Wednesday, April 23, 2008

The Greenback: Toward A New Monetary Policy

As we transit to a world of resource depletion and the reversal of the Permagrowth model, what is the proper monetary and currency regime? Clearly, not the existing fiat/credit currency, which depends entirely on financing present consumption by discounting future growth that may never occur. Just as bad would be a throwback to precious metals. It would suppress economic activity without providing incentives for developing alternative energy resources.

Instead, I believe we should implement a monetary system that uses renewable, "green" energy as a benchmark. In previous posts I have called the new currency the "Greenback", an allusion to the fact that for most people nothing would change in their daily routine. Same dollars, same bank accounts, same credit cards. The monetary institutions would also be retained: the Fed and the fractional banking system. The only change - admittedly a big one - would be the rate at which money supply is allowed to expand. Let's call this rate "M green", or M(g) for short and see how it will be calculated.

To begin with, we have the following energy consumption data from the US Energy Information Administation (EIA, see chart below). The discrepancy in percentages is in the original data, but it is very minor.

Data: EIA (2006)

We see that of the total 99.4 quadrillion BTU the US consumed in 2006, 86% was produced by "black" fossil fuels, the rest from nuclear and renewable sources. Adding the last two together gives us the percentage of "green" energy. Though I hesitate to call nuclear "green", it is an indispensable energy source in transiting away from fossil fuels.

For any given period, then, the allowed growth in money supply would be calculated by this formula:

M(g) = ΔE(g)/E(b)

where:

- ΔE(g) is the change in "green" energy consumption from the previous period, in BTU.
- E(b) is the total "black" energy consumed in the previous period, in BTU.

For example: let's say that in 2008 we consume 85 black BTU and 15 green BTU. The following year, we consume the same 85 black BTU but increase green to 17 BTU.

Therefore:

M(g) = (17 - 15)/85 = 0.0235 = 2.35%

i.e. broad Greenback money supply (the equivalent to M3 today) would be allowed to expand by 2.35%.

Putting it in simple terms, money growth would increase with "green" energy use and be constricted if "black" energy grows.

This system would broadly encourage the consumption of green energy and penalize the consumption of black energy, by controlling the money base. A monetary policy that targets money supply has not been used since the early 1980's, when the Fed switched to targeting short-term interest rates (i.e. Fed funds). Nevertheless, the tools and procedures for targeting money supply are simple and consist mostly of buying and selling Treasury securities in the open market.

There are certainly further details that will need to be worked out. Initially, at least, the formula will lead to a restrictive monetary policy and high interest rates. Left unchecked, the elevated cost of money would prevent even "green" projects from going ahead, so exceptions and subsidies should be provided. For example, the government could provide low-cost financing for alternative energy projects.

In addition, GDP growth as measured currently would be impacted negatively. To avoid a prolonged period of high unemployment resulting from sectors of the Permagrowth economy becoming obsolete, the government should implement an appropriate mix of fiscal policy initiatives. For example, increased taxes in "black" sectors could be recycled into "green" sectors, including education and retraining programs and incentives.

Notice that I have not called for a government-sponsored and financed "Greenshot" effort, a throwback to the Apollo Moonshot project. I believe that the proper mix of monetary and tax policies, balanced with liberal subsidies for green/sustainable efforts, will create more than enough opportunity for private enterprise. The prospect for attractive profits will promote vigorous technological advance and produce high value-added jobs.

The whole process will re-invigorate the American economy and society, leading to a long period of global superiority in intellectual and creative advancement. Crucially, we will no longer need to maintain a vast military-industrial complex to guard the world's oil sources and routes. America will once again become the beacon of liberty and hope, instead of fighting bloody resource wars that besmirch our national pride and give birth to sworn enemies.

Final Note: Some readers may not be familiar with actual macro-economic and monetary data and may thus be puzzled by the Greenback's ability to transform the economy. To illustrate, here is a real-life example:

Between 2005 and 2006 US "green" energy consumption grew by 0.53 quadrillion BTU, a tiny increase when fossil fuel consumption in 2005 was 86.4 quadrillion BTU. This means that broad money supply under the above Greenback system would only be allowed to grow by 0.6% for the year. By comparison, the last official reading of M3 growth, before its publication was discontinued in early 2006, was 8.0%.

I expect that the economic effects of such a large difference in money supply growth rates are obvious. If not, please refer to basic texts on monetary policy.

49 comments:

yoyomo said...

Hell,
the following article and video deal with exactly the contradiction of a growing money supply in a resource restricted world although neither comes up with the same solution as you do:

www.energybulletin.net/5944.html

www.brasschecktv.com/page/135.html

the video is a bit long but very entertaining with a good dose of humor however it does attack fractional reserve banking as being mathematically unsustainable with P+I tending towards infinity if there aren't continuous defaults.

Thai, I read the article you posted on income redistribution, I'll meet you back at Lords of Hedgistan.

eh said...

Though I hesitate to call nuclear "green",...

But it is, literally, as we've all learned by watching the movies, where all things radioactive are glowing green.

(BTW, Cerenkov radiation is one of the coolest things I've ever seen, although in a nuclear reactor, where the medium is water, it is blue, not green.)

Your suggestion seems kind of like the gold standard, albeit with a different kind of 'gold'.

Alessandro said...

This is the second time I don't understand this proposal of yours. And I'm a bit surprised becouse usually I understand and find illuminating what you say.

How do you get anything productive done with this different way of manipulating the monetary supply?

If you still give fresh money to the banks, what's going to change? Will they invest in prooductive green energy in order to get more free money?

Shouldn't you use the fresh money to buy the green energy directly, as opposed to government bonds? So you could give the inflation advantage to the producers.

I don't get it.

Hellasious said...

Alessandro,

First of all, money supply is no longer targeted directly by the Fed. Instead, they set the "price" (interest rates) and hope to achieve a desired change in money supply via supply-demand balance in the marketplace. It's part of the "free markets" principle that has become Holy Writ.

However, the system is not working properly any more because of a host of reasons, including the emergence of the "shadow" banking system. The result is that money supply/debt/liquidity exploded upwards in an unsustainable fashion.

Thus, we must set the rate of money growth to something else. By benchmarking it to green energy we kill two birds with one stone: money will grow only as fast as we can transition to an alternative energy regime and ultimately stabilize at rates equivalent to REAL growth, calculated by the increase/decrease of energy consumption. By then most energy should be green, but this is a long way off in the future.

Regards,
H.

Hellasious said...

to alessandro:

Also please read the Final Note which I just added to the main post.

eh said...

I expect that the economic effects of such a large difference in money supply growth are obvious.

This is one of the (ostensible) reasons the gold standard was deemed obsolete: it placed an artificial (according to some) constraint on the money supply.

But it seems this is actually your aim: to constrain money supply -- and hence overall economic -- growth via making it contingent upon development and use of 'green' energy.

Obviously, some people will like this idea/proposal, and others will not. One big problem is that most of the people who possess money and power (many would say those two things are one and the same) today will be amongst the "not" crowd.

Anonymous said...

Great post:

OT: You posted about this last year I believe.... This is a good post I got from Naked Capitalism.


http://feeds.feedburner.com/~r/NakedCapitalism/~3/275990826/debasing-dollar-will-accelerate.html

Econolicious

Thai said...

Agreed, nice post

Andrew Foland said...

You better hope the energy mandarins (and their managers and Cabinet Secretaries) at DoE's EIA are all bright, careful, incorruptible folks. Because you'll be handing them a lot of power.

Arnould said...

.
I found no other economic blog who proposes such interesting thoughts as yours. Thanks a lot for the effort (is it because you were educated as an engineer?).

Now about this suject of end of permagrowth due to the foreseeable end of fossil fuel reserves: I think that most of the people, including our politicians, do not understand this.

When I was 10, in 1973, there was an energy crisis and the oil reserves were estimated to last only 30 years. And ever since then the reserves are estimated to last 30 years. As a consequence my 20 years old son can simply not imagine that he may not be able to buy gas for his bike. Nor can most of the people of my generation. That is a tragedy.

Arnould, France,
.

Thai said...

Thank you Andrew and Amen! The Harvard physics professor understands my point...

Regards

:-)

Hellasious said...

Dear Andrew, you said:

"You better hope the energy mandarins (and their managers and Cabinet Secretaries) at DoE's EIA are all bright, careful, incorruptible folks. Because you'll be handing them a lot of power."

As opposed to the finance mandarins at the Fed and Treasury who currently control things?

Camabron said...

Why would having Gold as a benchmark reduce economic growth? The stability and value of the currency would be a magnet for investors all over (eg Switzerland) and that would be the incentive to develop green energy alternatives. Prices would be in cents and dollars.

Thai said...

Hell, that's a little unfair, Andrew isn't proposing we change the system so that it looks very similar to the way it looks now, you are

(not that I am opposed to changing it, just that you shouldn't kid yourself)

Martin said...

The monetary system in the Book of Mormon:

4 Now these are the names of the different pieces of their gold, and of their silver, according to their value. And the names are given by the Nephites, for they did not reckon after the amanner of the Jews who were at Jerusalem; neither did they measure after the manner of the Jews; but they altered their reckoning and their measure, according to the minds and the circumstances of the people, in every generation, until the reign of the judges, they having been bestablished by king Mosiah.
5 Now the reckoning is thus—a senine of gold, a seon of gold, a shum of gold, and a limnah of gold.
6 A senum of silver, an amnor of silver, an ezrom of silver, and an onti of silver.
7 A senum of silver was equal to a senine of gold, and either for a measure of barley, and also for a measure of every kind of grain.
8 Now the amount of a seon of gold was twice the value of a senine.
9 And a shum of gold was twice the value of a seon.
10 And a limnah of gold was the value of them all.
11 And an amnor of silver was as great as two senums.
12 And an ezrom of silver was as great as four senums.
13 And an onti was as great as them all.
14 Now this is the value of the lesser numbers of their reckoning—
15 A shiblon is half of a senum; therefore, a shiblon for half a measure of barley.
16 And a shiblum is a half of a shiblon.
17 And a leah is the half of a shiblum.
18 Now this is their number, according to their reckoning.
19 Now an antion of gold is equal to three shiblons.

Notice the presence of metals and other useful commodities.

Marty Mitchell Provo Utah

Jenna's Bush said...

I hope the same people who determine our "official" inflation and unemploymnet rates won't be the ones calculating our green energy rate.

Martin said...

The problem with using unproven technologies in determining currencies is the lack of universal acceptance of value.

Martin Mitchell
Provo, Utah

The Obfuscation Oracle said...

sounds like it could work... However, I would like to know what you think of the "green" ethanol program? Do we want more of the same?

damocles said...

Readers clamor for Hell's solutions and when he gives them one they start poking holes in it. Such is the mark of a lively and smart community.

The "Greenback" is a fascinating place to start. Clearly there are potential problems but perhaps less than our current system. What we have now is rather arbitrary. The Greenback seems much more elegant when viewed from the Sustainable Future rather than the Permagrowth past. This is such a huge paradigm shift that it's hard to hold full awareness of the scope of change.

What I don't see yet is how we transition without first suffering a huge collapse of the current system. There may be every reason to do so, but it just seems contrary to Nature.

Anonymous said...

Huh - first time i actually disagree with something you've posted. IMO there is no chance whatsoever for an "American" future with a true constitutional republic unless the FED is abolished. You must know that they are an abomination, and they are in control of creating the fascist nation we have become. Not direct control - see "The Bilderberg Group" for the actual puppeteers, however the most visible control.

There is no future for America with a federal reserve - NONE. And time is running out for us stop them from enslaving us entirely...

All things "Green" are typically good, but not as long as central banks and elite maintain a death grip on our country, our money, our politics, our judges, our energy and our media.

Greenie said...

Wow !! I like your idea Hel. Very creative.

Anonymous said...

H

A very interesting post and some equally interesting comments in response.
Clearly “something must be done” about the whole fiat currency / interest rate / credit crisis – in this respect I thought (start irony) a particularly insightful piece was published today in the WSJ (end irony)

“Libor Hits US Borrowers

The troubles of banks in Europe are pushing up an interest rate widely used in the U.S., prompting the idea of a U.S.-based alternative to that rate, known as the London interbank offered rate, or Libor…… That means the financial difficulties of European banks are having an outsized effect on U.S. borrowing costs.”

For details, please see -

http://online.wsj.com/article/SB120889721800735883.html

On behalf of all Brits, I would like to apologise for creating these problems for the great American borrower.

Regards
Dome

Anonymous said...

domacles,

You're absolutely right...there must be a collapse in order to implement this new currency. The reality is, the US and dollar are headed for an imminent collapse. It WILL happen. The question is whether the collapse is done with a purpose and vision to come out stronger from the other end, or if the collapse just happens on its own creating even more chaos.

Thai said...

Andrew, do you have any thoughts on this?

Darth Toll said...

This post is horribly naive and misguided and that is surprising coming from one as smart as you are about economics. First of all, what we have is a debt based currency, in other words, all "money" is loaned into existence and the Federal Reserve gets interest on this money. This system operates this way by design, courtesy of the elite banking oligarchy, and is of course illegal and unconstitutional. These pigmen make roughly $500B/year on this absurdity for basically doing nothing. The last two presidents that proposed a tax-free (interest free) money supply were assassinated in short order.

Why do you suppose that no matter what party is in power, deficits never seem to disappear? Because the debt-based fee system that the pigmen have created demands more deficits that pay interest to them. Neither party wants to upset the REAL governing power of the Federal Reserve and the 12 member banks.

Why do you think highly inflationary wars are fought? Same answer as above.

Why are we in Iraq? Same answer as above, with the added bonus of maintaining a presence in the middle east in case we need another war for some more debt creation.

Is the war about oil? Not really, although there are some oil-centric elements to the strategy. Currently we are operating under a petro-recycling regime where the Arabs provide us with oil, and we give them money which they turn around and invest in Treasuries and GSE paper and keep our economy afloat with artificially low interest rates. Lately, with the US consumer slowing, the price of oil has needed to be higher to support the massive Treasury bond bubble via petro-recycling, but this isn't quite enough so the Arabs have also been printing in their own currencies to make up the difference.

This has led to a crack-up-boom (CUB) in the region , food hoarding, riots, etc. The Asians were also a big part of the USD recycling operations until recently and have largely dropped out of the game due to skyrocketing inflation and CUB effects in their own nations. The concept for them was similar. Sell cheap crap to the US for $$$, take that money and recycle back into treasuries and agencies to peg the currency to keep the export machine going.

So you see, its about oil only indirectly, but its really about currency regimes. Why would the Arabs continue this recycling when they know that it only makes the CUB worse? (last week was a record $26B FCB infusion!) Godfather Protection Racket - another reason our fleet needs to be stationed in the middle east.

Why would Bush fill the strategic oil reserve to the brim with the most expensive oil ever, in spite of the fact that there is actually a global glut of liquid crude? Same answer as above. We need to give the Arabs enough money so they can recycle without the CUB getting too out of line. $150/bl oil may be necessary to keep the currency regime from cracking. Heck, $180/bl may be necessary. Who knows how high it will need to get?

Did anybody notice a couple of years back when oil dropped below $60/bl for a short time, the Arabs dumped boatloads of Treasuries and rates shot up. The next day, the energy secretary announced a doubling of the strategic oil reserve, oil immediately started its ascent and the 10-year quietly went back down over the next coupled of days. Black Swan over on Mish's board added this up the other day.

The reason that a lot of your proposals will never work is because the PTB don't want them to work - at least not yet. Not because what you say doesn't make sense, but because it would disrupt the petro-recycling regime which is the only thing we have left now that keeps interest rates artificially low.

Having said this, look for an engineered bond collapse of epic proportions beginning in the next month or so as the pigmen purposely allow this regime to fail and gut the GSE's and the Fed. Once the Arabs and the Asians are "all in" the pigmen can pull the rug out and destroy them and do a massive foreclosure land grab and become the land barons of the 2000's. Interest rates will spike higher and the economy will be thrust into GD2. This is similar to what happened in the 1931 bond collapse although this one will be much bigger and more dramatic.

dink said...

So...let's just say, for the purposes of argument, a reader of Hell's blog hasn't been educated on how monetary policy works exactly. What books and/or websites could be recommended to gather up the fundamentals?

Oh so humbly,
Dink

Arnould said...

I did not understand everything in darth toll's post but here is something to read:

"The Americans will always do the right thing," British Prime Minister Winston Churchill once said, "after they've exhausted all the alternatives."

Anonymous said...

You forgot one thing Darth - the destruction of the US as a nation state as a result of the depression, and the creation of the North American Union and the Amero. Soon after that we'll all be fitted with RFID chips, and tracked constantly.

Serfdom...Slaves - with no rights and no freedoms. This is the New World Order - the Bilderberger Groups grand scheme, where they control almost the entire population of earth, and all it's resources. The vision of Nazi's. Know why? B/c these are the same people who orchestrated the rise of hitler and the Nazi regime. Yup - financed by the same elite. (As have been all contemporary wars). Hell - these guys financed the women's lib movement b/c they wanted to tax women in the workforce and take them away from their children earlier so the kids could be put into their dumbed down education system earlier!!! That's how fucked up these people are!! Nick Rockefeller admitted that directly to his friend, producer Aaron Russo (Freedom to Fascism - watch the movie on utube). And he also spilled the beans on 9/11 and "the war on terror" 11 months before it happened.

We have been lulled to sleep and there is no fight left in Americans. This movement has become more and more blatant recently, and they don't even hide it so much anymore. They smell fear, and victory....

The FED is implicit in the coming crash, as this has been planned for a very long time now. So is our executive branch, judicial branch, treasury, SEC, and much of congress. Our military is mostly a pawn.

You better start fighting people. You better start screaming to abolish the FED and the IRS right now....or you will regret it.

Leonard

Greenie said...

You know what you created with that idea Hel? Another silver standard versus gold standard debate.

We been through similar debates around late 1800-early 1900. Some people proposed that USA has vast silver mines and no gold mine. Therefore, the country should abide by silver standard, and treasury should replace customer's silver with gold at predetermined exchange rate.

So you are turning into another W. J. Bryan :)

Greenie said...

"You better start screaming"

I am in a big meeting room now. Should I start screaming??

notso_liquid_paper said...

first,

The FED sets a target rate, the marketplace sets the 30 day T-bill rate in the secondary market.

The notion that the fed sets rates is not the issue.

The issue is what is money supposed to be "like". The growth of money tied to the growth of "alternative or green or purple energy" is not made by one. The choice will come from the participants.

Man is suffering the pain of the elite participants deciding money is now oil, food, and base metals... gonna cap money growth to fertile fields of corn and soy? deep cobalt mines for battery production? uranium deposits?

This is an absolute wish list for the commodity bulls....

notso_liquid_paper said...

why not just tie the money supply to pig-shit, you can burn it for light and heat, you eat the meat that makes it.

dont get fooled by US dollar collapse propoganda of socialist regimes, when the commodity bubble pops, Australia, Canada, South Africa, and Brazillian currencies will be the ones collapsing. Probably nordics as well.....Cultural Conservatism only gets you so far.

wkwillis said...

Well, why not the steel/rebar standard? It's price and availability is certainly countercyclical to the market. It can be produced with coal in blast furnaces and with electricity in arc furnaces, so it's impossible to manipulate the price.

Darth Toll said...

Leonard

Well, I could have said all of those things that you did (which I agree with BTW) but it would have been pointless as I'd be marginalized as a tinfoil-hat crackpot nut, along the lines of Ron Paul or whoever else is a hard money advocate and/or historian of the economic basis for political turmoil. You obviously have decided to pull back the green curtain to expose the truth, as ugly as it may be. I applaud you.

Alfred said...

What you are suggesting, to target the growth of money supply by pegging it to an artificial benchmark, in your case "green" energy consumption, was the reason why the BoE and the Federal Reserve dropped monetary targeting of aggregated money supply in the early 1980s. For decades bank economists thought that they could achieve a particular rate of growth of the money stock by appropriate adjustment of the money demand equation. But in the 1971-1973 period this did not work, as it appeared that the old relationship had broken down. The explanation for that was provided by Goodhart’s Law which finds, "that any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes". Its kind of like the Heisenberg Uncertainty Principle which states, in the context of quantum physics, that the observation of a system fundamentally disturbs it. In simple terms what this means is that a system cannot be observed without a change to the system itself being introduced.

Your idea could have merits in terms of reigning in rampant money supply growth ( US M3 up 20% yoy, global money supply up 10% yoy) but as Gotthart's Law states the interference by itself will break down the relationship. Your suggestion is certainly noble but there are other measure that can be taken to foster green technology. The problem is that at least in this country the Federal government only supports R&D for green technologies to the tune of 0.05pc of GDP and the private sector (ExxonMobil.. ) is faring even worse.

Hellasious said...

A response to some of the comments...

Energy is fundamental, not artificial. It underlies everything we do, our very existence. It is thus the ONLY measure of real activity. The relationship is so solid that in most cases you can estimate real GDP growth by looking solely at energy consumption data.

Let me give you a for instance. What would you rather have on Mars:
a million tons of gold or a million square miles of photovoltaic panels?

As for using "green" energy as a money supply benchmark, it serves:

(a) As a hard brake in the current debt expansion and artificial growth, leading to a more sustainable economy.

(b) Promotes the transition from a depleting "black" world to a "green" sustainable world.

Is this acceptable to the current elites? Of course not - they are stuck way too deep in the oil/finance relationship.

So.. first we must change our elites, or the way they think. It's not impossible: FDR was a rich politico from NY and became "a traitor to his class" when required.

yoyomo said...

I'm with Darth Toll & Leonard,
the Bushler regime can't finance it's deficits from domestic lenders so it needs high oil prices to pry those $ from J6P's wallet, blame OPEC, then get the money recycled into the Treasury market. The only question in my mind is if shrub is too dumb to see how close the inevitable collapse of such an unstable pyrimid is or do they let him sit with the grown-ups when they plot the take over of the world's resources.

I don't know how many of you followed the story of Bechtel when it took over the water utility in Cochabamba, Bolivia. They went around tearing rain gutters off people's roofs to prevent them from collecting rain water so they would be forced to buy all their water from Bechtel at a high multiple of the previous price.

Talk about hubiris!

WRT said...

FDR was a rich politico from NY and became "a traitor to his class" when required.

I can't even imagine what you're talking about here. Aside from central bankers, FDR's probably the man we can hold most responsible for the crony capitalist system we have now.

OkieLawyer said...

Anyone want to take a stab at this CNN report?

Criminals target energy, financial markets, Mukasey says

Mox said...

What happens when the "black" energy decreases as would happen after peak oil? Then you start decreasing the denominator and then even a small increase in "green" gets compounded by the fact that the denominator is smaller than in previous years. As such, if the decline rates for black are great enough, you end up gunning the money supply even as overall BTUs (and overall economic activity are going down). This is would lead to hyperinflation. The money supply should contract as we move into "permadecline" while this system would lead to the opposite conclusion. You need to rework the formula so that this doesn't happen. If we ran our current system properly, this would work, but the Fed has no concept of peak oil, or at least behaves as such.

notso_liquid_paper said...

Fundamental Energy Consumption Data:

this is a haphazard approach to build out Global Growth good times.

as it relates to Mgooogle.

notso_liquid_paper said...

I agree that Global growth good times is a function of the build-down....recovery story, and that is a function of sustainable CURRENT cosumption.

Why are more trucks driving than cars? Why is a false food shortage manifesting in the emrging build-out?

to see the future you must think, live, and understand:
As above, so below.

notso_liquid_paper said...

Okie Lawyer:
I have read your posts, and I am not trying to upset your delicate world, but if you have something to add other than a tag, move on sir or speak to the issues the posters and readers are trying to understand......

notso_liquid_paper said...

Fundamentals change.

the things that cant happen, will happen....keep placing and suddenly removing capital controls, alter short term target rates, announce that you can feed and clothe your peoples.

tell me you are in charge, and I l'll show you how fast that you are not.

notso_liquid_paper said...

"permadecline":

this is the arguement for destruction of people. China has lifted the one child policy, if your gonna pull the trigger....please wait for the 2 for 2 policy..one family, is two children, I have adopted 3 already, do not make the weight greater.

Anonymous said...

Good Post. Having money valued against something of value would be a great idea. Energy, food, etc.

yoyomo said...

Okie,
I've read many articles about the increase in crime as prices rise. Farmers are having their irrigation pipes ripped out for the metal, manhole covers are disappearing, catalytic converters are being chopped out of cars for the platinum and in Poland a section of unused rail was stolen.

Crime is going to be a painful side-effect of resource depletion for every item that can be reused or recycled. Some people come back from vacation and find that their trees have been cut down for fire wood. This is a problem that will only get worse.

notso-liquid,
I'm not sure too many people besides yourself can always understand the point of all of your posts, perhaps a little more effort at coherence would be beneficial. The meaning of unstructured streams of consciousness is not always self-evident.

berto said...

Manufacturers of heavy construction equipment are being particularly hard hit by the current record prices of commodities, such as steel, oil, iron ore and rubber. Yes. we have a great industry. I want to buy this equipments at komatpillar.com

Snowcat said...

The idea of carefully controlling the money supply is fundamentally sound. The growth rate of money supply should be fixed as you say. The currency should be based on energy and a basket of consumables which cannot be hoarded. That last thing is very important. Green energy seems to be a good fit, so I like your idea. If we dream a bit more, green energy should include fast breeding reactors (in a sense, they produce more fuel that they consume) and also fusion reactors (the technology may cost about 1% of the Iraq war to date).

The real problem is getting rid of the debt money system in which we soaking now. Yes, it's totally corrupt but getting dry out of it seems impossible. It'll crumble upon our heads and I suspect we'll be seeing red everywhere for quite a while. Then may be greener times will come...