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Part II: Monetary Revalue

Part II: Monetary Revalue


The data preceding has been in aid of ascertaining two possibilities. Thus far, our economic system is unable and unwilling to alter its goals based on what is best for people as a whole and our species’ continued survival on this planet. The data leads us to find a “magic number”, that is, how many years of continued usage of fossil fuels we have, the present reserve’s ability to produce meaningful, sustainable energy sources that will allow us to have a future.

It seems that it would be easier to alter the currency (thus our economy) than it would be to alter our base instincts that have brought us to such a point of helplessness. I can identify two competing philosophies that might set our economy on the right track.


A. Meaningless Debt


This appears to be the best suited option for people to continue working, and for our economy, and all others, to continue growing. All loans come with their own risk. There is the possibility that the person or entity loaning the money will not get back what they gave in the first place. More likely still, they will not get more than what they offered. This is usury, and it comes with its risks, but for the most part, in our present economy, it has been quite safe. Many people have gotten quite rich, and many of the clients to which they made loans, utilized that money well, at the moment that it mattered, and they were bettered for it.

This system of loans has been the basis of our growth in entrepreneurship for some time, if not all time. Recently, it has become unstable. The housing crisis is one example of those loaning money putting too much on the line. Anyone with a sizable stack of cash can loan out to people who want it, and people who need it, and people desperate for it. Those more desperate for cash can and will take out whatever they can, for they are desperate. That is a human condition that, no matter the economy, will always persist, and there’s little we can do about it.

Unless, that credit were to be made meaningless. In that all were entitled to a certain amount that could be as easily deduced as how much one pays in taxes. If free credit were to reign, in that any adult could access up to that amount pre-decided, enough to cover needs, then we could open the social and individual “golden chest” of freedom and pursuit of happiness.

But of course! This money, this meaningless credit, this cash that is useful only as a means, one that people are not required to work for, one that is given to them as easily as life itself, could not come from nothing or nowhere. It would come with a price of its own. It would require that we erect an institution to create this credit (i.e. the Federal Reserve), which would then release a certain amount upon the people, utilizing an extremely high sales tax, and the present framework of banks and loans, in order to dole out this credit to the people. There would be a degradation, of course, in that if, say at tax time, all were given this allowance, we would find some people saving and some people spending. Since not all of the credit could possibly return to the place where it came from, since businesses still need to have an incentive to continue operating, and since this plan would discourage people from operating in traditional sectors of monetary recompensal employment, the original institution, and thus the currency, from which all of this came would soon become inoperable. We will have created a “golden goose”, which would then have to die. In which case, plans could be made for a new currency, and a new institution which performed the same function. Every 10 years or so, maybe. The ideal would be to create the system with the least amount of degradation, thus extending its lifetime, and thus allowing people to become well-acquainted with this new system.

Control of the source would lie in the people that created it. Responsibility would fall to those that occupied the halls of the financial institution from whence the credit springs. It would be upon them to keep it flowing. If they were to accept the “gift” of which they make, the system would fall apart. In that, were those in charge of the credit to become irresponsible or attempt to take advantage of the system of which they are stewards, the institution would fall, far short of its planned obsolescence. At which point, when the institution has reached the limit of what it can contribute, when the credit has degraded so such an extent that it is not useful, the institution would then be “thrown under the bus”, tossed out like yesterday’s trash, which another one built on the same ground, with roughly the same rules, with all individual debt incurred during the previous institution’s tenure wiped clean.

Other factors contribute to the absolute fragility of this system. It would be a house of cards, intentionally. (I would say that this idea is defined as the end result of the “bubble economy”, in that the bubbles are created in order that they be deflated, but taken to its logical extreme, with frequent shifts.)

Though all of this satisfies our individual freedom and pursuit, grows our economy, and allows for a worry-free existence (except for the stewards), it does not address our energy problem. Therefore, we should put the full extent of this idea on the backburner for now, in order that we might fix that which is most pertinent at present. Which brings us to…


B. Fossil Fuel Standard


There was a time at which our country held by a standard for its currency. You could take your paper money to the appropriate institution and you would be handed the equivalent in gold. It was something that you could wrap your hand around, it was something that had value in and of itself in either ornamentation or construction or craft, as opposed to a currency that is ‘fiat’. This was not a catch-all, however, as with any currency, there could be runs on the banks where individuals demanded their recompense, and the banks or other institutions could not keep up with the volume of sudden loss of faith in economics. The gold standard did not save the stock market during the great depression.

Our world has changed, however. Gold does not have the “buying power” it once had. It is useful still, and quite valuable as a mineral. But it does not, or no longer, drives people toward activity.

Now, this is what drives our economy: fossil fuels. They make our world. The world you know, right now, is because of coal, natural gas, and oil. This energy is valuable. Extremely valuable. Transportation, manufacture, creation of electricity, all construction on every scale, home heating, cooling, industrial agriculture, you name it. It all comes from fossil fuels. Fossil fuels give you the ability to… well, to do anything and everything. Some scraps of paper might buy you things, they might mean something to the person you are getting them from, but that is a shared illusion. A useful illusion, of course, but an illusion nonetheless.

Owning fossil fuels, owning energy… that is the real power. There is no illusion there. If you want to sell it off for paper money to buy other things, creature comforts, needs and wants, then that’s great. But do your needs end? Do they have a finish line? Is there some point in your life when you say, “Well, we don’t need a house or heating or food or water anymore,”? This is not the case. Our wants and needs to survive and subsist supersede any “good intentions” or altruistic favors toward future generations. The fact is: the individual consumer cannot be relied upon to police his own energy usage. And at present, the consumer is in charge.

Here is what we can do: create a currency with a fossil fuel standard. As in, with one Amero1, you are able to receive 1.0 units of crude oil, 0.7 units of gasoline, 2.0 units of coal, and 1.5 units of natural gas, for example. The amount is subject to the data that I was compiling earlier. I am unsure of the exact amount, but much analysis ought to be performed, of course.

This appears to be the best option for our present course. For these reasons:


1. That we might better gauge our use of fossil fuels. We attach the truest value that our economy understands, that we are better able to alter the root of its trajectory.


2. As it is the driving force for growth, a fossil fuel standard will better ensure that our economy grows at a level appropriate to actual activity and true value, helping to prevent future bubbles, granted that crises of packaged loans can be kept to a minimum through traditional or innovative regulation enforcement.


3. The idea of “peak oil” comes to mind. Attaching our currency to fossil fuels prevents the deterioration of that currency through continued usage of non-renewable energy sources. Our currency may well deteriorate, but at a pace we can relate to, and one that represents, explicitly, the very problem addressed, such that, as these energy sources dry up, it is quite obvious what is to blame for conspicuous currency degradation.


4. It fulfills the recommendations of those who believe that “austerity” is the answer to the economic crises. Attaching the currency as such would restrict economic activity at all levels, requiring that there be very good reason for transportation or shipping or construction. It would discourage all frivolity. Fossil fuel waste would become a thing of the past. Inappropriate use of fossil fuels would quickly fall out of favor as well, as in excessive usage of oil-based fertilizer.


5. Loans would be much more difficult to acquire. “Bubbles” of the sort that resulted in the housing crisis would become much less frequent, if not disappear. Few would be willing to risk that which is of such true practical value.


6. After a certain period of time, people might well figure out that this currency is poison, causing them to either invent something new or take on another currency, that they might still be able to work actively. But these actions, this new currency or barter or black market deals would be bereft of usage of fossil fuels, for the very reason that only those with the currency of standard would be able to trade for those energy sources. It would create a separate economy and separate currency that would then spawn energy creation in renewable sectors, exclusively, by virtue of the very system itself.


7. Culturally, it would require that communities utilize their own resources to the maximum of local function, bringing them closer together and more autonomous.


8. There would be a reduction in profit-margins for those drilling or mining for these fuels. The incentive of future rewards would be reduced. Simply supply and demand would dictate that when an energy source is valuable, the less that there is of that energy source would contribute to a rise in price. Those interested in fossil fuel “futures” (trading to make a quick buck) would be out of luck.

9. For the middle and lower classes, the price of gas, being the most obvious indicator of this plan, would stay roughly the same (depending on factors I have not considered). This would, with the effect of inflation, cause a subsequent rise in peoples’ “buying power”, thus enabling economic growth in sectors more beneficial for our future. [This may offset drawbacks listed below.]




1. Depression. It might very well bring all economic activity to a standstill. That might not be such a bad thing, however.2


2. Hassle. It should not be too difficult, theoretically, to apply this. Simply fix the price of oil, coal, and natural gas. I believe the federal government has this power.


3. Unemployment. The myriad people who already work on the fringes, those whose jobs are not secure, those who rely upon personal, fossil-fuel-using transportation, they will take an even harder hit than they have already.


4. Big cities. Contingencies, specific to each city, ought to be considered, and rightly executed, were there to be an economic downturn of such a sort that a loss of life would result. Further examination of this plan is required to know the needs of each of these cities and their inhabitants. (Large cities will probably required contingencies of this sort. Smaller ones, at least those surrounded by arable cropland, would be sufficient, with their own resources and the ability of leaders present, to satisfy the needs of their citizens.)


5. Businesses that currently profit from fossil fuels being traded around like a prostitute will soon be denied excessive amounts of “their god-damned money”. They will have to accept that their “hoes” won’t be pulling in diamond wristwatches on their “tricks”, and be satisfied with a reasonable profit like everyone else in this world. Or branch out into new forms of renewable energy creation.



II. Critique Response:


While discussing this idea with others, it has been brought to my attention that this possibility goes against the grain of what is considered standard economic practice, or the observable phenomenon that is that: those things which are of practical value and which are priced below the normal amount, will be purchased at a higher rate, thus increasing production and consumption. As I, at the time, responded, and shall now, that will not be the end result.

The case of our present world, our present economy, the way that our world appears to work3. It seems then, that the driving force behind our economy is that of production, as opposed to consumption. This thus necessitates that our goal to fix the way we trade with each other be attached to the most root of the problem: those that produce. They appear, nowadays, to be the makers of our world. Such as it is, the solution to our energy crisis (barring a reduction in advertising and marketing, which would certainly help the cause, though appears to be beyond the scope of any essay of sorts, being that demanding that anyone not shout to the streets the benefit of their product is against free speech rights), the solution to our energy crisis, at the least the beginning of a solution, is to reduce the incentive to profit for fossil fuel production.

If, in the event that it appears that the production part of our economy is the driving force, and the consumer is subservient to it, the point at which to drive a wedge into this system is that of production. Rather than reduce incentive for the consumer to utilize fossil fuels (which, by the way, WILL NEVER HAPPEN, as people in general are unable to alter their most comfortable wants and needs), we ought to reduce incentive for those who retrieve or produce the fuels, increasing incentive for them to push to other options, namely renewable energy sources, that then have unlimited profit potential.

Why is the consumer not king? Because he is nearly incapable of buying anything. Our middle class has been gutted, skinned, and stripped of anything that could be called “buying power”. We are steadily declining into poverty, every day, while the rich get richer. Suppose one could say that the “rich” are now the consumers, but what is the end result of that? Only oligarchy, and scraps left for the rest of us, endless days of toil for peanuts that can hardly pay rent on a two-bedroom place. This is not an argument for anarchy or communism or socialism or capitalism. This is a solution.



1To use the term to describe America’s Euro, of which much fuss was made some years ago when a North American Union was suggested.

2While pondering this, this rider continually comes up: “if we could all come to agreement”. In particular, to think, “we ought to stop producing for a time, while everyone collectively comes to an agreement on what to do about our economy.” On reflection, the idea was patently absurd, but may well come about if a “fossil fuel standard” were to be enforced.

3In the “Premises”, I said that the “consumer was king”. Upon further analysis and discussion and observation, it appears to be otherwise. The consumer is not king, the consumer appears to be a weak-willed, easily-swayed sap, happy to do the bidding of those that would prescribe him an object, for fear that he be denied his indentured servitude. Marketing and advertising are so manipulative, and so powerful, that the consumer has become an unconscious servant of the oligarchic complex. Though occasionally conscious, quite powerless. As the marketing budget of a particular product increases beyond the product’s actual creation, manipulation, rather than necessity, is the course (thanks to Lee Camp for that particular point). Psychoanalysis and social psychology from Freud, capitalized by Edward Bernays, solidified much of the consumerist society in this way.