I spelled silver wrong!! What an IDIOT!!!!! Ummm did I spell Idiot wrong?? 😉

Great show Jack!
Your show is often a needed voice of sanity in the “survivalist movement”. I am seeing so much nonsense in the cause of fear-based marketing that I am coming to hate the term “survival”– Just like “tactical” became the buzzword in the gun industry (like when the $500 .223 varmint rifle is resold as the $800 Tactical rifle).

You said that when Congress raises the debt ceiling or spends money, the Fed never says no. But that doesn’t answer my objection at all. Of course the Fed never says no… but they’re not the ones who make Congress raise the debt ceiling. Congress does that all by itself. All I said was that I think the people would be as good a check on Congress in the area of the money supply as they have already proven themselves to be on those issues originally given to Congress to control in Article I, Section 8. And I disagree that the Constitution gives Congress the right to issue paper currency. I realize you’re going to disagree with me on that, so don’t even bother to rebut this point, but I think that the wording of that section of the Constitution, combined with the disastrous inflation experienced under the Articles of Confederation, show that the Founders didn’t like and didn’t want the country issuing unbacked paper money.

Also, you seem to think that I argued somewhere that I wanted to keep the Fed. I made no such argument. I argued for private individuals to control the money supply. You seem to think that this is synonymous with Congress controlling the money supply, but I think your argument is akin to a Communist claiming that their government is the people’s government and government property the people’s property. Sounds nice in theory, but it never actually works in practice (And no, I’m not comparing you to a communist or implying your a communist, just pointing out that this single argument you make on this single issue is basically the same argument the communists make on every issue, so please don’t get offended).

As to your objection that it was private bankers who created the Fed, while it is certainly true that the bankers got together to plan and structure the Fed, and that they pushed for the Fed, it was an act of Congress that brought it into existence. Those private bankers could never have created the Fed without government interference. The Fed could never hold a monopoly on money without the support of the federal government. That is the exact same thing that Congress and crony capitalists do in other sectors of the economy: taking a problem caused by government intervention and proposing a solution of more government intervention. I don’t see why you say that the solution to such problems in say, education or health care is more freedom, and yet claim that the solution in the realm of money is to hand complete control of the currency to government (though of course, they have it already).

There was indeed a currency contraction after the civil war to get off the greenback and back to the gold standard. But I don’t see why you’re so fixed on the amount of physical money in the economy. If the amount of money shrinks, prices and wages go down. If the amount of money rises, prices and wages go up. The numbers don’t matter, so long as a) the wage/price ratio doesn’t change, and b) the numbers aren’t so large or small as to be impractical. If we went back to gold, there’d be horrible deflation, just as there was deflation in 1981-1982 with Reagan/Volcker when they shrank the paper money supply by raising interest rates. But with the amount of money in ciculation right now, a deflationary period is inevitable, anyway. Why not at least use that period to get onto a sound monetary footing with a form of currency whose production price is something higher than zero? Because that is the real reason precious metals have always been so valued as money. Metal costs something to mine, and metal coins cost something to mint, meaning that the supply balances out when the manufacturing of the tokens becomes unprofitable.

I also don’t understand why you hold up the greenback as an example of a successful currency. I don’t know how inflated it became during the five years of the war, but the fact remains that no matter how well or badly it did, it only existed for five years, which is not nearly enough time to field test a national currency. Would you have suspected a problem with the Federal Reserve in 1918? Or if you prefer a time frame in which there was no war, from 1921-1926? Probably if you’d lived in 1926, with a booming economy and no special knowledge of money, you’d have thought the whole central banking thing was doing pretty good after all.

There is one thing you have said that has some merit. It is true that with a publicly issued currency, it would not be issued against debt. However, the problem with the debt is not the debt itself. It is that in order to pay it back, you have to inflate the currency in a never-ending spiral until it becomes worthless. Since Congress would have the ability to inflate the currency that way anyway, I don’t see what difference it ultimately makes whether it comes about as a result of paying back debt or so that Congress can spend what it likes.

Finally, I never said I revered priavte bankers; merely that in a free market, there would be more checks on the ability of private bankers to issue banknotes based on commodities than there would be on governments to issue unbacked currency in a mixed economy. Those who argue in favor of a government solution always seem to think that those arguing in favor of a private solution are promising perfection. That’s never true. Private solutions aren’t perfect. They’re just less problematic, and the problems have the ability to correct themselves without crashing an entire system.

I just finished listening to this episode and was quite impressed. However, using our forefathers notions of promoting entrepreneurship, I would prefer to be a sole propietorship instead of just a stockholder.

Duh… won’t = want….LOL

Speaking of gold, I have a question. If the United States moved to a system in which its currency was based on the total value of nation’s goods, services, property, and capability, what would that currency be made from? Would it be precious metals, carbon fiber, leather? What would I carry in my pockets to buy eggs?

An interesting episode. I especially like Jack’s look at the United States from a business perspective. A clever and insightful way of looking at the country from another angle.
I do think he falls down though, when he speaks of how the citizens of the United States are special, more hard-working, and somehow possessing more knowhow and wherewithal than citizens of other countries.
While many Americans may well be hard-working, intelligent, and all the rest, they are no more so than the people of any other country.
I’m sure the Romans and the British thought that they were quite exceptional too….

You may be right.
But to me he seemed to be counting the ‘specialness’ of the American people as an asset that contributes to the value of the American dollar. I just don’t think that this ‘specialness’ exists.