Bank lending policy

Not in the scenario I am suggesting, where money is time-valued.

"M Holmes" wrote

Ah, now I see where you were going - you're thinking about the people in

"M Holmes" wrote

You don't seem to have fully grasped my suggestion.

I'm suggesting that **instead of** using coins and notes to denote cash, cash is actually denoted in future by plastic cards (or anything else that can store numbers that may be suitable) - hence my comment (in another part of this thread): "Do you think that it may be easier for people to accept when we get rid of all coins/notes, and simply use little plastic cards all the time for our money - which just store a "number" on a chip or such-like ??".

So people won't have the "choice between cash in their pocket or the card" -- the card **will be** their cash!

People now believe in fiat money the way very few people historically have, and even believe that it's basically the same sort of thing as money that's always been around.

In my view, sooner or later, that will lead to trouble. Fiat money has an inherent fault: governments can't help themselves but mess with it, and print more when they run into trouble. In the end they'll screw up and that currency will fail. That failure is fundamentally built into the system.

FoFP

I get the feeling that a left leaning government is more likely to screw with it than a right leaning one. And that's coming from a leftie. So, if fiat money has inherent issues, what's the solution?

In message , M Holmes writes

How much of this should we put down to just printing money for the sake of it, as opposed to limits on the amount of money imposed by the amount of shiny metal.

Doesn't just apply to money really.

Asset backed money. Gold worked fine for most of human history but we could easily have oil-backed money or whatever.

It simply has to be something finite and in demand. The basic idea is to stop governments debasing the currency.

In fact John Major's idea Way Back When of having the European currencies compete with each other would have perhaps allowed this. A private gold-backed currency could have beaten both the Euro and the Pound in free markets. Of course arguably this is why private currencies are generally banned by governments.

Heh, the local Chapter of the Tories once wrote and asked:

What should we do about the Pound and the Euro?

and

What should we do to stop Rising Crime?

They promised they'd be interested in my answer and would pop round to discuss it and perhaps invite me to join. I answered "Introduce a gold-backed private currency and put both the Pound and the Euro out of business" and "Arm the citizenry and make life unsafe for criminals".

Not only haven't they been round, I don't even get election communications from them any more. I suspect I'm on a little list...

FoFP

I'd be willing to bet Real Money that most of it is down to government counterfeiting.

FoFP

"M Holmes" wrote

How?

"M Holmes" wrote

... just as a "cash stored on a card"-type system could be!

"M Holmes" wrote

Eh? Where does that "necessity" come from?

The system could quite easily be set up just storing **current value**, not storing each *transaction* at all. You just need to make it secure enough so that the only way of changing the value stored on it, is by a transfer to/from another person's card.

Currently, when you pay 20 for something in a shop, your wallet "loses" 20 of value and the shop's till gains 20 of value. With the idea we're discussing now, your "card" reduces its value by 20 at the same time as the shop's "card" increases its by 20 -- when the two are linked together in some agreed way (possibly wirelessly, but just requiring the permission of the person whose card's value is going to be reduced).

"M Holmes" wrote

Glad you (finally) agree!

I'm no luddite, believe me, but I'm dead against this idea. And I suspect you'll find the average daily mail reading nutter would feel the same way. Political suicide, as well as almost certainly enormously expensive, which we'd have to pay through taxes for.

They send bills. They phone up and ask "There's a strange transaction at a brothel in Croydon, is that one of yours?" and send all sort of crap to the taxman.

And that's only if you're not flagged by the authorities.

But *WON'T* be. I follow this stuff. Trust me: I'm an anarchocapitalist.

Oh, things like them having to know that if you blew 250 quid on a Hawkwind record from Dodgy Dennie's record Store, they ned to subtract that from your balance.

It *could* and there are indeed some good crypto protocols already designed for anyonymous electronic cash. Governments however are against it (Hell, just try putting 3000 quid in cash into your bank account quite legally and the Teller neeeds your shoe size or they'll jail him) because you might be Al Queda, or worse, trying not to pay their rakeoff.

I understand the technology. I also understand that as long as there are governments, folks will be heavily leaned upon to prevent anonymous electronic trading coming about.

If this is still going when I'm less busy, I'll dig out some references.

FoFP

"M Holmes" wrote

No they won't - not in my system. Just like you currently "fill-up" your wallet at an ATM, you'll be able to "fill-up" your 'plastic card' at a (new-style) ATM. No bills required!

"M Holmes" wrote

No they won't - because the system won't store those details, nor pass them to anyone!!

"M Holmes" wrote

The authorities won't know any transactions either, just like with cash at the moment (except perhaps "large" transactions, eg >10K, could be automatically referred to money laundering officers by the plastcic cards ...)

"M Holmes" wrote

If you're so sure that a 'plastic card' system would not be allowed to be anonymous, then how come the "powers-that-be" allow the current coins & notes system to be anonymous??

And as you're so sure that if the masses didn't like a government's currency, then they'd start using gold or silver (even if the authorities didn't like that!) -- then why wouldn't they use an anonymous "plastic card" system which some enterprising company had set up, if that's really what they wanted (even if the authorities didn't like it)??

If the masses would "force" authorities to allow gold/silver if that's what the masses wanted, then the masses would surely also force the authorities to allow anonymous 'plastic cards' if *that* was what the masses wanted!

"M Holmes" wrote

But the balance would be stored *on* the 'plastic card'. That balance would be automatically reduced, as the balance of Dodgy Dennie's record Store was increased - real time, just like you currently hand over some coins & notes instead.

So no need to store any details of transactions - just the balance remaining. Just like at the moment, your wallet doesn't store details of it's transactions (assuming you don't put your receipts in it!) - it just 'knows' the balance remaining (ie how many coins & notes it now stores).

"M Holmes" wrote

Which is why the system could be set up to be anonymous below a certain limit, and automatically notify the authorities if the transaction is above, say 10K (isn't that close to the current M.L. limit?) - but NOT NOTIFY below this.

It'd only be the terrorists who'd be unhappy with a system like that, wouldn't it - and who cares about them being unhappy? ;-)

"M Holmes" wrote

In that case, I'm surprised that the governments don't just go and abolish coins & notes. If they don't like anonymous trading, they're being a bit hypocritical by producing the coins & notes which allow it!!

"Jo Reed" wrote

Hmmm. Wouldn't it be so much easier for them to (say) press a button on a card (to 'release' cash) rather than having to count-out the correct combinations of differently-denoted coins & notes?

"Jo Reed" wrote

How much does it currently cost to mint, print & count a large number of coins & notes per person? How much should it cost to produce a single "plastic card" for each person??

all good points tim, but people just don't want it! you can say "wouldn't it be easier if x or if y" but people are very wedded to the cash. they tried this in leeds about 10 years ago, a local privatley run scheme, it flopped. and as for cost, it would be enormous. To attempt to intoroduce a new money system for 55 million people, and intergrate that into the current system, without making any mistakes. Think how many laywers of management there would have to be, call centers full of people dealing with problems, new terminals to be rolled out over the entire country, an enormous team of engineers to do that. get outta town! bearing it mind it would be anonymous, so if money went missing from you card you wouldn't be able to prove it. naaa, no way, ain't gonna happen for a long long time yet.

"Jo Reed" wrote

You mean just like now, if coins/notes go missing from your wallet?? :-(

I thought you might say that.... the difference is, and it's quite a significant difference, i don't lose money from my wallet, at least I haven't yet. It's a risk that I can personally control, which i like. Whereas with electronic money it's a risk that I can't control.

"Jo Reed" wrote

Notes are susceptible to fire or water damage. Coins are susceptible to being dropped & rolling away, into drains / behind immovable objects in stores etc. All these problems could be "designed-out" of a 'plastic card' (or whatever) system.

The system could also include security features such as fingerprint readers, PIN numbers, memorable info etc etc - which would make it harder for anyone but the "true owner" to use the card.

You may be worried about electronic failure of the card - fair enough. But if the reliability of the card is such that the chances of it losing it's crucial information is *less* than the chances of a careful person having their notes burnt/soaked, their coins rolling away, or being mugged - then what's the problem??

You're making an unfair comparison. You're comparing the risk of physical loss/destruction of coins/notes with the risk of electronic/security failure of the card. Have you forgotten that the card is *also* susceptible to risk of physical loss/destruction?