Skip to content

Money must Exist … Currencies, however, are Metaphysical!

April 13, 2014

To understand today’s monetary system, we need to differentiate between the concept which we call MONEY and the concept which we call CURRENCY. If we go back to a barter marketplace we encounter the concept called VALUE (value in exchange). The concept of ‘value’ is subjective and derives from our consciousness so it can not serve as ‘money’ directly. To assist us with solving this riddle called ‘value’, we invent MONEY (a physical commodity) as our proxy for ‘value’. As human beings we have invented numerous items from nature to serve as our substitute for ‘value’. If we go back to the beginning (some 5000 years prior to today), we probably started with farm products as our original items which solved this riddle called ‘value’. Oats, wheat, barley may have been the original items chosen as ‘money’. These items (at the time) were viewed as items which contained ‘value’. Later, we invented other items such as cowry shells, wampum, deer skins as our substitute for ‘value’ (money). Then we eventually invented metals…such as silver, gold, copper as our proxies for ‘value’ (money).

The most desired items which we chose as our substitutes for the concept called ‘value’ were silver and gold. These precious metals were viewed by the vast majority of consumers and producers as superior proxies for this riddle called ‘value’. People accepted these metals as containing ‘intrinsic’ value. But how can we expand trade further so that our valuations are more logical? What emerged later is the concept called a ‘currency’. A ‘currency’ is merely a name, number, and symbol (within consciousness) prior to being ‘defined’. So if we desire to create a logical and stable currency we need to ‘define’ our currency ‘name’ in terms of the item chosen as ‘money’. For example: If we choose silver as our ‘money’ and the ‘name’ dollar as our ‘currency’, we need to ‘define’ the ‘name’ dollar in terms of silver. This is what happened when our Founding Father, Thomas Jefferson, created the American ‘dollar’. T.J. and our Congress chose to ‘define’ the American ‘dollar’ as grains of silver (specifically 371.25 grains of silver).

Notice that the ‘money’ chosen by the American marketplace was the element called SILVER. This precious metal was then given meaning by creating a currency unit (called the ‘dollar’) which was defined in terms of SILVER. The Coinage Act of 1792 created the definitions of all our currency units (dollar, half-dollar, quarter, dime, nickel, and penny). All these definitions were specific and this allowed our Philadelphia MINT to create coins based on these definitions. All this specificity allowed consumers and producers to ‘value’ their items of exchange (in our marketplace) with logic and confidence. For example: if I produce a dozen eggs from my chicken farm, the marketplace could ‘value’ these eggs in terms of our currency unit. Our currency unit (being defined in terms of a money commodity) had meaning and perceived ‘value…and this gave the marketplace confidence when exchanging and trading items within the marketplace.

Philosophically, Capitalism must have ‘money’ and also a ‘currency’ if it is to solve the riddle called ‘value’. As consumers and producers within a Capitalistic economy, we have agreed to the concept called ‘private’ property. This legal concept allows us to sell and buy within a marketplace where exchange (exchange of value) is allowed. Money and a defined Currency allows us to measure or derive ‘value’ in a logical manner. If we all desire to recreate another economic philosophy (under historical Capitalism for our global economy) we would need to choose some physical item as our ‘money’ and then define a ‘word’ like ‘dollar’ so that we have a currency for valuation. The breakdown of our prior international agreement, called the Bretton Woods Monetary Agreement, severed our chosen ‘money’ (gold) from our chosen global reserve ‘currency’ (the dollar). Today, we have NO ‘money’ within our international community and our ‘currency’ has evolved into a virtual digit (a unit of nothing…typed into reality)!

Our global monetary system is now living with fiat currencies (units of imagination/metal abstractions) which have no anchor to physical reality. At some point down the road, we will need to either eliminate all these imaginary currencies and/or reconstruct a NEW monetary regime (say a new Bretton Woods Monetary Agreement). What is now emerging globally is a crash/collapse of our existing currency units. This crash/collapse is a result of not having an anchor to our metaphysical (virtual) currencies. Fiat currencies typically have a maximum lifespan of around 40 years. Given that our international system abandoned the gold standard in 1971-73, we now are at the END of this 40 year fiat cycle. Today, our current debt and derivative obligations can not be repaid and this eventually leads to a crash of confidence in the global marketplace. This crash environment is now imminent. Watch and learn! Money needs to EXIST so that a Currency can be Defined (in terms of this item)! I am: https://kingdomecon.wordpress.com/

No comments yet

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: