What is money anyways?
March 21st, 2016 at 8:34:36 AM permalink | |
TheCesspit Member since: Oct 24, 2012 Threads: 23 Posts: 1929 |
Hmm, that explanation is till really using money as a medium of exchange. You do work and turn it into something else. The debt first model (see: http://www.amazon.com/Debt-The-First-000-Years/dp/1612191290) suggests it's a case of someone saying "I'll take your bananas, and in the future, I'll deal 3 hour of craps". And that this concept came first, before money. I'm no expert on the ideas in that book, but it's a different way of looking at it. There's several other videos on line that describe the debt is money/money is debt idea. I pretend no expertise on how good that model is. I certainly normally think of money as a way of transferring and recording 'value'. Certainly the idea of 'energy units' works to a point, but value can be created long after the energy units are expended. Or should I say, the value of the work can be withdrawn for some time. It's why we invest in capital expenditure, or spend time pushing forward the envelopes of technology. It is said that your life flashes before your eyes just before you die.... it's called Life |
March 21st, 2016 at 9:33:56 AM permalink | |
Wizard Administrator Member since: Oct 23, 2012 Threads: 239 Posts: 6095 | Ultimately, anything is only worth something because we have faith that others subscribe to it having value. What perplexes me a little is something like Bitcoin. Here is something that appeared out of nowhere, doesn't really exist in any physical sense, and yet it gained traction and the market cap of bitcoins is in the high millions. I'm personally thinking of getting into bitcoin but what bothers me is that the whole thing seems to have no foundation to it. Knowledge is Good -- Emil Faber |
March 21st, 2016 at 10:27:28 AM permalink | |
Pacomartin Member since: Oct 24, 2012 Threads: 1068 Posts: 12569 |
August 15, 1971 Nixon removes convertibility of the US dollar to gold. Some people date this speech with the end of commodity money to fiat money, but the transition had effectively begun during WWII. We all accept that the dollar is no longer based on gold, but the money is backed by the full faith and credit of the US government that issues it. But since 1971 the currency supply has increased by 27x, while the GDP has increased by 16x. I would have to look up M1, M2, and M3 but they presumably increase by a lot more than currency. When the nations of the Eurozone fixed their national currencies to the Euro they had 380 billion euros worth of banknotes between them. That factor has increased by 280% to today. As a footnote the 7 nations that joined increased the GDP by about 4% , so they are not a big factor. The GDP of the Euro zone has certainly not increased by 280%. You really can't think of US money existing in a physical sense. |
March 21st, 2016 at 11:45:55 AM permalink | |
petroglyph Member since: Aug 3, 2014 Threads: 25 Posts: 6227 | How is it that this nations people know less about the unit of measurement for the value of their existence than they do about their cell phone plan? Norm Franz > Quotes > Quotable Quote “Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants – but debt is the money of slaves.” Central banks all use fiat or "debt based currency", and all fiat eventually returns to it's intrinsic value. Every single time. Hundreds of recorded times. https://en.wikipedia.org/wiki/Fiat_money http://dailyreckoning.com/fiat-currency/ The average lifespan of a new fiat is 27 years. The laws of physics and exponential growth will not be denied. The fact that most Americans don't/won't realize that the dollar is precisely described in their constitution for a reason, all the while prancing about supporting one candidate over another as if there were a difference now keeps me away from elections. The full faith and credit of the American people means, that we, the people are the collateral for our governments debts. That is slavery. The last official act of any government is to loot the treasury. GW |
March 21st, 2016 at 11:58:08 AM permalink | |
Ayecarumba Member since: Oct 24, 2012 Threads: 89 Posts: 1744 |
While I can't take my silver certificate to the treasury and exchange it for metal, I think that we have to think of US money in a 'physical' sense. The system works because there is agreement that a commodity X is worth commodity Y. Money provides an easy way to make the exchange. I think this is why Bitcoin works. As long as people believe that their currency can be exchanged for desirable goods and services, the market will find an exchange rate. Without the commodity exchange, a currency's only value is as scrap. This is the risk with Bitcoin. It has no scrap value. I suppose there is the same risk in U.S. paper too; if people were to believe that they could not exchange it for commodities, the market would crash and a new means of exchange would need to be agreed upon. |
March 21st, 2016 at 2:55:56 PM permalink | |
AZDuffman Member since: Oct 24, 2012 Threads: 135 Posts: 18136 |
Do you understand the math behind the whole block-chain thing? I get the point but don't understand how that works. The President is a fink. |
March 21st, 2016 at 3:14:16 PM permalink | |
Wizard Administrator Member since: Oct 23, 2012 Threads: 239 Posts: 6095 | When were still on the silver standard, how much silver would $100 buy you? Was it pegged to the amount of silver in a dime/quarter/half dollar/dollar? Or is that just a coincidence those coins are valued in proportion to their weight (correct me if I'm wrong).
Me neither. I should read up on it as I find the topic quite interesting. Knowledge is Good -- Emil Faber |
March 21st, 2016 at 3:38:06 PM permalink | |
AZDuffman Member since: Oct 24, 2012 Threads: 135 Posts: 18136 |
Money cannot really be compared the further you go back from 1913. Inflation did kill silver coins, and is the first half of what I have been calling here the change in the monetary system 1965-1971. After that shift inflation was more planned-in to things.
Please do and if you do please see if you can explain it here for us lesser-math people. I'm no math-head but no dummy either. IOW, I can usually understand what is being conveyed even if I cannot figure it for myself. But the Bitcoin thing has me for one stumped. The President is a fink. |
March 21st, 2016 at 4:52:08 PM permalink | |
Ayecarumba Member since: Oct 24, 2012 Threads: 89 Posts: 1744 |
$100 could be exchanged for 100 silver dollars. The paper certificate represented a physical amount of silver in the "Treasury". I recall that the weight of silver to be used in coins was actually specified in the ?Constitution? to make it similar to popular coinage in circulation at the time. |
March 21st, 2016 at 5:27:36 PM permalink | |
Evenbob Member since: Oct 24, 2012 Threads: 146 Posts: 25010 | I bought a thousand dollar bill 20 years ago for $1250, and sold it for $1400 a few months later. They sell for $2000 to $2500 now on Ebay for the 1934 version. I was nervous having it, the thought of that much money in one bill made me uncomfortable. If you take a risk, you may lose. If you never take a risk, you will always lose. |