especially to Rich for being so through and precise in the discussion.
Starchild took at good stab at a way to transition to a market based
currency. This is how I would attempt the transition, were i the King.
The Fed can't stop creating money right now because the debt pyramid
would collapse. But as they create more money and prevent debt
collapse the pyramid gets more and more leveraged, climbing ever
higher, eith occcasional cave ins, such as the Nasdaq crash, the
Tussian default, the asian crises, LTCM, all met by more credit
creation.So what the Fed needs to do is inflate without credit
creation. I am not totallyu confident about this, but it seems the Fed
could do two actions at once. Tighten credit by raising reserve
requirements. Gradually cut back on government guarantees. And at the
same time buy gold. When the amount of gold in Fort Knox was
sufficient to back upthe dollar at then free market price in gold, the
gold backing of the dollar could be resumed. The legal tender laws
could then berescinded.The reserves of the Fed didtributed back to the
banks which by then would be on one hundred percent reserves and there
we are. The banks would then be free to do as they please, isssue
paper as they plaese, so long as they did not commit theft or fraud.
If I , if I were King.