Pre-Civil War Fiat Money was Issued Regionally by Private Banks
In the pre-Civil War era, 90% of US money was regionally issued banknotes from private banks.
These currencies traded at different rates at different times and places. There were discount books in each town to keep track of how much each currency should be discounted.
Everything old is new again!
So, now instead of leading to the future, cryptocurrencies are taking the country back to the 1830’s, St. Louis Fed President James Bullard said Monday.
The Big Q: Is something like this happening today?
The Big A: “It certainly appears to be,” Mr. Bullard said in a speech to CoinDesk Consensus 2018 conference in New York.
Here and now, there are lots of privately issued cryptocurrencies, trading at various rates minute by minute on exchanged around the world, Mr. Bullard said.
According to the published data there are than 1,800 cryptocurrencies have launched, he noted.
Notably: The fiat currency arrangement in the US pre-Civil War was not popular and there was a call for uniform currency, which was implemented during the Civil War, but Gold and Silver were considered real or hard money.
“The only reason this is not a bigger issue today is that the total volume of cryptocurrency trade is not that large in relation to the entire economy,” Mr. Bullard said.
Nouriel Roubini, an economics professor at New York University, said that the cryptocurrency will take the US “back to the Stone Age.” But Professor Roubini is Bearish everything!