Sunday, October 2, 2011

The Dollar on the Energy Standard

Giving the dollar a standard of value.

1. We need a standard of value.
2. The energy standard makes green energy more economically viable:

Synopsis: On the Energy Standard ms increases faster than energy use.
increases at the rate of energy efficiency.
ms increases even faster if inefficient.
this incs the cost of imported E.
so E projects that increase efficiency are more economical.
so the inefficiency is corrected.

can take an action which will save financial system. but they won’t.
does anyone else like the idea of having a currency that has a standard of value. the problem with using gold as a standard of value is that the supply of gold doesn’t necessarily grow in conjunction with the growth in the economy. when the economy is growing, we need the money supply to increase at a similar growth rate. Energy use grows as the economy grows. We could consider energy as a standard of value, if adjustments are made for increases in energy efficiency.

with the dollar on the Energy Standard, energy efficiency generates beneficial currency effects.

If we put the dollar on the energy standard, our money supply growth would correlate with the growth of the economy, adjusting for increases in energy efficiency (see box). putting the dollar on the energy standard regulates money supply growth. this stabilizes bond markets. [the following in box > create an energy standard bond. or add an energy standard component to bonds: if energy efficiency increases beyond a benchmark, the bond returns more. this reflects the decrease in the rate of money supply growth, which increases [decreases] interest rates. [if was a decrease in rates, then offset by increasing bond yield). sell these bonds to increase energy efficiency. the more bonds you sell, the more energy efficiency increases.<]  

Placing the dollar on the energy standard has an unanticipated benefit. The Energy Standard increases the economic viability of energy efficiency and clean energy projects. Here’s how: With the dollar on the Energy Standard, the less efficient our energy use, the less the value of the dollar: Put another way, if the growth in our energy efficiency growth declines, the value of the dollar declines. This decline in the value of the dollar raises the cost of everything we import, including energy.  The higher cost of energy increases the viability of clean tech (home grown energy) and of energy efficiency technologies. Putting the dollar on the Energy Standard increases the benefit of energy efficiency and clean technologies.

The more efficient our energy use, the stronger the dollar and the less imported energy costs.

Such as electric cars. As gas becomes more expensive, electrically generated power from wind, from solar is more competitive. then, electric cars make economic sense.

home grown solar panels have a higher return on investment. make more economic sense. wind turbines make more sense. so greater energy efficiency and self sufficiency becomes the way things are.  

if ms growth corresponds with our increase in efficiency, our currency maintains its value. (we increase purchasing power).   

With the dollar on the energy standard, energy efficient and clean energy technologies manifest currency effects that reduce energy costs. [the es increases the economic benefit of energy efficient projects. due to being on the es, energy efficiency reduces the cost of all energy purchased.]

energy standard enhances productivity due to better use of resources; use resources for energy efficiency.

sell corporate and government energy efficiency bonds.
energy efficient bonds tend to increase the value of the dollar. stronger dollar means FDI investors win from currency effect.
I make it predictable.  
because of this upside, people take lower yield for energy efficient bonds. if there is an increase in energy efficiency then have a basis pt change in yield.
the fed can offer lower interest rates when the dollar is getting stronger. because we are on the energy standard, our dollar will get stronger.

of course the fed can sell energy standard bonds to banks.
companies can sell energy standard bonds. they get a tax credit for
energy standard bonds can be sold to fund projects. the yield increases with an increase in energy efficiency. inc efficiency is specific coorelation to bond yield.

can add energy standard feature to bonds.

ground breakers
  • equilibrium loop
  • create external economy to offset internal diseconomy
  • energy standard bond
  • create an external economy that resolves a market created diseconomy.

the diseconomy is transfer of wealth from debtor to creditor, who pays back in cheaper money.  

stronger dollar is a win for FTD that is in dollars. when convert dollar into their currency they get more money. so a country on the energy standard attracts more FDI.  

BOX [consider this scenario: imported energy costs are .08 per kwh. my project generates energy at .12 kwh. but if dollar denominated  energy costs increase to .12 per kwh,then my project makes sense. my project will bring imported energy costs down because of an increase in supply, less demand for foreign energy, a stronger currency. what if the efficiencies bring imported energy costs to .08 per kwh?]

consider equilibrium effect:
Energy projects increase energy efficiency. the growth rate of the money supply slows. the currency appreciates. energy costs fall due to the efficient projects. energy use increases due to lower cost and a faster growing economy. money supply growth increases, raising energy prices [complex feedback mechanisms like a bio-system].