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Martin:

Well, I thought you mean this would be the only thing, so I simply didn't know what you mean.

Actually I don't think it will be universally accepted, because it is not so easy to redeem. For practical reasons, a gold standard would be easier with respect to that.

Is there a country you are aware of that does not use energy?

Gold is limited in quantity, of little practical use, and routinely manipulated.

Martin:

This might make sense in a country, that has natural gas in its ground. But for a country, that imports most of its gas, that doesn't seem to be a very good idea, to have a currency redeemable in something that it has to buy, and that can't be easily stored.

I advocate an International Energy Clearing Union, based upon an energy standard. Units redeemable in energy would be exchanged for other forms of value by reference to such an energy standard. Positive and negative balances will of course exist between nations. Energy imbalances will have to be dealt with within a coherent global energy market framework. I believe that not only is this possible but that such a system of global energy accounting is the only way in which carbon use can be addressed.

Martin:

Where is the fundamental difference,

The fundamental difference is that the cost of finance from a forward sale of production carries neither an interest cost nor a return on equity to rentier shareholders.

Martin:

It is not clear how to come from the current state, with lots of existing credit, to the alternative world, where credit plays a minor role. Somehow that has to be resolved.

Unitisation of land rental value is straightforwardly achievable now, with no need for any new laws, and such unitisation may replace secured debt.

Banks would gain from such a debt/equity swap of distressed debt because they would receive far more from the sale proceeds of Units than they ever could from a restructuring of debt.

This isn't an alternative world: it's a complementary world that could start working tomorrow.

Martin:

So there ARE still sterlings. And what is now a sterling? Is this the old paper money running parallel, or is it something connected to this new form of financial asset? What is the market price of energy? I thought the currency than is pegged against energy.
And still, how do you pay taxes on your units, if this something different than sterlings, if you redeem the energy? This is not a trivial question. That is essentially what defines legal tender. Most local money projects et al. are simply tax fraud.

Unfortunately I still don't get the big picture, and what the role of your new financial idea in it is.

I see energy as the basis of a new global common currency which will make the dollar redundant.

National currencies will remain, but I think may come to be re-based directly on land rental value through wholesale unitisation of property.

"Peer to Peer" credit clearing - as with the Swiss WIR - is what enables the circulation on credit terms of whatever forms of "Money's Worth" are acceptable between sellers and buyers.

As I have pointed out, billions of Swiss Franc's worth of goods and services change hands not for Swiss Francs, but by reference to Swiss Francs.

And as I understand it tax is payable in the normal way even though  "fiat" Swiss francs are not involved.

Naturally, if an entire economy went down this road, there would be no profit and therefore no tax on profit. That's not fraud - it's a consequence of a Peer to Peer" economy. The logic of such a P2P economy is of simple and inescapable levies on value transfers.

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

by ChrisCook (cojockathotmaildotcom) on Fri Feb 20th, 2009 at 10:01:49 PM EST
[ Parent ]
ChrisCook:
which will make the dollar redundant.

...in its role as a global reserve currency at least. It would still have a domestic role in the US.

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

by ChrisCook (cojockathotmaildotcom) on Fri Feb 20th, 2009 at 10:10:55 PM EST
[ Parent ]

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