Fractional Reserve SmudgeSubmitted by BILL3 on Tue, 02/25/2014 - 01:32
My theory is that Smudge Pot is not just an ordinary member of DP or participant in the chat room, but something more complex and fundamental to the functioning of the DP ecosystem.
Just as the federal reserve is on call to supply a reserve of money when the velocity of money declines, Smudge is "elastic" in just the same way. Like the federal reserve note supply, he stretches himself as much as needed to maintain the stability of DP chat and the G-DP.
When chat activity declines, the gap in intellectual commerce is filled by the verbal banknotes of Smudge's nuggets of wisdom, aka Smudgisms, and his folksy stories. There is never a shortage of liquidity, and as long as there are some Smudge reserves, all is well.
As long as there is 1% activity, Smudge is able to provide the other 99% and so maintain chat solvency.
Some have claimed fractional reserve Smudge is a form of fraud, but really it is a form of giving. The purpose of Smudge is to tide chat over in the dry spells and keep it afloat for when the good times return.
When people are hoarding chat and it faces systemic risk, Smudge provides the liquidity needed to hold us over for better times.