Abstract
This chapter discusses the implications of adopting the space value framework for money mechanics. While hardwiring sustainability into financial mathematics based on the space value of money principle and ensuing equations will require a comprehensive reassessment of instruments and transactions used by money creators, i.e., central and commercial banks, this chapter focuses on the broader systemic considerations given our debt-based monetary architecture. It discusses three major limitations of debt-based money, calendar time, monetary gravity, and monetary hunger, and offers a new money creation logic based on space value creation. It proposes Value Easing through Public Capitalisation Notes as a transactional approach that can also facilitate the funding of the many trillions of dollars needed for the transition to a Net Zero sustainable economy.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
Please note that the calculations assume uniform terrestrial conditions for simplicity and the purpose of the argument.
- 2.
Calculation details: the distance light can travel in one month, also known as a light-month, is the distance that light travels in an absolute vacuum in one full month. The speed of light is equal to 299 792 458 m/s, assuming 30 days in a month, and 86,400 seconds in each, in one month light travels 777,062,051,136,000 metres, which is equivalent to approximately 777 Tm (1 Terametre = 1,000,000,000,000 metres). Usain Bolt, the Jamaican sprinter, set the world record in 2009 in the 100-metre sprint at 9.58 seconds, giving him a speed of 10.44 metres per second, which means the furthest Bolt can run in one month is 27,060,480 metres. The fastest production, the SSC Tuatara, reported to have a speed of 316 miles per hour, or 141.265 metres per second, the furthest SSC Tuatara can travel in a month is 366,158,880 metres. The Parker Solar Probe (NASA 2018) achieved speeds of 153,454 miles per hour or 68,600.076 metres per second, the furthest it can travel within a month is 177,811,397,406.72 metres.
- 3.
Cryptocurrencies should not be confused with Central Bank Digital Currencies (CBDC) which are now being considered by the Bank of England and other central banks (Bank of England 2023a).
- 4.
For a relative understanding of the numbers, note that the two highest-consuming countries, China and the United States, use respectively 7805.66 TWh and 3979.28 TWh per year (CCAF 2023).
- 5.
Emphasis added.
References
Austin, A. 2015. The Debt Limit: History and Recent Increases. Congressional Research Service. https://sgp.fas.org/crs/misc/RL31967.pdf. Accessed 2 February 2020.
Bank of England. 2020. What Are Cryptoassets (Cryptocurrencies)? Bank of England, England. https://www.bankofengland.co.uk/knowledgebank/what-are-cryptocurrencies. Accessed 2 February 2022.
Bank of England. 2021. Bank of England Annual Report and Accounts 20/21. Bank of England. https://www.bankofengland.co.uk/-/media/boe/files/annual-report/2021/boe-2021.pdf?la=en&hash=965204F6565CB8CAD29A86E595CB7F02E8A54E07#page=97. Accessed 2 February 2022.
Bank of England. 2023a. Bank of England Annual Report and Accounts 21/22. Bank of England. https://www.bankofengland.co.uk/-/media/boe/files/annual-report/2023/boe-2023.pdf. Accessed 6 July 2023.
Bank of England. 2023b. What is CBDC? https://www.bankofengland.co.uk/explainers/what-is-a-central-bank-digital-currency. Accessed 1 March 2023.
Bernanke, S.B. 2009. The Crisis and the Policy Response. Federal Reserve Board of Directors. Speech at London School of Economics. https://www.federalreserve.gov/newsevents/speech/bernanke20090113a.htm. Accessed 2 February 2021.
Bitcoin. 2021a. Why Do Bitcoins Have Value? Bitcoin.org. https://bitcoin.org/en/faq#why-do-bitcoins-have-value. Accessed 12 December 2021.
Bitcoin. 2021b. How are Bitcoins Created? Bitcoin.org. https://bitcoin.org/en/faq#how-are-bitcoins-created. Accessed 12 December 2021.
Bitcoin. 2021c. How Does Bitcoin Mining Work? Bitcoin.org. https://bitcoin.org/en/faq#how-does-bitcoin-mining-work. Accessed 12 December 2021.
Blanqué, P. 2021. Money and Its Velocity Matter: The Great Comeback of the Quan-tity Equation of Money in an Era of Regime Shift. Amundi Asset management. Discussion Paper 52. https://research-center.amundi.com/article/money-and-its-velocity-matter-great-comeback-quantity-equation-money-era-regime-shift. Accessed 2 March 2022.
Britannica. 2023a. Time Zones. Encyclopedia Britannica. https://www.britannica.com/science/time-zone. Accessed June 2023.
Britannica. 2023b. Meridian Geography. Encyclopaedia Britannica. https://www.britannica.com/science/meridian-geography. Accessed June 2023.
CCAF. 2023. Cambridge Bitcoin Electricity Consumption Index. Cambridge Centre for Alternative Finance, Cambridge. https://ccaf.io/cbeci/index. Accessed 20 March 2023.
CoinMarketCap. 2023. All Cryptocurrencies. CoinMarketCap. https://coinmarketcap.com/. Accessed July 2023.
De Vries, A., and C. Stoll. 2021. Bitcoin’s Growing E-waste Problem. Resources Conservation and Recycling. https://doi.org/10.1016/j.resconrec.2021.105901. Accessed 2 February 2022.
Economist. 2022. The Charm of Cryptocurrencies for White Supremacists. The Economist. https://www.economist.com/united-states/2022/02/05/the-charm-of-cryptocurrencies-for-white-supremacists. Accessed 22 February 2022
Edelberg, W., and L. Sheiner. 2023. How Worried Should We be If the Debt Ceiling Isn’t Lifted? Brookings. https://www.brookings.edu/articles/how-worried-should-we-be-if-the-debt-ceiling-isnt-lifted/. Accessed 12 July 2023.
FED. 2022. Total Assets of the Federal Reserve. The Federal Reserve. https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm. Accessed 2 August 2023.
Greene, B. 2004. The Fabric of the Cosmos: Space, Time, and the Texture of Reality. London: Penguin Books.
HSBC-BCG. 2021. Delivering Net Zero Supply Chains: The Multi-Trillion Dollar Key to Beat Climate Change. Boston Consulting Group and HSBC. https://www.hsbc.com/-/files/hsbc/news-and-insight/2021/pdf/211026-delivering-net-zero-supply-chains.pdf?download=1. Accessed 2 February 2022.
IMF. 2023. 3 Global Currency Reserves. International Monetary Fund. https://data.imf.org/?sk=e6a5f467-c14b-4aa8-9f6d-5a09ec4e62a4. Accessed 31 July 2023.
McKinsey GI. 2022. The Net-zero Transition What It Would Cost, What It Could Bring. McKinsey Global Institute. https://www.mckinsey.com/~/media/mckinsey/business%20functions/sustainability/our%20insights/the%20net%20zero%20transition%20what%20it%20would%20cost%20what%20it%20could%20bring/the%20net-zero%20transition-report-january-2022-final.pdf. Accessed 14 February 2022.
McLeay, M., A. Radia, and R. Thomas. 2014a. Money in the Modern Economy: An Introduction. Bank of England. Quarterly Bulletin. https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-in-the-modern-economy-an-introduction.pdf. Accessed 6 June 2020.
McLeay, M., A. Radia, and R. Thomas. 2014b. Money Creation in the Modern Economy. Bank of England. Quarterly Bulletin. https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy. Accessed 6 June 2020.
NASA. 2018. Parker Solar Probe Becomes Fastest Ever Spacecraft. NASA. https://blogs.nasa.gov/parkersolarprobe/2018/10/29/parker-solar-probe-becomes-fastest-ever-spacecraft/. Accessed 2 February 2022.
Papazian, Armen. 2022. The Space Value of Money: Rethinking Finance Beyond Risk and Time. New York: Palgrave Macmillan. https://doi.org/10.1057/978-1-137-59489-1.
Prasad, E. 2021. Five Myths About Cryptocurrency. The Washington Post. https://www.washingtonpost.com/outlook/five-myths/cryptocurrency-yths-bitcoin-dogecoin-musk/2021/05/20/1f3f6c28-b8ad-11eb-96b9-e949d5397de9_story.html. Accessed 02 February 2022.
Rovelli, C. 2018. The Order of Time. New York: Riverhead Books.
Smolin, L. 2006. The Trouble with Physics. London: Penguin Books.
Statista. 2022. Total Outstanding Public and Private Debt Across All Sectors in the United States from 2000 to 2022. Statista. https://www.statista.com/statistics/1083150/total-us-debt-across-all-sectors/#:~:text=Between%202000%20and%202021%2C%20the,to%2088.2%20trillion%20U.S.%20dollars. Accessed 10 July 2023.
US Treasury. 2023. Debt Limit. US Treasury, USA. https://home.treasury.gov/policy-issues/financial-markets-financial-institutions-and-fiscal-service/debt-limit. Accessed 12 July 2023.
White House. 2023. The Potential Economic Impacts of Various Debt Ceiling Scenarios. The White House. https://www.whitehouse.gov/cea/written-materials/2023/05/03/debt-ceiling-scenarios/. Accessed 23 July 2023.
Withers, W.J.C. 2017. Zero Degrees: Geographies of the Prime Meridian. Cambridge: Harvard University Press.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
Copyright information
© 2023 The Author(s), under exclusive license to Springer Nature Switzerland AG
About this chapter
Cite this chapter
Papazian, A.V. (2023). Implications for Money Mechanics. In: Hardwiring Sustainability into Financial Mathematics. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-031-45689-3_5
Download citation
DOI: https://doi.org/10.1007/978-3-031-45689-3_5
Published:
Publisher Name: Palgrave Macmillan, Cham
Print ISBN: 978-3-031-45688-6
Online ISBN: 978-3-031-45689-3
eBook Packages: Economics and FinanceEconomics and Finance (R0)