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I like the analogy from Argentina. Bank runs equivalent is the major weakness - or people who profit from runs will attack it to make it happen. See Soros. GD,
by hc07 10y ago
I like the analogy from Argentina. Bank runs equivalent is the major weakness - or people who profit from runs will attack it to make it happen. See Soros.
GD, if it's meant to create distrust and runs, almost by definition must over time lose its value compared to USD.
It might start off 1:1 with us US dollar, but it must drop for the simple fact because it's supply will exceed USD. There are more complex issues I'm skipping, like the mass psychology of perception of value could actually create a panic where none might be warranted.
If it keeps dropping, the what it can buy with it will also drop.
What's the point of basic income then if eventually tens of thousands of GD is required to buy bread and basic income is only several thousand (point is, not enough to make a difference)?
This happens in a sort of way in real life already... Because govt meddle in education loans and subsidies for college, the result isn't that there are more availability of education only, there's also an ever increasing climb , almost unhooked from reality, if tuition costs. And some people simply stop paying back, which in a way results in a kind of wealth transfer effect like your GD.
But the lethal point that is becoming ridiculous, is that colleges no longer have incentive to adhere to reality and prices go to the moon.
Applied to entire economy, you get hyper inflation. Your GD can't distribute fast enough when mass psychology sets in.
That's another fundamental problem with currency or its like -- the entire human race is really not just cooperating with it, every one will also try to game it. It's like a horde of intelligent learning agents trying to bring it down for his own benefit.
- Suncho 10y agoGD, if it's meant to create distrust and runs, almost by definition must over time lose its value compared to USD. Gresham Dollar is not meant to create distrust and runs. It's meant to withstand distrust and the psychology behind currency runs. If people want to get rid of their GD, the only option they have to spend it. Spending GD resets its lifetime, so the same psychology that would normally deplete the reserves of a central bank has the opposite effect on the USD reserves backing Gresham Dollar. Are you worried that a Gresham Dollar panic would increase monetary velocity enough to kick off an inflationary feedback loop? I'm not worried about that. The same panic would also strengthen Gresham Dollar's peg to USD by making our USD reserves last longer. And because the peg would remain strong, any inflationary effects would affect GD and USD equally. It might start off 1:1 with us US dollar, but it must drop for the simple fact because it's supply will exceed USD. Do you feel that merchants would refuse to agree to reserve requirements below 100%? That's another fundamental problem with currency or its like -- the entire human race is really not just cooperating with it, every one will also try to game it. It's like a horde of intelligent learning agents trying to bring it down for his own benefit. Some people are definitely doing that, yeah. One "attack" that I could imagine being carried out against Gresham Dollar is if a GD dealer sold a large amount GD people who were under their Activation Cap to help then "top off." This would cause us to burn through our USD reserves more quickly because more GD would be active. There are other possibilities, but I'm not worried about something like a currency run panic.