Dear R3 bankers,
If you can't beat Bitcoin then maybe you should join it. The massive Bitcoin hashrate makes Bitcoin pretty darn secure. We have learned that merge mined coins with Bitcoin can tap onto this security. Why not help society out by creating an Elastic Fed Coin, that is merge mined with Bitcoin. Think about it. You get a premined coin you control,
with Bitcoin Blockchain tech. Add in the features that Martin Armstrong talks about, (allowing the paid back elastic money to expire) and you just might stabilize the economy.
Sincerely yours
A Concerned Citizen
http://www.armstrongeconomics.com/archives/42557Elastic Money
Elastic money was a brilliant idea that, if implemented properly, would help to stabilize the economy during economic declines. The problem is that Congress usurped and transformed it into buying government bonds that do not help the economy at all. The original design was to “stimulate” by directly buying corporate paper. The Fed would create money to stimulate, and when the short-term paper was repaid, the “elastic money would expire. Targeting corporate paper funded corporations when banks were not lending, and thus prevented excessive unemployment.
The Fed would expand the money supply during periods of economic decline and it would contract the money supply as the corporate paper was repaid. There was no such authority to perpetually create money at will on some covert perpetual basis. A banking crisis, as we have now in Europe, occurs when banks cannot meet the demand for withdrawals because they lent the money long-term. They would have to sell their portfolios at discounts to raise cash to meet the demands of depositors. Elastic money would meet the demands of depositors without having to liquidate the portfolios.
Elastic money was not some evil conspiracy. It was to keep money flowing when banks were contracting. Keep in mind there was also limitations on banks to regions. The Clintons removed all restraints and allowed interstate banking which siphons money from local regions and deploys it someplace else. If we returned the central bank to perform its original function, then the economy would be much more stable. Our problem is we live in a political economy where politicians just cannot keep their fingers out of everyone’s pockets.
