NationStates Jolt Archive

http://www.nationstates.net/images/flags/uploads/fluffywuffy__4.jpg

Third Empire of Fluffywuffy Returns to Gold Standard

(AP) After a hearty debate between the Emperor and members of the Legislative Council, it was decided that the Third Empire shall return its currency to the gold standard, after roughly thirty years of being purely fiat based money. "It is clear," the Emperor said in a speech to the Council, "that paper money is an inadequate substitute for currency, and is a dangerous threat to economic and personal liberty in the demands placed upon the individual. The great Ludwig von Mises said, 'The gold standard makes the money's purchasing power independent of the changing, ambitions and doctrines of political parties and pressure groups. This is not a defect of the gold standard; it is its main excellence.'

It is in this vein that the Third Empire shall endeavor to have all of its marks covered by one thirtieth of a gram of gold. It is my sincerest hope that this step towards economic liberalisation will lead to further, sustained, and sustainable economic growth. We call upon other nations to join us in establishing a new world standard currency: gold. It is paramount to economic progress to return to hard currency in order to help prevent government manipulated money, and government created inflation. A hard currency is one safe from the central bankers."

The Hon. Paul van Rijn
Member of the Vaar Parliament
Parliamentary Office Building, Rm. 149
1300 Prince Henri Blvd., Ten Eyck, Vaarshire

To whom it may concern,

While the Vaarshire Guilder-Sterling may still be a fiat currency, I have been working tirelessly in Vaarliament to remedy the situation. I, on behalf of all the gold-standard supporters in my country, congratulate you on making your currency safe once more. Surely, your money is safe from the greed of Big Government and Big Government-run banks. Bravo, Fluffywuffy, on what you have done this day. Soon the whole world shall see the light- the gleaming glow of gold.

I am obligated to inform you that the opinions expressed in this letter do not necessarily represent those of Prince Johannes de Vaar, the Vaar Parliament, or any other member or part of the government of Vaarshire.

Congratulations and warmest regards,
The Hon. Paul van Rijn, MP

bump for potential interest

To The Third Empire Of Fluffywuffy,
From Ministerial Counciller Oswald Garving Of The Department Of Economics Metropolitan-Regional Council Of Hydrosteria,

Dear sir, whilst the nation of Hydrosteria's free open economy allows the Great Chain of economy to control the abundance and distribution of our fiat currency the adoption of gold standard is recognised as a reliable way for nations with economic polices less malleable than ours to ensure a far and stable economic base, although this can in turn reduce the abundance of finance throughout a nation; although we are sure that your nation would only have converted to such a currency base if it's currency was exceptionally strong and equal to the proportion of gold i utilised; otherwise the economic effects would of course be disastrous.

All the best, Ministerial Counciller Oswald Garving

(OOC:That is the reason for the 1/30th of a gram, it's about a dollar, more or less depending on the day.)

Teletext Message

To the Esteemed Leader of the Third Empire of Fluffywuffy,

Your reversion to the Gold Standard, marks a sad day for the global economy. Effectively, you are limiting your nation, to the amount of gold you posses, and only through the purchase of more gold, will your nation ever become richer. Clearly, you must see, that you are only limiting your own economy. In your nation, the total value of all currency, in circulation in your nation, after the transition, will be the same, as it will be, one year from the transition, whereas, in my nation, with a currency, not backed by the gold standard, as our economy grows, the total value of all currency, in circulation, can be larger from one year to another. I hope you understand what I am saying, and how your actions, will have a negative impact on the global economy.

Signed,
His Holiness, Edwardo Listless,
President,
The Theocracy of the Beatus

To The Third Empire Of Fluffywuffy,
From Ministerial Counciller Oswald Garving Of The Department Of Economics Metropolitan-Regional Council Of Hydrosteria,

Dear sir, after being contacted by a minister withen your nation correcting me on a singular yet pivtol point which I had overlooked I now reaffirm my confidence that your nation will indeed by strong in this endeavour, I wish to submit a reccomendation on the minister who contacted me on the matter for he was indeed an observant type who will serve your nation well.

All the best, Ministerial Counciller Oswald Garving

(OOC: That is assumign of course that you have enough gold to be distributed across to evey citizen in place of their currency.)

To His Holiness, Edwardo Listless,

The use of gold for a currency in no way hinders the global economy, for a fiat currency has several negatives that gold can overcome. Foremost of these is the ability for a bank, typically a central bank, to print money into oblivion and greatly inflate the monetary supply. Such a distortion eventual wends its way back into the price of goods, distorting supply and demand. As the great Ludwig von Mises argued, without a functional pricing system, rational production is not possible. Eventually, economic collapse is inevitable.

Inflation is the major enemy of a prosperous society. Inflation provides a discentive to save, leading many to invest foolishly in order to be able to simply break even with the passage of time. These foolish, inflation driven, investments are part of the boom and bust cycle, causing bubbles and tearing them down once the entire deck of cards is unstable. With a gold currency, each unit of currency shall retain its value over time. Because of advances in technology and the reduction of future costs, saving because a good investment. In fact, purchasing power would increase over time, meaning fewer units of currency would be needed in order to purchase the same goods. A fiat currency cannot supply this, save by a central bank artificially destroying bills.

The limitation of the amount of currency in circulation is the limit to the amount of gold that the Third Empire can itself acquire. Private citizens are fully capable of using, even paying taxes in, any other currency that is backed by a hard asset, be it gold, silver, platinum, or even lesser materials, such as coal. For private business use, anyone is free to use any currency a business will accept. In fact, it is legal to establish private currencies in the Empire to allow the market to drive the demand and supply for currency.

In short, our system is rock solid.

Signed
Timothy Escard
Economic Minister