Bringing back the Somali shilling • Hacker News Board

Re: Bringing back the Somali shilling

#11

Post by statusgraph » Thu, May 25, 2017, 2:38 AM UTC

captainmuon wrote: post #8

I crazy idea I had was using counterfeiters to mint money. Make it so that the manufacturing cost of a $100 bill is $100 minus the amount you want the counterfeiter to make, so for $1 say $99. Include tons of security features, use silk, gold, diamond dust, whatever. Then just let the market do it's thing. Have money testing machines that shred fake bank notes at sight. You may or may not want to keep punishments for…

This is precisely what is happening in Somalia (as noted in the article), although in the inverse: the value of the money fluctuates (down) with the cost of production.

Re: Bringing back the Somali shilling

#12

Post by jordanb » Thu, May 25, 2017, 2:53 AM UTC

As an aside: I've been waiting for Libertarians to declare Somalia to be heaven on earth. I wonder why they've never picked up on the obvious real-world example of a nation with no central state government with a monopoly on violence?

Re: Bringing back the Somali shilling

#13

Post by smitherfield » Thu, May 25, 2017, 2:53 AM UTC

If the central bank is buying counterfeits with the new currency, won't that encourage the creation of more counterfeits just so they can be exchanged?

Re: Bringing back the Somali shilling

#14

Post by tshaddox » Thu, May 25, 2017, 3:01 AM UTC

jordanb wrote: post #12

As an aside: I've been waiting for Libertarians to declare Somalia to be heaven on earth. I wonder why they've never picked up on the obvious real-world example of a nation with no central state government with a monopoly on violence?

You probably haven't looked that hard. Somalia case studies are ubiquitous in libertarian (anarchist-leaning) circles. The general claim seems to be that, yeah, stateless Somalia is way worse than high-functioning governments like the United States, but better than its neighbor states and better than it was before it became stateless.

Leeson's article is probably the best on the topic:

http://www.peterleeson.com/Better_Off_Stateless.pdf

Re: Bringing back the Somali shilling

#15

Post by protomyth » Thu, May 25, 2017, 3:12 AM UTC

smitherfield wrote: post #13

If the central bank is buying counterfeits with the new currency, won't that encourage the creation of more counterfeits just so they can be exchanged?

The article emphasized that the counterfeit currency cost about the same amount to make as the actual trading value of the currency.

Re: Bringing back the Somali shilling

#16

Post by redblacktree » Thu, May 25, 2017, 3:26 AM UTC

tshaddox wrote: post #14

jordanb wrote: post #12

As an aside: I've been waiting for Libertarians to declare Somalia to be heaven on earth. I wonder why they've never picked up on the obvious real-world example of a nation with no central state government with a monopoly on violence?

You probably haven't looked that hard. Somalia case studies are ubiquitous in libertarian (anarchist-leaning) circles. The general claim seems to be that, yeah, stateless Somalia is way worse than high-functioning governments like the United States, but better than its neighbor states and better than it was before it became stateless. Leeson's article is probably the best on the topic: http://www.peterleeson.com/Bett…

> Somalia is way worse than high-functioning governments like the United States

Yet my libertarian friends on Facebook all seem to want to tear the enitre government down.

Re: Bringing back the Somali shilling

#17

Post by an_account » Thu, May 25, 2017, 3:26 AM UTC

protomyth wrote: post #15

smitherfield wrote: post #13

If the central bank is buying counterfeits with the new currency, won't that encourage the creation of more counterfeits just so they can be exchanged?

The article emphasized that the counterfeit currency cost about the same amount to make as the actual trading value of the currency.

But the article also claims that the central bank would have to buy the counterfeit (and legit) currency at a premium, so that it's worth it to the citizens to exchange.

Re: Bringing back the Somali shilling

#18

Post by smitherfield » Thu, May 25, 2017, 3:27 AM UTC

protomyth wrote: post #15

smitherfield wrote: post #13

If the central bank is buying counterfeits with the new currency, won't that encourage the creation of more counterfeits just so they can be exchanged?

The article emphasized that the counterfeit currency cost about the same amount to make as the actual trading value of the currency.

Yes, but that's just begging the question — where is value being created in this equation?

Re: Bringing back the Somali shilling

#19

Post by isubkhankulov » Thu, May 25, 2017, 3:29 AM UTC

nowarninglabel wrote: post #5

This highlights well some of the conversations I have with folks who want to replace fiat currencies with cryptocurrencies. Sure, one can design a better monetary system, but that doesn't mean people are going to want to use it. You have to incentivize and enable people in order to get them to change. M-PESA and the similar mobile money telecom products are doing more for digitizing and disrupting fiat currencies tha…

you're comparing a phone sms based payment method to bitcoin. you're missing the charactistic that gives it its killer use case: digital scarcity. the uncensored payment method on top of scarcity is just icing on the cake.

Re: Bringing back the Somali shilling

#20

Post by an_account » Thu, May 25, 2017, 3:31 AM UTC

cup wrote: post #4

dmoy wrote: post #3

Earlier quoted context omitted.

I think the article is in violent agreement with you (at least the latter half of it). It in fact argues just that - they shouldn't go back to the shilling, precisely because nobody uses it (and instead they should go dollar/mobile/etc).

Oh you're right. Strange that the full page didn't load on my phone. My mistake, thanks for pointing that out.

I'm sure you read this as well after it loaded, but the article does mention that in urban areas most payments are mobile. It's the rural areas using conferfeits.