An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
Why complicate things? Let the central bank continue to create fiat but only for the monetary sovereign and it's the same thing as having only the monetary sovereign issue fiat.But one thing is essential: inherently risk-free fiat accounts for all citizens, their businesses, State and local governments, etc. so no one has to work through a usury cartel to deal with what is properly the citizens money, fiat.And, of course, deposit insurance should be abolished too. The good news is that the proper abolition of government-provided deposit insurance should require the equal distribution of huge amounts of new fiat to all adult citizens - thereby reducing a great deal of unjust wealth inequality.
Nice article, btw.However, if we don't eliminate all privileges for the banks, the power of the State to issue fiat without significant price inflation risk will be greatly diminished by the ability of the government-privileged usury cartel to cause price inflation by increasing private debt - once the economy recovers significantly so that lending appears safe to them.
Andrew Anderson,You're pretty much advocating full reserve banking, a system where private banks are barred from creating/printing money: only the state can do that. That system has been supported by numerous famous people / economists: Abraham Lincoln, David Hume and more recently by at least four economics Nobel laureates: Maurice Allais, Milton Friedman, Merton Miller and James Tobin. It is currently supported by John Cochrane, Lawrence Kotlikoff and Richard Werner.
You're pretty much advocating full reserve banking, a system where private banks are barred from creating/printing money: only the state can do that. Ralph Musgrave The effect would be to greatly reduce the amount of new liabilities the banks could SAFELY create but without reducing their freedom to create as many as they dared.In other words, I'm advocating that the liabilities the banks create be entirely real ones and not the sham they currently are wrt the general population.
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