New at Reason

David Weigel | November 2, 2006

Brian Doherty talks shop with Milton Friedman, Ron Paul, James Grant, Bryan Caplan and Jeff Saut about the future of the Federal Reserve.

Comments

|11.2.06 @ 8:39AM|#

What a great article. A perfect reminder of why I subscribe to Reason in the first place.

You have to love the guy, but is it just me, or is Ron Paul really out there on some things? Advocating competing currencies? Legalizing other currencies that we can work in?

|11.2.06 @ 9:44AM|#

Cab,

For many years, many countries have had "competing currencies", in the form of bank notes issued by private banks.

You deposit your gold in Bank A, they give you a note for redemption at any branch of the bank. Banks B and C do likewise. All of the bank notes are interchangeably traded as currency, despite the fact that they are competitors.

It is exactly that competition that prevents any one bank from doing imprudent things with their depositors money (like lending out too large a fraction of their gold reserves). Should that happen, a "bank run" would quickly result, at best steeply discounting the market value of the offending bank's notes, at worst punishing the transgressor by bankrupting it.

Most people consider healthy competition essential to a free market. Currency need not be any different.

Larry A|11.2.06 @ 9:58AM|#

IMO the biggest problem the U.S. has now is that everything economic is tied together under government regulation.

If you have stress in one part of the economy it used to be relieved by fixing that part of the economy. Today the stress is compensated for by transferring it to another part of the interrelated economy.

Short term that evens things out by "preventing" disruptions. Long term it means all our eggs are in the same basket. On the day the system can't handle the accumulated stress everything crashes and there's nothing left to rebuild with.

The standard economist response is, "The government won't let that happen."

|11.2.06 @ 11:10AM|#

I second Cab's post. That article in and of itself made me feel all warm 'n' fuzzy about subscribing.

Kudos on this month's ish, too.