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Important: Money comes from ‘Nature’ – Currency comes from ‘Politicians’!

December 6, 2013

The history of ‘money’ shows clearly that people choose some item from Nature for their money (wampum, nails, cowry shells, silver, gold, etc.). Prior to money we had Barter. Within a Barter community (or marketplace) people chose some thing from Nature as a substitute (proxy) for Value. Once this money commodity was chosen (to denominate Value) by the marketplace, than politicians (governments) can increase the velocity of this money by creating a Currency. To understand Money we need to understand its off-shoot…Currency. Let’s take an example from our American history to understand the difference between Money and Currency. This distinction is very, very, important to understand!

Silver comes from Nature and has been chosen by Americans (1792-1968) as MONEY! Today, our Fed calls this commodity an ASSET (but not ‘money’)! Why?

What did our American founding Fathers choose for Money in 1792 during our first Congress (represented in the Coinage Act of 1792)? After Thomas Jefferson and others decided that Americans needed their own monetary system (separate from Britain’s), they looked to the marketplace for evidence of what the people had CHOSEN for their money. Their conclusion was that the most desired item within the 13 original States was Silver (represented by the Spanish Silver Coin called the Piece of Eight). This Spanish Milled Coin (called various names) contained pure silver within the coin. The marketplace viewed Silver as the best commodity (from Nature) to represent Value. This is real history! Value can not be represented directly as this concept is subjective and internal to each person within the marketplace. Value, however, is the concept that we all want to ‘measure’ with our Money. Think about Value the next time you purchase an item at your shopping mall.

We measure VALUE via a Currency Unit. This coupon, however, originated from its ‘tie’ to real MONEY from Nature! Currencies can increase the number of transactions within a marketplace (if people have faith and confidence in the unit)!

When a Money item is chosen (by the people) to represent Value, however,  than this Money item serves the purposes of denominating Value for all goods being exchanged within a marketplace. Money is the ‘name’, ‘word’, and ‘concept’ that emerges from our activity within a marketplace where Barter has been used (previously) for exchanging goods. Barter is inefficient and impossible to administer as the exchange process (number of transactions) grows within a marketplace. To ‘solve’ the issue of ‘value in exchange’ someone must INVENT the concept of Money and than exchange can grow more rapidly and efficiently. Now let’s expand our monetary system by introducing the concept of CURRENCY. A currency (really a coupon of some type) can increase the velocity of transactions within any marketplace. The key to this increase in velocity is for people to have FAITH in the validity of the Currency (coupon). Faith and Confidence is what makes Money Coupons WORK.

Prior to MONEY we had BARTER. Barter is the foundation for VALUE and exchange of goods/products. Barter, however, is rather slow and inefficient as an economy grows. This means we need to INVENT money!

For example: If I choose a paper coupon, note, or script as Representative of a unit of the Money item (say Silver), then I can expand the number of transactions within a marketplace exponentially. A paper coupon can be Printed from paper products and engraved with images that promote Confidence (say an image of George Washington…who we all view as honest and trustworthy). We can then choose a ‘name’ for the Currency Unit (such as dollar) and define this ‘name’ in terms of the above Money item (Silver). If I define a Currency Unit (say dollar) as 371.25 grains of Silver, we now have logic which helps us expand the transactions within a marketplace. I can now issue coupons, notes, script (called dollars) with the words printed thereon “the bearer of this note can exchange this coupon (one dollar) for precise units of the Money item (Silver)”.

Velocity of Money (really the Currency) allows more transactions to occur. This is one of our problems today as the Velocity of our Currency has collapsed.

Notice this subtle distinction between the word MONEY and the word CURRENCY. Money, historically, has always been some item from Nature which was chosen by the people within a marketplace. Currency (this word) then emerges from this Money item as political authorities create units of Currency for the purpose of increasing ‘transactions’ within the marketplace. Before there was the currency unit called the DOLLAR, there was the money item called SILVER. Silver was MONEY (when our Nation started back in the late 1700’s) and then our Dollar emerged later as our political legal tender currency unit. Notice this important difference as you think about the word MONEY and the word CURRENCY.

Politicians create Paper Currencies (not real Money). These units work ONLY as long as the public has Confidence and Faith in the issuing Authority! Many Americans and Global Citizens are losing faith and confidence in these units today!

This distinction is very important to understand. Money, historically, is CHOSEN by the marketplace (the common people) and then a Currency unit emerges (like our Dollar) to facilitate trade and the measurement of VALUE. The core underlying concept before we have Money or Currency is the concept of VALUE. This concept is subjective and can not be directly observed or determined (‘value’ is derived from our consciousness). This means that we need to INVENT some item from Nature to serve as a Proxy or Substitute for the underlying VALUE of each good or product being exchanged within a marketplace. This item becomes MONEY. These word distinctions are very important to UNDERSTAND! Why? Money is Money and Currency is Currency (not the same in historical meaning)! Below and underlying all is the concept of Value!

Today’s Currencies are DIGITAL. This means that banksters can create these units by ‘typing’ numbers into the computer screen. Quantitative Easing (QE) is an example of currencies created by our Fed by ‘typing’ numbers from their consciousness (into the computer screen)!

Today, our political Authorities have abandoned MONEY from our trading/market system. All we have today are CURRENCIES. None of these currencies are tied, backed, or defined in terms of real MONEY (chosen by the people). The last vestige of Money for Americans ended in 1934 with the calling in of all our GOLD (after the Great Depression of 1929 and after). When all real MONEY was confiscated from the American people, then FDR and his financial pundits, created a paper coupon called the Federal Reserve Note as our Currency Unit. This paper coupon was created by a ‘printing press’ in Washington D.C. called the Bureau of Engraving and Printing ( Later the Fed was allowed to initiate all the printing of these currency coupons. Americans have forgotten the origin of our MONEY and the difference between the concepts of MONEY and CURRENCY. We need to rethink this important history!

This single policymaker has created (I call it counterfeited) more digital currency units than any other banking official in all history. Trillions of these digital units have emerged from his consciousness (and then typed into the computer screen)! Does this create real Wealth for our economy?

Our politicians have further debased our Money with the closing of the gold window in 1971. This action, by President Nixon, created the fiat currencies which we now use for our legal tender. Then in the 1980’s and 1990’s our Politicians and our Central banksters (the Fed), further debased our CURRENCY (the dollar) by creating the DIGITAL DOLLAR. This currency unit is not even made of PAPER. So today, our currency coupons are DIGITAL units that are ‘typed’ into the computer screen by our Banksters (without any Authority from our elected Politicians). Today, we have a Fed which can COUNTERFEIT coupons (imaginary digital units) and call this process Quantitative Easing (QE). What a play on words. Banksters and Politicians can use a ‘play on words’ to disguise their official COUNTERFEITING. Who is AWARE! All this has emerged since the days of FDR (and after with) Nixon. WHO is aware of this history? Who cares? Why should you care? That is my missive for today! Think about this history as our current imaginary non-system collapses in the near future! I am:

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