[Toddsterpatriot]

A far more sensible approach would be to do the opposite, by restricting how electronic currency can be used for speculative purposes, to cause a serious deflation of cash. This could be done quickly with a 1 for 10 deflation, that is, a dime can buy what a dollar could buy.

Causing another Great Depression by intentionally causing a 90% deflation is a great idea.

Just look at all the great, conservative programs that came out of the Great Depression. We'd get even better conservative programs this time. LOL!

[Mase]

Whoa. Restricting electronic currency for speculative purposes would pretty much put an end to speculation I have to think. Why is it the people that want to control speculation understand the least about it?

90% deflation in one fell swoop? Dear lord. Save us from the people who would save us from ourselves.

[yefragetuwrabrumuy]

You didn’t think that through. To start with, this posits a currency split, in which electronic money becomes very difficult to spend, because retailers refuse it, possibly with national bank holidays lasting weeks or months. A million dollars in the bank is worthless.

In that situation, cash is already deflated by 95% solely by shortage. There just isn’t more cash and coins, nor can there be in short order. So a 1 for 10 cash redenomination-deflation is only going to relieve the de facto shortage, while plastic coins can be minted to take up the slack.

The problem in the Great Depression was that there was no cash or coins, either, and considerable inflation was needed just to get it into the marketplace. The government needed to literally, not just figuratively, print money. But they did not for far too long.

Right now, the vast majority of US paper money is $1 bills, about 45% of all US paper money. But most people’s typical retail is in the $10 - $100 range. With an official 1 for 10 deflation, this makes a $50 purchase cost $5, and means a lot more people can make purchases just because there are far more $1 bills.

In effect, it is redenomination, to counter deflation. It buys time until electronic transfers can be reestablished to some extent, likely in the form of debit instead of credit.