Kilowatt Cards demonstrate how a financial security can have fixed and stable value. Their value is fixed because 10 kilowatt-hours is a physical constant, a fixed amount of work (in the scientific sense) that one can evaluate intuitively:
10kWh = 10,000 Watt-hours which is enough electricity to run a 100 Watt light bulb for 100 hours (exactly), or drive a Toyota Prius about 30 kilometers.

Electricity can do work - expressed as light, heat, or fuel - using the principle of the conservation of energy (e.g., 10 kWh = 34,120 BTU).

The value of 10 KWh can be judged intuitively without reference to a cash price, like one kilogram of pure water.

Kilowatt Cards are gift cards not a currency. Because they can be redeemed by anyone to pay for electricity anywhere on earth they are useful for barter - and as a store of value - worth a fixed amount of energy regardless of local electricity prices.

While some people want gold and silver, everybody needs light, heat or transportation. Unlike notes backed by gold, Kilowatt Cards may be redeemed for a useful commodity.

While the price of electricity is not stable, its value to people as a source of light, heat and motion is stable. A given amount of electricity has objective value, because activites such as traveling by train or reading at night consume the same amounts of energy every time.

So no matter what its price in money, a fixed quantity of electricity has the same value to people because the amount of work it can do is constant.

The corporation behind Kilowatt Cards does not produce or deliver electricity - it pays for electricity - using national currencies obtained from investments such as rental properties, farm land, bonds, intellectual property, equipment leasing, and other equity holdings which fund payments for electricity as the notes are redeemed. Kilowatt Cards are backed by tangible assets to keep up with monetary inflation, not promises about economic growth.

Kilowatt Cards are issued in exchange for commodites (e.g. firewood, grains, gasoline) that can be stored and later sold to pay for electricity or to be invested more assets.

The system provides a store-of-value (the underlying assets) and medium-of-exchange (paper or electronic accounts of kWh liabilities) in a financial instrument that resists inflation. Kilowatt-hour liabilites are a new asset class that are safe to hold because the kWh is a scientific constant - not subject to currency inflation - provided that the system is run prudently.

The underlying assets are owned collectively by holders of the Kilowatt Cards, which pay no interest but do maintain a fixed value of 10 kWh and may be saved, sold, or loaned at interest. They are liquid assets which are easier to aquire than houses, land or equities (the traditional inflation hedges).

Capitalism works best when tangible assets can be monetized into something liquid and stable. Financial liabilities denominated in kilowatt-hours, if backed by tangible assets owned without debt could stabilize the boom-bust business cycle - by letting people avoid asset bubbles and just save honestly the value of their labors, commodities and wealth knowing that their savings cannot be simply distroyed by fiat currency growth and bubble collapse.

If electricity-backed notes remain redeemable at face value, one cannot loose wealth to monetary inflation.

You may doubt that wealth can be equated with electrical energy - or liken it to the illusion that wealth can be equated with gold - or feel that power grids are so vulnerable that financial capital should not depend on them. But most capital already depends on electricity - for example, nearly every building and business on earth. Name an asset of yours which does not require light, heat or motion to retain value.

Securities backed by a physical commodity such as gold must be issued in limited numbers, assuming the gold is owned and stored, or else the gold may be backed by futures contracts (promises).

In contrast, securites backed by kilowatt-hours are not based on promises to produce or deliver electricity. The issuer of kWh liabilites need only be able to pay for electricity produced by others.

As for evaluating our ability to pay for electicity one may look to (1) an issuer's total kWh liabilities, and (2) its total assets, thereby permitting ordinary financial analysis.

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It is a truth universally acknowledged that a shrinking economy must be in want of more credit.

Kilowatt Cards demonstrate a way to monetize assets and to extend credit against collateral.

The Kilowatt-Hour Card Corporation is a not-for-profit entity without owners, except for the holders of the circulating Kilowatt Cards. Trustees and employess manage operations but there are no shareholders extracting profits from operations.

Our approach is like that of a mutual insurance company owned by its policy holders so that all of the assets funding the kilowatt-hour libilities can be run prudently, to maintain value, rather than being run for economic growth.

Rents are used for maintaining the underlying assets to a decent standard. While the economic surplus is not high the absence of shareholders extracting profit makes the economic surplus avilable for reinvestment in the underlying assets, providing jobs, while protecting the value of the kWh liablities issued to finance those assets.

The value of the underlying assets should rise with inflation, while the reinvested profits should build a cushion against rising energy prices.

The Kilowatt Cards in circulation thus represent collective ownership of the underlying assets (capital) in liquid form.

The underlying assets need not be limited to real estate and might include capital equipment, business inventories, commodities, soverign debt or any other collateral that might be financed by a bank, asssuming that there were enough demand for the kWh paper.

One goal of the project is to demonstrate how one might finance housing, farms, and other enterprises without promising economic growth. Collective ownership of the underlying assets can serve to avoid usury if desired.

The profits saved by this mutual ownership structure are available to be reinvested in the system, providing the value to pay for rising electricity prices and making it a very safe investment vehicle.

Another goal of this project is to provide a way for people to save money without buying equities or oversized houses.

Kilowatt Cards can democratize credit allocation and smooth out the boom/bust cycles of capitalism since almost any asset can be monetized as kilowatt-hour liabilites without the participaion of a bank.

Just as Kilowatt Cards do not depend on any particular investment style, they do not depend on any particular electricity supplier.

In princiopal an individual electric company could issue its own redeemable coupons, but the risk of failure due to war or fuel shortage would be high.

The delocalized approach used by Kilowatt Cards transforms the risk into a simple financial question that can be analyzed on the basis of earnings and balance sheets.

This approach to finance may be viewed as a type of mutual insurance society. Instead of pooling money to insure against physical losses, it pools land, tangibles, and perhaps soverign debt to guard against currency depreciation and credit contraction.

As with any risk pool it's important not to have too many claims (redemptions for electricity) at one time. Kilowatt Cards have been redeemed at a rate of about 1% of the total in circulation per year since July 2007.

Another use for kilowatt-hour paper is Islamic finance, since one can lend at 0% interest when the medium-of-exchange has fixed and stable value.

Since fiat currencies are depreciating always, the prohibition against paying interest means that Islamic investments are really for equity, not loans. Lending in kilowatt-hours could enable Islamic finace to actually function in the way that it claims to function.

That is, one might lend kilowatt-hour notes to a borrower who could trade them for cash (or something productive), and who will eventually repay the debt by buying that same number of kilowatt-hours on the market. That later purchase of kWh's might cost more money than was originally obtained by selling the loaned kilowatt-hours, but it would represent repayment of the same energy debt.

While Islam forbids payment of interest on debt, it might allow payment of money to cover currency inflation if the debt itself had been defined in terms of energy.

Samples of Kilowatt Cards are available FREE in limited amounts.