In a Venezuela Ravaged by Inflation, ‘a Race for Survival’
<i>“Something so simple as taking money out of a bank machine or buying a coffee or taking a taxi has become a race for survival,” Mr. Sandoval said.</i><p>How much of this race to the ATM etc. would be a problem if the money supply was digital and everyone could use their phone to make purchases.<p>I would like to propose a thought experiment and solicit opinions on whether situations like this can be mitigated by using a LOCAL digital (crypto) currency.<p>Suppose the prices are marked up constantly but there is also a constant increase in the money supply available to the public.<p>A user of an app could choose to view the prices in their preferred currency (eg dollars) while using the underlying currency so everything would seem more stable.<p>Then it becomes an engineering problem of storing the amounts as two integers: 1. The number of cents 2. The power of 10 to which to raise the price.<p>I would love to get feedback on the following: how to get the new money into the hands of the people?<p>What if there was a system that automatically calculated eg the median amount people spent on food, and issued (a percent of) that amount the next day as Basic Income to everyone in ther account?<p>Automatically issuing Basic Income based on Local CPI would organically allow people to prioritize necessities such as food before other transactions.<p>Of course, unilateral issuance of money by the government (eg to pay debt) would rob people of the savings power in that currency. But they could buy non perishable assets as investments and a store of value, including bitcoin.<p>Under such a system, the currency would then still be usable as a medium of exchange, which can be decoupled from its role as a store of value.<p>However, if the newly issued money was solely issued to pay the foreign debt, it would not be available for the local population to use. This is the real problem with austerity. The currency is devalued on global markets, making imported goods more and more expensive. Runaway inflation is exponential.<p>The government would have to BALANCE printing money to satisfy foreign interests with issuing money to its own citizens (eg as UBI to all citizens - which even Ron Paul himself suggested as a better alternative to bailing out the banks).<p>In other words for every X amount you print to satisfy foreign debts you issue 2X to your own citizens, so they can still buy necessities.<p>This is not ideal -- but it does allow a country to soften the blow of austerity. Incurring such debts is the underlying problem. They should just default, like Iceland. And issue a new currency to all their people. They still keep paying their debts, even as the price of oil plummeted and they do not have enough real assets to back their foreign promises anymore.<p>By defaulting on their debts, they can once again get control of their own money supply, which is probably far more valuable to each citizen than the country&#x27;s credit rating -- paying debts on the verge of bankruptcy isn&#x27;t doing any of the citizens any favors.<p>That&#x27;s the real mistake of the Maduro government in my opinion.<p>Disclaimer: my company is building a technology to power all the things I said for communities -- doesn&#x27;t have to be countries. Cities like Detroit or even  a remote unbanked village in Africa should be able to have their own local currency and run their own monetary policy, and hopefully using DIRECT democracy rather than representative democracy which can lead to stuff like this. Much of the economic analysis and fundamentals should be automated and available to every citizen, making them informed enough to choose what they want to do, instead of watching their leaders mess it up.<p>PS: Why is this being downvoted? Do we just have to say &quot;socialism -- so bad -- sigh&quot; and move on without any substantive analysis of possible real solutions to existing problems?