What the hell is money? 2 of 2

part 2 of a lecture on money.

full text can be read at:

http://kapitalism101.wordpress.com/what-the-hell-is-money/

Category:

Science & Technology

Tags:

• money
• exchange
• barter
• trade
• value
• labor
• use
• commodity
• inflation
• recession
• finance
• crisis
• medium
• of
• circulation
• measure

[00iam]

Money as debt cannot be allocated or distributed widely, so circulation problem is the root Lincoln geenback were debt-free and issued by Us Treasury, not privatised FED. So it is we the people who need to wake up and demnand debt-free money, which will make our government debt-free. Check out American Monetary Institute free conferences in the west coast.

[brendanmcooney]

Greenbacks depleted the government's gold reserves and made banks unable to respond to capitalist crisis effectively. This culminated in serious economic crisis in the 1890's and a long movement by the capitalist class to replace greenbacks with a more modern monetary system. What makes you think greenbacks can overcome the problems that led to their annihilation 1oo years ago?

[studentoflife01]

I think it was a bad idea to imply that someones brain would hurt after understanding the video. Everything thing else about it was great. You can put in cartoons but I beg you to stop it. I mean your explaination wasn't even that deep (That it would hurt my brain)..

[brendanmcooney]

well it hurt my brain trying to understand it so I assumed it might be a bit taxing to others as well.

[brendanmcooney]

I wonder if other folks have input into the determination of the reflex value of money. Does anyone have any comments about my characterization of it in this video? I worry I make too much a point about supply and demand characterizing reflex value.

[princeofexcess]

@badnewswade so gold inflation only happens as a result of really high gold deflation (like people begin to be much wealthier in other resources so gold becomes worth more and more because the ratio between the gold and other resources changes)

[princeofexcess]

@badnewswade golds value as a metal is the same as its value of medium of exchange. (just because you make something medium of exchange it does not mean its value changes gold is not a value of exchange but it still has a high value now)Gold inflation is possible however gold is a scarce resource it actually costs resources to get gold out of the ground and to find new gold ores and to transport goldThe costs are high so it only pays off to find new gold when there is huge deflation

[badnewswade]

(contd)

Wonder what would happen if you tied the value of money to a vital industrial commodity, like oil or a basket of energy commodities rather than have fiat money or a gold standard? I know oil is usually traded in US$ which gives the USD a lot of its power - anyone have any thoughts? @brendanmcooney ?

[badnewswade]

(contd) Also the system gets gamed, for instance the authorities refuse to audit Fort Knox & about half the gold in the world only exists on paper. Nothing magic about gold - Keynes once said it was like burying paper money and paying people to dig it up!

(to be continued)

[badnewswade]

@princeofexcess Problem with gold is that it has little real value as a metal, or rather its value as a metal is out of all proportion to its value as a medium of exchange.

Also the supply of gold is every bit as vulnerable to "money printing" and inflation as paper money, when more gold is mined inflation occurs. (to be continued)

[wilwon33]

@brendanmcooney

You appear to be unfamiliar with modern money theory (MMT). I suggest that you take a look at the writings of LR Wray, Marshall Auerback, Warren Mosler, Bill Mitchell (billy blog). These economists have developed the concepts of A Lerner, H Minsky, and others to explain how the fiat system in use in the US since 1971 would work if the expediters in Washington had the interests of the worker in mind rather than the system as it currently exists. Fiat money is not the problem.

[tuberesponder]

why all the throwing up the the magic hand signs?

a medium of circulation is a misnomer.

it's a medium of exchange

it's like saying the water in a river is the medium of circulation, it's not. it's the water that actually circulates.

The CURRENT SEE, flows between the BANKS of the River Economy.  It can FREEZE and stop circulating, but still be the CURRENT SEE. It often LIQUID (cash) or be VAPOR (credit). saving is not hoarding.

you keep equating "value" and "price"

[princeofexcess]

there is also another way to stabilize the problem. Its called backing money with a standard. Gold has real value of labor. Meaning it takes certain amount of labor to extract gold. It also has real value as a material (paper money also has that value but that value is the value of paper) Circulation is a disaster when there is an inflation in a recession. If a recession is caused by spending its saving that is the solution.

[Invirtuo]

No, the principal arguments against progressive taxation at the marginal rate is that incentives are reduced and that inflationary pressures are produced. Redistributive transfer payments dampen efficiency, create dependency and diminish incentives among many other problems

[Invirtuo]

"Socialism cannot exist in any economy with any form of exchange" Ludwig Von Mises