tag:blogger.com,1999:blog-6704573462403312459.post5274358185810518501..comments2024-03-28T06:53:23.473-04:00Comments on Moneyness: The road to sound digital moneyJP Koninghttp://www.blogger.com/profile/02559687323828006535noreply@blogger.comBlogger53125tag:blogger.com,1999:blog-6704573462403312459.post-29059182844107953552017-08-08T10:39:50.134-04:002017-08-08T10:39:50.134-04:00addendum:
Even if one concluded that multiple sta...addendum:<br /><br />Even if one concluded that multiple standards within the same jurisdictions could not survive due to the gravitational forces of the omnipotent market, one would still have to explain by which mechanism the law / national borders interfere with the minds of people so as to perturb that otherwise immaculate, universal standard.Oliver Daveyhttps://www.blogger.com/profile/09960924207469377279noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-33565838058558646282017-08-08T03:55:43.478-04:002017-08-08T03:55:43.478-04:00I think where we differ is that I don't view t... <br /><i>I think where we differ is that I don't view these as cases of different standards. For me the 'standard' is the abstract dollar; that's what the entries in all banks' books refer to</i><br /><br />And this is where I would repeat my 'accusation' that you are idealising the abstract dollar. Let me try with a hopefully more realistic example.<br /><br />Start with two countries that have one bank each. Lets call them USA & Mexico.<br /><br />Now zoom in to neighbouring border towns of El Paso and Ciudad Juarez. Basically , they make up one, albeit segregated, economy. Assuming for a moment that there are no transaction costs for cross the border trade (no taxes, trade restrictions etc.), one could well imagine that the inhabitants of both towns adhere to the same abstract 'money' standard. They always think in terms of both currencies and are very apt at translating peso prices into dollar prices. The two are separated simply by a factor of multiplication. A bun is always worth about 1/10th of an hour's work, rent will cost approx. 1/3 monthly wages etc., no matter which currency you choose. Nad if there is a shift, it happens in both currencies simultaneously. One could consider this to be one standard with two different names.<br /><br /> Unfortunately for these residents, though, the US and Mexican economies consist of more than only the El Paso and Ciudad Juarez economies. And so, the currencies tend to change in value relative to another. Banking and trade thus become speculative activities and with each transaction one will have to consider which currency / bank to bank with. The set of abstract but stable relative prices that residents of both cities have internalised are disturbed by factors that lie beyond the realm of their respective economies. They have to deal with two distinct standards.<br /><br />My claim, now, is that such differing standards can exist within a single jurisdiction. Namely in the case where you have various commercial banks that do not commit to any mutual standard. Free floating bank 'notes', if you like it tangible. Where the value of each is determined not by a shared set of abstract, relative values, but rather by the relative commercial success of the banks themselves. Your claim seems to be that market forces would make such a system naturally gravitate towards the standard of one bank (the most successful one, I suppose), unless they are somehow fenced off by national borders. I can see that, but I say that if the banks specialise in certain types of transactions, (or regions, or services, customer groups etc.) that a system with different 'standards' can exist with a certain amount of stability within one and the same jurisdiction. I am not claiming that such a system is suprerior to having a common standard. But it can be imagined.<br /><br />And again, the reason I bring up such a theoretical example, is to tease out the respective roles of a: trading partners, b: banks and c: the central bank and how each relate to the abstract standard.<br /><br />I hope that was understandable.Oliver Daveyhttps://www.blogger.com/profile/09960924207469377279noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-36308314364875058642017-08-04T09:00:05.113-04:002017-08-04T09:00:05.113-04:00Sorry for late answer, Oliver!
I think where we d...Sorry for late answer, Oliver!<br /><br />I think where we differ is that I don't view these as cases of different standards. For me the 'standard' is the abstract dollar; that's what the entries in all banks' books refer to.<br /><br />What you mean is probably easiest to explain by using an example of commercial bank notes (paper money). If we have two seller's, both selling the same good at $10 price, then one of them might accept a $10 note from a certain bank at full face value and the other didn't. That alone wouldn't testify for two different standards; there's no standard if individuals acting alone are responsible for the valuation. Do you have in mind an exchange rate set on a market? Say, how bank notes from Texas would be priced in the Californian market?<br /><br />We probably just use different meanings for 'standard' :-)Antti Jokinenhttps://www.blogger.com/profile/04778440661520118404noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-53281575658290196722017-07-31T07:54:54.907-04:002017-07-31T07:54:54.907-04:00clarification:
Each bank will try to maintain pari...clarification:<br />Each bank will try to maintain <i>parity with the common</i> standard but may fail.Oliver Daveyhttps://www.blogger.com/profile/09960924207469377279noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-54328996754573294322017-07-31T07:38:02.741-04:002017-07-31T07:38:02.741-04:00I think the most basic case is one in which 10 uni...I think the most basic case is one in which 10 units underwritten by one bank are not necessarily comparable with 10 units underwritten by another. One bank may have an apple standard, the other an orange standard.<br /><br />A second step is then to have unified units / and or fixed exchange rates across various banks by means of a common, universal reference standard (a gold standard or whatever). This can and has happened with or without a central bank. Each bank will try to maintain its own standard but may fail.<br /><br />The third step is then complete homogenisation into a 'real currency' by means of modern central banking. The banking system becomes like a franchise system in which entries may survive the demise of individual banks. I.e. it doesn't really matter where you bank within a currency area.<br /><br />I'll grant you that case I is not particularly practical and would most likely be found, if anywhere, in closed trading circles with a common clearing house. I still maintain that this is a type of money, though - indeed the simplest type. Albeit not one that lends itself naturally to 'decentralised' types of exchange, e.g. with coinage or bills. <br /><br />The reason I bring this up is that I find it exemplifies the role of the central bank and how it differs from that of 'ordinary' banks and from the notion of a standard. Neither in case I nor II is there a need for a central bank as such. All three cases, however, are perfectly compatible with the book keeping view of money and some sort of common or not so common standard. I would keep institutions (or what they do), methods (book keeping) and social phenomena (a shared notion / standard) separated. <br /><br />Nit picking, I suppose...<br /><br />I also don't understand what you mean by your last sentence.Oliver Daveyhttps://www.blogger.com/profile/09960924207469377279noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-35874653171621389212017-07-17T09:51:40.654-04:002017-07-17T09:51:40.654-04:00Oliver said: "Imo one has to start with the s...Oliver said: "Imo one has to start with the smallest logical element, in this case the record keeper, aka a bank, and aggregate from there. Society in this particular sense is thus merely the customer base of one single bank."<br /><br />Yes and no. If there's a group of people who transact mostly with each other and all have accounts at the same bank, then yes. But if people are using multiple banks, then what matters is that the seller's account at his own bank gets credited. All that is required for the goods transaction to be settled is that the buyer is able to make that happen.<br /><br />It's hard to think of a situation where buyers were looking specifically for sellers with accounts at the same bank as the buyer. It's not wholly inconcievable, but to say that logically that should be the starting point sounds like a stretch.<br /><br />Yet, I do see your point. In theory you might even be right. But practice shows that once there are multiple banks, the society (consisting of any number of people who cooperate, whether we are talking about multiple towns or even multiple nations -- I'm not trying to define society here) tries to make it, and keep it, so that people can transact with one another as smoothly as possible regardless of which bank they happen to use. One single bank as a starting point, as you suggest, is (in a larger society with multiple banks) practically conceivable only in the case where that particular bank fails. Isn't it?Antti Jokinenhttps://www.blogger.com/profile/04778440661520118404noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-47430528713818795812017-07-16T13:09:41.609-04:002017-07-16T13:09:41.609-04:00JP said: "So maybe it is this that has the wr...JP said: "So maybe it is this that has the writer concerned."<br /><br />Could be, but I doubt it. They talk about "any meaningful quantity", which in the absence of a fall in the issuance (they probably mean stock? Issuance to me sounds like flow, not stock) of banknotes would lead to significant increase in liabilities. Whereas your case is an extreme, and thus we can't really talk about "any meaningful quantity" in that case, can we?<br /><br />I really like the way you try to follow lines of thought into their logical conclusion! I'd like to do some serious brainstorming with you on this subject, but right now I'm a bit short of time. A couple of ideas/questions related to your extreme scenario:<br /><br />1. Let's say commercial banks would offer a higher (than CBDC) interest rate on a checking/savings account. Could we still assume that those accounts are risk-free, even if they weren't explicitly insured? If yes (and I can think of a couple of reasons why this would be so), there would remain significant demand for checking account balances.<br /><br />2. You said: "At this point, to get new CBDC the public will have to directly provide some sort of asset of their own to the central bank."<br /><br />I think this is partly related to a wider problem in thinking about "money demand". How do we get our hands on money? We sell something to a <i>non-bank</i>. By posing this problem, you implicitly assume that in a world where most of us are already using CBDC -- and CBDC only -- in our daily business, there would be no one willing to buy goods/services/assets offered for sale. Right? That's an extreme assumption, and to get even close to this would require the mother of all deflations.<br /><br />Perhaps where you're getting at is that the CB should start extending credit (also unsecured) to non-banks for the system to work, or at least extend credit to commercial banks while non-banks would continue to go to commercial banks for their credit needs?Antti Jokinenhttps://www.blogger.com/profile/04778440661520118404noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-20339459792798697092017-07-14T11:55:25.023-04:002017-07-14T11:55:25.023-04:00Yep, you're right. That paragraph is weak.
&q...Yep, you're right. That paragraph is weak.<br /><br />"This would mean that the CB would debit the instructing bank's reserve account, so there would be no increase in CB liabilities/balance sheet. There's plenty of excess reserves, so there should be no need to further increase the CB liabilities."<br /><br />When all excess reserves are used up, banks will have nothing to debit in order to get CBDC. They will have to sell or repo an asset to the central bank in order to get new reserves, and then convert these reserves into CBDC. <br /><br />So maybe it is this that has the writer concerned. If we take things to the extreme, and every deposit in the U.S. is brought in for conversion into CBDC because of massive public demand, then the central bank will have to take the entire banking system's assets onto its books in order to facilitate the demand for CBDC. That's a big expansion of its balance sheet.<br /><br />Once banks have submitted all their assets to the central bank, then banks will have effectively ceased to exist. At this point, to get new CBDC the public will have to directly provide some sort of asset of their own to the central bank. One wonders what assets would be acceptable.JP Koninghttps://www.blogger.com/profile/02559687323828006535noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-42336227230390057512017-07-14T04:10:18.505-04:002017-07-14T04:10:18.505-04:00You're raising important points, and I'm n...You're raising important points, and I'm not sure if I'm yet ready to tackle all of them.<br /><br />What is the 'standard' we are talking about? I'd approach it like this:<br /><br />If a seller quotes a price of 10 dollars for his wares, what does it mean? If it means he is happy to part with his wares should he get his account in a certain bank credited with 10, then can we say that this bank sets the standard at least when it comes to this particular seller. But it might be that another seller would demand a credit of 11 in that bank, whereas a credit of 10 in his local bank, which he happens to trust the most, is enough for him (it's perhaps easiest to think of private banknotes, familiar from JP's posts).<br /><br />Do you see what I mean? Of course, the central bank usually sets a common standard, where all the sellers are happy to receive a 10 dollar credit in its books for wares they price at 10 dollars.Antti Jokinenhttps://www.blogger.com/profile/04778440661520118404noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-71171350631287598762017-07-10T03:59:44.356-04:002017-07-10T03:59:44.356-04:00re: I'll try to drop you my coordinates
I hav...re: <i>I'll try to drop you my coordinates</i><br /><br />I have done so. I expect an avalanche of spam...<br /><br />Re your other points. A bit of historical fiction: <br /><br />- Consider a country with a number of banks. One, the largest, is very profitable, offers good conditions on loans and deposits, has a large network of local branches, broad base of customers, friendy service while another, much smaller, has close ties to the crown. Which of the two is likelier to have a more stable 'standard' in relation to, say a precious metal or foreign currency? And which is likelier to become the central bank?<br /><br />- Maybe bank A's notes start out stable but, being highly invested in agriculture, become less so after a series of natural desasters? <br /><br />- Maybe a central beaurocracy seated e.g. in Brussels suddenly decides to create a new standard, ex nihilo so to speak?<br /><br />How do you define society? I'm not sure one can use a political definition of the term (say, a country) for making a logical, economic argument. Imo one has to start with the smallest logical element, in this case the record keeper, aka a bank, and aggregate from there. Society in this particular sense is thus merely the customer base of one single bank. From there it is logically feasible, and I'm sure also historically verifiable, to have a situation in which there is more than one monetary standard within a political / legal entity. Likewise one can have a group of political / legal entities that share a standard (say, the Euro or CFA franc). That isn't to say that the fact that in most cases national borders coincide with monetary standards is a coincidence. But, rather than being a logical necessity, I would interpret that as being an artefact of the synergy between the legal sphere and the nature of accoutning money (e.g. in enforcing contracts).Oliver Daveyhttps://www.blogger.com/profile/09960924207469377279noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-36928892595397735212017-07-08T16:11:00.616-04:002017-07-08T16:11:00.616-04:00There's an interesting post touching this subj...There's an interesting post touching this subject at the Bank Underground:<br /><br />https://bankunderground.co.uk/2017/07/03/central-bank-balance-sheets-past-present-and-future/<br /><br />I tried to leave a comment there, but it doesn't seem to get even into moderation (although I'm quite sure it will somehow show up one day). I'll anyway re-post it here:<br /><br />---------------------------------------------------------------<br /><br />Great post! Thanks.<br /><br />You said: "However, assuming the rise in CBDC isn’t matched by a fall in the issuance of banknotes, the issuance of any meaningful quantity would lead to a significant increase in liabilities for the central bank, requiring them to buy more assets."<br /><br />I'm struggling to understand how this would lead to increase in CB liabilities.<br /><br />Members of the public willing to hold CBDC would most likely instruct their bank to debit their checking account and credit their CBDC account at the central bank (if no individual accounts, but a e-token system, this would nevertheless lead to a credit on "CBDC in circulation" account at the CB). This would mean that the CB would debit the instructing bank's reserve account, so there would be no increase in CB liabilities/balance sheet. There's plenty of excess reserves, so there should be no need to further increase the CB liabilities.<br /><br />CBDC issuance is comparable to issuance of new banknotes, and as you well know, in the modern world that doesn't increase CB liabilities -- new notes replace either bank reserves or old banknotes. <br /><br />Did you have in mind some other way the CBDC would be issued? Of course it could be issued when the CB does purchase new assets, but those purchases would not need to be made to deliberately issue CBDC.Antti Jokinenhttps://www.blogger.com/profile/04778440661520118404noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-26878576446429390912017-07-07T14:39:49.932-04:002017-07-07T14:39:49.932-04:00To continue a bit: One or more of the banks would,...To continue a bit: One or more of the banks would, I think, necessarily become a de facto central bank when it comes to the standard. Sellers would demand that their accounts in the strong bank(s) should be credited with the exact price of the goods they sell.Antti Jokinenhttps://www.blogger.com/profile/04778440661520118404noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-30652919871683077142017-07-07T13:29:27.203-04:002017-07-07T13:29:27.203-04:00Great!
Good questions. I think all records refer ...Great!<br /><br />Good questions. I think all records refer to the same abstract dollar; what varies is how willing people are to have their dollar-denominated credits recorded in a certain bank's books. But in practice this might lead to a situation you have in mind, where we can say that a 10 dollar credit in one bank's books is worth more than a similar credit in another bank.<br /><br />I would say the whole society is the counterpart if the bank's customer can transact with practically anyone in the society. And the goal of authorities is to ensure that this is the case. Once the range of counterparties is severely restricted, then we can't anymore speak of 'money' (MOE; that stuff which others still seem to see ;-)), can we?Antti Jokinenhttps://www.blogger.com/profile/04778440661520118404noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-71704564605792788502017-07-03T11:16:54.856-04:002017-07-03T11:16:54.856-04:00Beer is on! I'll try to drop you my coordinate...Beer is on! I'll try to drop you my coordinates in an inconspicuous place on your blog.<br />My question is, does the 'bank of agriculture dollar' necessarily follow the same path in value as say that of the 'mortgage bank'? Is it really one and the same dollar in absence of standard enforcer of first and lender of last resort? And is really society as a whole the counter party to each dolar or is the counter party restricted to the users / clients of each bank? I think you may be idealising the value of the Skilo. But I fear this has gone way off topic.Oliver Daveyhttps://www.blogger.com/profile/09960924207469377279noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-61813385921490018862017-07-02T07:34:03.453-04:002017-07-02T07:34:03.453-04:00Oliver, not only am I alive, but I'll be in Zü...Oliver, not only am I alive, but I'll be in Zürich on Nov 12. I'm ready to claim the beer you once offered, if you're in town ;-)<br /><br />The central bank surely helps in establishing a standard, as you suggest. You might be right.<br /><br />Of course, changing the record-keeper is not different from what we are used to call "making a payment", when the account to be debited is in one bank's ledger and the account to be credited is another bank's ledger. At least in theory the banks should be able to sort it out between themselves, in the absence of a central bank, so that parity is maintained? Of course, there would then probably be fewer and more robust banks -- and less debt.Antti Jokinenhttps://www.blogger.com/profile/04778440661520118404noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-18615187856660520292017-06-30T05:21:10.654-04:002017-06-30T05:21:10.654-04:00Antti! You're alive! ;-)
You wrote: The only d...Antti! You're alive! ;-)<br />You wrote: <i>The only difference is that in the case of a commercial bank, there happens to be a rule which allows a credit-holder in the bank to demand for a credit balance in another bank's (incl. the central bank) books instead; that is, he can change his record-keeper.</i><br />I would say that it is the existence of a central bank that allows for that rule to exist. That 'rule' is the raison d'être of a central bank. Without it, one bank's bills could not be guaranteed to convert at a fixed exchange rate with another's. That would make freely changing record keepers a lot more difficult, if not impossible, imo. No CB = no common standard.Oliver Daveyhttps://www.blogger.com/profile/09960924207469377279noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-55163383409216744392017-06-29T07:18:52.996-04:002017-06-29T07:18:52.996-04:00Cheers to you, Dinero! I don't think we are ye...Cheers to you, Dinero! I don't think we are yet fully on the same page, but mostly so. (If we were, I'd have nothing new to say, and I believe I have. We'll see.)Antti Jokinenhttps://www.blogger.com/profile/04778440661520118404noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-39941815935631862232017-06-29T07:03:55.835-04:002017-06-29T07:03:55.835-04:00A transferable IOU can be used to buy goods from a...A transferable IOU can be used to buy goods from anyone who positively rates the credibility of the issuer. Its not equivalent to a bank its a scenario that is illustrative of contractual arrangements that are similar to the raw material of a bank.<br /> Bank ledger, yes that is what I had in mind, the transactions are <i>recorded</i> on the commercial banks ledger.<br /><br />Cheers for the chat Antti Jokinen !Dinerohttps://www.blogger.com/profile/14632385731642361211noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-91452984099618423732017-06-28T15:16:22.031-04:002017-06-28T15:16:22.031-04:00I don't think we can remove the bank. That wou...I don't think we can remove the bank. That would lead to bilateral debt relations, where the holder of the IOU could walk to the debtor and demand payment in goods (incl. services). The whole point about the banking system is that there's no I in the IOU. It's more like "you are owed" (credit balance) and "you owe" (debit balance), but the counterparty is the society as a whole. I as a mortgagor can work for any company I choose and in this way pay my debt to others (the society). You as a "deposit-holder" can buy goods from anyone and in this way you get paid.<br /><br />I would say the actual (economic) transaction is usually <i>recorded</i> on commercial bank ledger. Not that it occurs there. For instance, nothing is transferred from the buyer's account to the seller's account. It is just recorded by the bank that (a) the seller has given up goods of certain value (measured in an abstract unit-of-account) without receiving anything in return, and that (b) the buyer has received goods of certain value without giving anything in return.<br /><br />Do you see what I mean?Antti Jokinenhttps://www.blogger.com/profile/04778440661520118404noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-90341212436852086082017-06-28T04:26:48.619-04:002017-06-28T04:26:48.619-04:00I agree , the bank is keeping records of obligatio...I agree , the bank is keeping records of obligations and rights. You can make it even more self evident by removing the bank and replacing it with a paper transferable IOU written by the issuer.<br /><br />I think the Trading site record keeping does give an insight into our actual monetary system. That is why I think the actual economic transaction between people occurs on commercial bank ledgers. <br /><br />Dinerohttps://www.blogger.com/profile/14632385731642361211noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-47211359020705121572017-06-27T16:17:22.042-04:002017-06-27T16:17:22.042-04:00I agree. Including gold or silver, especially in f...I agree. Including gold or silver, especially in form of coins, is at best a distraction. I only chose to include gold in my example because the Fed actually does have a gold stock, but it could have been replaced by any real or nominal assets.<br /><br />Commercial bank "deposits" (I avoid that word and prefer to talk about different kinds of credit balances; nothing is deposited) are important, as you say. But if we first explain how central bank credit balances work (for instance, that they themselves are no debt/liability to anyone), then we can see that commercial bank credit balances can be viewed in the same way: the bank is keeping records of (mostly other agents') liabilities (LHS) and rights (RHS). The only difference is that in the case of a commercial bank, there happens to be a rule which allows a credit-holder in the bank to demand for a credit balance in another bank's (incl. the central bank) books instead; that is, he can change his record-keeper. Note that this does not mean that the bank owes the "depositor" money; within this framework that kind of language is not valid.<br /><br />Yes, the record-keeping in my "world" is probably very similar to community trading sites. But how do you see that our actual monetary system differs from that kind of record-keeping?<br /><br />My aim is to show how from these simple premises we can build up our actual monetary system, and once we adopt the viewpoint I suggest, and the language that goes with it, we never need to talk about "money being created by banks" or "out of nothing". All that is going on is simple accounting.Antti Jokinenhttps://www.blogger.com/profile/04778440661520118404noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-52302726673477908852017-06-27T09:39:07.000-04:002017-06-27T09:39:07.000-04:00My view of the relationship between bank deposits ...My view of the relationship between bank deposits and assets does start with the 1800s Real bills Doctrine but NOT as Mike Sprouls version as he references everything to silver coins, which I think is unnecessary and missing the point that the relationship between borrowers and deposit holders recorded on a bank Balance sheet T account endogenously provides currency. <br /><br />There is no one site that provides an exposition as far as I know. I also share the view with Monetary Realism often discussed here , http://www.pragcap.com/ama/, that the prime source of money in the economy is commercial bank deposits, Central Bank deposits being somewhat a distraction.<br /><br />Your post about Andy, Betty and bananas uses a record keeping that is actually used in practice on community trading sites like community-exchange.org but I have not read up on them for a while.<br />Dinerohttps://www.blogger.com/profile/14632385731642361211noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-9227986854328529892017-06-27T06:20:43.882-04:002017-06-27T06:20:43.882-04:00I explain where I come from here:
http://giftecon...I explain where I come from here:<br /><br />http://gifteconomics.blogspot.com/2016/11/a-new-monetary-system-from-scratch-part.html<br /><br />I'm currently working on a longer post where I go through how my view compares to others' views on how the monetary system works. In it I will also go through an example of public spending and taxation. (I aim to post it during July.)Antti Jokinenhttps://www.blogger.com/profile/04778440661520118404noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-16290626854952161292017-06-27T06:06:29.760-04:002017-06-27T06:06:29.760-04:00Dinero, can I find some kind of exposition of your...Dinero, can I find some kind of exposition of your view somewhere? It sounds it's not too far from how, for instance, Mike Sproul puts things in his version of Real Bills Doctrine?Antti Jokinenhttps://www.blogger.com/profile/04778440661520118404noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-17364571468574516272017-06-27T05:54:31.643-04:002017-06-27T05:54:31.643-04:00Dinero, exactly. They don't need to sell their...Dinero, exactly. They don't need to sell their houses, if they sell their labor, or products of their labor. I only had them sell their houses for simplicity's sake; focus was on the note-holders.<br /><br />You said: "There is an expense to storing gold but that expense does not make it a liability , it is still an asset."<br /><br />Yes, but whose asset it really is? Who ultimately owns it? The beneficiaries on the RHS, as you call them. And the Fed, to me, is someone who is liable to take care of the gold, but doesn't own it. It keeps accounts exactly because -- as a trustee -- it's under the scrutiny of parties on the RHS (public at large in the case of a central bank).Antti Jokinenhttps://www.blogger.com/profile/04778440661520118404noreply@blogger.com