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With QE3 and the Eurozone bond buying spree....and China easing fiscal policies, it looks like inflation is going to surge and cash is going to dwindle in value. The world will be awash with cash, while paradoxically, there will be major economies going on the verge of bankruptcy? it really is scary contemplating where cash is heading for. We are in uncharted territory. What is fiat currency without any backing at all? (Read Peter Schiff's seminal book on Crash Proof 2.0: How to Profit From the Economic Collapse)
If one looked at the other asset classes that will retain value in these times- property, stocks, gold- which of these could potentially complement or perhaps replace cash as currency in certain situations. Property is illiquid and are huge capital items. Gold is ascribed value according to market forces and is non- productive. One can re-bury gold into the ground, go to sleep, and wake up with the same 100g, no more no less. Of course, it's value may increase or diminish according to the gold market which again is tied to the value of the US dollar, among others.
Stocks on the other hand represent the composite value of a company or group of companies which in turn represents all the myriad elements that makes the company what it is- human capital, human talent, human industriousness, raw material, machinery, property assets, cash, patents, creative license, etc, etc. The company is organic, diverse and diversified. This is where true value resides and will be retained. Parts of this value are represented by the stock of the company ( which previously, just as in cash, were represented by a piece of paper).
I now put forward the case that stocks, which are more liquid and can be represented by smaller denominations, may one day take over some of the role of cash as currency especially in these inflationary times. As it is now companies are paying with their shares- dividends, buyouts, etc. With the proliferation of smart technology, the Internet, and ever more sophisticated telecommunications systems, the use of stocks as a mode of payment, perhaps for big ticket items, may become a reality. I am sure some others have considered this before.
I seek the valued opinions of fellow Buddies.

I have heard of banks willing to loan customer money for property acquisition with property pledge as collateral. I hardly heard of banks willing to loan customer for shares purchase using the shares as collateral.

I thought there is share financing? just the requirement is high and the leverage is low.

(28-09-2012, 11:10 PM)freedom Wrote: [ -> ]I thought there is share financing? just the requirement is high and the leverage is low.

Yes there is. For e.g. Uob offers leveraging of 1.85 times the value of share/ stock pledged as collateral.

i certainly wouldn't like to pay for my next meal with some share certificates in future! Stocks are productive assets, grow in value and their valuations (relative to each other) change in time.

All stocks are NOT the same but the same fiat currency paper or 2 pieces of gold (with the same purity level) are, so you could exchange fiat money/gold freely, but certainly not 2 pieces of stock certificates of different companies - Let's imagine i have to pay USD700, i could either use 1 Apple stock (worthed 700usd each) or 10000 'S chip' stock (worthed USD0.07 each) - which one would the retailer take up?

(29-09-2012, 02:13 AM)Muck Wrote: [ -> ]

(28-09-2012, 11:10 PM)freedom Wrote: [ -> ]I thought there is share financing? just the requirement is high and the leverage is low.

Yes there is. For e.g. Uob offers leveraging of 1.85 times the value of share/ stock pledged as collateral.

I didnt know banks offer that. I thought only brokerage firms do that. I notice the terms are not as favourable compared to property loans. Interest can range from 3.5 to 7.5% per annum. Hmm can consider loan during recession period as the dividend from stable shares usually can offset the interest payment.

(29-09-2012, 08:25 AM)weijian Wrote: [ -> ]i certainly wouldn't like to pay for my next meal with some share certificates in future! Stocks are productive assets, grow in value and their valuations (relative to each other) change in time.

All stocks are NOT the same but the same fiat currency paper or 2 pieces of gold (with the same purity level) are, so you could exchange fiat money/gold freely, but certainly not 2 pieces of stock certificates of different companies - Let's imagine i have to pay USD700, i could either use 1 Apple stock (worthed 700usd each) or 10000 'S chip' stock (worthed USD0.07 each) - which one would the retailer take up?

No, we will not be reverting back to the days of yore when share certificates were the order of the day but we will be using the handsets that we now carry in our pockets and handbags to carry out the transactions. Note too that cash changes hands electronically, often without any movement of real hard money.
Stocks could be used to pay for bigger items, not for your Kopi and kaya toast or nasi lemak items. I think both cash and stocks could coexist and complement each other.
Between Apple shares and the Dong or Kyat, I'll go for the former. Btw the Euro and Apple shares..wow..this is going to be a tough one...but if you offered the Sing dollar as payment, I'll take the latter. Oh yes, I might accept real physical gold but my worry would be where to store and secure it. Gold certificates...perhaps.
On a different note, I believe that with the electronic trading platform, there is nothing to stop exchanges from making the board lot size much smaller, doing away with the middle-man and trading round-the-clock 24/7. This is a personal opinion but I am sure is open to much argument.