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To: mnehring
Basing a currency on a consumable is probably not the best way to go, especially during a crisis. Grain is probably the worst. A bad harvest in the middle of a problem, and suddenly you have a financial crisis as well. Oil has the same disability. A flexible currency is best.

A major reason why gold is considered stable is because it isn't really used for anything else. It doesn't tarnish in its purest state, nor corrode. Put it in a fire, and it comes out gold. It does have its place as a store of wealth, but not as currency in an economy of scale anymore.

63 posted on 01/04/2011 1:40:44 PM PST by ex 98C MI Dude (Alea Iacta Est)
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To: ex 98C MI Dude

That’s a pretty good thought. My thoughts regarding tying it to a different set of commodities is that if you have a real SHTF situation, commodities like grain and oil would be directly bartered, increasing demand and thus, pulling up the price of the currency tied to it. It could actually result in a faster stabilization in one of these situations.


66 posted on 01/04/2011 4:57:58 PM PST by mnehring
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