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Reality: Subjective or Objective! Let’s Think!

August 24, 2014

If we view reality from the perspective of the whole (our planet) we might conclude that all reality is ‘subjective’ at the core. Why? In reality, I am a subjective person as my words, observations, and ideas derive from my subjective thinking (which is personal and limited). You, I maintain, also have a subjective perspective or viewpoint. We, as human beings, are unable to discern ultimate reality or that which is absolute for everyone. This suggests that all reality is ultimately ‘subjective’ and relative. How do I discern my subjective reality? What I do is derive assumptions about what I observe and what I desire to present to you. My assumptions are always tentative and uncertain to some degree.  So, ultimately, all reality is ‘subjective’ to some degree. Let’s now talk about what most of us view as that which is relatively ‘objective’. If I propose that an element from the earth has substance and can be minted into a coin for exchange as ‘money’, would this be a reasonable assumption? In other words, if I proposed that a gold coin (say with one ounce of pure AU within the coin) can be minted and then used as ‘money’ for our marketplace, would this seem like a reasonable proposal for getting a financial market off the ground? Most of us probably would agree that this proposal is logical and reasonable. This suggests that reality starts out as subjective assumptions (personal and uncertain) and after we agree on select assumptions we can assert that our agreement represents a logical and objective viewpoint. If a large group of diverse thinkers also agree, then we can assert that this is an objective conclusion. Does this sound reasonable? We start with subjective concepts, assumptions, and observations (derived from personal experience) and then we create that which is objective (via later agreements)? Agreement (by a group of thinkers) is what creates new realities which we then call objective and/or facts!

The human ‘eye’ observes reality but all observations start out as a subjective assumptions (based on someone’s personal perspective/viewpoint)! Later we tend to agree on that which is obvious and this creates a form of ‘objectivity’! Our goal when creating a monetary system is to promote that which is mostly ‘objective’ for the whole! Doesn’t this sound reasonable?

Our planet currently has around 7 billion human beings occupying space on the planet. America has about 315 million people occupying space. Does any single individual person have absolute knowledge, understanding, discernment, and abilities to enunciate ‘objective’ reality for everyone (or for the planet as a whole)? Are not all individuals (persons) limited, uncertain, and subjective with their viewpoints and perspective (within various degrees)? Is there any single person who can claim to be all-knowing and the source for all that we call reality? I don’t think there is anyone (on our planet)! What do you think?

We would generally agree that ‘things’ which can be identified from nature and created so that everyone can use these ‘things’ in the same manner with the same meaning would reflect  a degree of objectivity. For example: If I desire to exchange a dozen eggs for your loaf of bread and you agree with this exchange, then we could say that this was an ‘objective’ agreement (at least between you and me). My point is that the word ‘objective’ is merely an agreement that we both reach from thinking about what we are saying and doing (and then agreeing). Human beings decide via agreements that which is objective within their Worldview. Now let’s talk about economics and money to expand these concepts of objectivity and logic. In reality, there is no such ‘thing’ as money within our greater material universe (right now/at this moment). Would you agree? Yet, we can certainly ‘invent’ some ‘thing’ as money if we desire. Doesn’t this sound logical. As human beings we ‘invent’ reality continually (isn’t our current cyber/digital currency a recent invention). For example: Let’s start with a barter marketplace (where a group of people are desiring to exchange their products for other products produced by various counterparties). What concept emerges as we start this process of exchange within our marketplace? What concept (within our subjective mind/consciousness) emerges as we think about this exchange of products? Do we not desire a ‘value’ for ‘value’ exchange? Think about what is important when we exchange products (which we own/produced) within a barter marketplace! Doesn’t the concept of ‘value’ emerge from our thinking?

People start a marketplace and negotiate subjectively. Later these negotiations become transparent and ‘prices’ emerge! Monetary transactions create our ‘prices’! Prices are determined by agreements between participants within a marketplace. We usually call this process objective when full transparency is available for each participant. The core underlying concept of trading is the concept we call ‘value’!

I would suggest that the concept which emerges when we exchange products is the concept we call ‘value’. When we exchange product for product (assuming we both produced these products with our labor and intellect), we encounter this subjective concept called ‘value’ and/or ‘value in exchange’. What is the ‘value’ of my eggs and your loaf of bread prior to an exchange? Is the concept of ‘value’ a subjective concept? Do we not have different perceptions/conceptions of ‘value’ within our personal thinking? Let’s assume that we make an exchange. Is this a relatively ‘equal’ exchange? Is it a ‘fair’ exchange? Is this exchange a ‘value’ for ‘value’ exchange? Let’s say that we make the exchange and that others in our marketplace agree that our exchange was ‘fair’ and ‘equitable’. Does this not make the exchange somewhat ‘objective’? I think most of us would agree that this exchange of 12 eggs for a specific loaf of home-made bread was probably an ‘objective’ exchange (upon reflection). This example, my friends,  is the foundation of economics and an emerging ‘money’ system. Value was given for Value and we now desire to expand this process/operation so that our marketplace can expand, grow, and prosper. What happens over time? What emerges from our marketplace? What do we create as a proxy or substitute for this subjective concept that we call ‘value’?

This scale represents the concept of giving and receiving (value for value)! Prior to selecting (inventing) our money item and our currency concept we must ‘barter’ our subjective perceptions of ‘value’ to arrive at some agreement. This subjective negotiation process eventually leads to the creation of a money/currency system!

As we continue with various exchanges of products (via our subjective bartering), we desire to find some item within our marketplace which can be viewed as an ‘objective’ substitute for this subjective concept that we call ‘value’. What could we invent that could be accepted by our marketplace as a proxy/substitute for the subjective concept called ‘value’? After much trial and error, let’s assume that we all agree that the element called AU (gold) minted into a coin of one ounce pure gold, would be a relatively ‘objective’ standard of ‘value’ for all exchanges within our marketplace. This market behavior then sets in motion this gold coin as our initial ‘money’ item for additional exchanges within our marketplace. We have now ‘invented’ money to serve as our proxy/substitute for this subjective concept we call ‘value’. A gold coin (one ounce) becomes both our ‘money’ and our ‘currency’ (think about this process which started from barter). Now let’s expand our marketplace further and add the concept of ‘calculating’ value via our invention! If we use this gold coin for new exchanges within our marketplace, we can create the concept of ‘prices’ for each product. Creating objective ‘prices’ is accomplished when we have some objective currency (for our valuation process)! Let’s explore!

A one ounce gold coin is ‘invented’ to serve as our proxy or substitute for the subjective concept called Value! Later we specify (via a definition) the number of grains within the gold coin that will equal our initial currency unit. We could start with 24.75 grains of pure gold equaling a currency unit (say our dollar). The word ‘dollar’ now is defined and equal to 24.75 grains of Au. This starts our valuation system for our financial markets. Can you discern the importance of this starting process for determining stable ‘prices’ within our marketplace?

As time continues and we exchange products for products, we discover that specific ‘prices’ emerge within our marketplace from our diverse transactions using these gold coins. One dozen eggs = 1 Au coin. One loaf of bread = 1 Au coin, etc. As exchanges are made and more transactions develop, new ‘prices’ (denominated in Au coins) emerge within our marketplace. Over time, these ‘prices’ (and other product prices) become the measure of ‘value’ for all our products being exchanged. This eventually emerges into a greater marketplace which we can now call Capitalism. Capitalism has emerged from our exchanges of products for products and we now can expand this System of Capitalism to the entire global marketplace. Our logic is sound and most market participants like gold as our invented ‘money’. Exchanges (using a currency/dollar) can now be accomplished with a medium of exchange (our Au coin)…now a standard of value, and a store of value (as well as a unit of accounting). All this happened via our subjective thinking which we later called ‘objective’ as agreements and prices emerged fairly and logically within the greater marketplace. Isn’t this how our markets started? Didn’t our markets emerge from our subjective thinking and then evolve via agreements which we viewed as logical, fair, and relatively ‘objective’? Think about the above First Principles! First Principles are the key to understanding today’s confused markets!

As we trade products produced from the soil (via our defined currency unit) ‘prices’ emerge. Prices gradually get objectified (and remembered) as trades are made within a marketplace! Prices are mostly stable when our currency unit is defined and exchangeable into some physical ‘thing’ which the marketplace perceives as containing ‘value’. Without this definition of a currency unit, stable prices are impossible! For prices to remain somewhat stable over time requires a disciplined financial system (administered by knowledgeable and discerning administrators)!

Now let’s ‘fast forward’ this logic and thinking which we can call First Principles do our realtime markets today. Do we have any ‘objective’ or stable markets today? Are exchanges of ‘value’ between counterparties in our marketplace reflecting ‘objective’ exchanges of value? Let’s start with this example: China produces products for America which we display within our stores (let’s use Wal-mart as our example). All these products are produced by Chinese workers and Chinese intellect for our stores. Americans desire these products and our consumers purchase these products with a type of ‘money’ called the American Dollar (now a cyberspace unit). We purchase these Chinese products and then exchange our American Cyber Dollars for these products. Is our Chinese counterparty receiving fair ‘value’, equivalent to what they provide us, via this exchange? Let’s think about what China is providing us and what we are giving them in exchange. Do we have a ‘value’ for ‘value’ exchange? Is this exchange really a ‘fair’ exchange for both parties to the transaction? China is providing us material products/wealth (produced from their soil and via their intellect) and we provide them with a cyber currency (which is created out of thin-air by our Central Bank). This unit within cyberspace has no real inherent value/wealth. We create this unit via our mental activity (also called our consciousness). Where is the comparable labor and materiality on the American side for these transactions? Is a ‘no-thing’ unit within cyberspace = to a material product produced from the soil of china (also called real material wealth)? Let’s think about this process of exchange between China and America. We receive ‘value’ (a material product) and we give ‘nothing’ (a typed into the computer cyber unit). Cyber units do not even ‘exist’ within observable time and space. How can this be viewed (objectively) as a ‘value’ for ‘value’ exchange? Do you discern this Ponzi exchange process between China and America? China now has some $3 trillion of our cyber dollars within their computer screen (Central Bank). How does America create their cyber dollar? Do you know?

Today, our prices emerge from computer manipulations and via centralized decisions within our private banks (commercial as well as our Central Bank)! There is no Free Market Capitalism to set transparent prices for our products (nationally or internationally)! All is now mostly within Cyberspace (a subjective space within our extended consciousness)! We trade ‘imaginary’ currencies and ‘imaginary’ values from our computer driven manipulations. We will soon have a global cashless computerized pricing mechanism (all within cyberspace). Objective prices are now not possible! Do you discern these realities?

If we go back to our starting example, our First Principles, we should be exchanging the ‘money’ which we invented for the products which China is providing for our markets. This ‘money emerged from the marketplace and everyone agreed that this unit of Au was a ‘thing’ of perceived ‘value’. We originally invented the element called AU/gold as our ‘money’. We then minted coins (let’s say one ounce coins) to serve as our proxy for value (our money) for all monetary transactions. What we are giving China today, however, is an American Dollar which does not even EXIST (as an objective thing). Can you discern what a cyber dollar is (in reality)? What is our American Dollar today? Do you understand? We receive millions of products from China every day and we give China a ‘non-thing’ (called the America Cyber Dollar). Where is this American Cyber Dollar within our greater material universe? Can you or our Chinese counterparty locate, find, or hold this American Cyber Dollar so it can be objectively identified? Think about the nature of this American Cyber Dollar. We create this cyber unit by merely ‘typing’ numbers into the computer screen. How can ‘numbers’ typed into the computer screen be viewed as ‘objective’ money/currency? These units get created by our Centralized Federal Reserve (by merely a few administrators meeting mostly in secret) without any objective logic (derived from market participants or via supply/demand). Our market does not create these cyber units (only the Fed can create these units). Does this sound like an objective marketplace or what we generally call Free Market Capitalism? Not in my mind! What do you think?

The American Cyber Dollar can not be found, located, or held in one’s hand. Cyber money has replaced ‘objective’ money (gold/silver/copper)! We now live with ‘subjective’ currencies globally (which have no referent to material reality)! These units are NOT objective ‘wealth’. This type of non-system eventually leads to serious distortions, value destruction, mal-investments, price volatility, inflation/deflation, and a general loss in confidence within our trading markets (nationally and internationally).

In conclusion, let’s summarize what we have considered above:

1. All reality is ‘subjective’ at the core. This is because each human being is unique and subjective (with limited knowledge/understanding). There is none on our planet who can discern reality objectively for everyone!

2. What we call ‘objective’ reality emerges from our agreements (and agreements change over time). We observe and think about reality and then ‘agreements’ develop. When a body of intellects agree on prior assumptions, we call this objective reality. Later this reality is discovered to be fallacious or illusionary!

3. Capitalism starts with private property (ownership) and then we exchange products within a marketplace. Exchange of products creates this subjective concept which we call ‘value’. Value is the core concept of Capitalism!

4. The concept we call ‘money’ starts out as a ‘word’ derived from someone’s subjective mouth. After most participants agree that a particular ‘thing’ has perceived ‘value’ (for all within a marketplace) we then agree that this invented ‘thing’ is our money. Money is the ‘name’ we give to that which our marketplace has chosen (invented) for our proxy for ‘value’.

5. As time continues we invent a ‘currency’ (like our dollar) which emerges from a definition/weight of the item we chose as our ‘money’. This ‘currency’ is used to calculate/measure value in the marketplace more precisely.

6. As we calculate ‘value’ of all the products within a marketplace, ‘prices’ emerge for all these products. Prices tend to remain stable and constant when our ‘money’ is sound and derived from nature (at least for a time period).

7. Today, we have abandoned the market logic (of our Free Market Capitalism) and created a Centralized Bureaucracy (called the Fed) to create subjective currencies for us and our foreign counterparties.

8. Our subjective Cyber Dollar is an example of a unit of nothing which creates unfair transactions for all our foreign counterparties (as well as our own National markets). Today, there is no real ‘value’ for ‘value’ exchanges and all is now ‘subjective’ globally. We now trade a subjective cyber dollar (in exchange for our imported products) with no real knowledge of what is the objective ‘value’ underlying the exchange. This creates distortions, mal-investments, volatility, and manipulated prices. Governments demand centralization and this leads to their planned Cashless Society (soon to arrive on a global basis)!

Give this missive some serious thought and think for yourself about what has evolved since the closing of the gold window in 1971. First Principles are key to understanding today’s markets. Do Americans desire a subjective currency system where a few elite bureaucrats administer all that occurs within our markets? This is what America now lives with! Who understands? Enjoy! I am:


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