Exchange Rates Between What Sorts of Currencies?

It is argued that an exchange rate system is needed with a unit of account defined to be stable, probably with reference to a basket of goods and services, under institutional arrangements for keeping its definition effective. An argument is made for a private enterprise system, with government out of the money business. It is argued that an exchange rate system is needed with a unit of account defined to be stable, probably with reference to a basket of goods and services, under institutional arrangements for keeping its definition effective. An argument is made for a private enterprise system, with government out of the money business. The kind of stability needed could also be provided by a reformed government system. Once the largest countries or monetary areas establish institutions assuring domestically stable units of account, perhaps even by getting government out of the business of issuing money, they can safely let exchange rates and balances of payments take care of themselves.