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The amount currency "required" by an economy correlates to the size of the economy. The available energy commodities are not guaranteed to track the size of an
by bradleyland 14y ago
The amount currency "required" by an economy correlates to the size of the economy. The available energy commodities are not guaranteed to track the size of an economy. That's why we see fluctuations in the cost of energy.
> A major issue is that we don't have anything that's usefully dense in energy content to use as money.
I don't really understand this comment. If you're going to design a commodity backed currency, the energy density of the commodity is irrelevant. You don't have to swap uranium bars at the store in order to use an energy commodity as currency. You issue contracts representing your ownership of a specific amount of the commodity in a warehouse somewhere.
Sound familiar? Commodity backed currency is not new. Swapping out the commodity just ties you to another system of supply & demand.
- randallsquared 14y agoHaving a piece of paper that says you owe me 6 trillion kJ is fine until it turns out you can't pay up. Ultimately, someone has to have the actual backing commodity. This is no problem with USD, since it's all just numbers anyway. It's less of a problem for gold than for energy, since 1 400oz bar is worth over half a million USD. Half a million USD in barrels of oil is more than 5000 barrels. Ideally you'd want something that was easy to store to base your economy on. :)