John Médaille wrote:

>>John, I am proposing a 100% reserve system in 
>>which the government controls the quantity of 
>>currency (federal reserve notes and coins).
>Thanks for the clarification, Pat, but I didn't 
>see the mechanism. Are you saying the gov't 
>should control the quantitity of (money? 
>currency?) by just printing it? I don't 
>necessarily disagree, I just want to understand what you are saying.
Exactly, John, except that it only has to print 
it once (and replace the deteriorated bills with new ones)..

>>I would prefer a commodity-based system like a 
>>gold standard in order to completely avoid the 
>>possibility of discretionary monetary policy. 
>>However, I don't think that this is politically feasible.
>Well, it wouldn't have been feasible in the last 
>two weeks, when the price of gold fluctuated up 
>and down by about 10% in either direction. I 
>don't know of anybody who could do business 
>under those circumstances. How would you price 
>things? You would have to look in the paper each 
>morning to find out if your money would buy a loaf of bread or just a slice.
Why do you think that the gold price fluctuated? 
Was the fluctuation due to the demand and/or 
supply of gold? Or was it due to a speculative 
flight to and away from gold out of a concern for 
holding money, which many think is on the verge 
of losing a great deal of purchasing power.

Pat Gunning