by Pops » Sat 16 Jan 2016, 19:46:39
MonteQuest wrote:Pops wrote: If I remember my original comment, as the economy cools post peak, the supply of bank deposits will shrink as bank loans are paid or defaulted on, effectively reducing the "money supply."
Pops, I have been struggling to see your point.
Are you trying to say that when all the debts are either defaulted or are paid back, that there will be some money left over? Is this your point that all money isn't debt? If so, where did this money come from, if not through debt?
FRNs are government obligations backed by the government. As I said, they will be good as long as the government stands (or until it comes up with something new).
All the old stock certs, corp bonds etc will long since be used as TP. All the bits will have gone to nil. But trade will continue.
Barter is great but once beyond a few individuals some currency is invaluable. Currency as FRNs will remain or maybe something new invented, maybe locally. If a Gov exists at all, one of it's main duties would be to enable trade [and of course collect tax]. A single national currency is beneficial if for no other reason than standardization and convertibility. Because the government can create currency by decree ("loaning" itself the money if need be) then I think that will happen.
Regardless of what a federal gov does there will be currency.
iPhones maybe, limited supply, not making any more...
The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves -- in their separate, and individual capacities.
-- Abraham Lincoln, Fragment on Government (July 1, 1854)