[DesuMaiden]

Oil in the ground.... Mmm... You do realise the difference? A hundred years ago there were lots of places you could pick it up from a spring with a bucket. These days, miles underwater, miles under the sea floor. Production costs anywhere from $10 to upwards of $100 a barrel. It's not worth anything until it's extracted. It's not worth extracting if you can't get what it cost to get it out at market. So money is very important in relationship to oil. No money, no oil.

There will be no modern economy without oil...oil matters more than money because without oil, there would be no money.

[SeaGypsy]

Nope, it's both.

[DesuMaiden]

Nope, it's both.

Money derives its value from natural resources. Without natural resources, money would have no value. Hence natural resources are more axiomatic to the economy than money is.

[SeaGypsy]

You are trying to simplify something which is not simple. In principle you are correct, under the current structure the economy cannot function without oil. But there is always a price at which oil is not worth extracting. Search 'EREOI' here for detailed discussion. Energy return on energy invested. This is the key principle to energy extraction. Money being the symbolic totem we use to represent energy, the two subjects are intimately entwined & interconnected.

[DesuMaiden]

You are trying to simplify something which is not simple. In principle you are correct, under the current structure the economy cannot function without oil. But there is always a price at which oil is not worth extracting. Search 'EREOI' here for detailed discussion. Energy return on energy invested. This is the key principle to energy extraction. Money being the symbolic totem we use to represent energy, the two subjects are intimately entwined & interconnected.

You are right...money matters in that it is symbolic to represent energy.

[GregT]

Desu,

Money was around for a very long time before mankind began exploiting oil, and money will still be around in some form or another, after the oil age is over. ( If we don't destroy the natural environment first ) Money is a means of exchange, and whatever people agree upon to be that means of exchange, will be money. Whether it be sea-shells, animal hides, sticks, stones, chickens, bones, paper, or now even plastics.

Money is a claim on future human labour. Whether that human uses muscle energy, animal muscle energy, gravity, solar energy, heat energy from burning wood, coal, or oil, only determines the amount of goods or services that human labour can produce. So I guess you could say that money represents energy, but the energy that it represents is human energy, because without human labour, there would be no exploitation of energy sources, and there would be no money.

[ralfy]

Usage of money today moves beyond exchange, and as part of credit systems involve financial speculation.

[GregT]

Yes Ralfy,

The bankers have now taken it to a whole new level, and beyond. We now have an entire corrupt market casino behind the scenes, CDSs and OTC derivatives to name a couple of the games.

[DesuMaiden]

Desu,

Money was around for a very long time before mankind began exploiting oil, and money will still be around in some form or another, after the oil age is over. ( If we don't destroy the natural environment first ) Money is a means of exchange, and whatever people agree upon to be that means of exchange, will be money. Whether it be sea-shells, animal hides, sticks, stones, chickens, bones, paper, or now even plastics.

Money is a claim on future human labour. Whether that human uses muscle energy, animal muscle energy, gravity, solar energy, heat energy from burning wood, coal, or oil, only determines the amount of goods or services that human labour can produce. So I guess you could say that money represents energy, but the energy that it represents is human energy, because without human labour, there would be no exploitation of energy sources, and there would be no money.

So I was right the whole time. Energy is axiomatic to money but not the other way around. Without energy, money would have no worth.

[vtsnowedin]

So let me rephrase the question...what is more important...the money supply in the bank or the oil supply in the ground? I think everyone will arrive at the conclusion that the oil supply in the ground is more important because oil is the edifice upon which our modern economy was built on. Money is just an exchange medium for goods, but without any goods to exchange, money has no inheritant value...money is worthless. Oil has inheritant value because it is used to manufacture countless products and used to transport all of our goods.

Oil was used to build modern civilization. Money's worth is essentially imaginary. It has no real worth.

I think you are going to far towards the alter of the oil god there.
Consider not just the oil but the coal, iron , copper, aluminum that are also in the ground and the grain in the fields and storage silos, the livestock on the range and feed lots, factories, houses, infrastructure, (roads , bridges, water mains , electric grids, dams power plants) etc. All these things have inherent value and can be sold for money or to back the value of money. Then you have the skilled labor and management that is needed to extract, produce and use all these things and the store of knowledge in our libraries and universities that can improve on those skills and increase efficiency and productivity. And finally you have the service industry which will feed cloth and entertain the skilled laborers so that they have more time to devote to base production, all for a fair share of the money gained therefrom.

Money's worth is essentially imaginary. It has no real worth.

No as long as someone will except it in exchange for something (Goods or labor) that the holder wants and that someone then can exchange it yet again for something they want the money has just what value the parties agreed it had.
Gold coins would be useless as money if no one would except them and hazel nuts would work fine for money if everyone accepted them for payment of all debts "public and private".
Oil is a big part of our economy but not the only thing. Without labor ,management and machinery to use it, it just sits in it's barrel and waits.

[dolanbaker]

Oil in the ground.... Mmm... You do realise the difference? A hundred years ago there were lots of places you could pick it up from a spring with a bucket. These days, miles underwater, miles under the sea floor. Production costs anywhere from $10 to upwards of $100 a barrel. It's not worth anything until it's extracted. It's not worth extracting if you can't get what it cost to get it out at market. So money is very important in relationship to oil. No money, no oil.

There will be no modern economy without oil...oil matters more than money because without oil, there would be no money.

Yes there will! But it will be very different than the world we currently live in.
Much slower & (most likely) less populous, unless agriculture can be made to produce similar quantities of food without oil.

Don't forget that the "oil age" is only 80 - 150 years old, depending on where in the world you live.

[DesuMaiden]

Oil in the ground.... Mmm... You do realise the difference? A hundred years ago there were lots of places you could pick it up from a spring with a bucket. These days, miles underwater, miles under the sea floor. Production costs anywhere from $10 to upwards of $100 a barrel. It's not worth anything until it's extracted. It's not worth extracting if you can't get what it cost to get it out at market. So money is very important in relationship to oil. No money, no oil.

There will be no modern economy without oil...oil matters more than money because without oil, there would be no money.

Yes there will! But it will be very different than the world we currently live in.
Much slower & (most likely) less populous, unless agriculture can be made to produce similar quantities of food without oil.

Don't forget that the "oil age" is only 80 - 150 years old, depending on where in the world you live.

You are right. Without oil, our population will be smaller. Also the economy will be much slower.