[Brainwalter]

[ QUOTE ]
The national productivity of a nation is what is used to back the issuance of currency - not nothing. The national productivity of the nation satisfactorily fulfills the incompleteness of the Austrian postulation of regression ad infinitum with regards to the value of money as well as any commodity does.

[/ QUOTE ]

I've seen this asserted before but never satisfactorily explained. Can you more specifically explain what you mean by this?

I can only think of one way a nation's productive economy can be said to "back" a currency in the way, say, gold does. The citizens are obligaed to accept the notes for the things they produce. But isn't this another way of referring to what you called the "decreed aspect of government paper". Prior to now I have believed that decree is the only thing giving the paper value, and unless you can tell me what you mean by "the economy backs it" I will be forced to continue so.

I think it's worth pointing out too that when currency is backed by gold, the issuer has their own gold in a vault somewhere (their ownership may be suspect if they are a state but it is under their control), while under your "the economy" scheme as I understand it the issuers are backing their currency with goods that don't belong to them and again the force of the decree is all that supports the currency. I hope you can see why this is seen by some as a less solid promise than "we have one ounce of gold for every $20 in circulation, redeemable on demand." I asked another poster in the last gold thread what "promise" he claimed the government had made regarding the dollar's value, and it would appear your interpretation of it is "we will continue to force our productive citizens to accept these notes" (but with no reference to a level of prices).

I kind of took the ball and ran with it based on my interpretation of the quoted text, if I am wrong ignore the above and explain it please.