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[SMCengineer]

I have but one choice in gas company.

That's most likely because they provide a reliable, convenient, and competitive service that no other gas company could compete with, which leaves the needs of your local market for gas fulfilled and satisfied. If something happened and the local market's needs changed or the gas company started taking advantage of it's customers (ie raising prices, forcing payment with some obscure currency, putting caps on the amount of gas you can purchase, etc), an opportunity would open for a competitor and those practices wouldn't last long.

However, lets assume that they do in fact have a monopoly in your area and you were forced to pay in Bank of America bills. What happens when the gas company receives your payment along with everyone elses? What do they do with the money? When they need equipment or trucks or employees, they would be forced to use Bank of America dollars as payment, but not all equipment companies, truck dealers or employees would accept those. So they would be forced (by the market) to exchange it for dollars and pay a fee. They would quickly find that using Bank of America dollars isn't worth it and revert back to dollars.

This is how competion works between currencies. If currency laws were repealed today, I would suspect nothing major, in terms of currencies, to occur for at least a decade. A million companies could start their own currency (regulated by congress of course), but none would be of any value unless it was competitive with the dollar. That means that it would do everything the dollar does with little to no disruption to anybodies life and could be used just as conveniently as the dollar. Otherwise, it would not be competitive and it would be a nonissue.

Or things could go the other way, the cable company won't take what I got so I get Direct TV cause they accept everything. But their bank accounts are in Sun Trust money...they have to show a company balance sheet in all the same money. So they take my check, deposit it in Sun Trust bank, and get charged a commision to do so. They'd rather pay than not have my business. But this is a real cost, and all costs get passed on to the consumer. It was a cost that didn't exist before. Competition will keep costs low as possible, but it will never be zero.

Again, the key word here is competitive. If something isn't accepted, recognized and trusted nationally than it would never gain any ground on the dollar. So in the example you gave, the company would have to convert the currency and loose money by doing so. Does this make it competitive with the dollar? No, and I would assume that soon after they would drop that currency option and most places wouldn't use it. This would also cause you to exchange your holdings of the currency with something more trustworthy, perhaps the dollar or gold. Eventually the currency would be wiped out of existence.

There's an example of that today in credit cards. Discover card charges vendors a premium to use and accept it, many restaurants and stores choose not to offer that option to it's customers. However, to make the card more palatable to it's customers, discover has to offer some incentives to make the card worth using and they manage to stay afloat.

[Kratos]

However, lets assume that they do in fact have a monopoly in your area and you were forced to pay in Bank of America bills. What happens when the gas company receives your payment along with everyone elses? What do they do with the money? When they need equipment or trucks or employees, they would be forced to use Bank of America dollars as payment, but not all equipment companies, truck dealers or employees would accept those. So they would be forced (by the market) to exchange it for dollars and pay a fee. They would quickly find that using Bank of America dollars isn't worth it and revert back to dollars.

So, you agree that eventually we'd be back to one currency, weather it be the dollar or a private bank's money that emerges as the dominant currency.
I would say we couldn't let a private bank have a monopoly on the money in this country. It's better the people retain ownership of their central bank.

If you want currency in other forms buy stock, comodities, bonds...whatever you want. These are essentially currency, just not accepted at your local business. You have to pay to exchange them for somthing you can spend and any tax on gains. If you make a profit in the currency market vs the dollar, do you still not have to declare your gains and pay taxes? Same thing.

[Kratos]

As for the bailout, which is what this thread is about...I totally disagree with it on pricipal. It lets the gov further into private banks to impose regulation. The banks aren't paying for their mystakes and if regulation isn't put into place, it won't be long before banks start chasing their tails again for profits. If they are forced to feel the costs of making the bad loans the industry will self regulate.

At the same time I don't know how deep the economic downturn would go if no action were taken. Maybe it's a risk we should take to preserve what's left of the free market. So, I'm neutral on the bailout, not happy about it, though.

[SMCengineer]

At the same time I don't know how deep the economic downturn would go if no action were taken.

The same as it will now. The only difference is the speed at which it'll reach it's bottom and the speed at which it'll recover. If no action were taken the market would bottom out quickly and return to normal much faster as well.

[Kratos]

The same as it will now. The only difference is the speed at which it'll reach it's bottom and the speed at which it'll recover. If no action were taken the market would bottom out quickly and return to normal much faster as well.

I'm leaning towards agreement with you there. The more I think about it, the more I feel like it's something the gov shouldn't be doing. But, impossible to know the real result if they don't act.

I don't know who came up with this plan anyway or why the balance sheet of banks became the business of Goverment for any reason but tax on profit.

Banks should be able to grant loans based on their own risk assesment. If I read correctly a whole bunch of that money went to buying stock in the banks. WTF? They want more say in private banks and banks should answer to their stock holders, but not the gov, they shouldn't be there.

It might just be better to let the economic pain happen then go down the road we are headed for. But I don't claim to have the answer to this.

[SMCengineer]

So, you agree that eventually we'd be back to one currency, weather it be the dollar or a private bank's money that emerges as the dominant currency.
I would say we couldn't let a private bank have a monopoly on the money in this country. It's better the people retain ownership of their central bank.

I agree that one currency would be dominant in the market based on it's strength, but not because it has a monopoly on currency. That's why none of the situations that you described would occur. As I said before, a monopoly on currency couldn't exist unless it's government sanctioned. Therefore, the dominance of any currency would rely on the integrity of the business issuing it. If people lost faith in the currency, it would be fazed out as all businesses whose practices become suspect are. Plus, "the people" don't retain ownership over the Fed. It's a private central bank that is not subject to the laws of the free market.

If you want currency in other forms buy stock, comodities, bonds...whatever you want. These are essentially currency, just not accepted at your local business. You have to pay to exchange them for somthing you can spend and any tax on gains. If you make a profit in the currency market vs the dollar, do you still not have to declare your gains and pay taxes? Same thing.

The difference is that a strong stable currency wouldn't have the huge fluctuations in value that we have now. So instead of being taxed through inflation, you could retain purchasing power indefinetly.

[Kratos]

I agree that one currency would be dominant in the market based on it's strength, but not because it has a monopoly on currency.
But a monopoly can be retained by marketshare alone, look at microsoft.


The difference is that a strong stable currency wouldn't have the huge fluctuations in value that we have now. So instead of being taxed through inflation, you could retain purchasing power indefinetly.

They're gonna tax you either way, it doesn't matter how they do it. They still need to hit the same magic number to satisfy the enormous budget and desire for redistribution of wealth. Currency is just a representation of resources. The resource is the same no matter how you represent it. Budget reform needs to be the first priority, not a change in currency.

Washington isn't concerned with budget reform, you get votes by playing to the middle and promising benifits. They won't be happy until we're all living in the same size apt, have the same health care, the same education, drive the same car, and create generally a homogenous society with no chance for betterment while maintaining the need to go to work everyday. The public is demanding it, because they're hoping that same size apt we will all live in is bigger and nicer then the one they live in now. We'll all be in line for our benifits, you won't be able to live without them.

[SMCengineer]

But a monopoly can be retained by marketshare alone, look at microsoft.

I was careful not to say that monopolies are impossible in free markets, but they are very unlikely. Microsoft, however, didn't have a monopoly in any traditional sense and certainly not because of marketshare.

They're gonna tax you either way, it doesn't matter how they do it. They still need to hit the same magic number to satisfy the enormous budget and desire for redistribution of wealth. Currency is just a representation of resources. The resource is the same no matter how you represent it. Budget reform needs to be the first priority, not a change in currency.

Washington isn't concerned with budget reform, you get votes by playing to the middle and promising benifits. They won't be happy until we're all living in the same size apt, have the same health care, the same education, drive the same car, and create generally a homogenous society with no chance for betterment while maintaining the need to go to work everyday. The public is demanding it, because they're hoping that same size apt we will all live in is bigger and nicer then the one they live in now. We'll all be in line for our benifits, you won't be able to live without them.

We're pretty much in agreement here, especially about changing the currency. We don't need a change in currency unless the market called for one, what we need is a change in policy for that to be possible.