As could be anticipated, SwapRent makes a precise new financial instrument with a robust mathematical model to make the TARELV based new exchange rate system a reality.
With reference to my two earlier blog posts, one on 04/12/2011 A new exchange rate pegging system based on and backed by each country’s total aggregate real estate and land value (TARELV) and the other on 02/20/2011 It is not Keynesian. It is not Monetarist. Perhaps we could call it SwapRentism? Any better suggestions?, the linkage between an external exchange rate for a country and the internal domestic free market based operation for swapping cash for an economic ownership of real estate could be established.
While the domestic money could sit in the bank deposit accounts to earn interests for any defined maturity date, it could also be turned into a claim on economic real estate ownership for any maturity date and earn a market based rent, i.e. the SwapRent rate through an exchange or a marketplace such as REIDeX. (http://www.REIDeX.com)
As a result, this new free market based operation between cash and real estate exposures could offer the collateral security that a foreign entity would need to gain confidence in holding this country’s external debt in the form of its currency, either in paper notes, coins or electronic bank records.
The new uninhibited free market based capital market operation between cash and real estate exposures through SwapRent (SM) contracts could offer the enhanced liquidity to the holders and hence further confidence than those offered by the conventional legal forms of real estate and land ownership. A SwapRent (SM) contract could therefore even become a legal tender like the country’s own treasury securities.
Filed under: Currencies, Economic Viewpoints, TARELV, Alternative currencies, Exchange rate mechanism, Exchange rate pegging system, TARELV
Innovation Trio: SwapRent, FARJHO & TARELV 