Monday, November 8, 2010

The Cheese Standard

Problem 1: The World Bank head promotes an international currency system based on gold.

Problem 2: The USDA promotes overconsumption of cheese, in tension with its anti-obesity drive.

Both of these are bad ideas from authorities who should know better. But with minor modifications, we can unite both of these foolish proposals into a superior one. Namely: a new international monetary order based around the Cheese Standard.

In an economic environment characterized by high unemployment and low to negative inflation, gold is inferior to cheese as a medium of exchange. Since cheese can't be stored indefinitely, it must be spent quickly, stimulating the economy and boosting employment. Gold has exactly the opposite properties. And as a medium of exchange whose supply is relatively fixed and beyond any government's immediate control, gold leaves expansionary monetary policy unable to help anyone.

And that's how I answer Robert Zoellick's demands for a Gold Standard. He may press upon the brow of labor a crown of cheese. But he shall not crucify mankind upon a cross of gold.


Anonymous said...

Who moved my currency standard?

Axel said...

It would also constitute a nice reductio of the old Greenpeace slogan "When the last tree is cut, when the last river has been poisoned, when the last fish has been caught, then we will find out that we can't eat money."