2015 May 24 What is Money: Physical or Just Defined pt 2

See Part 1 here

>In your loan contract you are saying that if the borrower utilizes his borrowed money to produce value (which, I assume, you mean increase the goods and services available in the marketplace), you are thinking about the normal process whereby men trade their labor producing a good or service – for money, and then this money (or credit/debt) is utilized to retire their debt with the borrower. If they do this, it justifies the debauching of the money, but only the private banking system is granted an exclusive monopoly to do this. If anyone else tries to do this they will be punished for the crime. You also imply, in the idea of “justification”, that if the borrower doesn’t produce sufficient “value”, that something will be un-justified about the whole borrow/repay project. Someone will have done something wrong, like a crime that has to be punished. I have asked you repeatedly what Scriptural law would be broken here and what punishment is specified if this should happen? Let me give you a real scenario.

>John needs to sell his house and build a new one. Building takes a year or two, what with permits, engineering, driveway modifications, and actual construction with will have to schedule by the calendar. When the prior house sells cannot be absolutely controlled. Rent is expensive….so……Need a bridge-loan. Need a line of credit about 20,000 to get things going, and can pay it back when house sells. So, would it be moral to have QuickenLoans reckon up money out of nowhere for me to give the contractors for 3 months before the house sells, then pay them off with the proceeds of the sale? Would it still be moral if we change our minds about the actual building, or the contractors finally admit they cannot build the house within budget and we just have to rent till the money is gone? How would Jesus judge me in the last day then? Or is it the Federal Reserve System’s sin to let this happen? Should the national government punish them or me because I did not produce anything to pay back the debt, but just paid back with money that I had. It was not money I earned, but represents money my wife received as inheritance, by gift. Would it be sin or crime to borrow up imaginary money for a while, when you had other kinds of wealth stored you could have used instead, but just wanted to borrow anyway, then you paid it back out of non-earned wealth whenever you pleased? On the other hand, you seem to be real happy with a simple wage-earner who borrows imaginary money from a bank and then slaves away at his wage-job, manufacturing widgets, or mowing laws, paying back tiny amounts on principal for 40 years out of a tight budget.

Rather, money can only be physical, as per the the 1792 coinage act.   Money can only be a substance that everyone agrees upon and is enforced by government as a definition of the value of a unit of the money.

>See above on money not having to be physical, or what we normally think of as substance and how imperative it is to have a definition and capability of being measured, falsified, or verified. You do not have to have everyone agree on its use, but you do have to, at least, have a critical mass of folks willing to use it. Government is not essential to endorse or require money. This has not always been the case in the throughout the first 5900 years of human history. Much of the time, the marketplace determines the means of exchange used. Government does have a powerful influence over the marketplace, though, in what it chooses to require in payment for taxes. Once support for law enforcement becomes coercive/mandatory, the government is in a position to also require which type of money will be approved as tax payments. This has a tremendous influence in the marketplace. Also, the use of the word “value” in this last sentence is very close to the wording of the Constitution where value referred to the QMS context of number of grains of weight of the alloy – Only Congress could dictate the size of the coin used as the standard Unit of Account.

Expanding your objection to using debt as money, you totally reject the concept that notes representing contracts to produce future value (goods/service) could be used as money (i.e. as a medium of exchange).

>Maybe we could say a debt -- whether or not it is used and valued as a defined item in trade – is the absence of money. Hopefully, we can tell the difference between the presence of money and the absence of money. We are back to telling the difference between a mountain { presence of rocksoil } and a hole in the ground { absence of rocksoil }. Hopefully we can verify [money is there] or falsify [money is not there]. If you can’t, I am happy to inform you that you really do owe me 100,000.

>A contract to deliver a good, a service, or an amount of money some buyer or seller of that good or service values as an equivalent certainly could be defined, measured and counted. This contract could be traded because it would be valued by vendor and customer. Actually, I think we do this all the time. For instance, I assume a contract with my employer that if I come to work on time, obey most of the rules, answer my callers’ problems in a professional and courteous manner – that they will tell J.P. Morgan Chase to pretend to owe me some quantity that cannot be counted of some measurements which cannot be defined of some substance that cannot be defined. But I also assume that Fred Meyer gas station values these fictitious ‘credits’ enough to trade gas to me. It all works until it doesn’t, and no power on earth can stop people from figuring this out, eventually, and repudiating it after much damage has been done. The power of Heaven, is very much interested in training the human race by utilizing debt, ;poverty, slavery, famine, war, and disease as disciplinary consequences for man’s propensity to think that someone else is more just, more good and more powerful than the God of the Bible. Surely there must be a wiser, more gracious plan that His laws?

You consider the value associated with a contract to be meaningless/indistinct/intangible and hence not-money.

>Over and over we have hammered on this. Value is determined by the buyer in the trade. Value is not meaningless. Many times we can estimate / anticipate approximately what buyers will trade for something. With Redemption of money for symbols / tokens / representatives of money units – we need to have a more certain and exact definition and integrity-to-deliver. Remember the specifics of the old Silver Certificate:

There is on deposit

In the Treasury of the United States

One Dollar

In Silver (silver dollar having specific, verifiable definition)

Payable to the Bearer

On Demand.

When you have 2,000 balance on your account at the bank, you do not want to hear when you go to withdraw, “I’m sorry, we only value your account balance units at “10” today. Nor do you want to get the 2,000 and go out to buy with it, and discover that it will only buy 10 of something that it could have bought 2,000 of last week. Prior to the 70’s the standard phrase for RepresentativeMoney which might or might not be redeemable for the real QMS/Defined money – was “Paper Money” (and so in the following quotes). The well-understood problem, from the early 1600’s to the 1970’s when the RepresentativeMoney became even less-real than paper bills, was the irredeemable, extra notes that thieves could not help increasing in the banking systems. And so in this quote:

“It would be a great mistake to suppose that the statesmen of France, or the French people, were

ignorant of the dangers in issuing irredeemable paper money. No matter how skillfully the bright

side of such a currency was exhibited, all thoughtful men in France remembered its dark side. They knew

too well, from that ruinous experience seventy years before in John Law’s time, the difficulties and dangers

of a currency not well based and controlled.

They had then learned how easy it is to issue it; how difficult it is to check its over-issue; how seductively it leads to the absorption of the means of the workingmen and men of small fortunes; how heavily it falls on all those living on fixed incomes, salaries or wages;

how securely it creates on the ruins of the prosperity of all men of meager means a class of debauched

speculators, the most injurious class a nation can harbor, more injurious, indeed than professional

criminals whom the law recognizes and can throttle; how it stimulates overproduction at first and leaves

every industry flaccid afterward; how it breaks down thrift and develops political and social immorality.

All this France has been thoroughly taught by experience.”

http://mises.org/literature.aspx?action=search&q=Fiat%20Money%20Inflation%20in%20France

pub. 1896, Andrew Dickson White (1832-1918)

You do not recognize that the contract associated with a man’s commitment to do something in the future has any validity as an instrument of the representation of value.

>It will not represent like the old redemption process where there were two issues: the 1 for 1 relationship between the certificate/claim-check and the deliverable QMS real money promised to the bearer/holder of the claim-check – and the reliability of the Redeemer. Could they mathematically redeem it? And Would they righteously redeem it willingly at the right time? A man’s commitment to do something in the future if the “could” defines it well and is possible, and if the committer “would” follow through on his commitment. That is all fine for the goods/services-side of the agreement, but our concern is not that side, but the money-side. Thomas, What is the Money-Side? How is it defined? It is no good trying to define it by saying it is the value of the man’s-commitment-side. What will he trade that for?

You consider that money (the medium of exchange) can only be based upon a specific quantity of gold/silver/real substance. Thus, any definition of money as a contract (i.e. commitment to produce future value), is not only an incorrect definition of money, but rather, such a medium of exchange is simply not money\

>See above about not needing to be gold or silver but just being honest based on a verifiable definition, and remember we are not trying to define the non-money-side of the transaction, but the Money-Side. What are those units we are counting?

The problem with such a stand is that everyone is using debt-based (contract to produce future value) money as a medium of exchange every day, in all transactions.

>The fact that everyone is pretending to use something in no way stiff-arms away the guaranteed consequences of this well-studied cause-and-effect phenomena, but only insures that the devastation will be as damaging as it can be. Please wake up to the historical witness that this perversion and attack on language is morally reprehensible and destructive to the human race.

"The monetary managers are fond of telling us that they have substituted 'responsible money management' for the gold standard. But there is no historic record of responsible paper money management ... The record taken, as a whole is one of hyperinflation, devaluation and monetary chaos." Henry Hazlitt

Attributed to Thomas Jefferson:

The modern theory of the perpetuation of debt has drenched the earth with blood, and crushed its inhabitants under burdens ever accumulating.

I hope we shall crush in its birth the aristocracy of our moneyed corporations, which dare already to challenge our government to a trial of strength and bid defiance to the laws of our country.

in a letter to George Logan, 11/12/1816

We are undone, my dear sir, if legislation is still permitted which makes our money, much or little, real or imaginary, as the moneyed interests shall choose to make it.

But, rather than saying that this is simply a type of money that is subject to manipulation, you have gone one step farther (which is my point of disagreement) and said, that debt-based money is not money.

>But you are not describing money, you are describing the other side of the transaction from the money, and trying to use that as the money instead. This could be compared to asking, what is the price of the dollar? You silly, dollar is the price of the dollar. How many ounces in one ounce. How many pounds in a pound. What I’m trying to get you to see more clearly, is money measurements are like weight measurements. You have to understand that the measurement is a measure standard, but that it is not the same as the substance you are trying to measure.

There are pounds and there are beans. Beans is what you are trying to measure. Pounds are the measure you are using. What you are trying to do is pretend to get corn to be priced relative to the amount of beans you don’t have without being honest about the fact that you are trying to scale your money you are using to buy the corn is the absence of beans, and you are trying to obscure any determination of what units of measure you are using to measure out the beans you don’t-, and never- had.

>Trying to say that debt-based money is money is like saying the mountain you are trying to sell me is really a hole-in the ground. How much hole will be equivalent to a mountain – realizing that you are refusing to clarify any unit-of-measure you had in mind to measure the positive dirt, or the negative space-where-dirt-ought-to-be-but-isn’t.

You consider the concept of money based upon contracts to produce goods/services as inherently wrong, evil, unGodly, and you have made it your life’s work to convince people that your definition of money is right, and the rest of the world is wrong.   This is your crusade.

>I am trying to get you to use language honestly, and not twist it to mean something that is not possible to be “meant”. I’m trying to convince you that having any definition at all is necessary and that your attempts at a definition is failing to communicate anything definite we can talk about. As to the “Rest of the World”, you puzzle me, because I am doing wide reading in the “Rest of the World”, and quoting from them, and keeping what they say and write in mind as I think and write – whereas I have no idea where your ideas are coming from or who else in the world holds them and defends them intellectually – besides your own analytical thinking. I would covet for you to read/listen in more Biblical, Reformation, European, World, and American History. And I would work hard to give you the most important free links that could contribute most efficiently at trying to see history from what I think is an orthodox Biblical perspective.

You believe that trading notes based on debt is not honest money, since it is subjective.   You believe that it would be better to have a specific physical definition to give the dollar a foundational reference point, and a point of accountability for both bankers and merchants.

>I don’t think you can have accountability unless you have potential sanctions (punishments of law), and you cannot have law without clear definitions (not necessarily physical) There has to be away to distinguish between true and false accusation.

At that point, given the disagreement on the fundamental definition of the entire subject, there is no point in talking any more about current economics, since all money is based upon contracts/notes/debt.

>Any money not based on a definition that will withstand thinking clearly about it is not going to work. The kind of think you are trying to use as money seems to fail the test. A Contract has to spell out clearly what is being traded, given, paid, or promised. Otherwise you cannot tell if the terms of the covenant have been me or violated. I do not find you answering the “what” that is being traded in the covenant. A note specifies what is being borrowed and paid back by whom, when. You attempts to define do not define the “what”. A debt implies something is going to be paid. You do not explain adequately what is going to be paid.

So, at this point you leave conventional economic theory.   At this point, you stand outside of the economic system and declare everything that everyone says about money to be wrong, because it does not match your definition of money.

>What definition is going to leave out what is being traded, how it is measured, and the count of those measurements? Surely I am, thankfully, outside the mainstream, popular, contemporary theories. But I do not represent the minority, when taking all into account. I stand with mankind’s historical position, as well as a multitude of contemporary (minority) Christian and Austrian economic scholars. Where are your intellectual defenders? Where are the like-minded souls explaining these things during and prior to Andrew Jackson?

No further conversation can take place until there is agreement about the definition of money.   All further discussion of money, banking, finance, economy, trade, will be met with disagreement, because you are applying your definition of money (money as a specific amount of a physical substance) to the complex conversation, while the other person is using another definition of money (money as representation of contract to produce future value of goods/services).

>I am arguing that a good or service will be valued by men. That good or service can be defined. Efficiency is required for trade in our specialized modern world. This is greatly aided, perhaps absolutely necessary, by having a universal-as-possible unit of account to allow men to agree on trades by having that knowable Means of Exchange. You are wishing for a Unit of Account that has no units to count. You are wishing for Means of Exchange which has no means. You are wishing for a Store of Value which has always proven not to store value but to steal it. You are wishing to utilize a contract which can never meet the requirements of a contract through undefined-ability. If our conversation proves complex, how much more important to define terms clearly.

All discussion beyond a debate about the definition of money will be met (by you) with disagreement and rejection of the concepts presented.   This is inevitable, since your definition of money is different than theirs.   Your contribution to the debate with a person from conventional economic sphere is always disagreement at every turn that what they are talking about is not money.     The problem is that the focus of the debate always returns to your point that your definition of money is right, and their definition of money is wrong/incorrect/dishonest…   Thus, up front, you should say, “I will respond to all your points with the objection that what you are speaking about is not money.”   Therefore, the only thing we should talk about is the definition of money.   We will have that single discussion in many different contexts: FRB, fiat money, the Fed, gold standard, printing money vs. minting money…   This single and simple point should be re-emphasized on a regular basis throughout the conversation, that the debate is only about the definition of money.  

All this could be easily resolved, just by noting that you have a unique/personal definition of money that you think is right because of the textbook definition of money that you read/heard somewhere, and because of the Constitution and coinage act of 1792, and references to gold in the Bible.   You believe that it would be a better system, to base money on a fixed amount of physical substance, and that new money should not be created when people agree to make future production.

>All answered above about it not needing physicality in order to have valid definition. I hope you can understand my reasoning about how borrowing and paying back units of money does not have a moral or physical binding on what actions or what services and goods (production) a man may trade for the money.

At that point, we can talk about the merits of each system.   But, as the discussion is currently going, there is no progress possible, since you do not accept that people are even talking about money (a medium of exchange) when they discuss the relative merits of the two systems.   You simply reject that there is even a discussion about money, because what they are talking about (a medium of exchange using notes representing contracts to produce future goods/services as representations of value) is not money.   So, you trump every point made in a debate by simply saying “That’s not money”.

Thus, all conversation after that point is pointless/moot/frustrating.   There is no possibility of mutual understanding and agreement, because any discussion about complex/secondary/tertiary concepts/implications/correlations/applications/policy/procedure will be rejected because your definition of money is unique to you.

>It would help me if you would provide a couple other authors or speakers who show how to count measurements without any definition of what they are measuring. Should be easy, since everyone else holds to this and I am along in the history of the world.

You have rejected the actual functional definition of word “money”, which is in common usage by every man in everyday commerce, as well as the definition of money used by the entire subject of economics, and all those who function inside the economic realm (bankers, governments, economists, and philosophers…).

>True, I have rejected the mainstream non-definition. Remember, that what I am explaining to you is the same essential way the Federal Reserve documentation explains it in “I Bet You Thought”, and “Modern Money Mechanics”. Are you sure the economists and philosophers who write about the economic realm (including those who wrote before 1694) in the Austrian and Christian tradition embrace your definition?

The result of you defining money in a unique/personal way is that you find no agreement with anyone you debate, except those who hold/agree with your definition of money.   As such, you have not been able to engage in productive/mutually agreed upon complex conversation, because the foundational definition you have chosen will not agree with anyone who lives in the modern world.   Such is the problem with trying to change the definition of a word as a one-man crusade against the English Language.  

Thus, because of a complete disparity in the language you use, from that used by others, it is not possible to assemble simple concepts into complex concepts, and then manipulate those complex concepts in a way that organizes for common action.

>It’s pretty easy to manipulate complex concepts once you do violence to the simple concepts. It is easier if you take a word like “value” for instance, and when it has two different and distinct meanings – utilize it like the two meanings are the same in order to make the cost of borrowing much cheaper and make it much easier to escape detection when you are partnering with a thief.

Given that you have a singular/unique/personal definition of money, you should give your concept a name that is distinct from the name that everyone else uses.   You should call it something like “substance-defined money”, or SDM.   You can then make a distinction from everyone else, who is using the concept of Debt Based Money, DBM.

As you hold the definition that money is money only if it is SDM.   Thus, It is not possible to merge your concept of tangible physical money into a discussion of contract-based money, DBM, because you completely/absolutely/totally reject the possibility of expanding the concept of money into the abstract and symbolic.   You are firmly planted in the conviction that any symbolic representation of contract that is not related to an actual specific, quantified, substance is not money.   You believe that DBM may be something else, but it definitely should not be called money.

>All I ask is that in your debt-based money, you define what it is you are paying the debt back with, and if your money is symbolic, I would like a clear definition, be it physical or idealogical, of what that money symbolizes, and how you are measuring it.

If the discussion goes any further than an overtly identified conversation about the definition of money, anyone debating with you should realize that the rest of the discussion will only be about you presenting evidence and argument that your definition of money is the Right/Good/Godly/Divinely ordained definition of money, and that any other definition of money is wrong/unGodly/and ultimately evil.   If the topic diverges into complex economic concepts, you will reject/ignore/refute/counter the validity of all such theory/concepts.   This is because your foundational assumption about economics is that your definition of money is the only true/right/proper definition of money, and if they talk about complex economic concepts, you will then disagree, based upon your objection to their definition of money.

  T.

Bottom line:

1. Christ owns it all. He gets to say who does what, who trades what, what the laws should be, what the crimes should be, and what the punishments should be for them.

2. In our discussions, I appeal to you to embrace the wisdom of the Holy Spirit to know how best we are to live in a fallen, sinful world and deal with the rebellion and damage. I appeal to you to embrace the power of the Trinity to protect, provide for, and bless His faithful, and to bring offenders to justice completely glorifying His name. I appeal to you to embrace the goodness of Jesus Christ confident He controls all things concerning each individual, and that no one human or group of humans can design or carry out any better design than He has in His love for each.

3. God, the Word, has spoken clearly about how He will judge all at the last day, that diligent study and sharing of that word has never been wasted or fruitless. Once He has clearly laid it out in one part of His instructions, He does not have to repeat Himself unless He chooses for emphasis. When He says in the Epistles, let none suffer as covetous, He need not re-describe the ways coveting is manifested if Moses already covered that.

4. If banks violate the criminal law of God, it is still the responsibility of the individual and that individual’s government to force God’s criminal sanctions on that personal or corporate entity. God’s holds individuals responsible, both the offender and the Bystander. No one can go unpunished for false accusations, and silence can be sin and crime as well if a form of partnering with the thief or false witness.

5. None who place their hope in Christ or trust His Word over any other voice – will be disappointed.

6. The law specifically states you can only receive rent on money from a non-covenanted member of a society. Apparently to help them learn the associate with the slavery to sin of being in the non-redeemed state, and the freedom wherewith Christ has set us free. If it is a sin (not a crime, though, no civil punishment is listed) to pay and receive interest/rent on a loan between believers, how much more shameful to Christ to have the believer pay interest/rent to non-believers or a corporation "created" by the civil government? This forces trade partners to form their contracts more on a partnership/percentage basis, where the terms are drawn up so as to share -- according to their relative contributions -- how they will split the gains or losses. Instead of demanding a secure, definite profit out of the arrangement of the use of capital, the recognition is made that God will determine whether the venture prospers or fails, according to His will. This glorifies God, plus leaves room for human dignity and freedom and avoids the debt bondage. If this was followed, we would not be at the mercy of the boom/bust cycle manipulated by the banks which appropriates the wealth of so many.