Money is not only the physical acknowledgment of what is owed, it is also a claim on an asset. Money is a receipt documenting the assets a bank holds for an individual and this receipt can be traded for some commodity, good, or service. The counterparty on the other side of the trade should feel comfortable that the receipt can be redeemed for the assets held at a bank or traded with another counterparty for commodities, goods, or services.
Most of the electorate have no receipts to trade because they have no assets upon which they can issue receipts.
The ideal money is not money issued by the Federal Reserve or U.S. Treasury. An ideal money is one issued directly by the individual, is backed by commodities or intellectual property, and contains up-to-the-minute data on the value of the individual’s assets.
Ideal, individually issued money should contain the individual’s identifying information, verifiable address, documented assets, and their real-time value. In an ideal, individually issued money environment, most of us, now, would be walking around with worthless currency. Our receipts today are backed by nothing that we own or produce.
You could argue that the money in your pocket or on your debit card that you use to buy a hamburger is the result of the hard work that you put in at AT&T. But is it? Yes, you have an employment contract with AT&T, and yes, they promise you some payment, x, in exchange for some service, y. The service you provide, however, is not a commodity that the traded receipts can be used to make a claim on. The receipts the wage earner receives from AT&T are either issued on the assets AT&T used to borrow money from a bank or from the services it sold with your help.
When you trade the receipts (money) you get from your AT&T wages in return for personal goods and services from a vendor, you are simply reselling someone else’s receipts.
In a value-driven, individual micro-bank environment, the portion of your value that you exchange with me in the form of individualized money should contain the data reflecting your real underlying wealth; the currency; the inputs for your value.
If you picked up a ten-dollar bill off the ground and bought a burger, fries, and a drink, what can I ascertain about your economic value? Nothing. Even if you believed that the very act of picking up the dollar generated some type of economic value, the act itself is no longer current. The act is not an existing commodity on which an current economic value can be assessed. Time passed and the duration of the act has reduced to zero any value it may have contained.
The wage earner/non-asset holder is left with no choice in an ideal, individual micro-bank scenario but to create a current asset that contains their data, skills, knowledge, and abilities. The demand for this individual micro-economy will determine the value of the money the asset generates.
Banks, institutions with 500 years of experience pricing assets, along with the assistance of fintechs, can help the trader design and issue the money issued against assets.
And what would be the role of government in this scenario? Other than offering a dispute settlement service, nothing. The data contained in an individually issued token should be sufficient for a trader to determine the token’s underlying value.
The real reason we have inflation is not because of increasing money supply or price gouging on the part of greedy corporations. This current round of inflation is an acknowledgment that the consumer is exchanging money backed by either nothing or by individual assets quickly depreciating to zero.