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Wildswimmer Pete

Food to be the new currency?

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Given the continual growth of population together with the depletion of resources, are we going towards the eventual adoption of the food kilocalorie as the basis for a future monetary system?

 

Our current system depending on fiat "funny money" is doomed to collapse.  While energy could (and probably will be) the new "gold standard", we all still have to eat.  I suspect that food and drinking water will be the blue touch paper of any worldwide conflict.

 

Edit: typo

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No.

 

If we are talking globally then we need to understand firstly that we are fully capable of producing a surplus of food, water and energy (though their will certainly be regional conflicts where poor nations can't afford the technology) and so no global conflict over these resources will occur. The resources that we have to concern ourselves with slightly (although most see new veins discovered and in decades to come we may even see space mining) are the actual rare earth metals and those commodities in significant demand (oil). 

 

Secondly, you claim that we need to move to a commodity based currency (i'll get to food in particular soon) despite the fact that currency is a means of exchange and fiat money allows inflated capital formation because people can borrow against future earnings/asset prices and then banks can borrow against those expected revenues as well. It's only inherently unsustainable if the risk premiums (interest rates) don't cover the default rate and far from moving to a commodity backed currency, we can simply tighten leverage ratios to prevent silly lending (assuming you believe that tighter credit availability would encourage banks to lend towards more productive assets). Control the rate of inflation of the credit supply and you somewhat reduce the risk of defaults because loans become more valuable as a source of income to banks. 

 

Finally, your choice of food is interesting although i don't think would be wise. Gold was previously chosen both because of its perceived value but also because at the time it wasn't really used in much beyond jewelry which is sold at a price nowhere near the market price anyway, in essence nobody would really mind if central banks set the price level and controlled the supply. With food, we don't see a similar pattern. For one thing, which food stuff do you want to go with (or a basket of foods), for another we see elastic demand patterns for individual foods based on a variety of factors. What this all means is that a food backed currency is not plausible because people would mind you controlling the supply of food and setting the price.

 

I don't see the need and i fear you may have bought into the scare stories. Africans may starve in the future, most of the world won't.

 

This assumes that you were not suggesting bartering in which case i point you to the economics and finance section of your local Waterstones.

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It's the old FIAT currency vs. a Representative Currency. As long as there are people with massive excess wealth then both are subject to manipulation.

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It's the old FIAT currency vs. a Representative Currency. As long as there are people with massive excess wealth then both are subject to manipulation.

 

Can 'excess wealth' ever be prevented in a state which allows private property rights?

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Whatever you base your currency on there's alway going to be the haves and Have nots ,it's Darwinian IMO ...

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It's the old FIAT currency vs. a Representative Currency. As long as there are people with massive excess wealth then both are subject to manipulation.

But, if you use food & water as a currency, the parasites (financiers) can't take a cut?? And, what exactly do financiers produce?

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Whatever you base your currency on there's alway going to be the haves and Have nots ,it's Darwinian IMO ...

I don't think Darwin's definition of 'the fittest' has anything to do with money or guns...It's a common enough fallacy, among those who've not read (and understood) him, however? :D

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But, if you use food & water as a currency, the parasites (financiers) can't take a cut?? And, what exactly do financiers produce?

That's why I suggested the kilocalorie - it represents a more basic need rather than the kilowatt.  Regarding our current funny money, I hope to live to see the whole Western monetary house of cards come toppling down.

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But, if you use food & water as a currency, the parasites (financiers) can't take a cut?? And, what exactly do financiers produce?

 

You'd change the entire system to stop them taking a cut?

 

That's why I suggested the kilocalorie - it represents a more basic need rather than the kilowatt.  Regarding our current funny money, I hope to live to see the whole Western monetary house of cards come toppling down.

 

I'm assuming you don't mind the hyperinflation that would come from complete collapse before we moved to your fruity system?

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But, if you use food & water as a currency, the parasites (financiers) can't take a cut?? And, what exactly do financiers produce?

No, well actually they can if they 'own' the land, but food and water need to be moved from areas of sufficiency to areas of insufficiency. There in lay the problem.

 

Finance provides the monetary 'oil' to make these movements and transactions. A whole section of finance is devoted to the futures markets. Everything and anything has a value and we use money as a basic common denominator to trade say wheat for tea or rubber.

 

Private agreements may exist such a joiner doing work for a gardener and vice versa. On the whole they work OK but are usually very local but can open up a tax minefield if discovered by the IR

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No, well actually they can if they 'own' the land, but food and water need to be moved from areas of sufficiency to areas of insufficiency. There in lay the problem.

 

Finance provides the monetary 'oil' to make these movements and transactions. A whole section of finance is devoted to the futures markets. Everything and anything has a value and we use money as a basic common denominator to trade say wheat for tea or rubber.

 

Private agreements may exist such a joiner doing work for a gardener and vice versa. On the whole they work OK but are usually very local but can open up a tax minefield if discovered by the IR

Fair point, frog...But it'd sure give the IR a run for their money? :D

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You'd change the entire system to stop them taking a cut?

 

 

I'm assuming you don't mind the hyperinflation that would come from complete collapse before we moved to your fruity system?

But what, pray, is the financiers' societal contribution, other than £billions in 'unearned' income for themselves?

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Finally, your choice of food is interesting although i don't think would be wise. Gold was previously chosen both because of its perceived value but also because at the time it wasn't really used in much beyond jewelry which is sold at a price nowhere near the market price anyway, in essence nobody would really mind if central banks set the price level and controlled the supply. With food, we don't see a similar pattern.

Mere fripperies and baubles.  Gold, platinum, iridium, palladium, gallium etc. as well as the rare-earths are essential for the electronics industry upon on which our modern civilisation depends.  Example: our sunrise room-temperature superconductivity programme ironically depends on the rare-earths.

 

The kilocalorie is basically a unit of heat, in other words the energy we need to run our metabolism.  The calorific value of a given food is readily evaluated by burning a sample of said food in oxygen in a bomb calorimeter.  That's what's shown in the nutritional data on every food.  What's wrong with pricing a pack of food in Kcal rather than £p?  Calorific values vary the types of food - a stick of celery is 16kcal, a bar of chocolate is more like 500kcal.  Different energy densities.

 

"For one thing, which food stuff do you want to go with (or a basket of foods), for another we see elastic demand patterns for individual foods based on a variety of factors. What this all means is that a food backed currency is not plausible because people would mind you controlling the supply of food and setting the price."

 

See above

 

"I don't see the need and i fear you may have bought into the scare stories."

 

I have a scientific background - I don't do scare stories.  Have you ever worked in research? - a discipline that depends on futurology.

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But what, pray, is the financiers' societal contribution, other than £billions in 'unearned' income for themselves?

 

Capital formation. 

 

Moving from a barter system to using a currency as a means of exchange and then to fiat currency (currency creation borrowed against expected currency that will exist when the mortgage is paid off) means that an entire industry has sprung up who's sole aim is to create new and inventive ways of creating more capital.

 

Whether you consider this really productive or the fiat system and capitalism serving their own ends (i.e. misallocating resources as a positive feedback within the system) depends on your philosophical bend.

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Mere fripperies and baubles.  Gold, platinum, iridium, palladium, gallium etc. as well as the rare-earths are essential for the electronics industry upon on which our modern civilisation depends.  Example: our sunrise room-temperature superconductivity programme ironically depends on the rare-earths.

 

The kilocalorie is basically a unit of heat, in other words the energy we need to run our metabolism.  The calorific value of a given food is readily evaluated by burning a sample of said food in oxygen in a bomb calorimeter.  That's what's shown in the nutritional data on every food.  What's wrong with pricing a pack of food in Kcal rather than £p?  Calorific values vary the types of food - a stick of celery is 16kcal, a bar of chocolate is more like 500kcal.  Different energy densities.

 

"For one thing, which food stuff do you want to go with (or a basket of foods), for another we see elastic demand patterns for individual foods based on a variety of factors. What this all means is that a food backed currency is not plausible because people would mind you controlling the supply of food and setting the price."

 

See above

 

They are today but the gold standard has not been used by most of the world in decades when these things were not important.

 

Ah. Well in that case it would be a bad idea because despite the celery being 31 times cheaper, the chocolate may only have cost twice as much to produce. 

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Capital formation. 

 

Moving from a barter system to using a currency as a means of exchange and then to fiat currency (currency creation borrowed against expected currency that will exist when the mortgage is paid off) means that an entire industry has sprung up who's sole aim is to create new and inventive ways of creating more capital.

 

Whether you consider this really productive or the fiat system and capitalism serving their own ends (i.e. misallocating resources as a positive feedback within the system) depends on your philosophical bend.

That sure looks like nothing to me...So why is it that, when they all collude in a monumental screw-up, Joe Taxpayer always foots the bill?

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You'd change the entire system to stop them taking a cut?

 

 

I'm assuming you don't mind the hyperinflation that would come from complete collapse before we moved to your fruity system?

In anyone involved in research the mindset is "what if". Mine is.  Which fruit? Calorific values vary greatly :D

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They are today but the gold standard has not been used by most of the world in decades when these things were not important.

 

Ah. Well in that case it would be a bad idea because despite the celery being 31 times cheaper, the chocolate may only have cost twice as much to produce. 

That's because you are used to thinking in terms of £p, not energy. It's Energy that drives everything in our civilisation be it expressed as kcal or kW

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That sure looks like nothing to me...So why is it that, when they all collude in a monumental screw-up, Joe Taxpayer always foots the bill?

 

In the case of the recession, removing a bunch of money from the money supply at once once have been devastating. 

 

That's because you are used to thinking in £p terms, not energy. It's Energy that drives everything in our civilisation be it expressed as kcal or kW

 

Your probably right. I still don't see the need though. 

 

Why will this new system satisfy my self interest more than the current one?

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In a bank-controlled system where fiat currency is basically created and lent out at usurious rates, you can't make your own money. Food is different - it can be produced by others than the banks.  You can grow your own money.

 

Anyone able to buy directly from the farmer? Look at the difference in price compared with supermarkets.  All those middlemen and financiers taking their cuts.   Next time you buy produce, try a farmers' market even if it's further than the local retail shed, and pocket the difference.

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In a bank-controlled system where fiat currency is basically created and lent out at usurious rates, you can't make your own money. Food is different - it can be produced by others than the banks.  You can grow your own money.

 

Anyone able to buy directly from the farmer? Look at the difference in price compared with supermarkets.  All those middlemen and financiers taking their cuts.   Next time you buy produce, try a farmers' market even if it's further than the local retail shed, and pocket the difference.

I think I'll do that, WP. Maybe I can buy smoked chicken?

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I just traded a ripe squash for a fully grown cabbage today, enjoying my new currency. Supply and demand working well, as my trading partner and I had both failed to grow each other's best crops. This currency only works at weekends though.

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I just traded a ripe squash for a fully grown cabbage today, enjoying my new currency. Supply and demand working well, as my trading partner and I had both failed to grow each other's best crops. This currency only works at weekends though.

That's barter :D

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