Paper Dollars

I am almost 70 years old.  The world has changed.  I remember when…….

….When I did not have a credit card.  I did not have one until after college.  I can't remember having a checking account.  I did have a savings account but don't remember making many deposits or withdrawls.  It was an account to cash the few checks I received.  I used cash and never used much of that, I was a student.  The days of cash in the pocket were simple days of understanding the money system.  Money in the pocket.  Money in the bank.  No loan until the last year of college, a few hundred dollars paid off when I joined the navy. Money was so simple then.  It was dollar bills. 

What if all money was in the form of dollar bills today?  Absolutely not realistic since money doesn't pass hand to hand, pocket to pocket today.  It passes between computers.  Dollar bills in various denominations are only about 3% of our money supply. Conceptually, however it is an idea that leads me to the conclusion that money today should be exactly like doing all transactions with dollar bills except those bills are on a computer, not in our pockets physically but in our pockets virtually on a device or accessible by a device connected by a network to our money.

What if all money in our system was defined as serialized paper dollar bills with denominated amounts at its four corners?

A dollar bill is uniquely serialized.  A physical object with a denominated amount.  Everyone can simply understand what it is.  Everyone simply understands what it does.  Few if any would know or care that it is actually a representation of debt in the real world of today.  The dollar belongs to them, they possess it.  Forget about any dollar bill association with debt.  All that is recognized in this "what if" situation is its positive value as a medium of exchange.  Therefore, for the sake of this example, let's just say a dollar only has a positive value, there is no debt side to it.

On with the pipe dream based on this crazy idea of all money being in the form of paper dollar bills.

There would be a finite number of dollar bills in existence.  They would all be serialized and in a range and total of denominated bills necessary to conduct business.  Maybe the largest necessary single bill would be a hundred million dollar bill.  Nice to have one.  Nicer to have more than one.  Maybe billion dollar bills would be necessary for large transactions.

Since this is a fantasy paper dollar bill world I can lay any number of fantasy qualifications on it.

Paper dollar bills are never lost and can never be destroyed in any way.  Once created they exist forever.  They never wear out.  They can never be lost.  They can never be used for any purpose that destroys their physical existence like using them to light cigars.

While dollar bills live forever and never die, they do have a birth.  They are born when an imprint is made on a special piece of paper that can exist forever, that cannot be duplicated in either its substance or imprint graphics and a denomination amount and a serial number is imprinted on the bill that is unique to that bill and is duplicated by no other dollar bill in the system of any denomination.  Exactly the way that dollar bills are born today.  They just exist forever, somehow.  They live at least until the world has no use for this form of money any longer.  Maybe that is an economic definition of the end of the world?

In this "what if world" that defines what money is.  This is what all money is as an object. The most fundamental relationship dollar bills have to any other object is to the object that owns it.  In this case the owner is the object entity in physical possession of the dollar bill.  Physical possession equals ownership by an entity capable of potentially using that dollar bill in a transaction exchange for goods and services.  All owners are therefore by definition in the class called Financial Entities and are in the sub class End User of the money system. 

There are primary two entities that act in the money system. 

1.End User Class financial entities with possession of dollar bills and therefore ability to use them as a medium of exchange for goods and services and, 

2. Custodian Class financial entities that have custody of dollar bills (for various reasons) but have no ownership of them nor authority to use them as a medium of exchange for goods and services.