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The money people put in is credited to their account and the goods they receive are debited. There is no absolute guarantee of delivery: if a producer has problems and can't deliver, all concerned may decide he can keep the prepay without supplying the goods, because the aim of the system is to support local family-level quality farming. (At least, this is a principle written into our contracts -- in practice, producers prefer to waive their rights in this kind of case.)
What my comment above was getting at was that your system is certificate-based, and the certificates are bought and sold on a market. You say there is no guarantee of delivery. I can only imagine you mean dated delivery, because if the certificate is redeemable against supply (delivery? is there a difference?) and there is no supply, we'll see an almighty crash on the market for these certificates. In fact, without a guarantee of supply/delivery, no one will buy the things in the first place.
Or, as you say below in a reply to askod,
When examining and judging energy prepay unit issuance you have to have regard to the rate, and the likelihood, of a flow of energy over time. This implies what I have heard described as 'confidence accounting'. ie the probability that a particular flow will be achieved.
This implies what I have heard described as 'confidence accounting'. ie the probability that a particular flow will be achieved.
In fact, a right to delivery is essential, or no one will have any confidence in the system. So I don't think you've answered Mig's question:
how do you prevent more money to be created than there is available energy, and how do you prevent energy certificate hoarding and "cornering the market" so to speak.
Clearly there is a need for a guarantee of performance, but a unit of currency - whether in bearer (certificate) form or registered to an account - does not confer upon the issuer a dated obligation to supply upon presentation of the instrument as does a (dated) futures contract.
What it does do is confer an obligation on the issuer to accept it in payment for supply.
In relation to Mig's point, we have to look at availability over time,
There's no reason why an energy generator could not sell entitlements to 10 years' worth of production, or a property owner 10 years' worth of rent.
But they will do so at a discount which reflects the return demanded by investors in respect of that form of value; their judgement of the likelihood of continuing production (or in the case of a property, occupation); and their expectations as to what the unit of currency will be worth in the future by reference to a unit of account.
"The future is already here -- it's just not very evenly distributed"
There's no reason why an energy generator could not sell entitlements to 10 years' worth of production
My electricity producer recently offered a low fixed ten year price in return for an upfront payment that they could use to build another wind power plantation. So something like that then?
Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
My electricity producer recently offered a low fixed ten year price in return for an upfront payment...
But it should now be clear that there is no distinction between "delivery" and "supply". If there is any doubt that the commodity will be delivered/supplied, the sale of certificates will be difficult to say the least. So waffly language such as
'confidence accounting'. ie the probability that a particular flow will be achieved
expectation of access to delivery
there is a need for a guarantee of performance
won't cut it. You actually have to garantee investors that there is sufficient supply to cover the certificates issued -- and more importantly, investors have to be convinced of that, or they will put their money elsewhere.
The function of these certificates as a form of money would therefore be strictly limited by a quantity of kWh, or rented accommodation/duration. The difference between this and the gold standard isn't clear to me.
The social usefulness of the certificates would seem at best to be simply a form of advance subscription with an advantage attached (discount). But who is addressed by the system? People with enough money to subscribe in order to gain a future advantage. One of the privileges of those who have enough money is in fact to save money by bulk buying, for instance, while those who live from hand to mouth pay top dollar for necessities (old example of the shilling in the gas meter?). Given that those who have no money ahead of them are far more likely to be living in rented accommodation than to be home-owners, what access will they have to your proposed rental scheme? In other words, what increased equality ie power-sharing would be achieved by it?
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