What if a new paper currency were introduced that was deliberately indexed to 1 unit = 1 Gallon gasoline guaranteed? (debt, buy)

[Freesponge]

Would this be possible to do first of all? It would require exact supply would be backed by gasoline and so if you paid your workers using this new currency a fixed wage instead of the dollar, they will never experience a change in gas at the pump , it will always be 1 unit per gallon cost forever . All other things you buy would be translated into dollars the way debit cards translate purchases overseas in Euros Pesos Pounds Won Yen etc

BUT … you can exchange that unit for all other things and as gas prices climb you get richer and as gas prices plunge you get poorer

Could this new currency help Americans?

[Lowexpectations]

What if we just made up ridiculous threads and that’s all we posted?

[Freesponge]

Originally Posted by Lowexpectations

What if we just made up ridiculous threads and that’s all we posted?

But wouldn’t it be a good idea they used to have the gold standard what if we had the gasoline standard?

[treasurekidd]

Originally Posted by Freesponge

But wouldn’t it be a good idea they used to have the gold standard what if we had the gasoline standard?

Sounds like someone’s been on the legalized weed standard.

[fishbrains]

This is not the dumbest idea I have ever heard.

Close though.

[sholomar]

Would be a nice way to maintain purchasing power by storing large amounts of cash in this format. An easy way to preserve purchasing power that is not taxed that keeps up with inflation pretty much in a 1 to 1 ratio would be greatly appreciated. I-bonds don't really cut it. You pay taxes and the inflation rate is way higher than the official rate.

In theory you can do physical metals and not pay the taxes, or cryptos but with cryptos the government knows everything you do unless you sell locally and use a mixer, and it's not a guaranteed investment by any means.

I wish I could have an account with a major oil company that was in "gallons of gas" that I could store a large quantity of cash, to prevent inflation by politicians which is a foregone conclusion because it's the path of least resistance, to pump pump pump.

[Moby Hick]

This is nuts. Gas doubles and drops by 50% fairly often. The inflation rate does nothing like that. You can't base a currency on something with unstable supply.



If you want to hedge against gas price increases, but stock in oil companies or get a hybrid.

[ChiGuy2.5]

Originally Posted by Freesponge

Would this be possible to do first of all? It would require exact supply would be backed by gasoline and so if you paid your workers using this new currency a fixed wage instead of the dollar, they will never experience a change in gas at the pump , it will always be 1 unit per gallon cost forever . All other things you buy would be translated into dollars the way debit cards translate purchases overseas in Euros Pesos Pounds Won Yen etc

BUT … you can exchange that unit for all other things and as gas prices climb you get richer and as gas prices plunge you get poorer

Could this new currency help Americans?

Part of the problem with the gold standard was the mining and storing of all of the gold to match the total value of all currency in circulation. By weight and volume, Gold has FARRRR more value than gasoline so to refine and store the equivalent in Gasoline would likely be impossible. At a minimum it would restrict the amount of money supply because it would be extremely hard to produce more currency AKA "gasoline" to circulate. Instead of the push of a button currency creation, we need to spend months and months to refine enough to cover any debts the government wants to issue.

This idea, much like the gold standard, would hinder the total currency in circulation and make cash infusions into the economy very difficult to implement. This essentially takes away some of the tools the fed uses to control inflation, boost economies during down times, and prevent recessions/depressions.

Although I understand why a standardized currency can be safe and beneficial, I also understand why the government abandoned it. Modern economics do not support a standardized currency.

There are currently 2.0407 trillion US$ in circulation as of 2020. As of 2020 we had only 38.2 billion barrels of oil in reserve. Times that by 20 gallons of gas per barrel so we have approximately 764billion gallons of gas, far shy of what we would need to even make the switch.

[Javacoffee]

LOL.

Why? There's nothing wrong with the gold standard we have now. To rely on something as unstable as gasoline prices... well, I just don't ... I mean,.... what!?

[1insider]

Sounds like the one ounce of gold for a good, tailored suit standard. I'd be in for a one ounce of silver for a dozen freshly shucked oysters and a beer standard.