At 9:39 PM -0400 on 9/18/00, R. A. Hettinga wrote:
Someday, of course, you won't need the fiat bit, but pure commodities aren't the end-state. You probably need a mix of stuff, including financial proxies like debt and equity indices, and so on. But the core problem is measuring inflation. Fortunately, :-), Paul Harrison and I have this giant rant in the can about non-state bearer synthetic numeraires, using things like digital bearer warehouse receipts for the hard stuff, a proxy for the CPI...
By the way, the above isn't necessarily the end state, either. A lot of people, probably me among them, subscribe to the theory advanced by Eugene Fama (Efficient Market Hypothesis) and Fisher Black (Black-Scholes option pricing formula) that if switching out of the numeraire is cheap enough (insert Moore's Law here), it's probably better to keep and price transactions in *appreciating* assets instead of assets which don't earn a return. Cheers, RAH -- ----------------- R. A. Hettinga <mailto: rah@ibuc.com> The Internet Bearer Underwriting Corporation <http://www.ibuc.com/> 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'