Did the MBS corner the market on trade?

RFC's posts upstream speaks of preparing to travel across the galaxy by contacting your bank, yatta yatta yatta. That happens now. If I fly across country without previous arrangements with my bank, they will automatically freeze my account, contact me by phone, and or many other possibilities if "someone" were to begin using my bank card across country or across the planet. You ever get the feeling your money isn't yours anymore? But, it is a measure of safety I will be thankful for if fraud is actually taking place.

In the HV, if you take currency with you - as the author states is an option - there must be huge denominations of currency for it to make a difference (remember the one million dollar US note?) or there are precious coins worth more than their weight in gold in your pocket. Unless it's a James Bond 007 7 kg Gold Coin. Yes, that is fifteen pounds of gold tipping the scales at a damn near staggering half million US dollars. It is over a seven inch coin. Accepted anywhere in the galaxy. Though I can't see carrying it in your pocket.

Can you imagine the Queen's image on a Manticoran Coin worth BIG BUCKS, face value? Accepted anywhere in the galaxy?

But, we have to remain practical. High denomination currencies will allow spies to have money when they travel. They can't volunteer their credentials to a bank. People literally have to have money in their pocket for quick expenditures. Hotels. Food. Clothing. Anyone can end up anywhere in the galaxy, because. And. . ."I NEED CASH NOW!"

I would imagine Manticoran, or Solarian currency to be accepted anywhere in the Galaxy at the current exchange rate at time of transaction.

Spies, be it Bond, Cachat, or Zilwicki can't saunter into a bank showing ID.

And, the Salamander isn't going to be in the habit of prearranging her travel plans with a bank, telegraphing her location to her enemies, in or out of the Navy.

cthia wrote:But, we have to remain practical. High denomination currencies will allow spies to have money when they travel. They can't volunteer their credentials to a bank. People literally have to have money in their pocket for quick expenditures. Hotels. Food. Clothing. Anyone can end up anywhere in the galaxy, because. And. . ."I NEED CASH NOW!"

I would imagine Manticoran, or Solarian currency to be accepted anywhere in the Galaxy at the current exchange rate at time of transaction.

That is exactly what was shown in Torch of Freedom; not an issued coin, but a credit chip that can hold an arbitrary amount. Chapter 4:

Fortunately, it wasn't always possible to rely on normal electronic transfers, even when both parties to the transfers in question were as pure as the new fallen snow. Which was why physical fund transfers were still possible. As the female crewmember stepped forward, Hutchins punched in the combination to unlock the battle steel box, and its lid slid smoothly upward. Inside were several dozen credit chips, issued by the Banco de Madrid of Old Earth. Each of those chips was a wafer of molecular circuitry embedded inside a matrix of virtually indestructible plastic. That wafer contained a bank validation code, a numerical value, and a security key (whose security was probably better protected than the Solarian League Navy's central computer command codes), and any attempt to change the value programmed into it when it was originally issued would trigger the security code and turn it into a useless, fused lump. Those chips were recognized as legal tender anywhere in the explored galaxy, but there was no way for anyone to track where they'd gone, or—best of all from the slavers' perspective—whose hands they'd passed through, since the day they'd been issued by the Banco de Madrid.
The crewwoman didn't actually reach for the credit chips, of course. That sort of thing simply wasn't done. Besides, she knew as well as Hutchins did that if she'd been foolish enough to insert her hand into that box, the automatically descending lid would have removed it quite messily. Instead, she produced a small hand unit, aimed it in the direction of the chips, and studied the readout. She gazed at it for a moment, making certain that the amount on the readout matched the one Hutchins' superiors had agreed to, then nodded.

This has been a fun thread to read... primarily because in addition to being a fan of the books, I am a bit of a political junkie who is so utterly disgusted with what passes for fiduciary responsibility in the US government and banking systems killing our belief in the "full faith of the US" to our own peoples and to the rest of the world.

So... in the HonorVerse, my assertion would be that as various star-polities failed in a single area, the MBS kept one thing intact: trust. Granted this was breached by the High Ridge period, but as a whole, the SKM did a really good job of not peculating in other system's business, aka they have a relatively polished reputation for sticking to fair rates, smuggling illicit goods (or genetic slaves), etc. Compare this to the RoH going south prior to OBS, Silesia being a political sewer for generations, the OFS being in bed with corrupt entities for centuries... and there sits Manticore, keeping their nose clean AND getting those cargoes and banking information things through without always trying to grind a star system into powder. I imagine the Andermani would be a close second place, but they don't have the MWJ.

Think of the conversation between Bernardus Van Dort when he sacks Ineka Vaandrager for valuing profit over the people of the Star Systems... he sees it as a mistake to rectify once he had the backing of the only system strong enough to tell the OFS to go to hell. And that even that crazily independent-minded Stephen Westman on Montana ultimately realizes that he really needs to trust the only game in town not bent on system domination.

That's what corners a market: trust.

tlb wrote:

cthia wrote:But, we have to remain practical. High denomination currencies will allow spies to have money when they travel. They can't volunteer their credentials to a bank. People literally have to have money in their pocket for quick expenditures. Hotels. Food. Clothing. Anyone can end up anywhere in the galaxy, because. And. . ."I NEED CASH NOW!"

I would imagine Manticoran, or Solarian currency to be accepted anywhere in the Galaxy at the current exchange rate at time of transaction.

That is exactly what was shown in Torch of Freedom; not an issued coin, but a credit chip that can hold an arbitrary amount. Chapter 4:

Fortunately, it wasn't always possible to rely on normal electronic transfers, even when both parties to the transfers in question were as pure as the new fallen snow. Which was why physical fund transfers were still possible. As the female crewmember stepped forward, Hutchins punched in the combination to unlock the battle steel box, and its lid slid smoothly upward. Inside were several dozen credit chips, issued by the Banco de Madrid of Old Earth. Each of those chips was a wafer of molecular circuitry embedded inside a matrix of virtually indestructible plastic. That wafer contained a bank validation code, a numerical value, and a security key (whose security was probably better protected than the Solarian League Navy's central computer command codes), and any attempt to change the value programmed into it when it was originally issued would trigger the security code and turn it into a useless, fused lump. Those chips were recognized as legal tender anywhere in the explored galaxy, but there was no way for anyone to track where they'd gone, or—best of all from the slavers' perspective—whose hands they'd passed through, since the day they'd been issued by the Banco de Madrid.
The crewwoman didn't actually reach for the credit chips, of course. That sort of thing simply wasn't done. Besides, she knew as well as Hutchins did that if she'd been foolish enough to insert her hand into that box, the automatically descending lid would have removed it quite messily. Instead, she produced a small hand unit, aimed it in the direction of the chips, and studied the readout. She gazed at it for a moment, making certain that the amount on the readout matched the one Hutchins' superiors had agreed to, then nodded.

Good post, and timely. But now, more questions.

I can't help but view these chips as high tech debit cards or prepaid gift cards. We've all dealt with them all, and the conditions and problems that can arise from using them.

In this case, do you have to spend the entirety of funds on the credit chip? Can the credit chip itself be cancelled if it is lost or stolen?

Today, the answer is yes, with time. But fraud can be a part of it. E.g., trade a prepaid card for goods, then later cancel the card before it is redeemed. Because you know the party will take days before they try and redeem it. Of course, the authorities may come after you. In the HV, who do you call?

If you lose the credit chips, or they are destroyed, you should be able to recover the funds. But it probably would have a long turnaround time. Look how long Zilwicki and Cachat were stranded aboard a somewhat crippled ship. Therefore, a long turn around time should he built-in.

Fortunately, it wasn't always possible to rely on normal electronic transfers, even when both parties to the transfers in question were as pure as the new fallen snow. Which was why physical fund transfers were still possible. As the female crewmember stepped forward, Hutchins punched in the combination to unlock the battle steel box, and its lid slid smoothly upward. Inside were several dozen credit chips, issued by the Banco de Madrid of Old Earth. Each of those chips was a wafer of molecular circuitry embedded inside a matrix of virtually indestructible plastic. That wafer contained a bank validation code, a numerical value, and a security key (whose security was probably better protected than the Solarian League Navy's central computer command codes), and any attempt to change the value programmed into it when it was originally issued would trigger the security code and turn it into a useless, fused lump. Those chips were recognized as legal tender anywhere in the explored galaxy, but there was no way for anyone to track where they'd gone, or—best of all from the slavers' perspective—whose hands they'd passed through, since the day they'd been issued by the Banco de Madrid.

cthia wrote:Good post, and timely. But now, more questions.

I can't help but view these chips as high tech debit cards or prepaid gift cards. We've all dealt with them all, and the conditions and problems that can arise from using them.

In this case, do you have to spend the entirety of funds on the credit chip? Can the credit chip itself be cancelled if it is lost or stolen?

Today, the answer is yes, with time. But fraud can be a part of it. E.g., trade a prepaid card for goods, then later cancel the card before it is redeemed. Because you know the party will take days before they try and redeem it. Of course, the authorities may come after you. In the HV, who do you call?

If you lose the credit chips, or they are destroyed, you should be able to recover the funds. But it probably would have a long turnaround time. Look how long Zilwicki and Cachat were stranded aboard a somewhat crippled ship. Therefore, a long turn around time should he built-in.

My reading of the highlighted phrase it that they are programmed for an amount fixed at the time of issuance; so they are NOT like a debit card, but more like a coinage. And like a coin; if you lose it, then you have lost the money represented. So you probably would not want to have a million dollar chip, unless that was the price you wanted to pay. Better to have a range of values and your partner in the deal to also have a range, so that together you can make a satisfactory transaction. That is just the same as if you paid cash with a variety of bill denominations. I wonder if you can get the chips color coded for the denomination, so you do not accidentally hand over a ten thousand, when you meant a two thousand.

Quite possibly the bank has already created a range of denominations and when you request credit chips from the teller, based on money in your account, the bank will hand over a set in the requested denominations and debit that account. At some later point someone will turn in a bag of these chips for deposit to their account and after verification those chips will then be available for the next customer.

When travelling the chips are bit like the old Amex travellers checks. You get local currency back if the chip is worth more than the purchase price.

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MantiMerchie wrote:When travelling the chips are bit like the old Amex travellers checks. You get local currency back if the chip is worth more than the purchase price.

Yes, or other chips of a lower denomination.

A long time ago I worked with someone who vacationed in Great Britain. Before leaving he went to a Barclays Bank and bought traveler's cheques payable in Pounds and he said he had a much easier time than other people who traveled with him.

On my trip to Scandinavia, I did not realize that the money changers would not deal with coins. Before getting on the train from Oslo to Stockholm, I bought a cup of coffee and a pastry and received coins back for my large bill. The food car on the train only took Swedish money, which I thought was strange since it ran back and forth between the two countries (my sister bought lunch, since she had both currencies). Finally when I flew home I changed my bills for Euros (plus a dollar or two thrown in to make up the difference) and I put the Norwegian coins into a can for UNICEF.

tlb wrote:

MantiMerchie wrote:When travelling the chips are bit like the old Amex travellers checks. You get local currency back if the chip is worth more than the purchase price.

Yes, or other chips of a lower denomination.

A long time ago I worked with someone who vacationed in Great Britain. Before leaving he went to a Barclays Bank and bought traveler's cheques payable in Pounds and he said he had a much easier time than other people who traveled with him.

On my trip to Scandinavia, I did not realize that the money changers would not deal with coins. Before getting on the train from Oslo to Stockholm, I bought a cup of coffee and a pastry and received coins back for my large bill. The food car on the train only took Swedish money, which I thought was strange since it ran back and forth between the two countries (my sister bought lunch, since she had both currencies). Finally when I flew home I changed my bills for Euros (plus a dollar or two thrown in to make up the difference) and I put the Norwegian coins into a can for UNICEF.

I meant to mention Traveler's Checks in my previous post, but it somehow slipped my mind. Thanks MantieMerchie, good catch. These checks are subject to the foreign exchange rate (Forex). I really liked the checks because they were safe and easy to recoup if lost or stolen with a single phone call if done in a timely manner. The problem was that everyone didn't accept them.

Tlb, electronic transactions cannot be handled as if they are coins. Here's why.

Electronic transactions, checks, debit cards, prepaid cards, etc., are still "in the system" until redeemed. Coins and cash are not. So, if you lose coins or cash, you're really out of luck. Not so with these type cards. The bank cannot be allowed to keep the money from an incomplete electronic transaction.

Saying you must be prudent and mindful of the amount you place on the card because you could lose it is hard to accept as the rule in the HV, or anywhere else. First off, you pay a premium for these type cards. There are all types of fees. The bank earns interest on the funds until the transaction is complete.

If Honor decides to pay for one of her maid's traveling costs to Timbuktu, a modest home and enough funds to tide her over, she has to spend money to receive that amount on a credit chip. The cost of the service itself is what the bank makes on the transaction, plus interest on the funds itself until redeemed. They are not entitled to the million dollars Honor placed on the card. You are saying that even if the card is destroyed and the transaction will never be completed the bank makes out like a bandit. IOW, you're saying that if a Peep Fleet came over the hyper wall and blows the yacht with her maid into orbital debris before it even embarked, Honor should not be able to recoup the million dollars. Actually, those kinds of banking practices would be illegal. Even cashier's checks can be recouped if lost, for a fee. There's always a fee. But the bank can't keep money in limbo. Even in the age of sail it wasn't that brutal.

THERE ARE TONS OF UNCLAIMED FUNDS IN THE US EVEN AS WE SPEAK FOR MANY DIFFERENT REASONS. ELECTRONIC FUNDS STUCK IN LIMBO IS ONE SUCH SOURCE.

Fortunately, it wasn't always possible to rely on normal electronic transfers, even when both parties to the transfers in question were as pure as the new fallen snow. Which was why physical fund transfers were still possible. As the female crewmember stepped forward, Hutchins punched in the combination to unlock the battle steel box, and its lid slid smoothly upward. Inside were several dozen credit chips, issued by the Banco de Madrid of Old Earth. Each of those chips was a wafer of molecular circuitry embedded inside a matrix of virtually indestructible plastic. That wafer contained a bank validation code, a numerical value, and a security key (whose security was probably better protected than the Solarian League Navy's central computer command codes), and any attempt to change the value programmed into it when it was originally issued would trigger the security code and turn it into a useless, fused lump. Those chips were recognized as legal tender anywhere in the explored galaxy, but there was no way for anyone to track where they'd gone, or—best of all from the slavers' perspective—whose hands they'd passed through, since the day they'd been issued by the Banco de Madrid.

cthia wrote:Tlb, electronic transactions cannot be handled as if they are coins. Here's why.

Electronic transactions, checks, debit cards, prepaid cards, etc., are still "in the system" until redeemed. Coins and cash are not. So, if you lose coins or cash, you're really out of luck. Not so with these type cards. The bank cannot be allowed to keep the money from an incomplete electronic transaction.

Saying you must be prudent and mindful of the amount you place on the card because you could lose it is hard to accept as the rule in the HV, or anywhere else. First off, you pay a premium for these type cards. There are all types of fees. The bank earns interest on the funds until the transaction is complete.

Don't think of it as "electronic transactions, checks, debit cards, prepaid cards, etc."; instead think of it as a casino issued gambling chip. You buy a bunch when you enter the casino and somebody redeems them at the end of the night, and the casino does not care how the chips made it from one hand to another - because they get the house cut out of all transactions.

Take a look at the line highlighted; what it is saying is that the chip represents a fixed amount of Solarian Credits set at the time the chip was created. In essence it is not a credit or debit card, but a piece of electronically protected money that is redeemable at the Bank of Madrid. I am saying, based on the fact that the amount is set at the time of issuance that it is exactly like a coin. The denomination is set and you buy the chip, the bank earns money on that amount until the chip is redeemed. The fact that it can be used by slave traders must mean that it cannot be "recouped if lost", because that would only be possible if it left a trail instead of being anonymous like a hundred dollar bill.

What this is saying is that paper money (and coins) have been replaced by an anonymous electronic equivalent; because this allowed security methods that meant the money could not be duplicated by counterfeiters.

If you do not accept this then please explain to me how these objects could be used by slave traders when you say they must be still "'in the system' until redeemed"?

tlb wrote:

Fortunately, it wasn't always possible to rely on normal electronic transfers, even when both parties to the transfers in question were as pure as the new fallen snow. Which was why physical fund transfers were still possible. As the female crewmember stepped forward, Hutchins punched in the combination to unlock the battle steel box, and its lid slid smoothly upward. Inside were several dozen credit chips, issued by the Banco de Madrid of Old Earth. Each of those chips was a wafer of molecular circuitry embedded inside a matrix of virtually indestructible plastic. That wafer contained a bank validation code, a numerical value, and a security key (whose security was probably better protected than the Solarian League Navy's central computer command codes), and any attempt to change the value programmed into it when it was originally issued would trigger the security code and turn it into a useless, fused lump. Those chips were recognized as legal tender anywhere in the explored galaxy, but there was no way for anyone to track where they'd gone, or—best of all from the slavers' perspective—whose hands they'd passed through, since the day they'd been issued by the Banco de Madrid.

cthia wrote:Tlb, electronic transactions cannot be handled as if they are coins. Here's why.

Electronic transactions, checks, debit cards, prepaid cards, etc., are still "in the system" until redeemed. Coins and cash are not. So, if you lose coins or cash, you're really out of luck. Not so with these type cards. The bank cannot be allowed to keep the money from an incomplete electronic transaction.

Saying you must be prudent and mindful of the amount you place on the card because you could lose it is hard to accept as the rule in the HV, or anywhere else. First off, you pay a premium for these type cards. There are all types of fees. The bank earns interest on the funds until the transaction is complete.

Don't think of it as "electronic transactions, checks, debit cards, prepaid cards, etc."; instead think of it as a casino issued gambling chip. You buy a bunch when you enter the casino and somebody redeems them at the end of the night, and the casino does not care how the chips made it from one hand to another - because they get the house cut out of all transactions.

Take a look at the line highlighted; what it is saying is that the chip represents a fixed amount of Solarian Credits set at the time the chip was created. In essence it is not a credit or debit card, but a piece of electronically protected money that is redeemable at the Bank of Madrid. I am saying, based on the fact that the amount is set at the time of issuance that it is exactly like a coin. The denomination is set and you buy the chip, the bank earns money on that amount until the chip is redeemed. The fact that it can be used by slave traders must mean that it cannot be "recouped if lost", because that would only be possible if it left a trail instead of being anonymous like a hundred dollar bill.

What this is saying is that paper money (and coins) have been replaced by an anonymous electronic equivalent; because this allowed security methods that meant the money could not be duplicated by counterfeiters.

If you do not accept this then please explain to me how these objects could be used by slave traders when you say they must be still "'in the system' until redeemed"?

First off, casinos are a closed system. A special case. Redemption is possible only at the casino and it is not an international form of currency.

The problem is that you aren't allowing for what is happening "behind the scenes" in bank transactions. Physical funds are always involved or banks can simply operate fraudulently by issuing their own credit chips. Only the Feds can do that. When these chips are purchased, physical funds will have to be moved, behind the scenes. The way I read it, they are appealing to slavers because there need not be a paper trail when using them. You simply need the PIN number.

Tlb, let me give you a more potent example. Let's say Hauptman decides to move to another system. Or, even better, let's say he becomes pissed off with his current bank (that's never happened to anyone), and decides he wants to withdraw all of his funds immediately. Well, surely he's not going to be foolish enough to try or risk physically carrying trillions of dollars out of the bank. Behind the scenes the bank is scurrying trying to gather trillions of dollars to send via armored vehicle to the bank of his choice.

An electronic credit chip could be the ticket. If he steps out of the bank and a pulser destroys the chip, who gets the trillions? If you say the bank, I can close my eyes and finger any bank with hit men waiting around the corner.