Money, money, money — excuse us, currency, currency, currency. Money came to be, common sense (government unfettered human ingenuity) says, when humans began to trade. Surely, the first banker thought, if I can get the ones who have grain to trade, but nee fur, instead of arguing how much grain to give for a bear skin, to use a common item for exchange, trade would be much simpler and easier. So, as I am already recognized as an arbitrator for trade, and would guarantee that this yellow, desirable metal can represent so much value, to represent the value of grain, fruits, furs, meats, and so forth; then there won’t have to be so much bickering and wasted time. And I’ll take a little piece of yellow metal for myself. The metal will represent so much value that it can be used any time. Everyone will know how much can be exchanged for what they need. I can make the yellow metal into different size ‘coins’ and every one will benefit and be content. So money and bankers came to be.
Since then, money or currencies have run a gauntlet that puts a multi-thousand piece jigsaw puzzle to shame. About four decades ago, currency, though governments know best how, mostly how to ‘cream’ investors and taxpayers, government has found ways to manipulate the value of money to keep them from paying their deficit spending. Currency has arrived today, baseless, of unknown value, leaving even governments in the dark as how to fix it, except to keep the printing presses running, printing more of the same.
Economists have ideas — good, bad, and passable — but those who believe money should go back to the yellow metal — the gold standard, overlook the consequences of a limited supply of gold trying to fund an unlimited global economy. It would drive the price of gold, and silver, to astronomical heights and the metal would end up hoarded. There is another way to keep paper currency with a base and a steady value that could serve the global economy in a manner unlike what it is — wild, unpredictable, and subject to corruption, bot by individuals and governments.
When I was a world traveler, exchanging currencies in the nations, it was either through banks or money exchangers. It came to me that they valued the different currencies by the soundness and wealth of the nations the currency represented. So why not use their method to value currencies, create a base for it, limit the amount a nation could print to maintain a stable value for currency. That could be done using the wealth of all nations that would participate. If the wealthiest nations did, many others would go along. The wealth of a nation is it’s GDP — Gross Domestic Product.
Item 1 needed: A standard formula of what to include to determine the GDP of each nation that participates.
2. A Standard Committee or Board to figure and publish the member nations GDP: monthly, quarterly, semi-annually, or something to that effect. Monitor the member nations for accuracy and as a go-between the nations and governments.
3. Set the limits of the amount of currency the nations can print and have in circulation based on the nation’s GDP.
4. A way to adjust the money in circulation as the nations GDP varies.
For instance, as an example of three different scenarios that each member nation would be subject to to keep it’s currency under a base and stable value: For a nation to run it’s economy normally takes 10% of it’s GDP. Allowing for 4% more for a reserve, currency in circulation could not exceed 14% of it’s GDP.
Case A: The nation’s GDP is $20T, it can circulate up to $2.8T.
B: The GDP slips to $18T, the maximum money in circulation would drop to $2.52T; $280B would have to be retired from circulation.
C The GDP increases to $22T, the nation can circulate an extra $280B and the money value remains stable.
This suggested method of putting a base under currency won’t cure all the ills of money, but it will dampen the wild swings of baseless money, keep inflation under check, and should stop government manipulating the value of the money by limiting the amount that can be printed. The money supply will keep in line with production. The system prevents the short supply of gold that going to the gold standard will create to fund a global economy.