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Why ‘imaginary’ currencies can not work as MONEY!

April 5, 2014

Today, we live with currencies which are virtual and which are circulated within the computer screen. These currencies are ‘typed’ into the computer screen by select unelected authorities (bankers/policymakers) and then circulated from computer to computer as our proxies for ‘value’. These currencies should be viewed as ‘imaginary’ in that each currency is now a digit (within cyberspace) which has no physical substance and which can not be physically transferred from one trader to another. Furthermore, currencies (historically) are NOT Money. Virtual currencies now make up most of our circulating currencies on our planet. In some Western countries some 96% of all currency transactions are now accomplished using these virtual/imaginary currencies. Let’s think about the real purpose for ‘money’ and ‘currencies’ to discern if these computer digits (as our proxies for value) can work in our global economic society. Are they working NOW? Why? Why not?

Value in exchange is not just the exchange of virtual currencies! What underlies the exchange is crucial (is the underlying asset associated with real economic wealth)? What is the purpose of an exchange (say barrels of oil, bushels of grain, or loafs of bread)? Isn’t an exchange suppose to reflect an ‘exchange’ of real wealth’?

The original ‘purpose’ for inventing money was to deal with the concept which we call ‘value’. As we exchange one product for another we encounter this concept called ‘value’. Since this concept (of our mind) is metaphysical and without any objective meaning, we need some item from Nature to serve as a proxy for the concept which we call ‘value’. The best proxy which has emerged over the past 5000 years has been the metal which we call Silver (also Gold). Silver has been viewed by the vast majority of human beings as a ‘thing’ from Nature which contains a stable ‘value’ (relatively). Gold also has been viewed in a similar manner over our long economic history. This has meant that silver and gold emerged as substitutes or proxies for this metaphysical concept which we call ‘value’ (value in exchange). Today, this mindset has been changed by our official authorities who have dropped silver and gold from our monetary system and promoted a new type of ‘money’ (virtual digits within the computer screen). Are any of these units perceived as having ‘value’? What about a long-term ‘store of value’?

A company produces a physical product (this represents ‘value’). Payment should be in a currency unit which holds its ‘value’ (relatively). Virtual currencies are subjective and created out of consciousness, this makes these currencies unstable for representing ‘value’. These currencies are metaphysical (subjective) and can not work as real ‘stores’ of value for longer term purposes!

Why can not virtual digits (within the computer screen) work as proxies for ‘value’ for the longer term? Let’s think about the purpose of economics and why ‘money’ was invented in the first place. The historical purpose for an economic/monetary system was to increase WEALTH for a nation/society. So what is ‘wealth’? Wealth has historically been viewed as physical/material items produced and consumed by people. Food items (wheat, corn, oats, etc.) are material items produced from the land. Cattle, hogs, chickens, etc. are material items produced for consumers food needs. Oil, coal, minerals, etc. are material items produced from our earth for transportation, etc. All our items of shelter (homes, apartments, factories, etc.) are material items produced for our consuming society for real needs. Wealth includes all the material/physical items that we use and consume as a growing society. What is NOT included in the concept that we call ‘wealth’? Today, most of our currency accumulations are not related to wealth creation!

Notice the exchange of ‘value’. The fish has perceived ‘value’ as food and the gold nuggets are perceived as ‘value’ in exchange for this item. The gold nuggets have historically been viewed as a long-term ‘store’ of value (an ‘objective’ exchange…thing for thing)! Computer images (our digital currencies) are really ‘subjective’ units of exchange! These units have no long-term existence and no long-term stability as ‘stores’ of value!

Wealth does not include politicians, preachers, teachers, and administrators who enunciate mere ‘words’ and ‘policy’ statements. In other words, ‘rhetoric’ does not qualify as ‘wealth’. We could say that all services and activities which produce nothing material or physical could be viewed as NOT producing any real ‘wealth’. Another ‘name’ for WEALTH is stuff. The stuff in our homes and garages are the best examples of previously produced ‘wealth’. All the natural resources (in the ground) which have not as yet been mined or produced could also be viewed as ‘potential’ wealth. The best example is our ‘oil’ (in the ground), natural gas (in the ground), and all our minerals (in the ground). The goal of economics is to increase production of our natural resources so that used-up wealth can be replaced with new wealth. This on-going job is continuous and never stops as long as people live on our planet. New ‘wealth’ is needed continually and increasing ‘wealth’ is needed if prosperity is to grow for our 7 billion planetary citizens.

Political speeches, preaching to the choir, playing video games, etc. do not produce real material wealth (in real-time). Rhetoric is fine and helpful at times, but it’s not necessarily relevant as an economic product (a thing of value)! Does political or similar rhetoric assist with growing our real economy (that is the question)?

Capitalism has produced the concepts of Private Property and Money. These concepts then produce the process which we call Exchange. As we ‘exchange’ our goods and products within our society (marketplace) we encounter this difficult and subjective concept called ‘value in exchange’. To deal with this subjective concept we INVENT money. So, what type of money serves as a valid proxy for this subjective concept called VALUE? The only valid MONEY (historically) is that which people view or perceive as containing VALUE. So what has historically been viewed as containing VALUE? We end up with the precious metals which we call by the name Silver and Gold. History shows that these two metals (over some 5000 years) have been the best options (tools) for resolving this difficult concept which we call VALUE. As long as Capitalism survives, MONEY is needed to solve the issue of ‘value in exchange’. Today, we have a serious problem as our current ‘money’ is NOT ‘money’. Let’s explore!

This economist/philosopher desired to eliminate ‘private property’. Without ‘private property’ there would be no private exchange and no real need for money! To each according to his need and from each according to his ability (enforced by an Authoritarian State)! This was the essential Communistic dogma!

Today, our monetary system (globally) has evolved into a system of virtual currencies which are circulated within the computer screen. The dollar, pound, yen, euro, krona, etc. are all now mostly digital currencies. Digital currencies are also virtual currencies. These currencies can not be viewed as MONEY as they have no material/physical substance which can be exchanged OUTSIDE the computer screen. Try to ‘grab’ a virtual/digital currency which is within your computer screen. It’s not possible! The item that we observe within our computer screen is within cyberspace (space which is really an extension of our consciousness). Can anyone ‘grap’ a currency unit that is INSIDE my/your consciousness? Can anyone physically exchange a currency unit that derives from consciousness (the human MIND) and then enters the computer screen via ‘typing’ (numbers)? I don’t think so! So what are currencies which are within the computer screen?

Today’s currencies are virtual or digital (within the computer screen). They enter the computer screen via ‘typing’ of numbers at the Authorized Central Banks on our planet. This process should be viewed as subjective, manipulative, and corrupting! All currencies on our planet are now mostly digital (virtual) currencies!

Computer screen currencies are metaphysical and/or imaginary units with NO ‘value’ and with NO ability to serve as an objective proxy for VALUE. These units are subjectively produced by our banking cartel and then circulated within our interconnected computer environment (cyberspace). They are divorced from material/physical reality (our Space/time Universe). These units are great for exchanging between person’s on the internet, but they are useless for solving the greater issues of VALUE in EXCHANGE. To solve the issue of ‘value in exchange’ Capitalism invented physical objective MONEY. The best options which Capitalism invented have been SILVER coins and GOLD coins. Think about the PURPOSE for money and currencies! The purpose for money is to solve the riddle of VALUE in EXCHANGE. How can virtual/imaginary currencies (created subjectively from the MIND of our banking cartel) solve this riddle called VALUE? It’s not possible! History demonstrates that it is not possible!

Historically, silver and gold have been viewed as ‘objective’ money and also an objective unit of currency (when defined)! Today, these precious metals are no longer used for valuation of our goods and services. Our currencies today are subjective! Is Capitalism over or is a re-structuring of the System necessary?

Today’s fantasy currencies (called MONEY) can not solve any of the core issues of Capitalism. Money is a TOOL which was invented to solve the issues of ‘value’. What is now happening (globally) is fantasy economics (exchange of mathematical codes and algorithms) designed for HFT traders and for Centralized banker ‘manipulations’. This is totally unsound for the 7 billion human beings needing real WEALTH for their survival. Virtual currencies are NOT wealth nor can they produce wealth given the computer generated system now in operation. What has evolved since the closing of the GOLD window in 1971 is a type of FANTASY economic/monetary system which must soon crash and collapse. This could start any day now! Get ready for the biggest financial crash and collapse in the history of planet Earth! That’s my message for today. I am: https://kingdomecon.wordpress.com/

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