Getting paid in space

Greetings Harvey,

Interesting post, it is going to cause me to do something that I really do
not like doing. I am going to talk about a subject that I am not an expert
on in a manner that sounds like I am, so, to all those out there who really
are experts in the the world of finance, please correct me if I get
something wrong, and I know that this is an invitation to all the EXPERTS
who like to think that they know it all (and I do not have anybody in mind),
oh well, the price of an interesting discussion in a place like the net.

First a short lecture, this is going to be in the form of *Lies to
children*, what I mean by that is what I am going to say is not exactly
correct but the meaning is, for example, atoms are not really little balls
in sticks joined to other little balls but thats the way we draw them
lies to children (besides, Im a little hazy on the exact details myself).

Take a good look at the economy we use today, I live in Australia, many on
this list live in the USA, there are some from the UK, Brazil, Chile and
many other places and I think all of them use FIAT currency, now the
question is (assuming the governments/banks in each place are being honest
no comments on this **please**) how does each of them decide how much money
each economy has? They can not just print more, either as paper (we use
plastic notes in Australia) or as a bigger number in the treasury computer,
that would make the currency worth less. So they use a complex formula to
decide how much real money they have, how much credit money they have,
this makes money just a commodity, this means that by the use of government
policy or a large enough attack the value of the money can be changed and
this is the reason many do not like it.
Now if you have a GOLD standard (gold/silver/hydrogen/magic fairy
dust/invisible pink unicorn horns what ever) it is harder but not
impossible to manipulate the value of a currency, it is easier if the
standard is a fractional reserve, that is the government does not have
enough **GOLD** to cover each and every dollar in the economy. The thing
is the Gold itself has little or no value, it is how rare it is that has
value, water would not make good currency unless you lived in a very dry
desert, if something is common then in order to use it as currency you have
to use a lot of it, hydrogen is the most common thing there is, it has just
about no rarity, as currency or the backing for currency, I can not think of
anything worse. Sorry if this attacks your baby, I really do not mean to do
that but why should I bother to use your currency, all I have to do is send
a ship to any of the gas giants and scoop up a couple of trillion
dollars/luna.tics of my own, if it is worth a lot on the moon, I just send
you a tanker from Jupiter. In any Hard currency, it doesnt matter what
backs it, just so long as there isnt a lot of it that can be gotten at
easily

What I was suggesting was a cross between a fiat and backed currency but
many people seem to be making the mistake of thinking that the energy is
backing the currency, this is NOT the case, it is in truth a fiat currency
but unlike the fiat currencies used today it is one with a built in limit,
you can not just print more money because it is linked to the energy
consumption of the nation, you can not rig a run on it because it can only
fall by a small amount because it is linked to the amount of energy
consumption, the energy usage of the nation dictates the amount of currency
in the economy. By itself this would just be a defacto gold standard,
pointless. So like a fiat currency it needs to have a credit component, this
would allow the government/bank to expand the money supply to keep the
economy going and the thing is any economy that is expanding is going to
need more energy, more energy, more currency. The hard part is deciding just
how much credit they should be allowed to put into the system. However much
it is it needs to be watch and needs to have strict time and amount limits
on it.

I agree with you when you say that any system is going to be abused, of
course it will be, that is human nature. I am 46 years old and Im just
little short of my 20 years in law enforcement and in my younger days I
worked in a hospital for almost 7 years (where I met my darling wife, who
has just told me not to stay up all night on the computer sigh 25 years of
marriage, she knows me well) I have a good understanding of human nature
having seen just what people are capable of but just because they will try
to abuse the system, doesnt mean its wrong. However I will tell you this,
the more complex a system the more ways there are to rip it off KISS,
works every time, there are bankers today who couldnt tell you how the
money they deal with everyday works and how it is decided how much there is
in an economy but link it to energy and a 10 year old would understand it
(just to check this I ran it by my 10 year old son and he got it first off
and in about 40 seconds), that makes it very hard for the politicians to
avoid the issue and spin you a line of male bovine excrement. Simple is hard
to cheat.
Now I know there would be all kinds of details that I havent thought of and
maybe there is a knock out punch that is just waiting to snap up and hit me,
time will tell.

And now for something completely different, well not really, it is kind of
related. A while ago I was reading (I *think* it was in New Scientist)
about an economist or at lest somebody with an interest in economy, built a
machine that modelled the economy, it was filled with water and had pumps
and valves and reservoirs. You poured in the water and by opening the
pension valve or closing the tax valve, half opening the income tax valve
and fully opening the sales tax valve ... And so on, you changed the economy
and it a way that anybody could see the result, I think he set it up in a
museum or some public place and it was a hit with the public (they could
play with the settings) but hated by the pollies who didnt like the idea of
a simple way to see what the tax cut they promised would do or having to
explain why the high taxes were good for the nation.
Does anybody know anything about this and where I could get plans of it or
if perhaps they is a computer simulation of it around somewhere?

Darren Brown

From: hetrevillion
Reply-To:
Date: Sun, 20 Aug 2006 18:11:06 -0000
To:
Subject: [spacesettlers] Re: Getting paid in space

Re: [spacesettlers] Re: Getting paid in space
Darren darrenb500 wrote:
Doug,
First, I have to agree with you, no system is perfect and when you have
people involved you will inevitably have some that will try to abuse the
system but that is what the police are for but then you run into the
problem
of politicians who will want to work the system for their benefit,
this is a
problem for the politics of the time and the law enforcement of the
habitat.
I am going to ignore the problems of bad guys doing things they
shouldnt
because that becomes a matter of law and politics and that is outside the
scope of this thread.

---This is appropriate regardless of the medium of exchange. There are
speculators
of any commodity including currencies. They will drive the value up
and down to
profit any way they can.---

No,
all habitats will be Green to a much greater degree than we are down here.
Now some may argue that they recycle more, and use less to do more,
well so
what, power in space is not a limited resource, there are huge masses of
metal just floating around out there.

---I agree. The habitats in good locations will have excess energy or
material of
one or more types over the habitats in other locations and on moons or
planets.
Any matter or energy will have variable value depending on where and
when it is
available. Short supply of aluminum on a habitat will cause the value
of it to go
up at the same time an overage at another site will cause the value to
go down there.
Profit will be made by transporting the shortage materials to the
location required
from the location where it is readily available.---

There is going to be every kind of economy possible but if they trade
among
themselves there has to be some way of deciding what the Zlotys used in
Hab-XYZ-123are worth against the Pounds used in Hab-ABC-321and the Drachma
used in Hab-ZYX-321and the Lira used in Hab CBA-123.

---Again, I agree. The true value of ANY commodity will be a variable
according to
location and availability. This includes the commodity chosen as money.---

We have a situation like this today in the EU, with the Euro but this
currency is having problems because some of the members of the Euro group
have stronger economies than others and the governments and banks must
work
hard to keep the currency within the self-imposed limits they have
set. The
question we must ask is why are they having such a hard time keeping the
currency in the range they have set? The answer is simple, the Euro is a
fiat currency, it only has the value the banks/government/markets say it
has, so the policy makers have to set policies that the banks and markets
interpret as being in line with keeping the currency inside the limits set
by the governments. With each government having different weaknesses and
strengths this become a constant juggling act, of course if the
currency was
based on a ** GOLD ** standard then this would not be such a
problem but
it would have its own different problems.

---Any chosen standard will have the same problems. This is the main
reason I
think the luna.tic based on hydrogen is the best solution. Hydrogen is
readily
available everywhere in the universe. Of course, some areas are short
of it
and will require importing from elsewhere, i.e. Lunar surface.
However, if the
currency is worth one liter of hydrogen at standard pressure and
temperature,
the relative values of other commodities, including energy will fluctuate
against one another and the currency--just as all commodities do
today, regardless
of the currency used as a measuring stick. The value of a liter of
gasoline
and the value of a gram of gold are not tied together in the USA or
Iraq or
Australia, nor are their respective currencies tied together. They all
fluctuate.
I have changed my mind about 100 tics to the luna, though. I now
believe, for
convience sake that a luna should be 1000 tics, or a cubic meter of
hydrogen
per luna.---

and all I can say is, WHY???? As for those who overproduce power,
again why?
Even if energy is cheap, it still has some small cost and generating power
just to boost the value of your currency, the cost of generating the power
would eat up the gain you get for the extra power. The thing here Doug
is I
think you are making a very common mistake, people use to think that
because
Gold was money, then Gold itself had value, this is not the case, Gold has
value because it is rare. There are rarer metals than Gold but it is used
for historical reasons and because it does not tarnish, if you used Gold
only for its practical uses, it cost would drop quickly. Having energy
backing the currency should not lead anybody into thinking that energy
itself is what has the value (okay, before anybody tells me, YES, I know
that energy has value, what I mean here is that the joules are not
thing you
spend), the other thing to remember is I keep saying ENERGY, not
electricity, if you use artificial lighting in your habitat or you use
large
mirrors to reflect sunlight, so what, both are energy.

What I am proposing is that the wealth (and the currency) of a society is
linked to the energy usage of that society.

I do not think an energy bases system is going to be used by everybody, I
just offer it as a way to have the stability of a **GOLD** standard
with the
flexibility of a fiat currency but without the problems, as I first
said, it
is a compromise.

---I can make the same argument for hydrogen...it is the most common
element
in the universe. Therefore, it would be used as a unit of measure, not a
store of value. It has value in and of itself and can be used at will. It
is available in various levels of readiness at various locations and is a
commodity in a fluctuating marketplace, regardless of location and
relative
value to other commodities. I do not expect the luna.tic to be physical
hydrogen handed over the counter for the nice tomato for your salad. I
expect it to be handled electronically for the most part. That being said,
a liter of hydrogen on the moon will be worth more than a liter on the
surface of Earth, and both would be different than the value of it on a
ship coming into port at Deimos station. The physical backing of the
currency
will have different values at different times and places, regardless of
what that backing commodity is.

This is an interesting thread and I don't think we will come to an
agreement
that the world will accept for ever and always, but we might come to the
agreement that money, be it 'real', 'fiat', 'gold standard' or 'fairy
dust'
is merely a method of keeping score. Anything can be used as a
standard unit
to keep score of who owes what to whom.

Thanks for the information and comments,

Harvey