Dave’s discussion below shows, among other things, that he is dealing in a reality he hasn’t quite grasped yet. It is important that he not let common popular ideas get him off track. He must stick with Mantra logic.
Let’s get specific. In common parlance, faith and hard cash are two ends of a spectrum. “Show me the MONEY” is supposed to be hard reality whereas faith is supposed to be wimpish. But, as Dave makes clear, it is faith in Germans that made the Deutschmark the hardest of currencies.
“Show me the money” sounds realistic, but it hasn’t been that long since the Hard Currency, pieces of official paper, was considered wimpish. “Show me the METAL,” Show me the GOLD” was the essence of Practicality until Roosevelt outlawed the possession of gold and the 20s gold bonds were called in.
So is Real Money gold or paper?
Real Money is what you can SPEND. How do you KNOW your paper or your gold will be accepted? Chances are your gold won’t. You can’t use gold coins as a medium of exchange.
You CAN use paper as a medium of exchange.
In fact, you can’t USE your gold coins as a medium exchange unless you have a piece of paper from a goldsmith saying they’re the Real McCoy. In the real world, you take your Hard Currency to the gold dealer and get pieces of paper, real money, for it.
Lots of people have gold for exchange when The Catastrophe hits. They do that because society will be in a state of collapse. They do that because all the stores will be closed.
So how in the HELL, in the midst of a catastrophe like that, are they going to get anyone to testify that it is REAL gold? We’ve all seen real gold, but how many touchstones have we seen?
So what IS money?
Money is what you accept because you have FAITH that anyone will accept it from you.
Money is faith.
In the 1960s survivalists talked about how only GOLD would work in The Great Collapse. I thought that was laugh then, but I couldn’t explain it to them.
Libertarians insist on their Magic Money, based on Hard and Objective Metal and the Magic Border Lines. But, as Dave points out, the Magic Border Line that makes wages higher is based entirely on faith in the PEOPLE north of that Line as opposed to PEOPLE south of that line.
Japan has less natural resources by far than Mexico has. But if you took all the Mexicans and moved them to Japan and took all the Japanese and moved them to Mexico, Mexicans would be worse off than they are now. I wrote that in the New Right Papers in 1982 after presenting it to before Nobel Laureates at an economics convention. No one EVER disagreed. But no one repeated it, either.
You can’t SAY that and have a career in academia, as Nobel Laureate Dr. Watson’s firing has just demonstrated.
AGAIN.
All the careerists in every field are OPENLY rejecting serious analysis that leads in politically incorrect directions. Which means that it is in precisely those directions that unexplored truth is piling up. It is a failure to move in those directions that is leading to the ever more impossible bottlenecks we are faced with in public policy.
Dave, BUGS participants, we have reality all to ourselves.
#1 by Sys Op on 02/25/2008 - 1:13 pm
THANK YOU, Bob. I thought that you were using Dave’s analysis because it was correct.
YOU are correct. FAITH is the basis of all exchange. Gold or silver are not as good as other medium and will not last precisely for the reasons you mention.
The system with the most faith is the system which rules.
Germany or England or China could rule the economy if they moved away from PC (and away from the World Bank) as you say and got completely out of the “moneychanger” corporate central banking with the fractional reserve money-printing-based-upon-loans-made, ponzi scheme.
If Montana secedes, they can then print their own money and use any currency their population trusted.
Your prowess at Economy issues is mantra thinking personified… let’s hear it.
#2 by Bob on 02/25/2008 - 1:23 pm
SysOps, thank you. I do very well for a recovering professor.
#3 by Simmons on 02/25/2008 - 4:20 pm
Thanks Bob. Let me distill Dave’s argument down, the yield curve for White Man’s debt is showing an inflationary curve even in the face of deflationary doom, so even when we are neck deep in crap paper the world wants the white man’s paper, pretty impressive I must add.
Other than that it just shows you that the coloreds look to us for leadership yet the PC gestapo refuses to ask those questions per usual stuck in the sand PC mentality. Still like my earlier post said its jew looting time and the debt markets regardless of the treasuries show it as such. The FED is in follow up mode to a disaster that dwarfs the savings and loan debacle. That one gave us Texans and Southerns in the dock this one will drive up the price of luxury condos in Haifa, Israel. The mortgage broker we used was a jew and his appraiser basically asked me how much I thought my property worth, and oh silly me I was honest.
To someone bored of finance here is the plan, the FED will need to create finance costs below what the cost of junk paper is going for to attract attention from the smart money. What does this have to do with us? Some Asian or African will be asking, “Why has the white man abandoned his responsibilities?” Race will be on the table.
#4 by mderpelding on 02/26/2008 - 7:58 pm
Money confers value.
Think about this.
Consider the trade imbalance with China. People talk about the so-called national debt. They are worried because the Chinese are basically accepting IOU’s against so -called trade deficits. But, as long as those IOU’s can be redeemed on the world market, they can confer value. In other words, as long as somebody will accept those IOU’s as payment in kind for goods or services, the Chinese will continue to accept them.
In other words, I can owe you a billion dollars.
And you will accept this debt as long as someone else in the world will be willing to trade you for it with commodities.
But lets imagine that nobody thinks you can make good on that debt.
And that IOU is worth nothing.
#5 by Simmons on 02/27/2008 - 1:29 pm
I won’t link to it but the Spengler columnist for the Asia Times has basically written our arguments using the angry incompetent minority in the person of Obama so as to remain PC enough. I have no doubt that Obama will find enough jews to staff the important jobs in his administration, but I also have no doubt that the confidence will be broken.