Debating Sound Money

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Hayek MoneyIn the commons chamber right now Steve Baker MP is proposing the denationalisation of money. Together with colleagues spanning four parties – Michael Meacher (Lab), Caroline Lucas (Green), Douglas Carswell (UKIP) and David Davis (Con) – he has secured a debate on Money Creation and Society. It is a complicated and important subject.

The Cobden Centre, which campaigns for sound money, explains: we have a system of paper or “fiat” money: it exists due to legal mandate as opposed to being a physical commodity like gold. Reserves, notes and coins are created by the state but claims on money are created by the banks when they lend. Most of the money we have was created by banks lending.

This video from Dominic Frisby is a good primer on the issue:

As things are now, recurrent financial crises are systemically built into the global monetary order… 

See also: The Death and Rebirth of Sound Money


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