Apply HN: Gresham Dollar – Viral Currency for Basic Income
Gresham&#x27;s law applies when businesses are legally compelled to accept better and worse money at the same rate. In your example with silver quarters, the businesses were compelled by the government to accept the new, worse coins at the same rate as the old, and thus the switch was made.<p>However absent legal force, different currencies trade at different rates, which are set by people buying and selling them. Since you cannot compel sellers to accept GD, GD will not trade one for one USD.<p>Unless of course you are buying back GD at at least one for one with USD to force the market price to your desired price.<p>Given that GD will be less valuable to sellers than USD (inherently and by design) it seems to follow that the value of GD to sellers will crash the moment you stop injecting USD into the system.<p>Is there a way you can get a massive amount of sellers to accept a massive amount of a rapidly depreciating currency without discounting it once you can no longer keep up with the required cash injections?