A restructuring of the home lending business

For theoretical reasons, we need to separate out time bet from money bets, this causes  lot of confusion. Fixed income vs open market.

If I create the personal income insurance business, then I cooperate with clients who want their future income insurable. My clients contract with me I investigate their budget history and provide an insurance voucher my client can take to the bank. Then the bank matches a lender to a home deal, and the deal is done, betting time has been removed from banking and placed into insurance, in the theory.

Banking gets thrown around a bit too much and we fail to separate out this function called 'bertting time to completion'.  Time to completion is the secret of the client, they are motivated to keep it hidden for a variety of reasons, mainly it has value to know the future.  Thus time is dumped from the TOE and derived after the fact, or bet like an insurance function, not an open market function.

Murray Rothbard failed to distinguish, when he meant 100% reserves, he missed a step, he meant 'time to completion' is hidden, not bettable by the currency banker.   We never have 100% reserves,  in time of goods;  time and goods are separable and will be separated by the currency banker.

The only thing the currency issuer cares about is savings to loans on a cash in advance method. The theory assumes pre-qualified, that is the same as time being separable. The currency issues assumes his clients already went to the insurance guy and got a voucher, in my model, the client is pre-qualed.

It is a separation problem.

The money equation works fine, as long as the components are measurable, meaning broken out onto their own axes of symmetry. Currency risk and pricing risk, separable. Time risk separable (semi-orthogonal, aysmmetric) , or time insuraqnce is an entirely different business, it is the pre-qual business. Pre-qual has to be separated so cash in advance works. It is not reality, it is the requirements needed to make the money and gas equations work. That is Boltzman and Selgin.

So the issue is, how well can the banking economist set the accounting standard to make money equation work, they are the gold standard, even if we are using gold. If your are on pure gold coins even, then bankers run the armored trucks, a fractional reserve business.

See the catch? The issue is always moving the agent toward a savings/loan that is more liquid than before, while keeping the delta of that ratio toward its optimum.  When those math conditions are met, then the banker declares, "Money equation working". That is the banker job, it is a market maker.