moonbat1775

Target for Inflation: Getting It Right

Consider a money backed by common stocks in certain companies. As those companies prospered the money would increase in value. Now consider that if the bank that issued that money lent it to those companies it would in effect be investing in the value of its own money. So, instead of a stable money as in one backed by gold, we would now have appreciating monies backed by equity. The monies would not be limited in value or quantity since the stock in new companies could be sold to the bank to purchase new money. Click on MyWebsite for an example of such a bank.

One objection raised is that equities are too volatile to be used for backing money. However this is a result of fractional reserve banking (FRB). A stock market based on 100% reserve equity backed monies would be stable and not subject to the deflation inherent in FRB.