By Detlev Schlichter
I thought I should address a couple of points that I consider to be
misconceptions and that frequently come up in discussions with the
audience or other speakers when I present my views on the fundamental
problems with fiat money. I am not always in a position to correct
these misconceptions right then. They are often woven into questions on
other points and I have to leave them uncommented so as not to disrupt
the flow of the debate. My book is, I believe, quite clear on these
points, so I could simply refer people to
Paper Money Collapse. But,
for whatever reason, it is still the case that many in my audience
make inferences from similar arguments to my own, and I fear that some
of the differences between these positions might get overlooked. These
differences are not unimportant, and I think it is worthwhile to
highlight and clarify them.
The first point is related to the question what gives money its
value? The second point is the question of whether fractional-reserve
banking is fraudulent, and should be banned on the basis of property
rights.
Let’s first restate the central premise of
Paper Money Collapse. The
main message is that today’s mainstream views on money are flawed. The
most important difference between commodity money, such as a proper
gold standard, and ‘paper money’,