Post by yyy on Sept 4, 2019 15:56:46 GMT
First: Medium-Of-Exchange (MOE)
Here, forget about Unit-Of-Account (UOA) and Store-Of-Value (SOV). We are looking for the best MOE ever.
Each assets can be used as a MOE, but some asset are better than other, and we can create an asset specifically for this mission.
They are evaluated on characteristics:
1. Value common assets
2. Common and accessible
3. Constant utility
4. Low cost of preservation
5. Transportability
6. Divisibility
7. High market value in relation to volume and weight
8. Recognisability
9. Resistance to counterfeiting
For 4,5,6,8,9 a numeric asset seems to be an excellent option.
For 1,3,7, this asset must be easy to use.
For 2, no one must lack of this asset.
In fact, if you have no assets, you have to borrow some to start exchanging. But borrowing have a cost, and producers can have a privileged position.
But we are looking for a neutral MOE.
Idea: Can we imagine an asset created and distributed equally to the people? (don't forget, no UOA or SOV problematics here!).
Quantitatively, the number of unit increases exponentially. But choosing a relative unit can easily fix this problem, like pourcentage of the total of units.
In this relative unit, units are redistributed among people: If you have less than the average, your balance is increasing. If you have more than the average, your balance is decreasing.
The average can be a good relative unit too. So we have a neutral numeric, common and accessible MOE. The Central Bank can create/redistribute it.
Second: Unit-Of-Account (UOA)
Here, forget about Medium-Of-Exchange (MOE) and Store-Of-Value (SOV). We are looking for the best UOA ever.
Each assets can be used as a UOA, but some asset are better than other, and we can create an asset specifically for this mission.
Idea:
If we want stable consumer prices, can we set prices directly in CPI? (I don't know, so discussion here: moneyness.freeforums.net/thread/20/businesses-start-setting-prices-cpi)
Day by day, people will pay in MOE units, but with prices in CPI. The Central Bank can calculate the CPI/MOE-unit ratio.
Third: Store-Of-Value (SOV)
Here, forget about Unit-Of-Account (UOA) and Medium-Of-Exchange (MOE). We are looking for the best SOV ever.
Each assets can be used as a SOV, but some asset are better than other, and we can create an asset specifically for this mission.
An asset is a good SOV if when you sell it, you have as many purchasing powers as before. But asset prices fluctuate over time.
We can never be sure that, in the future, buyers will be ready to buy it at the same price as today. And we can not force them.
But some people can agree to this: provide some purchasing power later, in exchange of some purchasing power now (expressed in CPI?). So nothing new: loans with interest, forwards with clearing house...
Conclusion:
If you have more than average MOE units, you are losing MOE units, so you have interest to spend and lend them.
If you have less than average MOE units, you are gaining MOE units, but it is only possible if others people have more than average.
Advantages:
- Money supply is no more based on credit demand with interests only paid to producers of credits for controling inflation (Instead, the MOE savings is fluctuating)
Disadvantages:
- The savings of MOE expressed in UOA fluctuates according to the ratio UOA-MOE units (but it is no-sense to store MOE units).
- You need to have MOE units to lend them (to the State for example)
What do you think of that?
Here, forget about Unit-Of-Account (UOA) and Store-Of-Value (SOV). We are looking for the best MOE ever.
Each assets can be used as a MOE, but some asset are better than other, and we can create an asset specifically for this mission.
They are evaluated on characteristics:
1. Value common assets
2. Common and accessible
3. Constant utility
4. Low cost of preservation
5. Transportability
6. Divisibility
7. High market value in relation to volume and weight
8. Recognisability
9. Resistance to counterfeiting
For 4,5,6,8,9 a numeric asset seems to be an excellent option.
For 1,3,7, this asset must be easy to use.
For 2, no one must lack of this asset.
In fact, if you have no assets, you have to borrow some to start exchanging. But borrowing have a cost, and producers can have a privileged position.
But we are looking for a neutral MOE.
Idea: Can we imagine an asset created and distributed equally to the people? (don't forget, no UOA or SOV problematics here!).
Quantitatively, the number of unit increases exponentially. But choosing a relative unit can easily fix this problem, like pourcentage of the total of units.
In this relative unit, units are redistributed among people: If you have less than the average, your balance is increasing. If you have more than the average, your balance is decreasing.
The average can be a good relative unit too. So we have a neutral numeric, common and accessible MOE. The Central Bank can create/redistribute it.
Second: Unit-Of-Account (UOA)
Here, forget about Medium-Of-Exchange (MOE) and Store-Of-Value (SOV). We are looking for the best UOA ever.
Each assets can be used as a UOA, but some asset are better than other, and we can create an asset specifically for this mission.
Idea:
If we want stable consumer prices, can we set prices directly in CPI? (I don't know, so discussion here: moneyness.freeforums.net/thread/20/businesses-start-setting-prices-cpi)
Day by day, people will pay in MOE units, but with prices in CPI. The Central Bank can calculate the CPI/MOE-unit ratio.
Third: Store-Of-Value (SOV)
Here, forget about Unit-Of-Account (UOA) and Medium-Of-Exchange (MOE). We are looking for the best SOV ever.
Each assets can be used as a SOV, but some asset are better than other, and we can create an asset specifically for this mission.
An asset is a good SOV if when you sell it, you have as many purchasing powers as before. But asset prices fluctuate over time.
We can never be sure that, in the future, buyers will be ready to buy it at the same price as today. And we can not force them.
But some people can agree to this: provide some purchasing power later, in exchange of some purchasing power now (expressed in CPI?). So nothing new: loans with interest, forwards with clearing house...
Conclusion:
MOE are distributed directly to people by CB, people use it to pay, but prices are fixed in UOA, the CB providing the ratio between MOE and UOA. And if you want a store of value, make contracts, because storing the MOE is no-sense.
If you have less than average MOE units, you are gaining MOE units, but it is only possible if others people have more than average.
So, like in Walrasian auction, more-than-average and less-than-average must meet: It is better to exceed the average only if you know that you can spend (to buy things or lend it).
The MOE units becomes the most liquid asset that no-one is lacking to clear this auction.
Advantages:
- Money supply is no more based on credit demand with interests only paid to producers of credits for controling inflation (Instead, the MOE savings is fluctuating)
Disadvantages:
- The savings of MOE expressed in UOA fluctuates according to the ratio UOA-MOE units (but it is no-sense to store MOE units).
- You need to have MOE units to lend them (to the State for example)
What do you think of that?
