ISS. Issuance
... how can a money (MNY) come into being?
Even money with no implicit value must come from somewhere.
Money must be issued. There are way of doing this:
- A government can issue currency by printing it.
- It can be a natural element like gold and be mined.
- The current US fractional reserve banking system relies on commercial banks making loans to issue new currency.
- The money can have an implicit form of issuance. ie. Bitcoin 'mining'
Do we always need new money? Not always, but in order to balance the amount of money in circulation and the production of an economy, money will need to be issued when production increases.
One issue that we currently have is that the fed tries to predict the amount of money that will be needed and adjust reserve rates and fed borrowing rates to affect the number of loans being issued. In a sense they are trying to predict what will happen. This is a foolish operation and has gotten us in trouble more than once. Can we determine a way to issue currency so that is a direct function of production instead of predictive?
What about when production falls? How is money removed. This is discussed in the chapter on Demurrage.
Therefore:
There must be a way to issue money. Try to make this method a direct function of production instead of attempting to predict production.