The economics of SR Options

[Stahlseele]

Depends on WHAT you can actually buy with it . .
Buy a House. A Car. A Boat. A Plane. Stock in a corp.
Stuff that can be sold, maybe with a bit of profit, outside to outsiders . .

[Warlordtheft]

But to translate Daylen's comment, basically, in an economy where the money exists because we say it exists, instead of in an economy based around a limited supply of precious metals, because "hoarding" fiat currency doesn't do anything for your company (a fact that I wish RL Wall Streeters would realize, but I digress), aside from being able to make short term purchases reliably, and actually taking fiat currency out of circulation damages the economy that depends on it, due to a resulting inflation.

(does that sound more or accurate, Daylen? it's almost 1 in the morning here...)

Minor point, removing fiat currency would probably screw up the economy--due to hoarding of precious metals, and dehoarding of it as the value of gold or whatever precious metals used goes up and down.

Reducing the money supply in (basically one ofthe ways the Federal Reserve tries to regulate the economy) would result in lower inflation---and in a severe case deflation, higher interest rates (less money to lend), and lower economic activity (AKA higher unemployment). Of course the opposite, increasing the supply of fiat money results in lower interest rates, inflation, and those invested in interest bearing intruments like savings accounts, municiple bods, govt bonds, etc, etc, suffer--which would mean more invest ment in the capital markets (AKA stocks). This in turn means more economic activity.

As always this assumes everything else stays the same. (AKA-Even economists cannot accurately portray the economy! (IMG:style_emoticons/default/grinbig.gif) )

@Nghtslast hero: You forgot to incorporate the value of the labor that the employee provides. Naturally if the employee doesnt provide sufficient value to be profitable or at least break even, the employee is probably going to get canned.

[3278]

It's scrip, not script.

It's never going to happen, but I applaud your dedication. "Scrip" is the other "canon."

[Daylen]

All currencies are fiat. Them being made of metal makes them no less so.

And while inflation erodes the value of savings, it also reduces the burden of any debt by the same mechanism.

And this also makes deflation incredibly nasty because it increases the burden of debt, something only creditors would want to see (at least in the short term, in the long term there will be waves of defaults with no way to liquidate whatever was put up for collateral).

Metals have real value as metal, in addition scarcity of metal prevents a printing press from simply increasing the supply of money; a powerful check on inflation.

Reducing the burden of debt is theft from the person who loaned the money.
Deflation is not so scary, when the US had hard currency and deflation was part of the game loans were very short term and required hefty down payments. This was a good thing, conservative loan markets are a check to housing and other loan driven bubbles.

[Daylen]

*facepalm* LOL Wow, and I thought I was nerdy... (IMG:style_emoticons/default/silly.gif)

No worries, carry on. (IMG:style_emoticons/default/rotate.gif)

But to translate Daylen's comment, basically, in an economy where the money exists because we say it exists, instead of in an economy based around a limited supply of precious metals, because "hoarding" fiat currency doesn't do anything for your company (a fact that I wish RL Wall Streeters would realize, but I digress), aside from being able to make short term purchases reliably, and actually taking fiat currency out of circulation damages the economy that depends on it, due to a resulting inflation.

(does that sound more or accurate, Daylen? it's almost 1 in the morning here...)

Not too bad. Wall streeters do realize it, but with uncertainty of where to invest money its better to hold than to waste. Also, if future profits will not be a benefit due to tax rates it is better to take profits sooner and buy gold, silver or something else that can't be easily devalued. For example I expect Lofwyre buys ore, scrap metal, mages and countries when production investment is uncertain.

[Irion]

@Irion: Creating money from debt isn't exactly creating money out of nowhere, with nothing to back it up. It's creating money backed by things that don't exist yet. It (sort of) works because the bank assures you that it'll have the money by then and that it can give it to you right now if you need it.

Yes, it is.
You give the guy some money, right? And what do you get for it? Something that tells, that you are entitled to money. So how does this possibly resolve?
The guy has to work or to build something, which makes more money. Or you will have still the money you gave him around and the "virtual" money, he owns you.

[quote]
You are not contradicting me. You just assume that "something is build". In this case, the "creation" of money was justified and therefor does not cause problems.

[Blade]

That's how it works today: when you (or a business or government) get a loan, the bank doesn't loan you money it already has. Instead, the bank creates the money it'll loan you.
Take a look at Fractional reserve banking for an in-depth explanation.

[hobgoblin]

http://www.bbc.co.uk/news/uk-england-bristol-16852326

[bibliophile20]

@hobgoblin: hmm. Interesting. Will have to keep an eye on that and see how it develops. The point of big companies "hoovering" money out of a local economy was a valid one, I feel.

[Erik Baird]

http://www.bbc.co.uk/news/uk-england-bristol-16852326

Interesting idea, but it would not be legal in the present-day US (only the Federal government has the authority and privilege to coin/print money).

[JanessaVR]

Interesting idea, but it would not be legal in the present-day US (only the Federal government has the authority and privilege to coin/print money).

This might be the closest we've come here in the U.S. (that I can remember off the top of my head, at least), but I'm scarcely an expert in this field.

[CanRay]

And thus we see the birth of the Nuyen, and the re-birth of the Company Town and Company Store (That will own my soul)...

[Wakshaani]

Interesting idea, but it would not be legal in the present-day US (only the Federal government has the authority and privilege to coin/print money).

Kinda.

It's illegal to forge currency.

You can actually print your own, if you can convince other people to take it. There's a few places in the American NorthEast that do this, for instance. (Vermont, I want to say. I'd have to unleash the spiders to find out.) You just have to make it crystal clear that it isn't US currency.

[CanRay]

Oh, like Canadian Tire Money.

[Erik Baird]

Huh. The states aren't allowed to do so under the current constitution, since that authority is specifically given to the Feds (Article I, Section 8 ). I was under the impression that anyone else making their own currency / corp scrip/ whatever had also been nixed somewhere down the line.

Although, come to think of it, if that were true, Bitcoin and the like wouldn't be legal, either. I'm not sure where that would leave a town government.

[CanRay]

And, again, the US had "Company Towns" and "Company Stores" that used "Company Money", too. The original Corp Scrip.

[Critias]

And, again, the US had "Company Towns" and "Company Stores" that used "Company Money", too. The original Corp Scrip.

Thurber, Texas was one of the nation's purest examples of it; they had company law, company schools, a company church, company opera house...you name it. All built up around some coal mines (and, later, shale/brickyards). They had workers from 18 different countries on the payroll, and a population peak of roughly 10,000 people (which wasn't too shabby, for the time period).

It's fascinating stuff. All you need is to get enough people to sign up, and you can work some real financial magic.

I've never taken issue with "Corp Scrip," in the slightest. History's done weirder stuff than that.

[Erik Baird]

Yep, I'm aware of the historical fact of corp scrip and company towns.

I don't think a normal town or city (like, say, New York) would be allowed to make its own currency here. If the town is owned lock, stock, and barrel by a private entity, that changes, although I'm not aware of any current towns that are using some form of scrip. Like I said, I'm under the impression that was nixed. I'll have to try to look up some info on it when I get a chance.

[CanRay]

It was nixed because people caught onto how the Company was screwing them, and it was perpetual "Indebted Service", effectively legal slavery. Give it some more time, people will forget again, and watch it happen.

Corporations tend to play the long game, as they don't die like humans do. Then again, after the '80s, I'm not so sure about the humans running those Corporations any longer...

[bibliophile20]

I know some schools do this as a fund-raising thing; my old middle school printed HAC Dollars (Hebrew Academy of Cleveland), the parents would buy them from the school at some favorable exchange rate and then use them at a bunch of local participating businesses (mostly food joints and whatnot), whereupon the school would then buy them back at a favorable exchange rate; it was basically a way for those businesses to give charity to the school as well as gain a certain amount of guaranteed business.

[Wakshaani]

Yep, I'm aware of the historical fact of corp scrip and company towns.

I don't think a normal town or city (like, say, New York) would be allowed to make its own currency here. If the town is owned lock, stock, and barrel by a private entity, that changes, although I'm not aware of any current towns that are using some form of scrip. Like I said, I'm under the impression that was nixed. I'll have to try to look up some info on it when I get a chance.

Here we go, a quick example.

http://senatorwagner.com/2011/02/small-tow...s-own-currency/

You can also make fake money freely, such as the old Bill Clinton "Sex Dollar Bill" and the George W Bush "Queer Three Dollar Bill" (Pretty much every president gets something like this), the Franklin Mint's "Collectable Coins", assorted play money (Monopoly, etc), digital currency or coupons for a store (Gift Cards, Gift Certificates, the banking system), local business (Disney Dollars), and, yes, even local townships and municipailities. I'd wager that the US Treasury would come down HARD on a state-level government that tried it, due to US Treasury laws, but for smaller communities, as long as it isn't made to be a forgery of US Currency, you're pretty free and clear to churn out your own.

Getting people to accept it is, as always, the tricky thing.

So, for example, if you and two hundred like-minded folks went out to Nebraska and set up a small town where everything was paid for in 'NewYen', trading among one another to take into account assorted rewards for hourly work for the compound, you'd be quite legit, as long as they were clearly NOT US Dollars. The Secret Service would likely drop by at some point to check it out, which is, you know, a tad scary, but after that, no big.

You mainly find it tried legitimately in LIbertarian areas these days, but that dives into a political discussion and that's a no-go for here.

At any rate ... education!

[Erik Baird]

Those are nifty examples. I stand corrected. (IMG:style_emoticons/default/smile.gif)

Though I'm still gonna have to look and see if there were any court cases about corp/town scrip.

[nylanfs]

ALL currency is valued because of the social contract that we "agree" that it has value. Including precious metals.

And these kind of conversations are why I absolutely love role playing games and their forms. You always learn something new (or different view points).

[Wakshaani]

Oh lord yes, nylanfs (Goodness, how does one pronounce that?) ... Gary Gygax drove nails into my head with his vocabulary, but,by golly, it foced me to go out there and LEARN, and I've been a student ever since. Math, science, economics, sociology, biology, kinesics ... it's astounding what you can absorb when you try, and every little nugget may well come up some day.

As an aside, I want to tell you about my worst FAILURE in this regard ... if you ever run into me at a con, ask this story and you can get it told live, complete with agonizing winces. I'm told it's quite impressive.

At any rate, there was a word I used to know, which referred to the body of a bull after it had been gelded and slaughtered in a Bacchanal ritual by a group of thirteen Bachitte priestesses on a drunken celebration during a high holy day of Bacchus. It's a Greek word, and someone here might know it, but I *used* to know it, until the day that I needed it.

Friend of mine had gone to a crazt sororiety party, gotten plastered, vaguely recalled hitting on some of the sisters there and them getting upset. He wakes up, stripped naked, kinda scratched up, laying face down on the hood of his car, with his keys stuck in his arse.

To which I could reply, "Oh, so you were a ... .... ... DAMMIT!"

The word? The word that I'd learned when I was ten and had been waiting fifteen years to use, that I finally had a PERFECT chance to use, that I could have scored MAJOR points with by using devastating precision at JUST the right time?

It fell out of my head.

I opened my mouth, it fell out, rolled under a couch, and I was never able to find it again.

To this *day* I don't remember what that word is, but I know that I will never, EVER, be in a position to use it like that again.

My one greatest missed opportunity.

[CanRay]

ALL currency is valued because of the social contract that we "agree" that it has value. Including precious metals.

That and it's easier than a barter system to have some kind of relative and effective way of equating things to a set number. (IMG:style_emoticons/default/biggrin.gif)