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<p>[QUOTE=&quot;Numbers, post: 1210318, member: 11668&quot;]That was exactly my point.&nbsp; Once the investors spend their USNs to buy other investments, where do all those USNs go?&nbsp; They go to the gold miners that the investors buy gold from, the corporations that the investors buy stocks from, and so on.&nbsp; The USNs continue to float around in the market, losing value all the time as the government keeps printing more of them.&nbsp; Under your system, there&#039;s no way for these excess USNs to be removed from circulation.</p><p><br /></p><p>Once a couple trillion face value of USNs is in circulation, their value will get so low that the remaining holders of Treasury debt will start refusing to accept payment in that form.&nbsp; If the U.S. doesn&#039;t give them any other option, it&#039;ll effectively be defaulting on the remaining debt, by paying it off with worthless USNs instead of real dollars.&nbsp; See above on the consequences of default.</p><p><br /></p><p><br /></p><p><br /></p><p>But that&#039;s a monetary issue rather than a currency issue.&nbsp; To fix that problem, we need less spending or more taxes, as I keep saying.</p><p><br /></p><p>Under the current system, a $1 FRN is always worth a dollar, though the value of the dollar itself can decrease with inflation if the government issues too much debt.&nbsp; Under your system, a $1 USN wouldn&#039;t even be worth a dollar, though dollars in other forms might retain their value in spite of that.&nbsp; This is why your system breaks, and this is the problem you keep ignoring.&nbsp; Yes, the USNs would be a wonderfully brilliant idea if you could magically make this problem go away; but so far you don&#039;t even acknowledge that it exists.</p><p><br /></p><p><br /></p><p><br /></p><p>There&#039;s no connection between this and the earlier part of your post.&nbsp; Clearly these junk loans are bad things; clearly it&#039;d be great if the banks would quit making them.&nbsp; But the government would be under political pressure to bail out the careless bankers whether we were using FRNs or USNs, and just as much political courage would be required to end the bailouts under either system.&nbsp; Nothing about the USNs would cause, force, or prod the bankers to &quot;grow up&quot;; that&#039;s a separate problem.[/QUOTE]</p><p><br /></p>

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