The entire story here is wildly bizarre. The fact that the honest-to-god solution to anything in today's world is to have a mint at the ready, just in case you need to swiftly stamp a coin of arbitrary value and then transport it with haste by helicopter to a particular location in time to keep the national economy on track is just completely bonkers.
> It's not even half as bizarre as someone buying a GIF of some cartoon cats as a sort of cryptocurrency token.
I think it is considerably more bizarre. People have always done strange things with their money; NFTs have made it maybe more visible, and have certainly dressed it up in new tech-y buzzwords, but they've hardly introduced the idea of spending money in strange and stupid ways.
But I am considerably more upset about whole countries' economies being founded on strange and stupid decisions than I am on individuals making such decisions. (Which is not to say that I could, or know how to, do any better; we're just comparing bizarre-ness, not solutions.)
Isn't the following approximately right: suppose that some country has a net worth of 10B (calculated somehow). The government decides that it needs some cash, so it prints another 10B of that currency and injects it into the system. Well, all it has done is devalue the currency by half, thereby looting half the economy of half its value, transferring that to the government. It's just a ploy to steal 5B by declaring it to be government property, which is possible since every instance of money is a tiny abstract contract which is controlled by the government's treasury/mint.
It's like issuing new stock to raise cash, without any increase in the total market valuation, which nothing but a cash grab from the current share holders made possible by controlling the issuance of stock.
The coin is used to offset bonds. It's not increasing the money supply.
The money supply is increased by government spending.
The US economy grows by approximately $700B per year. (23T * 3%). Therefore as a first approximation the money supply needs to grow at approximately $700B per year. If the government deficit is less than that, it acts as a brake on the economy.
When the government spends money, it buys stuff with that money. Whether that is inflationary depends on how rivalrous the spending is -- IOW if it's competing with private money for that stuff or it's buying stuff that nobody else would ever want to buy.
You can't buy a fucking gif! This fiction spread way too easily. All you're buying a token that mentions the gif. This gif itself lives on as if nothing had happened, just like if you bought a star.
But in that particular token-buying ecosystem, nobody else can buy that gif. Unless they change a pixel value, or some bit of metadata.
Suppose you actually approached the author of the gif, and bought the exclusive copyright to it, conventionally. The gif itself is still not affected any more by that transaction than of the non-fungible token purchase. Exact copies of it exist all over the place, shared by people who don't care about your copyright.
Also in that particular token-buying ecosystem, you can sell yourself the token representation of that gif multiple times, in order to fool people into thinking that there is a genuine market for the token corresponding to that gif.
It's as bizarre as the original Mona Lisa in the Louvre being about a billion dollars more expensive than an identical copy sold on the banks of the Seine.
We can get very close, but even if we had technology to make an indistinguishable copy the original wouldn't fall in value and none of the copies would be near it.
The Mona Lisa isn't valuable because it's a nice painting: it's valuable because of its history and meaning to the arts.
I don't see why it's bonkers. The stamp represents a contract issued by an authority that gets its legitimacy from a vast population. All the issuance and transfer of this coin does is grant permission to distribute resources to various groups and as a society we've agreed that said permission is needed to lend legitimacy to our currency.
In principle it doesn't need to be transported by helicopter or transported at all, that's a formality that predates the Internet. It's not a particularly big detail that is worth changing, much like it's not a particularly big detail that a President must be sworn in by having a judge physically stand next to him and have him exhale CO2 in such a manner so as to produce vibrations within a narrow audible range.
Both things are just formalities to express intention.
I think it's mainly how physical the process is. We can't just decide this stuff informationally, or even on a paper document, or ahead of time. We have to hike a chunk of metal somewhere else within a specific time window like it's The Amazing Race or something.
Who knew such theatric fuckery lay within the US treasury system? Based on the line below, I guess we should view the helicopter as the modern day folkloric finger of Hans[1] awaiting dispatch to plug the dike, stem the flood and save the country:
"In case of emergency, a trillion-dollar coin could be deployed to bridge any gap between the money running out and the debt ceiling being raised".
Legal tender is generally not invalidated unless destroyed. Stealing property does not grant you legal possession over it, so you'd be hard pressed to find anyone willing to accept that coin in exchange for anything since they could easily determine that you have no right to exchange it in the first place.
The most you could do is destroy it, the end result would be as if nothing happened and that's about it.
That is because once you understand the economy, you understand that is all built upon Smoke, Mirrors, Lies and Deceit on top of a foundation of sand....
