This is some blue sky, beating around the money bushes, to see what emerges when I think about two major divisions of the monetary system: Debt Money and Debt Free Money.
Debt money is balance sheet money. Every unit of monetary value in existence has an equal balancing counter part. One is a positive value the other is a negative value. A positive value (asset) to one entity claiming right to the negative value (debt) of the other entity in a contractual relationship obligating the holder of the debt to repay (and therefore extinguish the debt) Plus, in most cases, some extra payment (interest). Lucky if you get an interest free loan!
All money in our current monetary system is debt money. Except that money that has no debt related counterpart: Coins. Coins are debt free money. They can be exchanged for debt money, if you have enough coins to total a single unit paper dollar value. A single unit paper dollar value can be exchanged for an equal value of coins. Coins as official legal tender is a grey legal area that does not matter much since it is simple thing of definition. They could be declared legal tender in a day. Legal or not does not matter for this examination.
Debt money is bank created money. Created from nothing with a stroke of a pen that establishes a relationship between a debit and a credit account and the two parties. Each party holding one or the other of the balancing accounts.
Coins are sovereign money created by the government. It has the right to do that for all money but restricts itself to coin creation and contracts out the creation of big money, debt money, to the banking system with controls and regulations that the banks want. The system is rigged.
This is a given fact: The difference between Big Money (Debt Money) and Little Money (Debt Free Coin Money) in the current monetary system is the unit is determined by the nature of a single unit value of one dollar in either currency.
If it is a paper dollar bill it is a debt based dollar.
If it is a coin with a value of one dollar or a coins with a total of one dollar it is a debt free dollar.
Decimal fraction coin denominations of less than a single dollar coins are always debt free as much as the single dollar coin. That is obvious.
The governments role in the creation and regulation of the monetary system to which it has sole and exclusive sovereign right granted by our constitution is confined to the Small Change segment of coins.
Joe Firestone has ideas to expand government control of the money system to exercise its sovereign rights simply by specifying the denomination of a coin that it has sole right and power to create as the "coin of the realm". It can be a million or trillion dollar coin. Minted and put on deposit in the Treasury. Or put on the president's desk. "The coin (buck) starts and stops here". It becomes the authority to issue all debt free money as object children of the parent coin inheriting the feature of the parent coin to have value up to the level of its child value. Total value of all denominated object children equal the value of the parent coin. Make the parent coin big enough so that only one coin is needed to support all potential children or issue another parent coin as necessary.
The defined monetary value of a coin (our only debt free money) is the arbitrary definition of our government that has the sole power and right as a government of the people to declare. So be it! That power is supreme to the power of the banks.
Little money is coin debt free money. Little money is only an matter of numerical definition. What can it be? Why.....it can be anything we wish it to be!
National Debt is not necessary to create money! All it creates is Debt Money. It is a confusing, complicated system to create money that benefits the banking and financial system. Benefitted it to the extent that it creates a dysfunctional economic system that fails in the allocation of resources and the achieving the private and public social media decision making objectives of the medium of exchange.
Little money scales well. Scaling of a small modular system to a big system, maybe the only big system, is a valuable system characteristic. It is especially valuable when it consumes bigger systems that are dysfunctional. It eats them bite by bite like pac man until they no longer exist. The only variable in the scaling of a small system that eats a bigger system is the function of time.
Some old systems take a long time to replace. Religious systems, political systems. In the information age our dominating social structure has become conceptually digital. Digital systems can change rapidly! Enterprise entities that dominated sector systems based on technology are history if they do not succeed in changing with the rapidity of the base they dominate. They become old school and out of business. However, they will fight to delay demise and protect themselves to perpetuate their power until they die or are otherwise terminated for the sake of removing impediments to progress. The market kills them off. If they are more powerful than the market forces then the government steps in for the good of the people.
Sometimes the only thing that the government has to do to terminate an entity that is severely dysfunctional is establish a regulated level playing field open to those systems that should scale and survive based on their public benefit to accomplish the objectives and ideals of out nation.
Perhaps the scaling of a debt free money system based on its value to our "way of life" to the extent that it beneficially replaces the dysfunctional elements of the debt based money system only needs the slightest tilting of the playing field back to level. The level field is always the one where "we the people" have the freedom of choice. A choice between the current debt based money system and a new system in which a debt free money operating system can emerge where debt is not the base upon which the money system is built but only one of the applications of a system built on the conceptual structure of debt free money.
Little money debt free money, coins in our current system can scale to big debt free money quickly. Scale to the point where it equals the total value of all money currently existing as our medium of exchange in a system designed to regulate and maintain the levels necessary to achieve full employment and low (or no) inflation. It can scale to the level of national public debt (about 16 trillion dollars) or ultimately to both public and private domestic debt (about 50 to 60 trillion dollars) which is a very far out idea. The more likely degree of scaling is to the level of world wide public debt. That means it that debt free money scales to the level of common world currency cornerstone as a the medium of exchange.
First step in scaling to a debt free medium of exchange is to declare that all physical cash paper dollars in the current system are to be replaced on a one by one basis by serialized digital dollars. This would be an incremental applying increments of change on a denomination basis as paper dollars up to 100 dollar denominations are replaced by digital dollars created by the government in the same conceptual structure as the current creation of coins.
That method of scaling gets the government out of the small change business and into it proper sovereign right of managing our public monetary system for the public good.
Once the medium of exchange has been converted to level where it replaces all physical cash up to the 100 dollar level then the next increment of scale replaces digital bank created money up to whatever level is beneficial to the purpose of the our monetary system to provide a medium of exchange for the allocation of resources. Beyond the 100 dollar bill that domain is the credit and debit card. Scaling into that domain requires the elimination of clearing house and banking account entities.
The first step is to replace the monetary unit "device" existing as a paper dollar. Replaced by a device that represents and is able to perform the functions of a paper dollar in the digital domain.
That device? A smart phone. iPhone. The software system? Apple Pay?
The Federal Government granted the Federal Reserve the exclusive right to run our debt based monetary system in 1913. I see no reason why the Federal Government should not grant exclusive rights to an entity or conglomerate of entities operate a government franchised debt free money system to administer money created by the government and exchanged on a one for one basis for debt based cash paper dollars as they are retired from the debt based system and reborn in a debt free monetary system.
Free private enterprise has always been a government partner. Competition for the government franchise contract. Award it to Apple and Google? In partnership with the NSA to keep everything honest.....or else. Where money is involved a cop is always needed.
Apple Pay would, as a function of time, replace cold hard debt based cash with debt free digital money. Time span? could be 5 years to get to a 90% replacement level.
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