From Money to Stock (shares)

[Sam]

How to achieve a shift away from Money to Shares

I propose a gradual shift away from money (Federal Reserve notes)
towards shares. There are several ways that can be achieved, but the
Fed Res can be a good instrument to achieve this, so it shouldn't be
privatized as this would isolate it from political control.

The Fed Res should gradually widen the range of organizations it lends
to, as long as they have a good reserve (i.e. asset/liability ratio
with assets measured in shareholdings).

At the same time, Congress should use the Depository Institutions
Deregulation and Monetary Control Act of 1980 (MCA) to change the
reserve requirements for financial institutions in such a way that such
institutions will be required to keep an ever-larger back-up of shares
if they want to lend from government.

As the Fed Res keeps increasing its reserve requirements, it will
eventually price itself out of the market. That's good, because
eventually we want shares to become the dominant means to facilitate
trade. But the process should take place gradually, because it will
come with a gradual decrease in the value of the dollar. Shares in
general already appreciate more compared to currency, but the above
policy will add to that, encouraging people to use shares more and
more, rather than to keep dollars on bankaccounts. The Fed Res can
change interest rates to ensure it will be a smooth process, but given
the projected decrease in the value of the dollar, it will have to
charge ever higher interest rates, eventually also pricing itself out
of the market in that way.

MCS

above forwarded from:
http://groups.yahoo.com/group/libertarian-nation/message/1829

[Sam Carana]

The value of any promisory notes depends not just on the face value, but on the chances that the one who issues the notes will actually keep the promise. 

 

That reality can be hidden for a long time in a country that is closed off from the world. In some countries, banks keep carrying bad loans that are getting worse all the time.
 

At some stage, it should be clear that some debts will never be repaid. Especially now that globalization forces countries to open up their financial affairs, it's better to write off bad debts and bite the bullet.

 

We should look forward to a world where government no longer controls society as the sole issuer of currency.
 

Sam

 

On 6/11/05, John Gelles <indexed...@sbcglobal.net> wrote:

Dear Sam,

 

Remember, we are off the gold standard. Richard Nixon ordered the nation to stop paying central banks gold for their dollars. Congress cheered.

 

Ben Bernanke and countless others have explained that government cannot run out of paper or binary 0's and 1's.  It cannot default.  We pay dollar debt in dollars.  We can run out of ammunition and soldiers. Not our own money.

 

The question is for how long people will be willing to go without things they can produce just because Congress refuses to contract for their production.

 

John

[Sam Carana]

Hi John,

 

I welcome competition to the monopoly-control by government over money. In the long term, I see shares replace money altogether, at least for the larger amounts. But it's interesting to speculate what will happen to coins.

 

In small transactions, coins still work out best, but t

echnically, any items can be used to replace coins, so your currency may well be feasible, but like any other currency it needs back-up. People want to get some assurance that they can trade in the money somewhere.

 

To get such back-up, assurances by large companies could suffice, but government intervention could affect their assurances. Perhaps back-up could be better provided by companies registered at the Channel Islands, issuing shares in your currency traded at a Stock Exchange at the Channel Islands.  That way, users of the currency have more assurance that they can exchange the currency for shares and visa versa. Have you thought about setting up a stock exchange at the Channel Islands, John? Is there perhaps already one?

 

One of the problems in the current system is that Stock Exchanges do not like the companies listed there to also list at another exchange. Dual listing could result in two different prices for the same stock. Personally, I welcome more competition between stock exchanges including multiple listings, which will force Stock Exchanges to differentiate in the services they offer, such as background information on the stock listed, online transactions, accrue services, brokerage, etc.

 

What are your thoughts on this? How about setting up a stock exchange at the Channel Islands where companies can issue stock on your currency, and that allows for multiple listings and online trading?

 

Sam

 

On 6/12/05, John Gelles <indexed...@sbcglobal.net> wrote:

Dear Sam,

 

• You and I may have some of the same goals: to end poverty and tyranny as we promote liberty; to go green as we raise living standards and end involuntary unemployment; to do the preceding with the help of the internet to reach people who can work together to create a political voice. 

 

• We each will most likely respond to money. That is its miraculous nature. A billion Chinese work to supply our stores with stuff just to get some American money.

 

• One day the Chinese may no longer love our money. Most likely on that day they will love some other money.

 

• Money is not necessarily a banknote or even debt. It is something that buys what you want.

 

• We presently use fiat coins and fiat banknotes. The fiat coins are real money. People must accept them in payment of private debt. But they are GI (government issue) money.

 

• The banknotes are also by law good to pay off private debt. But banknotes are created by new debt. Coins are just stamped from metal worth little compared to the money they are. They do not require new or added government debt or taxes.

 

• My proposal is to add to our money supply, new money that does not add to our taxes or national debt.

 

• My money, like greenbacks or silver certificates, waters existing money. It can only be created if production of things for sale and or private savings rise to maintain prices at an affordable level.

 

• Your proposal is for a system far more complicated and different from the one in place. Possibly, it cannot be understood.

 

• My system is roughly in place in the Channel Islands; and it was in place in every nation in WW II and in America in the Revolution and the Civil War.

 

• The only difference between those previously successful systems is that mine features inflation protected (indexed) savings accounts.

 

John

 

P.S. feel free to post this on world currency group's bulletin board.