'..the fiat currencies of the world are no longer likely to command enough public confidence to be workable .. a return to a Gold Standard will be not only inevitable but irresistible, since it will have been imposed on the ruins of the current system by the global private sector .. It will permit only minimal government, but will allow the private sector, particularly the small scale private sector, to flourish as never before .. from the chaos of monetary ruin will emerge a new global economy that is stronger and healthier, provides better living standards for its citizens and imposes far fewer taxes, scams and state-aided rip-offs..'<blockquote>'..effect on the global economy of the removal of government debt markets. In general, it should improve financial availability for the private sector, while starving profligate governments of the means to implement “Keynesian” stimulus and other wasteful policies. Thus it may well improve economic performance in the long run .. The Bank of England, the Federal Reserve and the Bank of Japan will also be legally insolvent, since in their policies of quantitative easing they have acquired gigantic quantities of assets that will drop catastrophically in price once interest rates rise.
The Fed, for example, is leveraged 60-to-1, and it was recently calculated that a rise in long-term interest rates of only 40 basis points would be sufficient to wipe out its capital. Needless to say, a rise of 4-5% in long-term interest rates, back to a historically normal level 2-3% above the true level of inflation, would put a hole in the Fed’s balance sheet that in current stringent budgetary conditions would be politically impossible for the U.S. Treasury to fill. Thus if a debt default in the eurozone spread even partially to the over-indebted economies of Britain, Japan and the United States, not only will government bond markets be wiped out, but central banks in their current form will disappear also.
In the long term, this should also prove a blessing. My colleague and co-author, Kevin Dowd, has been trying for some years to persuade me that the ideal monetary system is not only a Gold Standard, but one entirely without a central bank..
..the fiat currencies of the world are no longer likely to command enough public confidence to be workable .. a return to a Gold Standard will be not only inevitable but irresistible, since it will have been imposed on the ruins of the current system by the global private sector.
With a Gold Standard, and central banks in ruins, a truly free banking system will also be inevitable. Most large existing banks will have failed along with their central banks, with no more money for bailouts and their regulatory institutions thoroughly discredited. The new central bank-less Gold Standard banking system that arises from the ashes of the old will be perfectly workable, as in 18th century Scotland, 19th century Canada and the United States between 1837 and 1862. It will permit only minimal government, but will allow the private sector, particularly the small scale private sector, to flourish as never before. As after 1945, from the chaos of monetary ruin will emerge a new global economy that is stronger and healthier, provides better living standards for its citizens and imposes far fewer taxes, scams and state-aided rip-offs on their wealth than does the current system.'
- Martin Hutchinson (
Source, November 22, 2011)</blockquote>
Context<blockquote>
'..a truly stable financial and monetary system for the twenty-first century..'Thymology in the Electric Universe -
Bazaarmodel‘Story’ (not fictional) - Found it</blockquote>