Mqurice - it's a pleasure to cross swords with you.
>>The world's burgeoning population and global trade needs more and more $$ and they can be printed without inflation because demand is so high.<<
Agreed. That's why all the hand-wringing over the increase in the money supply since the mid-'90s is overdone. A good chunk of that MZM increase is now in the hands of the Chinese and ________ (insert nationality of your choice) government and people.
>>BUT ... there is a lurking challenge. The Q. My beloved encrypted cyberspace currency representing ownership of companies around the world is in zygotic form, looming larger each day as a thousand technological developments bring its birth closer and closer.<<
Q already exists. It's called an index option. And Q is denominated in .... dollars.
>>People who have some Q will be the owners of the currency. They will actually make profits, just as owners of shares do now. People holding US$ have a will o' the wisp which can slip through their fingers overnight if there is a bank run, an Argentina, a major printing, an inflation. They don't own the money. They are just holders of an intangible good faith and hope piece of paper. It's a Ponzi scheme writ large, with no visible means of support.<<
Life is a Ponzi scheme. There is no fundamental, immutable store of value (sorry, Goldbugs). Things are worth only what two parties agree they are worth at a particular moment, in the medium of exchange of the moment. The US dollar is at this point in history the closest we mortals can come to a certainty of value.
If you doubt this, ask a Goldbug what an ounce of gold is worth or should be worth. Will his answer be "two hours of intellectual labor of a top-rated agricultural economist in Wellington, New Zealand?" I think not. It'll be $275 or $450. The value of gold defined in terms of fiat money. Imagine a post-apocalyptic world, one without central banks or fiat money. You have an ounce of gold in your pocket. What is it worth? If you are starving, it's worth a handful of rice and a cupful of clean water. If you are a warlord with a well and a warehouse full of canned goods it's worth much more, say an hour or two of high quality entertainment. In our world, gold is worth only what it costs the marginal producer to dig it out of the ground in hours of human labor defined in fiat money.
>>It's only because there's no viable alternative that people tolerate it for now. But when they see a better way, the jig will be up, the printing game over and the US government will not be able to print profits daily at the expense of aliens who unlike USA citizens, don't own the currency and have to pay for their own governments out of their hard-earned money, while watching their US$ holdings being diluted by Americans printing more US$ for to cover their government needs.<<
There is no better way. Sorry. As long as the world believes in the power of US economic growth, the lack of corruption in the US political system, the integrity of the US central bank, there will be no better way. The world believes in "the full faith and credit of the Government of the United States of America." It's interesting that Osama bin Laden bankrolled the Taliban to the tune of 100 million US dollars per year, no? They might hate us, but they like our money.
>>We, the aliens of the world hereby declare that we wish to have our own currency, to trade freely among ourselves and Americans, without the usurious payments to Uncle Green$pan and successors. The Q will be freely owned and traded by any person, company or other entity.<<
Won't work. No central bank, therefore no "full faith and credit." By the way, thanks for the lamb (delicious!), the wool and the timber. Now you have a few dollars, how about investing them in a nice T-bond, or perhaps a few shares of QQQ? |
