Rule-of-law monetary systems are more ethically justifiable. They also work better.
Hayek’s commodity reserve standard would automatically serve to stabilize prices and output. In our discussion of rule-based monetary policy and sound money, the mechanics and principles guiding Hayek’s proposal deserve careful consideration.
In August, it will be 10 years since the Federal Reserve balance sheet exploded in size. How does it look now?
The idea that a central bank might be constrained by rules is problematic. It merely moves the central bank's choices to the more abstract level of selecting and interpreting rules.
Discretionary central banking places immense information burdens on central bankers.
Central banking is the institutionalization of irresponsibility in monetary policy.
My theory: the paper is written for bankers and policy makers of an older generation who have heretofore ignored or dismissed crypto-based innovations. They might know something about money and banking. But they know next to nothing about computer science, digital resources, and cryptography. As a result, the paper speaks in the plainest-possible English about these technical topics. It then turns to debunking the most common myths about crypto.
Immediately following the inauguration in 1933, President Franklin D. Roosevelt focussed on what his advisers told him was the real problem: the fall in the prices of everything. The theory, which is completely wrong, is that falling prices were causing the fall in productivity. They believed that by boosting the prices of stocks and other financials, in addition to commodities, profits and wages would rise and recovery would dawn. They would achieve this by wrecking the dollar.
Banks improved financial intermediation, but also made it much easier for rulers to reallocate resources to the themselves while indirectly imposing costs on society at large.