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They don't see it as free, but they do think that - since it is in part the ir money - they should get back as much as possible. More than other - less deserving - regions, anyway.

Norway is sticking its oil money in a sovereign fund

The money there doesn't seem to be debilitating anybody. Saudi Arabia doesn 't seem to be doing as well, but Norway is a democracy, with an elected gov ernment.

"Dependency societies" exist only in the minds of people like James Arthur.

The Dutch got a lot of money from the gas under the northern half of the Ne therlands. It started to flow in 1959. It didn't seem to create any kind of "dependency culture" at the time, and if it did it had entirely gone away by the time we got there in 1993. The Dutch do have democratically elected governments who do seem to be able to sort out stuff like that.

Texas might not have been as lucky.

That's because the constraints on it work funny[1]. And yeah - everybody wants to get all they can, period ( within limits ).

If you/we want to make Federal money irrelevant, then we need to behave like it is. We've done that; people work, they spend and life is better.

Also, "next higher level money" may mean a number of sources these days. This includes VC, possibly increase in equity from an IPO, "profits" from land price appreciation, any of a number of sources. Maybe a Bain-out of a stodgy firm.

The *private sector* is not keeping its end up these days. The private sector is the primary; the government is a secondary. Corporations are behaving like bulimics. Have you spoken to some Six-Sigma Black Belts lately?

In modern Western Civilization in which the Bank of England is the model ( IOW here and now ), money is created out of thin air.

This is true of public money and it is true of private money. The only difference is the accounting regime. Taxes only pay the "vig" on public debt at best.

That's arguable. For any given instance of money creation, there may be less than unity or greater than unity "efficiency".

Yet there are models in which the Oil Curse is ( with variable success ) managed.

It's all dependency. You don't think all those SiVa corporations aren't fostering a culture of dependency? That the Fortune 500 aren't running those firms like they're a pawn shop?

That raises the /very/ interesting and difficult question: "what is money?"

As far as I can tell, the best (and maybe only useful) definition is printed on the front of every Bank of England note: "I *promise* to pay the bearer on demand the sum of X pounds"

If you believe the promise, the note has value and, ahem, currency. If you don't believe the promise, well...

It's not even pieces of paper any more, it's magnetic domains on hard drives. It's just a temporary proxy for barter of real stuff.

Since governments can now create it without limit, they do. That is equivalent to stealing peoples' stuff.

Yes.

No.

No? It works that way for me. I can convert stuff to money and vice versa. We put parts on boards and send them to people, and they in exchange set bits on some disk drive somewhere. We have no idea where those bits are. It is kind of scary.

We had a nice French dinner last night and it cost me about 13 binary bits.

What's amazing is that using money, and having a job to make money, is a relatively modern concept.

I use "A collective hallucination used to estimate value badly."

Yes, but in what medium? ":) The promise is the thing it promises.

Please send any currency you've stopped believing in my way.

Yeah, because pieces of paper, while better than bars of gold, are a pain in the neck.

Have we learned nothing from "Scarface?" :)

It is neither equivalent to nor proportional to. The problem is that we have a big experiment that proves things like gold don't work. It was called The Great Depression. It led to WWII, in which we put 4% of the world population to the sword.

The Fed sets a growth rate of 2% and we don't achieve it. That's not exactly hyperinflation.

Will you pay the postage for the small part of a deciduous forest? (Nothing has changed in almost 40 years :( )

"If," ["the management consultant"] said tersely, "we could for a moment move on to the subject of fiscal policy..."

The management consultant gave him a look that only a lungfish could have copied. "Fiscal policy..." he repeated, "that is what I said." "How can you have money," demanded Ford, "if none of you actually produces anything? It doesn't grow on trees you know." "If you would allow me to continue.. ." Ford nodded dejectedly. "Thank you. Since we decided a few weeks ago to adopt the leaf as legal tender, we have, of course, all become immensely rich." Ford stared in disbelief at the crowd who were murmuring appreciatively at this and greedily fingering the wads of leaves with which their track suits were stuffed.

inflation problem on account of the high level of leaf availability, which means that, I gather, the current going rate has something like three deciduous forests buying one ship's peanut." Murmurs of alarm came from the crowd. The management consultant waved them down. "So in order to obviate this problem," he continued, "and effectively revalue the leaf, we are about to embark on a massive defoliation campaign, and...er, burn down all the forests. I think you'll all agree that's a sensible move under the circumstances." The crowd seemed a little uncertain about this for a second or two until someone pointed out how much this would increase the value of the leaves in their pockets whereupon they let out whoops of delight and gave the management consultant a standing ovation. The accountants among them looked forward to a profitable autumn aloft and it got an appreciative round from the crowd.

Only as long as other people believe the promise. When they stop believing, wallets are replaced by wheelbarrows.

President Franklin?

It might be, if they did. In fact control of the money supply is mostly han ded off to an independent central bank, and most of them seem to want to se e about 2% inflation a year. If you stored all your wealth in cash or negot iable fixed value bonds, you'd lose 2% per year, but few people do. Shares and property typically increase their real (inflation adjusted) value with time.

You really should learn a bit more about the subjects you sound off about.