I don't know if my ideas are part of some economist's theory.

In Web of Debt, Ellen told about the tally sticks that served as: 1) receipts for payment of taxes and 2) money. I have to imagine a tax rate of say 20% (if anyone know the actual tax rate, I would love to know it). So the shoe maker brings shoes, The framer brings wheat and so forth. Basing a currency on what would be available in the market that year avoids inflation or deflation and rewards accomplishment. Even ale and tobacco are not just promised but must be on hand to pay the tax.

Debt based money feeds on fear of the repo man; It also mandates boom, bubble and bust cycles.

One thing I forgot to ask was "Is there a foolproof guideline for stable money?" I wasn't convinced that what I understood, about tally sticks as money, was a complete set of guidelines. The main open question is how and when to remove excess money from use.

I am tempted to suggest a hybrid of the two systems.

Hi James, Tally sticks are nothing more than a system of accounting. A debit and credit. Any system of bookkeeping would serve in its place today, as long as it could be secure, and protected from hacking or tampering (counterfeiting).

The "stability" of money has nothing to do with the form of accounting. Stability is all about how the money is created and controlled, and how it circulates, or doesn't. Its about keeping the level of money "just right" to match production of goods and services.

Hope that helps a little.

Thanks Jere,

The difference I wanted to talk about was not which accounting system would be useful but, as you concluded, how is the money created and controlled.

What I will temperarily call the reward style of money management is illustrated by the village using tally sticks. Assumming a podructive year and a tax rate of 20% afte the taxes are paid 80% of the years production is still in the producer's individual warehouses. Perishable goods like milk or bread will need to be stored and accounted for somewhat differently.

Assuming no one saves from year to year, four money assisted bartering sessions could serve to allow every productive member of the village to get a portio9n of the available goods. Notice no one is in debt! The only bad part is that more and more money accumulates. The extra money could cause prices to increase.

The second style of money management is the debt system. This method is more likely to cycle between booms of excess production, soft sales, worker lay-offs.

Part of what I'm asking is what is the effect of loan leveraging or fractional reserve lending as its called.

In Ron Paul's Monetary Reform Ac,t pending in Congress, no loan leveraging is proposed in the future. Is that really necessary?

That's it for now.