But it is also reasonable to hope that phone money weakens the local monopolies that central banks enjoy in the business of issuing currency.

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The European Financial Stability Facility (EFSF) is considering issuing foreign currency, yuan, bonds.

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California owes dollars, so what positive could be achieved for it in issuing a currency a great deal less credible than the dollar presently is?

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The government is issuing more debt, particularly in local currency.

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The whole Eurozone problem is that each Eurozone country was issuing bonds in what was effectively a foreign currency, and so it lacked an effective lender of last resort.

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That would finance the costs of issuing and maintaining the Terra, including the costs of the storage of the reserve commodities backing the currency.

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Each Terra can be turned in for the specified share of the basket of commodities, which would be held as 100% backing of the currency, under contract with producers of those commodities who are partners in the financial institution issuing the Terras.

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When the claim checks outstanding grow sufficiently numerous and when the issuing party can unilaterally determine their purchasing power, the pressure on the issuer to dilute their value by inflating the currency becomes almost irresistible.

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