@Karen

Do what I do . Copy them to a 90min audio cassette tape.

Ya had me worried Jack.
But you didn’t let me down.
Listening today I started worrying that you were proposing some kind of variance of the Mississippi Scheme. But by capping the “value of America” like you described, based on real values specifically outlined and verifiable, you escape the flaw of the Mississippi Scheme.

Nicely done.

Sure thing …will send you an email. Thanks for the great show Jack!

Interesting show, think I’ll have to go through both of them again as I was only able to give it half attention the first time through: and its a topic that needs and deserves more than half attention.

Found a link that may interest you and your other listeners.

http://www.telegraph.co.uk/finance/economics/8090902/Pimco-likens-US-to-Ponzi-scheme.html

Love the show!

I’ll bet these 2 episodes will make all our economic/banking majors storm the colleges and demand their tuition money back!!

Hey hoping it’s not too late to join the conversation on this one, and that this is the best place to do it. Jack, great show as always, I always enjoy listening to your take, and as you probably prefer it, occasionally differ in opinion with you. A lot of interesting and good points in this show, but a couple I would take exception to, and sorry for going longer than I hoped, there’s just so much good stuff in this topic to cover:

First, I agree with you that keeping the FED and adding a gold standard wouldn’t be the ideal situation, but I disagree that the FED would be just as unconstrained as they are today if we had a gold (or other) standard with full convertibility.

On convertibility, I do not see trading dollars to a 3rd party for gold (as we can today) as the direct equivalent of converting dollars back to their issuing body in exchange for that body’s physical reserves, the latter being more damaging to the issuing body/currency and thereby giving the public more say over bad policy.

On Gresham’s law: it is most accurately stated as “Bad money drives out good if their exchange rate is set by law.” (Wikipedia). Meaning that without the legal tender laws people wouldn’t have the same incentive to pull ‘good’, ie silver, money out of circulation.

So far as your plan to fix things, lets be serious, what you describe is a fiat currency managed by congress, with a formula to constrain them. Which might be better than a fiat currency controlled by the FED; we have no way of knowing unless we try it. Even assuming though that it were possible to derive a formula to calculate the sum total of value in the US (a dubious claim to say the least: consider the difficulty just in getting the census right, or the garbage number that is called GDP), and then allowing that the politicians wouldn’t mess with the formula over time to suit their needs (again dubious, consider the CPI calculations), even then is it desirable to have a monetary base that’s derived mainly from the ‘value’ of the US? I think not necessarily; the purpose of a currency isn’t to be able to ‘purchase everything in the US’ as you describe, and it’s backing doesn’t represent ‘the only value in our nation, in a hole in the ground’. The purpose of a currency is to enable and facilitate transactions, and in some cases store value, and in all these things people have a demand for wealth in the form of currency to save or to spend, and there is a supply of available currency, and I just see having a physically backed, convertible currency as offering the greatest check to the public, on those who would debase it for their own purposes. And of course historically gold has been the most popular backing, not that it’s the only option.

On Russia manipulating our currency through a gold standard: maybe you have a point here? I’m not sure one way or the other. Do you know of any historical precedent for this? I know the history of mercantilism is one of governments basically screwing themselves and their people over in the misguided goal of trying to get ‘all’ the gold. And of course if the Jack currency were in effect, the Russians could buy up resources/land/whatever in America, and then dump them or do whatever else it takes to manipulate the currency right?

On the glorious greenback you described: not my specialty, but from the bit of research I did, it seemed like any other fiat currency: the debtors wanted more, the creditors wanted less, everyone got hurt. It didn’t *sound* like anything to write home about.

On US banks manipulating the gold standard and reducing the monetary base to a ridiculously low number: I couldn’t really find anything on this, do you have any references here?

Thanks as always for the great open dialog, and apologies for any misquotes/misinterpretations of your material, I tried my best to stay accurate.

I guess what I’m asserting is that our economic infrastructure is somehow affected more than we would think, by a “lack of” labor in the US production of products and services and/or the “desire to” get out and really work in order to gain capitol. The fundamental sense of work seems to had somehow found a way to escape in the 20th century. I literally have to go through dozens and dozens of perspective employees to find one that is really willing and motivated to get an opportunity to prove his value verses demanding a “fair” wage before he or she has ever lifted a finger. I really think this has a larger impact on the bigger economic picture than what’s being recognized. Am I alone in my perspective?

Jack,
You need to read more. Congresses delegated duties are specified in Article 1 Section 8. There are 17 delegated duties.

Article 1 – The Legislative Branch
Section 8 – Powers of Congress

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

To borrow money on the credit of the United States;

To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;

To establish Post Offices and Post Roads;

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;

To constitute Tribunals inferior to the supreme Court;

To define and punish Piracies and Felonies committed on the high Seas, and Offenses against the Law of Nations;

To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water;

To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years;

To provide and maintain a Navy;

To make Rules for the Government and Regulation of the land and naval Forces;

To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions;

To provide for organizing, arming, and disciplining, the Militia, and for governing such Part of them as may be employed in the Service of the United States, reserving to the States respectively, the Appointment of the Officers, and the Authority of training the Militia according to the discipline prescribed by Congress;

To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings; And

To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.
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The trouble arose as the congress took greater power, the states did not object (they are bribed with fiat currency) and federal courts would not likely rule against the their own power.

Read Rothbard on Money and Nock on the State and Lew Rockwell on Liberty.