Fiat Money and Dr. Ben Carson

ben-carson

Physicians frequently believe their brilliance transfers to other disciplines. It doesn’t

Dr. Ben Carson has a check list of conservative positions he takes. All are the conventional wisdom of Republicans who unwittingly describe themselves as conservative. The fair tax is on the list. So is gun ownership and gun ownership prevents crime. Now Dr. Ben’s dialog is focused on  fiat money and and how harmful it is. This is common among the elite who have no idea what money really is.

Here is the truth about fiat money. Fiat money is actually backed by gold, more so than money that can be redeemed in gold. With a metal backed currency such as is the gold standard the free market for gold is replaced with a fixed value that is determined by government. Tampering with metal backed money supplies has been just as damaging as tampering with fiat money. Fiat money can be converted into gold or anything else. Fiat money is easier to abuse through the use of government. Fiat money would actually be a better system if the amount in circulation was not determined by the political process. Given our current political arena, the gold standard would be tampered with immediately and relentlessly the same as with fiat money.

Here is the true deal with respect to all money. Money evolves naturally in a society. Historically, gold has worked well as a naturally occurring currency up until government starts managing the amount in circulation.   The only money that has any real value is that which is derived from work. The amount accumulated as the result of work can logically be augmented by credit, up to an amount that can logically be repaid. The value of credit based money is based on future work providing a future income. To date, the world has not had a sound currency except over a few short time spans. Politics destroys currencies. Sound money has always been a work in progress. It still is.

How much money should be in circulation. Money representing value received for work + Credit representing future income from work performed.  Work is used in a broad sense so as to include corporate profits and future profits that can be logically expected.

Don’t expect an improvement in our currency unless its amount and value is determined by a free market system. The problem of having sound currency has been around since the beginning of civilization.

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About Fantasy Free Economics

James Quillian is an independent scholar,free market economist, teacher of natural law, teacher and originator of the Fantasy Free approach to economics. James Quillian does not believe lies. Contact: news@quillian.net
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