How can currency be stable What should government do to stabilize currency How can be used gold and other valued metal to keep currency strong how can be used reserve?

Answer 1

While a prevalent majority of purported economists will attempt to assert otherwise, even the relative value of a purported precious metal monetary standard will fluctuate in response to a variety of systemic conditions, including relative cost of its further production or demand for its use; and in fact, 1) since there is no fixed linkage between monetary units specified by a standard and other things of value, it is impossible for a standard such as the purported gold standard to endow currency with a stable practical value.

Furthermore, a finite resource such as gold has no capacity whatsoever 2) to sustain commerce requiring a circulation exceeding such a monetary standard; or 3) to avert further consequences which may affect the relative value of a currency, such as multiplication of debt by interest.

That is (3), merely to maintain a circulation subject to interest, it is necessary to perpetually re-borrow what we pay against principal and interest obligations. Payments against principal effectively then cannot pay down the sum of debt, as they must be re-borrowed back into circulation as subsequent debts equal to the former sum of debt. But as payments against interest obligations count none against former debt and are necessarily re-borrowed then as new debt above the previous sum of debt, thus the sum of debt increases in proportion to the circulation by so much as periodic interest on debt.

This perpetual multiplication of debt in proportion to the circulation has numerous effects, including effects on value or spendability. Ever more of a circulation is inherently devoted to servicing the ever greater sum of debt; and ever less of the circulation therefore can be devoted to sustaining the commerce which nonetheless is responsible for servicing the debt. Thus within the units of a currency subject to interest, there is a constant transformation of what proportions of the unit are devotable to each, with what can be devoted to sustaining commerce constantly deteriorating. Eventually even, a sum of debt is engendered which demands the entire circulation to service it, leaving nothing to sustain commerce.

Obviously, this inherent transformation affects the application of any definition of "value" or "stability" for currency subject to interest; and in fact establishes not only that it is impossible to enjoy stability from a currency subject to interest, but that interest is ultimately terminal to the purported monetary system.

Therefore a stable currency cannot be subject to interest.

Neither can an honored, finite monetary standard assert stability or sustain commerce exceeding its finite limitations (as in any case imposed upon a gold standard, where a circulation is required in excess of the standard).

A stable currency must overcome these imposed problems or limitations. Thus it must be available or circulate in quantities equal to our production if it is to provide a stable value related to the production for which it is issued.

There is one and one only prescription for such a currency.

That is, the only prescription which preserves the original value of a currency throughout the life or its circulation is to finance new production with notes which are not subject to interest, the value of which is fixed directly to the related assets by paying off the note at the rate of depreciation or consumption (which must be understood to be equivalent).

Thus in the case of a $100,000 home with a hundred year lifespan, a debt equal to the original value of the home is paid off at the overall rate of $1,000 per year, or $83.33 per month.

Only by said prescription is there no inflation or deflation, because the circulation is constantly equal to the remaining value of the asset. Nor is there a need for an alternate "monetary standard" (which only intends to ensure ineffectively against a contrary, defective system, that the money can be redeemed), because at all times and for every case of such a mathematically perfected economy™ (perfecteconomy.com), every dollar is redeemable in the very thing of value it is intended to represent.

Not only so; only in such a case can we the subjects of the system procure for our own labors whatever we deem to be an equal measure of the work of others.