best monetary system?

[adolf512]

There excist many ideas about how the current monetary system needs to be fixed. The libertarians generally reject the idea of the govetment having anything to do with many and this has certainly worked for a very long period of time. For a long period of time gold, silver and other valuable metals has been used as currency.

Printed money come into existance when people wanted to store their gold, this made it possible to print more money than actual goal, later the goverment started doing the same thing.

Hitler realized that backing up the currency with gold(which they had none) wasn't neccisary. You still need money to pay taxes and even if the taxes is zero a currency will still have value if people wants it to have value(bitcoin is the best example of that).

http://positivemoney.org/our-proposals/ has suggested that money should be created by a democratic state and distributed into the real ecomony instead of speculation(bailing out failed banks). I am all for letting the state create its own money(when we do get power) however i do not like idea democracy.

I prefer a systen where the state* controlles the monetary base, they state* will then provide an account which works as a deposit account(similar to the central bank deposit account). The money does not need to be stored physically, it can be destroid and reprinted depending on the need for cash. If the country is governed by the most competent i am sure overprinting wont be an issue.

*If you have a federation it will be the federal goverment / highest ruling power that controlles the monetary system.

Fractional reserve banking
I see no problem with this if no state or central bank protects the savers/banks. It will then up to each individual do decide if the it is worth the risk for the interest the banks provides you.

Of course you can have both free(fair) market and have publicly owned banks, banks that its owned by their costumers(my bank länsförsäkringar is that), banks that uses the money for improving our society, etc. If you offer an inferior product the costumers will leave you and you will go bankrupt.

It might be "unfair" that you are likely to lose money if a company that owes you money goes bankrupt but as a costumers/saver you have a responsibility. Of course the banks will required to follow the laws, it will not be allowed to just take the money and run or making false claims.

central Banking
This is a communist idea. Actually there is usually two central bank interest rate. The interest rare for the central bank is deposit account is lower than the interest rate banks needs to pay for lending money from the central bank, the interest rate mentioned is usually the average if these two.

The central Banks works as lender as last resort and makes it possible for banks to create unlimited amount of money(without bank regulations). Without a lender of last resort a lot of banks would become bankrupt and the amount of money created would be limited(approx 10 times the amount of money created by the state).