Why are the TIPS used to secure the private currency?
There are four primary reasons why we selected the TIPS to initially back the issuance of the Millennium Dollars®. First, the TIPS are a real financial instrument, effectively denominated in real (or constant) dollars and a real rate of interest. This gives us the real-principal-only (RPO) strip that provides the proper asset to back a currency that is designed to be self-adjusting for inflation and deflation. Second, U.S. Treasuries carry an implied “AAA” credit rating. In fact, the U.S. Treasury has perhaps the best credit record in the world. Third, inasmuch as the Treasury has an excellent credit record, and the market for U.S. Treasuries is huge; the TIPS will give us a higher degree of liquidity than other inflation-adjusted investments. And, fourth, the TIPS may be margined up to 90%, or more. As such, the sponsor can hypothecate the TIPS to fund the monetary conversions of the MR$ into USD. This provides the sponsor with a substantial reserve potential to meet monetary conversi
