| Great points. What I think would be interesting is if the Treasury did something like create a variety of your "Bit-dolla" crypto-currencies and let the markets/users decide which ones to use for which purposes. Each would have fixed rate of inflation. $BD0: 0% annual inflation $BD1: 1% annual inflation $BD2: 2% annual inflation $BD3: 3% annual inflation etc., maybe up to 15% That way market expectations of inflation and demand for price stability (and maybe actual laws) would dictate the overall usage patterns of the currencies, without the typical psychological risk associate with central banking systems. Prices of goods would always be expressible be in terms of each currency, and conversion between them at any point in time would be easy and automatic. Prices of things like flash memory would go down in BD0 but would appear stable in BD4. Just as businesses/industries settle on accounting practices (FIFO, LIFO, etc.) they could choose which currency to pay employees in, which to store cash in, and which to use to track the value of inventory. The nice thing about this kind of system would be that we'd actually have much more price transparency, since inflation hides information (such as decreasing real wages). Laws could be made to require pension funds to use BD2, for example, or to require all taxes to be paid in BD4, or student loans to be issued in BD10. Treasury bills could be sold against each BD type which would add discipline and certainty to that market as well. I know this is a sort of silly idea but it's fun to think about. |