This piece by Dennis Riness appears here with his words and mine in black, mine in square brackets [], Riegel's words are in blue. Underlining and emphasis are mine. This appears to be an effort begun in late 2012 which was probably discontinued because the author could not and cannot resolve the obvious differences between Riegel and the Austrians. The E. C. Riegel Institute for Monetary Freedom is also probably defunct.
Money Series: E. C. Riegel
(Capitalized words which are underlined are key words in the Civilization Engineering lexicon and are defined in the Glossary found here: (right click then “open hyperlink”). These words have very definite meanings and should be looked up before proceeding.
[I reviewed his glossary but not his website.]
This paper is an expansion of some ideas used in Money: Executive Summary. Those wishing to see the complete outline of a private-enterprise money system should download the Money: Executive Summary on the civilizationengineering.com website.)
Introduction
This is the first in what will be a series of articles on the subject of Money. Money is a Glue component of a stable, durable civilization. Without a proper Money system in place, a civilization cannot function correctly and will self-destruct. To date, this has always been the case and that is why understanding Money is so important.
Money is a large and very confused intellectual arena. Many great minds down through the ages have attempted to define money, but no one was convincing. I spent eight years researching everything I could get my hands on regarding the subject of money and still was not convinced by anyone until I found Riegel’s work. He is the first, and I believe still the only one, who argues that money cannot be a commodity, such as gold or silver or anything else. He is saying it is an ontological impossibility for any commodity to be money.
The main purpose of this article is to highlight Riegel’s idea of what is money using his own words as much as possible. That Riegel understood the ontology of a monetary exchange like no one else is not to say he knew how to build a system that could function on that understanding. The second purpose of this article is to show where Riegel’s ideas on a monetary system were woefully inadequate or just simply wrong even though he correctly identified the nature of a monetary exchange.
There are likely somewhere around one hundred thousand books written advocating the idea that money must be based on a commodity, e.g. the idea that gold is money. The arena is a giant echo-chamber. There are only three books and one article I know of advocating, in unequivocal terms, that money is not a commodity but is, in fact, just a number stored somehow. There are many people, starting with Plato, who argue in a casual way that we do not necessarily need a gold backing for a monetary system to function, but no one else I have found argues it from the ontological, generic— not to mention passionate— basis as does Riegel.
Riegel produced three books and one article that argue the idea that money cannot be a commodity. They are:
1. Private Enterprise Money 1944 by E. C. Riegel
2. The New
Approach to Freedom 1949 by E.C. Riegel, then an expanded version
by the Heather Foundation in 1976
3. Flight From Inflation
1978 by E.C. Riegel with heavy pruning by the editors of the Heather
Foundation, published posthumously from a transcript found in
Riegel’s papers.
4. Money is the Language of Accountancy
1945 article in the Journal of Accountancy November 1945, pp 358–360.
Private Enterprise Money encompasses all the components of Riegel’s monetary system. The other two books and one article repeat and expand on these components without adding any new components. What the other three materials mostly do is expand on Riegel’s claims for what benefits a private enterprise monetary system will provide for humankind once it is in place; all the mechanics of money that Riegel envisions are covered in the first book, Private Enterprise Money.
By the title, Private Enterprise Money, one can surmise that Riegel does not include the political state in the design of his monetary system. He is advocating the separation of money and state. Riegel will not even allow the state to participate in the money-creation (money issue) process— explained below— since he believes the state has no identifiable product or service to exchange in the marketplace.
But most of all, for our purposes here, Riegel is advocating separation of money and commodity.
Riegel’s Definition of Money
Riegel begins his thesis with the observation that everything is ultimately barter— a commodity or service in exchange for a commodity or service— whether done on a direct or indirect basis. When we exchange for a monetary unit of some kind, in the end we let that monetary unit go and purchase a commodity or service with it. This two-step process is still just barter, but by an indirect means. The function of money is to liberate the exchange process from the straitjacket of whole-barter, wherein traditionally a commodity or service passes in both directions at once. The function of money is to split barter into two transactions. He started by calling this practice split-barter and later half-barter. Both terms will be used below.
Riegel bases his concept of money on a view that is diametrically opposed to the “hard money” advocates such as the Austrian School. Here are their respective foundational positions:
Austrian School: Money is equal to a Commodity (usually silver & gold)
Private Enterprise Money encompasses all the components of Riegel’s monetary system. The other two books and one article repeat and expand on these components without adding any new components. What the other three materials mostly do is expand on Riegel’s claims for what benefits a private enterprise monetary system will provide for humankind once it is in place; all the mechanics of money that Riegel envisions are covered in the first book, Private Enterprise Money.
By the title, Private Enterprise Money, one can surmise that Riegel does not include the political state in the design of his monetary system. He is advocating the separation of money and state. Riegel will not even allow the state to participate in the money-creation (money issue) process— explained below— since he believes the state has no identifiable product or service to exchange in the marketplace.
But most of all, for our purposes here, Riegel is advocating separation of money and commodity.
Riegel’s Definition of Money
Riegel begins his thesis with the observation that everything is ultimately barter— a commodity or service in exchange for a commodity or service— whether done on a direct or indirect basis. When we exchange for a monetary unit of some kind, in the end we let that monetary unit go and purchase a commodity or service with it. This two-step process is still just barter, but by an indirect means. The function of money is to liberate the exchange process from the straitjacket of whole-barter, wherein traditionally a commodity or service passes in both directions at once. The function of money is to split barter into two transactions. He started by calling this practice split-barter and later half-barter. Both terms will be used below.
Riegel bases his concept of money on a view that is diametrically opposed to the “hard money” advocates such as the Austrian School. Here are their respective foundational positions:
Austrian School: Money is equal to a Commodity (usually silver & gold)
Riegel: Money is not equal to any Commodity
In other words, the Austrian School says that money can only be a commodity such as gold. Riegel says that money cannot be a commodity and to the extent to which the monetary unit is backed by a commodity it is not money. They could not be further apart. The Austrian School is saying that money is a thing; a commodity; a something-that-has-“intrinsic value” and Riegel is saying that money is an action; a process; a modality of exchange. These are two ontologically different views. I call them the second mode of exchange (gold is money) and the third mode of exchange (number is money) respectively.
[Number is money, except that money as Value Units is also a voluntarily chosen universal world standard of measurement -sorry Riegel- equivalent to one for other weights and measures; in this case based on the value of something at a particular point in time, as a Figure 1. Thereafter the values selected by Value Units have nothing to do with the initial valuation.]
“Money can be issued only in the act of buying, and can be backed only in the act of selling. Any buyer who is also a seller is qualified to be a money issuer. Government— he means the state— because it is not and should not be a seller, is not qualified to be a money issuer.” 1-xvi (from book 1 above Private Enterprise Money page xvi)
What Riegel means by issuing money— or creating money— is the act wherein the issuer creates new monetary units into the existing monetary system by making a computer entry or writing a check against his bank account where there is no positive balance in that account. This is what the commodity-money-advocates call, always with a sneer, fiat-money, or fountain-pen money. What only Riegel understood is that this creation of new monetary units into the system is a temporary thing and the issuer ultimately redeems his issue by selling into the marketplace and accepting back at least the same number of units that he issued.
[This is the fundamentals of credit clearing which shall be the basis of the VEN and have the following as results; the vast amount of money created in the system -better than 90% of it perhaps- will be destroyed by the process of monetary circles. The rest shall be accrued as savings, which shall become progressively more important as the economy based on Value Units expands.]
The state has always just issued new monetary units and never redeemed them, this being one of its principal means of plunder [by inflation and because the government as principal buyer gets to buy what it wants despite the price. This activity deliberately distorts markets.], and this is, understandably, why the Austrian School sneers at “fiat money.” It is also an indication of how limited and shallow the analysis of the Austrian School is [bravo!] and how revolutionary is Riegel's insight to get past this treachery of so many centuries and recognize the true principle of money. [We hope that Dennis gets that the reason the Austrians have for their sneering -we call it jeering, same thing- has nothing to do with the money being fiat at all, but that all of it is government issued.]
“Any valuable thing, such as metal in coins, is not money— it is commodity, and to the extent of its value, displaces money in the coin. Money is a memorandum, a credit instrument, a bookkeeping device to effect split-barter and is money only to the extent that it obviates delivery of value by the transmitter.” 1-37
[Let's take Riegel's words apart here: when a coin contains silver or gold, that commodity with its own price and value, participates in the trade; one is bartering the quantity of precious metals for whatever, and the face value of the coin has nothing to do with it. This also explains, as will be shown in the forthcoming paper on US monetary history, why neither a single metal system, as envisaged by the organic Constitution, nor a bimetalic system in any form, stands any chance of surviving long term or of adequately effecting all the trade humanity may require. Money is that bookkeeping appliance that's used to keep track of barter and nothing more.]
“Since all money is fountain-pen-fiat money, the only question we have to decide is whether its issuance shall continue to be the special privilege of a few or the right of all. By such decision we determine the fate of humanity.” 1-37
[Fountain pens were once used quite often to make out and sign checks. We choose ultimately that the right of money issue shall be the right of all, but there will be universal rules, simple, straightforward and reasonable as they are involved with experience and trust.]
“As has been stated, the purpose of money is to split barter into two parts so the seller is free to find his source of supply later and elsewhere. This is the sole purpose of money. Any effort to use money to serve another purpose is perversive; and this statement condemns the entire managed money philosophy.” 1-38
[Managed money is nonsensical and unnecessary in a credit clearing based system. What we are saying and shall ultimately accomplish, by analogy, is making the trading platform conform more closely to quantum mechanics than unified field theory; there wont be any period of time when any data will have more importance than the quantities of this or that that were bought in a particular location and it will be up to enterprising businesses, operating within the VEN rules, to find needs and fill them.]
“The word money has two [honest] meanings:
a)
A concept of abstract value as a unit of computation. In other words, the Austrian School says that money can only be a commodity such as gold. Riegel says that money cannot be a commodity and to the extent to which the monetary unit is backed by a commodity it is not money. They could not be further apart. The Austrian School is saying that money is a thing; a commodity; a something-that-has-“intrinsic value” and Riegel is saying that money is an action; a process; a modality of exchange. These are two ontologically different views. I call them the second mode of exchange (gold is money) and the third mode of exchange (number is money) respectively.
[Number is money, except that money as Value Units is also a voluntarily chosen universal world standard of measurement -sorry Riegel- equivalent to one for other weights and measures; in this case based on the value of something at a particular point in time, as a Figure 1. Thereafter the values selected by Value Units have nothing to do with the initial valuation.]
“Money can be issued only in the act of buying, and can be backed only in the act of selling. Any buyer who is also a seller is qualified to be a money issuer. Government— he means the state— because it is not and should not be a seller, is not qualified to be a money issuer.” 1-xvi (from book 1 above Private Enterprise Money page xvi)
What Riegel means by issuing money— or creating money— is the act wherein the issuer creates new monetary units into the existing monetary system by making a computer entry or writing a check against his bank account where there is no positive balance in that account. This is what the commodity-money-advocates call, always with a sneer, fiat-money, or fountain-pen money. What only Riegel understood is that this creation of new monetary units into the system is a temporary thing and the issuer ultimately redeems his issue by selling into the marketplace and accepting back at least the same number of units that he issued.
[This is the fundamentals of credit clearing which shall be the basis of the VEN and have the following as results; the vast amount of money created in the system -better than 90% of it perhaps- will be destroyed by the process of monetary circles. The rest shall be accrued as savings, which shall become progressively more important as the economy based on Value Units expands.]
The state has always just issued new monetary units and never redeemed them, this being one of its principal means of plunder [by inflation and because the government as principal buyer gets to buy what it wants despite the price. This activity deliberately distorts markets.], and this is, understandably, why the Austrian School sneers at “fiat money.” It is also an indication of how limited and shallow the analysis of the Austrian School is [bravo!] and how revolutionary is Riegel's insight to get past this treachery of so many centuries and recognize the true principle of money. [We hope that Dennis gets that the reason the Austrians have for their sneering -we call it jeering, same thing- has nothing to do with the money being fiat at all, but that all of it is government issued.]
“Any valuable thing, such as metal in coins, is not money— it is commodity, and to the extent of its value, displaces money in the coin. Money is a memorandum, a credit instrument, a bookkeeping device to effect split-barter and is money only to the extent that it obviates delivery of value by the transmitter.” 1-37
[Let's take Riegel's words apart here: when a coin contains silver or gold, that commodity with its own price and value, participates in the trade; one is bartering the quantity of precious metals for whatever, and the face value of the coin has nothing to do with it. This also explains, as will be shown in the forthcoming paper on US monetary history, why neither a single metal system, as envisaged by the organic Constitution, nor a bimetalic system in any form, stands any chance of surviving long term or of adequately effecting all the trade humanity may require. Money is that bookkeeping appliance that's used to keep track of barter and nothing more.]
“Since all money is fountain-pen-fiat money, the only question we have to decide is whether its issuance shall continue to be the special privilege of a few or the right of all. By such decision we determine the fate of humanity.” 1-37
[Fountain pens were once used quite often to make out and sign checks. We choose ultimately that the right of money issue shall be the right of all, but there will be universal rules, simple, straightforward and reasonable as they are involved with experience and trust.]
“As has been stated, the purpose of money is to split barter into two parts so the seller is free to find his source of supply later and elsewhere. This is the sole purpose of money. Any effort to use money to serve another purpose is perversive; and this statement condemns the entire managed money philosophy.” 1-38
[Managed money is nonsensical and unnecessary in a credit clearing based system. What we are saying and shall ultimately accomplish, by analogy, is making the trading platform conform more closely to quantum mechanics than unified field theory; there wont be any period of time when any data will have more importance than the quantities of this or that that were bought in a particular location and it will be up to enterprising businesses, operating within the VEN rules, to find needs and fill them.]
“The word money has two [honest] meanings:
b)
An instrument expressing, in some numeral of the unit of computation,
a consummated half-barter transaction and involving traders in a pact
to accept it in exchange for a value equivalent to that which it
mediated in the previous exchange.
c)
Trading by means of money may be practiced in the concept a) and
under the pact in b) by means of mental or written record and without
the use of negotiable or transferable instruments.” 1-100
In my terms: a monetary unit is pure number, never a commodity.
“The conventional ‘definition’ of money is as follows:
Money is a medium of exchange; a measure of value; a store of value; and, a standard of value.
In my terms: a monetary unit is pure number, never a commodity.
“The conventional ‘definition’ of money is as follows:
Money is a medium of exchange; a measure of value; a store of value; and, a standard of value.
“This is a statement of four functions that money is supposed to fulfill, in the confused orthodox concept.
“Medium of Exchange: This is so broad that it conveys no comprehension. A vehicle, a memorandum, an agent, a verbal intercourse, etc. are media of exchange. If we say ‘a medium of split barter,’ the statement becomes definitive, because only money can serve this purpose. The word ‘exchange’ includes whole-barter, (in which a commodity and not money could act as a medium) as well as split-barter.
“Measure of Value: Money is not a measure of value. Value can be measured only by value and money has no part in the process of evaluation. Having no value, it is not a criterion of value. Money is merely a means of expressing value after it has been determined.
[We'll pardon some people for being obtuse about this but “expressing value after it has been determined” and measurement are dead square equivalents. What Riegel means by saying that money is not a measure of value is that whatever value one is measuring must be compared with what one received as value in another similar transaction. If one stops and thinks about what one spent $5 on yesterday and what one will spend $5 on today, one cannot say that the money measured those values, but that the value one received today was roughly equal to the value received yesterday. You made the comparison based on the comparable value received not what the money was intrinsically worth or said on it in numbers. Nevertheless the sales were settled the same with the same amount of money.]
“Money (the concept) is the language tool of split-barter. Money (the instrument) is the evidence of a consummated split-barter in the sum of the unit.
[To the extent that you hold onto these instruments -saving them- you are keeping them out of whatever present time market exists therefore you are not contributing to price inflation.]
“Store of Value: This apparently relates to the instrument or record of money credits. To say that it is a claim on value is the nearest concession we can make to the statement. The value that the money instrument or money record holds a claim upon, is in hands other than the money holder and is not stored, pledged or in any way identified, and the extent of its claim thereon is dependent upon the fidelity of the monetary system. If ‘store of value’ refers to the intrinsic value of coins it is also false. For instance, if a silver dollar contains 36 cents worth of silver, the coin is 64% money and 36% commodity. 1-101
[A store of value vs. a claim on value, dependent upon the fidelity of the monetary system. What of a precious metal? In a coin represented as money, it participates in the value of the money in trade and to the extent that the commodity does so, the coin is no longer money.]
“Standard of Value: This approximates ‘measure of value,’ but is an effort to capture some of the superstitious quality that attaches to the idea that money rests upon a standard commodity. 1-102
[Except that the basis of value in a Value Unit system is not based precisely on a “standard commodity” as it is the price for that commodity at a particular point in time chosen as a Figure 1 for that monetary unit. Riegel himself advocated this, but preferred to choose the dollar at a particular point in time. Our choice was instigated and explained here.]
“These ‘definitions’ are part of the arsenal of abracadabra that help to confound the student and obscure the teacher’s ignorance of the subject of money. The two meanings of the word money, the concept and the instrument or record, are indiscriminately mixed in this parrot jargon.
“The four cardinal truths of money practice are:
The Purpose of Money,
The Source of Money,
The Backing of Money and
The
Democracy of Money.
“THE PURPOSE of MONEY is to facilitate barter by splitting each transaction in halves, obviating the delivery of value by one trader (the buyer) and permitting the other trader (the seller) to make requisition for his half upon any trader at any time. This is the sole purpose of money. Any effort to employ it to influence prices or control trade is perversive.
[All government interference is harmful and moreover its monopoly of money issue insures both inflation and communism, neither of which work.]
“THE SOURCE of MONEY is the trader (the buyer) who receives his half of the barter. Since [money] arises out of the buying process, and is based upon the evaluation of the acquired value made by the buyer, it is obvious that [money] can have no other source, and is created only by the act of paying for a purchase. 1-102
“THE BACKING of MONEY: Money is given its material backing by the seller through acceptance in exchange for value. Its moral backing is the buyer’s pledge to accept it for equivalent value in free exchange.
[This too is a fundamental of the credit clearing model of monetary systems; the buyer agrees to accept back the money he spent, if not attempt to earn by trade of his labour or things, more of the same money for use in the future.]
“THE DEMOCRACY OF MONEY: Since trade is democratic, and since money is an instrument for facilitating trade, and since it can arise only from a trader in the act of selling, it is obvious that money is an instrument of democracy and the essence of man’s sovereignty over business and government.” 1-103
Here is probably Riegel’s cleanest and clearest summary of what is money:
“Money can best be understood by inquiring into the purpose of it. In simple or whole barter, there is no need for money. When barter is to be split into two halves, i.e. one trader is to receive full satisfaction in value, and the other is to receive only a promise of value, there arises the need of an accounting system and money is a system of split-barter accounting. It is essential to remember that in the process of trading by means of money, there is no departure from barter, but merely a facilitation of barter by splitting it into two parts, one half finished and the other half prospective. Values still continue to exchange for values with money acting as an interim device, but itself having no value.” 4-358
[Though we will continue to state otherwise, because we understand Riegel's meaning, the “interim device” shall have no intrinsic value, or very little, but shall operate to determine exchanges of value based on Value Units.]
The Valun Exchange
Since money is just a bookkeeping affair, Riegel proposed a clearinghouse-type operation wherein all the transactions by the participants in his new monetary system would be recorded. The record-keeping could easily be done over telephone lines such as credit card purchases are done today. All the technology to accomplish Riegel’s vision of the Valun Exchange is on the shelf today.
Riegel is calling for the creation of a brand new monetary unit which he named the Valun, which he derived from contracting Value-Unit and pronounced val-loon. Initially he called his new monetary unit a barter-unit [a bar-toon perhaps?] which works slightly better for me given his definition that the purpose of money is to split barter into two transactions. I would like to call the new unit a Riegel in honor of his being the first person in history to so forcefully shed the mind-set of “gold-is-money.”
[Well and good Dennis and so might we all wish to call it a Riegel. But the fact is that right now, we simply can not, because one man, Laurence Gilbert, has apparently secured copyright over the use of Riegel's name for his own money! This is disgraceful as well as treacherous and dishonourable and Gilbert should be considered a traitor to honest monetary reform since he has been willing to place for sale, in a dollar denominated market which is registered trademarks and copyrights administered by the government, the ideas of a man who belongs to the ages. Perhaps Gilbert's rash and tactically irresponsible move will not prevail and a future respected conference of real monetary reformers will overrule his rude claim to any and all copyrights and proclaim the Riegel as the official internationally accepted name for the new money. Only time will tell.]
No one else I have come across ever made that leap with such semantic force. A suitable symbol for me would be a B with a vertical line through it— a B(arter) and a U(nit) contracted as was the U(nited) and the S(tates) that became the dollar sign, initially with two vertical lines and then just one— and pronounced Riegel.
[Nice. Well Mr. Gilbert has other ideas and has acquired copyrights over them.]
Riegel envisioned a group of merchants and businessmen coming into agreement to begin exchanging with one another in the new Valun monetary unit. Since money comes into existence only through the act of buying, there is no money in the system until the first exchange takes place.
[Before we allow this to proceed any farther without sensible comment, it will be recalled that Laurence Gilbert wrangled over whether accounts could be set up in any exchange without a purchase occurring first. This is like asking whether the chicken proceeded the egg or vice versa and evades the crucial point. Though no motion occurs before the sale is made, the means has to be a fact before the sale even if this means be the issuance of new money rather than spending previously obtained money. What Riness now proceeds to do is demonstrate credit clearing.]
Here is the status of the system after the first day’s exchanging:
Mr. A buys something from Mr. B for 10 Valuns.
Mr.
A goes negative in his account which means Valuns have come
into existence.
Mr.
B receives the 10 Valuns into his account and his account is
positive.
The total volume of Valuns created on day 1 is 10 and the total Valuns remaining on the books is 10 at the close of exchanging on day 1
The total volume of Valuns created on day 1 is 10 and the total Valuns remaining on the books is 10 at the close of exchanging on day 1
And so it goes each day bringing more exchanges and each participant’s account moving from negative to positive to negative etc. The volume tells how much buying and selling occurred that day and the open interest tells how many Valuns are in the system ready to be canceled some day when the holder of a negative account becomes a seller and receives Valuns into his account to bring it again toward a positive balance. The point is to note that Valuns come into existence and then go out of existence as he who was first a buyer (issuing Valuns) becomes a seller and redeems the Valuns he initially issued.
[This
becomes the essential mechanism of the entire system; credit
clearing.]
The
Launch of the Valun
Launching a new monetary unit immediately faces two challenges:
Launching a new monetary unit immediately faces two challenges:
1)
what are the prices of things to be when expressed in the new
monetary unit and
2) how many new monetary units should be issued
in the new system?
Riegel does not offer a satisfactory solution to either of these questions.
Riegel does not offer a satisfactory solution to either of these questions.
Riegel depends implicitly— and I think unknowingly— on a Monetary Matrix being in existence in launching the Valun Exchange [the current US dollar of his time]. He is silent on the creation of the first Monetary Matrix and wobbly on how to launch new monetary units into a marketplace where an old monetary unit is in existence.
The Monetary Matrix
The Monetary Matrix is my name for what is created in one’s consciousness when a monetary exchange takes place, whether the monetary unit is a commodity or not. Whenever anyone deviates from whole-barter in their exchanging, they have shifted from valuing the gold coin as gold and instead begin placing their value on the number on the coin, that is, on its monetary value not its commodity value. When this shift takes place, one begins to develop his/her personal Monetary Matrix. In very short order, one does not care about the gold-content, or the gold-backing of the monetary unit and only cares about the number on the monetary instrument. This is the maturation of the Monetary Matrix. This is the evolution of exchange from barter to quasi-money (gold as money, not as commodity) to money as Riegel characterizes money.
The Monetary Matrix becomes that knowledge of market prices that one acquires over time by producing and exchanging in a particular monetary unit in the marketplace.
My personal Monetary Matrix is calibrated in US Dollars. This means I do all my financial reckoning in that monetary unit. If I go to Europe and try to reckon in the Euro marketplace, I will at first be converting all Euro prices into US Dollar prices so that I will be able to get Euro prices mapped back into what I know, my personal Monetary Matrix denominated in US dollars wherein I do my reckoning. If I continue operating in the Euro long enough, say several weeks or months, I will eventually become calibrated in the Euro and not have to convert Euro prices into equivalent US Dollar prices in order to make a financial decision.
Acquiring a second Monetary Matrix in a new monetary unit is analogous to learning a second language or working with English units versus Metric units or Fahrenheit versus Centigrade degrees. These are all examples of reckoning done in different units where the object being reckoned remains the same be it temperature, market price, etc. regardless of what unit it is expressed in.
[Of course the proposal on this blog would add another Monetary Matrix.]
The question is where does this Monetary Matrix come from exactly? How does it come into existence? The original Monetary Matrix creation is a fascinating story and explained best by the Austrian School and will be developed in a subsequent paper in this series when the Austrian School’s contribution to money theory is covered. For now, our purpose is to explain Riegel’s proposal for launching a new, alternative monetary unit into an existing monetary environment with its concomitant Monetary Matrix.
[Believe me, Dennis, the Austrians have nothing on good old common sense which lies at the heart of Riegel's observations (and the Austrians do not deserve to be celebrated half as much as they are either). If the people choose to base a new and durable alternative monetary system on precious metals as a basis of Monetary Matrix (I like and accept the term and what it means) that accomplishes the additional function of providing a useful exchange between all other “public” money and any new Value Unit, as frankly according to law and custom, we do not ever want to be holding “on account” any of their money.]
[16 May, 2014: UPDATE I thought you might like to know that this man has been arrested for organizing a tax evasion scheme involving a phony "church."
Man Gets 13 Months for Role in Tax Evasion Plot
Thank-you and duly noted. This blog's proposal does not involve tax evasion so if anyone had that in mind they are advised to look elsewhere.]
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