates as well.

Demurrage is one way of guarding against the hoarding or currency, which takes it out of general circulation. Hoarding of currency is inflationary. Demurrage would work to insure that stored wealth was in some other form than currency (circulating money).

But in my opinion, the simplest, quickest, and most direct way of correcting the current private money monopoly is to make the so-called “national banks” really national. It is doing no more than what their name implies in the first place.

“National” should actually mean that it belongs to the “nation” – not a tiny minority of private money-monopolists.

“Federal” should actually mean that it is part of the “Federal” government.

All I ( and Web of Debt) am proposing is to return to “truth in wording”, and re-make these institutions into that which they already claim to be. End the deceptions. End the private monopoly over money – which in turn controls everything else, including our so-called “democratic” government.

I just wish people could grasp the importance of these issues, and the enormous cost to them of doing nothing.

If the lender has actually earned and must part with the money that is being lent, then the lender has the right to charge interest or demurrage, or any other fees, as supply and demand allows. (With real money in a free market, these rates set themselves.)

But if the “lender” is creating the money out of nothing, then there is no justice in collecting anything for it in return, whether interest, demurrage, or any other fees.

I think the biggest problem though is fiat currency itself. The owners of central banks around the world have the monopoly power to steal from everyone through the use of these currencies. The wealth of nations is being pilfered, and fiat currency makes that possible. (The collection of interest or demurrage or anything else for the creation of money also makes this possible.)

I do like thinking things through theoretically though. If the theft didn’t happen, what principles could stabilize fiat currency to make it behave like real money? (But in the real world, fiat currency is too tempting for the monopoly powers that create it, and the unlimited wealth they gain from the system ultimately leads to tyranny.)

When fiat currency is created, there is a transfer of wealth from existing currency to the new currency. So a just system should issue money to everyone, not stealing from the many to pay the few. But what system could pay everyone the appropriate amount to maintain both stability and justice?

“Land value tax” sounds pretty much like Henry George. I do believe it has many benefits over other forms of taxes.

George believed that land value is a measure of economic productivity. If the number of goods and services stay about the same from year to year, land value should stay the same as well. If goods and services increase, land value should also increase. For money supply to increase along with goods and services, it could increase along with land value. With the “land value tax,” this value would be partially collected in taxes. So changes in tax revenues from land value could indicate appropriate changes in money supply.

The most just system would leave everyone’s purchasing power unchanged. So currency could be issued as a percentage of the amounts people already have. That way people can still buy the goods and services they could buy before, plus having the ability to buy the new goods and services as well. The easy way to accomplish the same thing would be to leave the money supply constant, leaving purchasing power the same, but allowing the value of the currency to change. (If everyone’s money doubles simultaneously, prices double in response, and everyone still has the same purchasing power as before. Why not leave the money supply alone? It’s much easier.)

But gold and silver are a better form of money, because they are much harder to counterfeit. They can be mined, making the growth of the currency dependent on production (so it can only grow with production). The free market can determine their value relative to other goods and services. And their intrinsic value makes “fiat” regulations unnecessary. Supply and demand become free to work, and the people become free from the monopoly powers that currently steal the value of everyone’s money.

Money issued with interest is fundamentally flawed (no matter who the issuer.) There are many advantages of issuing money with demurrage, to quote from wikipedia:

“demurrage is a cost associated with owning or holding currency .. sometimes referred to as a carrying cost of money. The term was used by Silvio Gesell. It is regarded .. as having a number of advantages over interest: while interest on deposits lead to discount the future and to place immediate gains ahead of long-term concerns, demurrage does the opposite, creating an incentive to invest in assets which lead to longer-term sustainable growth. Furthermore, demurrage acts like inflation, stimulating the circulation of the currency, encouraging economic activity, and increasing employment.”

Transaction based taxation systems are bad economics – they should be scrapped, and replaced with ‘land value tax’ (LVT.) This measure is required with demurraged money to prevent flight of capital into land (again see wikipedia.)

Taxes raised from LVT should be distributed in the form of a a basic income (markets will then be driven bottom up rather than top down.) The basic income will replace all other forms of state run social welfare.

In summary:

Demurrage upon money of perhaps 6-12%, and a LVT of 2% on land distributed as basic income.

Capital will be forced into long term productive pursuits, where it best benefits society.

Here are some basics. A worker deserves what he or she produces. If you work hard to turn a barren field into a harvest of food, you have earned the value of that food. This reward motivates production. It also makes sense. When you create something, it’s yours. You’ve earned its value in exchange, and that value is yours.

If your neighbor steals your crop, you sense something isn’t right. You worked hard while your neighbor sat around waiting for the food. Likewise, if the government takes your crop and gives it to your neighbor, that’s also stealing. But you have every right to support your neighbor out of your own generosity. Your neighbor has the right to work as well, producing more crops (or tools, or you name it). But your neighbor won’t be motivated to work if laziness results in free food.

Money facilitates exchange, so whatever you produce with your unique skills and abilities, you can trade for what you want. The relative value each party places on these goods and services determines the exchange value of each item.

Money serves as a go-between, but it must have characteristics appropriate to its purpose. Since money represents limited, tangible goods and services, money also has to be limited. Otherwise, if people can create money out of thin air, they steal from the value of money already in existence. It’s counterfeiting, plain and simple. When the money itself is a tangible good, it does have this appropriate characteristic of being limited, and therefore having certain value.

The socialist view that everyone has an equal right to everything is flawed. People deserve what they earn. This motivates people to produce goods and services. Maybe a case can be made with respect to natural resources, which are not produced by people. But redistributing everything leaves people with no motivation to work. Easy credit does the same thing.

Henry George believed that everyone has a right to natural resources. But he also believed everyone has a right to the fruit of their labor. These are mutually exclusive because people don’t produce natural resources. I think this is the furthest extent to which equal distribution of value can be justified. But this value would need to make it to the people, not be kept by the government. I believe distributing this value among individuals (instead of making bigger government) would make Henry George’s theory more just, but the practical issue of keeping government honest and accountable keeps even this solution imperfect.

A danger of socialism (and of Henry George’s proposal) is tyranny. In capitalism, great little small businesses can flourish, and if a big business becomes too monopolistic, government can step in. But in socialism, government is big business, so there’s no stopping its monopoly power.

Socialism also includes the injustice of robbing the hard workers to pay everyone else. (This Henry George corrects.)

As for the monetary system, as long as central banks can collect interest on money they’ve made out of thin air (fractional reserve banking), they are stealing from the public. Also, inflation itself steals from the public, devaluing people’s individual amounts of money, and giving that stolen value to whoever gets the new money. With gold and silver, the only way to add money to the system is to work, mining more of it. This labor would keep the money valuable, and the makers of money deserving of its value.

Personally, I think competition between precious metals and a justly regulated fiat system (in theory — absent fraud and corruption) might work. I believe the precious metals would win the competition over time, and would stabilize the value of the fiat currency by competing for use.

Better regulations for a (fundamentally flawed) fiat system could include a tax on fractional reserve interest at 100%, or (better yet) the abolishing of fractional reserve banking altogether. But the whole banking pyramid scheme has to go. Central banking has to go. Also if there’s a national fiat currency, the government shouldn’t have to borrow it at interest, paying bankers billions of taxpayer dollars for entering numbers in a register. But the theft that fiat currency allows should not be in the hands of the government either. Precious metals need to be allowed at least to compete in the marketplace, to help keep a fiat system honest. And I do believe gold and (especially) silver would win out in the end, proving themselves by market choice.

As far as interest is concerned, the problem is the creation of money out of thin air, not the interest. The interest is the part of fractional reserve banking that allows the bankers to get something for nothing (really stealing from everyone else). But the root problem is not the interest but the creation of money out of nothing. The interest is merely the slight-of-hand that puts the money in their pocket. But interest itself is not the problem. With real money, interest is merely the market price for the use of money over time. It competes with investments of money in people’s business endeavors. It motivates lenders to part with their money temporarily. But with fiat currency, interest is arbitrarily low, because the money itself is ultimately worthless.

So please study Austrian economics. Our problems already have answers if people would just know about them. (I also recommend Henry George, but I think stopping the fraud of central banking is much more important for fixing the economy.)

Here’s a profoundly different approach to solving all of our economic and monetary problems. It eliminates the need for private investment capital entirely and replaces it with a system of self-extinguishing credit, or public investment capital.

For a moment, put aside everything that you have learned about the dynamics of our existing economy, and try to think freely about an idea that is entirely new. You may have to re-read the material presented several times before it all fits together in your mind.

I urge you to hesitate before jumping to any conclusions based on previous assumptions or ideologies. There are no historical precedents to draw upon. Before you form an opinion, try to imagine the tremendously positive social implications that true economic freedom would bring to the human race.

Please visit this link: http://www.monetaryreform.com/MR/betterWay.htm

Thank you

Firstly, the “value” of anything (even gold) is not in the thing itself; it is in “your mind”. Think about that carefully. If you don’t believe me, think again. Once you’re comfortable with that fundamental point, we need to establish an underlying concept of ‘price’ which does not rely on the mechanism called ‘money’ (which will carry the units for prices).

To establish a stable unit for ‘prices’ (which is what we desperately need for our money) you need to understand that a ‘price’ only exists when an exchange of goods and/or services actually takes place – and that ‘price’ is the ratio of the ‘values’ given and received, which should always be exactly 1 : 1. If the ratio is not 1:1, then the exchange won’t happen. Or if the exchange should be forced to occur when the ratio is not 1:1, then you see the true nature of coercion (or fraud). No money is involved here, yet.

That being understood, it is possible to see how some statistic based on the prevailing gold-for-silver “exchange ratio” (1 oz of gold for 64 ozs of silver = 64:1 “value ratio”, as I type this) can form a basis for establishing a stable unit for ‘price’. It was, in fact, the basis for the dollar coin design which prevailed in the US of for decades before the Legal Tender Cases were decided (1869-1871 or thereabouts).

You can study how the physical exchange ratio between gold and silver has varied through history: 12:1 for 1,300 years in Roman times; 15:1 in England for 59 years; from 15:1 to 16:1 in the US before the Legal Tender Cases; , between 70:1 and 90:1 during the 90’s, and now down to 64:1. These are all weight-for-weight ratios, not money-price ratios (although they could be) and they remained relatively stable over very, very long periods.

But the useful fact to note is that changes in the ‘values’ of those metals (which commonly follow each other up and down) will not greatly disturb that exchange ratio in the short term and a suitable statistic based on that ratio (like a 30 day or 100 day moving-average) will be inherently more stable than either of the metal values or the basic exchange ratio.

So, if today we again made a 1oz silver coin the legal definition of “one dollar”, following the 1860’s US model, a 1oz gold coin would today have an exchange value of $64.00, and all money-prices in the US would immediately be reduced by a factor of 17 (1oz of silver sells for about $17.00 at present). I’m not recommending the US do this, just stating what the old standard coin used to be and how our present values measure up against it, as a reference point.

Using this metal ratio to establish a more stable ‘exchange value unit’ is not unlike using a Laser Interferometer to establish the unit of length, or a Caesium Atomic Clock to establish the unit of time. While few people would know what either of those instruments looks like, we all obtain the immeasurable benefits of their ’stabilizing influence’ on our units of length and time and it will be much the same with correctly sized and imprinted gold and silver coins. They are not intended to be our common, everyday pocket money or the means of exchange for business, just the “reference point” to which all other forms of money must be compared, like comparing your wrist watch with the time pips broadcast over our radio networks, or the NIST standard against which commercial manufacturers of tape measures would check their master tape-printing machines.

Electronic credit mechanisms and paper notes will serve just as well as our everyday ‘tape measures’ and ‘egg timers’ do for ordinary trade purposes, so long as they are compelled by law to “agree with” the reference standard coins, so that one paper dollar will get you exactly the same ‘value’ of goods or services as our new 1 oz silver coin will, for example.

Can you imagine how far-reaching the effects of a more stable reference standard for the ‘price’ measurement system would be? Think about it for a moment, in relation to tape measures and clocks. Does the length of an hour vary depending on how many digital wrist watches are ‘in circulation’ or how often people are reading them? Is there any sense in borrowing a 10 ft tape measure from a length-bank to measure a piece of lumber in a lumber-yard, then giving it back to the ‘bank’ (together with an extra 12” ruler!!) when you have finished that transaction?

The true ‘value’ of having a legally defined unit of exchange value (fixed and realized in the form of a 1oz silver coin, for example) cannot really be measured in dollar terms, any more than the ‘value’ of a Caesium Atomic Clock can properly be assessed in minutes or seconds, and cannot be measured in terms of the cost of building it. It’s true ‘value’ (as a reference standard) for determining the precise extent of 1 second, is immeasurable: like the value of ‘justice’, which should never be ‘for sale’; or the ‘price of liberty’, which is ‘eternal vigilance’. The real question is, “Why have we tolerated ‘flexible’ dollars for so long?”