Monetary Alternatives: Rethinking Government Fiat Money

Today we live a world of discretionary government fiat monies. Any link of the dollar to gold ended in August 1971, when foreign central banks were no longer allowed to freely covert their dollars for gold at the official exchange rate. The end of convertibility left the dollar without an anchor except for the Federal Reserve’s promise to maintain price stability. However, the current system of pure government fiat monies, managed by discretionary central banks, is inconsistent with monetary freedom and stability. The lack of a rules-based monetary regime and the barriers to competitive private currencies limit freedom and needlessly and dangerously enhance the power of central bankers.

The contributors to this volume question the status quo and offer a deeper understanding of the case for rules versus discretion in the conduct of monetary policy, examine the characteristics and benefits of alternative rules, and provide a blueprint for making the transition to a free-market monetary system. It is hoped that their insights will help guide the public and policymakers to rethink current monetary arrangements and help shape a new monetary order based on freedom and the rule of law.