Quote:
Originally Posted by NuclearSlug
Perhaps you should look into taking an economics class. If you did, you'd know that new money is created every day. Every time someone gets a home loan, that money is created virtually out of thin air. Sounds crazy, but it works. The distribution of Z Keys is a very similar concept. While it does change the value of certain items, it does keeps the economy moving.
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Perhaps YOU should take more than one economics class.
Banks must have money to lend it. (They also must have solvent balance sheets, but that's a separate lecture.) Central banks determine how much money is available in the system by selling and purchasing government bonds. Money is created when banks loan money, but they have to meet certain reserve requirements. The upshot is that the central bank can control the amount of available money in the system by controlling the amount of reserves available to the banks.
If the government starts printing money and buying government bonds with the printed money, it releases more money into the system and devalues existing currency.
Creating a
brand new source of Zkey drops not associated with Balth faction is analogous to running the printing presses.
In this case, the printing presses are
privately held. There are property rights associated with who gets the money: the distribution is given on a per account basis. People who buy lots of accounts get money. Everyone that does not buy tons of accounts loses, because they are doing more poorly relative to how they were doing in the absence of XTH. Nominal prices increase as a result of the printing of "money".
Good luck in your undergraduate classes.