I hate the sound of an X-year plan -- very Maoist, I know.
But here are the facts as I see them: The last time we went from a fiat-money system (instituted by the tyrant Lincoln) back to a gold standard, there were plenty of people hurt by the change-- and not the bankers. In fact, the bankers were the ones cheering it on. Those hurt were the mortagors who borrowed money, long-term, with built-in inflation expectations that got reversed by the return to gold. These were mostly farmers who, thanks to deflation, lost their lands to the banks. This led to the Popluist Revolt, which I believe gave us the Progressive Movement and the New Deal. I can connect those dots if need be.
Point being: If we halted money-supply growth right now, people who agreed to mortgages with the expectation of inflation built into the interest rates would effectively be robbed. The only way around this, as I see it, is a Constitutional amendment prescribing exactly how the Fed should be abolished over the course of three decades.
At the end of thirty years, there would be no more "U.S. dollar." There would be a free market in money. However, I think a transition is needed, given the existence of contracts made under current assumptions.
Here is how I would do it:1) Require that all Federal Reserve open market transactions takeplace in either the Gold spot market or the Gold Futures market. Alsorequire that all futures market transactions, once entered only endwith actual delivery. (If we are shooting for a gold+silver 'basketdollar', extend instructions as needed).Now, from a naive/theoretical/Keynsian perspective, this wouldn't haveany particular effect on anything. Good for us, harder for the badguys to complain.But, we all know that in the long run this will mean two things, Imean really, they only got one play in the play book. So at somepoint in the future we will have : (a) higher gold prices and (b) moregold reserves owned by Federal Reserve.So2) Once Gold Reserves times Gold Prices are high enough to redeem allFederal Reserve Deposits at the market price in gold, declare dollarsredeemable, at that price.3) Issue every citizen one share of the Federal Reserve. Axe all govermental ties .... i.e. make it a regular bank.4) Require all banks to clearly communicate their reserve policy.5) Start enforcing fraud and bankruptcy laws like Murray Rothbard would.
Jason Dean:2. Legalize monetary competition: Let private banks issue their own notes backed by the assets (or not) of their choice. Get rid of legal tender laws. Completely deregulate the banking system.
Thats all you have to do, and thats all you should do. Government has no business being a supplier of money; allowing that will only tempt them to monopolize it again. If free banking really is superior, the Fed will go away on its own if competition is legalized. Besides, there are plenty of people who don't want their money backed by gold, including me. We don't know what sort of monetary system would arise out of free banking, but I'd imagine it would be very different from what we currently have, and I hope it doesn't involve high gold prices for industrial uses.
No one would be hurt any more than legalization of competition in package delivery hurt USPS customers.