Don't know what your point about pizza is, but the people in Zimbabwe and Weimar Republic Germany certainly understood that while their currency could be measured out in some amount to buy gold, it was an amount below where it was then they earned the money, representing a huge loss of wealth. The reason a static money supply is desirable is to preserve wealth. When the supply increases, wealth is removed and transferred to those who receive the newly created money. There is no need for a growth in the money supply as the value of the money will increase with the growth of the economy, thus no need to transfer wealth to the wealthy. This gradual increase in the value of money is desirable because it discourages malinvestment. When people realize that their money is going to be worthless when they retire they feel pressure to invest. With security in their wealth, then they will tend only to invest in things they understand and thus are more likely to succeed, as opposed to real estate, Yahoo!, Bernard Madoff, etc.
We are well headed towards 70s level inflation as the government has been increasing the money supply at an historical rate. The biggest difference is that now the government even more heavily manipulates the numbers that we use as metrics for economic performance. For the CPI, the lack of inclusion of most things people purchase, such as food, real estate, and energy, combined with what they call the substitution effect, means that the numbers they provide are substantially lower than what the real inflation numbers are.
The history of fiat currencies is that 100% of the time they are ultimately abused by governments to support the rich and impoverish rest. We are on our way there. Labor participation rate has fallen to the same level it was 1979, a time when women were still significantly underrepresented in the workforce.
You may find this hard to believe, but I know quite a few adults who download torrents. The RIAA/MPAA are very powerful and have been able to introduce and pass legislation in most nations and even the U.N. They take it quite seriously and have manipulated every level of government to support and enforce their schemes. Even if it is "kids downloading movies", consider that the government cannot stop kids from downloading movies. How on earth are they going to stop people from using a currency they desire? And if we're going to talk about stuff the Government fails to stop people from doing, that pretty much encompasses everything banned by the Government - drugs, insider trading, prostitution, speeding, talking on cell phones while driving, ponzi schemes, etc.
Counterfeiting is not the same as competing currencies and is not generally something done digitally. All I have seen with regards to government interference is fear-mongering that the government is going to come in and shut things down with a magical law, but what I have not seen is a technical discussion on how Bitcoin is going to be shut down.
The Fed loaned trillions of dollars to foreign central banks and gave untold billions to select private companies. There is nothing that states the Fed cannot create as much currency as it desires.
The Fed sets interest rates, and nobody else can. Banks are required to be members of the Fed and it is a private organization that operates without Congressional oversight. Just going by the Wikipedia article on Cartels, I'd say it's a pretty close match.
Rothbard never argued for eliminating banks. No clue what your point is.
The Fed is currently adding $40 billion per month directly through the purchase of mortgage backed securities. The Federal Government continues to run $1+ trillion deficits. Insane is certainly a subjective term, but the amount of currency currently being created seems unreasonable.
Work continues in this area. -- DEC's SPR-Answering-Automaton
