Your argument is sound, Peter. I can follow your reasoning clearly. And, I am not necessarily disputing you, but are all resources the same as "natural resources?" It does seem, on the surface, anyway, that petroleum has a universal utility and demand, and there is a capital cost to producing it sufficient to make it a scarce commodity. My curiosity, however, is concerning what is there if anything that can serve as a universal basis for currency? ----- Original Message ----- From: "Peter Todd" To: "Microcontroller discussion list - Public." Sent: Monday, March 31, 2008 12:44 AM Subject: Re: [OT]: Unbelievable and a bit scary! > -----BEGIN PGP SIGNED MESSAGE----- > Hash: SHA1 > > On Sun, Mar 30, 2008 at 11:58:21PM -0400, Rich wrote: >> You are right on, IMHO about the problems with gold. If a person or >> agency >> holds dollar-denominated assets and the dollar rests on speculation and >> moving trends that person or agency is not secure. But gold is not >> necessarily the answer. But if a nation has natural resources, even >> commodities like copper, grain and so on that is fairly stable, is that >> something that can work? For example, suppose a nation produces >> petroleum, >> refined petroleum products such as gasoline, and petrochemicals. Is >> there >> some universality of utility and demand that values the petroleum and >> byproducts so as to provide a basis for currency? Just a thought. > > I'd argue no. If anything, resources tend to be one of the least stable > economic metrics out there. If the basket of goods that $1 was equal too > was fixed you'd see huge changes in the value of money, changes that in > the long run will likely have very little to do with the rest of the > economy. If you are selling long distance networking equipment, why > would you want to conduct business with a currency based on copper > prices? (well, unless you *really* dislike photons...) Give it a decade > or two, and for all we know we'll be using aluminum and silver almost > exclusively, and someone is going to have to update the weightings on > the basket of commodities. But, if that basket is getting updated, it's > open to manipulation, so why not just go back to a fiat currentcy in the > first place? > > At least with gold the historical nature of it meant that new gold > production is a small percentage of world gold stocks; so much is hidden > away in vaults. It sort of approximates the "ideal" of a fixed money > supply, which is anything but ideal anyway. Commodities give you either > a supply almost exclusively dominated by short term events, or with a > basket system they still requiring government interference and are open > to government manipulation. > > - -- > peter[:-1]@petertodd.org http://petertodd.org > -----BEGIN PGP SIGNATURE----- > Version: GnuPG v1.4.6 (GNU/Linux) > > iD8DBQFH8GwR3bMhDbI9xWQRAqXAAKCbBCCWcZ6tq92w7S8uywgSzuMZ7QCgotON > 5mNGgt5m1E8nPRkUhjL1DX8= > =NDIM > -----END PGP SIGNATURE----- > -- > http://www.piclist.com PIC/SX FAQ & list archive > View/change your membership options at > http://mailman.mit.edu/mailman/listinfo/piclist -- http://www.piclist.com PIC/SX FAQ & list archive View/change your membership options at http://mailman.mit.edu/mailman/listinfo/piclist