Gordon Haave, blogging at Daily Speculations raises a point I've been thinking about a lot, lately. Prior to the Federal Reserve, there were private bank notes. They traded freely, such that if a bank was deemed to have too few reserves, the notes traded at a discount. In the late 1800s there was a big information problem, not only on the quality of the banks, but also authenticity of notes, because of distance. Does someone in St. Louis recognize a bank in New York? All those problems would be gone today. Citibank and B of A would issue currencies. They would be backed with real assets (like a money market fund, sort of). Everyone would have a real interest in bank solvency, and if banks did silly things, their notes would trade at discounts and their customers would be miffed. To recap, I'm not a "gold bug," and never have been. It's the state monopoly, stupid. Whether the federal government backs its currency with "full faith and credit," dynamically intervening in the credit markets with interest rate adjustments, or with gold, seems hardly relevant to me. It's a monopoly currency, and that's the problem, assuming there is one. And given...