> > A money can have value, just based on its widespread acceptance and a sound > > 'open books' management. > > > What is 'sound open books', please?
Robert, It means the people who are managing the currency show the books how many (new) currency they are issuing, and give justification for the interest rates they maintain. > Widespread acceptance is a tricky subject because people do 'NOT' really > have a choice. If they do not have a choice it means there is no free market. > Who decides which is the right amount of additional currency to spend into > circulation and why does in an overheated economy get cooled off by > raising interest rates, rater than taking money out of the circulation? Money is not added to the circulation by printing it and throwing it out of a helicopter over the people's houses. At least I have never seen that helicopter pass :-( Raising interest rates takes money out of the system because people are more likely to pay off their debts if the rates are high. Similarly low interest rates encourage more borrowing, which means money is added to the system. > The macro economic effect would in theory be same, reduced growth with > possibly a brief flirt with deflation. Wouldn't that be sound fiscal > policy as opposed to playing with interest rates and seeing what happens > and how the market reacts? How you will take money out directly? By going round in town, asking everybody to hand in $100, and subsequently burn the paper on the town square? > As soon as elected, the new government announced that Venezuelian oil > would be sold in EUROs. The generalissimo who staged the coup, reverted to > US dollars, the returning government reverted back to EUROs and as soon as > they changed their policies and announced that US dollars were just fine, > the strikes stopped. Free market? Think again. I have not said we have a free market. What you describe is the politician's tampering with this market. It is not good, and it is this tampering that also disturbes the proper working of the paper money systems. > If dollars are freely available in a country, people tend to shun it - > especially if the own currency is not being devalued every couple of > years. Interestingly, all the countries in which dollars are not overly > welcome, have no tax on gold and count gold imports as a major trade. That > does suggest that the FREE market has chosen gold, does it not? In these countries , yes. Danny --- You are currently subscribed to e-gold-list as: [EMAIL PROTECTED] To unsubscribe send a blank email to [EMAIL PROTECTED] Use e-gold's Secure Randomized Keyboard (SRK) when accessing your e-gold account(s) via the web and shopping cart interfaces to help thwart keystroke loggers and common viruses.
