Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Save to My Library
Look up keyword
Like this
1Activity
0 of .
Results for:
No results containing your search query
P. 1
Electricity vs Gold and Debt for Currency

Electricity vs Gold and Debt for Currency

Ratings: (0)|Views: 9 |Likes:
Published by Dario Tamburrano

More info:

Published by: Dario Tamburrano on Nov 10, 2011
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less

11/10/2011

pdf

text

original

 
Electronic copy available at: http://ssrn.com/abstract=1802166
 
Authors: Nick Gogerty, Joseph Zitoli
DeKo
 An energy backed currency proposal
 ABSTRACT
Currencies historically represent claims on metals such as gold with limited utilitarian value or sovereign debt prone to default or purchasing power loss. The DeKo backedcurrency uses standard electricity delivery obligations as the asset base for a currency.This is done to increase currency stability and value retention.
 
Electronic copy available at: http://ssrn.com/abstract=1802166
THOUGHTFUL CAPITAL GROUP
2
 
CURRENCYDEFINITION3
HARDVS.SOFTCURRENCY3
MONETARYPOLICY4
 AGOVERNMENTANDITSCENTRALBANKRELATIONSHIP5
CENTRALIZEDISSUANCE6
GOLDBASEDCURRENCY6
DEBTBASEDCURRENCY7
THEDEKOBACKEDCURRENCYSOLUTION9
SOCIALUTILITYTHEORY10
FUELRISK13
FUELAGNOSTICDEKOSCOULDBEGREEN13
PHYSICALFUNCTIONALITY15
DEKOFINANCIALINSTRUMENT16
DEKOADOPTIONPATH20
THECONSUMERDEKOEXPERIENCE21
DEKOREDEMPTION22
INFLATION:CURRENCYOVERISSUANCE23
CURRENCYCRISISANDRISKMANAGEMENT24
LIMITEDFLEXIBILITYINMONETARYPOLICY26
CONCLUSION27
 APPENDIX:28
 
 
Electronic copy available at: http://ssrn.com/abstract=1802166
THOUGHTFUL CAPITAL GROUP
3
 
Currency Definition
 
The goal of a currency system should be economic stability and growth as a means of improving citizens’ lives. A currency acting as a stable store of value contributes toeconomic stability.
 Premise/promise
 All currencies are belief systems. The inherent belief for users of a currency is that thecurrency issuer does not over-issue or debase the currency relative to the asset portfolioheld against the currency by the issuer. The first and primary role of a currency forusers is as a store of value. After that role is established, a currencies economic utilityfunction is as a means of exchange.Historically, currencies have been government debt or commodity backed.
The DeKothesis is that energy, more properly electrical work in the unit form of delivered kilowatt hours (a DeKo), may be a more stable asset form forbacking a currency.
 
 A DeKo backed currency may offer the advantages of stable value and economic utility over time that neither debt nor goldbacked currencies offer alone.
The utilitarian value of a currency as a unit of exchange is driven by people’s faith in thecurrency as a representation of value. Currency faith is driven by faith in the issuer andthe perceived value of the issuer’s underlying asset portfolio. If the assets in thecurrency issuer’s portfolio are perceived weak or not present, the currency may become volatile, potentially contributing to economic contractions.Most currencies represent claims on portfolios of government debt and other perceivedlow risk securities. Debt backed currencies often hold assets denominated in thecurrency itself. This leads to a complex reflexive relationship between assets held andthe metric used to determine their future value. Often the bulk of these debt assets aredomestic government debt, meaning that a government’s fiscal policy (taxation andspending) and monetary policy (currency issuance and inflation targeting) managementattempts become tightly interrelated.
Hard vs. Soft Currency
Currencies require perceived value stability in order to perform their primary economicrole acting as stores of value to facilitate trade and their secondary role as a unit of account. Historically, currencies represented claims on physical assets such as gold orother hard assets such as grain. These commodity backed currencies were mostlyseparate from government political fiscal policy. Many early civilizations were defined

You're Reading a Free Preview

Download
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->