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Guest Post: The Tangled Relationship Between Wealth & Money

Tyler Durden's picture


Submitted by John Michael Greer of Peak Prosperity,

One of the most dangerous mistakes possible to make in trying to understand the shape of the economic future is to think of the fundamental concepts of economics as simple and uncontroversial.  They aren’t. 

In economics, as in all other fields, the fundamentals are where disguised ideologies and unexamined presuppositions are most likely to hide out, precisely because nobody questions them.

In this and future essays here at Peak Prosperity, I will explore a number of things that seem, at first glance, very obvious and basic.  I hope you’ll bear with me, as there are lessons of crucial and deeply practical importance to anyone facing the challenging years ahead.

This is, above all, true of the first thing I want to talk about: the tangled relationship between wealth and money.

Our co-host here, Chris Martenson, likes to remind us all that money is not wealth, but a claim on wealth.  He’s quite right, and it’s important to understand why.

Money is a system of abstract tokens that complex societies use to manage the distribution of goods and services, and that’s all it is.  Money can consist of lumps of precious metal, pieces of paper decorated with the faces of dead politicians, digits in computer memory, or any number of other things, up to and including the sheer make-believe that underlies derivatives and the like. Important differences separate these various forms of money, depending on the ease or lack of same with which they can be manufactured, but everything that counts as money has one thing in common – it has only one of the two kinds of economic value.

The Two Kinds of Value

Economists call those use value and exchange value.

You already know about them, even if you don’t know the names.  Odds are, in fact, that you learned about them back in elementary school the first time that one of your classmates offered to trade you something for the cookies in your lunchbox.  You then had to choose between trading the cookies for whatever your classmate offered and eating them yourself.  The first of those choices treated the cookies primarily as a bearer of exchange value; the second treated them primarily as a bearer of use value.

All forms of real wealth – that is, all nonfinancial goods and services – have use value as well as exchange value.  They can be exchanged for other goods and services, financial or otherwise, but they also provide some direct benefit to the person who is able to obtain them.  All forms of money, by contrast, have exchange value but no use value. You can’t do a thing with them except trade them for something that has use value (or for some other kind of money that can be traded for things with use value).

Most people realize this.  Or, more precisely, most people think that they realize this.

It’s still embarrassingly common for people to forget that money isn’t true wealth, and to assume that as long as they have some sufficiently large quantity of some kind of money that’s likely to hold its exchange value over time, they’ll never want for wealth.  This assumption is understandably made, because in the relatively recent past, this has been true a good deal more often than not, which feeds the belief that it will always be true in the future. 

But that assumption is lethally flawed, and it’s important to understand why.

The Economic Relationship between Money and Wealth

For the last three hundred years, as industrial society emerged from older socioeconomic forms and became adept at finding ways to use the immense economic windfall provided by fossil fuel energy, there have been two principal brakes on economic growth.

The first has been the rate at which new technologies have been developed to produce goods and services using energy derived from fossil fuels. The Industrial Revolution didn’t get started in the first place until inventors and entrepreneurs found ways to put the first generation of steam engines to work making goods and providing services.  At every step along the road from that tentative beginning to today’s extravagantly fueled high-tech societies, the rate of economic growth has been largely a function of the rate at which new inventions have appeared and linked up with the business models that were needed to integrate them into the productive economy.  That’s the source of the innovation-centered strategy that leads most industrial societies to fund basic and applied research as lavishly as they can afford.

The second major brake on economic growth is the relationship between the economy of goods and services, on the one hand, and the economy of money on the other.  Just as wealth and money are not the same, as we’ve seen, the economic processes that center on them are not the same.  The printing and circulation of money is not the same thing as the production and distribution of nonfinancial goods and services, and ignoring the difference between them confuses much more than it reveals.  In my book The Wealth of Nature, I called the economy of goods and services the 'secondary economy,' and the economy of money the 'tertiary economy,' with nature itself – the ultimate source of all wealth – as the 'primary economy.'  For the purposes of this essay and those to come, though, we’ll use simpler labels and call them the 'wealth economy' and the 'money economy'.

During this three-hundred-year timespan, when the money economy stayed in sync with the wealth economy, economic growth normally followed.  When the two economies got out of sync, on the other hand, growth normally faltered or went into reverse. There were (and are) two ways that the money supply can slip out of its proper relationship with the wealth economy. 

The first occurs when growth in the money supply outstrips growth in the production of real wealth, so that the more money is available to compete for any given good or service, and prices normally go up.  That’s inflation.

The second occurs when growth in the money supply fails to keep up with growth in the production of real wealth, so that less money is available to purchase any given good or service, and prices normally go down.  That’s deflation. 

Fighting to Keep the Economies in Sync

In either case, the imbalance hinders the ability of the wealth economy to keep producing goods and services, mostly by throwing a monkey wrench into the machinery of investment — the process by which the money economy allots extra wealth to the producers of wealth to assist them in expanding their ability to create real, nonfinancial goods and services. Whether it’s inflation or deflation that chucks the wrench into the gears, the result is flagging or negative growth.

It’s the hope of keeping inflation and deflation in check that motivates the obsessive tinkering with economics on the part of so many of the world’s governments these days. However poorly that tinkering works out in practice (and it usually works out very poorly, indeed) the politicians can at least claim to citizens that they’re doing something to get economic growth back on track.

Most economists, and for that matter most people who consider economic issues, think and act as though these two factors — the rate of innovation and the money economy’s habit of getting out of sync with the underlying economy of real wealth — are still the only factors that can get in the way of growth. That’s why proposals for putting an end to the current economic mess focus so narrowly on more innovation, on the one hand, and finding some way to gimmick the money economy so that it no longer drags on the wealth economy, on the other. 

Now, of course, scarcely any two people agree on what measures will get the two economies in sync again. Similarly there’s no general agreement over where government support for innovation ought to go. But there’s near-universal agreement that getting these two factors to work right is the way out of the ongoing global economic crisis.

The Tangled Web We've Woven

The disagreements between partisans of various economic schemes, and between proponents of various new technologies, make it easy to miss the fact that something is happening that’s clean outside the box of contemporary economic thought.

The wealth economy and the money economy are certainly out of sync just now, but the problem isn’t in the money economy; it’s in the wealth economy.

The production of real goods and services has run up against limits that are not financial in nature, and today’s economic orthodoxies can’t even imagine that possibility, much less respond to it in any useful fashion.

In Part II: Slamming Face-First into the Limits to Growth we explain why, given our misguided efforts to solve the wrong problems, you can no longer assume that having enough money – of any kind – will guarantee that you will have enough wealth.  Distortions in the money supply driven by the shenanigans of central bankers are not the only force twisting the relationship between money and growth.  The key factor now is a contraction in the wealth economy driven by the economic effects of the exhaustion of easily accessible resources. 

There simply is too much money chasing a limited (and, in some cases, shrinking) supply of real wealth. 

Click here to read Part II of this report (free executive summary; enrollment required for full access).


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Thu, 01/24/2013 - 14:24 | 3183112 Lohn Jocke
Lohn Jocke's picture

I'm all set, I own shares in Apple.

Thu, 01/24/2013 - 15:29 | 3183349 SAT 800
SAT 800's picture

I'm all set too; I've just come in from the yard, where I was shooting my IPE wood bow that I made; it's a kind of a brazilian war bow, I guess; it couldn't be an English war bow, because IPE is a huge noble hardwood tree that grows in Brazil. I can't actually draw the damn thing to full draw, but at around 26" the arrows are fucking deadly, deadly missiles. I shot one in the tailgate of my retired Ford Taurus; if you were using a station wagon door for your chest armor as a knight, I guess you'd be out of luck. All I have right now is junk arrows, which are kind of heavy, but boy are they movin' downrange. The results on high-densisty foam indicate that they would go in the front of a "bad zombie" and come out the back. and you don't have to explain the noise of the 25-06 to the neighbors, either. Although, most of my neighbors are cattle. This is completely off-topic, but a combat qualified bow must be some kind of wealth? It could certainly settle the question of who is going to have the wealth if it came to that; which we hope it doesn't.

Thu, 01/24/2013 - 16:01 | 3183461 Panafrican Funk...
Panafrican Funktron Robot's picture

The NBC network seems pretty keen to tell us in their show "Revolution" that a crossbow is a worthwhile weapon that causes concern, even if wielded by a very fucking stupid girl.  

Thu, 01/24/2013 - 16:18 | 3183539 css1971
css1971's picture

Nah, these days your cheapest most basic body armour will stop anythng from anything with the word "bow" in it's name with nary a dent.

Thu, 01/24/2013 - 23:10 | 3184685 Big Slick
Big Slick's picture

"Buy my book... and part II of my report"

Thu, 01/24/2013 - 19:34 | 3184126 dark pools of soros
dark pools of soros's picture

you have a problem with fucking stupid girls?

Thu, 01/24/2013 - 16:12 | 3183516 css1971
css1971's picture

Replaced by the crossbow. Much easier to hit something.

But you're not serious of course when you can legally own a magazine fed semi automatic shotgun which can fire stuff like this:

Thu, 01/24/2013 - 16:34 | 3183604 Thisson
Thisson's picture

Well, it definitely has exchange value, as I'd sure like to buy it based on that awesome marketing hype thing you just did!

Thu, 01/24/2013 - 19:29 | 3184112 logicalman
logicalman's picture

Got me a nice 60lb recurve. Those arrows sure do move and with a decent broadhead, do a lot of damage.

My son has one too.

A strong slingshot is a handy item too, with 3/8in steel ball.

Mon, 01/28/2013 - 14:44 | 3192079 tip e. canoe
tip e. canoe's picture

a water cannon filled with ammonia doesn't hurt either

Thu, 01/24/2013 - 19:23 | 3184098 jeebuswept
jeebuswept's picture

I have an apple tree!

Thu, 01/24/2013 - 19:23 | 3184099 jeebuswept
jeebuswept's picture

I have an apple tree!

Fri, 01/25/2013 - 00:20 | 3184824 RockyRacoon
RockyRacoon's picture

That makes it an orchard.

Thu, 01/24/2013 - 14:26 | 3183119 Gmacks
Gmacks's picture

More money more problems.

Thu, 01/24/2013 - 14:44 | 3183185 Acidtest Dummy
Acidtest Dummy's picture

When there is food on the table there are many problems. When there is no food on the table there is only one problem. -Chinese proverb

Thu, 01/24/2013 - 15:10 | 3183290 SAT 800
SAT 800's picture

I usually sum this up as "Reality is a Bitch".

Thu, 01/24/2013 - 16:31 | 3183544 Ignatius
Ignatius's picture

John Michael Greer is an educated, well written, though muddle-headed ass-clown.

I used to read his Arch Druid blog and he had just enough insights to hold my attention.

Peak oil is his main theme and on that he is correct.  Big deal, join the gathering crowd.

I made only one comment to his blog where the subject of money came up.  I simply and humbly noted that a silver quarter from the early 60s could buy a gallon of gas then and that that same quarter could still buy a gallon of gas+ today.  I mentioned gold in the same context.

His response was a rambling tirade of his personal, ideological ignorance.  He immediately inferred in his response that I was some kind of anti-government, gun-toting, raving hillbilly prepper (not true, but it's still early) and that the government confiscated gold before and they'll do it again and they'll send in drones so what good is a gun.... Wha...?  I didn't even mention guns. I guess he assumes nobody should save anything, ever, 'cause someone will target it.

His blog is an intolerant, obediant, well organized girl scout troop.

I deleted that bookmark and ain't been back since.


Thu, 01/24/2013 - 14:28 | 3183125 valkir
valkir's picture

For me,the best quality of monney/gold and silver/is theyr quantity.

Thu, 01/24/2013 - 14:31 | 3183137 Seasmoke
Seasmoke's picture

Your health is real wealth.

Thu, 01/24/2013 - 14:35 | 3183150 Rustysilver
Rustysilver's picture

Your choice: $5M or Lung cancer; which would you choose.

Thu, 01/24/2013 - 15:04 | 3183253 SAT 800
SAT 800's picture

Lung cancer for my ex-girlfriend, $5M for me. Easy. what's the next question?

Thu, 01/24/2013 - 15:24 | 3183330 BLOTTO
BLOTTO's picture

Very true Smoke.


"We are not rich by what we possess but by what we can do without."

- Immanuel Kant

Thu, 01/24/2013 - 14:33 | 3183142 zerozulu
zerozulu's picture

wealth multiplied by money is equal tyranny .

Thu, 01/24/2013 - 15:03 | 3183248 SAT 800
SAT 800's picture

Yeah, but you get a lot of pussy, you know.

Thu, 01/24/2013 - 14:44 | 3183187 ZH11
ZH11's picture

Economics like philosophy is no science but only one of these schools of thought has the humility to admit it.


Economists need to come clean and admit the models only work retrospectively within  limited timescales and that every prediction of the future is flawed on the basis of incomplete information due the inherent human element in economies which are neither rational or predictable 'en masse'.


Therefore the above in nothing but a rehash of the physiocrats arguments that ultimately will fail because if anyone knew what the future held they'd never tell anyone else.


Thu, 01/24/2013 - 14:50 | 3183196 falak pema
falak pema's picture

the tangled relationship beween market perception and rich Oligarchs who iconise their  company's profile : Amazon's Profits Versus Apple - Business Insider

If Apple is over valued how does one qualify Amazon? 

Ah the market and the economy; what is behind that flimsy curtain of the invisible hand? 

Fu Man Chu; ever since a command economy and a free market one achieve the same financialised performance; aka CHS's demo, we are justified in popping that question. 

Apparently Cook is not good at cooking Jobs baby for the investors. 

Thu, 01/24/2013 - 14:51 | 3183208 linrom
linrom's picture

I think the author is making an ant hill out of mole hole. To simply restate what I think the author says is that there are too many claims on assets by wealthy individiuals who own nothing but DEBT.

Thu, 01/24/2013 - 15:09 | 3183280 SAT 800
SAT 800's picture

Making an ant hill out of a Mole hole is topologically challenging. I'm willing to admit I have no idea what  he's talking about, but I do notice there's a premium level of membership in his club that you get to pay for; if you paid him for this would you be buying wealth? spending money? or buying money and spending wealth? I think I'll continue to pass on everybody who wants to sell me a premium membership in their club. Especially since you can read Bastiat "On Money" on the Von Mises website, for free; and Bastiat was about 2.7 times smarter than this guy; (my estimate).

Thu, 01/24/2013 - 17:30 | 3183791 Frederic Bastiat
Frederic Bastiat's picture

read me read me read me!!  I'm dead, so no member fee required!

Thu, 01/24/2013 - 15:09 | 3183285 risk-reward
risk-reward's picture

Well said, linrom

Thu, 01/24/2013 - 15:56 | 3183442 Seer
Seer's picture

I think he's stating that most people confuse money with wealth and that our distortion of money has convoluted our understanding of wealth.  It's questionable, then, as to whether those we think/believe are wealthy are in fact "wealthy."  Again, debt backed by meaningful assets is fine; we have, however, come to the point where debt is pretty much backed by nothing.  I suppose that I could state that both the "rich" and the "poor" are essentially the same: it's relative- they're both primarily measuring their positions of wealth using (mostly) meaningless measurement- un-backed debt.

It's all so convoluted that it's hard to tell whether this is agreeing or disagreeing with your statement- sorry!

Thu, 01/24/2013 - 14:56 | 3183225 etresoi
etresoi's picture

Wealth = Health, Abundance, Happiness And Harmony, Always = HAHAHA

Thu, 01/24/2013 - 14:57 | 3183227 q99x2
q99x2's picture

This is true although I believe the finincial oligarchs knew this when they produced the housing fraud to continue to pump the Chinese and emerging market economies. Maybe they thought it was out of balance and could be a way to incentivise emerging nations to come under their NWO.

The natural progression is revolution and war to bring about the rebalance. Pandemics have also been very successful in the past.

I say Open Source anything to do with the monetary system. Programmers will gladly accept the challenge. The antiquated existing system cannot and should not survive or ever reappear.

Thu, 01/24/2013 - 15:01 | 3183242 ali-ali-al-qomfri
ali-ali-al-qomfri's picture

Early to bed, early to rise,

makes a man healthy, wealthy and wise.

Notice ‘wealthy’ is only one third of the quality of life triumverte.

Thu, 01/24/2013 - 16:56 | 3183689 recidivist
recidivist's picture

or a postman

Thu, 01/24/2013 - 17:05 | 3183716 edifice
edifice's picture

Bullocks, the postman doens't get to my house until at least 2 PM.

Thu, 01/24/2013 - 15:03 | 3183252 NidStyles
NidStyles's picture

 "...Economists call those use value and exchange value."


Only bad economists use those terms. There is only Marginal value.

Thu, 01/24/2013 - 15:18 | 3183310 SAT 800
SAT 800's picture

Yeah; well, we know the guy is a fraud. "Enrollment required for full access"; he's in tne financial newsletter business. You type a lot of high sounding rhetoric, which never turns out to mean anything, and then you offer the people educated in North America, who, by definition cannot do critical thinking, a chance to pay you for more babbling and buzzwords. The discouraging thing about this as a social comment, is that it works. Somebody is going to sign up for the "full enrollment"; and "may the road rise up to meet their feet".

Thu, 01/24/2013 - 17:35 | 3183805 Frederic Bastiat
Frederic Bastiat's picture

After Obama was re-elected, an aquaintence of mine, who is in the financial newsletter business, threatened to 'Shrug' in the ayn rand sense, and deprive the world of his bearish investment advice.  hahaha. 

Thu, 01/24/2013 - 23:13 | 3184692 Big Slick
Big Slick's picture

I'm not sure about being "a fraud" but Tyler should make thse guys post Part II for free... they're getting a lot of publicity on ZH.

Thu, 01/24/2013 - 15:51 | 3183425 falak pema
falak pema's picture

what do you mean by "bad"...?

You only know how to use subjective values to define your viewpoint. 

One man's bad is another man's good. But this seems beyond your mental comprehension. 

Thu, 01/24/2013 - 21:25 | 3184341 NidStyles
NidStyles's picture

Yay! You use my own explanation to prove me correct, but then you don't even understand it. I feel very vindicated right now.


Marginal Value IS subjective. Also my opinion does matter, because as you would know had you been reading what I have been saying for a year now. I am an Economist. Want to talk about mental comprehension, firgure out why that detail is relevant.

Thu, 01/24/2013 - 15:14 | 3183297 Joe moneybags
Joe moneybags's picture

The author is making arguments like the rationalizations that I make to myself when I loose money in the stock market.

Thu, 01/24/2013 - 21:16 | 3184347 NidStyles
NidStyles's picture

You mean whether to stop at that third shot before that tranny starts looking attractive or the 8th one when you decide to go get a blow job from it? That kind of rationalization?

Thu, 01/24/2013 - 15:30 | 3183350 Variance Doc
Variance Doc's picture

"In economics, as in all other fields, the fundamentals are where disguised ideologies and unexamined presuppositions are most likely to hide out, precisely because nobody questions them."

Bullshit.  Mathematics, engineering and the real sciences (physics, chem, etc) question results (and fundamentals) ALL the time.  In math, we get to prove things - either they are true or false.

Econ, in it's current various forms, is nothing more than a religion at best.

Thu, 01/24/2013 - 16:36 | 3183607 Seer
Seer's picture

So, you're saying that economics IS measurable, repeatable and predictable (like math and engineering)?

The author is trying to say that economics isn't properly connected to anything (physical).  I know that this point gets lost when people start seeing the realities behind this: that being that there's no more growth possible.

Thu, 01/24/2013 - 20:01 | 3184185 RopeADope
RopeADope's picture

I think the natural economy will prove to be measurable if the primate species inhabiting this planet ever decides to graduate from preschool economics.

Thu, 01/24/2013 - 21:21 | 3184366 NidStyles
NidStyles's picture

Ahh the old, if only humans were perfect excuse. We are not perfect, and we never will be, get over it.

Thu, 01/24/2013 - 21:19 | 3184362 NidStyles
NidStyles's picture

The author is correct on that but his method of measuring value is wrong.


The problem is that most people still do not undersand that economics is about HUMAN choice and interaction on the market, not numerica weighted values created by a human.

Thu, 01/24/2013 - 15:32 | 3183360 Mad Mohel
Mad Mohel's picture

What was that they taught us when we were kids, "cheaters never prosper". Bullshit!

Thu, 01/24/2013 - 15:41 | 3183386 No Euros please...
No Euros please we're British's picture

I disagree. Paper money has exchange value. You can wipe your arse with it.

Thu, 01/24/2013 - 16:12 | 3183514 Peter Pan
Peter Pan's picture

The author is wrong because real money DOES have a use vlue. Silver has countless industrial uses and gold at the very least can be used to make jewellery.

Thu, 01/24/2013 - 16:40 | 3183622 Seer
Seer's picture

I think that he's talking PRIMARY use (TODAY): I wonder how much silver and gold is sitting as "money" vs what's in "use?"

We're also talking past ourselves in mixing current money with historic money.  Sorry, probably not the best choice of words, but hopefully it makes sense.  It's not how I want things, it's how the world is primarily operating.

Thu, 01/24/2013 - 17:17 | 3183736 Thisson
Thisson's picture

Not really.  Used in this instance means consumed.  Gold is not consumed when it is made into jewelry.

Thu, 01/24/2013 - 16:13 | 3183520 menlobear
menlobear's picture

Arse-wiping is actually "use value"

Thu, 01/24/2013 - 16:14 | 3183528 Peter Pan
Peter Pan's picture

The o ly time paper money seems to ppreciate is when it no longer is official currency and ends up on ebay.

Thu, 01/24/2013 - 17:02 | 3183708 edifice
edifice's picture

There will be a shortage of well-used FRNs, going specifically to this purpose. However, wiping with a crisp, new FRN is bound to be uncomfortable.

Fri, 01/25/2013 - 01:00 | 3184890 WTFUD
WTFUD's picture

. . . and then purchase a big mac happy meal.

Thu, 01/24/2013 - 16:33 | 3183600 tricky rick
tricky rick's picture

Hey SAT800...  don't usually put my .02 in but quit be an know nothing dipshit.

This guy's post was a guest post on Martensen's Peak Prosperity site.

It's that site that requires the membership to read the rest... a great site btw.

If you'd take a sec, stop running off at the keyboard and investigate:  this guys site is

Now, go there, read something and leave your .02 where it should be...


Thu, 01/24/2013 - 17:08 | 3183718 AgAu_man
AgAu_man's picture

A close group of friends and I sometimes toast to Health, Wealth and Cheap, Sleazy Sex.  Because we... have a sense of humor.

Thu, 01/24/2013 - 17:11 | 3183726 TzaristBondHolder
TzaristBondHolder's picture

There is a far deeper relationship between Wealth and Money

Thu, 01/24/2013 - 17:26 | 3183776 Frederic Bastiat
Frederic Bastiat's picture

This is all set out very clearly in Economic Sophisms by Frederic Bastait written in 1873.  Everyone should read it. 

We need higher taxes on the 'wealthly'--at this time in our economy--becuase too many people receieved claims on good without creating a requisite amount of goods in return, i.e. a zero sum game.   

Thu, 01/24/2013 - 17:34 | 3183801 Seer
Seer's picture

I suppose that it depends... it depends on whether you wish to retain the existing system (which is horribly misguided, being based on perpetual growth on a finite planet- perpetual bubbles [therefore fraud]), or you axe those whom have been driving and start up in a new direction (not necessarily a revolution in the sense of tossing out the bums and taking over the same system).

The "wealthy" will have little choice but to shed wealth just as everyone else is doing.  And, at the very least, they should try and appear less of a target than they've been making themselves out to be: pretty common sense; pretty stupid to put up a big sign reading "come steal here!" (or, "I'm ONE of Them!")

Thu, 01/24/2013 - 17:46 | 3183828 Frederic Bastiat
Frederic Bastiat's picture

Instead of starting over, we need to rebalance.  The planet is not finite--as long as the sun is providing perpetual energy--though we do have some rate of growth issues.  My position is that claims on goods (money) is stuck in the hands of people who aren't willing to actually claims goods with it.  This resulted in an asset bubble and should have resulted in a collapse and vast destruction of claims on goods (these goods were still there, just the claims would be destroyed).  Instead the government stepped in to stop the fast rebalancing, and instead destroy claims via low interest rates over time. 

Higher taxes will speed up the rebalancing.  Thats why I'm for them. 

Thu, 01/24/2013 - 18:35 | 3183966 Seer
Seer's picture

"The planet is not finite"

No.  The planet IS finite (it's measurable!).

"the sun is providing perpetual energy"

The AMOUNT of energy coming in to earth IS FINITE over time (we KNOW how much energy it's giving off- it's measurable; if it weren't we'd have the infinity sign representing the amount of energy rather than a number).  One cannot acquire MORE energy from the sun per day than the sun gives off (and is absorbed by the earth in one day).

"though we do have some rate of growth issues."

Of course we do!  One cannot deplete finite resources (on the planet, or in the case of the sun- over draw more than it can deliver on a given day) at faster and faster rates in perpetuity.

"Rebalancing" means what?

Thu, 01/24/2013 - 22:16 | 3184531 Bear
Bear's picture

Higher tax on the wealthy ... no, we just need to take the wealth from those who pilfered it and those in goberment who added them.

Thu, 01/24/2013 - 18:02 | 3183884 alfbell
alfbell's picture

Japan has been going on for decades. Europe is doing the same. The USA will follow the same routine. All thanks to "financial engineering" and central banking policies. It's gonna be a long, uncomfortable and maddening next 50 years. Waiting for the shoe that never drops. It's all one big distraction.

If you've got the money to prep and own a farm, stock water, food, guns, ammo, gold and silver then fine you'll maybe sleep a little better at nite. You may need these things, you may never need them.

We're all moving into very new and unknown territory. No one has a crystal ball.

Just get on with your life... that's my idea.

Thu, 01/24/2013 - 18:39 | 3183977 Seer
Seer's picture


"If you've got the money to prep and own a farm, stock water, food, guns, ammo, gold and silver then fine you'll maybe sleep a little better at nite. You may need these things, you may never need them."

I sleep really, really well.  When you're dog tired from hard work it's not hard to do!  And doing honest work keeps one's mind peaceful.  NOTE: you'll always need food and water (the other things, though important, are secondary [important in secondary ways, but not fundamentals]).

Thu, 01/24/2013 - 23:07 | 3184678 FlyinaRage
FlyinaRage's picture

Someone is going to need them.

Thu, 01/24/2013 - 19:37 | 3184130 logicalman
logicalman's picture

On a long enought timescale..........

The only time you are at risk of dying is when you are alive.

Thu, 01/24/2013 - 21:48 | 3184455 FlyinaRage
FlyinaRage's picture

"back in elementary school the first time that one of your classmates offered to trade you something for the cookies in your lunchbox.  You then had to choose between trading the cookies for whatever your classmate offered and eating them yourself.  The first of those choices treated the cookies primarily as a bearer of exchange value; the second treated them primarily as a bearer of use value."

Then there is the third value. The value of the friend...

Thu, 01/24/2013 - 22:14 | 3184526 Nimby
Nimby's picture

Ammunition has both use value and exchange value.  Ammunition is as "money-like" as any trinket.

Thu, 01/24/2013 - 22:57 | 3184578 Aurora Ex Machina
Aurora Ex Machina's picture

"Wealth" and "Money" are made of people.

It's like language: a child learns language from it's surrounding social sphere, it isn't inherent. Put a homo sapiens child in seclusion or raised by wolves, and they lose the ability for language at a developmental point. And, past age 10-13, they can never regain it. They don't call it "Human Resources" for nothing, you know.


Ok, let's be ultra-proper-none-of-this-bullshit Capitalist about this:

Each human is unique, and each human has a set of potentials across a time-line of their life (probabilities vrs possibilities. i.e. You might have the P+ (ossibility) <required facet> to be <Y>, but the P- (robability) is offset against that. To explain: whatever you aim for, it's determined by the possibilites of your genetic structure (fat kids who are under 5' 6" won't ever play NFL, sorry; they might, however, be awesome at a whole other range of stuff); however, the probability of that occurring is dependent on your environment (Oh, shit, Johnny just got whacked by a drive-by, there goes this years best linebacker... at aged 14) and the options you're given.

This is simple stuff: what's gone so majorly wrong in America is that the two have been conflated, and shoved under a "special snowflake" rug of "WE'RE ALL THE SAME, EQUAL AND SPECIAL".


Sorry, you ain't. You all enjoy the same LEGAL equality, and hopefully a SOCIAL equality (Yep, that was a joke, folks), but you sure as shit ain't all the same - this has been the most damaging bullshit from the 60's ever presented. "No Competition, because everyone has to feel equal". Bullshit - the children certainly don't buy it, they see the micro-scale inequalities every fucking day in school. The real solution to this is to point out that societies require a multitude of skill-sets and aptitudes, and then should value them properly. Here, I merely point to Dubai not planning a proper sewage system for how fucking retarded modern American (and yes, it was American businesses building it) life has become. Old Roman saying: Sort the sewers and internal plumbing out, that's the basis of civilisation.

But that doesn't mean difference is wrong; fuck no. The entire point of evolution is to provide the species with as much differentiated genetic material as possible, to further the "options" (adaptability) of the species, increase its survival rate and allow transmission of genetic data down the line even in stupidly hostile environments. Difference is great; which is exactly opposite to what is brain-washed into children in your schools via Flags, Oaths and Teams. Oh, and you medicate or hospitalise those who can't live in your narrow, bullshit, hypocritical nonsense of a "civilisation", where lying (even on TV, look at Ben Bewanke and Murdoch's son) is your best survival trait. Not smart, not smart at all.

That's why America don't get no Van Goghs.


America has gone so badly wrong for three reasons:

1) It assumes (incorrectly) that there's only a few ways to economic success. It then does it's level best (via law, market monopoly and so forth) to enforce that idea.

2) It assumes that the P+ and P- don't exist, evolution doesn't exist, and we should all fit some kind of mold; whilst, (and this is the insane bit), declaring "EVERYONE IS THE SAME (but, secretly, and we'll never admit it, there's a huge Class System at work, and we've never got over Slavery and Fearing the Dark-Skins)". Can you see the problem here already? Hint: You can deny reality in an ideological stance, but reality will always exist. Spoiler for the slow: CCCP hit this one hard, bitch.

3) It then slathers this all in some kind of nonsense ideological bullshit from 2k years ago, coupled with a social structure left in the 19th Century. Now, wait now: that's not to say the fringe bullshit reactionary (and yes, they are reactionary) ultra-feminist / anti-CIS etc thinkers are correct either. You're just both sides of a very old, and very shitty pudding.

Real "wealth" and "money" is based purely on those who expand, create and define expansion of the species. It's not pieces of silver or 1010 binary notes- those are just the score-card. Now: Bankers have a role to play; but at the moment, they're way beyond their possibilities (*ahem* A computer can make hypocathation make a billion mean a trillion, but Nature & Science sure can't), and dangerously close to closing any probability for a better world through their greed, myopic ignorance and arrogance. (50% unemployment ain't working there, and wait until it hits the USA proper in Mar - Sept).


So, hmm. Oh, and to the "let's kill a few billion brigade" - any reading on enhancing the homo sapien leaves you with an obvious data point: The U Hockey-stick model; it's far, far, far easier to raise the medium levels of a bell curve than it is to raise the outliers. Same goes for nootropics etc etc. That's not to say you shouldn't: nootropics have been proven safe, non-toxic, and so forth. The best thing any civilisation should be doing for their children is providing proper nutrious meals (and kick the fucking food industry out already) and be dosing them up to the nines on nootropics, vitamins and so forth.


Because, you know: really sick of this bullshit that "we won't improve them, in case they depose us". Compete or die; either be Capitalists, or admit you're not. [You want me polite? Perhaps you should have sent a more adaptive diplomat]





Ask a German industrialist in 1946 about what "wealth" and "money" means; then look what they accomplished.

Thu, 01/24/2013 - 23:21 | 3184705 Big Slick
Big Slick's picture

Where do I know you from, Aurora? :)

BTW I carry P+ in my 9mm.  Let's hope the 1.2 billion rounds DHS just bot are P-

Fri, 01/25/2013 - 07:35 | 3185116 Singaporean
Singaporean's picture

Amen to that, brother.

Fri, 01/25/2013 - 06:47 | 3185100 AmeliaV
AmeliaV's picture

Money and wealth are closely connected but they are not the same, especially if we talk about the national economy. Basically just money isn’t enough to build wealth and strong economy. The most important is how government manange money and if this money really work. If money doesn’t work then wealth will be temporary, so there should be a regular money circulation. But I have an impression that we just borrow cash and overspend and borrow more. The US has never been so much in debt, it’s not just about the government one, people also make debts, use credit cards and no fax payday loans. With a help of borrowing they get cash but these money doesn’t make them any wealthier.

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