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Dollar Freshness

 
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jabailo



Joined: 20 Mar 2006
Posts: 1273
Location: Kent (East Hill), WA

PostPosted: Wed Jan 07, 2009 7:16 pm    Post subject: Dollar Freshness Reply with quote

What if dollars were printed with freshness dates.

A dollar bill that expired in, say, a year.

It would have to be spent, or used to pay tax before that date for it to have value.

This has occurred in the past as when East German marks were redeemable for German marks after the Berlin Wall fell. Suddenly, East German currency had a freshness date.

Freshness may solve some of the problems both of lingering cash that is not put to productive use, but hoarded. It also may solve some of the problems of inflation or deflation where dollars earned a while back suddenly change in value.

By printing a freshness date, faster liquidity is created and more business throughput. Investment in purchased goods increases and pooling of stagnant capital decreases.
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brian-hansen
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Joined: 17 Mar 2006
Posts: 712
Location: Oregon

PostPosted: Thu Jan 08, 2009 10:06 pm    Post subject: Reply with quote

We have this, only it works gradually, instead of all at once.

It is called "inflation". The value of a dollar bill slowly erodes
with each passing month.

It sounds like you would prefer a high-inflation economy.
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jabailo



Joined: 20 Mar 2006
Posts: 1273
Location: Kent (East Hill), WA

PostPosted: Thu Jan 08, 2009 11:14 pm    Post subject: Reply with quote

At this time I would prefer a "high velocity" economy. I think people and institutions are wrongly clinging to money when they should be loaning and spending far more freely. As goes human behavior, they should have been saving when they were spending, and now that we've been in a climate of economic fear, they are saving when they should be spending!

I say high velocity, because I truly believe were in an era where there is no clear path, but we need a high degree of creativity, new ideas, new business formation and even some creative destruction of old ideas and institutions to carry us through the next, oh, 20 years.
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jabailo



Joined: 20 Mar 2006
Posts: 1273
Location: Kent (East Hill), WA

PostPosted: Sun Apr 19, 2009 2:22 am    Post subject: Reply with quote

It May Be Time for the Fed to Go Negative

http://www.nytimes.com/2009/04/19/business/economy/19view.html?_r=1

Quote:
Imagine that the Fed were to announce that, a year from today, it would pick a digit from zero to 9 out of a hat. All currency with a serial number ending in that digit would no longer be legal tender. Suddenly, the expected return to holding currency would become negative 10 percent.
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