Smart Cards, the modern way to hoard cash

Bankers think cash is inefficient. Citi’s Willem Buiter looks at the inefficiency of cash hoarding and is looking for better hoarding technology.

What do we need?

• We need trusted exchangers that use no arbitrage banker bot technology.
• We need to use the public key encryption technology so we can always verify that a set of digits was encoded by a trusted exchanger.
• We need counterfeit proof smart cards that contain out faces in photo and digital form.

With these we can hoard valuable, secure digit sequences all we want.If the connection between the banker bot spreadsheet and the digit encryption is secure, then there is no way any banker of money exchanger can cheat the system. The banker bot can verify the digits using its own private key, then match block counts, and then put the digits into the cell labeled "savings balance" with its uncertain term length and posted rate, as I have mentioned here. The weak link is the trusted borrower, Banker Bot runs a savings and loan ratio business. I guarantees that all the digits it produces will collectively comprise a cotangent/tangent group. So it needs trusted members who will try and 'out fox' banker bot, and have fun doing so; so as to keep the ratio function up to date and accurate. But as long as merchants like secure digits then there should be a stable set of connected merchants to perform the member bank function.

What Banker Bot really does is ensure that all customers buying stuff will be a unit variance Gaussian distribution of arrival rates at the check out counter..  If they are crowding in line then the merchant has assurance that a price hike will restore equilibrium. And for customers, Banker Bot guarantees that when the line is crowded, they will be better off shopping less and putting money in the savings account. Neutral prices are discovered by the queue length. Merchants are all enthused about this, Banker Bot guarantees it, this will be very popular, safe and secure money.

How does the customer trade digits for tax dollars? Easy, the merchant knows the price he pays for a can of beans, in tax dollars. His register can always invert the price and get tax dollars per digit, since he sells beans for digits.  The merchant is simply adding money transactions to the list of products. Since the digits are always a gaussian distribution there should be no problem, except with the tax dollar. If the tax dollar has an uncertain distribution, then raise the price of the exchange.

Consider my little community here in the Tower District of Fesno.

It is a pedestrian community with about 50 shops, restaurants and clubs.  All this community needs to do is have about 10% of prices paid in Tower points, like discount coupons.  That is enough to stabilize the foot traffic. They get a 30% boost in inventory efficiency, and the cost is nearly nothing, once the smart cards are in place. Our local Bank of America could easily run the system, providing a secure place for Banker Bot. The new smart cards would be compatible with exiting terminal and ATM systems.  The bank web site could sell local advertising. Every merchant in the are would join because the digits are targeted to the local customer base. Digits and customers having the same probability distribution around the community.


Where is the problem?