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So What is RP's Ideal Monetary System?

Since the various parts have been discussed in detail, what is RP's ideal Monetary System? I'll take a shot and see if I understand it.

1. Eliminate the FED
2. Congress strictly abides by the constitution, coins gold and silver and regulates the value through the Treasury Department.
(Competing currencies are also legally allowed).
4. Private banks borrow from the Treasury with the daily market demand determining the natural interest rate.
5. Private banks lend money without the fractional reserve system.

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He doesn't have one

There isn't a well laid out path to getting back to honest money. Dr. Paul has suggested the first few steps and described what an idea system would look like...but getting there is not an easy task.

Establishing full reserve banking would be a nightmare. Getting there would require the kind of market internention that would make Stalin nervous.

I have often suggested rather than granting the regulators the power to control banks, have it done by a private rating agency (or several private rating agencies).

They could pore through the bank's balance sheet and assess the viability of the bank to stay afloat. They could then translate thousands of pages of their books into a simple and easy to understand grade. This would inform banking customers of their bank's risk, and give a bank a reason to take less foolish chances with their customer's money.

Also, it would be a good first step into privatizing FDIC insurance, as a bank's grade goes down, their cost to insure their deposits goes up.

Well...

one thing you could do to get to full reserve banking would be to gradually increase the amount of cash that banks have to hold in order to cover their checking accounts up to 100% over the course of say... 50 years. It would suck, but it wouldn't instantly deflate the entire system.

FDIC privatization goes I would recommend the government slowly makes the regulations that go hand in hand with the FDIC more and more painful to the banks, until they all voluntarily opt out, and form their own system.

As far as the original posters 4th comment goes, I think you're wrong there buddy. I'm pretty sure in the ideal RP system no one borrows from Uncle Sam... It creates an inherent conflict of interest, and would give the Federal Government the ability to do some serious meddling.

yes

Your outline follows how I understand RP's positions.
These are not new issues or problems. We now know that there have been 2 previous central banks in the United States and the issue of what should be used as money has been the subject of a long ongoing debate. Seems that the system requires 2 metals to work best, gold and silver. For reasons not clear to me yet, only using gold is not "flexible" enough to allow good function of the economy.
I am 3/4 of the way through The Web of Debt, by EH Brown. It's the easiest book about economics to understand I've found yet AND it connects the dots!
RP wants Congress to be able to audit the FED as a first step. Not an unreasonable idea.
One problem I have with the economists who write at length and in complex terms and concepts about economics is that they leave too many of us who don't have a background in the subject confused. But there's no reason to feel stupid, remember, RP saying that fellow members of Congress will come up to him and ask "how does the FED work?". We need to make sure "no liberty minded people are left behind"; our version of no child left behind. Until then, keep reading and digging.
Hey, when I get frustrated with it, I just think back to early-2007, before I had heard about RP, and even knew what the Federal Reserve really is.

Dr. Mike Vasovski
South Carolina Campaign Chairman, Ron Paul 2012
The SINGLE vote in the SC delegation for RP, GOP Convention, Tampa, FL
2010 Candidate, US Congress SC-03
Past Chairman, Aiken, SC County Tea Party

The more details I learn about RP the more I realize the

tremendous amount of research that is behind his positions. His speech in Prague a few years back was quiet revealing.

The way I see it, the most

The way I see it, the most important thing is that the only 'money' acceptable as payment by the government is gold, or possible some other metal or commodity.

To ease friction, it may well be beneficial if the government issues currency convertible into this metal as well, in which case they will need to make sure any bank lending out this currency in fact has reserves fully backing every loan, and that these reserves are properly safe guarded. Otherwise treasury will soon find themselves without any gold at all.

Another option is for the government to get out of the currency business altogether, and demand all it's payments in physical bullion. Then anyone can issue currency backed by whatever they feel like, as long as someone is willing to accept it in exchange for gold. Over time, this will probably lead to commerce gravitating to a few distinct currencies who manage to garner the trust of a large part of the population.

Conceptually, I prefer the latter scenario, but both scenarios are such huge improvements on what we have today that I don't think we should let the best get in the way of the good on this one.