You're right that I conflated the two above but the relevant feature of each is that they're a form of money creation. With a fractional reserve, the amount of

You're right that I conflated the two above but the relevant feature of each is that they're a form of money creation. With a fractional reserve, the amount of money created (through leveraging the reserve) is inversely related to the size of the reserve. With fiat currency the 'reserve' the government has is nonexistent, allowing for unlimited money creation. The government or a bank's ability to engage in money creation are both limited by the certainty that those using the currency have in its future value. If a bank loses it, we get a run. If a government loses it, we get hyperinflation. Thanks for the distinction between the two concepts though. You're exactly right and gave a great explanation of them. I'll take a look at the free banking period. It does sound very interesting. Talking about the money and valuation sometimes it seems like all we have to measure things with is a rubber ruler, especially when the amount and value of currencies can be manipulated.