The third and final part of Joe and Pete’s rebuttal of “The Dangers of Monetary Reform” on the von Mises blog. A National Monetary Commission would be responsible for seeing that the proper and not excessive amount of money would be created each year.
As to how a sovereignty based debt free money would be controlled to prevent and reduce inflation, it seems that the “functional finance” method already being used would work. The selling of Treasury bonds on a bidding process would operate to absorb excess liquidity. To accommodate the seasonal need for capital for agriculture and construction, as examples, short term bonds may work best by way of the units of account utility. The “employer of last resort” (ELR) process would be used to prevent deflation. Currently we have minor inflation going on and major deflation of wages, which if I recall correctly is a version stagflation, as has been experienced by the Japanese people for about 17 years. The ZIRP provides a massive means of the inflating of nominal profits, which spans the difference between deflating wages and basic commodities. The US people will be similarly stuck until the whole system can be reformed.