Episode 295: Must Government Control Money?
Words & Numbers
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Redeeming Gold Coins
Under a free banking system, I don't think you would get to a point where people were indifferent. The option to redeem it is what keeps the bank-issued money at par. It's certainly the case that each bank wants its notes and deposits to be accepted at par at face value. And so they will make efforts to do that. In a system where legal obstacles don't prevent it from happening, you get banknotes circulating nationwide at par value.
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