On the value of money:
Even Fiat money can work if we use it correctly.
In essence, money is a medium of exchange representing value.
What must we value to survive? Time, effort, skill, and knowledge.
Value of X-amount of money (V) should be:
V = (Time spent) X (effort + required knowledge or skill).
Taxation would not be required if the government used this formula to pay contractors.
The formula can not work if private parties are allowed to print their own money--like the central Banksters do today.
The formula cannot work in Socialist UBI where payments are made despite the fact that (effort + required knowledge) = 0
But we will never again get the chance to get back to coherent free-market Capitalism.
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Feel free to reply to any comment by clicking the "Reply" button.One of the debt free US dollar notes that John F Kennedy started to issue just before he was assassinated.
kennedy-dollar
The Kennedy $2 and $5 debt free US Treasury Notes had red ink.
donmcgon64
Level 5
Apr 6, 2019
0
How were they debt free? They are treasury notes.
Value is entirely subjective. There is no formula to determine value. The formula mentioned is not an individual's idea of value. It could only be a measure of the aggregate concept of value itself and not the value of money seen by the individual. Keynesians do attempt to measure value mathematically by measuring aggregate demand. This perverts economics into something better called "econometrics", a mathematical study of macroeconomics. This perversion is a desire to bring economics into the realm of "science". The subject of "money" itself, is a subject of perversion, let alone economics as a whole. Bankers have made certain, over the years, that the citizen understand the issuance of their piece of paper is money.
What makes something worthy of being used as money, what makes it "sound money", is the level of confidence and trust that people have in it to fulfill the purposes of money. The more universally accepted a form of money is as "a medium of exchange" the more confidence and trust it is a "sound" exchange. The better a form of money is in being perceived as "a store of value" the more "sound" the form of money. There are, of course, other characteristics or purposes of money but those are the most important to the consumer to maintain his sense of security in the present and in the future.
The creation of the federal reserve would have been impossible at the time it came into being if it was thought that it could print money. The federal reserve was created by the Currency Act of 1913 and could only print a currency redeemable for money which was, way back then, the deposits of the people in the bank of their gold and silver. The people still owned the money. What the Currency Act did was open the door for the abuse and debasement of money by certain individuals, mostly who were bankers, so that today we think of money as being either their printed/minted medium or the banks digital entry in our bank account. This would all be fine if we had full confidence and trust in our government and the federal reserve to keep our money "sound". Several abuses by government infringe upon the soundness of our money, its creation of debt, inflation of the currency, and an income tax, all diminish confidence in the purposes or characteristics that define money. It is being relegated to the level of "token".
FrankZeleniuk
Level 8
Apr 6, 2019
1
Value is not entirely subjective. Each society places value on Time, on certain skills, on certain types of knowledge--and of course on the goods or services that can be produced by the combinations. If we need a service or a good--then we must pay a price for it. The medium of exchange we generally call money is used. A medium of exchange is a very desirable product of any society to escape pure bartering. Paper money is easily used for such, but becomes worthless with uncontrolled production by privateers, central banksters, or idiot governments.
@MarPep Value is subjective. In 1973 the price of a brand new car was around $3 - $4K, now over $20K. People pay it now, but it never would've been paid in 1973.
I would never pay $600+ for a cell phone. While I value my smart phone and consider it essential to have one, I don't value it that much. My subjective value for such a product is about $200 or less. The same goes with the plan. I pay around $60 per month without a contract, but I see no (or not nearly enough) added value in going with a contract and, therefore, paying more.
When a consumer's value and the product's price get close enough a transaction can take place. I grew up in a neighborhood where owning a Cadillac was highly valued, but I never caught that value, so it would've been very hard to sell me a Cadillac at anywhere near the going rate at the time.
While there may be something of a societial consensus of a value for any certain commodity or product at any given time, it is still subjective. Nobody pays the price without considering how they value that product in relation to the price.
@MarPep Can something be partially subjective?
Does "each society place value on Time, on certain skills, on certain types of knowledge--and of course on the goods or services that can be produced by the combinations"? How does "society" do that? Someone, probably an econometrist, takes an average of individual transactions and determines it as the value to society.
@FrankZeleniuk gentleman, i am stepping into this thread. I am a tradesman. I barter my time, tools, experience and physicality for little pieces of paper, depending on the difficulty of the service required. Though materials may have no negotiable value in the process of the services i complete, my "value" is a personal matter subject to relations, environmental factors and willingness to complete the service. There are time when i am in competitive opportunities. There are times when there is no competition because of the difficulty. There are times i throw a number out ridiculously high to be struck from negotiation to save myself grief. And then have the contract accepted.
Money for me, a little brilliant dwarf star, is fluid.
But i have to recognize that there is a "greed" upon the monetary system.
@CuriousFury I'm retired but I worked in a trade as well. When it comes to economics I'm an autodidact. I've been mostly reading about Austrian economic theory which links up quite closely with libertarianism and classical liberalism. I find the left today is squeezing out anyone not a progressive leftist. I have always thought of conservatism as being the party of small government, not true, but that's pretty much how I've voted my entire life.
Greed is an interesting aspect of the human condition. We are supposed to be rational beings and for the most part I guess we are in control of ourselves. Greed to me is a baser instinct that kicks in to override rationality as a survival mechanism. Optimally, a high moral/ethic level keeps us out of greed mode. Not to say none of us don't look after ourselves and loved ones first.
@FrankZeleniuk ah, but how far after are you looking? Generations beyond? Or pleasures presents?
@CuriousFury
I'm not sure I understand what the question is but Greed to me, is more immediate and a reaction. Long term, it seems a rational plan and thus something of a low ethical standard that could even reach down to the criminal level.
@FrankZeleniuk look after as s way to see what you leave you family behind or as seeking to tickle all your families desires and vanities?(please do not answer as this is a question for peoples hearts that may ever read down this thread in the future)
Personally, my looking afters is leaving my joirnals and art behind, since i do not sign my tradeswork it will be impossible to trace my fingerprint much beyond my personal works(which i do not sell)
In games there are currency systems. In one game uncut diamonds, another "energy credits" and/or dilithium, another crystals of a certain type
Many games also have a marketplace where goods are sold at whatever price the market will bear. Sometimes you aquire the goods during gameplay, sometimes you craft it, but it's yours to sell
If you list for sale an item but you price it too high it doesn't sell, just like the neighbor who listed his house at market value +10% and nobody was interested
Even virtual market places work on standard principles like supply and demand etc, It's all the same real or virtual, brick & mortar or Internet
The markets in games are are also fluid like in RL (Real Life). Something new comes on the market and starts out priced high. Then the market gets flooded and the price drops
In RL the prices of cell phones drop drastically in a ½ a year. A brand new never opened cell phone in the box 6 months after it first came out will sometimes be half the price. Same phone, new, but half the price
There are certain natural ways a market functions and no amount of trying to apply a different reality will change it.
Enen markets in games
Source:
Ferengi rule of acquisition #1 Once you have their money... you never give it back.
Phrankhs
Level 7
Apr 6, 2019
0
Fiat currency has only one purpose , to bleed the wealth out of a nation and enslave the population .
Georgesblogforum
Level 7
Apr 6, 2019
1
Your statement is correct only if manufacturing of the money is controlled by private concerns. If a nation can reasonably allow its government to be the manufacturer/controller of new money--and if such were only allowed for payments to contractors doing work for said government--and not for buying votes--fiat money could work fine. Constitutionally, only Gold and Silver should be coined and used as money, but that would be very inconvenient in today's world.
@MarPep The issue of real money is a horse that no one has reined in , since it left the barn . I don't see anyone digging up the Jekyll Island cabal and hanging them for treason . The fact is that the issuance of currency is controlled by a private bank , The Federal Reserve . They do not tolerate competition . The last attempt to divest the Fed of that power was JFK . He caught a bullet in the head . Central banks start wars and assassinate their enemies . Fiat currencies do not function in a healthy economy . They collapse them and enslave the population in poverty .
@Georgesblogforum Yup, when thieves, deceivers, and would-be World-Rulers control the creation of "money" our society/planet is screwed.
@MarPep I remember the stories of the early days of the stock market . They coincided with the formation of the Federal Reserve
The hustle was strong in those days
While I certainly get the point you are making, I can only agree with it in principle.
The fiat that creates the money will always allow itself to change the value to its benefit. Money is itself a commodity with a natural fluctuation in value. To ignore this reality is a utopian pipe dream as much as socialism is. It always comes down to who gets to determine the right use in specific cases and can we trust them to enforce it without arbitrary favoritism.
Lickspittle
Level 6
Apr 6, 2019
0
@Guido_Provolone What is "fake" money? Is that what I give you when I give you a federal reserve note? What are you then going to use it for? Do you think you will be able to use it tomorrow for the reason you got it today? It is money but it is not a very sound form of money. It will probably be worth less in a year. There is a threat it will even be worthless altogether at which point it is no longer money.
@Guido_Provolone So you would never think bitcoin was money?
The thing is that you do use government issued fiat paper to fulfill the purposes of money, essentially making it money. It isn't "fake". It is just not very sound and you dislike the government so yo dislike that they issue the money. Does this perhaps mean then that government is really what is fake?
@FrankZeleniuk I think you are on to something here: the use of money is in itself a value. A bit more shadowy and substanceless of a value than gold or silver, but a value nonetheless.
@Lickspittle Yes. It's value is subjective. This is especially clear when you look at what has passed as money throughout history in various societies. Really it is the confidence and trust people place in it to fulfill the purposes that define it. Government and the banking industry feel its prime purpose to be a "method of account". They are hardly concerned with value since they have the power to create it.
Bitcoin actually restores some of the soundness of our current money by restoring some security to the individual by keeping government out of it through the privacy of ownership. It has some drawbacks as it is not easily accessible in the event of power failures and the average person is not familiar with how to make a transaction.
@FrankZeleniuk Power failure is a draw back to the card that allows access to the "cash" backing the bank account number, too. I think the biggest bitcoin draw back, is the carry in the pocket factor. I've never trusted my phone enough to pay for anything with it. Another may be showing itself now. A problem with gold-based currency is having enough in reserve to allow for the amount of certificates needed to circulate in an economy that has grown -- i.e. monetary restrictiveness. BitCoin may be seeing the same as less and less of it gets mined and usage increases. The value of each BitCoin goes up due to the demand and transactions need to further and further fraction the BitCoin to spend. Nobody wants to spend a whole $3,747 coin on a pizza. Where does this end? With infintesimal fractions of a coin? Units smaller than a satoshi?
@Lickspittle Bitcoin has a very limited market as money so far. Fungibility and divisibility contribute to the adoption of a medium as money because that facilitates trade. There are forms of bitcoin like ethereum and litecoin and even precious metal backed bitcoin based on blockchain technology.
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