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He says central banks have nothing to fear, giving the example of saving for retirement by forgoing unpredictable U.S. dollars for money based on kilowatt hours and cubic feet of water. “If the priority of a central bank is price stability, then I would have thought they would be in favor of a wide variety of currencies,” he says.
A very clever and powerful economic argument. It strikes at the core of the western CB's mandate to provide price stability (something they have failed imho) and one of the reasons they are given 'independence'. Since it is probably provable with some good analysis that a basket of currencies will indeed lead to more price stability than a single monopolistic currency. Particularly if that basket includes currencies linked to prices of a wide range of commodities, water, electricity, oil, grains, etc. In fact, Hayek specifically mentioned having done analysis for such commodity basket currencies and how they would be ideal for providing price stability.
Surely the CB's want price stability? What could they possibly have against alternative currencies or bitcoin?
Exactly. This should resonate strongly with the subscriber base. Most institutional investors have a mandate to first and foremost preserve wealth. When someone as influential as Mohamed El-Erian (Pimco) says (a few days ago) that "people no longer need to be concerned just with return on investment, but return of investment" investors pay attention. Or at least they should.
Hopefully.