What is Fiat Creation?

Are all existing proposals for money creation absurd?

• Ron Paul wants to eliminate the powers of both the Fed and the commercial banks to create money. But not only would this not work if done unilaterally by one nation, it would give the power to create money to... gold miners. Positive Money wants to eliminate only the power of the commercial banks to create money, leaving fiat currency intact. Since there would still be a need from time to time to expand the amount of credit in the economy, it would leave the decisions on this matter to government bureaucrats. This seems... risky. And now we come to the mainstream views - which nowadays, tend towards quantitative easing. Ben Bernanke, under QE3/QE4, has promised to print money for as long as it takes. So... what happens if he is never satisfied with the state of the economy? Will the Fed go on creating money forever? Does anyone have any sensible ideas about money creation? P.S. Before you make a proposal, you have to understand how things actually work, and what I've written above.

• Answer:

  All existing proposals on monetary policy are based on debt loaned at interest, and therefore are indeed absurd.