"... important political figures throughout the world are agitating for changes in the international financial system. These changes would (i) reduce the role of the dollar, (ii) increase the role of developing states, (iii) reduce the role of the United States, (iv) aim for a global currency, (v) increase the role of international financial institutions, (vi) increase the role of France, Germany, and the BRIC countries, and (vii) aim for global uniformity. These changes would maintain the existing system of central banks and fiat currencies...
This, I say, is something we don’t need. We don’t need no stinkin’ gold standard that is another version of government-controlled currencies, accompanied by government suppression of monetary freedom and privately or market-produced money...
What we need is market-produced money. This may take a number of possible forms, such as e-money backed by metals such as silver and gold, or silver coin, or gold coin and bullion for larger transactions.
Market-produced money differs radically from government-controlled and government-produced money. With market-produced money, there cannot be a systematically injurious deflation or harmful shortage of money. If the demand for money exceeds the supply to the point where the costs of a money shortage to demanders are exceeding the costs of producing more money, the market will produce more money and eliminate the shortage...
The Great Depression occurred at a time when the gold backing of government money was extensive. The current hardships are occurring at a time when gold is far, far less important in America’s monetary system. The common feature of these large depressions is not the presence or absence of gold backing. It is the presence of government-controlled money, with or without gold backing..."
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Comment: The more I think about it, the more plausible it appears to be that free banking is the natural form of money creation and the more I have investigated matters, the more I find that private money creation through free banking is the best way to do away with inflation and the business cycle.
Read more here: The Theory of Free Banking
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