Food-Based Currency A Viable Alternative?

[Dubh the dark]

We'll simply make the Grain Bills legal tender, people come and deposit grain in the store houses in exchange for transferable "Grain Bills".

If the government could build trust in "Federal Reserve Notes" I'm sure "Grain Bills" would be no problem.. Maybe we'd have to wait for the next great depression to come up with a valid excuse for executing such monetary changes but there's no doubt it's possible.

Gold melts, food burns, not to mention the problems with crop disease and/or climate change.

[Shams al-Ma'rifa]

Gold melts, food burns

Paper is even more flamable but we use it anyways.

not to mention the problems with crop disease and/or climate change.

So? Farmers have been able to make profits on crops for thousands of years despite these problems so I don't see how the introduction of a new currency would somehow stop farmers from making any income.

And it's not like everyone's gonna start farming if we use grain as currency. Civilization was able to flourish in the first place because increased food supplies allowed for the specialization of labor. Since not everyone had to farm people were free to do other things.

[Dubh the dark]

Paper is even more flamable but we use it anyways.

So? Farmers have been able to make profits on crops for thousands of years despite these problems so I don't see how the introduction of a new currency would somehow stop farmers from making any income.

And it's not like everyone's gonna start farming if we use grain as currency. Civilization was able to flourish in the first place because increased food supplies allowed for the specialization of labor. Since not everyone had to farm people were free to do other things.

Seriously, if food was currency I'd be planting in my back garden straight away. That is until someone burns my crops, bankrupts me and farms the land over the rubble of my house.

[Shams al-Ma'rifa]

Seriously, if food was currency I'd be planting in my back garden straight away. That is until someone burns my crops, bankrupts me and farms the land over the rubble of my house.

You're not making any sense.. First of all, I seriously doubt you could make a significant income on wheat planted in your backyard..

Second of all, you're assuming random crop-burning ninjas are out there trying to destroy your way of life. REAL farmers have yet to encounter such problems so I'm not sure why you would be concerned that a random arsonist will just throw a torch at your backyard for the lulz. If it becomes a continual problem you could always call the cops.

[Dubh the dark]

You're not making any sense.. First of all, I seriously doubt you could make a significant income on wheat planted in your backyard..

Second of all, you're assuming random crop-burning ninjas are out there trying to destroy your way of life. REAL farmers have yet to encounter such problems so I'm not sure why you would be concerned that a random arsonist will just throw a torch at your backyard for the lulz. If it becomes a continual problem you could always call the cops.

I'm not making sense, want to take you food based currency plan to the IMF then?

[Shams al-Ma'rifa]

I'm not making sense, want to take you food based currency plan to the IMF then?

Why would I, it wouldn't match their globalist interests..

To be honest I thought of this plan in reaction to Indonesia's current socioeconomic problems but found it to be an equally effective replacement to the US Federal Reserve fiat currency which is literally based on debt..

[Dubh the dark]

Why would I, it wouldn't match their globalist interests..

To be honest I thought of this plan in reaction to Indonesia's current socioeconomic problems but found it to be an equally effective replacement to the US Federal Reserve fiat currency which is literally based on debt..

How would the currency work when crops are failing?

A climate expert says the country is far from ready to deal with the harmful effects of climate change on crops, with droughts or floods likely to threaten food security down the road.

“Crops are very sensitive to weather changes. It cannot be too dry or too wet. Climate change will result in a gradual increase in the overall temperature, which would result in longer dry seasons and shorter rainy seasons,” said Rizaldi Boer, executive director of the Center for Climate Risk and Opportunity Management in Southeast Asia and the Pacific at the Bogor Agricultural University.

“As a result, if we plant crops in a particular area twice a year, when it’s an El Nino or La Nina year, the second planting usually fails,” Boer said. “That means we have not been handling it very well and we are still suffering from crop failures due to drought or floods.”

http://www.thejakartaglobe.com/natio...-change/332802

[Town Watch]

why would anybody for example develop any new grain storage methdods, if all they got in return was grain (or food or whatever)? Who would guard the grain supplies you talked about and why?

You would pay doctors with grain etc... How would the police and the armed forces be paid?

Eventually if we transformed into this type of society, arable land value would skyrocket, water would also probably become more valuable as well, eventually people would figure out that it will probably be more profitable to simply seize goods/land/grain, you'd get massive wars. I don't know I'm just brainstorming here.

It wasn't the overproduction of food that advanced mankind, it was the fact that production of food allowed smarter folks to dedicate more of their time to do cool shiz and get some benefits over teh rest. (dunno, just an idea)

When you really get down to it, the only resources that a person really fundamentally needs is clean water and food. Eventually the specialized service society that we currently have would disintegrate. You might have food and water, but you'd still be ed when your blind gut (caecum) gets infected.

[Shams al-Ma'rifa]

why would anybody for example develop any new grain storage methdods, if all they got in return was grain (or food or whatever)? Who would guard the grain supplies you talked about and why?

Government officials.. because it will be their job.

You would pay doctors with grain etc... How would the police and the armed forces be paid?

Better than paying them "Federal Reserve Notes"

Eventually if we transformed into this type of society, arable land value would skyrocket, water would also probably become more valuable as well, eventually people would figure out that it will probably be more profitable to simply seize goods/land/grain, you'd get massive wars. I don't know I'm just brainstorming here.

No.. you forgot about the invisible hand. Supply will eventually exceed demand and people will be forced to move on to other sectors thus stabilizing market prices. Economics 101

It wasn't the overproduction of food that advanced mankind, it was the fact that production of food allowed smarter folks to dedicate more of their time to do cool shiz and get some benefits over teh rest. (dunno, just an idea)

Yea.. surplus foods meant that not everyone had to farm and so specialization of labor developed. It wouldn't make sense for everyone to farm their own foods and make their own shoes when one decent farmer could harvest enough food for the entire village and one good shoemaker could provide shoes for the community getting food in return.

When you really get down to it, the only resources that a person really fundamentally needs is clean water and food. Eventually the specialized service society that we currently have would disintegrate. You might have food and water, but you'd still be ed when your blind gut (caecum) gets infected.

I don't get where you're going with this..

How would the currency work when crops are failing?

A climate expert says the country is far from ready to deal with the harmful effects of climate change on crops, with droughts or floods likely to threaten food security down the road.

“Crops are very sensitive to weather changes. It cannot be too dry or too wet. Climate change will result in a gradual increase in the overall temperature, which would result in longer dry seasons and shorter rainy seasons,” said Rizaldi Boer, executive director of the Center for Climate Risk and Opportunity Management in Southeast Asia and the Pacific at the Bogor Agricultural University.

“As a result, if we plant crops in a particular area twice a year, when it’s an El Nino or La Nina year, the second planting usually fails,” Boer said. “That means we have not been handling it very well and we are still suffering from crop failures due to drought or floods.”

http://www.thejakartaglobe.com/national/indonesian-farmers-ill-equipped-to-prevent-crop-failures-due-to-climate-change/332802

More farmers = more crops. It's not like a plague that ravages all the rice in one country.. If rice doesn't grow on one paddy it will grow in another paddy in a different region..

The fact that Indonesia has food problems gives us more incentive to enact this food-currency since rice will be inherently more valued at such a time.

[Sphere]

Fiat money works, get over it.

Yes, fiat money is theoretically easy to devalue and hyperinflate because its availability is determined by people. So why isn't their continual hyperinflation in the Eurozone, US, Japan, China, Korea etc? Because nobody wants hyperinflation. A fiat monetary system allows a central bank to combat swings in the currency which makes it a very desirable system.

So really, you have to show how exactly the fiat monetary system has failed before suggesting reverting back to some stone aged methods.

[Enemy of the State]

Yea but gold doesn't have any inherent value either, worst case scenario is it becomes devalued, like any other currency.

Food will always have a value. Worst case scenario is we have monstrous grain supplies to feed the population in times of emergency.

It might become a little inflated if everyone starts growing their own grain in exchange for currency but increased food production is great for the entire world. We'll simply just export surpluses overseas in exchange for other commodities.

It would encourage hoarding. If there was a natural disaster that would limit the supply of food, it would only be made worse by speculators who want to make a profit. People could starve.

I guess I like the idea better than the current fiat system, but gold is still the best currency we can have for the moment.

[Town Watch]

Government officials.. because it will be their job.

Better than paying them "Federal Reserve Notes"

No.. you forgot about the invisible hand. Supply will eventually exceed demand and people will be forced to move on to other sectors thus stabilizing market prices. Economics 101

Yea.. surplus foods meant that not everyone had to farm and so specialization of labor developed. It wouldn't make sense for everyone to farm their own foods and make their own shoes when one decent farmer could harvest enough food for the entire village and one good shoemaker could provide shoes for the community getting food in return.

I don't get where you're going with this..

More farmers = more crops. It's not like a plague that ravages all the rice in one country.. If rice doesn't grow on one paddy it will grow in another paddy in a different region..

The fact that Indonesia has food problems gives us more incentive to enact this food-currency since rice will be inherently more valued at such a time.

well, government officials are people as well, they cannot be legally into becoming a government official like that if they don't want to, I don't see how that suffices as an answer.

I don't honestly see how it would be possible to make your kind of society to work. You said that currency would be based on grain because everyone needs grain. Yet you can farm grain for yourself and essentially do what you want.

Having a barter economy where everyone trades for different things when they want something, isn't the same as grain as currency, as you are suggesting.

What I meant with the blind gut infection: even with the current depression, the jobs that seem to be on demand worldwide are in the healthcare. As sure as you said that people need grain, people also get sick. The reasoning behind doctors usually have high wages is because their job is demanding to train to (it takes time to attain high skill levels), and they are needed, so don't you think a doctor in a hypothetical village should get a little more than grain for his efforts? He would just perform his demanding job because of sheer goodwill, or would he be forced to?

I would rather have fiat money system and a good healthcare system and be alive in the age of 25, instead of having grain and dying to a blind gut infection in the age of 25. This gut infection is just an example because it's a rather common ailment, which is easily fixed with surgery. It could be any disease, epidemic etc...

This is one of the reasons behind brain drain from communist countries.

[Treize]

I hear all these people who want to replace paper money and bankpasses with a direct trade system.
Why?! Why replace a perfectly fine system with a rediculous and unwieldy system?

[Col. Tartleton]

Japans money was based on rice for a while.

[Angrychris]

The u.s. wouldnt be wasting so much food anymore.

[Denny Crane!]

It is to dependant on other things and to likely to wildly fluctuate and do we really want that? Instability and fluctuations in supply helped cause the banking crisis in the USA (along with central banking - it isn't just now they have helped cause problems) which directly contributed to factors that led to civil war. Is that what we want?

No what we want is hard currency. That was the USD, that is why asian economies peg their currency to it. But in the age of quantitative easing and an unstable USD it has become utterly obvious that they are all soft currency and the world is trading on faith, fiat money is an exercise in mass delusions. It is working thus far but not without massive problems.

There is nothing wrong with a return to a gold standard or some more complex method of fixing hard currency. Do you know why governments don't like it? The same reason they didn't like it when they scrapped it. They had to pay some bills and didn't have the money. Fiat money is like a credit card for governments. So they can extend the money supply. Before anyone comes in telling me the gold standard extended the depression; I along with Milton Friedman and Ben Bernanke don't believe it. In fact it is the relative ease with which governments all around the world didn't stick to the gold standard or in many cases just dropped it, that means gold standards were a matter of economic policy only to the extent that the BoE has been whipping out QE every 3 months in the UK. When you start playing with the economy like the fed did in the 20's and expanding the money supply 60% along with creative and speculative interest rate adjustments it is no surprise that you end up with a bloody great big crash. At that point they had to pull the gold standard because no one had any faith in the monetary system ran by the same people and hoarded their money causing contractions. Compare and contrast the things that happened in 1907 and 1920. I think the biggest problem with the gold standard in the context of the great depression were the destruction and economic chaos of WW1 and the differences in its implementation and trust. We had to leave the gold standard but that doesn't preclude a return to it providing there was absolute trust in the state to stick to it strictly (yeah right)

Fiat money seems to me little different to fractional reserve banking. Banks are at the root of our current problems, and the state is strongly implicated in the problems of the 30's (not least for WW's), for the banks it is the cavalier way in which they handle risk and their fractional reserves helping exponentially increase the severity of business cycles and disruptions in the money supply. With the states it is fiat money, inflation and disruptions or causing instability in the money supply. Does that comparison fit with anyone?

I can't back the current system in the slightest, or properly throw my weight behind a gold standard which relies on the state to be trustworthy and sensible. I think the only thing we can do is get the state the hell away from the money supply altogether and have free banking.

TL,DR: I support removing the lender of last resort.

[Poach]

Paper is even more flamable but we use it anyways.

You realise that the notes themselves are entirely worthless? I don't know what's written on your banknotes but a British £20 note specifically says on the note itself "Clydesdale Bank Plc promise to bay the bearer on demand at their office here twenty poounds sterling by order of the board of directors". (It's a Scottish note, English notes would say Bank of England most likely, don't have one on me to check)

The note has no value at all, exchange of notes is simply an exchange of IOUs, which by convention have become an accepted form of currency.

Most currency is backed by gold or something of value in order to ensure it remains relevent. No one would want to deal in notes that aren't backed by something of value, because the notes themselves are worthless. For example, the British Pound is backed by the UK Economy. If the economy does well, the currency has value. If the economy does poorly, people would be unwilling to trade in that currency because the commodity backing it (UK economy) is weak.

Look at Zimbabwe for an example: it's economy is a wreck, and as such its currency holds no value.

[Plant]

To those who are saying strange things like that healthcare would collapse, the opening post has written that paper money to be pegged on a a materially suitable foodstuff, as opposed to being pegged onto nothing, and only has value because the government says it has value. Of course, the problem with foodstuff is that more of it can be grown, which can devalue it, but so as can be gold and silver mines and the dangerous ways in which current governments has been successfully devaluing money continuously since fiat money.

[Shams al-Ma'rifa]

To those who are saying strange things like that healthcare would collapse, the opening post has written that paper money to be pegged on a a materially suitable foodstuff, as opposed to being pegged onto nothing, and only has value because the government says it has value. Of course, the problem with foodstuff is that more of it can be grown, which can devalue it, but so as can be gold and silver mines and the dangerous ways in which current governments has been successfully devaluing money continuously since fiat money.

Thank you, this is exactly what I'm saying.

Now that I think of it though the way China uses fiat money to intentionally keep currency prices down to stimulate economic growth is brilliant. They should just buy more gold with their dollar reserves instead of U.S. Treasury bonds as I seriously fear that the dollar will crash in the next few decades.

What I'm against is fractional-reserve banking and this whole lifestyle of buying goods on credit. It only increases the already tremendous debt bubble. The higher they rise, the harder they fall.

[Vizsla]

The IMF released a report calling for a global currency to be used alongside national currencies administered by a global central bank.
http://www.imf.org/external/np/pp/eng/2010/041310.pdf
Like a Bancor
Wiki says the Brits wanted to introduce it after WW2.
They’d probably end up calling it something else though.
It would fix so many of the world’s problems that the chances of it ever happening must be zero.
Neither China nor the US will ever support this idea.