[RETRACTED] On the simplest acceptable fiat monetary system
0. This was originally posted on 22.10.2025, and retracted shortly thereafter on 14.11.2025, though I still leave these up. The design proposed here was simple, indeed so simple that it does very little monetary management, but mostly serves as a gauge of the natural interest rate. If demand for money increases, the market turns consols in but we quickly adapt and slash the price until equilibrium is restored. The only actual money being created would be in the short period before full equilibrium is reached, after which we are left with higher rates. Now, the system can be salvaged quite easily by adding a second step, where the monetary authority separately conducts open market operation on FX such as to target a stable price (yield) for these consols. But by now we're just doing standard central banking without the frills, so nothing particularly novel here, and in case the alternative model does this and more. 1 The setup 1.1 Let’s rejig one of my earlier mechanisms to come u...