Oh look! Another bubble
(twitter.com)
You're viewing a single comment thread. View all comments, or full comment thread.
Comments (49)
sorted by:
I understand the definition of money. The problem is tying it up to anything as specific as energy. It's not encompassing enough.
I just don't see how you can tie it to multiple things unless they're inherently linked supply-wise, otherwise the value would get unstable if supply of one thing independently went up whilst the other went down.
It either has to be tied to one specific thing (gold/oil/etc.) or it becomes completely abstract again.
The value of a unit of currency is the total production divided by the amount of currency. It's abstract in the sense that it represents everything that is deemed as valuable. You just mint and spread the money around and people will, on their own, end up assigning money its value as they trade. It doesn't need to be tied to any indicator. The free market can assign the value through natural exchange.
It doesn't need to be tied to an indicator, but when it is it's a lot more resilient to the kind of manipulation that can happen when the market isn't allowed to be truly free, if for no other reason than because it puts physical limits on how far you can stretch the truth.
From where I'm standing the market hasn't been properly free for a veeeery long time, and with all the powerful information control and obfuscation tools in the pipeline, along with the almost universally expanding government powers in the west, it's not looking to get any more free any time soon. So I think there's still value in considering currency paradigms that work in real-world conditions as well as ideal ones.
Tying the value of currency to energy is as unrealistic as letting the value be determined by the free market. Neither will happen. Faced with two fantastical options, I think mine is a better fictitious solution.
But this conversation is getting silly. Let's end it here, friend.