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To: Ilaine who wrote (40)	3/21/2001 1:58:12 PM
From: Don Lloyd	Read Replies (1) of 443

CB - I am having difficulty understanding the difference between commodity backed money and what we do have in this country. Do the Austrians have a problem with fractional reserves? Yes. For an Austrian, gold backed money could consist of a combination of gold coins, 100% backed gold certificates and low value token coins which might not need to be backed. Treat this as an approximation which is my opinion off the top of my head. What we have is pure fiat money, backed by the promise only that it will be accepted for tax payments and that the force of the state will enforce its acceptability in commerce. (I'm making this one up as well. -g-) Gold is a commodity money in the sense that a commodity is a good sold on the basis of price alone, and not some special characteristic due to a particular vendor. Commodity doesn't necessary imply cheap or copious. You will choose to buy gold from 'King's Ransom Gold Refiners Ltd.' instead of 'Ye Olde Pirates' Gold' because it has a lower price. -g- Regards, Don

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