Money is Minted Certainty

Every year or two, I realize I don’t actually understand what banks do and how they work. This happens reliably enough that I keep getting less confident that I, or anyone else, will ever really truly understand what a bank does.

But I’ve recently settled on a model that’s both novel and useful, that neatly synthesizes the two broad schools of thought. We can think of those schools as Hard Money and Bagehot.

• The Hard Money Theory is popular with a motley crew of Bitcoiners, Austrian economists, Ayn Rand’s imaginary pirates, and, oh yeah, 99% of people who…