032614moneyThe Swiss central bank’s recent move to de-peg the Swiss franc from the euro reminds us of the importance of choice in currency.,By pegging the Swiss franc to the euro, the Swiss central bank was in effect subsidizing the euro by refusing to compete with it. If carried into the long term, this would have meant a de facto monetary union between the euro and the franc. Fortunately for most people however, the Swiss central bank maintained its legal independence from the euro and the peg was eventually ended, thus freeing the holders of Swiss francs from the new round of money-supply inflation that is expected from the European Central Bank. Those who have their savings in euros are not so lucky. Those in the Eurozone who work hard to save and invest will have the value of their euros reduced to further subsidize and bail out politically-connected investors who have financed southern European governments. All the while, the government of the European Union will enrich itself and its friends through the money-creation mechanism. Such are the expected results of the expansion of government’s money monopoly in the Eurozone.The European monetary experiment illustrates anew for us how a monetary monopoly is an indispensable component of an effort to achieve political unity and more powerful government. As Philipp Bagus has noted, the currency known as the euro is just as much a political instrument as it is an economic one. It greatly enhances the monopoly power enjoyed by the nascent state known as the European Union without having to first achieve true de jure political union. The central bankers of a unified Europe are far more powerful than the central bankers of any one European state could ever hope to be. More