Monetary reform
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Monetary reform is any movement or theory that proposes a system of supplying money and financing the economy that is different from the current system.
Monetary reformers may advocate any of the following, among other proposals:
- A return to the gold standard (or silver standard or bimetallism).
- Abolition of central bank support of the banking system during periods of crisis and/or the enforcement of full reserve banking for the privately owned banking system to remove the possibility of bank runs, possibly combined with sovereign money issued and controlled by the government or a central bank under the direction of the government. There is an associated debate within Austrian School whether free banking or full reserve banking should be advocated but regardless Austrian School economists such as Murray Rothbard support ending central bank bail outs ("ending the Fed").
- The issuance of interest-free credit by a government-controlled and fully owned central bank. Such interest-free but repayable loans could be used for public infrastructure and productive private investment. This proposal seeks to avoid debt-free money causing inflation.
- The issuance of social credit – "debt-free" or "pure" money issued directly from the Treasury – rather than the sourcing of fresh money from a central bank in the form of interest-bearing bonds. Maurice Reckitt said the community would issue its own credit, enabling goods to be sold below cost.
- The issuance of demurrage currency, a form of money that is designed to have a deliberately high velocity of money. The Freiwirtschaft economist Silvio Gesell theorized that demurrage would prevent inflation, recessions, the creation of interest rates, and artificial scarcity of capital.
- The international monetary reform by proposing the development of a world central bank managed jointly by all member countries in the world. The world central bank then issues a real international currency that coexists with the national currency of each member country and can be converted to each other at an exchange rate that follows the fundamentals of each country called "auto-balancing". The international currency is only for crosborder transactions between member countries, while domestic transactions continue to use their respective national currencies.