scratch-mark

Money

Gordon Haave, blogging at Daily Speculations raises a point I've been thinking about a lot, lately. Prior to the Federal Reserve, there were private bank notes. They traded freely, such that if a bank was deemed to have too few reserves, the notes traded at a discount. In the late 1800s there was a big information problem, not only on the quality of the banks, but also authenticity of notes, because of distance. Does someone in St. Louis recognize a bank in New York? All those problems would be gone today. Citibank and B of A would issue currencies. They would be backed with real assets (like a money market fund, sort of). Everyone would have a real interest in bank solvency, and if banks did silly things, their notes would trade at discounts and their customers would be miffed. To recap, I'm not a "gold bug," and never have been. It's the state monopoly, stupid. Whether the federal government backs its currency with "full faith and credit," dynamically intervening in the credit markets with interest rate adjustments, or with gold, seems hardly relevant to me. It's a monopoly currency, and that's the problem, assuming there is one. And given...

This content is for Annual Subscription, Monthly Subscription, and Free Member Content members only.
Login Join Now

Richard Nikoley

I'm Richard Nikoley. Free The Animal began in 2003 and as of 2021, contains 5,000 posts. I blog what I wish...from health, diet, and food to travel and lifestyle; to politics, social antagonism, expat-living location and time independent—while you sleep—income. I celebrate the audacity and hubris to live by your own exclusive authority and take your own chances. Read More
Facebook3k
Twitter6k
Instagram358
Pinterest118k
YouTube798
YouTube
Follow by Email8k
RSS780