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An Economic Concept few Understand/Comprehend! What is it?

October 29, 2015

I talked to a PhD. in economics today. The one concept which he seemed not to comprehend is the core concept of all our social economic systems. Capitalism is based upon this concept. Socialism is based on this concept. And Communism deals with this concept to a degree. What is this concept? I have been experiencing this concept as a professional consultant for some 50 years. I have taught this concept to thousands of students. This concept is known by everyone but understood by  few to none (it seems)! Can you identify this concept? It’s the foundation of economics and money!

Prior to the concept of ‘money’ there was the core concept of exchange called VALUE! The invention of ‘money’ is an attempt to objectify this core concept of economics!

Capitalism started within a Barter marketplace. As people exchanged their products and services with others this concept was the core to an exchange. If I produced pottery, bread, food items, or machinery I would need to deal with this concept which we all call VALUE! Yes, VALUE is this core concept of economics and the core concept of the above social economic systems. What is VALUE? What does it mean? Is it a ‘thing’ which exists? Is it subjective or objective? To comprehend why our current global financial system is collapsing we need to understand this concept which we call VALUE.

The starting point in economics is ‘private’ property which then creates ‘exchange’ and then the concept we call VALUE! This subjective ‘concept’ is at the foundation of any monetary system!

Capitalism started in 1620…after the Pilgrims discovered that communal living under the structure of a centralized distribution center did not work. People needed an incentive to work and then to own their own private property. With a plot of land and the incentive to acquire other products via trade with neighbors who had the same values, these immigrants started Capitalism in the United States of America. The other settlement in Jamestown,Virginia which started in 1607 also recognized the importance of ‘private property’ and the free exchange of products produced from the land. Gradually, this philosophy called Capitalism emerged and grew. America was founded upon the philosophy of Capitalism!

All social systems are based on core principles and concepts! Capitalism is based upon ‘private ownership’, ‘free exchange’, an objective concept of ‘Value’, and a currency ‘defined’ in terms of that which people view as containing intrinsic VALUE!

In 1776 and after, Americans continued to promote these concepts of ‘private’ ownership, free exchange of products, and a money system based upon this concept we call VALUE. In 1792, after our Constitution was adopted, our first President and his administrators created the American monetary system which was based upon this concept we call VALUE. People at the time viewed select items (such as precious metals) as unique products which contained VALUE. The foundation of our new American currency unit, called the American Dollar, was its ‘definition’…which was derived from the view that Silver and also Gold contained intrinsic VALUE.

America’s first currency unit was given the ‘name’ Dollar. It was defined as 371.25 grains of Silver. Silver was viewed as containing ‘intrinsic’ VALUE! Value was ‘objectified’ with this definition!

Our Dollar, after being defined as 371.25 grains of Silver, became the foundation of our American exchange system and then the unit which created all the American prosperity after 1792. The concept of VALUE was objectified with a minted coin which was ‘defined’ in terms of silver and given the ‘name’ Dollar. What few seem to understand or comprehend is that this concept called VALUE is the core concept of any monetary system and is still relevant in our markets today. Today, however, our esteemed leaders have abandoned the commodity which the people had chosen as their ‘proxy’ for VALUE (silver). Today, we promote an ‘imaginary’ unit of nothing called our Cyber Dollar!

Today, our Dollar has been destroyed by the abandonment of the silver/gold standard and the official ‘counterfeiting operations started by our esteemed Federal Reserve Banking Administrators (under Bernanke and others)! Yes, QE policies, now ubiquitous, have destroyed America’s Dollar and soon all currencies on this planet! With no definition of our Dollar we now live with an ‘imaginary’ subjective unit of nothing!

Today, we have abandoned the definition of our Dollar in terms of silver (later the definition became gold) and we now promote a ‘valueless’ unit of nothing called our CYBER Dollar. This ‘no thing’ unit has become a unit of our Central Bankers consciousness which gets ‘typed’ into our computer screens as a bogus representation of ‘value’. Cyber units get counterfeited in the trillions by our Central Bank policymakers and today we live with a bastardized monetary system which will soon collapse. Yes, the core concept of an economic system is this concept which we call VALUE. What is it? Where is it? Why do we not understand or comprehend this core concept? I have taught this concept for over 40 years! Enjoy! I am:

P.S. To save your own wealth (to some degree), in the coming years of financial collapse, you could purchase a supply of Silver and/or Gold coins…for barter and for your store of VALUE. Any physical item which people desire during difficult economic times could serve as your ‘store of VALUE’. Eventually, we will need a NEW ECONOMIC SYSTEM! One distributor of silver/gold coins which I use is:

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