Re-basing the currency
What would you think of a monetary system with NO borrowing, NO taxation and NO reserves? It is simplicity itself. When the government needs some dough to build a fighter jet or provide orthodontia to a retired race horse, they just print it up. All bonds will be retired, on schedule and as issued (except TIPS, we’ll have to do something about them) but no more will be sold. Taxes? A dusty anachronism. And since this is fiat money, not based on crappy Italian cars but rather on the forceful declarations of government, there is no need to keep gold or silver stocks as the US currently does. We will call this Infinity Money, an appealing brand name. Inflation? Oh hells yeah! Hyperinflation? Perhaps so but now in the computer age the handling of numbers forty digits long is no great chore and as in the Weimar Age, once the numeric string is too long and the tail end isn’t worth a single grape we just cut off a dozen or so zeroes from all accounts on a date certain, I’m thinking midnight every Friday so you can restart the melting of your valuables fresh on Monday. This solves many, many problems. For one, we are constantly told that the billionaires and krillionaires are maliciously keeping trillions in their vaults so they can lounge among the greenbacks and deprive Danish Lit majors of productive employment. No more. Anyone who hoards our un-earned money will see it evaporate like dry ice so high-risk, high-growth investments will be the only recourse. The consumer likewise will not keep his money in his pocket because his pocket (or more accurately, his card) now has an extra-dimensional rift within it that will empty out the value at the pace of a flushing toilet. Consumer spending spikes. Investment spikes. Savings? Well, there won’t be any actual savings but there will be investment in goods and services. It is said in Weimar Berlin that the streets were awash in cocaine and prostitutes of all descriptions. Now that is an enviably energetic economy! [Read more →]