It seems like a new banking system backed by something tangible again like how it was in the 1800's and prior would be a good move but would those of us in debt still be in debt to the banks? If not, how would our debts magically be absolved?
Example, say you owe money on your car and you have a ton of outstanding debt to a bank or credit lender. How exactly does implementing a new system of banking nullify this? Can't the bank still say "Since the USD is defunct, now you owe us the "New US Treasury Certificate" equivalent of that amount"?
I just can't quite put 2 and 2 together how the new currency would be debt free without older debts being absolved first.
I think everything would be exchanged, old dollar for new dollar. Your question is about “what about debt?” Well, what about assets? If you have $5000 in the bank, would you want that to disappear? Would millionaires want their nest egg gone? It’s impossible to erase debt and not assets. The elderly couple that scrimped and saved their whole life might have to go live on the street.
The problem with this line of reasoning is re-hypothecation. One asset that has been unknowingly sold to many different parties. Derivatives currently represent a sizeable fraction of a quadrillion dollars, and they are leveraged hundreds of times vs. real assets. In theory, derivatives are balanced, but counterparty risk means even a slight imbalance collapses the entire structure, because there aren't enough real assets to make good on all the promises.
Introducing a new currency necessarily requires eliminating this structure, and that is going to be financial chaos. The only clean way to do it is to inflate away the old currency, which is asymptotically equivalent to cancelling all debts. Those who are financial creditors in this case lose out, but everyone benefits from the physical assets the own.
It's a complete reset. All financial assets are worth zero. If you're a renter with large bond holdings...well, you'll be left holding the bag. But nobody would lose their home, so nobody would be pushed onto the street. Rents would also be reduced as the mortgages would be zeroed.
But some will clearly be hurt, and assistance programs would need to be offered to those who were seriously and adversely affected in the reset.
Yes, this is key. Re-hypothecation has multiplied the fraud. It’s impossible to determine the rightful owner of many assets.
That’s why everyone should consider having assets in one’s own posession.
btw. I believe that blockchain’s (could also be other form of shared ledger) real use case will be to eliminate re-hypothecation.
I’m not sure this is entirely true as every US citizen with a birth certificate has been and is currently being bought and sold daily on the markets. This is the elusive strawman accounts they found when they found the Panama papers… so in essence you yourself could be worth millions or billions depending on your “worth” to traders. For understanding everyone has to become familiar with actual legal terms set forth by our founders, and how the entire fiasco of usury debt facilitated against us is in actual terms fraud and makes the contracts null and void, in fact they are illegal… https://youtu.be/e4KNxgWY5yg?si=RF8WMCPhcUc6mg7T
This. I will rescue a tarp and some blankets.