Getting paid in space

On Aug 14, 2006, at 19:36 UTC, Ed Minchau wrote:

> I'm hoping that in a future space colony that they get
> away from fiat currency and instead have it backed
> with a valuable commodity like Gold. They might
> directly trade Gold coins, or they might have a
> digital currency backed up by Gold, but in either case
> the currency would have an intrinsic value.
>
> Then you wouldn't have meddling in the economy as is
> possible by entities like the US federal reserve. No
> printing up money out of nothing, thus devaluing all
> money.

..Until somebody retrieves an asteroid containing more easily
accessible gold than has been mind on Earth in human history, at which
point your gold-tied currency would suddenly be worthless, while
relatively stable floating currencies like those of the U.S. would be
just fine.

Reminds me of one of the Hitchhiker books, where a new (planetary)
colony decided to use tree leaves as currency -- worked fine except for
a terrible inflation problem.

I also can't help but point out that the US Federal Reserve meddles
with the economy mainly by setting the prime interest rate, not by
changing the amount of currency it prints. (And it's been doing a
fantastic job of holding inflation steady for many decades; certainly
there were much worse periods when the dollar was tied to gold. Our
economy may end up collapsing under its national debt, but not due to
its floating currency.)

Cheers,
- Joe

Joe Strout -- joe@...