Same problem...New look
Originally posted by Historical-Mozart
The new banking system, in order to maintain as much stability world-wide, it must offer to replace the trillions of dollars being held by foreigners
on a one-for-one basis, replacing the old Federal Reserve notes with the new notes, presumably US Treasury notes.
Far too many people, corporations and countries have far too many US Fed Notes to be able to absorb the sudden loss of any value of the US Fed Notes,
so any new banking system must offer to replace the old notes with new notes on a 1-for-1 basis.
In Vegas , I think they call that
kissing your sister.
Still leaves "trillions" of "dollars" in the global monetary system (the problem).
No net gain.
The beauty of the end of the Fed and the start of the new banking system is that the US can then offer to have the many trillions of old Fed
notes -- in electronic form, as well as paper form -- be loaned to the US, so that it can survive the current crisis without inflating the old
currency with worthless printing of yet more old Fed Res notes. The foreigners who loan the old Fed notes to the US can then be repaid in interest
and principal with the new US notes and they can then use the new notes with confidence, as long as the new notes are handled with transparency and
full accountability.
New currencies are issued by governmental decree , it's not a voluntary process. The "old" paper currency would immediately be replaced by the
"new" as it re-entered the banking system , then repatriated to the US for retirement....digital currency would be replaced automatically. There
would be no need for the US to borrow the "old Fed notes" , especially at interest.
The "old Fed notes" would no longer be acceptable for the settlement of international trade , or public/private debt.....iow , zero help for the
current financial crises.
If you're implying some form of duel currency system (fiat as opposed to bi-metalism) , where old Fed notes & new "US Treasury notes" would coexist
as
legal tender , then you have effectively doubled the amount of currency in circulation.
Besides , could the US really afford to pay interest on the unfathomable amount of $USD in circulation ? We'll be lucky if we don't ultimately
default on our existing and future Treasury obligations.
What we refer to as a
dollar crises , is really a crises of confidence....reflecting the stewardship of US monetary authorities.
Abysmal at best.