The illusion of money

Token money was never meant to be an end in itself, and certainly not for speculation.

What is money, but a token of convenience which parties trade goods and services.  These tokens made of paper, of base metal, or markings in the memory of a computer are worthless in of themselves.  The problem is that those in control of these tokens think that they have control over you and me; they start treating these tokens as commodities to gamble with; and they play games by devaluing, printing more or scrapping these tokens.  A man can be the richest man on earth with trillions of these tokens on a computer database in a bank, and in one crisis it can be wiped to nothing.   Money as tokens is a worthless illusion.

Spain at the present time occupies the minds of bankers, politicians and media, in the place of Greece, in the latest financial crisis as the experts attempt to play further tricks with worthless tokens to stem total disaster.  Money tokens have been replaced with debt tokens.  I am unsure how one can trade with negatives.

The real commodity of trade is things produced, our time, our sweat.  You may have no money, but everyone has a commodity of their creativity, time and sweat which is tangible and more valuable than a token that can vanish as an item of value overnight.

Interest bearing investments, stocks and shares and other token based investing is really a mass delusion with nothing of value backing it up, but of debt.  For investments something of practical and tangible value is better like land, buildings, art, manufactured commodities (the type useful even if civilisation collapses) than token money.  It is better to invest as an investor in small local or creative enterprises, such as those on KickStarter.com.  As has been shown by the Facebook IPO saga, the small investor was ripped off by faceless bankers.

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34 responses to “The illusion of money

  1. We should govern the money and economics, it should’t be other way around.

  2. An age old problem that history has not given us a lesson that anyone will listen to.

  3. The problem is that not many people can really accept the fact that money is an illusion. They reed this article and then check their accounts trying to figure out how to acquire food for dinner etc. I think there is no point of talking about how bad money is unless we have a system of alternative trading that is wast accepted and well functioning.

    Though if we would trade again with goods rather than money we ‘d never have another financial crises. Say I grow a lot of potatoes. They are pretty much worthless to me. What I want is a car so I can expand my trading. For a car dealer cars are worthless cause he has a lot of them. So what happened is that I give the guy say 3 tons of potatoes. I got a car really cheap and he got a year’s worth of potatoes really cheap too.

    Basically every item would be valuable and yet cheap at the same time and with today’s global communication networks we could always find someone who values our product and is also willing to pay for it with something that we are in need of.

    I’m sure it’s some age old thinking but we should totally try this after breaking the new world order down. But then I’d have to grow potatoes…

    • I think what is now happening will force people to consider alternatives to the current financial system, since everyone has passed the point of no return.

      You identify one alternative, which is barter.

  4. I’m not attempting to diminish your post, Alex, but want to respond to the subject of bartering, instead of using “money.” I’ve always loved bartering – in the 90’s I belonged to a barter group, in which each member would give some things of value to gain membership, which would be translated into “points” and then other members could buy, so to speak, with their points. It worked as a list of items, and point value, and there were also large barter events, where members could set up shop, and we could also carry our “exchange items” with us. The option was there to make up the difference in money, though. I’m not sure why it fell apart, but I still have the handmade room sized needlepoint rug I got by trading my pressed floral art work.
    I barter with people I know, simply by asking if they’d like to. Most of the time the answer is yes.
    And, I barter with friends who can provide a service for me, in exchange for something I have, and vice versa.
    My very favorite barter, I’ll write a post about right now… Thanks, once again!

    • Hi seapunk2, yes barter is a highly effective way to transact business, especially when cash is low. I have various products and services that I am willing to barter in the Colchester area. I look forward to reading your post.

      • AJ,

        Nonsense. Compared to money, it is highly inefficient.

        jog on
        duc

      • Inefficient in what sense?

      • AJ,

        Inefficient in that you require a coincidence of wants.

        jog on
        duc

      • Hi ducati, if I am right in understanding you, I would think that a trade based on a specific need is efficient.

      • AJ,

        No, not at all.

        If I produce very specialised goods or services, that do not command a universal demand, and I require a good or service in direct exchange, viz. barter, for my good/service, it will be far more difficult to complete each exchange that I require, which is highly inefficient to indirect exchange where I use money.

        Money is so much more efficient than barter that I am incredulous that we are even having this conversation. The chappie with the LETS system has created his own money to facilitate indirect exchange precisely for the reason that direct exchange is so inefficient.

        jog on
        duc

      • Economic systems follow the rules of Darwin, and if someone produces something nobody wants they starve. The problem is not that barter is inefficient, rather that people are producing crap nobody needs. With barter you are limited to a focus of need, and that is good. The concept of consumerism of producing vast crap, employing salespeople to convince people they need that crap, resulting in crap never being used and being dumped to pollute the environment is highly inefficient and wasteful.

    • AJ,

      You are engaging in a “Straw Man” argument. Of course if what you produce is junk that nobody wants, it is probably the case that you will go out of business, unless of course you receive a government subsidy.

      Unfortunately, this is not the argument.

      The argument is: barter, inefficient or efficient relative to money.

      The unequivocal answer is that barter, relative to money, is highly inefficient, simply because of the requirement of the coincidence of wants/needs. This doesn’t even take into account the issues of a temporal nature which further underline the advantage of money.

      jog on
      duc

      • Hi Ducati, in my opinion you are making the error of thinking money is an end in itself, which it is not. The primary goal is that people are exchanging products and services where there is a need. In my opinion money is a worthless middleman that is taken out of the equation in barter, since the exchange is a direct exchange of products and services.

        It boils down to if there is no need, there should be no trade. Money kind of screws this idea up, since instead of a direct product/service for product/service trade, there is now product/service for a worthless piece of paper, base metal, or couple of digits on a computer database.

      • AJ,

        Let me start by quoting the post I made yesterday here: http://leduc998.wordpress.com/2012/05/31/what-the-average-chappie-thinks/

        Interesting opening statement. Money…an end, or a means? I would agree I think that money is a means: a means to facilitate exchange, to simplify and universalize the price system, to allow economic calculation and incorporate the reality of time into those calculations.

        So clearly your “opinion” is factually incorrect.

        You simply never address the objection of my argument, which is coincidence of wants/needs. Until you can refute this objection, all your opinions etc are without substance.

        Money clearly facilitates exchange through eliminating the requirement for a coincidence of wants/needs, thus increases the ability to complete exchanges.

        You clearly struggle with the abstract nature of “money.”

        jog on
        duc

      • Personally, I struggle with anything that starts becoming abstract, since that is when things start to go wrong (though another topic altogether).

  5. Pingback: What the average chappie thinks. « ducati998

  6. AJ,

    I’ve responded at length on my blog, the refutation was simply too long to put into a comment here.

    jog on
    duc

  7. Hi Alex,
    I am nominating you for the Commentator Award. See my post for the guidelines:
    http://restinginawareness.com/2012/05/31/the-commentator-award/
    ~ Paul

  8. The LETSystem is an improvement on straight bartering. In bartering between two people, each must have something the other wants. LETS is a like a pool of barterers, with credit given to someone providing goods or services, which they can then use to purchase their requirements from anyone in the pool. I was involved in the very early stages of a LETS group in Kingston-upon-Thames which has been operating over twenty years: http://www.kutlets.org.uk/

    • LETS is something I am looking to introduce into my town of Colchester. This is certainly a step up from straight forward bartering and has as you say a long good track record.

      Thanks for your nomination.

    • I will at some stage contact you about your experiences of setting up a LETS system if you are okay with that.

      • Hi Alex,
        You are welcome to contact me, but as I said, it’s been an awfully long time since I was involved with it, plus I was involved in the initial planning but not the actual implementation. I do still know someone who has been involved with KUTLETS from the start, and I could see if they would be willing to contact you if you wish. You can communicate with me by email restinginawareness yahoo.ca (obviously, replace with @)
        ~ Paul

      • Thanks Paul, it would be useful to be in contact with someone who has experience of LETS so I don’t make too many errors if a LETS is created for my town.

    • RIA,

      I’ve posted a longer refutation, but let me state the argument briefly: you are not undertaking barter, you are using indirect exchange via a free market money system [your created credits are “money” created by your free market]. You seem oblivious to the error that you have made.

      jog on
      duc

  9. I wait for the day when commerce will perhaps return to anything real such as money tied to gold or other “real” objects. I think the real problem with money is debt. In the beginning, money was just a recepit for deposited gold. Back then, money had a 1:1 value. Then, the banks soon learned they could give people more receipts and take the people’s deposited valuables and invest in something, since it’s always something deposited anyway and people won’t notice unless they all claim their gold at the same time. Over time, no gold was left and we ended up with the situation today where money is just numbers inside a computer. Fooled everyone and continues until society as we know it break down to simpler terms.

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