Normal contractions in a network theory are rank reductions. Network contract from smaller transactions at faster rates to the integer rung down. But they get there with skew, mostly, like the spiral of defaulting nations in Europe. When contracted, people hold more inventory, velocity is lower.
If that is the model, what is the shock? The same shock as today, nerdy goofs with communications technology. Same garage operations, making radio receivers for their friends, the ham radio operators would blast music.
Network theory, broadcast commercial radio and automobiles yields suburbia, which announced itself, almost overnight, in every community. The network contracted two or three rungs to support people in migration, getting into place for suburbia. The preference for liquidity is often posed as traveling costs, in the model it is about the lowest rank network the bicoastal nation could hold.
Went back here because of Free Banking and George Selgin. Would banks have been more or less migratory than the economy as a whole. I don't see it. I see banks scrambling to catch up, but banking error is not an eight year process.
What about Free Banking? Start by allowing a little private coinage. Why exactly are Liberty Dollars illegal and why is Schrumer threatening the Bitcoins?
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