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Jerome:

The currency actually used to make the payment makes very little difference as long as the underlying currency to value the trade is the dollar.

"To value" here must mean to price such that USD is a unit of measurement to express transaction value of any commodity Q ("trade") which is not the use-value or production cost of or demand for the commodity Q. USD is the price of the currency of settlement. USD still dominates currencies of settlement in part because of FRB glut policies. However, if USD is not the currency of settlement, the transaction event yields ForEx profit (loss).

Elsewhere Chris is promoting a unit of measurement other than currency to express transaction value as well as demand for commodity Q, e.g. work, kWh.

Where did Jerome comment, "it doesn't matter what currency oil prices are denominated in"?

Diversity is the key to economic and political evolution.

by Cat on Wed Oct 7th, 2009 at 08:19:21 AM EST
[ Parent ]
Cat:
Where did Jerome comment, "it doesn't matter what currency oil prices are denominated in"?
Oh, we've been rehashing this argument for many years now...

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
by Migeru (migeru at eurotrib dot com) on Wed Oct 7th, 2009 at 09:14:53 AM EST
[ Parent ]
But if I'm misrepresenting his position he can always say so...

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
by Migeru (migeru at eurotrib dot com) on Wed Oct 7th, 2009 at 09:20:46 AM EST
[ Parent ]
Cat:
Chris is promoting a unit of measurement other than currency to express transaction value as well as demand for commodity Q, e.g. work, kWh.

Indeed, and I'm pointing out that this distinction already occurs in any barter system which involves credit.

So in the Swiss WIR system no Swiss Franc credit objects (ie fiat currency Units) change hands. Instead, goods and services change hands on trade credit terms (time to pay) by reference to Swiss Francs as a purely abstract "Value Standard" or unit of measure.

The framework of trust needed (to police debit balances) comes from property backing - ie WIR members have to give a charge over their property. The WIR accounting/monetary system works, and has worked since 1934.

I advocate extending such credit clearing more widely (ie to individuals as well as businesses) within new frameworks of trust, backed by provisions into default pools.

This requires currency units which are generally acceptable in exchange, (ie fungible) and in my view, Units redeemable in the use value of location, and of energy, are natural candidates. It also requires Credit-Service-Providers-Formerly-Known-As-Banks.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Wed Oct 7th, 2009 at 09:23:17 AM EST
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