A universal monetary unit

[flykiller]

There is also SAD money, Secured and Delivered, which has to do with money secured with tangible goods.

oh yeah, the chinese have that one down pat, most recently with iron ore. get a loan, secured with a shipment of iron ore held in port. then another loan, secured with the same ore. it's easy, just walk the loan officer down to the port, show them the ore and the paperwork proving it's yours, it's all right there in front of you, it's all legitimate, what could go wrong, get the loan. then another, then another, then another. a recent case in the news related how one chinese businessman did this something like 50 times over, and then on top of that turned around and sold the ore itself, AFTER returning the ore and getting his original money back. and then disappeared, leaving lots of people real SaD.

gotta watch out for that "secured" thing ....

 

[kilemall]

oh yeah, the chinese have that one down pat, most recently with iron ore. get a loan, secured with a shipment of iron ore held in port. then another loan, secured with the same ore. it's easy, just walk the loan officer down to the port, show them the ore and the paperwork proving it's yours, it's all right there in front of you, it's all legitimate, what could go wrong, get the loan. then another, then another, then another. a recent case in the news related how one chinese businessman did this something like 50 times over, and then on top of that turned around and sold the ore itself, AFTER returning the ore and getting his original money back. and then disappeared, leaving lots of people real SaD.

gotta watch out for that "secured" thing ....

One gets the feeling the Instrumentality of Mankind does not take kindly to contractual default and has many nasty ways of ensuring payment. Not even the thief planet will cross their effectively planetary slavery contract.

Another pretty funny side bit was when the psionic ducks showed up, didn't want to take over, but they wanted to buy every food and beverage they could get their hands on. They paid in gold which was considered rude in a credit society, couldn't be forced out due to the psionic thing, and were annoying.

 

[salochin999]

While the Imperial Credit has always been the "gold standard" for Traveller, I have always had some difficulty with it being the sole currency or even one that is easily transported between worlds, particularly ones outside the Imperium.

So, what I came up with as a "universal" form of money was something akin to the Krugerrand as an alternative. This I've dubbed a "Sliver." It is a small silver metal bar of extremely durable non-magnetic metal that is generally stamped with its origin, and other pertinent data showing what it is. The bar itself is worthless except for a microgram of a super-heavy long lived isotope called "Oganessium" (element 126 - 321) that can only be found near neutron stars and pulsars. Even then this element exists in only small quantities.
Because of its rarity and the difficulty in obtaining it (it costs more to make in a particle accelerator etc., than it is worth so collection is the only real method it is gotten by) and it's general uselessness for any other purpose it became the choice for a universal currency.
It's presence can be verified by testing easily even when present in minute amounts. Hence, a Sliver is very valuable and also relatively easily tested to determine if it is the "real thing." It is nearly impossible to counterfeit one as well (although this is tried regularly).

Comments?

The problem with fiat currencies is the people with the power to create it generally can't resist the temptation to create too much - as new money is free money for them - and thus they inflate all the value away.

(The most likely cause of civilizational collapse imo.)

If that was the case in the 3I then I think you'd have very complicated barter trade either directly - one system trading spices for gravs - or indirectly by using more convenient barter commodities with a perceived innate value like gold, silver or gems etc.

That could be interesting but if you don't want the hassle then it's a lot easier to assume the 3I (and other polities) have their own fiat currency kept stable by putting the money supply in the hands of an AI or something.

However I can only imagine this working long-term if each polity's fiat currency - like the Imperial Credit - is mainly (only?) used as an inter-system currency for trade and taxes.

Each major system would have its own local currency with its own exchange rate to the Imperial Credit.

Minor systems that weren't fully connected to the network - like Belter colonies for example - might use gold, silver, gems or anything else valuable in their context - air filters.

On top of that I think there would be some very high value physical currency that was used to settle accounts between polities or other major factions. This would be the interstellar version of "gold" - an ultra valuable commodity which wasn't used in daily life but acted as a backup emergency store of value and occasionally as currency for very major transactions such as between major systems or polities.

 

[flykiller]

putting the money supply in the hands of an AI

"I should regulate human affairs precisely because I lack all ambition."

the problem with ai is that logic doesn't care.

The problem with fiat currencies is the people with the power to create it generally can't resist the temptation to create too much - as new money is free money for them - and thus they inflate all the value away.

actually, no, historically it is SaD'ed away. the term is "re-hypothecate". and actually, no, fiat currencies do not tempt to thievery, they are created precisely to facilitate covert theft.

 

[Condottiere]

The temptation is for governments to inflate their way out of debt.

 

[flykiller]

The temptation is for governments to inflate their way out of debt.

not exactly. the intent is for governments to inflate their citizens into debt.

 

[Enoki]

The problem with fiat currencies is the people with the power to create it generally can't resist the temptation to create too much - as new money is free money for them - and thus they inflate all the value away.

(The most likely cause of civilizational collapse imo.)

If that was the case in the 3I then I think you'd have very complicated barter trade either directly - one system trading spices for gravs - or indirectly by using more convenient barter commodities with a perceived innate value like gold, silver or gems etc.

That could be interesting but if you don't want the hassle then it's a lot easier to assume the 3I (and other polities) have their own fiat currency kept stable by putting the money supply in the hands of an AI or something.

However I can only imagine this working long-term if each polity's fiat currency - like the Imperial Credit - is mainly (only?) used as an inter-system currency for trade and taxes.

Each major system would have its own local currency with its own exchange rate to the Imperial Credit.

Minor systems that weren't fully connected to the network - like Belter colonies for example - might use gold, silver, gems or anything else valuable in their context - air filters.

On top of that I think there would be some very high value physical currency that was used to settle accounts between polities or other major factions. This would be the interstellar version of "gold" - an ultra valuable commodity which wasn't used in daily life but acted as a backup emergency store of value and occasionally as currency for very major transactions such as between major systems or polities.

The problem with that comes back to transportability of that money. Without a means to move money from one system to another in some compact and commonly accepted form you end up at barter and that won't work as a monetary system. Barter is never convenient and any decent merchant would find such a system unacceptable as they couldn't be assured of a price ahead of time.

This all comes back to the jump limitations inherent in the game. So long as information moves relatively slowly between systems you need a monetary system that allows those moving between those systems to have a stable portable currency to work with.

Electronic systems work only until you end up "off the grid." Also, there is the problem of dealing with non-Imperial worlds if you live on the fringes of the empire. Electronic systems also make it possible for someone to run "ahead" of the system drawing money that earlier updates show is available while current ones show that the person is overdrawn, badly.

Local currencies would also encourage black markets in currency, another problem...

 

[mike wightman]

The Imperial credit is the standard monetary unit and is electronic. The Imperium pegs its value and everyone that is a member of the Imperium abides by it.

Try paying for a loaf of bread and a pint of milk in a Gateshead (UK) shop with a couple of dollar bills - they will refuse.
Try paying with a bank card and it is no problem. The bank card transaction is backed by VISA, MasterCard etc.

 

[salochin999]

@flykiller, condotierre

The main point I was trying to make was fiat currencies can be increased at will so if the Imperial Credit is a stable fiat currency then they must have figured out a way to prevent themselves inflating it away.

@mike wightman

Fine by me, I'll just carry on assuming the electronic system automatically adjusts for local productivity levels - certainly can't see any benefit in the added complication.

@Enoki

Electronic systems work only until you end up "off the grid." Also, there is the problem of dealing with non-Imperial worlds if you live on the fringes of the empire.

Yeah, those are the two biggies imo: backwater worlds within the Imperium and worlds outside the Imperium.

It's not important unless you want to make a plot hook out of it but

- a backwater system with just some Belter prospectors would more likely use some kind of physical currency imo

- two polities with their own fiat currency e.g. 3I and Zhodani would need some arrangement. if their mutual trade was roughly balanced they could just accept each other's fiat currencies but if it was very one sided then the one with the trade surplus might start to want at least part payment in something physical. so i think there would be something that was the equivalent of gold on earth today - not used as money on a day to day basis but available in the background.

 

[mike wightman]

Fine by me, I'll just carry on assuming the electronic system automatically adjusts for local productivity levels - certainly can't see any benefit in the added complication.

Does the value of the US dollar change as you go from state to state or city to city in line with local productivity?

Does the value of the Euro change as you go from Germany to Greece?

 

[kilemall]

not exactly. the intent is for governments to inflate their citizens into debt.

I disagree.

Certainly it can be used in that manner, but hard currencies can be used for punishing debt as well if the money supply does not stay neutral value for economic expansion and/or contraction.

 

[kilemall]

The problem with that comes back to transportability of that money. Without a means to move money from one system to another in some compact and commonly accepted form you end up at barter and that won't work as a monetary system. Barter is never convenient and any decent merchant would find such a system unacceptable as they couldn't be assured of a price ahead of time.

This all comes back to the jump limitations inherent in the game. So long as information moves relatively slowly between systems you need a monetary system that allows those moving between those systems to have a stable portable currency to work with.

Electronic systems work only until you end up "off the grid." Also, there is the problem of dealing with non-Imperial worlds if you live on the fringes of the empire. Electronic systems also make it possible for someone to run "ahead" of the system drawing money that earlier updates show is available while current ones show that the person is overdrawn, badly.

Local currencies would also encourage black markets in currency, another problem...

The Templars handled this with their cryptochecks. The check was the passport to pulling the money, and would be confiscated and I assume destroyed afterwards to prevent multiple withdrawals.

I assume the corollary was that if you lost the check you couldn't cash it. I would expect a high tech similar system in play in the Imperium.

 

[flykiller]

figured out a way to prevent themselves

so they just can't do it, no matter how much they want.

(unless they want to, of course.)

in the end, it's a game, and we just assume certain things in order to concentrate on the game. but some game features, when you look closely at them ... don't work.

I disagree.

feel free. one may always say, "I disagree."

 

[kilemall]

If we take Striker's per capita and per unit cost/TL to be canon regarding the CrImp, then we can say that the Imperium has a very hard currency that is very stable.

So probably there is a great deal of effort put on maintaining that currency as a neutral hard value and step on inflation very quickly, as a matter of maintaining the realm, a High Matter to concentrate on as much as naval fleets.

Given the greater amount individual higher tech finished items can go for at different TLs signifying greater demand (vs. the large lots of the speculation system), there would tend to be a flow of credits and vast amounts of raw material and less desirable goods from lower TL to higher TL worlds.

A corollary is the per capita listing is just a base, the real economic indicator would be to adjust the per capita to actual purchase power vs. a TL15 A starport item, the base value of the CrImp in trading between planets.

To avoid the inflationary effects of too much currency pooling around higher TL planets and not enough on the lower TL worlds, I would expect that there is some policy that either taxes the extra credits out of existence/funds the Imperium, then incentivizes investment and/or increases the money supply going to the lower TL worlds at some lower loan rate.

 

[salochin999]

Does the value of the US dollar change as you go from state to state or city to city in line with local productivity?

Does the value of the Euro change as you go from Germany to Greece?

No, but the exchange rate of the dollar with other currencies in the world does vary in line with relative productivity.

It's a question of scale.

I don't think there's any game value in making it more complicated than it is but personally given the inter-stellar scale of the Imperium I think of the ICr as a trade currency like the earth dollar and among the worlds fully plugged into the 3I the electronic system automatically makes any local adjustments.

 

[flykiller]

Does the value of the US dollar change as you go from state to state or city to city in line with local productivity?

yes.

over time, too, not just place.

 

[kilemall]

yes.

over time, too, not just place.

Along those lines, best to at least have a handy tool on hand for such discussions-

http://www.measuringworth.com/worthmeasures.php

 

[flykiller]

Along those lines, best to at least have a handy tool on hand for such discussions-

I dunno man, it seems of tremendously limited utility. good for comparing bread by itself as such, sure. but how many ipods could a roman emperor buy for his orgies? how many kidney transplants to save his relatives? how many machine guns to hold back the savage allemani hordes? how many agricultural slaves could you buy now? how many chariot racers could you hire? how many scribes to record your glorious deeds? (and of course, why would you?)

heh. reminds me of long island being purchased for a basket of glass beads. try figuring THAT in terms of indian gdp.

 

[Condottiere]

The Imperal Credit keeps it's value since likely the Imperium collects it's taxes in that currency, and charges for services in Starports in that currency, which means that member governments and Starport customers have to make an effort to obtain Imperial Credits in order to pay those Imperial taxes and obtain those services.

Luckily, Imperium tourists, military and bureaucracies, as well as Imperium procurements are paid with and for in Imperial Credits.

 

[kilemall]

I dunno man, it seems of tremendously limited utility. good for comparing bread by itself as such, sure. but how many ipods could a roman emperor buy for his orgies? how many kidney transplants to save his relatives? how many machine guns to hold back the savage allemani hordes? how many agricultural slaves could you buy now? how many chariot racers could you hire? how many scribes to record your glorious deeds? (and of course, why would you?)

heh. reminds me of long island being purchased for a basket of glass beads. try figuring THAT in terms of indian gdp.

Easy there cowboy. I didn't say it would fix up all tech level economics in a theoretical entertainment universe, just to the point that there is no such thing as a static currency and the sort of issues and measures one has to think of to compare which IS of use to our purpose.