Chapter Twenty-Five: Private Money

Carlos and Jennifer called a meeting of the employees of Remesa Banking Company. Jennifer made an announcement. “In a few weeks, we’ll be offering accounts in commodities contracts. In the past, these were all for limited terms. Now, these contracts are essentially redeemable at any time, for certain commodities. There are contracts redeemable for one kilogram of gold in New York City, contracts redeemable for one thousand kilograms of corn in Chicago, and dozens of other commodities available out there. Now that they are redeemable on demand, the contracts can be used as media of exchange. What we have done is, we have devised an index of these commodities. For about a million dollars, a person could buy the entire basket of goods; that is, they could buy the complete set of contracts, and redeem or sell them individually. The complete set is one million shares. Smaller amounts of money can buy proportional numbers of shares. The value of the shares will rise and fall with the value of the commodities for which they are redeemable, but the value will not fluctuate as much as the value of a single commodity. Furthermore, there’s a wide base of commodities to back the shares. There isn’t enough gold in the world to run an economy on gold. But gold is just one of the commodities in the package. Individual shares, of course, can be sold for dollars or anything else, but the big commodities exchanges only handle the wholesale quantities and will not deliver smaller amounts.”

Tina asked, “Will these accounts be accessible through your server?”

Carlos explained, “Yes, these commodities share accounts will be accessible through our server. Furthermore, you can tie them to a debit card and spend your shares. We anticipate that some merchants will start pricing their goods in shares. That’s because the shares are backed by something, while dollars are backed by nothing.”


Copyright © 2004 Tom Alciere