The fact that
redeemability does not determine value except so far as it determines quantity means that we might be able to design a protocol so that the total quantity of coins behaves similarly to a system of competitive and redeemable bank liabilities, without intermediation at all.
The Banking Amendment Act of 1914 enabled the government to end
redeemability in gold and declare all privately issued bank notes in circulation to be legal tender.
He argues that the dynamics of change within the payments system would result in the maintenance of a (national currency as a) unit of account function without government intervention requiring
redeemability in central bank money.
Investments in money market and bond mutual funds can provide investors with rates of return that are nearly identical to investments in term CDs (the funds can hold these CDs themselves), but with the added convenience of mutual fund
redeemability.
The more confidence the bank can imbue in the consumer regarding the
redeemability of its notes, the less likely it is that anyone will believe otherwise.
The long maturities would assure that investors were making a substantial commitment to the bank while the
redeemability feature would subject the bank to continuous monitoring.
The purchase price to be paid for each properly tendered Note will be the price resulting from a yield to maturity or earliest redemption date equal to a fixed spread (varying in amount depending upon the series, maturity and
redeemability of Notes) over the yield to maturity of an applicable United States Treasury security (as quoted on the relevant Bloomberg Page), as determined and announced two business days prior to the expiration date of the applicable Offer.
The dollar could be redefined in terms of gold or a broader commodity bundle, with
redeemability for Federal Reserve liabilities being reinstated.
To sum up, the main characteristics to keep in mind are; the voluntary nature of private coinage, the complete absence of any sort of deposit contract between the two transacting parties and the existence of
redeemability pledges on the coins.
Finally, commentators pointed out that the mutual fund industry generally was suffering from net redemptions, and that if this malady were not reversed, the interests of all shareholders would be harmed by, among other things, increasing the overall expense ratios of funds and jeopardizing shareholders' right of net asset
redeemability.
Thus, when circumstances force one bank to refuse redemption of its IOUs, the public is likely to become suspicious about the continuing
redeemability of other IOUs as well.
It has been speculated that the Boston area has some unique combination of service-friendly factors: a civic-spirited corporate community, a mayor friendly to the concept, and a Camelot-era faith in both the
redeemability of human beings and the transformability of public life through service.
