How to improve the financial system - by Sam Carana

The Federal Reserve Bank should gradually be phased out, so that stock (shares) will replace money as a facilitator of trade. The Federal Reserve Bank should gradually increase interest rates. The Federal Reserve Bank should also widen the organizations it lends to. At the same time the Federal Reserve Bank should increase the conditions under which organizations can borrow money from the government, looking at asset backing rather than banking licenses. This will loosen the stranglehold the cartel of banks currently has over financial services. More competition will improve financial services. It will also make it more interesting for companies to offer financial services (in competition with banks), which should be supported by deregulation of banking. Eventually, the fed res will price itself out of the market, while companies and individuals will use their assets to back up developments their want to invest in, in return for stock, rather than money. Money itself will gradually loose value in comparison to stock, so people will replace their (dollar-denominated) bank accounts for "stock" accounts (either with stockbrokers or directly with companies) that allow them to make payments in shares of, say, IBM, SONY or whatever stock they feel comfortable with. [source]

As globalization continues, an ever larger proportion of trade will involve multiple currencies and all the associated volatility and speculation. Instead of making deals in currency, it makes ever more sense to agree on shares of a reputable company to facilitate trade. Shares typically outperform other forms of investment, so it makes more sense to have an account in shares than in currency.

For small amounts of money, it may still make sense to keep using coins, but any company should be allowed to mint its own coins, just like casinos already use their own tokens, the Post Office issues stamps, etc. Bus and rail tickets, in theory anything that's easily transferable could be used instead of government-issued coins. In the end, the assets and the prospects of the company issuing the coins constitute the back-up, just like they constitute the back-up for shares such a company may issue. In the case of coins, anti-trust and cartel legislation should be imposed to ensure that no such company (nor any government agency) will be able to unfairly exploit a monopoly.

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