Friday, August 22, 2014

Why not the California Peso?

A digital currency, valid for all taxes paid to Sacramento.

We got the smart card terminals, they are here. Cal legislature just votes the Cal Peso into existence. Then everyone's got to trade the peso for tax payments. A brand new currency usable anywhere in California. The State of California makes all payments in the peso. The state creates 1% of the peso YoY as seigniorage. We would gain a huge efficiency in consumer transactions. The governor can borrow long for the water project.  The government gets a clear 1% discount from the market money rates. It can be taylored as a water investment fund. Turn a problem into a solution. Of course the currency would dominate across the west, smart card available. The state need only guarantee an interest expense  of 2% YoY, for water construction. That gets them a 20 year line of credit. And Jerry gets out the mole machines.

This works because the state can trade water debt directly to the construction firm. So the currency flows from the water industry first.  The secondary market spreads the currency across California and out west a bit, but no more. Texas can do their own peso, and Mexico has theirs. Trade their debt up and down the curve.  Great idea.

The clear idea is that an artificial river from the north is valuable.   And Jerry Brown guarantees us a new digital currency in return. A fair trade.

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