Finland is giving 2,000 citizens a guaranteed income

a reply to: Azureblue

Yes and no. Coins and paper money are only a token used for convenience anyway. What governments create is bank reserves. Saying that banks would create 100% of money is
True only if you treat central banks the same as retail banks which is highly inaccurate.

That minor quibble aside I agree that the idea that an X of the money supply results in a corresponding x increase in prices is nonsense. It ignores both role of banks in money creation and assumed that production is fixed in an economy (amongst many other erroneous assumptions).

originally posted by: lordcomac
a reply to: Azureblue

Are you suggesting that the banks simply print more money to give to the citizens?
Surely if you understand fractional reserve lending, you understand inflation.

If you give everyone free money every month, the cost of living will go up by that amount, plus tax, for everyone. There is no version of this concept that gets around that outcome.

Not true. Inflation is a pretty easy concept to work around as long as you have a finite amount of money in the system. There's two ways to accomplish this:

#1. Finite currency system. In this system there exists X dollars in the system, based on the number of people using the currency, it remains tied to the population (say $10,000 per person). As money is spent in the system it's subtracted from the account of the person who spends it, and equally distributed to everyone else in the system. The downside here is in allowing for profit. That's why the dual currency system is better.

#2 Dual currency system. In this system you have your dollars just as they are now, except they can't buy everything inside the US. You also have another currency, lets say Amero's. On items tagged luxury goods (non necessities basically), you charge both a dollar value for the product and a value for the Amero's. However, the only way to obtain Amero's would be either through digital distribution like in system #1, or through purchasing on an exchange where people can sell their Amero's for dollars. In turn, this creates a value for each person (US citizen most likely) simply by existing. They could in turn use these Amero's to skip on luxury goods and buy necessities like rent and food, without consuming welfare dollars, because those who want those goods could spend more dollars and buy them. Such a system would ultimately result in a passive income stream for anyone willing to live simply, supported entirely through the free market.