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Objective ‘Money’ vs Subjective ‘Money’

September 15, 2012

Who understands the difference between todays ‘money’ and 1971 ‘money’?

Few traders and investors seem to understand the ‘nature’ of our money units today. What we need to understand is that there has been a major transition in the ‘nature’ of our money units from objective to subjective. Let’s think about the current ‘nature’ of our money units. From our founding in 1776 until basically 1971 our economy operated with basically OBJECTIVE money units. Money was a material THING that we could hold in our hand. Money was physical and consisted of a material item from nature. We all used copper pennies, silver dimes, silver quarters, silver dollars and paper notes back when I was a child. What has happened to our money since then?

Gradually, over the past 40 plus years our money system has changed from Objective ‘money’ to mostly Subjective ‘money’. Today, some 96% of money transactions are accomplished using non-physical or non-material money units. Money units today are mostly ‘electrical’ charges which ‘appear’ as money symbols (numbers) within our computer screens. We now mostly use these money symbols ($ and such) as our money. Math and symbols have become our money and few seem to understand why this is significant. To understand why our Fed Chairman can create ‘money units’ OUT OF NOTHING we need to understand the ‘nature’ of our money and why this ‘nature’ is radically different from prior periods of our history.

The above image shows our money symbol ($) within the computer screen. Can anyone HOLD this money symbol in their hand (as a material thing)? I don’t think so! The symbol APPEARS as an image and if we look at our on-line checking account we will discover that ‘numbers’ within our computer screen represent our money units today. How do money symbols and numbers get into our computer screen? Do these symbols and numbers represent some physical thing from nature (say a silver coin or a paper note)? I would suggest NO! What we have for our money units today are ‘virtual’ images within cyberspace.

 
Since the ‘nature’ of our money units are now non-material and non-physical (virtual images) this means that our money Authorities (commercial banks and our Central Bank) can create this imaginary money by ‘clicking’ or ‘typing’ these money symbols and numbers into a computer. Money today is ‘clicked’ into reality that appears real but is really merely ‘virtual’. If the electrical power is turned off, our money disappears into cyber heaven. Our money will vanish from our view and from existence. Why is this type of money dangerous and meaningless for our future growth as an economic entity?
 
First of all, this type of money has NO VALUE. It is not a material item or physical commodity. We can not HOLD this type of money in our HAND. To exchange this money we need a computer and a system of computers for the entire global market. This is precisely what we now have on this planet. Money has become ‘virtual’…and money is now distributed, transferred, invested, traded, lent, and created within computer screens. Can this type of money system work for meaningful trade, valuation of goods, and for economic growth and confidence? I don’t think so! Why?
 
First of all, Capitalism is based on the word ‘Capital’. What is ‘Capital’? Capital is MONEY with ‘value’. The whole purpose of Capitalism and Money is to VALUE goods that are created for the markets. Money serves the PURPOSE of a ‘tool’ for VALUATION. I call money a ‘proxy’ for value. Money units create PRICES for goods that are created and then exchanged between people, countries, and nations. If our money units are ‘virtual’ and ‘imaginary’ then PRICES become ‘virtual’ and ‘imaginary’. Objective valuations are IMPOSSIBLE in this environment. Traders today manipulate PRICES via their computer algorithms and computer manipulations. The recent QE3 operation of Ben Bernanke is nothing more than MANIPULATION of market prices, interest rates, and asset values. This is NOT Capitalism and this will NOT last going forward! 
 

 
Todays markets are global and wired. Money now flows at the speed of light all around our planet. Who runs or operates this global money system? Think Central Banks and their surrogates. Central Banks have taken over global money creation and money distribution. Just a few elite Banksters now run global Capitalism via their centralized TRADING DESKS (now using high frequency computers and digital symbols for money). Three of the most powerful money Creators on this planet are:  Ben Bernanke, Mario Draghi, and Mervyn King. Now that Central Banks create our money units ‘Out of Nothing’, these three elite policymakers (some would call ‘counterfeitors’) create, manipulate, favor, and secretly ‘click’ or ‘type’ new money symbols into reality for their policy agenda. Is this criminal or not! Based on American history and our Constitution, this money system should be viewed as illegal and unconstitutional (a crime on the working class of this planet). Think about this system and derive your own conclusions!
 
 
 
Historically (for some 5000 years) money or capital has been material and physical. Prior to money as a ‘tool’ for valuation of goods, there was barter. Barter is the foundation of Capitalism and this process of negotiation is the philosophical basis for money. Money started as an IDEA, then a NAME, and then a MATERIAL THING. The key concept that underlies money is the concept of VALUE. Money is supposed to act as a ‘tool’ for the valuation of goods (in the ground and above the ground). Material WEALTH is created by people and then given a VALUE. Money serves as a ‘tool’ for valuation. Today’s virtual (imaginary) money can not WORK as it has no OBJECTIVE existence. Prices become ‘subjective’ and ‘distorted’ when our money units are SUBJECTIVE!
 
Subjective money can also be viewed as ‘psychological’ money since the units are DERIVED from Central Bankers CONSCIOUSNESS (MIND). Units are created OUT OF NOTHING (another word for ‘out of the consciousness of the Creator). Ben Bernanke has created $ trillions in recent years from his CONSCIOUSNESS. Is this an operation that is sound and moral? Does this operation of Bernanke, et al, create CONFIDENCE in the market system? I don’t think so! Psychological money leads to chaos and collapse in time. Think about the role and purpose of money in a Capitalistic System! Is ‘subjective’ money legal and Constitutional?
 
 
 The above image is meant to convey the ‘subjective’ nature of money creation from one’s CONSCIOUSNESS (MIND). Central Bankers THINK, then CREATE numbers and symbols from their MIND, then enter these numbers (digits) into their Central Computer as representations of legal tender (money) for the purpose of purchasing assets and manipulating the global computer markets (interest rates/prices/and values). Watch the volatility in todays markets on your computer screen. Prices jump around like a spring-loaded ‘jumping jack’. You can expect a crash of the stock markets in the near future given this corrupt system and operation. Watch and Wait…its coming in the not to distant future!
 

 
 Conclusion:  SUBJECTIVE money can not work as a ‘tool’ for the VALUATION of goods within a Capitalistic System.  SUBJECTIVE money can not work to create STABLE prices and/or values for goods, assets, or services. Centralized money creation is not Capitalism nor is it Free Market Activity. Top/Down administration of Capital creates mal-investments and Distortion in prices. Bubbles and Crashes develop with this type of money. Subjective money creates ‘price’ inflation and ‘price’ deflation as markets are manipulated by secret money committees (think FOMC in the USA). If people desire Capitalism for our future, then we MUST have OBJECTIVE money (silver/gold  has been the foundation of money for most of human history)!
 
The ONLY other alternative to ‘objective’ money and Capitalism is NO MONEY! The reason for this fact is that MONEY must serve as a ‘tool’ for VALUATION (value). That is the sole and core reason for money within a Capitalistic society. Money is a ‘proxy’ for VALUE…and PRICES are derived from money units with VALUE. So if Capitalism is to survive in our FUTURE, we must abolish the FED and go back to CONSTITUTIONAL money (silver/gold). Think it through! NEW money or NONE are our ALTERNATIVES!
 
 
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