I’m reposting some of my thoughts from a blog comment discussion from last week.

I agree with the perspective that our currency should go back to being pegged to gold. This would force individuals, corporations, and governments to play by the same rules of economics. The side effect is that we wouldn’t really have bubbles and manias, there wouldn’t be as much real estate development and expansion (or “economic expansion” in general) because we would have a supply-side cap of money rather than an unlimited amount of money based on lending. We would be an asset-based society that rewards actual success rather than a debt-based society that builds its wealth by taking it from the people.

An asset-based society isn’t really wanted by many people who are wealthy thanks to debt. For instance, if you run a corporation that sells a product that people don’t have a strong desire or necessity for, then in an asset-based society you wouldn’t really sell them. In a debt-based society, people will buy your product using debt – by selling their future time simply because they don’t understand the true ramifications of their decision.

In an asset-based society, it’s much harder to start and run a successful business… the only products and services that will sell well are those that people want so much that they will buy them with their actual money. In a debt-based society, people just have to say “yes” to buy something. The decision itself is the form of payment. Unfortunately, that decision is also the forfeiture of future time in their life that could be spent doing enjoyable activities. Instead, the debt-funded “yes” sayer will be working with their future time because they have to in order to fulfill their “yes” obligations. The same concept applies to debts of government, but it’s the people who will pay the obligations through taxes and inflation.

Keep in mind, being “Pro-Dollar” may be anti-American. American principles include [Read more...]