Quote from: johnyj on February 09, 2015, 12:46:08 AM

Quote from: aantonopoulis on February 08, 2015, 09:21:08 AM

Quote from: johnyj on February 08, 2015, 06:32:22 AM

Quote from: dinofelis on February 08, 2015, 03:55:37 AM

The one who can issue money, can of course buy up the whole economy in the end. Whether this is by "backed" money, or "thin air" money doesn't really matter. The only advantage of "backed" money is that there will always be some finite supply of it, if the backing asset is a collectible, such as land or gold.

My analysis shows that backed money is indeed "out of thin air": As long as you have some spare asset, you can always issue money backed by them to buy more asset, and once you get more asset, you can issue more money, so the quantity of money that you can issue is only limited by the total available asset that you can buy in the whole world

To stop this kind of madness, it should be illegal to issue money backed by assets. If money can only be created by work or paying equal amount of valuables (for example exchange electricity for mining bitcoin), then that money will not create seigniorage

I agree with you 100%. "Backed" is a word which simply means "I am lying to you". Even if well intentioned, it is an unverifiable, unstable, and a sure-to-fail situation. Perhaps we should look to various alt-coin producers who are showing us the truth about this kind of language.

This trick can even be practiced on gold and I believe that is how those banks accumulated huge amount of gold during a century. But since the amount of gold is limited, once they have bought most of the gold available on market, they could not create more fiat. So they eventually shifted the target to assets, then they could continue with their wealth accumulation at a much faster pace

If you've discovered this secret why aren't you out there rasing venture capital to start a bank?