Sunday, January 9, 2011

Island Banking

I combine Kling's idea of locking up ponzi bankers with the Sotomayor doctrine of preemptive Due Process.

What I get is locking up the biggest bankers onto a very nice island and forcing a libertarian government and gold backed economy on the place.  We have this one island economy whose only purpose is to forecast big global economic events with gold backed betting.  All the counter parties live together on this beautiful island, they live via gold backed coins, they cannot leave without an exit visa, they are guarded by a division of marines, they are wired for information.  Any bank in any nation which has gotten too big is moved to the island, and any bank gotten too small kicked off the island.
Skipping the theoretical details, the end equilibrium are bankers whose main bounded function is to observe a world with very few large catastrophic changes.

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