Like I was listneing a Lecture by Salerno outlining many of the ways we can move to a Gold Standard, and all of them seemed to be less than ideal. Here’s what I thinking, it’s kinda derrived from hayeks competeting currencies and I think Ron Paul alluded to this in a interview or two, but I’m gonna go a weee bit more in detail in how I’d see it.
Step 1 - Leave the Dollar as is, end the fed
Step 2 - Pass a bill allowing banks to create 100% reserve notes equivalent to 1/400 of an ounce of gold/silver which are a legal medium of exchange
(hopefully people begin to buy and deposit gold/silver into their favorite bank to receive these notes)
Step 3 - As the demand for gold rises to deposit for these notes the dollar will eventually phase out and go through some fairly heavy inflation as demand for it drops
(less inflation than if you just said US gold reserves will back M1)
Step 4 - The Goverment has no real say in this currency aside from stadardizing the denomination of these notes.
The Question is:
Does this seem viable, and if so, has anyone written on anything extremely close to this. Competing currencies seems the closest this I’ve found so far.
Step 1. End the FED
Step 2. Remove legal tender laws
Step 3. Repeal 16th Amendment
Step 4. Enjoy liberty (or at least substantially so much more)
You will end up with competing currencies as a natural function of the market, when the government stops legalizing tender, organizing the banks and demanding taxes.
This is why Ron Paul selectively hammers on a few points. He’s trying to create pressure against the middle from all sides. Competing currencies, constitutional money, gold standard, economic freedom etc., it’s all tied towards removing most or all government from the control of money.
I agree, although Ron Paul has mentioned while he likes competing currencies that he’d legislate that people issuing alternative currencies that back by gold/silver as to the constitution.
My worry is just pure competiting currencies is you’ll end up with the government doing their transactions in a Fiat currency, and cause of this the population will adopt so and so competing currency. The constitution does restrict the government from doing that… but it needs to be enforced.
all the other stuff I agree with.
Not to argue with you, but Paul is not talking about legislating any particular kind of currency or backing.
He’s for repealing legal tender, and letting the market (not government) decide what is money. He recognizes that gold has consistently and traditionally been money, and so it is likely that gold would again serve that purpose, but he is not mandating that there MUST be a gold standard.
No one will take the government’s money if it is fiat as long as they can deal in sound money. People will exchange for fiat to deal with government, and then exchange back to deal privately. Paul’s point is, in an economy with market monies, fiat money will be driven out because no one wants to store value in meaningless counterfeit paper.
Put that way makes perfect sense and I’m in total agreement, your answer wins!!!
Isn’t the gold standard the name for any commodity backed currency?
Just to clarify what he is referring to by “legal tender”:
These are the laws that govern in what terms lawsuits are rewarded.