This is the best "short" summary of the history of central banking I've found. But the question that it raises, the question extant in this topic, is: WTF do we do?
http://www.theeventchronicle.com/editors...

When purchasing something, I would be bothered to have to figure out what printed money I had was worth as against the worth of the product I was buying. Gold, silver and platinum are the only money that makes sense, but a system of representing those items would be needed unless people and merchants want putz around with cutting and weighing metal, not to mention checking its actuality. A certificate that shows the value of the buyers stash, would only be as good as the name behind it, which could lead to many problems, not the least of which is counterfeiting. If one central authority is used, we're right back where we started from. I once met Alan Greenspan. Do you think he'd answer my call and give me his opinion? (Laugh Very Out Loud)

Agreed! #Cryptoceeds

I think that banks should be able to freely circulate their own "money". If its backed and it keeps its value- people will use it. If not, they wont. Forget federal reserve protections- they have stolen from me more than any conceivable bank run ever could.

There needs to be NO regulation at all. that is what the civil courts system is for, dealing with the harm one puts on another by taking advantage.

Only via Government does any form of monopoly exist anyhow...

As you state, this is a matter of "choice." There is no reason to ban such choices absent fraud. davidm is correct. Let the market decide which medium of exchange is superior.

OK... but if you had a choice between an equivalent amount of gold and monopoly money, assuming there was an exchange rate between them in said community, what would you choose? Even based on the premise that it "would be recognized as having value amongst people offering things that [you] see as valuable", would you not choose gold? The reason you should choose gold is because it has an objective value and because we know the alternative (fiat) is subject to confiscation through inflation.

"Money cannot function as money, i.e., as a medium of exchange, unless it is backed by actual, unconsumed goods."

Thus, fiat money is backed by nothing... other than the work of those from whom it is subsequently looted. In your example, it would be absolutely necessary to have a currency backed by something else - an "actual, unconsumed good" - for the money to have value. Beer, cigarettes, some commodity.

To be fair, I used US cash today. Funny money. Fiat. Etc. It bought me dinner. I suppose I should thank someone somewhere for the system where others are forced to accept my money on the basis that its the only money thats legal. Thanks FDR.

Now a beer would be refreshing!

The essence of money is that it is something that people can exchange with each other for goods and services. While gold and other precious metals have often been used, the money itself need not have any intrinsic value. It gets its value from the fact that it can be exchanged for goods and services.

The island of Yap used an amusing form of money based on giant carved rocks. You didn't exchange the rocks, just kept track of who owned which rock at the moment. This meant that when one sank during transport, all was not lost - they just kept track of who currently owned the one on the ocean floor.

The important thing about money is that the supply needs to be kept in proportion to the available goods and services or you have inflation or deflation. Ideally, the value of money should remains stable. If money is not tied to physical objects, there is a temptation to acquire wealth by making more money than is appropriate.

This is why people are attracted to precious metals. However, in an expanding economy you will have serious deflationary problems unless your mining operations keep up with the rest of your economy. During the conquest of the New World, Spain experienced inflation in gold based money due to it arriving faster than the economy could grow.

That's called barter. I don't see a problem with that. But fiat money implies 'out of thin air'.

No - I'm being deadly serious. We're not talking about monopoly money here anyway - we're talking about the right of a community to agree, by contract, for certain items to represent value.

With your example, broskjold22, I don't smoke. But if you wanted a beer, and I had spare beers, and I knew that your piece of monopoly money would be recognised as having value amongst people who were offering things that I see as valuable, then I'd be glad to trade :)

You're being funny, right? I'll trade you monopoly money for a cigarette...

The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves. This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the “hidden” confiscation of wealth. Gold stands in the way of this insidious process.

Alan Greenspan, "Gold and Economic Freedom"

To ban a community from minting its own fiat currency and freely choosing to trade with it - is that not an infringement on their civil liberties?

Gold, but no money changers. Some agreed upon standard on content per coin and ratio to silver. Bills without gold/silver backing banned. Local financial institutions OK to issue bonds backed by real property and investment accounts.

Why is nobody else answering this??? Gold!!

What I'm talking about, though, is the right for communities to create and circulate their own currencies, whether backed by scarce commodities such as gold, or purely fiat.

Well... gulch money was gold coins, sooooooo.