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.
They didn't have the money first to lend it.
The act of borrowing created the money.
The act of declaring the money void, means you can't pay it back. I borrowed fake fed dollers, if they no longer exist I can't pay them back.
Can't they just say, okay, then you owe us that $ equivalent of the new currency?
Or on another note. Say you had something like a mortgage or a car loan, now the USD is void, what's stopping the bank from repo'ing your car or taking over your house?
They can say whatever they want.
But they have no law to back them up.
Well typically the contract signed with the lender is pretty crystal clear and can be used in a court of law, but I don't know how detailed it is or if there's a "Customer only agreed to pay back loan in USD, but we didn't account for the USD going defunct" type of loophole that lets the customer off the hook. But then that would screw over the bank.
OK the old money would be practically worthless so with one doller of new money you could buy 10k of the old money, or something like that.
Problem solved.
If they come out with a new currency, you can bet your ass, they have a plan.
But if the source of the money was fraudulent then fraud vitiates a contract?
Nothing. Secured debt. They can recover their security if you don't pay for it.