On the ultimate temptation to monopoly of currency

The territorial monopoly on decision making (from here on state) lives parasitically off of the production of those citizens it can keep. As productive citizens seek to escape the parasitism the state seeks expansion. It inevitably runs into other competing states. Taxation and regulation have this naturally repellent force. It is happening right now under our noses to be sure.

What other potential for enrichment does the state have? What if the state could, when it wanted, take from anyone who had stored anything in the most readily useful form that it could be stored, take money. Taxation demands money explicitly. Control of money supply is a much more effective form of taking. Thus the incentive to control of money.

From Hoppe, A Short History of Man: Progress and Decline.

“By appointing itself as the sole producer of money, the State could increase and inflate the money supply through currency depreciation: by producing an increasingly cheaper and ultimately ‘worthless’ money, such as paper money, that could be produced at virtually zero cost, and thus enabled the State to ‘buy’ real, non-monetary goods at no cost to itself.”

Given that there are competing states, the depreciation of the value of one money will lead to the purchase and use of others. So, in order to maximize the parasitic power of money control the monopoly will seek to make itself the universal money supplier by eliminating all other currencies.

Right now the US Dollar as “world reserve” status. This is a part of the demand that maintains the value of the dollar. In addition so many other state currencies have already been depreciated in value that the dollar, despite its own depreciation, remains valuable.

But, just to give quick evidence of the depreciation in value of the dollar which has enabled the taking of wealth from anyone who holds it: twenty years ago a can of soda cost $.50 (cents). Today, the same can will cost a minimum, in the South East US at a dispensing machine, $1.25. What has happened is not that the quality or scarcity of soda has increased. What has happened is that the value of that which one trades for it (money) has decreased because of the state’s control of it.

Gold, a good candidate for more lasting and stable money (that cannot be “printed” at low cost) varies in how many dollars can be traded for it. But, let’s just look twenty years ago like we did with a soda. Twenty years ago (in the year 2000) gold was priced at roughly $400 an ounce. Now (2020)? Gold is aiming at $2000 an ounce, but even if one backed off to the recent lows seven years ago one was at $1300 an ounce.

Woe to the money printers. Yeah to the miners. At least the latter requires labor, ingenuity, production and provides individuals with something they actually want. Dollars used to be tied to gold which gave the dollar its value. In the mid 1930s when Roosevelt tried to make “hoarding” illegal and confiscated gold he traded US citizens who turned it in $24 dollars an ounce. After, he promptly by fiat raised the price to $35! Now we sit at $2000 an ounce. Look to fiat currency for an explanation.

What is next? Expect the behind the scene plutocrats who see the power of the ownership of currency to resolve the current currency with a new more universal fiat currency. I wouldn’t expect a return to sanity. I would expect the illusion that a “truly universal” fiat to allow the continued taking from those who attempt to hold and retain capital in the form of currency.

One of the practical economic questions that interests me is how to capitalize on what I take to be the trajectory of the territorial monopolies and the move to universal fiat? I still need the “legal” currency to trade on a daily basis. The question of how to preserve capital seems to involve the question of how to hold value in a form that is not susceptible to depreciation from the territorial monopoly.

Published by Purilib

Anonymously interested in grasping the good life.

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