Could I have come up with the solution to the economic crisis?
Almost certainly not!
So we’re finishing up our team meeting last week, when we get onto the current state of the world and how politicians, corporations, religious institutes are failing etc, basically the conversation everyone has been having for the past four years.
When the subject of the monetary system was brought up I decided to offer my own two cents on the matter and suggested an idea I’ve had for a while now about introducing two currencies into a single economy.
“What like the euro and the dollar?”
Not exactly. I should state this now before it becomes horrendously obvious anyway, I have no economic background, I know that there is sure to be faults with this idea but I’ve been told to post it regardless! Basically you have two forms of currency circulating simultaneously in a single economy. Currency 1 has a set positive interest rate, so the value of currency 1 increases over time encouraging saving. Currency 2 has a set negative interest rate so the value of currency 2 decreases over time encouraging spending.
So for example I am the owner of a business, I pay my employees each month as normal, the only difference is they now get paid in both currencies at a ratio set by the government. My employees get paid £500 in currency 1 which they are likely to save and £500 in currency 2 which they are likely to go out and spend in the economy.
This gives governments control over how much is saved or spent in their economy. Giving them the ability to control interest rates much more effectively, therefore controlling inflation, growth and more than this it would completely remove the risk of banks failing and people losing everything because some yuppie decided he wanted a flutter with your life’s savings. If the economy slowed down then the decision to shift the ratio in terms of employers paying their staff would be taken, more negative interest currency would encourage more spending in the economy. As the increase of negative interest currency started to reduce the value of the economy the ratio would therefore be moved back towards the positive interest currency again, stabilising the economy, growth and would hopefully turn economic crashes into a thing of the past.
Like I said this is just an idea and I would love to hear from anyone who has anything to add, argue or if there’s someone out there who can tear me apart then please do.
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