Wednesday 26 October 2011

If there are laws against counterfeiting then there should be no deposit insurance

If laws against counterfeiting exist then fiat currencies maintain value and deposit insurance is inflationary. Which is inconsistent because if banks can print money then everyone should be able to. And if everyone can print money then it will have no value. Fiat currencies need (at least) some people not to be able to print them. Those people should include the banks. If we are prevented from printing money then so too should banks be prevented. If there is a social contract... why not prevent banks from printing money?

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