note: one respondent on this subject claimed that my references to the money system only applied to the US. in fact I believe they apply to any country that is paying interest on government bonds!!

Start with "Money Mischief" by Milton Freidman for an interesting look at the role of money.

an interesting book, I think this is one of his I browsed. MF is correct in some ways but I believe he is off the mark in others. gold has a key advantage over money printed by a government in that it can't be counterfeited even by that government. it is clear to me at this point that any government that pays interest on its bonds without loaning out that money is actually counterfeiting its own currency. this interest paid on bonds is the direct cause of inflation.

Money has three functions:

of course all three are interchangeable in a complete economy.

If anyone was to adopt a 1920's lifestyle (few cars, no telephone or electricity, no indoor plumbing in many places) they would have plenty left over. As long as consumption is the goal, you can keep working longer to satisfy more marginal wants. If I can convince a couple that they "need" two luxury cars, they will work the longer hours. If they are satisfied with something less, they may get by with only one earner.

no, actually I think that this is not entirely true-- even measured for this factor, our money has lost force. consider some job that has not changed in nature since then, say plumbing or farming. I believe on average that today's plumber or farmer must work harder than the 20's farmer to achieve the same lifestyle. in fact this can be proven mathematically in a post I'm working on.

We work "harder" and have less free time only in the sense that we prefer working longer hours and having expensive things and less free time to working shorter hours and having more free time.

a reasonable hypothesis, and partly correct imho.

It is called economic inefficiency (the electrical analogy might be resistance). If tarriffs are imposed on an import, I end up paying the domestic producers a little more. If some regulation forces an employer to spend $100,000 printing manuals or something, he is spending that to satisfy the government and not me. And then there is the obvious "tax", which you pay regardless of who sends the actual amount to the government (e.g. the "employer's" half of FICA).

what I am trying to imply in the post is that there is actually a hidden resistance on our money that is not reflected in the fees that various entities charge. this is inflation, and it it can be totally controlled, despite whatever lies the Fed tells the public.

The problem is one of exchange. A local currency (banks used to issue their own notes) is only good in that locality. How do I buy a California pistachio with Michigan Money? Or with British Pounds for that matter. In all cases you get an exchange rate. There will be a varying ratio between any two given fiat currencies, and even two currencies based on (i.e. redeemable in) different commodities.

so what? I understand this obvious and trivial point.

But all the above won't fix any of your above points. You will work harder and be taxed on barter points, hamburger coupons, or anything else based on their (hopefully discounted) value in dollars. I will still have to spend more of whatever to get a car with an airbag which I don't want.

a local economy can have a currency, and ask the question, "why is value being extracted from our local economy when it is a self-sustaining unit"? the idea behind a local currency actually encourages local autonomy/sovereignty/independence.

The only reason we have national currencies is because nations have different ideas about how large their inflation rates and defecits should be and about trade. That way they can control the supply of that currency and require changing into that currency to do trade.

the reason is that, imho, a set of greedy people have realized they can enslave the population of an entire country by manipulating the currency supply.

Having 1000 other currencies would mean that each currency would have a fluctuating value relative to each other (great if you are an arbitrageur),

no, this is not a problem, but a solution. as our world markets show, it is trivial to convert between currencies and each one acts as a check and a balance on the other. if a currency declines in value to another in the market, I will bet you the country whose currency declined is "counterfeiting its own money" via interest rates paid on bonds.

Gold (content) can be counterfeited, which is why it needs to be assayed and there are assay marks on gold bars.

but the sheer beauty of this is that everyone can independently verify that gold is real by doing independent assays on it. anyone in an entire population can do so. however when a government controls the money supply, you are relying on them to govern the scarcity of it, and not to steal from the population using inflation. gold does not have this problem. in fact it doesn't have to be gold, it can be *anything*-- platinum, etc. the key thing is that as people get more of this material, like from mining or whatever, that the economic cost of this is not low compared to the existing supply. and, that new additions of this money going into the system are negligible compared to the total volume. in fact anyone who asserts "there isn't enough gold in the world to use for money" is marvelously ignorant of economic principles, in which it isn't the volume but the scarcity (lack of ability to create new volume) that matters. you see, the government can easily create new money. the government is right now doing this every time it pays money on a bond. the greed of the population fails to allow people to realize they are losing money in the long run. it's guaranteed to crash periodically.

If there is inflation, or even the hint, people will shift from dollars (or pounds, or yen) to something that is not inflating. It would be easier to control if they didn't tax you on the inflation (which they call capital gains).

it's a horrible problem that virtually all government currencies are being inflated by design by the central banks & the governments involved. this is done whenever they pay money for bonds, more going out than went in.

Try spending british pounds at a US fast food restaraunt (at least one that is not adjacent to a UK diplomatic building). Then you will have to go to someone to do the exchange and they will charge a fee. And then if you go to the UK and have to change back, there will be another fee.

fees to convert currency are currently quite negligible. and the fee is in line with the service to do so. multiple currencies act as checks and balances on each other, in the same way state independence does, or should, in the US. do you want one mass amalgamation of everything? so do various people in the UN working for "nwo".. and unifying the currency is the key means to do so.

Thus it is not trivial in practice. If your money was only good for a 50 mile radius, and you lost 3% in each exchange, going on vacation would get very expensive and you would then call for a universal currency, or convert into something like it (accepted by every locality very near par) before going on vacation. But if you convert it into a universal currency, why not just leave it as that?

in fact you pay a small percent for every transaction you make on a credit card that is not likely to be much larger than that involved in currency trader fees.

Considering the internet is international, exchange is a big problem and will get worse as more transactions require foreign exchange.

exchange problem is merely one of electrons in wires. it's not a problem, and it doesn't need to be solved. it's already been solved. only those who wish greater control assert it is a problem, and that it needs to be solved. they offer a false solution to a false problem. but their propaganda is working quite well across the world.

So although I consider autonomy a virtue, I consider trade a greater virtue, so local currencies are good only to the extent they promote both, and with the problems of currency exchange, I don't see how trade is enhanced by local currencies, but am interested on your thoughts on this point since you are more familiar with the narrow topic.

the world requires a mixture of independence and dependence. a local currency is working toward the former, a global currency toward the latter. it's not either/or but a mixture situation.

Yes, but each currency would then have to be exchanged (at a discount!) and that almost every time any transaction occured. Unless you are willing to exchange any amount of currency without making any profit on it, not even to cover expenses or fluctuations in value, this won't work - it is trivial to convert currency, but it is not without cost.

why should one expect to make a profit merely by exchanging currency? there will be very low friction rates involved in the transfer. but in fact what you get with a global currency is the sum of all these local friction rates, in an invisible format that you can't measure. which would you prefer? to know how much it really costs you, or to have the fees hidden so that you have no way of knowing why what you want costs more than it seems like it ought to?

You can have state and local tyrants who want to manipulate the money supply.

or worldwide ones. which is more dangerous? furthermore, as I have been trying to reveal, it is possible to use a money form that is impossible to manipulate. that is the advantage of gold that world bankers do not wish the public to know, because it makes them free and soveriegn and uncontrollable. hence my interest in this and my interest in promoting it as a key cypherpunk topic. good questions:

In sum, I have a set of questions: 1. Why would local currencies be any less subject to manipulation than national currencies which suffer from inflation and devalutation when the consequences are the same and the national level can't resist?

I am advocating a currency that is "open" in which it is public knowledge what everyone owns in that currency. everyone can verify how much of the currency is in circulation. people cannot use it unless they agree to the "open" requirement. note that this is only the local currency-- a person could have many assets not measured in it. that is, I could own far more than is revealed on these public boards.

2. If they aren't going to set the value themselves, they will have to fix the value "permanently", since if they can change the peg, they can manipulate it, but if they fix the value to X, why won't real X be prefered to the note denominated in X.

consider a company that releases "iou [x] service" or "iou [x] product". if there is knowledge about how many ious are out there, people can judge for themselve the ability of the individual to repay. an individual who has 1000 "iou" hours is more inflated than an individual with "100 iou hours" in circulation. 3. As

long as they have to pick X, if several localities pick gold as X, then their currencies then become the same, although having different numbers (e.g. 31 & change gram notes v.s. 1 troy ounce notes) - why have a dozen currencies which are merely different numbers representing the same amount of a commodity (except to manipulate later)?

local independence. a community that is self-sustaining shouldn't be taxed by a community that isn't, imho. this is the real message of the revolution of 1776 and man's century-long desire to escape slavery and tyranny.