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Energy based currency?

  • 01-04-2011 2:41pm
    #1
    ttmd
    Closed Accounts Posts: 81 ✭✭


    Saw this being mooted in the comments section of a blog post by Martin Wolf in the FT - is it worthy of discussion? Seems to make more sense than a gold standard at least.


Comments

  • #2
    andrew
    Moderators, Science, Health & Environment Moderators, Society & Culture Moderators Posts: 3,372 Mod ✭✭✭✭andrew


    Any chance you could link the blog post?


  • #3
    ttmd
    Closed Accounts Posts: 81 ✭✭ttmd


    http://blogs.ft.com/martin-wolf-exchange/2010/11/01/could-the-world-go-back-to-the-gold-standard/

    The comments I was referring to are by graeme_b and they begin at November 1 at 8.18.

    Just to clarify- I read the forum charter, and I hope the topic is not too strange/radical. It just struck me as an interesting idea, and I was wondering if it could be fleshed out or easily dismissed.


  • #4
    andrew
    Moderators, Science, Health & Environment Moderators, Society & Culture Moderators Posts: 3,372 Mod ✭✭✭✭andrew


    I don't know how you could base a currency on something as intangible as 'energy.' It just wouldn't be possible. The 'credibility' part of that article is about how was vital, when there was a gold backed currency, for people to be able to redeem their cash for gold. This wouldn't be possible. And then, while I understand that 'energy can neither be created or destroyed,' would changing it to a form that can't be used for money destroy the monetary base? And what about reserves?? In short, there are several logistical/implementation problems; and even if it suffered from no implementation problems, it'd eventually suffer the same problems as the gold standard, in that it's an arbitrary and limited resource.

    Basically, logistically it doesn't have the characteristics necessary to be money, and even if it did, it'd have the same problems as the gold standard did, only there's more 'energy' than there is gold, so some of those problems would be put off for a while, and so energy wouldn't be a suitable currency.


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