Tim Bouma

“The far less regulated Scottish and Canadian free banking systems had much better performance under similar economic conditions. Most free banking systems experienced no peacetime system-wide panics, and even heavily regulated free banking systems devel- oped arrangements that provided liquidity without a lender of last resort.”…

“Because free banking was inherently a regime of convertibility into gold or silver (or copper, in China), long-run price stability was greater than it has been under central banking, which has often begun as a regime of con- vertibility but has always become one of fiat money.”…

“Fiat money nowhere permanently supplanted convertible currency as the voluntarily preferred medium of exchange, and sometimes, as in the case of the California ‘gold banks’ of the 1860s and 1870s, people successfully defied government attempts to impose fiat money on them” Dowd, Free Banking…

The short of it is that central banks have been put in charge of managing a trilemma, where two of three objectives compromise the third. The trilemma in the case is managing: 1) price stability (inflation), 2) financial stability (banks) and 3) productivity (investment). Optimizing for any two, compromises the…

Great way of describing the difference!…

“Free banking systems maintained exchange-rate stability by giving people the right to convert banknotes and deposits into gold or silver at a fixed rate. Free banks issued notes denominated in the main currency of the region where they hoped the notes would circulate. There was not a proliferation of…

“In Canada, the Quebec Bank regarded its home city as a private preserve, and tried to persuade the legislature to close the Bank of Montreal’s branch there.” Dowd, Free Banking…

“In Europe, credit-clearing arrangements preceded note-issue banking. The trade fairs of Champagne became the centre of clearing for bills of exchange by the 1300s” Dowd, Free Banking…

Thx!…

“Independent accountability’ assumed that the ECB's tasks are fundamentally technical in nature and clearly and narrowly defined, leaving it with little discretion. In that logic, it is primarily the ECB's clear and narrow Treaty mandate that ensures its democratic legitimacy, justifying that accountability arrangements were kept

“So the question is, what will bind us to reality? If the internet has changed how we talk to each other, how we process events, then if anything, it’s made real truth harder to discern. The higher purpose of propaganda, of misinformation, of disinformation, isn’t just to create…

“Suspensions that occurred due to government intervention were always followed by monetary expansion and inflation. The claim that competition among unregulated banks would lead to an explosive money supply and rapid inflation has no support in the historical record and, indeed, inverts the truth that rapid inflations are always associated…

“The bankers were a decidedly unphilosophical group: during hearings about the 1923 revisions of the Bank Act and the Finance Act, the general manager of the Canadian Bank of Commerce and vice-president of the Canadian Bankers’ Association testified that he had never heard of the quantity theory of money,

“To finance war expenditures, the government relied in part on inflation.”…

“Inconvertible forced-tender government notes replaced gold as the basis of the monetary system.” #CanadaWW1…

It’s not ‘legal tender’, it’s ’forced tender’ # MonetaryHistory…