Overview

• Governments coercively fund themselves via taxation and by taking loans from central banks who increase the money supply and contribute to the rising cost of living.
  • The value of one US dollar has depreciated by 96% since the Federal Reserve was established in 1913.
• It is no breach of the Legal Principle to create and offer any currency for any purpose. The breach stems from forcing people to use that currency.
• In a free society, any (or no) currency could be used as money. People may wish to continue using the US Dollar, despite its track record of becoming steadily more worthless over time, or they may choose any other currency/currencies.

Definition of Central Bank

• Central Banks, like the USA’s Federal Reserve or the Bank of England, have the power to create money out of nothing. Historically the money was printed onto bank notes, but today the money is created digitally. They loan money to the government.
• The existence of central banks does not breach the Legal Principle, but forcing anyone to use that central bank’s currency is a breach.

Definition of inflation

• Inflation is when the supply of money increases relative to the products of the economy, such that the price of those products rises.
• Because inflation means the cost of goods is always rising, it creates an incentive to consume now, rather than save or invest for the future.