So I noticed there are a couple of regional currencies here in Germany, but all are Euro backed so not really currencies (I'll research the minting laws etc).
The idea is that they can be exchanged 1:1 for Euros at any time with some stipulations etc. I'm not sure what the whole exercise is good for but I think I'll monitor the acceptance of these closely.
You can pay in stores with these notes etc. and it seems people use them regularly.
The "banks" are required to hold 1:1 Euro to note money and must always show they do indeed hold the money so in essence it just replaces Euro notes "in circulation" with random other notes that can be exchanged for Euro 1:1.
In principle this is how a gold backed bank would run except that the exchange medium wouldn't be Euro but units of gold and it would actually make sense instead of being a rather random pseudolayer.

Now if this is possible I have to wonder how successfull a regional gold backed bank could be. If you assume that you could in fact legally issue notes that can be exchanged for gold and also assume you have enough financial backing to set up a bank that would function for say a 50k city for starters (and keep in mind the new notes would only be accepted city-wide for starters)

Further assume that profiting from the banking operation is not strictly neccessary, breakeven or slight losses may suffice to show the system is working (just assume you'd win some innovation price or something to cover small losses). How would you go about it.
How would you turn it into a profitable operation (I guess by holding some extra amount of bank-owned gold for speculation...i.e. build on the reputation of the bank to give credits)?

How practical are small denominations etc. etc.; any ideas thoughts etc are welcome.

you need an investment arm and/or you need to charge storage and or transaction fees to customers and or merchants.

you could also put ads on the cards, ads on the online banking etc. you could inventive in many ways

Charge a fee. Pay interest on time deposits and profit by loaning them out.

Ok fair enough. Let's say I just bought an adequately secure building, hired personel etc.
I open the doors and people come in. Essentially I'll need a certain stock of gold that I'll sell to them for Euros right (or alternatively I suppose they can bring in gold of their own). Then I can hand them bills that are claims to their goldstock. If they want everyday access to their funds I charge a safeguarding fee.
Then I can promise them a certain percentage X if they put their money in my vaults for say 3 years and I can lend that gold to people for Y>X% to be repayed in 3 years.

That's the basic business model. People can now use the bills to buy stuff from participating stores and the stores can redeem them for the related gold at my bank (or just have the gold transfered to their "stack of gold" aka account)

What's the smallest bills you'd issue, 1 gramm? That's quite a lot and micropayments will get somewaht ugly but below that it's a little cumbersome to pay out.
The biggest issue I see with a bill model is that store prices may just be impossible to pay, for example I can hardly pay a 10 cent item without the overhead being pretty big if I really do all transactions as they happen.
Alternatively I can do this virtually i.e. they can with some sort of e-cash card and shift the actual gold contents once a month or so?
It's these small details that I'm mostly interested in i.e. how to make it practical

you could issue very small bills but only accept withdrawals in certain bigger increments

I would imagine that today you'd want to do most transactions electronically, instead of with paper. You can certainly have transactions that are smaller then a gram. There could be a rule about only actually withdrawing metal in increments of that size though.

You could issue notes (or base metal coins) for very small denominations, and simply have a requirement that in order to redeem gold, you need to have at least 1 ounce worth of total notes. As long as everyone is informed of this rule before they deposit their gold, this shouldn't be a problem. This way, there would be no limit to what could be bought with this money.

Yeah that's probably the easiest way. Require a certain amount of paper before you can redeem + some rechargeable card with no credit.
I was just fascinated with how much people loved the use of other bills which was the main thing I took away from the pseudo stuff we got here.

Stealing an idea I heard that I think Boro came up with:

Put the metal ON the bills. Look at your paper bills right now, you can see a band of material inside it. You can put the metal right on the bills in very small amounts.

That does actually sound kind of brilliant since we're talking pretty small amounts. I wonder how complicated this would be to accomplish technically but it can't be all that hard I suppose.

I'm working on it.

Awesome. Can I get some?

Wouldn't the amount of gold on the bill gradually erode as it was circulated?
Or wouldn't some unscrupulous ****er like myself scrape a little of the gold off of a bunch of bills?


Either way your currency would end up debased.

I imagine it could be affixed rather securely.

You plan on scratching up your own bills? No one has to take them, so maybe you shouldn't debase them.

Now we finally know how much one Rothbard is worth!

You can put it "inside" the bills, you wouldn't be able to get to it from the surface.

can you make it 9999 fine gold so us nits can use it
gotta tap into the nit market imo

I also thought about transparent (lucite?) coins with small amounts of gold inside.

The gold removal would be done by machine, a barely detectable bit each time, with cosmetic repair afterwards.

Sounds like a pretty bad scheme imo

Edit cause that sounds kind of snarky:

The gold isn't accessible from the surface of the bill. It's stamped INSIDE the bill.

OK


I was thinking about the ancient art of shaving a little bit off of a crapload of gold or silver coins, then passing them on. Eventually you have a nice little pile of gold-dust. That's why coins had grooves cut in the edges, to make this more difficult.

Right.

So no one has their appendix removed who doesn't wear it on the outside?