Smarty_Pants

Zimbabwe: When Even the Central Bank Can't Keep Up

Comments on Moonbat plan 1) to 12)x2

Wow. Pretty involved. My plan would be simpler.

1) 'Money' is whatever two people agree it is between themselves.
2) A 'Bank' is defined, by law, as a warehouse for storing money.
3) While 'money' is in the 'bank' the owner still holds legal title, subject to any agreed upon charge for storage and insurance/security.
4) 'Loans' require the signature of the money owner and must specify amounts, payment schedules, interest, storage costs, and finder fees for the bank, if the bank 'found' the borrower.
5) Unless agreed to otherwise, the interest belongs to the owner.
6) The 'bank' serves as a witness that the 'money' changed hands and serves as an escrow account if the 'money' is issued in the form of a warehouse receipt (ie. a banknote).
7) The bank's signature is required for warehouse receipt type loans and they are legally culpable for allowing two receipts to be issued on the same 'money'.
8) When a warehouse receipt type loan is satisfied, the bank must sign to verify that the loan is satisfied thereby allowing another loan of the same money to be made.


Since ownership of 'money' does not transfer to the bank, they can't increase it via FRB. The money can only be loaned out once if physically transferred, and if a banknote (warehouse receipt) is issued the bank is responsible for holding the actual money in storage and ensuring it is not loaned out a second time.

In essence the banks acts as a facilitator and it earns profit from fees or agreements for splitting 'interest'. Therefore, any banknotes in circulation would have to be backed by physical money of some form, most likely gold or silver but not necessarily.

"Good" banks would, over time, develop the reputation for honesty and integrity in dealing with both borrowers and lenders. Beyond that point cost of 'services' would become the competitive issue between banks. Banks which try to skirt the rules would go under the first time they were caught as none would trust them.

The only public notices required would be bank fees, and bid/ask exchange rates for banknote <-> 'money' of various types.