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Think: Philosophical ‘Dualism’ when Investing in Assets Today!

May 9, 2012

Goods are ‘Material’ whereas ‘Prices’ are ‘mental’!

The key to understanding today’s markets centers on understanding the Philosophy of Dualism. We all use a ‘dualistic’ mindset when we go shopping and when we buy goods. A good example of Dualism in action is when we purchase a home. The house that we desire to purchase is a ‘material’ good but the ‘price’ of this house is subjective and derived from our mind. The philosophy of ‘monism’ (which most of us learned in our schools) is no longer valid for sound economic thinking.

Monism is the philosophy that both ‘house’ and ‘price’ are material things. This thinking had some validity when our ‘dollar’ was defined as a silver coin (as it was when originally defined in 1792). Today, however, our ‘dollar’ has no definition and has no substance. Following is an image of our dollar as a silver coin:

The name ‘dollar’ described a silver coin when our ‘dollar’ was originally defined by Thomas Jefferson in 1792. The history of our ‘dollar’ has been a material thing and has been viewed as a material thing by most Americans since its original definition as 371.25 grains of pure silver. Today, however, our ‘dollar’ is no longer a material thing. Today we use immaterial (digital units) as our ‘dollars’ (which we call ‘legal tender’). All this evolved after the closing of the gold window in 1971 by our then President, Richard M. Nixon. Today, we need to visualize our money units as ‘imaginary’ symbols and numbers…with specific mental ‘names’ (dollar, yen, euro, pound, etc.). These images reveal today’s reality:
What happens today is that fiat numbers are given ‘names’ (dollar, yen, euro, pound, etc.) and then digital units are created…out of nothing…and entered into computers. High speed computers now transfer money units all around our planet at the speed of light. Most of the Western world has adopted digital money and some 96% of all units created and spent are now electronic units created by our commercial banks. Some 70-80% of all stock market volume is now electronic. Practically all currency trading is now electronic. And most of us now invest, trade, borrow, spend, and save within cyberspace. Visualize these images to discern today’s reality:
There are still many investment advisors and financial pundits who desire to maintain the illusion that our money is still paper. If you listen to most of these financial pundits you will witness them thinking that our money is being ‘printed’. The illusion of ‘printing’ is maintained since a small portion of our money units are still paper notes and metal coins. But this small portion is now only about 4% of all money transactions. When you watch money programs on TV you often will witness these misleading images:
These images of paper notes, however, represent only about 4% of all money in circulation today. The vast majority of money units (some 96%) are now digital units within our computer screens. Electronic money has emerged in the past 10 years as the money of choice for most nations on this planet. We might call these units ‘electrical charges’ which appear as virtual images in our computer screen. Most of us now invest, buy, sell, save, borrow, and value our assets via electronic money units. We might visualize this as follows:
What we need to understand today is that we are approaching a period where money units are really nothing but imaginary numbers and symbols (with ‘names’). Money units really do not ‘exist’ as real material things (objects) today. Furthermore, our money units are no longer created as things with intrinsic ‘value’. When our then President, Richard Milhous Nixon, closed the ‘gold window’ on August 15, 1971, this decision created the emergence of our digital money of today. The initial decision in 1971 created the fiat paper currencies which you can observe above. This led to computerization of money in the late 1980’s and 1990’s which now is ubiquitous on a global scale.
The END of money may be emerging in the coming years unless the people on this planet desire to create NEW MONEY that is viewed as containing some real VALUE. Politicians like Ron Paul of Texas and many others are promoting alternative currencies backed by either or both silver and gold. The history of money supports some commodity as a unit of exchange and store of value. With the internet becoming ubiquitous, however, we may be seeing the end of all money in the coming years. Who desires a centralized digital currency which is controlled by ONE central bank for the entire planet? This envisions a ‘mark of beast’ image. Is this what is emerging in Europe today? The role of money to control society has a long and ‘dirty’ history. We all need to understand money and banking to discern future trends. Enjoy!
Video on the ‘end of money’ suggests that machines, robots, new technologies can create material goods and replace historical labor. This means that ‘money’ may have no role in our future:
2 Comments leave one →
  1. therooster permalink
    September 16, 2012 8:14 am

    The FED’s mission statement appears to be/have been to evolve inflexible gold and silver with fixed trade values and bring it full circle where the weight of gold and silver would be resurrected with real-time value capabilities. The economy is a real-time event, after all. What was needed for this process to complete is a real-time measuring tool and thus the “necessary evil” of the pure floating USD was crafted. The ultimate purpose of the USD is NOT to act as a currency of settlement. We know it as a such but the dollar’s role as a currency has been a process oriented stop-gap measure until such time that the market would wake up and remonetize bullion where the role of the dollar would act as a real-time measure and a servant to gold , in a real-time monetary role, where gold is the settlement currency, by weight. The dollar is a unit of consciousness, as mentioned further up in this blog. The dollar’s tenure (as a currency) can be looked upon as a necessary evil. The stage is set for bullion to reappear as a completely & instantly liquid (real-time) currency with all the debt-free qualities and store properties of history.

    If one is to reverse engineer real-time gold in its current money role, much like you can find with any gold backed digital currency, one will find that the FED’s footprints are very prominent in setting the stage for the design of the business model, particularly with the development and the abolishing of the fixed price peg of $35/oz associated with Bretton Woods.


  2. September 16, 2012 4:21 pm

    I will wait and watch to see if your vision develops. So far this reverse concept has not arrived.


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