Peter Rae, a former banker banker and brilliant economist, has proposed a similar alternative to Evolutionary Advantages of an Energy-Backed Currency called the “objective money solution”. It values money against the energy balance sheet of the nation or community, and bases itself on a unit of energy called the “Erg”, an internationally accepted measure of energy. Energy is the stuff that everything is made of (“matter is energy reduced to visibility”).
Peter observes that the potential or actual energy of everything is measurable. This listing, which takes solar power, wave-power, human power, etc. into account, represents the credit side of a nation’s balance sheet. The debit side will contain a listing of wasteful energy consumption, e.g. numbers of gas-guzzling cars; numbers of electrical appliances, etc. Add these up, and we have the negative side of the balance sheet. The differential between the two sides represents the value backing of this country’s currency. This could readjust the relative values of the world’s strongest currencies, with the US dollar weakening and the oil and sunlight rich Middle East and countries currencies strengthening
I also agree with Peter’s statement that this system will take the valuation of currencies out of the hands of speculators and places it back with governments and their people – if they find new sources of energy supply; develop better ways of releasing potential energy; and of reducing energy consumption, they will be able to put more genuine value behind their currency, so affecting their exchange rate and international standing.