Alternative Currency.

February 7, 2012 · 37 comments

Let’s have a little fun today shall we? Have you ever thought about money? I’m not talking about things like saving, paying doubt debt, investing, etc. No, I’m talking about tangible money. I personally am fascinated by it.

Think about it.  A $100 bill is worth ten times more than a $10 bill. Why? Simply because someone decided to print the number 100 on one piece of paper, and number 10 on the other. Money has virtually no intrinsic value. It’s only purpose is to serve as a medium for the exchanging of goods. (side note: did you know a penny costs 1.67 cents to make? how crazy is that!)

In fact money is so worthless that it’s quickly becoming an endangered species. If you’re like me then you get paid via direct deposit. Every two weeks my bank account increases as my employer transfers invisible cash in to my bank account. I can then head to Target and buy a plunger (you know for plunging things) with my debit card. Nowhere in that process did I see a single dollar. It’s this crazy magical accounting system that just kind of is.

So since we can all agree money is pretty much worthless, I figured we could get a little creative today and create some hypothetical currencies. I personally like the burrito factor. If you aren’t familiar with it, here’s a little rundown from a previous post

I can get a California burrito for $5 at the local taco stand. Not only is that sucker scrumtrulescent, but it also fills me up. Now, whenever I go out to eat and look at the menu, I run the burrito factor through my mental calculator. It looks a little something like this… “Okay, this salad is gonna cost me $12.50, which is the same price as 2.5 California burritos. Plus the salad is probably only going to fill me up 50%. So that means this salad is gonna cost the equivalent of 5 California burritos to get full. Death to salad!

So reader, what’s your currency?

image credit

1 Sun

Can the. Restaurant beat my wife’s cooking? Of not, we go elsewhere or eat in.

2 dubhall

One of my friends measures things in gumballs. They are always 25 cents. So your burrito would be 20 gumballs.

3 Michelle

Haha I love this. I definitely compare food and do this.

4 Mike

I read recently about a town that create its own currency, http://abclocal.go.com/wtvd/story?section=news/local&id=6747829. This may be a violation of Federal law, dating back to the origins of our country – each state had its own currency under the Articles of Confederation, which basically halted interstate commerce.

I think these proxy efforts are rediculous since people ultimately need to buy goods from other places that require a currency they can trust. I don’t know about you, but I wouldn’t want to get paid in something I couldn’t put in the bank or buy food with if I wasn’t confident it wouldn’t be accepted.

In a cartoon I used to watch (Duck Tales) there was an episode that showed a town using bottle caps as their currency. At least that would have the potential of costing less to make than it is worth.

5 Daisy

My currency is hours worked.

6 Derek

Mine too. Its finite and is easily measurable to me. I like that it reminds me of the value of my effort, regardless of account balance, or windfall.

Monthly efforts
Rent: 40 Hours
Foods: 20 hours

7 Kevin @ Thousandaire.com

Honestly, we should go back to the gold standard. But in my head, I measure the cost of something in how much fewer unnecessary electronics I can buy after spending money elsewhere. It all just depends on what I want next. Before I got my tablet, every $1 was 0.2% of my new tablet.

8 ImpulseSave @impulsesave

I agree. I think of money in terms of my next savings goal. This coffee is a portion of paying off student debt; this tshirt is a portion of my new coat; and that game download is a portion of my new camera.

What’s interesting about the gold standard, though, is that gold really has no intrinsic value either. Value is as high or low as the consumer sees fit: if I think of every dollar in terms of burritos, than burritos have a higher value in my mind than even gold.

9 JJ

The thing about gold that makes it a good money base are a few characteristics of it.

1. It is a substance of relative rarity that occurs naturally and cannot be counterfeited (otherwise alchemy would have really caught on until gold became worthless).

2. The worldwide supply of gold increases at a pretty stable rate. With fiat currencies a government can print tons of it overnight (quantitative easing, anyone?). This reliable and modest growth rate of supply lends it stability.

3. Gold has enjoyed a long, rich (pun intended, lol) history of being a store of value in many civilizations. This tradition alone and its fame as a valuable material (however abstract that value may arguably be) also help.

Every value of monetary worth is abstract and not an intrinsic property of the object in question. We all (hopefully) learned in economics class that in simplistic terms price is determined by the interaction between supply and demand. Those materials for which both supply and demand are generally stable (although gold gains more demand when people are nervous about inflation – like now) make the best stores of value. It also helps when a currency does not easily expire – hence burritos don’t seem like a great option to me. In the end it doesn’t really matter because fiat currencies will continue to be the way the world conducts business… unless of course a zombie apocalypse sweeps the earth and our new currencies become very concrete things like bullets, cans of food, uncontaminated water, and safe houses. Or in a future ruled by machines the currency might be Ah (amp hours). Or in a more realistic dystopia where pollution has ravaged our earth the currency may be viable seeds and fertile land. Food for thought :)

10 Melissa

Rent. As in, if I take that project, that’s two month’s rent. If I go on that vacation, that’s six weeks’ rent. Etc.

11 Rachel

My weakness is for books so I like to measure things in books purchased. However, with the rise in availablility of free books for my kindle, my economy is set to collapse.

12 The Money Monk

I always measure money in how long it would take me to earn the money, or if I would consider accepting that item in lieu of equal amount of money.

For example, if I am looking to buy a couch and it costs 200, would I be happy with that couch instead of $200 on my next paycheck? Probably not.

13 Mo D.

Like Melissa, I measure things in terms of our mortagage (ie: a night in Niagara Falls, ON Canada would run us approx. $400 for gas, hotel, meals, entertainment, etc), which is about 56% of our monthly mortgage. 1 night at a hotel vs. 30 nights at home; looks kinda ugly when you see it in print!

14 Jessica

I measure things in how many tables I would have to serve.
I usually average one table to about $10.
So a $100 purse would mean I have to serve 10 tables.
Which is usually about 1 full night of work.

or about .75 of a weekend night.

In the end, I usual decide it isn’t worth it!

15 jefferson

So awesome.. The burrito factor.

I just measure things in relation to my budget for the month..
If I buy that $50 now, I will only have $200 the rest of the month for gas and groceries.
Thus, it’s better to wait until next month.

16 Rafiki

I do something similar to your burrito factor but I usually just think of other things I need to get at the same time and make my decisions based on importance.

A guy once said to me. Money is the only thing you can add nothing too and get more of it. Basically the same argument you were making about the $10 and the $100.

17 cashflowmantra

I like to think in the amount of time that it takes me to make a certain amount.

18 Kristin

I don’t do this, but a friend’s unit of measurement was an iPod. And now that iPods are less popular, it’s an iPad. Scholarships, giveaways… how many Apple products would that net you?

19 Matt

Although I don’t buy lattes anymore in order to save money. I used to think in lattes. $5 could get me a warm latte on a cool brisk morning. That is my idea of waking up on a saturday.

20 Tanner

That’s pretty cool. I think of it in terms of how much extra I need to work. $100 would mean an extra Saturday/Sunday. A vacation is worth 4-5 extra weekend work days. I also see it in terms of other goals. Do I want a $250 phone, or do I want 4 fine-restaurant meals with my friends during vacation? I’ll take the meals!

21 Mike

My was looking over my shoulder and reminded me that she puts everything in terms of a car payment. When we were first married that was about $350, now unfortunately we measure a bit closer to $500.

22 Stu

Nugget-ology.

Everything is converted into an equivalent number of Wendy’s chicken nuggets. My friends and I have been using this conversion factor for years. We started using Nugget-ology when they were on the dollar menu ($1 = 5 nuggets), but I think it’s now around $1 = 4 nuggets.

At the original 5:1 ratio:
Jessica’s $100 purse is really 500 nuggets.
Tanner’s $250 phone is worth 1,250 nuggets.
Mike’s car payment ($500) is worth 2,500 nuggets.

What would you do with 2,500 delicious Wendy’s chicken nuggets?!?!

23 Stu

Taking it one step further…
Mike get rid of that car payment and you can have 30,000 nuggets per year (12*2500). That’s over 82 nuggets per day or enough to fill the swimming pool and live a life of gluttony! As an added bonus, you’d get 6,000 *free* BBQ sauce packets to help lube up the pool!

24 Mike

I think I’d rather have the car.

25 Healthy person

Hmm. Heart attack or car accident? Which is worse?

26 Mike

My thought exactly.

27 Healthy person

So you think a car accident is better?

28 Mike

Healthy Person, are you being sarcastic to my sarcasm? Or, do you think heart disease from unhealthy, fried foods is better? One is a statistical possibility that is considerably more likely to be non-life threatening (car accidents) compared to the other, which has a similar rate of affliction albeit with a considerably higher mortality rate.

Not to mention that I’d rather have a car as I enjoy being able to go places in a timely manner. You know, places like my job.

29 BrokeElizabeth

Ooh, good question… I think in terms of servings of chips (£2). It usually prevents small impulse purchases that can add up quickly, but then I start craving chips… mmmm… with vinegar and salt… dang it, now I’m hungry.

30 Drew @ EpicFinances.com

How many burrito’s is my house worth? Am I underburrito on my house?

31 KingofthePaupers

Ninja: So reader, what’s your currency?
Jct: My currency is an hour of volunteer labor. In 1999 I paid for 39/40 nights in Europe with a timebank IOU for a night back in Canada worth 5 Hours registered at my own P2P timebank account for those IOUs at http://facebook.com/john.turmel?sk=info page listing my Offers, Wants, Hours given, Hours received. Find UNILETS UNISET to see how I set mine and how you can set up yours to join the 99% in the underground timebanking economy. But Burritos would work fine too except a little messier and harder to transmit on the internet!

32 WinrWinrChknDinr

In our household, we do the same thing with McDonald’s double cheeseburgers (which used to be on the dollar menu). There have been more than a handful of occasions where one of us has said, “Just think, we could have had xx double cheeseburgers instead.” The weird part is we have McDonald’s maybe once every (2) months.

33 Keith

Well, I’ve got a small pile of firewood in my yard:

http://www.libmylife.com/2012/02/06/the-freedom-of-firewood-holzhausen-and-a-sunny-day/

If I could use that for money, I might be able to buy a couple burritos myself. :)

34 KingofthePaupers

JJ: The thing about gold that makes it a good money base are a few characteristics of it.
1. It is a substance of relative rarity that occurs naturally and cannot be counterfeited
Jct: Har har har. Rarity is the thing about gold I was going to say was most stupid. King Henry I took a stick, imprinted “10 pounds of gold” on it, split the stick in two so one half was the money and the other half was the stub to prevent counterfeiting. The wood grains better tally up at tax time. So there is really no good reason to use rare gold or metal for our poker chips when paper or plastic seem to work fine in most casinos. Oh right, these aren’t casino banks, they’re fractional reserve banks and everyone knows their chips work so badly that people think making them out of yellow rock would help. Har har har.

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