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Everybody wants monetary freedom, but how can you disentangle yourself from the money web? Lots of theories are out there. We can repeal legal tender laws, introduce a gold standard again, or get rid of the central bank. Economists and independent thinkers spend lots of time coming up with theories that might work. Or they may not.
But, there’s one simple strategy for maintaining your monetary freedom. It’s the oldest and easiest method out there, and there’s no theorizing involved.
How To Become Free From Money Trouble
Let’s take a simple example. Let’s imagine that you take the kids to the zoo. After several hours of looking at animals and having a good old time, the kids get hungry. You search the map and find that there’s only one restaurant in the whole place, a lousy little restaurant that serves greasy junk food at ridiculously high prices.
You can protest, you can talk to the park’s management, and you can even get up a huge group of local citizens just like you and demand that they offer a healthier, more sanely priced alternative. But instead of all this organizing and protesting, you can do something much easier, something that instantly makes the problem disappear … leave the zoo and grab something to eat on the way home. Next time you come, pack a picnic lunch.
I think that in the old days, people avoided getting swindled by simply not buying the product. How many times do you hear people standing in a packed fast-food line complaining about how slow the service is? Why don’t they just go somewhere else? This is the simplest strategy, and it’s called “taking your business somewhere else.” It’s a great freedom that you can still exercise.
When there are tough economic times, we throw all of these policy changes at the problem and nothing works. Each policy creates new problems, and many of them just plain don’t do anything at all. I believe the reason they don’t work is that they don’t address the real problem, which is the monopoly of the state in determining currency. This is called “fiat currency.”
How Did We Get Where We Are Today?
The United States didn’t always have a fiat currency. In the beginning, legal tender was only demanded by the government for the purpose of tax payment and other transactions within the government. Coins from different countries, precious metals, privately issued bank notes and other types of currency were commonly used.
The huge mistake was that the government demanded that only its fiat currency could be used as legal tender. This gave them a monopoly on the production and control of the nation’s money. They established a private central bank, closed the mint to the public, and started issuing coins. This system has been abused terribly and thus, led to the current crises that are happening today.
The problem is not the central bank or the mints being closed. The central problem is the monopoly on issuing legal tender. If this monopoly was broken, we’d see a stable system of currency. Private contracts could get around these legal tender laws, giving us the monetary freedom we want.
However, I don’t see the breaking of fiat currency happening any time soon. We all know that power never relinquishes power. Breaking this monopoly would create a more stable economy, but if you want monetary freedom, there’s an even easier way.
Three Easy Steps To Monetary Freedom
First, select the unit of exchange you will use with clients. There is no law that says you must use U.S. dollars. This means that you can use the currency of another country, like the Japanese yen, or precious metals like gold. In fact, some exchanges in local areas use the barter system, using everything from eggs to abstract units of time.
Next, choose the unit of exchange to do your accounts in. We don’t do accounting only to pay taxes. Like the unit of your transactions, you can choose whichever currency you’d like for your accounting. Companies that operate in several different countries already do this. Using multiple currencies means making exchange rate calculations, but this is an easy adjustment. You can even buy accounting software that allows you to use multiple currencies. It might make the most sense to do your accounting in the same currency you choose for transactions, but you have total freedom here to choose any currency you’d like.
You also have lots of freedom in choosing accounting methods. You can use sound accounting principles instead of the abstract (and usually inappropriate) accounting methods required by the government for tax purposes. Be creative.
Finally, you can choose a currency for your method of payment. The currency chosen for payments doesn’t matter as much as those selected for transactions and accounting. As long as the accounting is done in a good currency, you can even use a fiat currency when making payments.
One problem with fiat currencies is that they are debt-based and designed to prolong debt. A fiat currency actually IS a debt itself on a central bank’s balance sheet. For this reason, fiat currencies shouldn’t be used to settle a debt. You’d be passing one debt off for another. In a barter or trading system, this problem is solved by considering the payment a short-term debt. When it is paid, the debt disappears.
There is a lot of room for creativity in this field. Some entrepreneurs and businesses already use alternative monetary methods, but so much more can be done. With modern means of communication, and the ability of even small businesses to operate in multiple countries, we will probably see more alternatives to using the fiat currency system in the future.
Gaining monetary freedom is easier than most people believe. It’s simply a matter of choosing how to do your own accounting and transactions. Simply use the fiat currency when it’s time to do your taxes; the rest of the time, you can be in control of your own finances.
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