(1) Yes, the California warrants are “bills of credit” (to use a classical term of finance), and they are serving as a local currency to the extent that banks and merchants are accepting them as payments. This is what Von Mises identifies as “circulating credit.” He was distinguishing between “money” and “credit.”

But both are forms of liquidity – spending power; trade lubrication in a decentralized, division-of-labor society. Credit cards work even better. I do not know how well the California warrants are circulating there, but it is *NOT* inflationary in these circumstances to add lubrication and circulation for trade.

(2) No, there is not an impact on rich-vs-poor. Who is made poorer? Who is made richer? To the extent that trade is lubricated – closing the gap after the collapse of credit in 2008 – the California warrants help people mange their suddenly more difficult financial contracts and obligations.

If the welfare state has over-promised, particurlay in medical benefits, then it will simply have to cut them back or raise taxes. Money and credit are not sustainable solutions.

(3) Global vs. local determination of currency values: There are different markets, for example the local labor market and the international stock and bond markets. For such an international market, a global currency – outside a government – is best, unless of course some “central bank” to manage it could not be trusted. For a local labor market, more suitable might be a local currency.

The primary benefit of any monetary system is the ability of businessmen to quote relative prices in a common denominator, but the benefit of a “floating exchange rate” monetary system between international or interregional trade areas is to provide a “cushion effect.”

Consider that some prices in some markets are auction prices, like the prices on stock exchanges and commodity exchanges. Other prices are contract prices, like the wages of workers. The latter do not change, as worldwide market conditions change. So, it would be best if relative prices in the labor market were quoted in local currencies. If the local region were falling on hard times, the local currency would depreciate. Wages would remain unchanged. Standard of living for the unfortunate, lower-productivity workers would decline due to the higher prices for imports from other regions.

An efficient market requires flexible prices. Contract prices are an impediment, but floating exchange rates among local currencies, with an international non-political currency at the top, for the financial markets, would take care of many price inefficiencies.

I have one question regarding immigration re your general libertarian worldview.

Do you support unrestricted immigration to the United States?

I ask because the flood of people coming into the United States is one of my major objections to Libertarianism as it currently exists.

Since you don’t have a means on this page for me to subscribe to comments feel free to leave a post on my Facebook wall as a response. The link to my Facebook page is in my username above, and I have sent you a friend request, so you should be able to do so.