Did the MBS corner the market on trade?

cthia wrote:They are akin to nonaccrual bearer bonds.

I can't accept that they are what passes as money in the HV just yet, because it opens a huge can of worms. They may pass for the HV equivalent of bearer bonds, of some sort. But not the standard currency itself.

Banks cannot print money as you seem to suggest. So I'm going to assume that you mean input money on the chip from their reserves held in the vault. I am also going to assume the data chips are blank until the banks issue them. Or robbing a bank would be very profitable if the large denomination chips are stolen.

There are more questions and concerns squirming around like little worms. Like, what does a "bank's reserve" actually mean in the HV, if you can simply print - "input" - currency on a chip.

RFC states that currency is based on something other than precious metals. Even the US is off the gold standard. I'd certainly like to know what that "something" is.

Very engaging posts everyone!

I cannot understand why you will not call them banknotes; which are units of currency created by a bank. From Wikipedia:

A banknote (often known as a bill (in the US), paper money, or simply a note) is a type of negotiable promissory note, made by a bank or other licensed authority, payable to the bearer on demand. Banknotes were originally issued by commercial banks, which were legally required to redeem the notes for legal tender (usually gold or silver coin) when presented to the chief cashier of the originating bank. These commercial banknotes only traded at face value in the market served by the issuing bank. Commercial banknotes have primarily been replaced by national banknotes issued by central banks or monetary authorities.

National banknotes are often — but not always — legal tender, meaning that courts of law are required to recognize them as satisfactory payment of money debts. Historically, banks sought to ensure that they could always pay customers in coins when they presented banknotes for payment. This practice of "backing" notes with something of substance is the basis for the history of central banks backing their currencies in gold or silver. Today, most national currencies have no backing in precious metals or commodities and have value only by fiat. With the exception of non-circulating high-value or precious metal issues, coins are used for lower valued monetary units, while banknotes are used for higher values.

Eisenhower in the USA could not have cornered the market on oil by war prior to Pearl Harbor, because he was never in the position of energy czar and the USA was not then at war.

The Manticoran Merchant Marine was not the cause of war with Haven.

Another very legitimate group that would carry the Bank of Madrid type chips would be merchant ships.
They need to buy supplies, maybe buy cargo or pay for repairs. It's the equivalent of Masters Cash.

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cthia wrote:Banks cannot print money as you seem to suggest. So I'm going to assume that you mean input money on the chip from their reserves held in the vault. I am also going to assume the data chips are blank until the banks issue them. Or robbing a bank would be very profitable if the large denomination chips are stolen.

Reserve banks can - see the US Federal Reserve. As I understand RFC's post the League doesn't have a separate reserve bank but instead uses the sector banks, like Banco de Madrid, under League regulation and oversight, as its equivalent to a reserve bank.

(IIRC other systems, like Manticore, use a government reserve bank that's separated from the commercial banks that take deposits and make loans)

Now those untracable chips are only one way of producing or storing that created money, and hardly the most common. Most of it, like today, would exist only as entries in the bank's ledgers - relatively little would be realized as physical money, bearer bonds, or the like.


A bank probably does have a certain amount of those chips in its vault or teller drawer loaded with in various denominations; just like a bank branch today will have a certain amount of actual cash and coin. And yes, a bank robbery would steal those. But that'd be a small fraction of even that bank branch's holdings. Not every bank branch would be authorize to create new chips; which is why they'd need some amount on hand should customers wish to withdraw some funds in that form.

Even the ability to remove a chip from circulation by destroying it after recognizing its value into a bank's ledgers is probably tightly restricted because, due to the chip's untracability, that would open a loophole for fraud - with crooked bank employees faking the destruction and pocketing the chip. So only at the few regulated sector banks, under League oversight, could these chips be created - and I'd argue that they could only be properly removed from the system at those same locations under that same oversight.

And ultimately the League currency issued from those sector banks is backed by the full faith and credit of the League - and given value by people's believe that the League is good for it thanks to the size and robustness of the League's economy. (Really, no different from today's currencies)

cthia wrote:

Jonathan_S wrote:Individual countries may have laws against cornering the market - but there aren't international laws against a country, or collusion of countries, cornering a market.

Actually there is. It's called war. Eisenhower effectively cornered the market on oil and it led to Pearl Harbor.

The MBS effectively cornered the market on trade and it eventually led to the biggest naval battle in HV history, after centuries of resentment were allowed to fester. And fester. And fester. While Manticorans live like fatted hogs.

How exactly did the chief of staff of the newly activated IX Corps (Eisenhower's job in 1941) effectively corner the market on oil? Even FDR didn't do that. Though he did embargo the US from exporting oil to Japan - which isn't the same as cornering the market on oil.

And I said international laws. If there was an international law against cornering a market the rest of the world would convicted De beers or OPEC decades ago. Now despite the lack of a law against it, doing so to pressure sovereign nations is hardly without risk. There are ways, up to and including war, that a country can react or retaliate to unfair or damaging trade practices. But even the League would have a hard time making a case that Manticore raising shipping rates to cover fees the League was imposing was a casus belli.

MantiMerchie wrote:Another very legitimate group that would carry the Bank of Madrid type chips would be merchant ships.
They need to buy supplies, maybe buy cargo or pay for repairs. It's the equivalent of Masters Cash.

Smaller and independent outfits would probably do that, indeed. Hauptman and Kolokainos might just charge the company with the equivalent of a "corporate credit card" and it will be accepted almost everywhere -- everywhere that has a working banking system.

Jonathan_S wrote:

cthia wrote:Banks cannot print money as you seem to suggest. So I'm going to assume that you mean input money on the chip from their reserves held in the vault. I am also going to assume the data chips are blank until the banks issue them. Or robbing a bank would be very profitable if the large denomination chips are stolen.

Reserve banks can - see the US Federal Reserve. As I understand RFC's post the League doesn't have a separate reserve bank but instead uses the sector banks, like Banco de Madrid, under League regulation and oversight, as its equivalent to a reserve bank.

Indeed, depends on the jurisdiction.

Ever been to Scotland? For historical reasons I really don't understand and haven't bothered to research, banks are allowed to print notes. For example, the Royal Bank of Scotland prints their own pound sterling: https://www.rbs.com/heritage/subjects/our-banknotes.html. I don't know if those are considered legal tender and who exactly is required by law to accept them. But every business I went to in either Glasgow or Edinburgh accepted the notes from any of the three banks or the Bank of England. You just had to remember to take only BE notes with you if you went to England.

Now those untracable chips are only one way of producing or storing that created money, and hardly the most common. Most of it, like today, would exist only as entries in the bank's ledgers - relatively little would be realized as physical money, bearer bonds, or the like.

I wonder if there's also a third kind: a digital, physical wallet device. Instead of taking fixed-denomination notes or coins, one would load up a certain amount into their wallet device. It's still a withdrawal from your account, so if you lose this device, you can't recover the money. But unlike the fixed denominations that the transaction above was said to have been conducted in, this wallet would transfer only the amount required at the moment of transaction. You'd connect it via some very-short-range or physical medium to another such device and the two devices would exchange some information digitally, performing the monetary transaction.

Because they are of lower security (they are modifiable, after all), they may not be accepted for transactions above a certain amount. But for everything else, that might be acceptable.

I wonder though if it has a legitimate market. It's the old "if you have nothing to hide" question. Would it be acceptable for the citizens not to have a completely private way of conducting transactions that didn't immediately set off alarms at the financial authorities that an illegal transaction is happening? If I don't want anyone to know that I buy dog cookies but don't have a dog, is there a way?

PS: do you think the Banco de Madrid coins are made out of gold (because they don't corrode and why not?) and have latinum pressed inside?

Jonathan_S wrote:Now those untracable chips are only one way of producing or storing that created money, and hardly the most common. Most of it, like today, would exist only as entries in the bank's ledgers - relatively little would be realized as physical money, bearer bonds, or the like.

ThinksMarkedly wrote:I wonder if there's also a third kind: a digital, physical wallet device. Instead of taking fixed-denomination notes or coins, one would load up a certain amount into their wallet device. It's still a withdrawal from your account, so if you lose this device, you can't recover the money. But unlike the fixed denominations that the transaction above was said to have been conducted in, this wallet would transfer only the amount required at the moment of transaction. You'd connect it via some very-short-range or physical medium to another such device and the two devices would exchange some information digitally, performing the monetary transaction.

Because they are of lower security (they are modifiable, after all), they may not be accepted for transactions above a certain amount. But for everything else, that might be acceptable.

I wonder though if it has a legitimate market. It's the old "if you have nothing to hide" question. Would it be acceptable for the citizens not to have a completely private way of conducting transactions that didn't immediately set off alarms at the financial authorities that an illegal transaction is happening? If I don't want anyone to know that I buy dog cookies but don't have a dog, is there a way?

PS: do you think the Banco de Madrid coins are made out of gold (because they don't corrode and why not?) and have latinum pressed inside?

Interesting idea, the main advantage over a debit card would only appear in a different star system than the one containing your bank. But it does offer one advantage over the fixed amount chips: you do not have to worry about making change. This would work exactly like gift cards, so could be given to someone who did not have a bank account.

Do we have any evidence that coins are in use? I do not remember any specific text one way or the other.
From Wikipedia:

Until the middle of the 19th century, privately owned banks in Great Britain and Ireland were free to issue their own banknotes. Paper currency issued by a wide range of provincial and town banking companies in England, Wales, Scotland and Ireland circulated freely as a means of payment.

As gold shortages affected the supply of money, note-issuing powers of the banks were gradually restricted by various Acts of Parliament, until the Bank Charter Act 1844 gave exclusive note-issuing powers to the central Bank of England. Under the Act, no new banks could start issuing notes; and note-issuing banks gradually vanished through mergers and closures. The last private English banknotes were issued in 1921 by Fox, Fowler and Company, a Somerset bank.

However, some of the monopoly provisions of the Bank Charter Act only applied to England and Wales. The Bank Notes (Scotland) Act was passed the following year, and to this day, three retail banks retain the right to issue their own sterling banknotes in Scotland, and four in Northern Ireland. Notes issued in excess of the value of notes outstanding in 1844 (1845 in Scotland) must be backed up by an equivalent value of Bank of England notes.

cthia wrote:

Jonathan_S wrote:Individual countries may have laws against cornering the market - but there aren't international laws against a country, or collusion of countries, cornering a market.

Actually there is. It's called war. Eisenhower effectively cornered the market on oil and it led to Pearl Harbor.

The MBS effectively cornered the market on trade and it eventually led to the biggest naval battle in HV history, after centuries of resentment were allowed to fester. And fester. And fester. While Manticorans live like fatted hogs.

Jonathan_S wrote:How exactly did the chief of staff of the newly activated IX Corps (Eisenhower's job in 1941) effectively corner the market on oil? Even FDR didn't do that. Though he did embargo the US from exporting oil to Japan - which isn't the same as cornering the market on oil.

And I said international laws. If there was an international law against cornering a market the rest of the world would convicted De beers or OPEC decades ago. Now despite the lack of a law against it, doing so to pressure sovereign nations is hardly without risk. There are ways, up to and including war, that a country can react or retaliate to unfair or damaging trade practices. But even the League would have a hard time making a case that Manticore raising shipping rates to cover fees the League was imposing was a casus belli.

Oopsie Daisy. That should have been Roosevelt. He didn't "technically" corner the market, but his foreign policy and oil embargo crippled a country which imported 90 % of it's oil, the Lion's share from the US. Hence, it was the same bottom line.

Unfair trade practices can be considered an act of war. North Korea is bandying about that same claim against the US. We covered this before.

cthia wrote:Oopsie Daisy. That should have been Roosevelt. He didn't "technically" corner the market, but his foreign policy and oil embargo crippled a country which imported 90 % of it's oil, the Lion's share from the US. Hence, it was the same bottom line.

Unfair trade practices can be considered an act of war. North Korea is bandying about that same claim against the US.

Japan was already at war with a country for which we felt sympathy and interest. The US trade embargo was not an unfair trade practice, rather it was our protest against that war and a refusal to support it economically. If the result was to provoke Pearl Harbor and the resultant determination to force Japan to unconditionally surrender, so be it; the military rulers of Japan had only themselves to blame for their final defeat.

ThinksMarkedly wrote:
Indeed, depends on the jurisdiction.

Ever been to Scotland? For historical reasons I really don't understand and haven't bothered to research, banks are allowed to print notes. For example, the Royal Bank of Scotland prints their own pound sterling: https://www.rbs.com/heritage/subjects/our-banknotes.html. I don't know if those are considered legal tender and who exactly is required by law to accept them. But every business I went to in either Glasgow or Edinburgh accepted the notes from any of the three banks or the Bank of England. You just had to remember to take only BE notes with you if you went to England.

Essentially, the situation is that in England, private banks had to stop issuing their own banknotes, but in Scotland, Northern Ireland and the Crown Dependencies they were never required to stop. In ye olden days you could demand the Bank of Scotland or RBS hand over actual gold if you turned up at head office with their notes, but now they’re just accepted as currency.

You can spend Scottish and N. Irish notes in England if the retailer will accept them, and English banks will generally accept them. They’re legal currency, but not legal tender.

I wonder though if it has a legitimate market. It's the old "if you have nothing to hide" question. Would it be acceptable for the citizens not to have a completely private way of conducting transactions that didn't immediately set off alarms at the financial authorities that an illegal transaction is happening? If I don't want anyone to know that I buy dog cookies but don't have a dog, is there a way?

PS: do you think the Banco de Madrid coins are made out of gold (because they don't corrode and why not?) and have latinum pressed inside?

Does cash have a legitimate market? I just took the Banco de Madrid chips as futuristic cash - probably because bank issued notes are an everyday thing around these here parts. It may be like the Scottish notes; they’re a hold over from a time when transferring money from one planet to another needed a promise from a bank that they would hand over the funds to whoever turned up with the chip.