Debt-Based Money Corrodes Society

Tyler Durden's picture

Authored by Brian Maher via The Daily Reckoning,

We open today’s reckoning with a hypothesis:

The current monetary system debauches the culture.

Long-suffering readers are familiar with our… diminished regard for paper money.

Paper money — or digital money nowadays — is the great bogeyman of the boom/bust cycle. It inflates bubbles of every model and make.

Meanwhile, paper money fuels big government… as oxygen fuels fire.

But paper money’s effects on the culture?

“It has a very important impact on our culture,” writes economist Jorg Guido Hulsmann.

Under “natural money” like gold Hulsmann explains, prices tend to fall over time.

So natural money encourages the virtues of saving… thrift… deferred gratification. It sets the mind to the future:

In a free economy with a natural monetary system, there is a strong incentive to save money… Investments in savings accounts or other relatively safe investments also play a certain role, but cash hoarding is paramount.

Before the 20th century, explains Hulsmann, debt was a cultural taboo… a big scarlet “D.”

Credit for households was virtually unknown, he says. And only the poorest households resorted to debt-financed consumption.

Ah, but then the 20th century came along with its wars… its social movements… and its cranks…

Gold is a famously uncooperative agent of change.

It resists social uplift, in the same way an old man resists a new pair of shoes.

It turns away from the sound of trumpets.

“You go over there,” gold says. “I’m staying here.”

“The trouble with gold is that it turns its back on world improvers, empire builders and do-gooders,” wrote Bill Bonner and our leader Addison Wiggin in Empire of Debt.

“The nice thing about gold is that it is so unresponsive,” they continued. “It neither laughs nor applauds.”

And that’s why it couldn’t last…

Only a debt-backed system of paper money could finance the great wars, the social improvements and the fevered dreams of the 20th century.

But the same debt-based money also seeped its way into the cultural marrows… got into the bloodstream… and went to work…

The slow grind of saving yielded to lure of the fast buck. Hulsmann says it all encouraged a short-term perspective.

“Fiat-money systems tend to make people insatiable in their quest for ever higher monetary returns on their investments,” Hulsmann notes.

Hurry, hurry, hurry. More, more, more.

Hulsmann argues things work differently under a natural monetary system.

As savings increase under such a system, the return on investments of all sorts tends to diminish.

And instead of chasing rainbows, people direct their monies in pursuit of other worthwhile interests, including philanthropy:

It becomes ever less interesting to invest one’s savings in order to earn a return, and thus other motivations shift into the foreground. Savings will be used increasingly to finance personal projects including the acquisition of durable consumers’ goods, but also philanthropic activity. This is exactly what we saw in the West during the nineteenth century.

“By contrast,” Hulsmann adds,”in a fiat money society you are more likely to increase your returns by remaining in debt and continuing to chase monetary revenue indefinitely by leveraging more and more funds.”

The debt-soaked society loses something of the human face perhaps. He concludes:

You can imagine, then, how this inflation and debt-based system, over time, will begin to change the culture of a society and its behavior.

 

We become more materialistic than under a natural monetary system. We can’t just sit on our savings anymore, and we have to watch our investments constantly, and think about revenue constantly, because if it is not earning enough, we are actively getting poorer.

A point to ponder of a June day…

We don’t argue of course that a restoration of sound money would turn every heart to gold.

But it seems this Hulsmann has hooked onto something here.

Maybe our paper money system has not only debased our economy and our politics… but also our culture.

And maybe our socially inclined money… has somehow made us less social…

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VWAndy's picture

 Yes folks that magic money is in its simplest terms just a control fraud. Think about it and you will see.

Blue Balls's picture

Strait from hell to the people.  Fiat money is evil.

JohnDoeBerg's picture

All your debt based money are belong to us !

Prepare yourself for serfdom, goy.

 

VWAndy's picture

 That always was a really stupid plan and its not going to work.

 We going to Bartertwon folks be ready. Ya gots to be able to produce on your own,

Evil Peanut's picture

"Maybe our paper money system has not only debased our economy and our politics… but also our culture."

 

DUH!!!!!

Helicopter Rides's picture

Monetarism distorts natural laws about everything at its key foundation, as money is the tool to coordinate positive human actions, it corrupts every incentive as it's consequences are ramified. It's completly game changing. It brings a different meta, one which doesn't reward wathever fits best towards reality.

Enemies of reality are enemies of any real consciusness.

Mini-Me's picture

Does this mean the green paper tickets with numbers on them don't represent something of real value?

A. Boaty's picture

Yes they do, as long as you value a fraudulent, irredeemable debt instrument.

VWAndy's picture

 I do believe many good folks are catching on.

withglee's picture

 I do believe many good folks are catching on.

Oh really? What are they catching on to? And when they do catch on, they have to abandon it (whatever it is), right?

What are you recommending to replace it? How does your recommendation work?

Inquiring minds want to know.

VWAndy's picture

 We will have to go thru Bartertown to set all the real values correctly again. After that the truely free markets will find something to use as a MOE. My guess is high end booze chits. Maybe gold and silver? If it was up to me Id go with some form of energy redeamable coin.

 They are catching on to all fiats true value of 0.

Mr. Universe's picture

First thing is to void all corporate charters. Corporations are not people. You want to run MEGACORP, ok but you are responsible criminally and civilly for all wrong doings. Same goes to the Board of directors right down to the person who actually did the deed. No bail outs, no super pacs, no money for speeches, no lobbying at all. Jail time for those convicted.

Stock and commodity markets should be very limited, perhaps 1,000 shares total for any stock and all commodoty purchases must be delivered and received, no more speculation.

Until a gold and/or silver coin system can worked out the US treasury can suspend all income taxes and just issue bank credits based on (TBDL) whatever works best and limits production.

End 80% of the .Gov as superflourous, instead let's put out a welcome mat for honesty, morality, love and God.

 

withglee's picture

 We will have to go thru Bartertown to set all the real values correctly again.

Wrong. Institute a "proper" MOE (Medium of Exchange) process and denominate the media in HULs (Hours of Unskilled) labor. We have all been a HUL at one time. We have perspective.  We know the multipler we now use to get to our "claimed" value, and the value of other things. Roughly, today, we just divide by $8. When I was first a HUL we divided by $1.50. We know the value of a HUL has never changed through all time and space ... it has always traded for the same size hole in the ground. And since a proper MOE process guarantees perpetual zero inflation, it too never changes value over time and space.

The problem you describe does not exist.

After that the truely free markets will find something to use as a MOE. My guess is high end booze chits. Maybe gold and silver? If it was up to me Id go with some form of energy redeamable coin.

We need to have iterative secession so you and like thinkers (dolts) can have your own space ... and destroy yourselves with your provably bad guesses. Remember, for money, at a minimum, it must (1) be in perpetual free supply and (2) maintain perpetual perfect supply/demand balance. Can any of the guesses you enumerate deliver those attributes? Can you make a case for ignoring them?

Some of us will not be guessing in our space. We will be using a provably perfect process.

 They are catching on to all fiats true value of 0.

And they have to somehow recover, return and destroy those zero value fiats don't they. How are you going about doing that right now? Or haven't you ever bought anything by making a promise over time and space ... i.e. by making a promise to pay monthly until paid off.

I really do wonder how some minds sustain the life that holds them.

VWAndy's picture

 Automation screws up the HUL concept to much for it to work. Barter should/would be done in products that have real values.

  The othe issue I have with the HUL concept is not all unskilled labor has the same value. Take any two ditch diggers and put them to work. At the end of the day you wont have two equal holes. One of them will be deeper. This gap between the two actual reasults screws the pooch. It might not be as stretchy as the rubberbands we use now to measure stuff but its still not a fixed value.

 

 

withglee's picture

Automation screws up the HUL concept too much for it to work.

Is this your admission your bulb is really that dim?

The HUL is just a "unit of measure". Automation has nothing to do with it. If someone with a shovel can produce a certain size hole in 8 hours, the automated solution must be able to produce that hole in a short enough period of time to deliver that size hole for the same price or cheaper. If it can't, the automation won't sell ... will it! That's why small holes are still being dug by hand. It costs too much to get the steam shovel to the site and set it up. Or have you not ever been that close to labor? Think about it next time you plant a garden in your back yard and think about buying or renting a tiller ... or pay the high school kid to till it with a shovel ... or do it yourself (sacrificing your opportunity cost).

Barter should/would be done in products that have real values.

Oh really? Like gold ... whose cost to produce an ounce has been different every single year since man knew what it was? Is that what you mean by products with real values? And turns a trade into two uncertain steps (1) trade what you have for gold (if you can find it ... and wait until you can); (2) trade the gold for what you want (if you can find someone who wants it)?

 other issue I have with the HUL concept is not all unskilled labor has the same value.

So, now we have you down to that "one" issue, right?

And you are correct. If you are a weenie, your hour is not going to produce as large a hole as would John Henry, right? But is that really relevant?

For example, regardless of how skilled you are, spending that hour working in a McDonald's is only going to earn you one HUL of money (today about $8), right? Even if you're working against as dim a bulb as you seem to be, right? That job pays one HUL in an hour. Take it or leave it.

So now we're down to zero issues, right?

Take any two ditch diggers and put them to work. At the end of the day you wont have two equal holes. One of them will be deeper. This gap between the two actual reasults screws the pooch. It might not be as stretchy as the rubberbands we use now to measure stuff but its still not a fixed value.

And you weren't able to think yourself past that dilemma?

Try this.

The guy who digs the deeper hole trades his hour for more HULs ... and gets it, because the person buying the hole doesn't care how many hours it actually takes ... he cares how many HULs he trades for the size hole he wants. He does that with the perception of how hard he has to work for a HUL and how willing he is to spend that HUL on a hole ... or dig it himself. It's all a perception between that buyer and that seller for that transaction. The HUL does not care at all what that perception is. But it guarantees, all things being equal, what that HUL trades for doesn't change over time and space ... because of "proper" MOE process itself.

logicalman's picture

Can't think of anything worse than what we have now.

A small group given the power to 'make' money from thin air. Given human nature, hardly a plan to help anyone but the aforementioned small group.

Maybe we should go back to credit based money and tally sticks (look it up)

Hopefully this helps your inquiring mind to do its stuff.

 

withglee's picture

Can't think of anything worse than what we have now.

You're right. There probably isn't anything worse ... but you likely can't "think of anything better" either.

A small group given the power to 'make' money from thin air. Given human nature, hardly a plan to help anyone but the aforementioned small group.

Wrong. And enormously "large" group is given the power to "create" money. They are called "traders" ... and you (if you've ever bought something on time payments) and I are just such traders. The small group you refer to is the money changers who have co-opted traders invention of money for their own benefit and the benefit of the governments they have instituted for their protection.

If we institute a "proper" MOE (Medium of Exchange) process in competition with their "improper" process with its 4% annual leak, they will lose all their business to our competition. They will wilt on the vine. A bloodless coup so to speak.

Maybe we should go back to credit based money and tally sticks (look it up)

Maybe you should realize money is obviously "an in-process promise to complete a trade over time and space" ... always has been ... always will be. And that promises are debt ... not credit. Credit is a term the money changers have foisted on you so they can demand tribute (they incorrectly call interest) by granting certification of your promise (they call that "a loan"). Tally sticks were just a record keeping system. We now are amazingly proficient at record keeping so that is no longer an issue at all. The block-chain concept will make universal transparency possible as well ... eliminating the need for regulation and government inspection.

Hopefully this helps your inquiring mind to do its stuff.

If it does, you have deceived the inquiring mind. Maybe you should confirm this rebuttal helps your mind ... as you offer no alternative MOE plan.

DuneCreature's picture

Did you figure that out all by yourself, Brian?

Damn, we are in trouble.

Live Hard, I Know You Didn't Read It In The FED Notes, Die Free

~ DC v6.5

stitch-rock's picture

Gresham's law, bitches

The irony is the 3k bitcoin article next down...
hmmmmm, are these related?

brain_glitch's picture

They are related. Mixed messages for a succesfull gaslighting.

stitch-rock's picture

We used to have a gas blasting Blythe Masters on the silver...

Glyndwr will return's picture

Make sure you spread your disbelief. At least to one new person daily

Ms No's picture

They will probably pull the plug under Trump because he is an alleged conservative.  That way they can destroy the image if anything fiscally conservative in the eyes of the public.  Then after the epic ass-raping it will be chocolate rations for all.  Maybe the globalists don't want to have continuous cycles indefinitely.  Maybe the end game is to dwindle it all down and make the west look like India.  They then control whether people eat and the only businesses left are the war machine and the guys putting the stamp on your chocolate ration.

CRM114's picture

There is not a tradition of subservience in America, unlike India. There's also a lot more guns. Government will gradually withdraw to the cities as it meets resistance in the boondocks. It's happening already.

CRM114's picture

I'm not convinced that debt and paper money in themselves are the problem. Debt was still a cultural taboo until the late 1980s.

The problem is threefold. Firstly, the Governments of the World are failing to effectively regulate the banks. Secondly, the Too Big To Fail principle is entirely wrong, and lastly retail banking needs separating from investment banking.

And all of the above is due to one cause - corrupt politicians.

edotabin's picture

Yes, while the system is very skewed and flawed it is the added mismanagement that makes it even worse.

We had a gold standard folks. It isn't some unreachable utopia that everyone refers to it as. Elimination of the gold standard is a rather recent phenomenon. They will find a way to screw everything up while, naturally, leaving a window open for personal enrichment.

I still say one of the easier ways to bring things in line is to go based on taxes collected. This is what we "produced" and production -5% is what we will spend. This will never happen so..........

 

CRM114's picture

I would agree that, as well as the corruption, the current crop of politicians are also very much less competant than previously. They aren't even very good at politics any more.

MEFOBILLS's picture

We had a gold trading standard until recently.  This standard applied only to goods exchange internationally.  Within national economies, it was banker fiat.

Banker fiat, is banker credit, which is hypothecations of YOU.... when you take out a loan.  Actual government fiat was always only a small percentage of money supply.

Gold trading standard was post Bretton woods up until 1971 or so, when Nixon went off of gold.

Going back further in time, we had an internal gold standard, where bank credit rode on top of gold in a 10:1 ratio.  Bank credit was always good for exchange in gold, but that was a lie.  There was never enough gold to cover the credit.  Banker's lied.

Going back even further in time, there were some precious metal economies, but they used both gold and silver.  Predators took exchange rate differences between the metals.

Hanseatic league had a good gold system, but it was based on law.  All money is law.  In hanseatic league they would de-monetize old coins.  At the same time, they would do head taxes in coins.  This forced gold into circulation.  Gold likes to hide... .it is deflationary usually.

It is always annoying when a Mises Monk writes an article and ZH posts it.  The Monks have an a-priori view of history.  If it doesn't fit their narrative, they ignore facts.  This is dishonesty of the most extreme kind.

Going back to the beginning of Gold as money, it was weight, as done on a balance scale.  Even then it was law, because it was issued by Temple Priests.  Gold as money was easy to carve off of a rod, because it was soft.  Then it was measured on a balance scale against grains of barley.  Gold then represented barley weight.  This money was used by Temple priesthood to trade long distance.  It was the first money... and it was money because of it legal nature.

There is nothing magikal about metal as money, it is the law behind a money system is what matters.  In case of banker fiat, that is mostly a scam.  The bankers punked their societies and are running a giant con.

But, stop jacking around with the word "fiat."  Fiat only means faith.  A proper legal money system is a fiat system.  When a gold coin gets its stamp (by the King) it becomes fiat.  Over 2000 years of coin history is fiat.  It took man about 2000 years to figure out that money is law, not metal.  He conflated metal in his mind with money.  Please, lets not be ignorant people who cannot learn from history.

11b40's picture

Thanks, MEFOBILLS. Have always appreciated your perspective.

css1971's picture

Banks have had infinite free money since 1971.

What's not to like for politicians?

decentralisedscrutinizer's picture

One cause: money=power. Power corrupts. Which is best:  corporate banking power or elected representative power? Neither is perfect; but anarchy?!?!

CRM114's picture

I am content with a period of anarchy*. I don't see why I should suffer being told to do stupid, destructive things by either of your options. And in any case, that is what we will get in a few years anyway. The systems are failing rapidly (all of them; healthcare, roads, infrastructure, justice, etc).

And after the anarchy starts, ordinary people will be forced to reconsider what really matters.

The current political system is not fixable from within. I think it's failing rapidly enough that it doesn't need help in that respect.

 

*I'm pretty much self-sufficient, surrounded by good neighbours, a long way from any population center, and am ex-mil. Anarchy therefore doesn't bother me at all. I will concede that large numbers will be totally screwed, but they are largely the ones voting for the current bunch of corrupt idiots, so I see it as a self-inflicted wound.

logicalman's picture

When I was a kid, back in the 60s, I'd never even heard of a credit card.

To quote my dad 'if I can't afford to pay for it, I'll do without until I can'

BTW, I don't have one.

The problem is onefold - banksters.

Banks control governments, no the other way around, so don't look to 'regulation'

TBTF is bankster bullshit to scare the shit out of everyone for the purpose of perpetuating the system that benefits them.

Banking is banking and as long as the banks get to write the rules separating retail from investment banks will make no difference, they'll just come up with another rule that keeps them rolling in money.

We need a RULE OF LAW applied symmetrically and money actually based on SOMETHING. That would likely fix 90% of what ails the average guy. Then there would be time to try to solve the 10% left.

 

MEFOBILLS's picture

actually based on SOMETHING.

 

That's right, based on the amount of goods and services extant.  Money needs to match goods and services in production.

Money can only do this, if it is scientific, and follows indexes relating to production and consumption.

AE911Truth's picture

 

Life is tough for debt slaves competing against each other for survival. We can build a much better world after we get rid of the psychopaths destroying the planet.

jm's picture

Absolute rubbish.

Currencies have always been subject to slow controlled devaluation.  It is the only way to offset the effect of compounding interest.

 

 

 

 

withglee's picture
new jm Jun 11, 2017 4:35 PM

Absolute rubbish.

Currencies have always been subject to slow controlled devaluation.  It is the only way to offset the effect of compounding interest.

Correct ... by design of the money changers and the governments they institute for their own protection. They co-opted our MOE (Medium of Exchange) process from the traders who invented it and put it into use. They immediately abandoned its two principal and most important tenants:

(1) Money must in no way restrain trade (i.e. must be in perpetual free supply at zero cost)

(2) Must maintain perpetual supply/demand balance (i.e. must operate with zero inflation)

By taking control of these two attributes, they have been able to arbitrarily control trade (enabling their farming operation they call the business cycle); demand tribute from traders (they call it interest and the time value of money ... which would otherwise be zero); and then allow governments to freely counterfeit it (i.e. default) while taking all tax collections as interest tribute.

What's not to love.

Iterative secession.

Then institute a "proper" MOE process.

decentralisedscrutinizer's picture

Not if the bank is state-owned.

rejected's picture

I think the article suggested that most people saved and avoided debt. Of course savings would accrue interest. Thus the money supply could be adjusted without devaluing the money in circulation. This adjustment is different than the billions, trillions of rampant inflation we are seeing now. I doubt this inflation is to cover compound interest as the bank has the cost of money at damn near zero. The rest of the economy that are still charging large interest rates are just fraud.

withglee's picture

Gold is a famously uncooperative agent of change.

It also restrains trade and can never deliver a perfect balance between supply and demand for it ... let alone do it perpetually.

Two sub-minimal attributes of "all" proper MOE (Medium of Exchange) processes are:

(1) To present zero restraint to trade (i.e. to be in perpetual free supply at zero cost)

(2) To guarantee perpetual perfect balance between supply and demand for the exchange media itself (i.e. zero inflation)

Gold "famously" has no way of doing that ... not withstanding there's only 1oz of the stuff for every person on Earth ... less than chump change.

How much longer must we suffer this nonsense.

Money is obviously and provably "an in-process promise to complete a trade over time and space". It is created by traders and only traders. It is destroyed by traders on delivery or it is immediately recovered and destroyed by  interest collections of like amount when defaults are experienced.

And since money is "obviously" a promise, and all promises are "debts", money is obviously, and properly, debt based. And that's not bad. Tell the disinformation bogey man to pedal his wares somewhere else.

VW Nerd's picture

I do not remember my econimics classes requiring money to provide zero restraint on trade.  Currency maybe.  There is a difference.  Money is meant to fill two basic requirements. 1.  Store of value, and 2.  A medium of exchange (fungibility).  Gold and silver fill both.  Paper money only fills one. A medium of exchange.  Paper money does have the ability to be a store of value, unfortunately the dicipline required to balance money supply with economic growth has never and will never be realized due to the greed inherent in human nature.

withglee's picture

I do not remember my econimics classes requiring money to provide zero restraint on trade.

Now that you know the obvious, go back to your classes and set them straight.

 Currency maybe.  There is a difference.  

Right. A difference without a distinction. Recorded trading promises (i.e. debt recorded in ledgers), currency, coin, notes, all are examples of instantiation of money. All are ultimately created and destroyed by traders. All are easily exchanged for each other.

Money is meant to fill two basic requirements. 1.  Store of value, and 2.  A medium of exchange (fungibility).  

If that is the case, why does the dollar (an "improper" MOE media) have a 4% leak ... by design? Why does gold not maintain perfect supply/demand balance of the gold itself (a sub-minimal requirement for something to be a store of value). Why doesn't gold exist in exchange at all if what you say is true. I can exchange cement blocks more easily and efficiently than I can exchange gold.

Gold and silver fill both.  

Silver was proven not to be money in 1964-1965. Gold was proven not to be the backer of money in the early 1970's.

Paper money only fills one. A medium of exchange.  Paper money does have the ability to be a store of value, unfortunately the dicipline required to balance money supply with economic growth has never and will never be realized due to the greed inherent in human nature.

Ask to see my less than 300 word proof that money is, always has been, and always will be "an in-process promise to complete a trade over time and space". That it is "only and always" created by traders. That a "proper" MOE process is not about discipline. It's about objective operation (i.e. no manipulation like monetary policy). It's about perfect authentication and transparency. It's about perfect and perpetual supply/demand balance of the money itself ... guaranteeing perpetual zero inflation ... and thus an obvious perfect store of value.

Gold hasn't stored my value too well over the last four years ... not as well as my dollars even. My land has done splendidly. And if I had bitcoins (masquerading as money just like gold), it has held value splendidly ... and will continue to do so, until it doesn't, because it is a ponzi scheme.

rejected's picture

Oh yea,,, The dollar and all the rest of the fiat money has worked out so well.  The dollar in 1913 has the buying power of a nickel and everyday they're adding billions more to make it worth even less.  This is money?  What happened to a store of wealth?

Gold is not a 'promise' It is real and is a store of wealth and needs no law to force someone to accept it. It needs no 'clearing' and extinguishes debt immediately which makes it anti-debt. And the best thing about it is Man cannot print it.

You sound like a lobotomized (aka educated) economics graduate or PhD. How much longer must we suffer this nonsense

withglee's picture

Oh yea,,, The dollar and all the rest of the fiat money has worked out so well.  The dollar in 1913 has the buying power of a nickel and everyday they're adding billions more to make it worth even less.  This is money?  What happened to a store of wealth?

As I repeatedly illustrate and prove, the dollar is the media of an "improper" MOE (Medium of Exchange) process. The money changers who have co-opted it

  • have an objective of maintaining a 2% annual leak and delivered a 4% annual leak (to sustain fake time value of money).
  • They extract arbitrary tribute from traders (they call it interest).
  • They manipulate the creation by traders to serve their farming operation (they call it the business cycle).
  • They institute governments for their own protection and to collect taxes they take as interest.
  • The actually funding of their protective governments is being done through counterfeiting (i.e. inflation).
  • and they store wealth perfectly ... for about a month.

A "proper" MOE process returns the operation to the traders who invented it in the first place.

A "proper" MOE process does better. It guarantees

  • perpetual free supply of money everywhere
  • perpetual perfect supply/demand balance of the money everywhere (zero inflation)
  • zero interest load on responsible traders
  • automatic negative feedback through interest load immediately recovering defaults of deadbeat traders
  • no possibility of outside manipulation or gaming ... totally transparent and objective

Gold is not a 'promise' It is real and is a store of wealth and needs no law to force someone to accept it. It needs no 'clearing' and extinguishes debt immediately which makes it anti-debt. And the best thing about it is Man cannot print it.

Everything you assert there is true (though it hasn't stored wealth too well over the last four years or so).

But as you don't assert ... "gold is not money". It's just a clumsy, inefficient, expensive, trade restraining, and ineffective stand-in for money. We learned in 1964-65 that traders prefer real money to PM when it comes to trade. They removed the silver from coins and affected their effectiveness in trade not at all ... proving the process was the money ... the precious metal was not. 

Money is "an in-process promise to complete a trade over time and space". It is "only and always" created by traders. It is destroyed by traders delivering as promised or defaults are recovered by immediate interest collections of like amount. It doesn't exist before the promise nor after delivery for any given trade. In the interim it as the most valued object in every simple barter exchange ... because it works and is the most efficient game in town.

I can prove definition and describe the "proper" MOE process in less than 300 words. Can you disprove it or describe anything better ... even with more words?

You sound like a lobotomized (aka educated) economics graduate or PhD.

Oh really? Have you ever seen someone who has been lobotomized?  

How much longer must we suffer this nonsense

You must suffer until you come to see that what I write is obvious, plain and simple logic, and the furthest thing from nonsense.

 

 

css1971's picture

"Money is obviously and provably "an in-process promise to complete a trade over time and space". "

 

While this is true as far as it goes, for the period of a trade, it's not a sufficient criteria... For money to be money, it has to also be generally acceptable.

i.e. people, traders must also have a belief, or faith in the medium, and it's the belief that gives money it's moneyness, not the fact that it's a promise for the period of a trade.

withglee's picture

"Money is obviously and provably "an in-process promise to complete a trade over time and space". "

While this is true as far as it goes, for the period of a trade, it's not a sufficient criteria... For money to be money, it has to also be generally acceptable.

Money, for any given trade, only exists "for the period of a trade". It doesn't exist before the promise nor after delivery (or after a default is recovered by an interest collection of like amount).

And of course the fact that money in a "proper" MOE (Medium of Exchange) process

  • is in perpetual free supply everywhere;
  • that it maintains perpetual perfect supply/demand balance of itself everywhere (i.e. guaranteeing perpetual zero inflation);
  • the fact that it imposes no interest load on responsible traders (i.e. no time value of money nonsense);
  • that deadbeats are immediately mitigated with the automatic negative feedback mechanism of detecting their defaults and collecting an equal amount of interest to recover and destroy that orphaned money;
  • that makes the "proper" MOE process I repeatedly describe here the optimal process.

It can't not be eclipsed ... only equaled ... and once instituted, it will be equaled by many and thus eliminate MOE exchange rate issues and manipulations completely.

i.e. people, traders must also have a belief, or faith in the medium, and it's the belief that gives money it's moneyness, not the fact that it's a promise for the period of a trade. People trust what works for their purposes better than something that doesn't work as well. This is true of the dollar we use today (with its obvious 4% leak). Something without that leak will only work better. It's ultimately not about trust ... it's about what works. The dollar is progressing into a "does not work" state. The solution is not to resort to PM (i.e. gold, silver, etc. ) which has never been nor, as a clumsy stand-in, even performed as efficiently (i.e. as well) as money.