As Mike Berch pointed out, an economy can grow just fine without increasing the supply of whatever money is being used - as long as the currency is easy enough to divide into smaller quantities. That's one reason gold and silver are quite good, though paper money and numbers in a ledger do quite well also. Yes, there are difficulties with a fixed money supply in a growing economy - money that you save keeps increasing in value, and money that you borrow becomes harder to pay back. That's ok - markets adjust the interest rates on borrowed money to accomodate people's expectations. It's certainly better than having one group of people decide that there should be more money in the market, print it, and force everybody to accept it from them. On the other hand, in an international free market, no single government's fiat currency is mandated, and if the bank or its customers want to hedge their bets by using multiple currencies, it may be worthwhile to offer them, and any banking protocols we develop should probably accommodate that. Banks have to be more careful in a multi-currency environment - if gold or yen go way up in value, people can do a run on gold or yen accounts even though the dollar accounts aren't getting hit. (e.g. gold prices jumped about 20% at the beginning of the Yankee-UN-Iraqi War, and anything slumps in value after *I* buy much of it.:-) If a bank has all its assets in dollars, and Clinton decides to inflate the currency to pay for Nationalized Health Care, same problem, unless all its acocunts are in dollars and it has to convert when trading with people who use other currencies. As far as inflationary effects go, if you're a government and print lots of fiat currency, the value of that currency goes down. Same thing if you're issuing a private currency, except you can't force your citizens to accept your zorkmids in exchange for real stuff. So either you don't print more zorkmids than you can back with something, or your accountholders get upset, withdraw their money, and you're in big trouble unless you've got insurance - and insurance companies tend to make sure you have a reasonable audit program before they're willing to risk their money insuring you. Private deposit insurance *is* available - a credit union down the street from me insures accounts to $350K, which is $100K federal and $250K private insurance. The only reason it's not more widespread is that people have tended to believe government insurance was enough. Bill # Bill Stewart NCR Corp, 6870 Koll Center Parkway, Pleasanton CA, 94566 # Voice/Beeper 510-224-7043, Phone 510-484-6204 # email bill.stewart@pleasantonca.ncr.com billstewart@attmail.com # ViaCrypt PGP Key IDs 384/C2AFCD 1024/9D6465