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Many people confuse money with production. They fail to understand that money is only a medium of exchange, not the reason why you have an economy.   It is nothing more that a Universal Barter Card.

Free trade is what creates economies. The more individuals are able to trade freely the more prosperity in terms of choices that they have which creates more satisfaction. The more restrictive upon free trade, fewer choices that they have which creates less satisfaction. You can clearly see this in central run economies.

Economies come from people making things that other people would like to trade their possessions for. Money only helps to facilitate that trade and helps to better make more goods and services.   However, it is innovation and creativity that create new goods and services and is how markets can overcome diminishing returns (rising cost)  and limitations of the land.

If one were to increase or decrease the money in circulation, it would only means that more people have more or less of it to buy things with.   But the things that they buy are independent.  Of course more money means more things, but inflated money also means  more ways of creating restrictions which limits production in few hands.  Unless of course, you have access to easy created in which you temperately overcome restrictions.

But restriction on trade (regulations) also restrictions innovation and creativity which diminishes production.  Historically, this is why central run governments depend on inflating the money supply.  Because they do not produce wealth but consume it,  they cannot overcome diminishing returns.  So, over time wealth is concentrated in few and fewer hands as competition is restricted.  Both Government and corporate entities face this dilemma as over time as bureaucratic layers are created which is costly and stifles innovation and creativity.

So, Banks are encouraged to inflate the money supply, creating artificial booms and lots of new revenue that is often confused with prosperity.  For example, new money interjected into the money supply means that a lot more people can afford steak dinners. But eventually it all ends the same as cost rise and those people whom could not afford it before cannot afford it now.  And all of those new people who the restaurant hired to take care of artificial demand have to be let go and equipment sold. Instead of reducing cost and causing a natural boom so more people have the money, money was inflated and in this way, bureaucrats can keep their jobs too.

The real economic driver is individual production, not production based upon loose loan standards and money created out of thin air. All that does is to create things, that otherwise would not exist, and things that cannot exist when the correction occurs leaving loss jobs, loss wages, empty building, and spiritual destruction in its wake. Again, there is always a natural limitation of money due to the limitations of the land and diminishing returns.

The current problem is wealth concentration. There are too many restrictions placed upon people whom produce and too many consumers who do not produce.   So artificial money fills in the vacuum for a while offering false hope, until the bust, the result of which creates a lot of people who do not have the skills to produce anything. What is needed is the decentralization of wealth and the ending of lots and lots of government restrictions.

However, this is what governments exist for. Government exists to concentration money, and thus production. This is why we have national currencies and borders. It keeps money and wealth from leaving nations. IF this were not the case, people could go to other places with their money leaving national coffers dry.

Domestic currency forces people and nations to spend their money domestically and allows for the government collect to levy property and collect taxes. It keeps people from competing with political friends and allies by placing various rules and restrictions. And allows for more things to come from fewer companies which is good for tax collections.

This is what mercantile economies are all about. inflate the domestic currency, restrict the domestic production, and export to another nations so that those things that people need can be imported, leaving resources in the hands of the ever-increasing size of the state.  The Egyptians population riots because they do not export to the US and gain American dollars which means that they cannot buy American food to feed their population.  Farmers only take US dollars.  And America does feed most of the world.

What is really needed is for people to determine their own from of money based upon private contracts. There should be no monopoly upon money.  And for a government that only decide what form of money it can collect, and not levy private property for taxes. How else do you hold a government in check in which it can print, borrow, and take an unlimited amount of money?  What is not needed is for the common “we” to decide what money is as if they how the power.

Today, people are buying gold not as a currency hedge but as an investment alternative. But, if governments would mandate a return to gold, it would be the end for them and almost all international distributions channels. It would also be death for a lot of people whom live in inner cities which is why they keep printing money. The world would change overnight as shelves go bare, until enough people have access to gold. But of course would just go locally for their needs assuming that there are people producing things. OF course, fiat money and the thinks that you propose only create more people that produce less and less leaving them with no alternative to violence. This is how little Somalia are created.  But even a Somalian  must steal from someone who has money, otherwise without producing,  they cannot sustain themself.

But if you really wanted to fix everything and put the country on the right path then all you need are three things.

1) 100% banking reserves so that banks cannot lend out more money than they have.
2) ownership rights over deposits so that banks cannot speculate with other people money
3) and banks that only act as intermediaries with those people who want to speculate with their own money and who money is tied directly to the loan.

Implement this and everything else will come together. Eventually you will have sound money, low if any interest, and money that buys more things, not less (inflation) over time

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