Monetary Policy for a Transformed America.

I am advocating many forms of radical change in America. One of those radical changes will be to remake the money of the Union. I do not pretend this will be easy now but it will just get harder to do while it becomes more necessary. We have a far better chance of success if we undertake these radical changes now. This is one of those blog posts where a personal factor will be extremely important.  I have some problems including arthritis that sometimes act up before a storm. There are storms on the way and I am an agonizing cripple as I go through this project. 

I am not a money man! It must be among these very distinct circles of money men that  my ideas would be considered. In many ways as they examined my background they would find that I have a certain distrust for money compared to almost all  those who propound major monetary policies. Distrusting money more than most does not mean that one has necessarily got the worst monetary policy. One of the societies most famous for distrusting money was the society of ancient Sparta. In my glossary in this blog I say only a tiny bit about Sparta:  

“Sparta: Spartans were the most fierce, warlike and disciplined Greek culture. Their constitution was developed by Lycurgus from their status as a subgroup of the Arcadian hegemony. They became a diarchical mixed government military empire in which citizens were all soldiers supported by their women and the Helots whom they enslaved. Leonidas was a king who embodied their ideal when he opposed a vast Persian invasion at Thermopylae with his bodyguard of 300 picked troops effectively for a while and fighting to the last man. Arius  was a King of Sparta who signed a Treaty of Kinship with the Hebrews under the Maccabees.” 

However, there is certainly more to be said about that society. While I do not endorse everything this site says and it equates the polices with all of Greece and does not allow for the state of tribes and kingly tribal federations I am still willing to acknowledge the site as worth seeing:  

“What was more: Spartan women could inherit and so transfer wealth.  Athenian women, by contrast, were never heiresses; all property passed to the next male kinsman, who might at most be required to marry the heiress in order to claim the inheritance – an arrangement that often led men to discard their previous wife, although she was blameless, just to get their hands on the inheritance of a kinsman.  Economic power has always had the concomitant effect of increasing status.  This is clearly evidenced by contemporary descriptions of Spartan women.  They were “notorious” for having opinions (“even on political matters”!) and – what was clearly worse from the perspective of other Greek men – “their husbands listened to them”!  Aristotle claimed that Spartan men were “ruled by their wives” – and cited the freedom of Spartan women as one of two reasons why the Spartan constitution was reprehensible.  (For a comparison of women’s legal status in Sparta to that in other city-states, see Raphael Sealey, Woman and Law in Classical Greece (University of North Carolina Press, Chapel Hill, 1990), or Sue Blundell, Women in Ancient Greece (British Museum Press, London, 1995).)” The link itself is:  http://elysiumgates.com/~helena/Women.html 

That same Spartan society that distrusted money was an economic success as pointed out in this same site: 

” Sparta was the capital of the city-state of Lacedaemon.  The land area of Lacedaemon was larger than that of most Greek city-states, covering the bulk of the southern Peloponnese.  It was an extremely rich territory with considerable natural resources, including copper and tin mines, quarries, forests, and good ports giving access to the Aegean and Ionian Seas.  The fertile valleys of the Eurotas (Laconia itself) and Pamisos (Messenia) were suitable for the production of all essential foodstuffs of the ancient world, from olives to wine, as well as providing good pasture land for cattle, sheep, and goats.  It was known for the variety of its garden vegetables, including cucumbers and lettuce, which were considered distinctly Laconian.  It was famed for its horses and its Castorian hounds, both of which were valuable exports, while the horses frequently brought Sparta victories at the Olympic Games.  More important, however, unlike Athens and Corinth, Lacedaemon was self-sufficient in grain rather than being dependent on imports of this vital commodity – a critical political advantage.  In short, Sparta’s power did not rest on its military might alone, but was a function of its economic independence as well.” 

Because of the distrust of money the subjugate peoples were able to get rich and the Spartan money used by Spartans themselves was often iron, large and cumbersome. But their monetary policy worked. America will need some Spartan austerity to reach an Arcadian state of well-being from where we are now.  

America is used to paper money

 I quote from an earlier post  in this same blog that discussed how America was on the brink of a truly huge crisis. 

” Much of what is reported as wealth and success in this country is actually simply waste. Almost all our systems of accounting reward and honor some kind of waste and hide its nature as waste. Yet in spite of greatly diminishing the amount of waste that we report from the real ocean of waste produced, we still know that we produce more waste per capita than anyone in history. That is seen as horribly offensive to every responsible person in the world. It is storing up horrors for the future, straining our environment  and literally killing innocent productive people in all kinds of ways that are not reported. It is a massive national crisis in and of itself.” 

In order to address its vast national problems effectively the country must secure the value of the money it will use to manage its business. It must secure this money from the very piratical and chaotic milieu which this country itself has helped to create. To do so we will need an entirely new monetary policy. 

Paper legal tender will still be around.

 I will quote myself again from a post on this blog titled “America and the Next Big Thing”. Here I outline our basic monetary policy in the desired coming regime: 

” However, as this process goes forward we will be moving towards a society where most ego needs and heart’s desire needs are not met by a limitless desire for more expensive individual standards of living. Sharing in family and community will be incentivized. During this period of growth and liquidation we will also transition to a floating quatrimetalism as our monetary policy. The new money will tighten credit and secure our credit to some real degree always. Basically coins will make up a fixed percentage of all issued money value and count. All coins will be required to have a steel inner and outer ring. The coins will  be stringable like old Chinese coins. The four metals used will be Gold, Silver, Copper and Platinum. There will be mixed metal and pure metal coins and issues will vary with the markets by formulas designed to maximize stability. All banks will be forced to hold one percent of their assets in these value metal coins after a transition period, The Imperial House and Household Bank and the Federal Reserve as well as the  Senior Invited Guilds and the Imperial Association of Nobility and Aristocracy will form a very limited Bank of the Federal American Empire of the United States largely focusing on Specie issues.” 

I would have two steel rings on all these coins which would change their nominal value from their metal value and make them easier to use. Within that context I would call forth a formula which would allow the treasury to respond to fluctuations in the market by producing more or less of one kind of coin or another.  I would adopt the following coin types (not forgetting the unmentioned rings): 

1. platinum     5. platinum/gold  

2. gold              6. gold/ silver 

3. silver         7. silver/ copper 

4. Copper  

There will be some inconvenience if this is done.  But money flows too conveniently now. Let us look at the opposite Spartan extreme for a reference:   

“One reason why wealth was less desirable lay in the fact that Sparta’s authorities refused to adopt the system of making silver into coins in the manner of other Greek cities. Instead she continued to use unwieldy iron bars for money. The historian Xenophon commented that ‘ a thousand drachmas’ worth would fill a wagon’.Spartans were also forbidden to travel abroad , except on state instructions, and foreigners were not admitted to Sparta without supplying a very good reason for doing so . This was to prevent the citizens from being corrupted by foreign ideas and morality. ”
I am not advocating any of that behavior but it was a society with a monetary policy that worked while many have failed with a failed policy. The link to this site is: http://www.laconia.org/sparti_h_1.htm 

I do not advocate the Spartan approach or the very different return to the gold standard. However, some do advocate it today. “There is no reason, technically or economically, why the world today, even with its countless wide-ranging and complex commercial transactions, could not return to the gold standard and operate with gold money. The major obstacle is ideological.” See the link: http://www.thefreemanonline.org/featured/how-to-return-to-the-gold-standard/# 

So — yes — I dare to call for floating quatrimetalism as the new monetary policy for America. I hope America will push the world in a different direction by adopting this.