Comment: Okay one more thing

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Okay one more thing

Insurance would disappear under this system. It would be priced into the market.

For example: emergency workers. They live off trading their potential to save lives in an emergency whether they are called up or not. But what happens in that emergency, what if they don't show up? How do you know their certificate is worth a darn?

Well, a ratings agency, or perhaps the issuing bank, would provide measures of assurance represented in the certificate that these workers would do the job.

For example, to get the certificate issued these workers must constantly train and test to prove their abilities, willingness to work, and so forth. This requirement is in place even if no emergency ever occurs.

If you are a company launching a satellite, measures to ensure the success of the launch - redundant features, international coordination, etc. - are priced into the launch contract.

The reason this is the case is because the good or service exist before the credit, rather than vice versa.

You don't take out a loan of certain value (as we do now) and then translate the value into real wealth. Instead, real wealth (or the presumption of such) is translated into value.

So, you have $200 million for a satellite. It gets you certain features, but it might blow up, so you buy insurance. You don't want to owe $200 million on a loan with nothing of value to show for it.

But, in the new system, your loan is a satellite with certain features. Those features presume a certain value. If there are no safety features, that presumed value will be less because of the cost of risk. Thus, your 'satellite bucks' might not trade for enough on the market, perhaps not enough to sustain the operation of the satellite. This theoretical point is what goes into a cost analysis of what features to include or not on a satellite. If the satellite does fail, nothing is owed to anyone. Yes, it might be a loss but consider what insurance does.

Insurance can only cover losses equal to true risk. If a 1 in 4 chance of failure exists, then redeeming the failure requires insurance payments of the other 3. This is a must, the only way to change this equation is to change the risk. This is done through insurance requirements (such as safety features).

In the new system, the market know 1 in 4 satellites fail, so satellite 'bucks' only retain 3/4 of the actual real value of operational satellites. The successful satellites 'pay' for the accidental failure of the 1. That's not a moral/legal determination, just a representation of holistic economic reality. The 'real' effect of insurance economically is to encourage safety measures that decrease risk. This effect occurs in the new system in the pricing of the certificates. Satellites with better safety features are worth more.

Wait, what about the launch? Okay okay. Here's how it works. The satellites produce real value, in the end, when they broadcast information in a more efficient way. So, the operational use of the satellite is how it makes money. The satellite therefore is primarily financed by issuing use certificates/contracts. Again, these are not specific - there doesn't have to be a customer lined up today, only the presumption of one.

So, investment would work very much like it already does. People have to find means of assessing the value of a project. If an enterprise issues these notes, are they ever going actually launch and operate the satellite? If it operates, will there be customers. Financial institutions will get their raison d'etre from answering these questions.

Anyway, consider the risk of not launching. That's going to be based on the CEO's rated abilities - he'll have to present his plan to the bank to get the credit. Fine, makes sense.

Now, as for the likelihood of future customers? Well, the bank can issue a 'spacebuck' which is a note back by a basket of contract certificates. It's backed in the sense that the basket is a fixed trade value for these contract certificates. 1 spacebuck equals 2 man-hours engineer, or 1 spacebuck equals 10 hours on rocket nozzle machinery. The basket is composed transparently and adjusts transparently according to a known schedule.

The satellite enterprise is issued spacebucks equal to the presumed value of their future satellite - the bank creates an equivalent number of use certificates which are published on a schedule to go into the spacebuck basket on a timeline consistent with the development and launch cycle. The enterprise finds that spacebucks provide access to all the necessary goods and services to complete the project. A few additional services aren't in the basket, but the spacebucks are exchanged for say, tvbucks, in order to launch an ad campaign to raise public awareness of this particular satellite (let's say they're trying to start a new market).

If everything goes according to plan, the satellite goes operational, and its use certificates appear in the basket at a fixed exchange rate for spacebucks (again, which adjusts periodically).

Okay, here's the conclusion. If the satellite industry faces fewer customers, the value of the spacebuck itself will fall. Therefore, if our satellite enterprise represents unexpectedly diminishing future value, then the bank doesn't lose much since only spacebucks were issued.

This way lone industries won't affect the overall price level and distort the economy. There will be some overall price levels, but they will be created out of the real values in industry rather than create the nominal values in industry.

It's plausible that people would be paid in VisaBucks which has a basket of SpaceBucks, FoodBucks, TvBucks, HousingBucks, and so forth.

Or, GOLD could trade against a basket of these bucks.

The market would determine...

Anyway, this system is very complex