Posted by: graemebird | October 2, 2008

The Fable Of The Coiner: Monetization Of Commodities/Low-Key Support For The Extraction Industries.

Presumably blocked from “Thoughts On Freedom”.  Monetization is the lost jigsaw piece in the way the invisible hand can overcome long-term scarcity in key commodities. Particularly energy-commodities. Monetization is the lost treasure-map that brings even a “dumb” society, without plans for the future, relying on cash flow and yield alone, to make the decisions completely integral to the long-term interests of society as a whole. Monetization, under 100% backing, religiously followed, would enable a society that hadn’t even discovered double-entry-book-keeping to forge ahead with its cash-flow and generational investments seamlessly integrated.

It is the missing piece of the jigsaw Thats why I can never go for the blowing out of the gold price. to unsustainable levels, in our quest to get rid of the original sin of capitalism once and for all time. This is no criticism of Rothbard whatsoever. And I think his method was clean and had its own way of dealing with the hot potato.

 Part of the charm of commodity-money is that a commodity is more attractive to be taken up AS MONEY if its expected price is likely to rise over time due to inherent scarcity.

I tried to put out THE FABLE OF THE COINER to an unknowing public, to give a clue as to how this might work. But Humphreys only lets certain posts through. And this is a sensitive subject for Humphreys. Who by the way has been reasonably righteous lately and good on him. 

“Absolutely right. But in the first instance the fiat must give way to not just gold. Yes it might be a 100% backed gold standard. But to take up all that fiat in the first instance we need a whole line-up of commodities. We need to get rid of fractional reserve in all its forms.

(Modern money will be more about digitalization. But to get over the principle of the thing I related matters to a humble hypothetical COINER with a small licensed coining machine and a mom and pop bank.)

When a coiner goes to buy his raw material he must buy it when its right down from its peaks. He must buy it when its oversold. He must buy in the dips. Because he will use it for his coining machine and he has to buy it at the right time or else he will find it hard to make a profit.

So its natural for monetization of commodities to simply support the extraction industries from going into their lows.  To maintain the steady investment and to avoid any sort of crash. Its not about blowing out the price of any given commodity. But merely buying into the dips.

I believe this to be the natural way of things and It is for this reason that we cannot rely on Gold alone to get rid of this disgraceful, disgusting and shabby fiat money. And we cannot rely on gold alone to get rid of fractional reserve.

  1. Comment by graemebird | October 2, 2008 “


  1. “melaleuca Says:
    October 3rd, 2008 at 2:10 pm
    “I can understand how ‘predatory lending’ may be involved in the consumer goods market, but in the housing market, I don’t see how they can make money from it at all, especially if property prices are inflated.”

    Because the mortgage seller still gets paid a commission. Also what Steve Edney said.”

    Thats not quite the whole story. Its worse and more shabby than that Steve. What you don’t understand is that when the banking system creates new money they don’t just get a commision or a fee and a cut of the interest.

    They are supposed to get a couple of fees and a small proportion of the interest. But when new money is created they get the FULL VALUE OF THE LOAN PRINCIPLE AND INTEREST.

    Thats what must be understood here. And the money creation had to continue, the houses had to keep getting more expansive. Since if the money stopped being created the houses, which had been flipped many times, would have crashed in price and invalidated EARLIER LOANS AND MONEY CREATION.

    Do you guys get it now. The hot potato came to the end of the line. Now it goes from young white investors with 10 or 20 investment properties and their loans must be justified or they’ll default. The money creation must continue to justify the millionaire bankers salaries. So the hot potato goes to the last place it can go. To the 50 year old black singer who has worked and saved all her life and now she thinks for the first time she can get her own house. And they tell her that houses never go down in value. And to the black man with four kids. And they tell him that the house cannot go down in value and they offload it onto him without even a deposit.

    When they create new money they don’t just get a cut of interest. They get the full value of the principle and the interest. But what happens when you run out of people to dump these inflated assets onto?

    Well you see you HAVE TO KEEP DUMPING THEM. Any backtrack in money creation will destroy the vaibility of everything you’ve accumulated up until that date. So you have to keep going. You have an army of parasitical millionaire banking vampires that need feeding. So they keep going until they run out of people to flip these houses to and then at the end of the line they have to dump it all on the taxpayer.

    Thats what no-one seems to realise here. If you have fractional reserve inflation we get ripped off by the bankers and then we wind up having to bail them out. We always have and we always will until we tell ourselves that we will reject irrationalism and stupidity in all its forms.

    Now I’m not lying about this. You think the banks are supposed to get a fee and a cut of interest. Thats what they should get. Thats what their services demand as compensation.

    But these guys are thieves because with new money creation they get ALL OF THE PRINCIPAL AND ALL OF THE INTEREST. And they extort this off the community via currency debasement.

    Its a disgrace and every dimwitted idiot who supports fraud banking goes along with this outrage.

    So you get all these dimwitted people like Soon, Hill, Terje and so forth who are in favour of this utter racket and they are so stupid they think it is free enterprise. They can have 77000 pages of regulation but they will idiotically call this racket “free banking” just so long as fractional reserve is unrestricted.

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