Austrich...
There is this article about heterodox economics. One of the camps is the Austrian School. Their tennets: get rid of the Fed, the dollar and let banks issue their own currency.
So how could joe doe in Bangor Maine pay for his kindle in Seattle, Wa? Should Amazon have as many mini Amazon as currencies exist? Or the other way around?
What about foreign treasury bond holders? What would they do if the greenback is taken off-line? Take gold, diamonds?
So how come the issuing banks will support their own currency? No wonder they do not get published. Good grief....
Labels: Economics
posted by Jose @ 1/10/2012 05:43:00 AM
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4 Comments:
I think you've rather missed the point. The Austrian school observes that a base currency, one that a single country has control over the volume of 'dollars' on offer, cannot be used as the single pricing mechanism for the worlds commodities. Some other commodity that can't be created from thin air, is finite in volume and has limited other industrial purpose provides a more level playing field for all participants.
As the devil is is the details, the "free banking" proposed by its american followers, since Austria is part of the EU, propose just this. And what else other than paper has limited industrial purpose? Impossible to apply nowadays.
This, it seems to me, is a way to restrain moral hazard. Human ingenuity and moral hazard know no bounds :-}
Could it be a malinterpretation by libertarians? Then which commodity has enough stock and exists in every continent/country and can be agreed upon and used by all the major economies?
Aren't we creating a cartel of such commodity?
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