In short, there is no question that a country can run a stable paper currency without a gold standard, a central bank, a lender of last resort, or much regulation; and not only avoid disaster, but perform well. Bottom-up monetary systems - known as free banking - have a far better track record than top-down ones. Walter Bagehot, the great nineteenth-century theorist of central banking, admitted as much. In his influential book Lombard Street, he effectively conceded that the only reason a central bank needed to be a lender of last resort was because of the instability introduced by the existence of a central bank. The