[Commanding_Heights]

A friend and I were having a conversation about the failing econ. He was arguing for the gold standard when I made an off the cuff statement saying "We should just price everything in calorie or energy units." I was joking at the time but... I thought about it and can't seem to shoot holes in the idea. If we created a value for one unit of energy then products could be priced by that unit. X number units for production + X number of units for delivery + X number for profit. This model would work with capatilism all while reducing energy consumption. Companies would compete by lowering their energy input which in turn allows them to lower their cost to capture more of the market. It would also encourage more local manufacturing. On top of all of that you could accurately guage inflation and deflation across the board. None of the fuzzy math involved that's so often used by the econ heads.

Remarks?

[Tyler_JC]

If energy production increased, the price of energy should fall.

But if energy is the measure by which value is measured, we would see rampant inflation regardless of how much energy it took to produce a product.

We could end up with more energy currency than products to buy with the currency.

And they wouldn't be allowed to increase the price of the good or service because its "price" is a reflection of the energy required to make it.

How would you determine what wages should be paid to employees? And what are they going to do with their wages if there's nothing to buy?

The system just doesn't seem workable but I could be misunderstanding your definition of "energy currency".

[Cashmere]

Money is energy.

Your idea has been implemented at least since the Ind. Rev. started.

[Commanding_Heights]

$this->bbcode_second_pass_quote('Tyler_JC', 'I')f energy production increased, the price of energy should fall.

But if energy is the measure by which value is measured, we would see rampant inflation regardless of how much energy it took to produce a product.

We could end up with more energy currency than products to buy with the currency.

And they wouldn't be allowed to increase the price of the good or service because its "price" is a reflection of the energy required to make it.

How would you determine what wages should be paid to employees? And what are they going to do with their wages if there's nothing to buy?

The system just doesn't seem workable but I could be misunderstanding your definition of "energy currency".

[Commanding_Heights]

$this->bbcode_second_pass_quote('Cashmere', 'M')oney is energy.

Your idea has been implemented at least since the Ind. Rev. started.

[Tyler_JC]

Money is a measure of value.

If gold is money and gold reserves increase, we get inflation (more gold-money chasing the same number of goods).

If energy is money and total energy available increases, we get inflation (more energy-money chasing the same number of goods).

If energy availability declined, we would have deflation (less energy-money chasing the same number of goods).

Moreover, as we use up energy, we are using up money. If we're talking about electricity, there would be no easy way to store it. And do we want people trading in their energy-money for real energy resources like coal if there's a coal shortage? Instead of a run on the bank to take out gold in exchange for the gold paper-money, we'd have people trading in their energy certificates for whatever energy resource happened to be the most valuable at the moment.

Volatility in the gold market caused people to occasionally flood the banks with paper money (gold certificates) in order to get the physical metal. Imagine what would happen every time the Real Price of an energy good changed.

Not all energy forms are equal, either. More people would trade in their energy certificates (energy-money) for gasoline than they would for uranium pellets. And I don't think we want people carrying around uranium for safety reasons.

It's just not a practical alternative.

[Tyler_JC]

$this->bbcode_second_pass_quote('Commanding_Heights', '')$this->bbcode_second_pass_quote('Cashmere', 'M')oney is energy.

Your idea has been implemented at least since the Ind. Rev. started.

[Commanding_Heights]

Thanks Tyler

Those are probably two of the best explanations I've ever read.

[DavidFolks]

Try the "Powerdown, the solution for peak oil" thread. I made a similar suggestion on page 5, and some discussion ensues page 6. Here's the link http://www.peakoil.com/fortopic34467-0-asc-60.html . My second post that page.

Also an interesting thread to read to get a broad view of lots of po issues.

[MrBill]

I have to agree with Tyler. If money is fungible. And freely convertible. And if oil is fungible. Then it is simply a matter of exchanging money for oil and vice versa. If money supply is expanding and oil supply is not then the price of oil as expressed in money will rise. Inflation. As oil becomes more expensive relative to the value of other assets and commodities then there is an incentive to reduce consumption or look for alternatives in any case. The geological fact of peak oil as a finite resource cannot be solved by changing the currency unit in which its value is represented. Measuring oil's value in gold does not produce more oil.