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See it BIG…Keep it Simple!

November 24, 2014

The macro picture is key to understanding our economic situation today. Few, however, desire to SEE the Big Picture (it seems)! As a teacher of economics and money for some 40+ years, I recognize that the essential nature of economics is derived from thousands of years of economic history. This history must be understood if one desires to understand today’s Casino Economy! Let’s review the Big Picture to discern where we are today economically!

The key concepts are the following:

 1. Capitalism (and private property)

2. Value (the core concept of Capitalism)

3. Money (the emergent proxy for Value)

4. Currency (the metaphysical concept used for deriving Value)

The above four concepts (when understood) should help anyone to understand why our current corrupt economic system is about to collapse. We need to discern why we don’t have Capitalism today, why the concept of Value is now totally subjective, why we don’t use any real money today for buying and selling, and why all our currencies are now metaphysical creations (derived from nothing)! Anyone who desires to understand the above FOUR concepts will recognize why we now need a NEW ECONOMIC SYSTEM!

Let’s start with a brief review of Capitalism. Capitalism was started (for Americans) back in 1776 with the founding of our country and the philosophy of Adam Smith, Thomas Jefferson, and a few others who desired that Americans create a market based economy of mostly individuals. Capitalism is based on the important concept called ‘private property’. Private property means that you and I own our land, home, and business. Private property means that our ‘natural resources’ are mostly owned and produced by private firms, individuals, and corporations. Private property means that we exchange and trade that which we produce and own. Private property (as a legal concept) is essential to understanding what follows!

Due to this philosophy called Capitalism, we need a ‘tool’ or mechanism for dealing with the subjective concept called VALUE. What happens in a private property economy is that we need to exchange, trade, and sell the production which enters our markets. This need produces the concept (within our mind) called ‘value’. Value emerges because we exchange, trade, buy, sell our production within markets. This concept called ‘value’ is a difficult concept to understand and comprehend. I have been teaching this concept for some 40+ years and I know that most people lack an understanding of this concept. So what is ‘value’? Where does it derive from? Why is this concept ‘subjective’ and ‘metaphysical?

If we look out at nature (our physical universe) we will NOT discover this concept called ‘value’. There is no such ‘thing’ as VALUE within nature or our physical universe. In reality, ‘value’ derives from our subjective consciousness (our metaphysical mind’s). Each person has a concept of ‘value’ within their subjective/metaphysical MIND. When I trade, exchange, buy, and sell any item of production (say a loaf of bread) the issue of ‘what is the value’ emerges from my mind and from your mind. This concept called ‘value’ EMERGES from our subjective/metaphysical consciousness (mind) when we desire to exchange any item(s) which we own/produce in a marketplace. Think about what we DO when we trade, buy, and sell in a marketplace!

Now let’s talk about another problem which emerges under our system called Capitalism. Since we live with ‘private property’ and this concept of exchange called ‘value’, we need to develop some OBJECTIVE tool within exchange (our marketplace) which can serve as a ‘proxy’ for the SUBJECTIVE concept called ‘value’. What could we invent which could serve as this ‘proxy’ (substitute)? What has been invented since the dawn of man (now some 6000 years of history)? What man has invented to serve as a ‘proxy’ when exchanging ‘things’ is a tool which we call MONEY. Money (the word) emerges (in our mind) when we think about exchanging items of production in a marketplace. So what is this concept called MONEY?

The concept of MONEY emerges to solve the subjective riddle called ‘value’. What is the ‘value’ of the items which we exchange within a marketplace (is our ongoing problem)? If we can ‘invent’ a tool which is relatively OBJECTIVE, then everyone can trade, exchange, buy, and sell with much more confidence and assurance. People (in time) invent MONEY when they think about trading items of ‘value’! Anything that is perceived as containing some intrinsic ‘value’ can/has serve(d) as this tool for trading…which we call MONEY. Beads, shells, tobacco, tulip bulbs, silver, gold, etc. can all serve as this tool (called money)…if the tool is perceived as solving the subjective riddle called ‘value’. The best ‘things/objects’ which have emerged as this tool called MONEY (historically) are silver coins and gold coins.

Both Adam Smith (our founding economist/philosopher) and Thomas Jefferson (our primary founding Father of American Capitalism) chose SILVER AND GOLD as the best objective item (thing) which could solve the subjective riddle called ‘value’ or ‘value in exchange’ (within a private marketplace). Thus, in 1792, our American Congress adopted both silver/gold coins as our objective MONEY tool. The Coinage Act of 1792 emerged from our Congress and this set the ‘definitions’ for our MONEY tool. You can review this history if you Google this ACT and read the history. Now let’s continue with the fourth concept which emerged under the legislation called the Coinage Act of 1792? Think seriously about this fourth concept!

If we briefly review the above, we will recognize that Capitalism and private property creates our need for exchange (and our marketplace). Exchange creates the subjective concept called VALUE. Value (the concept) is subjective as it derives from our individual consciousness (our mind). Each person has a Consciousness/Mind (separate and independent from their BRAIN) and these metaphysical realities create our subjective thinking and our subjective experiences. Consciousness and Mind are fundamental to our thinking, speaking, learning, trading, buying, selling! Politicians use their ‘consciousness’ and their ‘minds’ to create this fourth concept of Capitalism called CURRENCY. The American currency is called our DOLLAR. What is this concept that we call DOLLAR? What is a ‘currency’ and why do we need this concept in addition to the concept called ‘money’?

First of all, let’s recognize that MONEY and CURRENCY are different concepts and both are needed if our system of Capitalism is to work properly. Few economists, however, seem to understand/discern the difference between these TWO important concepts. Let’s continue! Money emerges first (as a concept) and then serves as the real ‘proxy’ for the subjective concept called ‘value’. When we exchange items within a marketplace we exchange units of MONEY (say a silver coin, copper coin, or gold coin). Each coin is defined specifically as units of weight (grams/ounces). Think about INTERNATIONAL trade, for example. China produces most of our apparel items (say our clothes) and we desire to give them an item of ‘value’ in exchange for their labor/production/service. What do we give them and how do we ‘calculate’ the VALUE of this exchange (in realtime)?

Historically, we give China MONEY and also a CURRENCY to satisfy the exchange of ‘value’. Money is an item which exists within nature and is viewed as having ‘intrinsic’ value (again ‘value’ is a concept of our consciousness/mind). If we perceive that a silver coin has some ‘intrinsic’ value then this item (when minted and circulated) can serve as our MONEY item. Our politicians then create this concept which we call a CURRENCY (secondarily) so that ‘value’ can be CALCULATED for any item being exchanged (within a marketplace). America created the concept (word) which we call DOLLAR (as our national currency). We use the symbol ($) and the number (1.00) to represent this metaphysical unit of consciousness. We now have both a silver coin (money) and a symbol/number (currency) to use for calculating VALUE.

Can you discern why our philosophical system called CAPITALISM needs both a ‘money’ item and also a ‘currency’ symbol/number to effectively work within our greater marketplace? Both these concepts are absolutely essential if Capitalism is to work and if prosperity is to emerge for our society. Today, however, we do NOT have any real MONEY item (to serve as our ‘proxy’ for VALUE). We also do not have any real CURRENCY concept which can produce objective PRICES (values) within our marketplace. If ‘price discovery’ is to work within our greater marketplace, we need some objectivity within our thinking so that logical ‘prices’ can emerge. Price discovery, today is distorted (and all asset ‘values’ are distorted) as we do NOT have any objective MONEY item and our CURRENCY concept is also now subjective (within ‘cyberspace’)! Our Cyber Dollar is a subjective unit (created out of Central Bankers’ Consciousness).

Today, we live with subjective currencies (globally) and computer generated money (all circulating within what we call ‘cyberspace’). Cyberspace is an artificial (metaphysical) space which has no objective reality. Cyberspace is what creates the text and words which I am now writing. Cyberspace creates the symbols and numbers within all our savings/checking/mobile accounts. Look at your ‘smart’ phone, all the algorithmic apps, and your personal banking/trading/investment accounts (right now). All these accounts are now within CYBERSPACE (an artificial/virtual space created by our computers). Today, we have no real MONEY and no real CURRENCY (which is objective and stable for trading/investing/pricing)! We live within a Casino Economy which is about to reverse direction (crash and burn)!

The key concepts above (to think about) are Capitalism (private property), Value (emerging from private property), Money (an objective proxy or substitute for the subjective concept of ‘value’), and Currency (the symbol/name/number used as legal tender and a tool for calculating value). Capitalism can not work effectively without all the above working in unity. Today, we live within a different marketplace which can not survive going forward. We now need a NEW economic system for a global marketplace of some 7 billion people. Kingdom Economics is one alternative which I believe will work to make our global economy prosperous, functional, and exciting. Real change is now needed!

We need to start thinking about the BIG PICTURE (the concepts described above) which are now totally obsolete and dysfunctional for today’s interconnected global marketplace. Our so-called Keynesian economic model (as practiced by our Centralized banking cartel) is totally unfair for ‘international’ reconciliation of accounts, unfair for all settlement of trade balances, and is mostly ‘imaginary’ when we think about the meaning of our core philosophical concepts (value/money/currency). Capitalism can NOT work given the ‘nature’ of our current philosophical environment. Capitalism is over unless we want to go back to real MONEY (silver/gold) and real CURRENCIES (paper certificates which are viewed as ‘representing’ real silver/gold). The GAME of Capitalism is OVER as of today! A huge market ‘reversal’ within our stock/bond/derivative markets is now emerging! Bubbles will soon burst and our Markets will soon CRASH! Think about the above to understand the BIG PICTURE! Enjoy! I am:!

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