Grains as the Store of Value

The previous section explained that:

• paper money caused inflation
• paper stocks caused crashes
• paper checks caused bouncing checks

This was because paper lets people write any number that might not match the real value of the thing it was representing.

In addition, money is not controlled by people, but by:

• the central bank as wholesaler of money
• commercial banks as retailers

Cryptocurrencies were even worse because they had no third party regulating or securing or insuring them.

This makes both fiat and cryptocurrencies problematic as stores of value.

Grains as Store of Value

Adam Smith’s proposal was to use grains.

From century to century, wheat is a better measure than silver because a unit of wheat will command more equally a unit of labour than a unit of silver commands labour. But from year to year silver is better, because each unit of silver will command more equally a unit of labour.

Adam Smith

Wealth of Nations Book 1, Chapter 5

This is why Supereconomics uses the common food as the store of value.

• In most cases, these will be grains such as rice or wheat.
• In barren places that have little agriculture such as Greenland and Alaska, these are in fish or wild game.

The important thing that they should be prevalent and known by all, as to be the common measure of economic valuation.

In every state of society and every stage of improvement, equal amounts of wheat will, more nearly represent equal amounts of labour than equal amounts of any rude produce.

In all the different stages of wealth and improvement, wheat is a more accurate measure of value than any other commodity.

In all those different stages, we can judge the real value of silver by comparing it with wheat than any other commodity.

Adam Smith

Wealth of Nations, Book 1 Chapter 11

This concept is the foundation of the grain index which will be used for:

• Net Domestic Product
• Zero Inflation Goal