It would be more practical to break this down and move up the production food chain, say to a certain amount of corn, or a square-meter of arable grain producing land, but you get the point.
The currency would represent an asset - notably important it:
1) Has inherent value
2) Is limited
3) Is tangible
4) Is not subject to inflation
Perhapse a starch-Calorie dollar?
Fractional reserve lending? Not a chance - must go. Fractional reserve lending was _devised_ as a way to confiscate and consolidate wealth. It is a weapon of arbitrage, and inevitably guts the economy in which it is practiced. There's no other way to say this: a bank must not have the authority to extract value from money already in circulation, transfer that value to itself, keep the asset and flood the economy with worthless currency.
By making every piece of currency represent a real asset somewhere, you enforce that money supply growth = wealth creation. Essentially, you enforce that services or property provided in trade for currency are the actual value of the currency traded for them. The mechanism of "wealth theft" is thereby short-circuited.
Would this work today? Yes, but the current practice of hoarding and concentrating wealth would quickly break world economies. Corporations and individuals would have to provide services of equal value to their income in the economy in which they engaged in commerce. If they took out more than they put in, the economy would tank. If they put in more than they took out, they would tank.
Why don't we do this? We used to - it was the gold standard. 1 oz = $25. Then "There wasn't enough money," so we upped it to $35. Again, "there wasn't enough money" to keep the economy running, so we dropped it altogether.
There "wasn't enough to go around" because some entities were holding too much currency and not re-injecting it into the economy. Not enough currency = recession/depression as commerce grinds to a halt (no currency - no trade). Since our currency was based on a limited resource (gold) we could print money as fast as we could mine gold. That standard was too limited.
Why? The population engaging in the dollar economy was also growing faster than the money supply. Less currency injection, plus currency hoarding, equals a strangled economy. With no better alternatives, we basically said screw it and printed our way into a booming economy.
Yes, unfortunately, the really ugly reality is that if we pick an inherently limited asset to back our currency, the flip side of a stable currency is a stable population.
Solution? Population control. There's no way around this. Either people take an active role in reducing the speed at which they reproduce so we bring our population to a level that is sustainable by our renewable energy sources (food), or mother nature will step in and force the issue. It will be ugly and horrifying. It will be painful. It will be done. It is inevitable.
Stable currency = stable population + real & limited asset backing.
So how do we implement this? It's actually very simple. We don't need a new dollar, or a banking make over. It's actually so simple, you'll think "duh" or won't believe it.
1) Demand that you be compensated an amount of currency that, based on it's buying power at the moment, represents the value of the thing you create or the service you provide.
2) Only exchange an amount or currency or debt that again, based on it's current value, represents an amount of value comensurate with what you are purchasing.
We keep having the same problem - throughout history, but most recently, just prior to the advent of powerful unions. Unions allowed workers to demand compensation commensurate with the work they provided. This worked for a while, and the economy boomed. Then two things happened: a combination of globalization, and greedy over-powered unions. Having work done in the United States became more expensive than it was "worth" at the time.
Bye jobs.
There is a balance. A balance that is maintained by a stable currency, and the demand of _equitable_ trade of labor and goods for that currency.
Paying $300,000 on a loan for a house that's "worth" $100,000 at the time of purchase is the glaring example of why our currency is about to blow. Land values increase slowly, and a portion of that 3-4% everyone throws around gets chewed up by "inflation." More than that, banks price the future value of the property into the interest rate so that the total loan repayments are larger than the future value. What did we do when we took a loan for $300,000? We traded $300,000 for an asset that can only be sold for $100,000. Where did the $200,000 come from? Our future promise to perform some kind of useful activity (work). Where did it go? The bank. Did you get anything for your $200,000 of work? No. You got the priviledge of using someone else's money. As we're seeing with the credit market collapse, that privilege has zero nominal value. You can't eat it, you can't get out of the rain in it, and as several huge banks are struggling to learn: you can't even sell or trade it at a nominal value.
That's why people on this board call people with loans "debt slaves." You've sold your future(work). And what did you get for $200,000 of your future? Nothing. You got owned.
