There would be several problems if all states decided to print their own currency. For example, international trade would be very difficult, if not impossible. It is likely that each state would have to trade independently. This would be particularly difficult as the federal government oversees international trade. Moreover, trade between the states would also become difficult.
Such a system would also put us in a difficult financial situation. Money would not longer be unified, which might prove problematic for the federal government in issues such as budgeting and taxation.
Deflation would be the biggest problem because deflation is the depreciation of money. Another point of view is that if you have a surplus of something it will have less value
It was better for growing crops. A stable climate ensured a surplus of agricultural produce during these phases, slowly leading to the evolution of cities.
