In Me and Ron Paul, I knocked some of the historical basis for the assault on the Federal Banking System. While I still believe that a central system does need to exist, Thomas Breton’s article, Chickens Are Returning to the Roost, may cause me to modify my perspective somewhat. While I still believe that basing one’s currency on gold (or silver, or something else “precious”, Golem not withstanding) is silly because gold is only as valuable as one perceives it, Mr. Breton brought to my attention that the benefit of a gold (or whatever) standard is that supply is limited (I guess we shouldn’t have a “hot air” standard, eh, D.C.?). Therefore limits (if rules of ratios are followed, but we know rules and politicians) on currency production and lending becomes naturally integrated into the system (hmm, banking and credit issues, anyone?).
Mr. Breton’s point that banks would have to have tangible (read gold or whatever standard) assets to exchange for paper currency, means that banks would be less likely to loan money to any one (including me). Of course, such a path, would send the tax and spend politicians (please note that this is regardless of party affiliation) into a tizzy. Also, companies such as MasterCard, Visa, Sears, BancAmerica, and so on would no longer be quite so willing to give credit cards to pets or dead people.
This is sounding better and better.
And I’m quite serious about it.