Market Curiosity: Exploring Markets And Systems

January 16, 2009

A way through yet another fait produced debt crisis

Filed under: Editorials — Tags: — Jeff Fitzmyers @ 6:02 am

The hard way through: Keep using force to do what never works.

The easy way through: Institute a flat tax based on local consumption at the town or city level with a property tax based on the area of land and the area of structures. No exceptions. And no need for a bunch of employees to deal with assessing and managing potentially controversial prices. The Fair Tax looks interesting. The city then negotiates with the state for what services to purchase. And states negotiate with Washington DC for services they offer. (Soon one might find that locals can provide and manage things quite well since they can thoroughly oversee the deployment of taxation.) In other words, the nation and states lose their use of force and they have to work on a contractual basis like everyone else.

At the same time announce a new currency (I like the term “goldgrams” coined by backed by gold will back M3 and cut the float of Federal Reserve Dollars by half. Then let the Federal Reserve (neither “federal” nor “reserve” (1), (2), (3)) compete with this. Other competition is welcome too.

It seems a critical mistake to define value specifically, or in anything other than metal mass. This means a car costs 5 ounces (or goldgrams) of gold OR silver. The “or” is very important. Apparently the founding fathers legally specified the ratio between gold and silver. That was a mistake since the ratio naturally moves around. Trying to stop this natural motion, after a while, failed. How many US citizens know that 1 dollar is 371.25 grains of silver? About zero since that did not stand the test of time. Go ahead and try a basket of commodities, etc. Let the competition begin.

It is also a critical to have enough transparency. Not so much that privacy is compromised but plenty enough so that an average person can understand the status of the currency.

Things will be exciting for a bit, but everyone will instantly have a choice in the nation’s money and a huge reduction in many aspects of counter party risk, unlike now which is probably why 43% of all available gold, and 33% of available silver, were assigned for delivery from the COMEX in just the month of December 2008. (The rate of assignment since then has declined a lot.)

Then rescind 1% of all laws per week until there are only 2 laws left: Do all you say you will do; do not encroach on other people or there property (from Richard Maybury). The result should be an exceptionally lean and robust system where interdependence is directly in everyones best interest.

When a politician is running for office they indicate, in writing, exactly what outcome they are going after and the consequences if they do not achieve that outcome.

UPDATED FEBRUARY 2nd, 9th 2009: Heavy edits

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