A series of powerfully written articles by Charles Eisenstein at Reality Sandwich has renewed my interest in money alternatives, in particular a money-type which by design does a poor job of storing value. This money contains a built-in “rotting speed” in the form of negative interest, or demurrage. Demurrage would mean a money that acted as a very poor store of value, as compared with, say, income-generating entities such as farms or property or corporations. Not storing money to secure against future want would speed up its movement through the economy, thereby improving employment and, hopefully, community bonds. It would help turn money into a medium of exchange pure and simple, not something to stuff under the mattress. A money suffering negative interest was conceived to reflect the fact that value decays over time, like grain and meat for example. So the theory.
At first I was attracted by the idea of demurrage, but more thinking on it has led me to doubt its potential efficacy long-term. Any money, no matter its design, is based on the presumption of insoluble scarcity. If everyone just knows scarcity is insoluble, they will hoard to protect against want. With a money that decays, all that would change would be that which is hoarded.
Hoarding is a problem for two main reasons: 1. it slows the flow of wealth through society; and 2. it gives rise to gross societal imbalances characterized by wealth-gaps, health-gaps, education-gaps and so on. These two tendencies lead to status quos which calcify into inflexible institutions bent on self-protection at virtually all costs. Because hoarding is a fear based mechanism, in the time-honored tradition it spreads more fear, which exacerbates the hoarding impulse and sets us up for violent collapse.
If we want to address hoarding, we must change our perception of scarcity, at the cultural level, towards a perception of nature as abundant and trustworthy (if we treat the ecosystem wisely). Only thereafter can there be a transformation in where we feel value lies, namely, in a healthy, balanced ecosystem and in sustainability generally, not in accumulated material possessions. We seem to see value in those tools or processes, typically of our making, which enable accumulation and so protect us best from want. We lack faith in nature.
In conditions of scarcity – perceived, real or both – we project value into money, or, if we have lost faith in that, perhaps into gold or silver, or some other commodity that can store “value” indefinitely and be handed down to our progeny. Historically such things have tended to afford us security and, if we’re lucky, a nice life. Everybody wants a nice life. Sadly, because scarcity over-encourages competition, a nice life is currently seen as one characterized by the “victory” of material acquisition. On the other hand, building a socioeconomic system around the presumption of abundance would foster a perception of security and pleasure as necessarily arising out of a healthy ecosystem and a well functioning society. To my mind, the only way to begin such a task is by aiming to transcend all media of exchange. This turns economics upside down and inside out, I know. Nevertheless, we need to consider this analysis.
Our relationship with value is by my lights the principle problem. Because of our unhealthy and monetarily sustained perception of scarcity, we fear the wrong enemy, desire the wrong pleasure, and place our trust in the wrong processes. Scarcity lies at the root of this error, and lies too at the root of money, whether with demurrage or without, whether commodity backed or fiat, whether debt free or as debt.
In economic parlance, value arises from the interplay of supply and demand. As centimetres measure length, so monetary units could be said to measure value. In and of itself this is an elegant measuring system, but nothing operates in and of itself. Everything functions in relationships. Because supply and demand imply market activity and trade, and because, additionally, money is better than barter at enabling market activity, the measure has become confused with the thing measured, and we have lost sight of where value actually comes from. Economic activity does not generate value, it rides on value's coat-tails and measures it to boot.
Due to this false relationship, a relationship which fuses a tool for the mere enabling of trade with the function of storing value (a logical association given the circumstances), divergence between value as represented by money, and the ability of the ecosystem to sustain civilization, grows over time. As our success, fuelled by easy oil, has led to a rapidly growing human population, so economic growth has come at the expense of the health of other supporting systems. One simple function that exacerbates this tendency is that scarcity increases profit. The less freely available drinking water there is, the more money can be made from selling water. The less healthy top-soil there is, the more money can be made from increasing soil’s dependence on petrochemical fertilisers. The less healthy society is, the more money can be made from selling security against crime, and so on. We see value in money and economic growth, but not where it actually lies; in society, environment and healthy relationships.
Furthermore, as labour slowly loses power to extract a wage sufficient to drive “sustainable economic growth” (due to technological unemployment and globalisation), monetary value itself diminishes in a stealthy, non-apparent manner, which is “felt” generally by the population (globally in some measures), leading to a steep rise in the price of gold and other commodities (housing and commercial real estate included). The problem is, value is not added to the economy by rising prices, especially as ownership balloons at the top end. Rising commodity prices seem currently to be evidence of the slow economic panic of people desperately protecting their perceived wealth, which is nevertheless, and indeed because of their very efforts, being eroded. That erosion is sped up by the forces of technological change and capital concentration to the rich over time, both of which are, to a large degree, engendered by the pursuit of permanent wealth. It is a set of vicious, interwoven circles united and perpetuated by fear of want.
Can a correctly designed money stop this? I don’t think so, but it can redirect/slow the process down. Demurrage for example (see Charles Eisenstein and Bernard Lietaer) would likely make housing and land more “valuable” as money ceased to be a commodity, and might increase employment as well as investment in environmentally friendly enterprise. In the meantime, the “value” recent decades have puffed into the economy in the form of positive GDP, MBS, derivatives etc., will be vainly protected with a fierceness directly proportional to the somewhat unconscious perception that “value” is evaporating. The panic is on and growing, but will remain tectonic in speed from the point of view of a general population drunk on the ravings of the mainstream media, who think two weeks ago is old. At some point a global stampede will occur, but sadly there will be nowhere to go. There is no exit door from this one.
97 Comments
therooster
This is almost like asking whether one believes in God or evolution when the two seem inseparable to me.
Why not ask the bigger question, "should money be a store of value while also offering tremendous liquidity" ?
By asking whether money should be a good store of value, it almost sets the reader back into a dichotomy of sorts where store of value and good liquidity are mutually exclusive and any idea to the contrary cannot even be brought up for consideration. Bull crap !
The great marriage of economic history is upon us , the marriage of instant global liquidity and debt free store of value. Maybe I should correct myself here. The marriage has already taken place ..... the scale up will be at the reception. Don't miss it.
At first I was attracted by the idea of demurrage, but more thinking on it has led me to doubt its potential efficacy long-term. Any money, no matter its design, is based on the presumption of insoluble scarcity. If everyone just knows scarcity is insoluble, they will hoard to protect against want. With a money that decays, all that would change would be that which is hoarded.
Bingo ! This is a delicate point because instead of thinking about hoarding (scarcity) , we should be thinking in terms of liquidity and trade on the basis of abundance.
Much of the pedagogy that fuels our financial thinking has been pumped into us by financial institutions. Gee, what a surprise !
Hoarding has always been a market psychology that inhibits liquidity and promotes "holding on". This has been the reputation of gold money systems of the past and as such, gold has been associated with deflation and poor liquidity. Gold was not the probelm, upon closer examination however. It was a function of gold pricing and trading systems of the day and how poor support systems for liquidating gold caused gold to often be undervalued and as such , sought after as a store of value. We saw this effect as late as Bretton woods when countries, most notably France, called upon the US to deliver gold in exchange for USD's. This was another distortion of gold value on the basis that gold was pegged at $35.00 an ounce against printing press paper that was flying around the globe in view of liquidity needs to support a war. Something had to change and rightfully, the gold-dollar peg was severed. It had to be severed because a pegged relationship had no rightful way of reflecting supply demand fundamentals, especially considering the ability to mine and refine finished gold does not keep up with the pace of central bankers ability to create IOU's. The only justice was for gold to float.
If gold could find its fair value, as per the market, why would people hoard it ? The historical problem for gold has been based on fair value fair trade value and poor logistics in distribution.
Once the peg was severed and gold was free to float against the USD, it was still not enough to be able to use gold effectively as a form of money , however. Just because gold had been placed into an environment where it could float in price, so that debts could be covered by a rising fiat price in gold, did not make gold highly liquid. It made gold highly valued, more so than during Bretton Woods but liquidity, in order for gold to act as a supreme monetary unit, still had a day in the sun to experience.
In 2006, the e-gold.com model was launched and solved the problem of using gold as a form of money where liquidity could be every bit as efficient as the liquidity afforded to fiat currency. Let's keep in mind that most day-to-day money flows are electronic, so why not have the same support system for liquidity supporting gold and not just debt-numbers ? Account holders of gold backed payment processors can now place gold on account and use the fully backed tile of that gold to make payments anywhere on the globe in real-time with a simple click of the mouse.
Debt free store of value is a wonderful feature for money, but especially wonderful when it can be liquidated in the twinkling of an eye.
Having said the above, it's still important to see that at the present time, gold is still in a bull market as an investment and store of value. It is sought after and valued for those features and until gold "finds its monetary value" as per the market, it will not represent the money of great liquidity until such time it peaks and settles into its tight trading zone. In the short term, it will still take on some hoarded characteristics until the market feels that it wants to "let go". That could be and will be, IMO, a great renaissance in the liquidity of trade where liquidity and debt-free store of value will rule the ability to buy and sell things of real utility value. Better yet and of most importance, the incentive to produce and save will also be greatly enhanced and the decisions as to what we produce and consume will be empowered more to the marketplace than the need to service debt by serving Mammon.
This commerical has been brought to you by The Magi ..... never forget the beginning or you'll be lost at the end. :- )
Toby
Hi Rooster,
You wrote: "By asking whether money should be a good store of value, it almost sets the reader back into a dichotomy of sorts where store of value and good liquidity are mutually exclusive and any idea to the contrary cannot even be brought up for consideration."
This suggests to me that either I failed to communicate my thoughts correctly, or you failed to grasp them, or both. I am not discussing the functional ability of some medium of exchange to store value, which would of course include things like liquidity, but whether storing value per se is wise. I am setting up no dichotomy. My attempt was to look at the consequences of hoarding itself and its relationship with perceived and real scarcity, upon which rests the need for trade, and therefore the need for a medium of exchange.
You also wrote: "Better yet and of most importance, the incentive to produce and save will also be greatly enhanced and the decisions as to what we produce and consume will be empowered more to the marketplace than the need to service debt by serving Mammon."
This says that the incentive to hoard (save) will be increased, which gainsays the rest of your post, which itself is not barking up the tree I was pointing out, namely that scarcity as we deal with it over-encourages hoarding, which exacerbates scarcity. On top of that, we confuse media of exchange with value, or more prosaically put, price with value, when real value arises from important things such as clean water, fertile soil, and healthy communities. In pursuing monetary wealth we seem to have forgotten about what makes monetary wealth possible in the first place, as witnessed by eroding topsoil and dimishing water supplies. These are very important issues that liquid gold cannot solve, especially if it encourages yet more rampant consumption. The market is an unparalelled setter of price, but a poor shepherd to the ecosystem.
@Jason: I can't comment via Firefox anymore (this post is via Explorer). Hitting "reply" results in an unending eggtimer, and the comment box for upper level posting is non-existent. Strange.
ReverseEngineer
When it first was mentioned, the idea of demmurage money appealed to me as a possible means to discourage the hoarding of of money used as the grease of commerce for the purposes of saving it for your own future security. However, after reading just a couple of articles on the topic, I realized that really the charge placed on money in a Demmurage system is no different than the Inflation currently used in a Fiat system to gradually make money worth less over time. Not WORTHLESS if the inflation problem is handled carefully, but just always worth less and less over the time period a monetary system works.
PMs, Gold as the best example almost never face an inflationary problem, except in odd circumstances like the discovery of the New World when just tons of new Gold hit the markets in Spain and Portugal as it was stolen from the Aztecs. However, when the Gold supply remains fixed, it often is subjected to hoarding pressures which create a deflationary spiral. Cutting up the fixed supply into infinitesimally small divisions in a perfectly liquid market would not resolve this problem. The Gold extant would still become concentrated in a few hands of people who save it, and who then loan it at interest to people who have little of it. This then creates the Debtor-Creditor problems along with the compounding interest problem that a fixed money supply cannot handle.
No matter which of the 3 systems of money so far discussed here you use, where the real problem lies is in the Property Ownership conundrum. Faced with the problem that money can become worthless over time through Inflation or through a carrying charge, or faced with the possibility money can disappear entirely from circulation through deflation and hoarding, what folks with a lot of money do is just hoard OTHER assets besides the chosen currency of the day. Toby identifies this problem in his post. So in the case before us now, you have for instance the Chinese buying up mines and land all over Africa with their current savings of increasingly worthless dollars. Or individuals on the Doom Boards buying Doomsteads and stocking them up with #10 Cans of Mountain House Foods. Or of course our Illuminati friends who have been buying up the world piece by piece since 1692, and renting it back to everyone else after each depression. What this amounts to is the very richest folks Hoarding the Wealth of the very Earth itself as “theirs”. Of course we have scarcity problems when a very few people own nearly everything and most people own virtually nothing. So unless you remove the problem of hoarding through property ownership, no change in the monetary system will serve to remove the scarcity problem created by property ownership.
In all cases, whether it be the Illuminati and their Ownership of Property; the Chinese and their Ownership of Property or the individual Doomsteader and his ownership of his Doomstead, the real problem comes in PROTECTING that ownership from the Have Nots once the monetary system being used collapses. Thus you get your Wars, where people who have accumulated GREAT wealth and power seek to protect it by military force. The Chinese of course are engaged in building a Blue Water navy to compete with our own here, which in reality is the Navy of the Illuminati. Fro the individual Doomsteader, you have to be able to protect “your” land from both the roving Zombies who have nothing, as well as from Da Goobermint (read that Illuminati) who will dispossess you of that property through Taxation. Stuck in the middle between those two forces, you will have a hard time keeping and protecting what is “yours”. So for the typical individual here, savings by hoarding property doesn’t work quite as it does for the holders of GREAT wealth and property who can field large armies.
The only way this whole cycle can be broken is when the property itself of the Earth satrts losing value, which is what is happening now as the Oil Resource is depleted out. It is from this energy source that COMES the power to field large mechanized armies and keep such a large population fed. As this diminishes, the power to control and protect such vast areas of the earth by such a small group of people will quite literally disappear. The Battlefield will be quite leveled here as the ability to build such big engines of War are diminished. As we return to the Trebuchet and Atlatl and as the agricultural model used since the time of the Mesopotamians goes into catastrophic failure mode, even the ability to run such large armies as Rome did will no longer be possible. This is when true Tribalism will make its return, rising like a Phoenix from the Ashes of these types of civilizations, which have been with us for some 5000 or so years now, and gradually overrunning the earth and committing Genocide on the Tribes of Hunter gatherers who once roamed this planet and were far better stewards of the environment than any civilization or group of people since.
This is not going to happen in my lifetime. Lo, it shall not even be beheld in the time of our Grandchildren. It will likely take several cycles for this all to be undone, perhaps a millennia. When it does finally come, it would be my hope that those who survived will still REMEMBER what happened over 5000 years of Human History, and who will NEVER let the same mistakes be made again. Never a Borrower or Lender be. The Love of Money is the Root of all Evil. Lo it is true that it would be easier for a rich man to pass thru the Eye of a Needle than to enter the Kingdom of Heaven. I did not write such things for the first time, these are not concepts I have which others before me have not elucidated. This comes straight out of THE BIBLE. These were the WORDS of Jesus Christ. BELIEVE IT. It is the TRUTH. Deny it, and you will Burn in Everlasting Torment in the Fires of HELL.
I will of course walk into the Great Beyond before this all comes to pass. That does not bother me. I will see it all from the Other Side.
RE
therooster
RE : I'm weaving the paragraphs. You're in italics.
When it first was mentioned, the idea of demmurage money appealed to me as a possible means to discourage the hoarding of of money used as the grease of commerce for the purposes of saving it for your own future security. However, after reading just a couple of articles on the topic, I realized that really the charge placed on money in a Demmurage system is no different than the Inflation currently used in a Fiat system to gradually make money worth less over time. Not WORTHLESS if the inflation problem is handled carefully, but just always worth less and less over the time period a monetary system works.
Debt based fiat will always become worthless in time. Our current fiat paradigm was not designed to last.
PMs, Gold as the best example almost never face an inflationary problem, except in odd circumstances like the discovery of the New World when just tons of new Gold hit the markets in Spain and Portugal as it was stolen from the Aztecs. However, when the Gold supply remains fixed, it often is subjected to hoarding pressures which create a deflationary spiral. Cutting up the fixed supply into infinitesimally small divisions in a perfectly liquid market would not resolve this problem. The Gold extant would still become concentrated in a few hands of people who save it, and who then loan it at interest to people who have little of it. This then creates the Debtor-Creditor problems along with the compounding interest problem that a fixed money supply cannot handle.
If a monetary gold supply was static, the problem was that the gold "price" did not or could not (more likely) fluctuate in trade value to accommodate supply fundamentals of what gold's trade value really was in the market. Gold has historically traded on the basis of a pegged value or a pegged equivalent. This was evident and ever present right up until the demise of Bretton Woods when gold traded for $35 USD per ounce and was fixed. Under those systemic rules, gold was deflationary because issuing another $35 in currency credit (dollars) meant needing another ounce of gold on reserve. Unrealistic when you consider the supply fundamentals and capabilities of dollar production (pen and ink) versus gold coin/ingot production by the sweat of the brow. Bretton Woods (and historical gold systems) created market distortions when there was no real-time capability to adjust pricing on the basis of comparing supply-demand fundamentals. It was an issue of systemic capability versus incapability. It was only resolved when the dollar and gold were set free to float and gold could "express".
Cutting up the existing gold supply (even if another ounce never comes out of the ground) certainly does solve the problem of liquidity and the prospect of inflation, but only if the value of gold can fluctuate in real-time (which it does) to mirror market fundamentals. How long have floating real-time applications (and networks) for pricing and value been around ??? Not long ! That's the new wineskin. The fiat dollar, as the real-time gold measure within a gold money paradigm, is part of this overall solution. Ironic, isn't it ? It had to be created before liquid gold could be created, simply because of currency pricing of goods and services within the real economy.
No matter which of the 3 systems of money so far discussed here you use, where the real problem lies is in the Property Ownership conundrum. Faced with the problem that money can become worthless over time through Inflation or through a carrying charge, or faced with the possibility money can disappear entirely from circulation through deflation and hoarding, what folks with a lot of money do is just hoard OTHER assets besides the chosen currency of the day. Toby identifies this problem in his post. So in the case before us now, you have for instance the Chinese buying up mines and land all over Africa with their current savings of increasingly worthless dollars. Or individuals on the Doom Boards buying Doomsteads and stocking them up with #10 Cans of Mountain House Foods. Or of course our Illuminati friends who have been buying up the world piece by piece since 1692, and renting it back to everyone else after each depression. What this amounts to is the very richest folks Hoarding the Wealth of the very Earth itself as “theirs”. Of course we have scarcity problems when a very few people own nearly everything and most people own virtually nothing. So unless you remove the problem of hoarding through property ownership, no change in the monetary system will serve to remove the scarcity problem created by property ownership.
These are symptoms of "corporate capitalism" where "consumer capitalism" creates the much needed balance. Your paragraph comes dangerously close to a temptation of moving toward socialism. You're defining a structural problem on the basis of hierarchy where the answers, available via the information age, amount to creating a "rounder world" where consumers become more integrated and productive within the supply chains rather than being "dangling fragmentation's" at the end of the supply chains. The integration is the movement toward consumer capitalism. Do you feel that supply chains should be dominated by corporate entities, only ?
In all cases, whether it be the Illuminati and their Ownership of Property; the Chinese and their Ownership of Property or the individual Doomsteader and his ownership of his Doomstead, the real problem comes in PROTECTING that ownership from the Have Nots once the monetary system being used collapses. Thus you get your Wars, where people who have accumulated GREAT wealth and power seek to protect it by military force. The Chinese of course are engaged in building a Blue Water navy to compete with our own here, which in reality is the Navy of the Illuminati. Fro the individual Doomsteader, you have to be able to protect “your” land from both the roving Zombies who have nothing, as well as from Da Goobermint (read that Illuminati) who will dispossess you of that property through Taxation. Stuck in the middle between those two forces, you will have a hard time keeping and protecting what is “yours”. So for the typical individual here, savings by hoarding property doesn’t work quite as it does for the holders of GREAT wealth and property who can field large armies.
This assumes a great deal. Why do you not consider the factual aspect of what is capable , technically, versus what is not capable rather than drifting off into the concept of intentions on behalf of other people such as the rich or the elite ? I utilize fact over opinion whenever possible. The points that I have made on the basis of real-time and floating price/value relationships were always a matter of incapability short of the information age so regardless of ANYONE's intention, there was no solution forthcoming short of the information age. Are you ready, RE ?
You cannot pour new wine into old wineskins !
The only way this whole cycle can be broken is when the property itself of the Earth satrts losing value, which is what is happening now as the Oil Resource is depleted out. It is from this energy source that COMES the power to field large mechanized armies and keep such a large population fed. As this diminishes, the power to control and protect such vast areas of the earth by such a small group of people will quite literally disappear. The Battlefield will be quite leveled here as the ability to build such big engines of War are diminished. As we return to the Trebuchet and Atlatl and as the agricultural model used since the time of the Mesopotamians goes into catastrophic failure mode, even the ability to run such large armies as Rome did will no longer be possible. This is when true Tribalism will make its return, rising like a Phoenix from the Ashes of these types of civilizations, which have been with us for some 5000 or so years now, and gradually overrunning the earth and committing Genocide on the Tribes of Hunter gatherers who once roamed this planet and were far better stewards of the environment than any civilization or group of people since.
The way these Newtonian cycles will be broken is by replacing debt with assets. The cycles are driven by debt and inflation-deflation.
All else is in effect.
This is not going to happen in my lifetime. Lo, it shall not even be beheld in the time of our Grandchildren. It will likely take several cycles for this all to be undone, perhaps a millennia. When it does finally come, it would be my hope that those who survived will still REMEMBER what happened over 5000 years of Human History, and who will NEVER let the same mistakes be made again. Never a Borrower or Lender be. The Love of Money is the Root of all Evil. Lo it is true that it would be easier for a rich man to pass thru the Eye of a Needle than to enter the Kingdom of Heaven. I did not write such things for the first time, these are not concepts I have which others before me have not elucidated. This comes straight out of THE BIBLE. These were the WORDS of Jesus Christ. BELIEVE IT. It is the TRUTH. Deny it, and you will Burn in Everlasting Torment in the Fires of HELL.
Personally, I like the the wineskin parable and the parable of the mustard seed. They are both very structural in their esoteric messages.
I will of course walk into the Great Beyond before this all comes to pass. That does not bother me. I will see it all from the Other Side.
I may see it from this side before moving beyond. I'm hopeful. It really depends on people's desire to move away from debt and move toward assets.
JasonRines
Great and thought provoking post as always Toby! The comments are equally delicious.
I will weigh in.
1) Hoarding: The propensity to hoard is based on the fact that we as a species live on average 80 years. I believe that Gen X, Y will live over 100 years old based on the ability to replace organs and skin tissue. Anti-aging drugs have been tested with mice doubling their lifespan. As we live more years, the propensity to hoard will diminish. If you lived forever would you as an individual race to accumulate wealth and store it for retirement? I believe the answer is no.
2) Marketing message of Abundance over Scarcity: Humans live better on earth now than 100 years ago. Then, less than 50% of the world had running water and electricity compared to 80% today. To promote the message of Abundance, first we as researchers must be able to audit the assets of the globe. Rooster mentions any new monetary system must be anchored in assets. Well, the USA and the West as a whole was anchored in assets. It was real estate. Real estate became the replacement for the gold standard in the USA. Can we get to a fractional gold standard as a bridge between now and the time when money (as thought of today) is not necessary as Toby postulates? Yes, but to do so requires auditing of the core assets. Right now, Central Banking is the elephant in the room preventing accurate auditing of assets, especially gold. Real estate is and can be accurately measured now as can land. In the Weimar Republic after the hyperinflationary bust, the Germans several years later figured out anchoring monetary system to land was the only practical solution. I believe the USA several years from now as it too goes through a hyperinflationary bust will do the same. After stability sets back in (hopefully we can avoid world war as RE suggests but I doubt it) than at that point fractional gold or using some other precious metal can be utilized. I think we as a species are better off measuring energy units which is what global leadership seemed intent on doing which I will get into in a moment.
3) The Global Illuminati: First of all, I do not like the insinuation of an Illuminati. Why? Because solving the globe's problems require active participation by the global citizenship. People with less education than those posting here think of the movies, conspiracy theories and the like. Yes, a cabal has consolidated banking globally as Rothchild envisioned three hundred years ago. But Rothchild never considered the natural limit of the Central Bank model and global busts, nuclear and biological weapons in a world war scenario. I would wager since he saw the effects of regional wars in Europe, war profiteering and the like he envisioned world wars but not WMD. WMD ending all modern society in a flash is a game changer.
The population for their part can be educated that they have no representation in the money supply and the reason they don't have jobs now is because of the inherit instability of the fractional reserve lending model. The model was supposed to bring stability to the system, but a massive bust every seventy years, bubbles bursting in between causing major recessions is enough for the average person to understand. It always comes down in a nation (or now globally) to an Emporer like figure and his Chairman of a Central Bank that creates easy money which the biggest companies have access to first and that power is abused consistently throughout history.
Attempting to explain all the nuances of the CFR, Tri-Laterals, Club of Rome, etc. and whom is ultimately in charge of global governance is far too confusing to the average Joe. Joe can be taught that he deserves a say in how his productivity and fruit of labor can happen by having representation in the money supply. In other words, Democracy is something Joe understands. He does not know right now he has no representation. To Joe, he elects a President and it is the President's job of running a good economy. How about educating Joe that Congress is responsible for the economy? Then perhaps we can educate on the lack of representation in the money supply and how this critical failure of the Founding Fathers in setting up our Republic can be addressed?
As for the global elite or whatever they call themselves or Joe calls them, Cap and Trade was not only a massive tax scheme, it also was for the ability for the globe to begin measuring money with energy as an asset base. VP Gore and other elites were not merely going for a tax scheme, they are attempting to set up a new supply chain. Any supply chain that does not include representation in the money supply means that no audit of assets is ever possible. Globalization and government that can succeed will only happen when every person on earth is willing to run toward the supply chain and such a global government no longer has to use any form of the stick to get them into it.
therooster
Jason ....
The lynch-pin for real-estate as money is the ability to "call the land" and liquidity. The divisibility part is and has been a challenge.
Gold as money works on the basis of being able to call the gold on the having a gold derivative or claim on gold. Once the gold is in hand, if need be, it still has good monetary properties. Land is not quite the same. It's not a question of value or land being debt free (another issue) but one of simple liquidity, something that has been ever present in the history of gold systems until such time that gold could be easily "pieced up". How would land be pieced up on the basis of the current systemic characteristics that are integrated into title and applicable land taxes ?
Gold seems so simple by comparison.
Cisero
Ten paragraphs of mumbo jumbo nonsense. How ill-informed. Go be a mechanic or carpenter for a living. You don't know shit about money.
Anonymous
therooster
Anon ... you're describing corporate capitalsim which is a function of corporations having an overwhelming position of power in production and in supply chains. People need to integrate more and more into the supply chains. The is an ongoing process. The supply chains lead to the process of production.
Any fool who believes that corporations should trump the personal power of the people has simply lost hope and does not see the ongoing process of ordinary people jumping into their supply chain support opportunities, opportunities offered by consumer oriented companies that see much of what we discuss here in TBP ...... and have for over 50 years. There are thousands.
Cleaned
I enjoyed the anonymous comment a couple up. Corporations are run by people. Above them is the monopoly of money which is also run by people. The God given human rights of truth, freedom and justice has been abridged on a global basis.
The people with the new found global power will now squeeze all the renters until they can't afford to eat and will stand in line like the Soviet Union.
Feudalism always ends the same way. Those who steal labor to in such a massive extreme people can no longer afford to live are sociopaths. They will not stop until the people stop them. That likely means revolution and world war on a scale of breathtaking horror. Then such sociopathic kingmakers will get the guillotine. Such always think they will escape justice. To them, justice can be bought. It can be, for a time. Once the law has been abridged on a national level such as in the United States, only the law of the jungle rules. A nation without law is anarchy which we are seeing today.
therooster
The world is actually getting "rounder" and the beast knows that its time is short and it is swishing its tail in desperation. It's simply very dark before the dawn right now. The information age has been a great help in creating a balancing process in the power equation. It will probably get worse for a time too. It will transform with a little help from each and little help from God.
StuckInNJ
Speaking of money, there's a brand new book out,
Obamanomics: How Barack Obama Is Bankrupting You and Enriching His Wall Street Friends, Corporate Lobbyists, and Union Bosses -
Congressman Ron Paul says, “Every libertarian and free-market conservative needs to read Obamanomics.”
Looks good. Can be found here; http://superstore.wnd.com/store/item.asp?DEPARTMENT_ID=6&SUBDEPARTMENT_ID=20&ITEM_ID=3534
Anonymous
all the money and power wont stop us from moving back into the trees, and throwing shit at one another. similar to what wash dc and wall street to us now.
ReverseEngineer
From one of the above sub-threads
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No Rooster, I am perfectly aware that you have no desire to upset the current status quo, that is apparent in your hope that by buying Gold now, you will be able to insure your relative level of wealth and savings while the current fiat system collapses to whatever level it does finally end up at (but not Zero), at which time your real time, infinitessimally divisible, instantly transferable, fully backed Gold Title will grow and operate in parallel with Fiat debt money. Boy, jacking into one sentence all the descriptive adjectives you use makes for a mouthful of a sentence. LOL.
Of course, if YOU can insure your relative level of current wealth in this society, that means that people far wealthier than you can do the same thing. All Lloyd Blankein has to do with his Bonus Money stolen from the US Taxpayer is buy a pile of Gold with it as soon as he issues himself a check, and he’ll stay right up there at the top of the pyriamid as Goldman does its job crashing the current fiat based economy.
That is an unacceptable result in my book taken alone, but you could argue that the legal system will at some point claw back that stolen money from Lloyd, which it may well do but it won’t operate to claw back 100s of years worth of theft perpetrated by the Rothschilds, Rockefellers, Warburgs et al. Nor will it make restitution to the billions of people from whom that wealth was stolen, which is also an unacceptable result. Nor will it resolve the problems of the more than 60% of people in the USA who have more debt than savings, who have no jobs and who can afford to buy no Gold at all right now. Hell, they can’t even afford to buy food and have to depend on the collective generosity of our society to provide it to them in the form of food stamps.
Effectively, you change nothing at all in the status quo, which is exactly the same outcome as from all prior crashes when the Illuminati would sequester their wealth in Gold and ship it offshore to a Swiss Bank, where since the invention of the Telegraph they have always had real time access to their fully backed Gold title. About the only difference I can discern here is your system will divide up the extant Gold into nanograms so J6P can trade them for Twinkies while others hold tons of Gold and push around the capital to manipulate the price of Twinkies. Besides the fact you haven’t provided for any means of redistributing the extant Gold to the vast majority of the population that has none, you still also do not address the problem of how large quantities of capital wealth can be pushed around to manipulate markets. All unacceptable results.
So, while an evolutionary transition to infinitessimally divisble, fully transferable, instantly liquid fully backed gold title might be a good outcome for you and for anyone else who currently has greater than a zero net worth, its NOT a good outcome for the vast majority of the world population who either has a zero net worth or a net worth less than zero because they are loaded up with debt. If you held a perfectly democratic referendum on the Internet and held a Vote worldwide on whether people who currently hold Gold should be allowed to keep it or it should be redistributed out to everyone in equal portions to reboot a new system of trade, the results of said referendum should be obvious enough. Impoverished people are NOT going to vote for Rich people to stay rich. As long as rich people try to stay rich and hoard their accumulated wealth this Referendum WILL be held, except it won’t be held peacefully over the Internet with a vote. It will be held with bullets and guns at first, and eventually with Trebuchets and Atlatls.
The fact of the matter is that anyone who currently has assets is looking for some way to protect those assets. Your solution is more creative than most in the sense that you are looking for a better system of money to use in the future, but it rectifies none of the past inequities in wealth distribution, and therefore is not an acceptable solution to most people. In order to rectify past inequities, some form of restitution is necessary and some form of retribution for crimes which occurred over centuries must be undertaken. The peaceful way of making the restitution would be to simply redistribute all wealth equally, and the retribution would come from bringing into impoverishment the Elite of the world along with all the rest of us peons. We wouldn’t NEED the Guillotine, most of them would off themselves once they lost all their money and power. They could go off to the Great Beyond relatively painlessly in that way. The less peaceful means is the kind of class warfare you got in the time of the French Revolution and the Bolshevik Revolution. Except of course this time orders of magnitude greater, and there is nowhere left to run, nowhere left to hide anymore.
To conclude, besides the fact I don’t think your infinitessimally divisible, instantly liquid, fully backed Gold title system would actually WORK (though I am willing to give it a shot), in no way does it provide a solution to the real problem we have right NOW, which is a massively skewed distribution of wealth worldwide beteen the haves and the have nots. The organic collapse of ALL money of ALL types does provide such a solution. You don’t HAVE to physically remove Gold from the possession of anybody. You are free to collect as much Gold as you would like here, spend every dime you have on it. Once people recognize that a pile of Yellow Metal has no more intrinsic value than a pile of Cowrie Shells, your wealth of Gold has Zero Value. People WILL recognize this fact, if they haven’t already. When the society starts producing surplus again relative to the population size, then once again they might covet Gold and take it in exchange for a Twinkie. However, with the crash of the fiat system and the consequent crash of industrial conduits, its going to be a long time before society produces such surpluses again. In the intervening time, Gold will hold little value, and the real battle will not be fought on the trading floor of the NYSE or in the currency markets and the carry trade or on the COMEX in Gold Futures. It will be fought with POWER on battlefields far and wide, between the Elite in control of the Big Hardware who use Drone Aircraft to rain Death from Above and Terrorists who use Suicide Bombers with nothing left to lose to bring the death right back at them. For as long as the Oil Conduit holds up and EROEI from well head through the refineries and then out to the battlefield to fuel the tanks and the jets, the Elite will hold the advantage. I cannot say how long that advantage will last, I can only say for sure it won’t be forever. The day that EROEI goes negative is the day the tide of the battle will turn, and then inexorably the army of the Elite will be consumed by the horde of the impoverished.
Coming Soon to a Theatre Near You.
RE
GetClue
Hell yeah money should have value! What a doofy question. Why is everything so F'ed Up? Because of the F'ed Reserve and other fake money BS. Please note that most "millionaires" in Zimbabwe are starving to DEATH!!! Duh. Duh. Duh.
therooster
I agree, GetClue. Money that has no store of value is prone to inflation and a debasement in purchasing power. This creates a "hidden tax" that is an unfair disadvantage to the user and an unfair advantage to the creator. On that basis, the free market helps to decentralize production and set up competition for the sake of wealth distribution but the issue of oversupply is still the ongoing challenge. This is why precious metals have been favoured throughout history, as a store of value.
The only challenge that precious metals had, in acting as a currency, was good liquidity. That was not based on the precious metals in of themselves, but based on the logistical capabilities/incapabilities of the distributing support system. Precious metal weight can now be digitized, so even that old problem has now been addressed.
When looked up from a design standpoint, we don't actually have a financial crisis or a currency crisis. We have a design that needs to be marketed, made known and scaled up. The working models are already up and running.
cedartree
Good essay RE. However, wirh gold being a store of value, silver is more of a medium of exchange.
anyone who holds silver dollars or gold eagles will have the capability to trade the silver dollar for 2 silver halves, 4 silver quarters,
10 silver dimes. exactly the way they will trade gold eagles for an substantially larger # number of silver coins.
As for gold in particular and silver in general, IT IS A STORE OF WEALTH! tHE OLD ADAGE of saving for a rainy day.
REF NOAH or the great depression. seems as though we are headed for a "greater depreasion!
edwin
This is a media contact. Please contact me right away if you know who wrote Should Money Store Value.
Thank you. edwin
AetiusRomulous
"Economic activity does not generate value..."
I disagree. The product of economic activity is economic value. How we measure it is another thing.
Economic value is not moral value, community value, or ethical value - which is a shame, but true none the less. Economic value is heartless and without soul by itself. The object of the game I believe, should be to use economic value to promote and develop our other values, but that's our call as a society. It's not a soup, but an a la carte meal.
BlackRockBurner
Real money does store value. For those who can afford it.
BlackRockBurner
BlackRockBurner
BlackRockBurner
Mine......PtolemyIII I think. Minted for victorious soldiers. circa 200 BC
Anonymous
render unto caesar that which is caesar's and render unto God that which is God's
LindsayGKing
THE VIEW FROM MY 80TH YEAR
==========================
A new octogenarian, I was born, January, 1930-- <www.bellisland.net> Newfoundland--On Bell Island were 10,000 people, including 2000 iron ore miners. As a result of the so-called Great Depression, my family, and other families like us, experienced grinding economic poverty. But there were compensations: There was lots of fishing, hunting, adventure and no lack of familial love. Ironically, in 1939, WW 2--during which our island experienced two attacks by enemy subs--brought a modicum of prosperity, which enabled me to get away and get a university education and a career as a minister. My education and my career stimulated me to take an interest in and understanding of the history, the nature and the function of money--the use and abuse of which is mentioned, frequently in the Bible.
MONEY, IN THE HANDS OF GOOD PEOPLE
Over the years, my experience in life and in my career, as a minister, has convinced me that, in the hands of moral, ethical and loving people, money can be a wonderful tool and a helpful servant. But concentrated in the hands of selfish, greedy and power-hungry individuals and amoral corporations, it is tool of much evil.
Therefore, I agree with--and I offer to join with--those who argue that we must not allow "money power" to rule the world. I also agree with those who advocate "that control of money and exchange mechanisms ... must be the main focus" of "community empowerment and self-determination" ... A money monopoly, whether in private hands or government controlled, is inimical to freedom and equity."
WE CAN DEMOCRATICIZE MONEY. LET'S DO IT
"... money-as-we-know-it needs to be "depoliticized." This can only be accomplished by the separation of money and the state. Under the current arrangement the banking cartel creates money as debt and charges interest on it while governments get to spend as much as they want without regard to tax revenues.
Beware: "Legal tender laws and banking regulations endow the banking cartel with the exclusive power to issue money (as debt), which we are forced to use (through legal tender laws). The collusion between political power and financial power is the root cause of the mega-crises facing humanity."
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therooster
Lindsay ..... You don't look a day over 80 !
slowsmile
Sound money has always been defined as both a medium of exchange as well as something that has a tangible and exchangeable store of value. At the moment, most world currencies are not completely backed by gold and you cannot exchange currency for gold or silver now as you could in the old days. The result is that a nations currency value is now completely at the mercy of its country's GDP performance as well as heavily influenced by the volatility of the markets.
If all world currencies were backed against a stable resource like gold or silver, there would be little volatility in a currency's store of value. But because bankers have been allowed to so heavily manage and influence fiat currencies, the rise of endless credit by way of fractional reserve multiples has eroded the value of all currencies today because of continuous, subtle inflation.
Trouble is that, on a personal level, credit allows you to have today what you can't afford. Wonderful. Therefore, credit has become a mainstay essential for bettering our own modern lifestyles. As the argument goes, people should all have every right to better their lifestyles -- even with the rotten crutch of endless credit -- in their unrestricted pursuit of the American Way and self-betterment. After all, nobody wants a downgrade in their lifestyles do they?
And that's where the fiat bankers have got you by the balls...
therooster
SlowSmile ...
If all world currencies were backed against a stable resource like gold or silver, there would be little volatility in a currency's store of value.
I agree. Are you proposing a pegged system , one-to-one , such as what we saw in BW ?