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First, it is important to recognize that the private currencies must be indexed to the nominal government-issued currency, since it will provide us with a means of measuring inflation and deflation. Otherwise, how would we index the private currency. Second, it is important that the nominal and real currencies be controlled by separate sectors, if we are to have any hope of keeping both sides honest. As an example, if participants in the marketplace perceive that the government-tabulated inflation index is under-reporting inflation, they can react by increasing real rates in the marketplace and/or by undervaluing the private currency (i.e. by discounting the indexed value of the private currency for the sale of goods and services.) Third, only the private sector creates new technology. For a long time, the governments tended to monopolize the creation of money, along with the central banks; as a result, there has been very little true innovation in the monetary instrument over time. In
