7 votes

Fractional Reserve Smudge

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.




Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.

Fractional reserve banking is

Fractional reserve banking is a myth that needs to die.

Plan for eliminating the national debt in 10-20 years:

Overview: http://rolexian.wordpress.com/2010/09/12/my-plan-for-reducin...

Specific cuts; defense spending: http://rolexian.wordpress.com/2011/01/03/more-detailed-look-a

scawarren's picture

Darn that's about the nicest

Darn that's about the nicest comment I've ever seen from you, Bill :)

Individualism-
To be nobody but yourself in a world which is doing its best, night and day, to make you everybody else means to fight the hardest battle which any human being can fight; and never stop fighting.
e.e. cummings

Cyril's picture

LOL.

LOL.

+1 for an imaginative way to (barely) disguise a few compliments to a fellow.

Or I missed something... ?! :)

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

Do me!


http://youtu.be/CtEVy_zjr9Y

I saw the best minds of my generation, destroyed by pandas starving hysterical naked

-Allen Ginsberg

bend over

:)

“With laws shall our land be built up, but with lawlessness laid waste.”
-Njal Thorgeirsson

Don't make me have to repeat myself...


http://youtu.be/4xC3zFiwyAs

I saw the best minds of my generation, destroyed by pandas starving hysterical naked

-Allen Ginsberg