Exploring Hydrocarbon Depletion
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mattduke wrote:Why bother with paper at all? It leaves too much room for fraud. Just use various weights of precious-metal coins. There is no need for paper at all. That was Thomas Jefferson's opinion too.
RacerJace wrote:This may sound a bit Star Trekky, and I'm thinking about many years in the future, but how about energy as a form of currency? :
Locutionist wrote:Jaws -- a gold-backed local currency is indeed local. Beyond a certain geographic range, using the notes is a hassle for merchants, because they have to travel back to the administrative office to trade them in for either gold or FRNs. Handy for the locals, not so much for out-of-towners. That is also part of the reason for the use of paper, to keep the money circulating locally. If someone else set up a similar currency in an adjacent county for example, that office might choose to honor the original currency, but so much the better for weaning the local economy off long-distance shipping.
jaws wrote:That doesn't matter. The value of your currency is tied to gold, the value of which is set on global markets. Someone from outside the locality could redeem his notes for gold, then walk away with the gold. The money supply would shrink. To grow the money supply, the bank would have to buy gold on the global market. The notes would circulate locally, but the value of the notes would still be set on global markets.
I don't need to read through a stream of hippie ranting to know that gold is a global currency, not a local one. That's why the gold standard was the money of the global economy in the late 19th/early 20th century. It was a global money.Locutionist wrote:Jaws -- you didn't read the linked article, did you?
Some people in the locality served by the currency will likely horde gold-gram notes until the price rises. I don’t consider this to be either speculation or a problem—this is “savings,” and is what people should be doing anyway. Furthermore, hording gold-gram notes effectively decreases debt, as inflation drives down dollar-denominated debt.
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