John, I agree to an extent with Miles Franklin's commentary:

(The term ‘money’ is used loosely in this context. Government scrip is in a sense a pseudo-money. While it does serve as a medium of exchange, due to the secondary market demand that stems from its acceptance for tax payments and due to legal tender laws, such a money would never arise in a free market .)

Since you didn't preface this article with a commentary, I will argue what I think might have been your point for you. I think you are objecting to the use of the word "money" being applied to government notes. I was arguing in my last email that,

1) the definition of money is that which is used as a medium of exchange in lieu of trading objects/barter, and Here you are limiting your definition – not to money – but to what Maloney calls “currency”. Notice that using PM (gold/silver alloy) coins is trading objects, but it is not called barter. When you trade commodity 1 gallon of gas for commodity 1 US 1953 Quarter of a dollar – you are trading one object for another. One is manufactured into distilled petroleum, one is refined silver and copper in an alloy – manufactured into a coin shape. The Service Station records on its books that it has sold a gallon of gas that day and purchased a quarter, but the recording of ink on paper, or re-arrangement of on/off switches in the computer, or rearrangement of electrons that records this debit and credit on the books of the business is not the gas, and it is not the quarter.

Even the though the quarter is substance, and a manufactured material we could “barter”, in fact we call it the money and we do not call the gasoline money. Because the pm alloy is the most universally accepted substance. That is why we use it as money. The reason the Marketplace came to use it as money, is that it satisfies all the main features that makes everyone prefer it as money (divisible, fungible, transportable, verifiable, etc). And because it does, we acknowledge it to excel as the Unit of Account, the Means of Exchange, and the Store of Value.

“Current with the merchant” (Gen 23), and “currency” refers to the fact that the marketplace had chosen the old definition of the dollar as the Unit of Account for a time. The “current” functional definition of the substance was ~90/10 ration of silver/copper. And the “current” functional definition of the Unit of Account was last set in 1837 as 412.5 grains of the substance (see history). I’m not sure what to call the

2) that all money is physical, real, and human-created, it can be nothing else. There is no such thing as imaginary money. And, as you so correctly note, man cannot usurp God's place and create something out of nothing. Everything that man has invented, discovered, or uses, is material in some way.

See below.

In this piece, Miles Franklin notes that money issued by government is "pseudo money" (i.e. false money). But, calling government money "pseudo money" because it would never would arise in a free market is more about his opinion about what should be called false. (i.e. He has declared government money as false because people/the market have been forced to use government money as a medium of exchange, rather than people/the market choosing what they would have naturally used as a medium of exchange if they the choice were made by market forces.) In other words, government has forced the market to use government money as the medium as exchange. Still, this is act of force by government is not about man usurping something that God has not given man authority to do.

To extend this nomenclature, we should call all liberal/socialistic legislation "pseudo law", since it would never arise in a nation with Godly government, or populated by a Godly people. I happen to agree with the slur as an appropriate depreciation of men's law, but it is still law, it is still enforced, and men still bow to it even though it forces them to commit evil and self destruction in the process. It is men's law, not the law of God.

I get it. You are saying even a bad law is still being considered and acted upon as law. So you are suggesting that even though using paper bill and electronic ledgers as representations of quantities is a wrong/bad thing for people to think is money , government-imposed custom (one which produces sub-optimal market motivations and has implications for prosperity) it is still money. What haunts me is the suspicion that people might not be able to tell the difference between good and bad money.

It is commonly held that there are two realms, the realm of spirit and realm of matter, and another polarity: God created and man created.

Only God creates, Both man and God manufacture. But it is a spiritual matter what we do with material things, and what we do with immaterial things.

But, this matter/spirit dichotomy is difficult to divide, since matter only exists because of the animating understructure of the spirit. [I like that phrase] Likewise, the distinction between God-created and man-created blur, as men can create (i.e. organize the substance God created) [Men manufacture, God creates! They are not starting without raw materials. Remember the old joke about some man or angel challenging God, saying they could also create man. God had to say, “Hold on there, buster, get your own dirt.”] society in God's image, or in the image of man. In essence, that which is created by man is created by God, since man could not create anything if God did not animate his life.

This is good point, but does not refute the reality, that, so far in history, at least, God has not animated men to create out of nothing. (Reply: There was/is no implication of man being able to create out of nothing. The point was that men engage in a type of creation when they manufacture/organize the stuff that God created out of nothing. This "human-level creation" may call on divine or satanic/(other than God) inspiration for revelation of the pattern that directs this organizational work. The organization of men to

But, it does appear that man can choose to violate the rules of life conduct that God has revealed. I think it is those which we call the works of man.

If you want to label everything God-made to be real, and everything government has required me to do that opposes God's natural order/rules of life, as fake/unreal/pseudo, then the distinction of government money being "pseudo" money is certainly appropriate. But, in the common usage of money being a physical substance, that is used in exchange, as a carrier of value, then government money is just as real as any other choice of physical substance to use for a medium of exchange.

I am reacting, here, with what I remember of your previous definitions of money. In the above mentioned quarter/gallon exchange there was also some record of the transaction. Perhaps the car-owner wrote down the dollars and the gallons in a little ledger book and, for sure, the gas station would have a record somewhere of the same reference. This is similar to the Banks record that you have deposited units or withdrawn units. What frustrates me, is that sometimes you claim money is the "record" of these transactions, instead of a faithful account of two somethings that were traded. If you are pretending to trade 1/2 of the exchange, and you both agree to use imaginary units (credits), you will definitely write a record of your imaginary exchange. That does make the record the money. Something is missing. You have argued that the ink-on-paper, or the arrangement of electrons is tangible, is material, is the creation ex nihilo of God the Son, and man is just manufacturing/arranging creatively -- this creation, and thus that qualifies it for being real, being substance, and being the money. When I point out the crucial difference here, that is where you start saying, "Whoa, now, you are changing frames on me."

Even if it was just as “real” as an Element on the Periodic Table, it has this important difference: With an Element, it is not cost-effective to attempt to steal tiny amounts from every Element-holder in the world while still avoiding prosecution for theft. You can also tell if the bank has your money, or is lying to you and just pretending to have your money. It does make it a little harder to loan out the same quantity of the Element more than once without detection by the Authorities.

A world unified bank is a system of banking which once offered: 1) price-stability (but now has a goal of 2% inflation), and 2) elimination of the business cycle (but has precipitated the Great Depression and the Great Recession). Someday, the threat of collapse of trust in the fiat banking system may precipitate the central bankers offering to redeem all government money with gold. But, this is a meaningless/hollow/symbolism-only promise if they will not let you withdraw/redeem the gold. In other words:
1) If the number of units of gold backing the currency cannot be made more rare by withdrawal, then the two systems are effectively market-disconnected.
2) Even if they have “enough” gold to back all the fiat money units they say are on loan or on deposit, if the gold cannot be withdrawn from the central banking storage vault, the price relationship between fiat currency and gold will not be altered.
2a) (restated) In a banking system which uses gold as the underlying valuable substance upon which the notes in circulation lay claim, if there is no possibility of redeeming that gold, then there is no real/actual/effective price competition between dollar tokens/FRNs/ledger-money and gold.
2b) (restated) As long as you cannot take the gold that is backing the dollars out of the banking system, there remains the opportunity for limitless expansion of the money supply in relationship to both the vault gold and the aggregate amount of good/services available for consumption in the market.
2c) (restated) The central banking system creates money by entry of arbitrary numbers of dollar token units into its ledger by fiat; it then loans those electronic tokens into the marketplace; the money goes out of existence when the loan is repaid, except for the remnant which is paid in interest. If this remnant is re-loaned, and repaid, that increment will likewise go out of existence. Such a cycle is reminiscent of the wearing of gold colns, and the abrasion of wampum or stone wheel-money. All money (media of exchange) has a lifetime.
2d) In the case of fiat money created by writing electronic symbols of value into a ledger, as long as the vault gold offered as redeemable is not actually redeemable, the depreciating term "say-owe" may be appropriately applied to the FRNs and ledger-money. This term, "Say-Owe" implies that the central bank has a store of valuable element (e.g. gold) which may be withdrawn, and possession taken, upon demand. But, if such a promise cannot actually be fulfilled, then the name, "say-owe" is appropriate, since the central bank is saying they owe actual valuable substance, but they never deliver. It is this lack of accountability to/pegging to/regulation-upon that which is a scarce resource (which has alternative uses) which removes the FRN from the realm of being an economic good. Thus, as long as the central banking notes can be created with no actual limitation by physical work, the notes are just say-owe’s. As a result, the power to create money without limitation by work/energy/scarcity, will allow an almost unlimited opportunity to steal through deceit.

Tom's reply: (You are correct, if the central bank loans into existence more monetary units, this instantly reduces the value of each monetary unit. This act reduces ratio of goods to monetary units, which by corollary erodes the unit-value of each monetary unit. This does not mean that such a system will instantly produce price inflation with exact commensurability to the amount of money increase, (i.e. there is a time lag between the issuance of new debt and the market perception of the increased dollars compared to goods,

Correct - Agree so far....

but more importantly, the loaning of money to those committed to creating capital goods will result in the eventual increase in the amount of goods and services available for consumption).

Correct - Agree so far....but this is where you will go off the tracks...

Thus, the effective aggregate consumable value is expanded by such loans, and the effect of credit expansion/new-money-loaned-into-existence will not necessarily erode the value per dollar unit.

Here is where we disagree. You are mistaking the reality that -- if the bankers are skillful about how much money gets created relative to the expansion of goods/services in the marketplace -- the price of rice may remain stable. But you are confusing "the price of rice  remaining stable" with the "value of the dollar unit" remaining stable. In your example, the rice got a little cheaper because of overall global productivity, and the dollar got a little less valuable at the same time through debauchery/counterfeiting/inflation/increasing the money supply. Because they happened to have both "gotten a little cheaper" at approximately the same amount -- you are saying the value of the dollar has not dropped.

However, there is no reason that the Producers could not have honestly borrowed honest money which the loaner honestly lost the use of during the time of the loan until principal was paid back, and still been productive in raising the farm crop or building the house. In this case, the quantities of money have not been expanded but more production has still happened. In this case, the rice is actually cheaper now, as well as the house and everything else. And this is a good thing. We are assuming that, overall, folks have been keeping God's Law, applying due diligence, and God has blessed endeavors and more production has happened relative to the cost of the loan on the un-coerced credit market, etc. There was also the possibility that the Builder had a hard time getting up in the morning, was an alchoholic, didn't work efficiently enough, made mistakes, whatever, and the "more production" didn't really happen as planned, got saddled with additional, extra interest rates, late penalties, who knows and the overall economy did not get the greater ration of goods/services over money hoped for.

The point being God controls all this, God blesses, standard of living increases or declines because of His judgment, blessing, or curse -- it is not controlled by the monetary fluctuations generated by a central bank. Men cannot, by violating God's law, produce more freedom and prosperity that God will bring about among men who are keeping God's law. And it is wicked to say it can.

Therefore, for such a system to actually work as well as it can work, requires the honest/sincere attempt by those who are manufacturing money, and loaning it into circulation, to in some way simulate the scarcity of the new ledger money to be commensurate with resources/goods/services that is inherent in the effort required of mining or manufacture. The problem is that the process of judging monetary scarcity is necessarily inexact. The true gold standard, the increase in production of gold due to increased price due to the demand for money, is inherently self-regulating. In the gold-based money, the central bank does not need to judge whether the introduction of more money will enhance or diminish the value of the units of money currently in circulation. But, as noted by the Austrian market theorists, such central management of the value of money (i.e. the price vs. value ratio) by fiat is essentially impossible.

Agree. We have gone over this before, imaging out what it would take to actually accomplish. Only God could have the knowledge, power, justice to accomplish what the One Bank/One Govt would have to do, and even then, no one wants the prices to remain stable, we all want them cheaper. Also, the Austrians do not deal fully with the moral issues of God's law in the process but only man-oriented law.

Hopefully, sometime you will come to see that the difference between prices managing to be stable, and the lower prices that we would have had if God's law would have been followed -- is the amount stolen by the dishonest banking system and the individuals and governments who use it to plunder their neighbors.

The market price-value relationship is a chaotic system (i.e. sensitive to initial conditions, and each element operating according to its own rules which vary depending on the state of the local system). Chaotic systems are literally unpredictable, that is, outside of the ability of men to consistently predict a future state within an acceptable range of certainty. Such systems can produce wild excursions when it contains elements that can exert large forces on the rest of the system. The largest force that acts within a system is government, and this is the element which regulates monetary supply. Thus, the very entity and force meant to protect the market/economy/monetary system from large excursions, may be (will probably be/has been) the entity that produces those very excursions. Thus, to produce that desired monetary and economic-market stability, the controls may need to be released from the market. The big fear, monopoly, the economic entity which can supposedly distort all of the market prices by its influence, cannot maintain itself in perpetuity as an abusive entity without the force of government restricting alternatives. In particular, we should eliminate the money-banking monopoly of government to reduce the risk of accumulating catastrophically high levels of force in the market with regard to the judgment of scarcity of money, and its corresponding cost (interest).

Agree here. "We should eliminate" Government's monopoly. I keep pointing out that if we did what the Fed does, we would go to jail. (although, more appropriately, we should be required to pay restitution).

The problem is that men (regulators/central bankers) can overlook market feedback signals that would be dissipated with little disturbance/pain. Given the extremely complex and subjective nature of value, it is literally impossible for humans (central bankers/regulators) to appropriately intervene with force in a chaotic system to dampen the economic cycle; and more ominously, their very intervention may be the force that throws a chaotic system into extreme perturbation from stability.

Nothing is “backed” if you cannot redeem your certificates, take your substance home with you and stand in front of it with an sword. (This is true. Fiat money has nothing backing it with an alternative or reference value. But, there is a relationship between money and a claim to the goods in the market. This is by agreement of the participants in the secondary market for money. So, while the issuer, the originator of the notes, does not have any limitation on the number of notes he can issue, the secondary market traders of notes for merchandise can redeem those notes for goods that can be owned and defended. So, the accusation of money having no backing is true with regard to the primary lender/Fed/money-originator. Nevertheless, government money has a de facto backing in the secondary market, due to the near universal willingness of the market participants to trade ownership of goods/services for ownership of government money. But, the primary concern is: 1) stability of the money-value relationship, 2) instability of the money-value relationship due to intervention of government in its efforts to maintain stability or in its efforts to skew advantage to some market or government entities.)

If there is only one bank (which is effectively true because of the Fed ownership of all money) ALL the money units are always in the bank. There will always be the “ability” to loan out “unused” deposits, because – at any given moment – ALL the deposits are “in the bank”. (This is a corollary to the idea that more money could be created at any time. The fact that the Fed is the ultimate title holder of the deed that must be paid is somewhat irrelevant to the actual day to day acts of borrowing, paying off, and taking ownership. The monetary media expands with new loans, and it disappears with their retirement. The transient nature of money is practically irrelevant to the man who engages in the process of borrowing and repayment -- he begins by taking ownership of a valuable piece of property, and then he works with his hands, creating small increments of value at a time, transfers ownership of that valuable property to the original owner, and eventually satisfies the debt by the full/over-time/equivalent value to the original holder of title. Thus, the Fed is merely providing the monetary media by which the accounting of original value may be made with respect to the full accumulation and transfer of value to the old owner by the man who has created value by organizing elements into valuable goods/services. Thus, the problem is not with the money, per se, but rather with the Fed's arbitrary evaluation of the amount of need for new money. That evaluation and action, if inappropriate in its amount or timing, could result in inflation, deflation, collapse, or the facilitation of government/social action that has extreme quality of life consequences.)

It doesn't matter about the timing, or what the ultimate perceived "inflation/deflation/collapse" looks like. Inflation means increasing units which dilutes value of existing units and that steals. How much do they have to steal before it becomes theft?

As I said, it's not that one form of money is more real (physical/manufactured) than another, it's more about the ease of counterfeiting it. Gold is hard to counterfeit, but fiat money is easy for the government to counterfeit.

All money, all substance is fiat. God is fiat, silver is fiat. Sayowes are fiat. The difference is that when God says, "let there be" it happens, new stuff comes out of nothing. When Man says, "let there be", nothing happens. There is no new stuff, although when men are gullible to think that there is new stuff, there is opportunity to shuck the rubes as Gary North says. There is the opportunity to steal in the same way that manufacturing a silver plated coin enables more theft than manufacturing a solid silver coin. The deceived receiver is robbed. Burglared.  Remember, it will be easy for the future one-world bank to say "We owe you x units of gold (through our gold-backed currency)" as it is now to say they owe us x units of imaginary currency -- provided you are never able to get your units redeemed or audit them and see if they really have any gold behind the curtain.

But, the system does not fall apart instantly (because of being fake/unreal/fraudulent). There are rules (man-enforced behaviors) that simulate the effect of introducing new money into the system by the engagement of work. If the gatekeepers, the bankers, those who loan new money, do so only to those committed to producing new capacity for production of capital goods and new services, this is a method of keeping inflation under control. With the increase in capital goods, production capacity will increase, and new/more goods/services will eventually appear in the market to meet the demand of the new money.

"Meet the demand of the new money" is your way of saying, "It's ok, because, even though the purchasing value of all the money has been reduced stuff is a little cheaper as well, so it is OK that the bank has stolen the difference between the existing purchasing power of everyone's money and the greater purchasing power that would have been there if they hadn't lied about increasing money quantities." Already hammered this above. God does not want us to control or regulate the theft, but to eliminate it by not taking part in it.

Look, if God blesses the issuers of the substance the marketplace honestly chooses for money (say silver-miners) such that they can increase the money according to God's law faster than the building-contractors can produce houses according to God's law, houses will get more expensive. If the miners have trouble finding enough deposits or rich-enough ore, the contractors will beat them in the race and houses will become cheaper. But God's law will not be violated by men. Why would you want men to violate God's law by stealing just so everybody's money is worth less by that amount that is stolen, even though the prices might look the same, nominally?

What is immoral if I borrow, lose the money, and pay the loan back out of un-related wages? (There is nothing immoral about such a retirement of debt by alternative enterprise/labor/investment. The loan repayment has no restriction on method by which the repayment is accomplished. The loan-maker/lender has only the concern of repayment of principle and interest. If both are repaid, the lender's contract with borrower is satisfied.)

Then why were you proposing a law that make it a crime for the loan to happen if the borrower didn't produce something additional in the marketplace?

The problem with this strategy is the temptation to loan new money into circulation for pet governmental projects. Also, the presence of easy/new money/credit expansion, makes those who are loaning money loosen their criteria for potentially profitable loans. The problem is the same distinction as playing a game with no stakes, versus playing for keeps/ with real consequences, in life. There is an edge of unreality that is introduced into the system when at any point the money does not have to be created by real work/effort/sacrifice/pain. The Fed is the only market participant who can play the game of money-creation without hard/painful/sweat-inducing work. (Granted that the Fed still must work, following rules, examining market data, debate/meet... the market does not determine the value of their compensation. Rather, the Fed determines their own pay, and all must comply with their valuation. Such is the prerogative of government.) Everyone else has to work hard for their money. The fact that the Fed doesn't have to work hard for their money, puts them outside of the market, in the realm of autocracy; they as a dictator to the market, rather than a participant in the market. The Fed is playing in a game where the stakes are not commensurate with the implications of their real life actions.

It’s about ownership and control. We allow them to control the money origination and we allow them to control the transmission. When we cannot buy or sell without their help this should be a red flag that we are in dangerous spiritual territory. When we observe them controlling the civil government of the nation, we should recognize we have abandoned the rule of law. The situation is, we will have to do whatever they tell us.

Why do I go to jail if I loan you money out of nothing, even though you are productive and build a house with it, sell it, and pay it back on time? (This is because if you counterfeit money, and loan it to me, you receive payments in government money, which all accept as valid notes that correspond to value created. Thus, you can acquire goods/services with impunity with such notes. While, the bank whose note was bought for the house is now using Xerox-created money, whose value has not been properly initiated/regulated through the loan origination macroeconomic valuation process. It's just a way of controlling scarcity of resources (money). If we have no way of restricting the scarcity of a resource, it is no longer an economic good, the money just becomes paper rather than symbols representing units of value.)

As soon as you say "valid notes" and "properly" you tip your hand as thinking it is good to give the income to the money-issuers for free, compared to the income that would have been righteously earned by the owners of money who loaned it to the borrowers and went without the use of it during the time of the loan, and had to gamble on the purchasing power of the principal if and when it got paid back. Remember, banks can loan at interest rates under the inflation-loss rate, because they do not have to worry about what it will by when it comes back, since it disappears anyway.

Over all, Thomas, I think you would be most helped by paying attention to the history of money and banking instead of having fun thinking up what would be an acceptable system in your head. (I analyze systems based on the logic, rules, dynamics of that system. History provides examples of systems, as do hypothetical and current systems. The challenge is to predict the implication and results of the governance of various systems. You have offered the gold standard, 100% reserve banking as the only moral/honest way to organize an economy. You may be right. The flaw of such a system is the very slow accumulation of wealth (unconsumed capital/monetary credit).

Is it slower that it would be as the result of God's blessing on men who keep his law and do not steal from each other? And if so, why is this a bad thing? Are you saying that Human Government can produce more freedom and prosperity through the violation of God's law?

The result of such a system is the potential unavailability of monetary capital for investment in new productive capacity, by those who are willing to work and be productive. But, such an impersonal/market-regulatory governor may be the best governor because it is the group decision that supports the wisdom of that investment. The hard decision of the allocation of scarce resources, which have alternative uses, will always be made by the market in such a system, and there will be no extended pursuit of market ventures that are not rewarded by the demand of the market. It is this refined feedback, organic/impersonal/subconscious, that regulates the market's allocation of resources to the most-needed productive capacity. The Fed does not choose winners and losers per se, but it has a bias and to an extent that bias influences the market, and that bias originated from a few men rather than the consensus of many men in the market. Thus, the Fed-central-bank type of money-introduction and de facto value regulation, is open for the short sighted error of men, and the production of forces that sustain long after the market would have responded and dissipated them -- resulting in the potential chaotic extreme excursion from stability.)

It reminds me of the 20-something my daughter heard in the next booth over in the coffee shop arguing that Communism wasn't so bad, actually, it just had never been implemented like it should. (The Fed is like any authoritarian system: it can never be implemented to perfectly meet the desires/needs of men under its authority. The chaotic/non-linear nature of the economy does not allow for sufficient prediction and intervention to be able to effectively intervene with counter-cyclical force, to prevent boom and bust. Instead, we humans, thinking ourselves wise, have chosen to control a system, somewhat akin to the weather, with force, and will find ourselves equally frustrated by our inability to accurately predict the future state of the economy, and likewise ineffective in our interventions to control the economy's future state.)

After this much history of the thing, I think it is easy to accurately predict the net consequences of fiat/counterfeiting. Dishonest money always turns people off and they quiet using it out of moral indignation. Hurry up.

Look at all the "force" words underlined above! Are you thinking of what you mean by a central bank intervening by force? Are you realizing what you are saying about “controlling the economy”? There are a lot of things the men behind the Fed are doing that we don’t know about. I am personally confident that these men are engaged in the battle against the Kingdom you and I are trying to advance. Some of them are deceived about the moral nature of what they are doing. As you approach the center, there is more awareness of the anti-human element of what they are doing in terms of theft and murder – they are not deceived about that like the guys in the outer circles – instead their deception is that Lucifer is the good guy and Yahweh/Jesus is the enemy.

The things we do know about central banking function:

1. Its purpose is to steal through deceit both for personal gains, but also for the demonic goals of centralizing the families of the nations under the singular control of Lucifer in his desperate attempts to retard the advance of the Kingdom of Christ.

2. One mechanism is to dilute out the value of all prior money in “circulation” by dishonestly pretending to increase something that does not exist. This is mainly what you and I are talking about. I say it is theft/evil all the time. You say it is only bad if it is done inaccurately.
   

3. Another mechanism is the "pump" of controlling who gets loans when and at what interest rates. This is a tool that can easily control/takeover human governments and other man-made legal persons (corporations).