World Commodities and World Currency

Everybody has read The Intelligent Investor and a smaller group has actually got through Security Analysis. Almost nobody knows that in between writing them Graham spent years on a monetary proposal, which is that a currency should be backed by a basket of the raw commodities an economy actually runs on rather than by gold.

He is not hand-waving about it either. He works out the storage, the warrants, how redemption would function, what happens when one commodity in the basket moves against the others. It reads like a man doing engineering rather than economics.

What I took out of it has nothing to do with currency. Graham does the same thing here that he does with a company, which is that he never argues about what something ought to be worth, he works out what it can actually be exchanged for and builds everything on top of that number. Once you have watched him do it to a currency, doing it to a resort in Oklahoma stops feeling like a big leap.