Quote from: jonald_fyookball on December 19, 2014, 12:41:27 PM

how are we supposed to repay with interest? where would we get more wip?

Dear Jonald_fyookball,

Thank you for the question. As you ask a forward-looking question, firstly I would like to emphasize that all of the answers below are provisional and that, in fact, the Federal Reserve of WIP reserves the right to do or change anything at any time without notice. Therefore you may not rely on the information below, except with the understanding that the Federal Bank of WIP may behave or not behave in the ways described below at its sole and sovereign discretion, i.e. as it chooses and sees fit, at any time and for any reason or no reason without any limitations.

With this caveat, the answer is that (if the Federal Reserve of WIP so chooses) you can receive WIP from any possessor of WIP as long as the nominal value of the transaction is $0, i.e. in exchange for favors, friendship, free services, etc, similar to in-game actions in a video game. Anyone who possesses WIP may transfer it to any other account (or individual), simply by writing to the Federal Reserve of WIP (at federalreserveofwip@gmail.com), via PM here, or in this thread to initiate the wire transfer. Transactions are performed manually at the moment, and confirmations are sent out by email as well as being visible in the public ledger posted here. Through these means, you can transfer WIP to any other person, who would be assigned an account number if this recipient does not already possess one.

At the moment, if the Federal Reserve of WIP so chooses, you would have the following means of repaying WIP you have borrowed from the Federal Reserve of WIP:

1) Perform a favor or enter another transaction with a parity price of $0, to a possessor of WIP and in exchange receive WIP. For example, at the moment the owner of the account 23-36-64-13-66-01 possesses 5 WIP. If you are in touch with this person directly, you can simply receive a WIP transfer in exchange for performing some favor with a nominal price of $0. Likewise, as Chairman, I possess 0.5 WIP at present and can transfer part of this to you as well, as part of a transaction with a nominal price of $0.

2) In the future as more and more people possess WIP, which is by its nature inflationary, it will be easier and easier to acquire WIP from someone who wants from you a favor, social media interaction, or other transaction type with a nominal value of $0, including other borrowers, and even if you do not have direct contact with this party initially. You can, for example, advertise gift services and related non-monetary exchanges in exchange for WIP, or any other transaction with a parity price of $0 and receive WIP from such people. You can sell things for WIP in the real world in this way, as long as what you are selling has a parity price of $0 such as gift services and favors.

3) For those who choose to borrow WIP from the Federal Reserve of WIP, perhaps one of the easiest and most important ways you can receive additional WIP is by acting as a lending institution to borrowers i.e. treating The Federal Reserve of WIP as a Central Bank and being your own lending institution (bank.) For example, the Federal Reserve of WIP currently lends at a 5% annual interest rate. But users have requested loans at an interest rate of 15% per 3 weeks (i.e. 86.96% annually.) In this case, as a lending institution you can perform arbitrage among these rates by simply taking a loan from the Federal Reserve of WIP and lending it out to other users, pocketing the difference in WIP. This is extremely similar to how many banks operate in the real world, and like the real world, you will have to compete with other bank rates (other people doing the exact same thing), as well as take your borrowers credit and faithfulness into consideration, or non-monetary-based collateral or contractual promises/obligations.

4) The Federal Reserve of WIP may raise money (WIP) by selling Treasury-Bills (T-Bills) on the open market to raise funds for its own use, i.e. its own gift budget. These would be sold at a discount to the face denomination; for example, a T-Bill maturing in 30 days' time and paying out 5 WIP (its face value, also called par amount) may be sold for 4.5 WIP by the Federal Reserve of WIP for example. In this case, if you have received a low-interest loan from the Federal Reserve of WIP previously, you may simply use the WIP you possess to purchase T-Bills at their discounted value. Upon maturity of the T-Bills, you will repaid their face value, allowing you to pay back your loan and interest obligation, and pocket any difference. For its part, the Federal Reserve of WIP would sell T-Bills in order to finance its own volunteer budget and gift economy operations, much as governments do in the real world.

5) Therefore another important though smaller source of WIP would be the spending of WIP by the Federal Reserve of WIP itself. In other words, after raising money (WIP) by selling T-Bills to others, if the Federal Reserve of WIP spends this money, you would be in a position to receive it by providing a gift economy service of some kind to the institution which it desires. In this way, you would end up receiving WIP, with which you could then repay your earlier loan. However, it is just as possible to receive WIP from anyone else who possesses it, and the spending by the Federal Reserve of WIP would ordinarily be a small fraction of the WIP economy.

6) Finally, although this is not emphasized, the Federal Reserve of WIP intends to act as the lender of last resort. Assuming that you require WIP liquidity to which you do not have access from any source, cannot raise it from other lending institutions, and cannot produce it through gift economy services, the Federal Reserve of WIP would still be in a position to provide a short-term loan to provide the necessary liquidity. Although this runs the risk of creating systemic indebtedness, at the same time it provides extremely important liquidity that can be used in the real-world gift economy to create real 'in-game' value (albeit pegged to a parity price of $0 and in a gift economy.) In the real world, a sustainable level of systemic indebtedness is not in itself necessarily a bad state of affairs, and the real social value of a growing gift economy can act as a tide that 'raises all ships' and makes everyone better off. Therefore, this solution is not necessarily a bad solution, should the normal inflationary process and incentives fail to provide the necessary liquidity for loans to be repaid to the Central Bank. (Another word which in this case refers to the Federal Reserve of WIP, based on one of its most important functions.)

I hope that this answers your questions about some of the many sources for WIP repayment. Since WIP is by its nature inflationary, with the potential for additional quantitative easing provided by the Federal Reserve of WIP to further spur private spending and growth in stagnant cases, as well as the normal means through which additional WIP is introduced and spent, you can rest assured that you will have access to a stable and growing monetary supply you can use to finance your virtual, in-game gift activities as well as reasonable levels of borrowing now and in the future, provided you use these to engage in real economic gifting activity that provides benefits to others and incentive to spend WIP on your services while being pegged to a nominal transaction prices of $0. The caveat is that these services may not extend out of game to real-world transactions of value, nor would this be desirable given that the Federal Reserve of WIP rules with complete sovereign impunity, is not (currently) subject to any legal or constitutional checks and balances or limits of any kind, and can take any and all action it desires at any time and for any reason or no reason, without oversight or transparency. (Beyond the public ledgers it publishes.)

Within this framework, rest assured that we intend to remain faithful stewards of a working system, and we will do our best to show everyone the way in which it works or fails to work.

Jonald_fyookball, we would be honored to have you as among our first borrowing institutions, so that we can begin to introduce WIP into the world gift economy, and we are sure that you will not have difficulty in making the extremely reasonable interbank interest rate repayments, which are a tiny fraction of that of other currencies. Without emphasis on this degenerate case, in case you did fall into trouble, we are here to help you work out your liquidity needs from a money supply standpoint and get to building real-world gift value and being able to repay your reasonable loans. By providing real, albeit pegged to a parity of $0 services to the community, or using WIP in any other way you require from a stable money supply, we are sure you will be in an excellent position to benefit from our low interbank lending rates with which we hope to stimulate the economy.

Some of our members have already been extremely surprised that we provide loan rates at a tiny fraction of other currencies, 0.287% per three weeks versus 15%, 5% per year versus 86.96%. We consider those interest rates unsustainable for any fast-growing economy, and while the WIP economy is based on gift transactions and favors without a nominal value (pegged to $0), the main difference is that by being based on an inflationary centralized currency, we are sure we can create something of lasting value to everyone with stable prices (pegged to $0), a reasonably easy money supply, good employment and usage of WIP, and reasonable inflation and interest rates, all by close analogy to the real world of central banks and fiat currency.

Thank you very much for your interest. If you have any further questions, please don't hesitate to ask, either here or privately.

We look forward to hearing more from you or answering any other questions you may have.

Best regards:

Chairman of the Federal Reserve of WIP