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#LOL.
Hello, everyone; My name is Ventaura. I am very much so capitalist, and even work on the campaign and media staff for a big republican running for governor in my state! It feels good to be back. I actually used to be a justice many moons ago, in this region. It feels great to be back.
Acario, Burtonea, Poopsancagizal, Cafincy, and 1 otherObjectivist rebel news
**The ambassador reads the latest edict from the WA...*
The Wartime Looting and Pillage resolution?
**He keeps reading smiling at first, then chuckling, then outright laughing...**
Yeah, that's gonna work. **The ambassador wipes tears of mirth from his eyes.**
Lets see now. On to other business.
Here's how that would work. Someone announces an issue of private currency, backed by one hundred thousand barrels of high grade crude. We'll call this currency the Gal and it is based on the value of one gallon of crude oil. As a barrel of crude oil contains 42 gallons he has 4.2 million Gals in currency. He begins trading that currency for other commodities or currencies. Over time people start using his currency more and more. People occasionally cash their currency in, some actually wanting the oil which he quickly provides.
What the people do not know is that he has been quietly printing more currency then he has oil. He is not replacing the oil that is being redeemed. He distributed the excess currency very quietly over several years and over long distances. He does this until the con is no longer sustainable. (He starts running out of oil to redeem, some bangs on the sides of the tanks, etc.) Our scoundrel absconds with several times the value of the of the original offering in other currency or easily transported commodities like gold, diamonds, etc.
Right up until we find our commodity trader missing and empty oil tanks, everyone with that currency thought they had something with a specified value. A simple audit would have turned up the missing oil. An in depth audit would have turned up the excess currency in circulation.
I tend to place BitCoin into the same category of paperless electronic voting machines. Without some kind of paper trail or something to physically count, there nothing substantial to audit should some question come up.
Now with that said, I have to say I really do not understand BitCoin, how it operates or how it is backed. I do know that several large holders of BitCoin, one in Japan if I remember right, got hosed big time. But to be honest, I really do not remember how that hosing came about. For all I know they screwed themselves.
#MoneyTeam, let'$ go.
Ancap? I apologise that I ever dare assume.
By the way, what theme of the site do you guys use? Still getting use to the new Rift or loving it already? I prefer to use the antiquility theme, though I never started playing NationStates in the old days when Mr. Berry was around in our presence, I just love this look the best. :-)
To quote myself from yesterday:
The usual method would be to telegram me with the position location you are interested in though this might change after the reorganization. You can send me the location now if you want just so that its on file somewhere.
Poopsancagizal and Objectivist rebel news
To steal the equity others are putting into the currency and walk away with several times the investment in the oil.
Nothing really. It all depends on how long he can keep people from figuring out there is far more currency in circulation then there is oil to back it. In fact a purchase of more oil could be part of the con and extend the life of the scheme. The longer this con runs, the more people are buying and trading the currency, the more money the crook makes.
All of this assumes a bad actor in charge. Not everyone is going to behave this way. But then again, not everyone is going to come up with a private currency backed by something unless they can figure out how to make a profit from it.
I am too, how are you?
I see your point.
If there was a way to keep the issuer away from the oil and unable to bail with it that would act as a restraint?
You mean by like say having a government body regulate this? If you use another company to do the regulating, you can get an insider end up in on the con and then they're able to multiply the damage because they're stealing the money while producing records that says it's all above board from the "regulator" causing even more damage to investors. It's possible with government ones too, and has happened, but it's a lot less likely to happen than when you have a company with a vested interest in making money off the companies they're regulating continuing to do business. They keep closing down or fining their clients, companies end up wary of using them.
I just unlocked my leader guys! I'm so happy! :D
That's not what I meant.
Suppose you had no access to the oil. It was in an unknown location, or in another continent, and you are only dealing with numbers. The way I see it is, your job is then reduced to being an accountant. All you'd have to do is to simply publish the balance sheet and let the public audit. If the bottom line doesn't balance out, you'll know that there is an excess of currency.
Ladies and Gentlemen of Capitalist Paradise,
I know my new nation has not been here long. However, my former nation had. I was a former justice, and upheld and defended the laws of the land we all call home. I am a pre law student, head of the mock trial team which is undefeated might I add. It is with great pride, that I have decided to rejoin our government and run for Advocate and Arbiter General. I believer Dr. Sigmund Freud said it best "The first requisite of civilization is that of justice." I believe a strong justice system is need in order to maintain a striving civilization. I asked the legislation for support, and wish my candidate(s) the best. As it will be a pleasure to run against them.
Thank you,
Ventaura
OMG So I got the issue for choosing a leader and I chose one to boost my freedoms, but when it passed into legislation I can't set a leader! Why is this a thing?
Constitutional Compliance Act has been submitted to the President.
Prevent legislating from the bench. Vote FOR.
http://www.capitalistparadise.com/forums/threads/draft-constitutional-authority.268/
You are getting closer to an audit system with that. But then you get two people working the con. The one selling the currency and the one publishing the balance sheet. The problem is, if I understand you correctly, they are all still on the same payroll.
The other problem is if someone wants to cash in that currency and by their oil back. Let's say someone has 42,000 Gals (100 barrels). Another currency backed by diamonds is easier to use so he wants to cash out. Either by proxy (IE: The US Commodity Markets.) or directly, someone has to deliver that 100 barrels of oil somewhere. Now that 100 barrels could be part a vast reserve somewhere containing oil belonging to many different entities. The only thing that really changes are some numbers and a balance in a ledger sheet. But, to be of value, that oil is going to have to be available to anyone wanting to redeem their currency.
This is why independent auditors working for the investors are so important. Publicly held companies in the US are routinely audited by independent firms and their reports go directly to the stockholders. If you were to have private currency, it would strike me that people holding or accepting that currency would be wise to have the same thing.
Good point. Ok, let's modify it.
Suppose the one issuing the currency is the one publishing the balance sheet. However, the one holding the oil is on a separate payroll who also publishes the oil reserves.
Then, the "accountant" and "oil bank" can hold each other accountable by ensuring the numbers add up. This way, the accountant and oil bank have a disincentive to collude and con each other due to competing interests. Like a system of checks and balances to decentralize power.
If currency is excessively issued, the oil bank loses out because he has less oil relative to currency. If the oil bank produces more oil than he is supposed to, the accountant loses out because he has less currency relative to oil. The balance is the point where profit (surplus) is maximized on both sides. On top of that, if either of the 2 screw up, the public can simply redeem their wealth in oil or currency, depending on which one of the two has been overproduced.
Basically a 3-way audit mechanism.
Under a 3-way audit mechanism, the oil bank would be the one handling oil shipments, whereas the accountant would be the one handling currency shipments.
Agreed. I think this 3-way audit mechanism fulfills that purpose.
And what Justice were you?
Post self-deleted by Ventaura.
Rephrase: What was the name of your nation at the time you served as a justice?
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