Who Creates Money?
This chapter considers all potential issuers of money, from the central bank to the citizens. The conclusion is that neither individuals, nor private companies nor commercial banks should be allowed to create money. In the same way, private banks are not allowed to issue cash and bank notes, they should also not be allowed to issue book money. The right to create money should be limited to the public central banks. Additionally, regional political authorities should be allowed to issue complementary currencies with validity only in the region of their authority—should the sovereign citizens of the region wish so. The mandate for the central bank—or a regional issuer—should come directly from the citizens as the issuance of money is a “sovereign right,” which has already been the case for monarchies. In democracies the sovereign body is the citizens, which is why they should determine the issuer of all types of money at all levels.
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