Stable Money Systems

BIBOCURRENCY – STABLE CURRENCY SYSTEMS

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INTRODUCTION

LEARN

· STABILITY

· CURRENCY

· STABLE CURRENCY SYSTEMS

MORE ADVANCED

· REVIEW OF MONEY AND CURRENCIES

· FORMAL BIBO CURRENCY SPECIFICATION

· FORMAL STABILITY ANALYSIS

Now that you know what Stability, Passivity and Currency are, we can define without any doubt at all, what a Stable Currency System is.

1. First we define what a Stable Transaction is:

From BIBO, we know that for something to be stable both its inputs and outputs must be bounded values by virtue of the design. So what are the inputs and outputs of a currency transaction?

Transaction Inputs: The value of the thing of value being transacted called the “Price”.

Transaction Outputs: A positive number of the magnitude of the “Price” to the party that relinquishes the thing and a negative number of the same magnitude to the party that receives the thing.

The above represents a BIBO stable system because both inputs and outputs are bounded values. It is also a Passive system because outputs do not exceed inputs, as all value is equal to the “Price”.

2. Now we define a Stable Currency System:

A system of Transactions is only stable if and only if ALL Transactions are Passive BIBO stable.

3. The stable currency unit theorem:

A Passive BIBO Stable Money System by definition implies that all of the system’s component Transactions are also necessarily Passive BIBO Stable. Therefore, it directly follows that if every Transaction is a Passive BIBO Stable process and all money created is necessarily a product of such Stable Transactions, then all such money maintains a Bounded ratio with all system inputs i.e. units are stable by definition!

4. What matters in order to have a stable currency:

· It matters not who performs the Transactions that generate the Currency

· It matters not when the Transactions are performed

· It matters not what Wealth is Transacted

· It matters not why we Transact the Wealth

· It matters not how many units are generated

ALL THAT MATTERS IS THAT THE TRANSACTIONS THAT GENERATE UNITS ARE PASSIVE BIBO TRANSACTIONS. ABSOLUTELY NOTHING ELSE MATTERS!

5. Why our present Currency system is unstable:

Because the current system Transactions are financed by debt that grows unboundedly.

More advanced

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