Banking Houses

[Reban]

I wonder if there is enough gold in the Imperium to back up all its CrImp notes and coins? Gold that isn't being used for jewelry and industrial purposes, that is.


Hans

As well as gold bullion (and other precious metals) the Imperium probably owns the mining and resource rights to known deposits on the worlds it controls directly such as Imperial Reserves and depots etc. Correct me if I'm wrong but you can trade on such assets?

 

[McPerth]

It's fiat money all right. GT:FT says that the Imperium monitors the growth of the economy and increases the supply of currency to match the growth.

That makes me wonder how accurate is this monitoring, given the communication lag time in the Imperium...

If made by the means of projections, an erroneous projection could well lead to a financial crisis.

 

[Xerxeskingofking]

i think the CrImps value is based heavily on the idea that the Imperium is simply so big it won't fail, and that it's theoretical tax base is so huge it can absorb any debt.

I wonder how the Rebellion affects the value of the Crimp, though. unless it was made of valuable metal itself (which I was under the impression it was not), it would loose a lot of its fiat value compared to bullion and other goods.

 

[rancke]

Steady in relation to what though?

If Sector A has a mining boom, then that bit of the Imperium is growing, thus the CrImps in circulation has to change to keep pace. But over in Sector B a world has just had the Vargr bomb the crap out of its industrial base, reducing its local currency value.

Sector A won't have a mining boom big enough to affect its overall economy and the overall economy of Sector B won't be affected significantly by one world having its infrastructure wiped out (especially since any world with infrastructure small enough for the Vargr to wipe it out wouldn't be a blip on the economy of the sector's high-population worlds). Individual worlds will have boom and bust cycles (unless economic science has advanced 8 tech levels too), but the overall economies of the Imperium, the domains, and the sectors are IMO too vast to be affected by that. Subsectors... some subsectors might be affected by their high-population worlds, but compensating for that is one reason the sector government exists.


Hans

 

[rancke]

That makes me wonder how accurate is this monitoring, given the communication lag time in the Imperium...

If made by the means of projections, an erroneous projection could well lead to a financial crisis.

There's an Imperial mint in each sector, so that's probably the level at which adjustments are made. That's a communication lag of a maximum of six jumps for a really awkwardly placed sector capital. I think you can get some pretty accurate monitoring with that sort of lag.


Hans

 

[Timerover51]

i think the CrImps value is based heavily on the idea that the Imperium is simply so big it won't fail, and that it's theoretical tax base is so huge it can absorb any debt.

I wonder how the Rebellion affects the value of the Crimp, though. unless it was made of valuable metal itself (which I was under the impression it was not), it would loose a lot of its fiat value compared to bullion and other goods.

Generally, if you have a civil war going on, your currency is going to loose value, and the ability to manage credit transfers between the various warring factions of the Imperium is going to become pretty much impossible. The likelihood of each faction issuing its own currency or counterfitting another factions currency is quite high. I would expect gold, platinum(and its related metals), silver, and possibly copper would become more widely used in any kind of interstellar trade, as those would represent tangible assets.