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<p>[QUOTE=&quot;NorthKorea, post: 1184404, member: 29643&quot;]This is idiotic. Effectively, you&#039;re calling on the US government to compress MB/M1/M2/M3 to 1% of outstanding, while keeping M0 valued at 100% of circulated currency.</p><p><br /></p><p>All transactions would be &quot;cash and carry&quot; since deposits would be worth 1% of the day before. Deliveries of supplies would cease, and credit would be frozen. To offset the 10000% valuation of cash over deposits, stores would be required to price things at &quot;cash&quot; prices. All e-commerce and POS non-cash transactions would be rejected.</p><p><br /></p><p>If someone deposited $8000 to the bank the day before, they&#039;d have $80 to their name. The price of goods would remain constant, with the only thing changing being the deposits and balances on hand at banks. The bank would have taken in $8000 and have $7200 in excess reserve. Now with the account balance at $80, the bank would have a liability of $80, reserve requirement of $8 and $7992 in excess reserve.</p><p><br /></p><p>Who (other than the banks and the Federal Reserve) does this supposedly benefit? People will end up owing 270% taxes. You&#039;ll cause the vast majority of US wage earners to be in perpetual default. Since you can&#039;t really sue the IRS, anyone who hadn&#039;t paid any prior year taxes would be screwed. Also, taxes for the current year would be based on two separate systems: Money owed before the change and money owed after the change. However, taxes collected would be based upon money available after the change.</p><p><br /></p><p>The reason that currency debasement and recirculation work is controlling the ENTIRE money supply. If you merely reset the computer valued accounts, while maintaining the same currency, you create instantaneous hyper-inflation. After all, goods and services will cost 9900% more than they did the moment prior to the change relative to deposit/debenture accounts, while costing the same for cash-based transactions.[/QUOTE]</p><p><br /></p>

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