3 ms·

What would you posit the value/dynamics of Freicoin would be in such an event? Immune? Explain how the exchange rate would evolve, in your mind, between Freicoi

by fixxer 13y ago

What would you posit the value/dynamics of Freicoin would be in such an event? Immune? Explain how the exchange rate would evolve, in your mind, between Freicoin and a non-rotting bitcoin. The key concept that keeps getting avoided here is Freicoin's value in the face of alternatives. I think you're just as coupled.

maaku 13y ago
Historical experience with demurrage currency shows that the entire monetary base changes hands very quickly. People do in fact keep on hand just what they need for day-to-day trade. This results in a relatively stable valuation with only long-term trends due to things like GDP increase/decrease. We got the credit crunch because of "liquidity spirals" causing lending channels (banks) to hoard cash out of uncertainty. This worked for them (although it brought the whole global economy down) because fiat cash is non-perishable. “Cash in the bank” never decreases -- so long as the bank doesn't go under and you don't live in Cyprus, but that's another story. Demurrage, on the other hand, would cause rational actors to seek other liquid investments to put their assets, thereby keeping the medium of exchange in circulation and available for lending.
- fixxer 13y ago
  > Historical experience... I'm going to guess you're citing Worgl, which was a tiny experiment in a small town of 2000. How about the American experiments in 1932-33? Disasters. Canada? Fail. > We got the credit crunch because of "liquidity spirals" causing lending channels (banks) to hoard cash out of uncertainty. Yes, banks decreased lending due to the uncertainty of collateral upon which those loans are based. > ...brought the whole global economy down... Define that. Economy looks OK to me, especially compared to environment that spawned the economic theories you're working with. You're employed in a place that constantly complains about the need for more skilled labor and hires my idiot friends with MS degrees and zero experience for $150k/year + options. > [Hoarding cash worked for the banks because] fiat cash is non-perishable. If cash was perishable, they would just move it into something that wasn't. Keynes argued this point before me. > Demurrage ... would cause rational actors to seek other liquid investments to put their assets... Yes, I 100% agree. > ... thereby keeping the medium of exchange in circulation and available for lending. Nope. You need buyers. You don't have any. Since your currency rots, the consumers that don't spend it all on goods are either trying to sell it or trying to spend it. The vendors that were willing accept it in exchange for their goods are also trying to sell it. The value plummets and eventually vendors stop accepting it. A chunk of wealth vanishes into the ether and we all get a little more "equal" in the eyes of Occupy. Freicoin is a new modality of an old "-ism". The ultimate goal is the destruction of capital. For your idea to work, you need an authoritarian government to enforce it. Terrifying.

by fixxer 13y ago

maaku 13y ago

Historical experience with demurrage currency shows that the entire monetary base changes hands very quickly. People do in fact keep on hand just what they need for day-to-day trade. This results in a relatively stable valuation with only long-term trends due to things like GDP increase/decrease. We got the credit crunch because of "liquidity spirals" causing lending channels (banks) to hoard cash out of uncertainty. This worked for them (although it brought the whole global economy down) because fiat cash is non-perishable. “Cash in the bank” never decreases -- so long as the bank doesn't go under and you don't live in Cyprus, but that's another story. Demurrage, on the other hand, would cause rational actors to seek other liquid investments to put their assets, thereby keeping the medium of exchange in circulation and available for lending.

fixxer 13y ago
> Historical experience... I'm going to guess you're citing Worgl, which was a tiny experiment in a small town of 2000. How about the American experiments in 1932-33? Disasters. Canada? Fail. > We got the credit crunch because of "liquidity spirals" causing lending channels (banks) to hoard cash out of uncertainty. Yes, banks decreased lending due to the uncertainty of collateral upon which those loans are based. > ...brought the whole global economy down... Define that. Economy looks OK to me, especially compared to environment that spawned the economic theories you're working with. You're employed in a place that constantly complains about the need for more skilled labor and hires my idiot friends with MS degrees and zero experience for $150k/year + options. > [Hoarding cash worked for the banks because] fiat cash is non-perishable. If cash was perishable, they would just move it into something that wasn't. Keynes argued this point before me. > Demurrage ... would cause rational actors to seek other liquid investments to put their assets... Yes, I 100% agree. > ... thereby keeping the medium of exchange in circulation and available for lending. Nope. You need buyers. You don't have any. Since your currency rots, the consumers that don't spend it all on goods are either trying to sell it or trying to spend it. The vendors that were willing accept it in exchange for their goods are also trying to sell it. The value plummets and eventually vendors stop accepting it. A chunk of wealth vanishes into the ether and we all get a little more "equal" in the eyes of Occupy. Freicoin is a new modality of an old "-ism". The ultimate goal is the destruction of capital. For your idea to work, you need an authoritarian government to enforce it. Terrifying.