The RED dollar plan - comments?

Discussion in 'Business & Economics' started by Billy T, Oct 20, 2008.

  1. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    That is not problem, I think. If you have "electronic money" it is "green money" and can go out of the country in a second. I am suggesting that the $700 billion be real paper money (some large demoniation bills, perhaps some $100,000 red dollar bills for inter bank transfers to keep the transport problems managable) I have not calculated how big the volume of $700 billion in paper money is.

    One thing I am just now realizing is that the RED dollar plan will also essentially eliminate the ALL importation of hard drugs or at least create an electronic record for the police to use. It will not be possible to collect suitcases of $100 green dolllars bill to smuggle out of the country to pay for their importation. as very few green dollars will actually circulate.

    Everything so far seems to indicate only positive effects of the "RED DOLLAR" plan.

    The circulation of red paper dollars, I think, would aid in making people understand better the danger of spending more than they earn by borrowing.

    When I was just a kid, most companies paid their employess at the end of the week in cash. One company once used only two dollar bills to pay its employees one week. - As they circulated in the community everyone understood the valuable contribution that comapny made to everyone's lively hood. I had something like this in mind to show that the US was living on debt. (Only the red dollars would actually circulate - any green one you had would be hidden in your house of in a bank box.
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    Your second question was aready answered in post 19, by:

    " the importer who has only red dollars gained by selling in the US goes to the bank, gives both the bill for the imports and the bank's demanded amount of red dollars (he can go to another bank if he thinks that is too much) to the bank. In return bank issues him a "Paid for X dollars of imports from Y certificate" to him, and he goes back to work, home etc. He never gets his hands on the green dollars - the bank sends them to seller Y. "

    In an earlier post, it was told that the government prints more green dollars if no banks has them as the source of last resport. Actually of course the Saudis do not wnat paper dollars, so exactly what happens now takes place the: The bank makes an electronic credit for the Saudis. (Recall electronic money is "green money.")
     
    Last edited by a moderator: Oct 21, 2008
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  3. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    Obama’s plan to invest in alternate energy and domestic infrastructure is much better than transfer of funds to the banks etc. Banks may just hold them just to improve their balance sheets, or if they lend them it may be for projects in countries with more rapid GDP growth. The Republican “trickle down” ideas made new modern factories and construction jobs etc. – but in China and Dubai etc.

    If it possible to do so, investment funds will always gravitate to where the return is greatest, thus the pumping out of new funds can actually reduce the jobs for “Joe American” as it did under GWB. 100 dollar bills mainly facilitate the importation of drugs and illegal domestic activities, such as bribes. If all paper money were phased out then:
    Either truck loads of coins would be needed to import a suit case or tire stuffed with heroin;
    Or there would be an electronic trail to aid the police.

    If paper money is essential, why not at least change the words under the Federal Reserve seal to be:

    This note is legal tender for all debts public and private in the United States.

    And use red, instead of black, ink for these words and the Federal Reserve seal (or everything now printed with black ink to avoid and extra ink color). These new “red dollars” would not be allowed to legally leave the US and very quickly they would be the only ones commonly in circulation (Gresham’s Law).

    Their red color would help all understand that excessive debt and negative balance of trade is destroying the US. They would stop much of the “trickle down” to China and Dubai etc. as they would have essentially zero value to foreigners, except when visiting the USA. US imports would rapidly be reduced to the level of US exports as foreigners would not accept “red dollars” with no legal value in their country as they now accept US’s paper dollars – effectively lending to the US the current negative trade balance.

    Thus this too would tend to increase domestic jobs in the USA. US treasury notes and bonds, could of course be “rolled” into new ones, but if cashed in the credit would be effectively in dollars with value only in the US so this would encourage buying of US products or investing in the US. I.e. the US would be forced, like it or not, to cease borrowing from foreigners to finance imports in excess of US exports and budget deficits. The US mint could print these new red dollars with little inflation effect as an old one would go out of circulation automatically (Gresham's Law) for each new one issued. Normally the government needs to issue new bonds to "sterilize" or "soak up" the additional currency printed from "thin air" but his interest expense could largely be avoided. For example, pay the worker on a new infrastructure project with newly printed "red dollars" to put them into circulation with little inflationary effect.

    Legal imports are rarely paid for by export of cash, but if for some reason payment cannot be done via electronic transfer, then the foreigner could go to an authorized bank in his country to collect old style “green dollars.”
     
    Last edited by a moderator: Nov 9, 2008
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