RE: More questions for Bill and Randy

trond
ron phillips (institutionalist at fort collins) wrote a fairly
comprehensive book on the 100% money proposal along these lines.

all privately issued money is simply a "horizontal leveraging" of
govt issued HPM. obviously it cannot be prevented unless you can
somehow prevent monetary promises altogether. i see no good argument
for this.

you can, however, remove govt promises and/or encouragements behind
privately issued "money". on the one hand, this would tend to reduce
"moral hazard"; on the other, it would remove protection of depositors,
and hinder "par clearing". i see good arguments for narrowing the
govt's promises (explicit or implicit guarantees of particular
forms of horizontal leveraging). but i see no good argument for
eliminating all govt promises.

note that as keynes said, you can draw the line for what you are
willing to call "money" at any point you like. i prefer to be very
specific: HPM, bank money, CDs, whatever. the generic term "money"
should be used only to identify the unit of account in which these
"money things" are denominated. otherwise, you just get all sorts
of confusion.
randy
Received on Mon Jan 27 16:51:34 2003