The debate about the 1 Trillion dollar coin is back in the USA. The Treasury has arrived to the debt-ceiling limited by the Congress and has no authorization to issue new debt without the Congress approval (it has already been refused).
If the Treasury doesn’t receive new bonds (debt) , then it’s not possible to create more money to pay the bills, the interest of the debt, and the debt itself. Something usually called default.
But fortunately, some jurists and economists are proposing an alternative way, so that the Congress authorization to increase the debt of the country is not necessary. Rohan Grey proposes in the Kentucky Law Journal a legal alternative where the treasury could mint a platinum coin with a nominal value of 1 Trillion Dollar (platinum is the only metal without price restriction that the Treasury can legally mint).
With the coin minted, then the Treasury can ask the FEDeral Reserve to accept it as an asset with a 1 Trillion dollar face value, and the FED would be obliged to send all the dollars, up to 1 Trillion, requested by the Treasury, bypassing the debt-ceiling limit established by the US Congress. FED pseudo-independency would also be undermined, and this could lead to the US Supreme Court to decide if it is constitutional or not.
In an very interesting swing, it has been decided to use money from the public workers pensions, so the bills can be paid until september 2024.
It’s important to summarize the drama, as we can get lost in the mist.
- The debt has arrived to the limit established by the Congress
- It’s necessary to print more money to pay the bills, the interests, and the principal of the debt.
- Let’s choose between a fake 1 Trillion Platinum coin or some paper bonds
- Let’s bypass the US Congress and make the FED print everything we need to pay the bills.
This are the fundamentals behind the World Reserve Currency. The currency that some countries need to adopt because the corruption in their countries is still higher than in the US.
This is the “monetary policy” that brings inflation to all the world. Inflation as a decrease of the purchasing power.
SORA fundamentals are based. It is a New World Economic Order based on the Disaggregated Quantity Theory of Money and is the catalyst for advancing humanity, as it has been designed for the common good.
There is no national debt to pay. There is no need to increase the supply to pay miners. The supply of XOR is managed by an algorithm, the SORA Token Bonding Curve (TBC), and governed by on-chain voting.
There is no need to create new money to pay interests over an increasing debt. The TBC is the reason why the supply of the XOR currency is elastic and with price forward-guidance.
When the secondary market price concurs with the primary market price (the TBC price) , only the demand and offer of XOR, represented by swaps at Polkaswap.io, will decide about how much XOR must exist. The TBC will adapt the supply of XOR to the size of the SORA Economy, backed by reserve assets like TBCD, VAL, PSWAP, ETH, DAI and soon KSM and DOT.
The expected increase in the supply of XOR, considering an uprising trend of users, will not be correlated with a decrease of the purchasing power of the users of the currency, because in the SORA Economy the supply is adjusted without human intervention.
In the SORA Economy money is created for the production of goods and/or services. It’s not created to pay interests of debt or speculation in the financial markets. Money creation is decided by the users, the community, and with on-chain voting, using the Polkadot governance model while the SORA Parliament, based in sortition and multi-body panels, is under construction.
This are some of the fundamentals, among others, of the SORA Economy.
