Tick, tick, tick

So everyone is waiting until 14h15… That gives me a few hours to think.

The pure futility of this press conference makes me think of Gold, yes, Gold. Strange, I admit, but there’s also a certain futility in Gold. And by way of Bloomberg I saw a quote from Warren Buffett. He was commenting on Gold (not the ETF $GLD but the stuff they dig up):

  • They take it out of the ground in South Africa, ship it to the Federal Reserve, where they put it back in the ground, if you were watching from Mars, you might think it’s a little peculiar.

What if we didn’t have this shiny competing currency? Would we (or could we) invent another ‘something’ to compete with government issued currencies?

As far as I can understand (though I’m unclear why), Gold is primordial. We can’t just, ‘do away with it‘. We can’t just appreciate it like we appreciate other limited resources: wine, girls, diamonds, silver, oil, etc. Gold helps establish interest rates, the value of paper currencies, and gives Hugo Chavez and Mouammar Kadhafi safe passage.

This strikes me as a problem.

Lets invent a limited resource, and call it something catchy, in Esperanto. I don’t speak or read Esperanto, but being a “universal language, easy to learn and politcally neutral“, everyone could use the same word. Unlike “Gold”, which in French is “Or” and “Oro” in Spanish. Come to think about it, even Google would be more efficient… As an aside but casting doubt on my suggestion, according to this blog Esperanto has some more cynical origins…

  • “Over a hundred years ago a Polish physician by the name Ludovik Lazarus Zamenhof (1859 . 1917) created a synthetic language in the hope of removing the curse of Babel from mankind.”
I digress.

Maybe we can distribute a centrally managed limited resource across borders, “net out” our existing debt and replace Gold with this ‘something’? Martians would then find our behaviour less peculiar.

You’ve maybe read recently about academic propositions of “netting out” sovereign debt, but if you haven’t… Lets say Portugal holds 6 billion of Greek debt and Greece holds 3 billion of Portuguese debt, if we netted that out, Portugal now would only hold 3 billion and Greece none. FT Alphaville does a better job explaining this than I do. The short story is; netting out debt would reduce the Debt to GDP ratio significantly. Then we could borrow more…

Lets start simple and give every man woman and child 1 ‘something’, decide on a formula for distibuting (and limiting) this ‘something’ across countries.

Can’t we just create and use a fundamental object of value more intelligently than our peculiar use of Gold?