Freedom of currency (1 Viewer)

[128shot]

J. Paul GettyII (son of the old man) had proposed that the dollar be backed by stock. That is, we would simply trade shares in a humongous mutual fund rather than fiat money such as we presently do.

To the backing of stock, you could also add gold and other precious metals to form a sound currency that was actually intrinsically worth something.

Since stock backed the dollar in this scheme, the dollar would be linked to productivity. So when productivity was high, the dollar would be strong and would attract investment capital. When productivity was low, the dollar would be weak, making American goods less expensive to foreigners - just what is needed in terms of foreign trade.

Since these equity dollars would essentially be mutual fund shares, it would behoove people to save. All good things.

I've asked people about this idea over the years (both ordinary folks and people of special training) but I have not ever been offered a good analysis of the idea's strength or weakness or viability.

Seems like a pretty good basis for money to me.

Is this sound?

 

[Iriemon]

J. Paul GettyII (son of the old man) had proposed that the dollar be backed by stock. That is, we would simply trade shares in a humongous mutual fund rather than fiat money such as we presently do.

To the backing of stock, you could also add gold and other precious metals to form a sound currency that was actually intrinsically worth something.

Since stock backed the dollar in this scheme, the dollar would be linked to productivity. So when productivity was high, the dollar would be strong and would attract investment capital. When productivity was low, the dollar would be weak, making American goods less expensive to foreigners - just what is needed in terms of foreign trade.

Since these equity dollars would essentially be mutual fund shares, it would behoove people to save. All good things.

I've asked people about this idea over the years (both ordinary folks and people of special training) but I have not ever been offered a good analysis of the idea's strength or weakness or viability.

Seems like a pretty good basis for money to me.

Is this sound?

How would it work?

 

[128shot]

How would it work?

hmm, I figured people would just print their own dollars.

Essentially, the dollars worth more will be in effect the de facto national currency?


It sounds like the gold/silver standard, except you back the dollar with more options than just gold/silver.

 

[Amused]

Why must it be backed, by gold, mutual funds, etc? Regardless of what you aim to do, you are in effect fiating the existence and value of money (where is the stock market, can I touch a mutual fund? these are all intangible mechanisms fiated into existence). Also, when the US economy goes down hill, the value of the dollar drops and vice versa (one of the reasons why the Euro was increasing in value as fast as it did in relation to the dollar). The problem with your approach more than anything is that it strikes me as more volatile than the status quo. The status quo is amazing in that the value of the dollar doesn't fluctuate daily or monthly. It increases at such a slow rate that it has to be referenced in change over a several month span (.0125% strikes me as the last increase that I heard).