Sunday, February 3, 2013
Why Central Banks Cannot Allow Any Competition
I found this article about the ECB being worried about competition from BitCoin to be similar to the U.S. Postal Service threatening to prosecute a Boy Scout troop for planning to make a little money by delivering Christmas cards. Neither inefficient organization can stand competition from any source. This supports the contention of many economists that all that props up fiat currencies is legal tender laws. If we were allowed to use any currency mutually desired, Gresham's Law would work in the reverse; i.e., sound money would drive bad money out of the market.