[Draft] On International Currency

[Excidium Planetis]

Have you ever been to Baja California? Every " hotdog vendor and shop keeper" accepts both Mexican Pesos and American dollars.

I'm sure there are other examples of border towns putting up with the inconvenience of dual currencies too. That doesn't make it sensible. In fact, the added cost of maintaining dual currencies is actually a barrier to trade, which works against your choice of category.

OOC:
The cost of maintaining two currencies is lower than the cost of having to convert the literally thousands of currencies on NS, some of which are from nations that may suddenly CTE and thus make the currency worthless. Between having to exchange Excidian Credits for "cute baby seals" and then exchange those for some United Federation of Canada Dollars, or simply having to accept IS, I'll take the IS.

Case in point: Every nation on GE&T does currency conversion between their own currency and NSD (or NS$, or USD, whatever), because that is fairly simple. Almost no one does exchange between the hundreds of individual national currencies and their own currency, because that's ridiculous.

The committee, not the game, sets the value of IS, and the exchange rate is some nebulous rate that is half determined by the player's RPed currency value and the Committee's value (which, of course, we can never know). There is no game mechanics involved.

Whether that's bad game mechanics or not, it's pretty awful monetary policy. Markets set exchange rates, not committees. And I still maintain that a market exchange rate requires a coded mechanism that is far more complicated than our simple game is capable of.

In most cases, the market WILL set the exchange rate. The Excidian Credit's value is set by the market. The IS is set by the GAO (let's say, for example, they set the IS to the current market value of 1 gram of gold). The exchange rate between IS and Excidian Credits is therefore decided by the market... as the value of my currency fluctuates with the market, so does the exchange rate.

[Malkir]

So one issue related to this that I don't believe have been discussed very much is how it would affect nations' ability to conduct monetary policy. Ultimately I believe this would encourage rampant capital flow restrictions on between nations, which seems contrary to the resolution's expressed desire to make trade easier or it will result in a system of floating exchange rates which is at best as efficient as the current system.

Exchange rates, monetary policy, and capital flow are connected. By increasing the money supply you affect interest rates which changes the demand for a given currency and its exchange rate. An increase in the money supply pushes down interest rates and makes that currency less attractive relative to other currencies. Capital will then flow to more attractive currencies. The reverse is that a decrease in the money supply will raise interest rates and make a currency more attractive and cause capital to flow into that currency.

Pegging an exchange rate is requiring the central bank of that currency to maintain the exchange rate through open market operations or through capital flow restrictions. Because exchange rates are the value of a currency relative to another currency, one nation's monetary policy affects the exchange rate of every nation with which it trades. Usually because exchange rates are allowed to float this doesn't cause many problems. However if a country has pegged its exchange rate then that country must enact monetary policies which counter the monetary policies of those currencies to which they are pegged.

An example would probably help since I doubt I explained that very well. Suppose Malkir has its dollar (MD) pegged to the Brasilistan Supreme Dollar (BSD). Now unfortunately Brasilistan goes into a major recession and so increases their money supply. This pushes down interest rates and their exchange rate with the MD. But Malkir has pegged its exchange rate so Malkir has to do something to fix this. The choices are either pursue a contractionary monetary policy that would raise the exchange rate back to the pegged level or restrict capital flows so that the exchange rate can't change. End example.

This resolution tasks the WA GAO with regulating the value and distribution of IS. I am interpreting this to mean that WA GAO will set the exchange rate and have authority to conduct open market operations. This is terrifying because it means that if Malkir wants to use monetary policy to stabilize the business cycle, the WA GAO has the authority and ability to counteract my every move. So Malkir's only response to this can be either surrendering its monetary policy or imposing substantial capital flow restrictions on its citizens.

Alternatively if you leave it to member states to regulate the exchange rate, this will either lead to floating exchange rates which defeats the purpose of the resolution, or it will lead to pegged exchange rates which strips members of their independent monetary policies.

[Excidium Planetis]

So one issue related to this that I don't believe have been discussed very much is how it would affect nations' ability to conduct monetary policy. Ultimately I believe this would encourage rampant capital flow restrictions on between nations, which seems contrary to the resolution's expressed desire to make trade easier or it will result in a system of floating exchange rates which is at best as efficient as the current system.

Exchange rates, monetary policy, and capital flow are connected. By increasing the money supply you affect interest rates which changes the demand for a given currency and its exchange rate. An increase in the money supply pushes down interest rates and makes that currency less attractive relative to other currencies. Capital will then flow to more attractive currencies. The reverse is that a decrease in the money supply will raise interest rates and make a currency more attractive and cause capital to flow into that currency.

Pegging an exchange rate is requiring the central bank of that currency to maintain the exchange rate through open market operations or through capital flow restrictions. Because exchange rates are the value of a currency relative to another currency, one nation's monetary policy affects the exchange rate of every nation with which it trades. Usually because exchange rates are allowed to float this doesn't cause many problems. However if a country has pegged its exchange rate then that country must enact monetary policies which counter the monetary policies of those currencies to which they are pegged.

An example would probably help since I doubt I explained that very well. Suppose Malkir has its dollar (MD) pegged to the Brasilistan Supreme Dollar (BSD). Now unfortunately Brasilistan goes into a major recession and so increases their money supply. This pushes down interest rates and their exchange rate with the MD. But Malkir has pegged its exchange rate so Malkir has to do something to fix this. The choices are either pursue a contractionary monetary policy that would raise the exchange rate back to the pegged level or restrict capital flows so that the exchange rate can't change. End example.

This resolution tasks the WA GAO with regulating the value and distribution of IS. I am interpreting this to mean that WA GAO will set the exchange rate and have authority to conduct open market operations. This is terrifying because it means that if Malkir wants to use monetary policy to stabilize the business cycle, the WA GAO has the authority and ability to counteract my every move. So Malkir's only response to this can be either surrendering its monetary policy or imposing substantial capital flow restrictions on its citizens.

Alternatively if you leave it to member states to regulate the exchange rate, this will either lead to floating exchange rates which defeats the purpose of the resolution, or it will lead to pegged exchange rates which strips members of their independent monetary policies.

"The GAO cannot set the exchange rate, only the value of the IS. This means, of course, that they could theoretically keep the exchange rate the same for one particular national currency if they change the IS's value to track with that particular currency's value.

"But if one national currency goes up in value, and another goes down in value, the IS cannot simultaneously increase and decrease in value. The exchange rate will have to change for one or both currencies.

"So, while the GAO could theoretically counteract Malkir's monetary policy, there is no reason that they would choose your nation specifically, leaving them with practically no control over every one of the thousands of other nations' exchange rates. They have no reason to do so."

[Bears Armed]

"My own government is also among those who consider this proposal to be a bad idea, and in addition to supporting some of the arguments already raised against it they have directed me to ask the following questions:

"Apparently this would be a fiat currency, rather than based on any commodity? That being so, what would determine how much of this currency was issued? There don't seem to be any guidelines included for the committee to follow in that respect...
"By increasing money supply in this way, aren't you automatically promoting inflation?
"What about any types of transaction for which the relevant nation's own currency would not be considered legal tender, because the law (perhaps on the basis of custom, or a treaty) currently dictates that some specific locally issued currency -- for which national currency can be exchanged -- must be used instead? Shouldn't those be exempted?"

Artorrios o SouthWoods,
ChairBear, Bears Armed Mission at the World Assembly.

[Excidium Planetis]

"My own government is also among those who consider this proposal to be a bad idea, and in addition to supporting some of the arguments already raised against it they have directed me to ask the following questions:

"Apparently this would be a fiat currency, rather than based on any commodity? That being so, what would determine how much of this currency was issued? There don't seem to be any guidelines included for the committee to follow in that respect...
"By increasing money supply in this way, aren't you automatically promoting inflation?

"It is currently left up to the GAO to decide what the IS is valued on, and how much of it is issued. Theoretically, the GAO could not issue any IS. Anyways, what guidelines would you suggest I include? If the IS should be tied to a commodity, what would you suggest I use?"

"What about any types of transaction for which the relevant nation's own currency would not be considered legal tender, because the law (perhaps on the basis of custom, or a treaty) currently dictates that some specific locally issued currency -- for which national currency can be exchanged -- must be used instead? Shouldn't those be exempted?"

"An excellent point. I shall include that immediately."

[Wrapper]

If the IS should be tied to a commodity, what would you suggest I use?

OOC: Gold-pressed latinum!

[Bananaistan]

In most cases, the market WILL set the exchange rate. The Excidian Credit's value is set by the market. The IS is set by the GAO (let's say, for example, they set the IS to the current market value of 1 gram of gold). The exchange rate between IS and Excidian Credits is therefore decided by the market... as the value of my currency fluctuates with the market, so does the exchange rate.

OOC: This is the fundamental issue. If the value of one unit of IS is set as 1 gram of gold, then all other currencies in the WA are locked into an exchange rate based on how much 1 gram of gold is worth in that currency.

Nevermind all the monetary policy issues, who stumps up the currency reserves for the new WA central bank, and so on.

[Jersey Republic]

"I have made a proposal like this and it failed, it will not succeed"

OOC: I actually did this and I abandon it, many people have tried it

[Imperium Anglorum]

In most cases, the market WILL set the exchange rate. The Excidian Credit's value is set by the market. The IS is set by the GAO (let's say, for example, they set the IS to the current market value of 1 gram of gold). The exchange rate between IS and Excidian Credits is therefore decided by the market... as the value of my currency fluctuates with the market, so does the exchange rate.

OOC: This is the fundamental issue. If the value of one unit of IS is set as 1 gram of gold, then all other currencies in the WA are locked into an exchange rate based on how much 1 gram of gold is worth in that currency.

Would that not assume that all other currencies are also linked to gold?

[Separatist Peoples]

If the IS should be tied to a commodity, what would you suggest I use?

OOC: Gold-pressed latinum!

OOC: Bricks, bars, strips and slips! Love is fleeting but latinum lasts forever!!

[Excidium Planetis]

"I have made a proposal like this and it failed, it will not succeed"

OOC: I actually did this and I abandon it, many people have tried it

"That's a logical fallacy, Ambassador. Just because you failed does not mean I will."

OOC: If I remember correctly, your proposal was different from mine and definitely illegal, whereas mine only might be illegal.

In most cases, the market WILL set the exchange rate. The Excidian Credit's value is set by the market. The IS is set by the GAO (let's say, for example, they set the IS to the current market value of 1 gram of gold). The exchange rate between IS and Excidian Credits is therefore decided by the market... as the value of my currency fluctuates with the market, so does the exchange rate.

OOC: This is the fundamental issue. If the value of one unit of IS is set as 1 gram of gold, then all other currencies in the WA are locked into an exchange rate based on how much 1 gram of gold is worth in that currency.

Nevermind all the monetary policy issues, who stumps up the currency reserves for the new WA central bank, and so on.

OOC:
Your currency is effected by your monetary policy, and the value of your currency can fluctuate. Thus, how much gold you can buy with one [unit] fluctuates, and therefore how many IS you can get for your [unit] will fluctuate. The Market still sets the exchange rate.

[Kujuana]

The peoples republic of Kujuana supports international currency as it would lead to increased trade amongst nations.

Sincerely Niko Payan XIV

[Regalius]

Largest infringement of national sovereignty I've ever seen. I can't see this going through at all.

[Wallenburg]

OOC: Gold-pressed latinum!

OOC: Bricks, bars, strips and slips! Love is fleeting but latinum lasts forever!!

OOC: Once you have their money, never give it back.

[Kilimantonian]

I have one problem with this proposal. It appears that those using the new currency could take advantage of hyper-inflated or disadvantaged economies, if they were forced to accept this new currency as legal tender. If 1 $ were worth 1000 €, someone using $ would have a distinct advantage over those using €. However, if provisions were put in place to protect poorer economies from predatory use of the $, I would gladly support this resolution

[Bears Armed]

"My own government is also among those who consider this proposal to be a bad idea, and in addition to supporting some of the arguments already raised against it they have directed me to ask the following questions:

"Apparently this would be a fiat currency, rather than based on any commodity? That being so, what would determine how much of this currency was issued? There don't seem to be any guidelines included for the committee to follow in that respect...

"It is currently left up to the GAO to decide what the IS is valued on, and how much of it is issued. Theoretically, the GAO could not issue any IS. Anyways, what guidelines would you suggest I include? If the IS should be tied to a commodity, what would you suggest I use?"

"So the GAO might choose not to issue any IS anyhows, and that would be legal even though in that case the resolution would effectively do nothing whatsoever?

"And we'd be expected to vote on the matter without knowing whether they weren't going to issue any at all, or were going to issue so much that it theoretically had a higher total value than all of the member nations' own currencies combined, or what? Bad idea, that."

"Bearing in mind the differing extents to which different nations might have access to any particular resource, I don't think that there is any viable commodity to use. This has been one of the problems that helped to kill previous proposals on the subject... and what I would suggest is that you should just drop this project."

“If you choose to continue with this proposal, however, here’s another important question that needs answering within the proposal’s actual text: Just how would this currency be issued?”

“Would the GAO simply pass it to other WA agencies for their use in paying salaries and other bills, so that it enters general circulation in that way? (And would such a process be legal, bearing in mind the extant resolution that established the WA General Fund?)
“Would the GAO simply offer that currency for “sale” to member nations’ governments and banks, and perhaps — by establishing its own chain of currency-exchange offices — more widely?
“Would the GAO try to function as a bank, offering loans in this new currency?
“Or did you have some other method in mind?”

[Excidium Planetis]

"It is currently left up to the GAO to decide what the IS is valued on, and how much of it is issued. Theoretically, the GAO could not issue any IS. Anyways, what guidelines would you suggest I include? If the IS should be tied to a commodity, what would you suggest I use?"

"So the GAO might choose not to issue any IS anyhows, and that would be legal even though in that case the resolution would effectively do nothing whatsoever?

"And we'd be expected to vote on the matter without knowing whether they weren't going to issue any at all, or were going to issue so much that it theoretically had a higher total value than all of the member nations' own currencies combined, or what? Bad idea, that."

"So, perhaps a mandate to force the GAO to issue at least some IS, and that the total value of IS issued cannot exceed the total value of the General Fund?"

"Bearing in mind the differing extents to which different nations might have access to any particular resource, I don't think that there is any viable commodity to use. This has been one of the problems that helped to kill previous proposals on the subject... and what I would suggest is that you should just drop this project."

"So then, we have the option of pegging the IS to another currency, or letting the market decide the value. The latter seems more reasonable."

“If you choose to continue with this proposal, however, here’s another important question that needs answering within the proposal’s actual text: Just how would this currency be issued?”

“Would the GAO simply pass it to other WA agencies for their use in paying salaries and other bills, so that it enters general circulation in that way? (And would such a process be legal, bearing in mind the extant resolution that established the WA General Fund?)
“Would the GAO simply offer that currency for “sale” to member nations’ governments and banks, and perhaps — by establishing its own chain of currency-exchange offices — more widely?
“Would the GAO try to function as a bank, offering loans in this new currency?
“Or did you have some other method in mind?”

"Both the 'sale' of currency and IS loans seem quite reasonable. The WA paying its bills with its own currency seems... strange."

[Bears Armed]

"So, perhaps a mandate to force the GAO to issue at least some IS, and that the total value of IS issued cannot exceed the total value of the General Fund?"

“Actually, as it occurred to me last night after I’d left these premises, using the General Fund itself as the ‘commodity’ on which this currency’s official value is based might be a reasonable solution. After all, that would sort-of parallel the way in which markets base their relative values for ‘fiat’ currencies of the more normal type on the relative strengths of the national economies involved.
“Now, although the GAO receives the member nations’ “donations” in a wide range of currencies it obviously must then convert all of that income into one single scale for calculating its own internal accounts, presumably using a process that’s based somehow on the exchange rates which exist between those nations’ own currencies at the date when the donations are collected. Therefore it would be able to say what fraction of the General Fund came from which nation, so if it publishes parallel lists of those fractions and the actual amounts [in the nations’ own currencies involved], and defines the value of each ‘IS’ unit as being some minute fraction of the General Fund’s total value, then that combination of data would essentially give people a basic set of exchange rates to use for the IS… Wouldn’t it?”

“Bearing in mind the fact that the current “total value of the General Fund” will vary, as donations come in” (OOC: however frequently that happens, whether it’s annually or otherwise, which the relevant resolution unfortunately doesn’t specify…) “and money is expended, was what you meant by your suggested limitation that the total value of IS issued cannot exceed that level actually meant to be a restriction to the Fund’s annual total value? That could work, but I’d prefer a lower threshold so that if the Fund’s annual total value drops — because of a significant decline in membership or in the members’ average prosperity, because the resolutions establishing major funding programmes get repealed, or hwhatever — the GAO doesn’t find itself accidentally in breach of this clause. Maybeso an upper limit of half of the General Fund’s annual total value, instead?”

“Would the GAO simply offer that currency for “sale” to member nations’ governments and banks, and perhaps — by establishing its own chain of currency-exchange offices — more widely?
“Would the GAO try to function as a bank, offering loans in this new currency?
“Or did you have some other method in mind?”

"Both the 'sale' of currency and IS loans seem quite reasonable.

“I’d actually prefer, and strongly suggest, limiting this to the “sale” of IS — with that fact, and the question of whether it’s only governments and ‘national banks’ that can make the purchase directly from the GAO or whether some network for more widespread exchanges with local currencies would also be established, included in the proposal’s text — and not allowing the GAO to make IS loans too.
I only mentioned the latter possibility in my enquiry to smell whether you were considering it, rather than as a recommendation, and allowing it would not only place the GAO in competition with more conventional financial institutions but would also give it an unfair advantage over them because unlike them it wouldn’t have to acquire and hold ‘reserve’ funds… Also, limiting the issue of IS to “sales” in exchange for other currencies means that the issue of IS wouldn’t push the total supply of money available upwards, and therefore shouldn’t promote inflation in the way that simply adding the IS to the total pool of currency available might do.”

“Ur’rmm, and how about adding a clause to clarify that the GAO itself and all other WA agencies — and any commercial establishments that are situated within WA premises (such as the Strangers’ Bar, of course, although you probably can’t actually mention that by name…), too — will also accept IS as legal tender for all transactions? This would mean that any member nations’ governments finding themselves with a quantity of IS on their paws could include it in their ‘donations’ to the Fund, WA HQ office rent payments, ambassadorial bar bills, and so on… and, in my opinion, seems a perfectly reasonable idea.”

Artorrios o SouthWoods,
ChairBear, Bears Armed Mission at the World Assembly.


______________________________________________________________________

OOC: Two further points, both involving the GA’s rules _

1/ Because nobody would actually be required to start using this new currency, and many people involved in international trade will already have arrangements using the existing currencies in place, I suggest that a strength of ‘Significant’ — as you currently suggest — would be too high.
2/ Because all of the proposal’s ‘operative’ section (even the bits telling member nations, rather than the GAO, what to do) so far involves the GAO, and the currency which that agency is to create, I’d argue that it probably falls foul of “must be more than a committee” rule as the Mods have generally been interpreting that policy lately and that you need to include an operative clause that affects the member natiosn without involving the GAO) as well. Maybeso you could open the operative section with a clause urging all member nations to make their currencies mutually fully convertible, or something along those lines, too?

[Parliamentary Republic 4077]

This is truly a bad idea. One of the essential concepts of being a sovereign state is full control over it's own monetary policy.

[Excidium Planetis]

"So, perhaps a mandate to force the GAO to issue at least some IS, and that the total value of IS issued cannot exceed the total value of the General Fund?"

“Actually, as it occurred to me last night after I’d left these premises, using the General Fund itself as the ‘commodity’ on which this currency’s official value is based might be a reasonable solution. After all, that would sort-of parallel the way in which markets base their relative values for ‘fiat’ currencies of the more normal type on the relative strengths of the national economies involved.
“Now, although the GAO receives the member nations’ “donations” in a wide range of currencies it obviously must then convert all of that income into one single scale for calculating its own internal accounts, presumably using a process that’s based somehow on the exchange rates which exist between those nations’ own currencies at the date when the donations are collected. Therefore it would be able to say what fraction of the General Fund came from which nation, so if it publishes parallel lists of those fractions and the actual amounts [in the nations’ own currencies involved], and defines the value of each ‘IS’ unit as being some minute fraction of the General Fund’s total value, then that combination of data would essentially give people a basic set of exchange rates to use for the IS… Wouldn’t it?”

"Indeed... I have decided to include this in the resolution text."

“Bearing in mind the fact that the current “total value of the General Fund” will vary, as donations come in” (OOC: however frequently that happens, whether it’s annually or otherwise, which the relevant resolution unfortunately doesn’t specify…) “and money is expended, was what you meant by your suggested limitation that the total value of IS issued cannot exceed that level actually meant to be a restriction to the Fund’s annual total value? That could work, but I’d prefer a lower threshold so that if the Fund’s annual total value drops — because of a significant decline in membership or in the members’ average prosperity, because the resolutions establishing major funding programmes get repealed, or hwhatever — the GAO doesn’t find itself accidentally in breach of this clause. Maybeso an upper limit of half of the General Fund’s annual total value, instead?”

"Half the value could work, but I was imagining that as the funds in the General Fund dropped, the value of the IS would drop. In such a case, each IS would be worth a percentage of the General Fund based on how much IS was out there, and as the General Fund increased, the value of the IS would increase, and so on. Is this unfeasible?"

“I’d actually prefer, and strongly suggest, limiting this to the “sale” of IS — with that fact, and the question of whether it’s only governments and ‘national banks’ that can make the purchase directly from the GAO or whether some network for more widespread exchanges with local currencies would also be established, included in the proposal’s text — and not allowing the GAO to make IS loans too.
I only mentioned the latter possibility in my enquiry to smell whether you were considering it, rather than as a recommendation, and allowing it would not only place the GAO in competition with more conventional financial institutions but would also give it an unfair advantage over them because unlike them it wouldn’t have to acquire and hold ‘reserve’ funds… Also, limiting the issue of IS to “sales” in exchange for other currencies means that the issue of IS wouldn’t push the total supply of money available upwards, and therefore shouldn’t promote inflation in the way that simply adding the IS to the total pool of currency available might do.”

"Excellent points. So, a limit to the sale of IS at the GAO and GAO exchanges will be added."

“Ur’rmm, and how about adding a clause to clarify that the GAO itself and all other WA agencies — and any commercial establishments that are situated within WA premises (such as the Strangers’ Bar, of course, although you probably can’t actually mention that by name…), too — will also accept IS as legal tender for all transactions? This would mean that any member nations’ governments finding themselves with a quantity of IS on their paws could include it in their ‘donations’ to the Fund, WA HQ office rent payments, ambassadorial bar bills, and so on… and, in my opinion, seems a perfectly reasonable idea.”

"Of course. This shall be added."

1/ Because nobody would actually be required to start using this new currency, and many people involved in international trade will already have arrangements using the existing currencies in place, I suggest that a strength of ‘Significant’ — as you currently suggest — would be too high.

Indeed, I agree. I have kept it so far because many people believe that this would prevent nations from setting their own monetary policy, and because it forces nations to accept the IS. Both of those seem pretty significant. Now, I see forcing acceptance of the IS as fairly mild, and don't see how monetary policy would be completely out of control (especially with the value of IS based on nation's contributions to the General Fund, which would put its value in control of the member nations).

2/ Because all of the proposal’s ‘operative’ section (even the bits telling member nations, rather than the GAO, what to do) so far involves the GAO, and the currency which that agency is to create, I’d argue that it probably falls foul of “must be more than a committee” rule as the Mods have generally been interpreting that policy lately and that you need to include an operative clause that affects the member natiosn without involving the GAO) as well. Maybeso you could open the operative section with a clause urging all member nations to make their currencies mutually fully convertible, or something along those lines, too?

[/quote]
I'll consider it... I viewed the clause requiring acceptance of the IS as enough to avoid "Committee Only", but some additional clauses might help. Also, if Mal's new rules get approved (heaven knows when and if that will be though) then we can make Committee Only resolutions!

[Bears Armed]

“Bearing in mind the fact that the current [/i] “total value of the General Fund” will vary, as donations come in” (OOC: however frequently that happens, whether it’s annually or otherwise, which the relevant resolution unfortunately doesn’t specify…) “and money is expended, was what you meant by your suggested limitation that the total value of IS issued cannot exceed that level actually meant to be a restriction to the Fund’s annual total value? That could work, but I’d prefer a lower threshold so that if the Fund’s annual total value drops — because of a significant decline in membership or in the members’ average prosperity, because the resolutions establishing major funding programmes get repealed, or hwhatever — the GAO doesn’t find itself accidentally in breach of this clause. Maybeso an upper limit of half of the General Fund’s annual total value, instead?”

"Half the value could work, but I was imagining that as the funds in the General Fund dropped, the value of the IS would drop. In such a case, each IS would be worth a percentage of the General Fund based on how much IS was out there, and as the General Fund increased, the value of the IS would increase, and so on. Is this unfeasible?

"Wouldn't the idea that the currency is automatically going to drop significantly in value rrather deter people from acquiring it on the first paw?"


OOC: also, to avoid 'House of Cards' illegality, it might necessary to include a short definition of what 'WA General Fund' means for the purpose of this resolution.

[Excidium Planetis]

"Half the value could work, but I was imagining that as the funds in the General Fund dropped, the value of the IS would drop. In such a case, each IS would be worth a percentage of the General Fund based on how much IS was out there, and as the General Fund increased, the value of the IS would increase, and so on. Is this unfeasible?

"Wouldn't the idea that the currency is automatically going to drop significantly in value rrather deter people from acquiring it on the first paw?"


OOC: also, to avoid 'House of Cards' illegality, it might necessary to include a short definition of what 'WA General Fund' means for the purpose of this resolution.

"You assume the total annual value of the General Fund would automatically drop, which is not true."

OOC:
Sure, I'll see if I can work something out. Honestly, though, aren't there many resolutions that use the General Fund without defining it? And why was this OOC?

[Bears Armed]

"Wouldn't the idea that the currency is automatically going to drop significantly in value rrather deter people from acquiring it on the first paw?"

"You assume the total annual value of the General Fund would automatically drop, which is not true."

"Not the annual value, but the value within each financial year after the 'donations' have been collected and as they're spent: Wasn't that what you were talking about?"

"Excellent points. So, a limit to the sale of IS at the GAO and GAO exchanges will be added."

“I would suggest not going too far down the economic scale for distribution, neither: Thinking further about the subject, introducing a widespread network of GAO currency exchanges might be a bit too much, because — apart from anything else — this proposal’s opponents would probably use the presumed costs of establishing such a network as ammunition in their campaigns against it. Maybeso it might be best if the GAO simply makes this currency available (in exchange for appropriate sums in member nations’ own national currencies) to member nations’ governments, national banks, and multinational financial institutions, and then leaves it to those bodies to handle matters from there…

OOC: also, to avoid 'House of Cards' illegality, it might necessary to include a short definition of what 'WA General Fund' means for the purpose of this resolution.

OOC: Sure, I'll see if I can work something out. Honestly, though, aren't there many resolutions that use the General Fund without defining it? And why was this OOC?

OOC: It was OOC because it was about the proposal-writing rules and it's unclear (based on past Modly statements, in the context of the 'No meta-gaming' rule) how far those can be considered to exist IC...

[Cheyenne and Arapaho Systems]

"How exactly would this affect those with alternative forms of currency? The Cheyenne and Arapaho Systems have adopted two forms of currency; Credits, which are used in base commerce and trade, and Maza. Maza is not a currency one trades for grain or starship fuel, but for intangible services and spiritual matters. One might gift a medicine man with Maza for assistance with a spiritual journey, or a clan chief for taking special consideration for a troubled family member in conflict with the clan laws, though one never charges Maza." Standing Feather looked horrified at the prospect, and Black Eagle nodded emphatically.

"This proposal would require an exchange rate between this World Assembly currency and our Maza, which would be a travesty for our spiritual beliefs."

[Excidium Planetis]

"How exactly would this affect those with alternative forms of currency? The Cheyenne and Arapaho Systems have adopted two forms of currency; Credits, which are used in base commerce and trade, and Maza. Maza is not a currency one trades for grain or starship fuel, but for intangible services and spiritual matters. One might gift a medicine man with Maza for assistance with a spiritual journey, or a clan chief for taking special consideration for a troubled family member in conflict with the clan laws, though one never charges Maza." Standing Feather looked horrified at the prospect, and Black Eagle nodded emphatically.

"If you are gifting Maza, it isn't a transaction. It's be at best a donation. At any rate, I don't see how something never used to buy anything could be considered a currency."

"This proposal would require an exchange rate between this World Assembly currency and our Maza, which would be a travesty for our spiritual beliefs."

"And why exactly would that be a travesty? Plus, as mentioned, I wouldn't consider Maza a currency."