Lemma 1(from the Principia Economica de Philosophy UnNaturno) " The kind of profit you may find in your shorts is not one that will be accepted by a bank", wdstk46, and much of our business now seems to be supported by deposits made on the banks of the Nile. Incidentally, since the erection of the Aswan high dams, the Nile is not allowed to overflow its banks and therefore there are no yearly deposits made on the banks-which makes this an ironic commentary, allegorical of the condition of our U.S. Banks where the lack of savings deposits has definitely eroded our banks, and the flood of cheap money will destroy any hope of growth in most of our fields of business.
The disconcerting linkages of the worlds fiat currencies seems to be turning all to fahrt currencies i.e. they are highly inflatulated, are beginning to smell very bad, and will dissipate into thin air once released.
Most first year economics students, will soon realize that supported currencies suffer from the same delusion; the almost universal adoration of noble metals by human beings, and the concomitant limited practical value, and unreliable minimal distribution in the earth’s crust. But no! You say, this very scarcity generated value and served as a break to run-away economic expansion. Q.e.d, which is why paper money, was supported by the noble metal illusion for so long. BUT, the lack of specie led to piracy in the Americas during the 17th & 18th centuries and currently around the Horn of Africa. AND will do so in the rest of the world should all paper currencies be devalued due to inflation. The toughest Burmese Bandit will most definitely understand it.
Furthermore, the mounting lack of species is putting all our little dreams @ risk, and in mortal danger, because of the devilish interconnectedness of ALL ecologies (all Biomes interact at any distance, over time) Yes Virginia, sandstorms in the Sahara subvert your Turkey stuffing at Thanksgiving.
A fine kettle of fish say I, and not from Marseilles. Both the Ludic and Gaussian fantasies (errors) prevent most economists from using the proper mathematical tools to view economic conditions accurately. There is nothing sacred about mathematical results. Garbage in: Garbage out! Mathematics, is a deductive discipline; it is useful only to the degree it mimics reality (i.e. Nature, conditions, dynamics etc…) In the physical sciences (Chemistry, Physics, Geology, Astronomy) it is more usefull because it reflects the laws governing large numbers moving more or less randomly. BUT only over limited ranges with specific applications intended. Einstein failed in his general theory (quantum mechanics not withstanding) and so will you if you try to generalize economics. The human element is chaotic. It is more likely to follow fractured geometry than fractal geometry’s (apologies to B. Mandelbrot) but may follow both. (Do " Fractured Fairy Tales" ring a bell?)
I take issue with CM’s definition of money as "a claim on human labor” While this implies WORK and work requires energy (in any sense) it suffers by pandering to a Marxian view (Karl not Groucho) of the value of work. Most of you readers grew up in a world where you had to work (do recognized valued activities) to earn money. You were most often paid for the time you spent doing "useful " work rather than being paid for the result of your labor (i.e. a freshly painted house, a repaired car a new set of cloths). Hence, the impression that work-time has value and leading to the statement " time is money"
THIS IS COMPLETELY TRUE IF AND ONLY IF, WORK (YOUR WORK) YEILDS VALUBLE (GENERALLY ACCEPTABLE BY MOST VIEWERS) RESULTS FOR ALL SUBDIVISIONS OF TIME.
Before you have finished reading the above short statement you must see the error in this assumption. You counter with " we don’t need to nit-pick". Ah, but the devil is in the details. For instance, for a poor impoverished farmer, many place in the world, a whole years worth of work becomes valueless if his crops are destroyed before he can use them or sell them. Unlikely? Not at all. Is it then that time be money only in 1st world nations? In world trade, goods are more often valued than services, and the amount of human labor attached to these goods is ignored. Conversely, Clinton (either one) is paid large sums of money for prattling, gibbering, babbling, prating and braying to an audience of enraptured oafs for an hour or less. Unlikely C.M.? I think not. Where is the work (mass through distance) in the second example? "There ain’t none" unless you consider breathing "useful" work. Getting muddy isn’t it? Both of my examples are not outlandish. So then, is the key, value? The value we assign to things, which determine cost in generally, accepted media of exchange? And Bingo, we have come full circle. So, the tea is in the pot and the pot is in the tea eh? The medium has an assigned value for goods and services and debt, and intangibles and …and …And is a book then a purveyor of ideas or a lump of macerated, pressed dried and printed on poly beta 1-4 glucosyl glucoside linked by fillers, binders and whitening agents? Or a set of images on a TFT LCD screen? or…
And we are left with accepted value, generally recognized.
Confederate paper money became valueless in an instant after surrender of RE Lee and the capture of Jefferson Davis. Gold and silver retained their value in the south-accepted value, generally recognized; even though both require human input to have value and would be valueless to a raccoon who would never the less recognize the value of a beef steak. (And would undertake great risk to steal it from you if he were starving, as will starving people)
So despite the over printing of any treasury, any money can retain value as long as it is generally accepted and generally recognized.
Is it then periods of inflation that inflate the cost of goods and services because there are too many buyers and not enough sellers (easy money)?
And are deflationary periods necessary to regain balance, at unfair cost to the poor and disadvantaged?
I think, therefore that money management must incorporate all aspects of supply, demand, the necessity of capital concentration, and the realistic redistribution of "wealth" with a human face and incorporating group needs irrespective of the wishes of the rich, the powerful, the greedy, and the all too many stupids, not withstanding the enormous complexities of our global financial systems.(Nonzero1=nonzerosum)
The responsibility is yours and mine to the exclusion of the sociopaths. We will probably never again have such an opportunity.
Vestri servus, (your {pl.pos.}, servant)
gsmolk
SALVO PLANETAE SUPRIMA LEX ESTO