A decade ago, I was a fractional-reserve banking skeptic. Today, I’m all for it. Here’s why.
Hayek’s commodity reserve standard would automatically serve to stabilize prices and output. In our discussion of rule-based monetary policy and sound money, the mechanics and principles guiding Hayek’s proposal deserve careful consideration.
Requiring that citizens track transactions in gold or alternative currencies and pay taxes on gains and losses relative to the dollar is just another mechanism for keeping the monetary playing field unbalanced in favor of government fiat.
The personal signature has a notorious history: J.S. Bach’s on his compositions, the founding fathers on the Declaration of Independence, Picasso on his paintings, and the president’s today on executive orders. Creating your own was a right of passage. With credit card companies admitting the obvious that it does nothing to verify your identity, does it matter anymore? The signature isn’t going away. It has just changed forms.
In many ways, we are better off than we were in the era of the international gold standard. But monetary freedom is not one of them.
Chartalists are right: debt preceded money. But that fact doesn’t do the work they think it does.
There are two reasons monetary policy cooperation might backfire.