Thursday, October 11, 2007

black gold standard

black gold museum

I think that I may have mumbled something about this somewhere in the context of the Gold Standard, Bretton-Woods, foreign exchange, fiat currency discussions (most of which bores me to tears - so no discussion on gold will be tolerated This is about oil).

Since "They" don't like gold for some reason, why not use a barrel of oil (or a gallon) to back our currency? OK, oil is not quite as durable as gold (evaporation, rapid oxidization, etc.), but it is certainly more useful, and becoming just as "scarce". I also recognize that They don't really want to back the currency with anything materially tangible. Electrons and fantasy will suffice.

(Just to keep this in the realm of RE, we use oil to heat our homes, take the garbage away, bring the building supplies in, etc.)

Our dollar certainly has been riding the oil wave. Oil up = $ up, so in essence (pun intended), we are backed by petroleum, and lots of it. An unintended, but beneficial side-effect may be the hoarding of oil (less burnt/global warming blah, blah, blah), and the recognition and respect of it's real value.

Black Gold. Y'see?

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