i always hear people talking about how america should switch from its central banking system but i am confused on what other types there are and why this system isn’t great
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Central banking is where a singular entity serves as a lender of last resort, as well as a source and backer of currency. For obvious reasons, this tends to be something done by governments, rather than businesses, but also for obvious reasons the central bank tends to be dissociated from the political side of governments to make it rather difficult for people to simply vote for more money for themselves.
People who want to move away from central banking are the kinds of people who idolize the finance scene of the early 1800s, or who want to go back to commodity-backed currency (typically, gold). They also don’t seem to realize that the world is very different from the 1800s, and we can’t simply go back without, in effect, removing a few billion people from the international financial system.
They do this because they’re deeply uncomfortable with the idea that currency isn’t “backed” in anything, when in reality they just don’t understand that the backing of a currency is entirely dependent on the strength of the economy in which that particular currency has a government-enforced monopoly.
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