I used to say that George W. Bush wasn't going to be outdone by his father who saw the collapse of one of the world's two superpowers, Dubya was going to make sure the other one collapsed.
Of course, people have been predicting the demise of the United States before the Declaration of Independence, let alone the Treaty of Paris.
What gets me off on this topic is that a few mornings back, I awoke to a story about China studying and preparing for the decline of US power. I would have preferred a more definite story on this, but I found the possibility quite intriguing.
I mean you have to remember that the question “How would you carry out a surprise attack on Pearl Harbor?” appeared on every final exam for each graduating class of Japan’s Naval Academy from 1931 until the actual attack. So, there is a precedent for not so sneak attacks catching the US unprepared.
I have to thank il principe for the term weapons of mass distraction media since as per usual, the yanks are too distracted by wedge issues and irrelevancies to see what is happening right in front of their noses. That is that the Chinese are the people propping up the US economy.
Sure, this seems a bit like the episode of Spooks I watched last night (S7e5) where the British economy is on the brink of collapse. On the other hand, that episode raised a lot of the issues, such as running an economy based upon debt, that I talk about here.
There is a seriously mixed rant here at the inability of the American people to see through the bullshit handed to them by the media and politicians. Worse, they are easily misled by special interest groups such as the NRA, Americans for Quality and Affordable Healthcare, pro-life, and so on that keep them in a panic about everything except what really is happening.
The funny thing is that the next invasion may happen by stealth. It will be undetected until the coup has happened. By that time, it will be too late for anything to be done.
Showing posts with label debt. Show all posts
Showing posts with label debt. Show all posts
17 November 2009
06 August 2009
All that glitters...
I have to admit that I am musing on the topic of money and economics lately. Not just fiat money, you know, the folding stuff in your wallet that you spend. I am considering why gold has value.
There are two commonly held views as to why money has value:
1. Social convention--People are willing to accept it as payment.
2. Government decree--The government says so (Fiat money).
The first reason, that being that money has value because people are willing to accept it as payment is nothing more than a circular argument. It states that money has value because it is accepted. Why is it accepted? ...because it has value!
The second belief is also false. As history reveals, there are many country currencies that have suffered through hyperinflation or complete collapse click here.
Right now we are witnessing the collapse of the world economic system which is causing great grief to governments. The problem is what is going to replace it. Not to mention there is fierce resistance from the "haves" who see their power waning as their wealth becomes worthless.
Money originally started out as a commodity. Originally, people exchanged goods according to their wants and needs with one another. Examples of commodities that have been used as mediums of exchange include gold, silver, copper, salt, peppercorns, large stones, decorated belts, shells, alcohol, cigarettes, cannabis, candy, barley etc. These items were sometimes used in a metric of perceived value in conjunction to one another, in various commodity valuation or price system economies. The problem is that it makes trade difficult, so along came a medium of exchange that eventually became money.
Money has to fulfill three things to be useful:
1. It is a medium of exchange.
2. It is a store of value.
3. It is a unit of account.
Now the real hitch is value. The title of this comes from the fact that I read that gold has no real value. I read somewhere that gold's value is subjective. That is
There are actually three types of value in economics, Objective, Subjective, and relative. Objective value is a value set by a marketplace such as a commodities exchange and is otherwise known as market value. It's a bit like the social convention that says "gold is valuable because people find value in gold". Relative value is the attractiveness measured in terms of utility for a given instrument of exchange.
Although value in general is relative. That is even if gold has a market value (Objective), it doesn't matter whether you think it's valuable or not (subjective), it does not affect its objective value. However, the situation in which the gold is supposed to be of value does matter, because value in general is relative to individual and circumstances. For instance to person X, who happens to be stranded on a desert island, gold is not valuable. Its value to him is still objective. That is it won't all of a sudden change price because he decides so, that's a market force. But relative to him the value of gold is, objectively, zero since it isn't useful for exchange. That is there is no utilty to gold.
So, in a situation where the currency has colapsed and one needs food, which is more valuable to the person with food: gold or something they need?
I like to quote the TV show "Jute City": Money in of itself isn't evil, its when people take it from a medium of exchange and make it into a commodity that it becomes evil. Probably more of a paraphrase than a quote, but you get the idea. There is a cruder version of this which is "money is like shit, it's useless unless it's spread around."
Part of the problem is that people have been wanting to accumulate far more money and things than they need. That means the rest of us are stuck in an economic form of musical chairs since the economy is really based upon debt. I know, I just did a literary no-no by introducing debt into this mix about money and value. But really the fiat money has been backed by debt and not by value for some time now. That is the reason for the seeming economic fluctuations. Although to be quite honest, the economy has been in recovery for quite some time now: at least since Reagan-Thatcher came into office.
Why are so many people having trouble making ends meet given the economic recoveries?
Actually, the economic situation is like a game of musical chairs and the recoveries have just been changes of songs.
But the real gist of this is that the gold out there is worthless if it can't be spent. It's nice to think something has value until you try to sell it.
Then you really see the market forces kick in.
There are two commonly held views as to why money has value:
1. Social convention--People are willing to accept it as payment.
2. Government decree--The government says so (Fiat money).
The first reason, that being that money has value because people are willing to accept it as payment is nothing more than a circular argument. It states that money has value because it is accepted. Why is it accepted? ...because it has value!
The second belief is also false. As history reveals, there are many country currencies that have suffered through hyperinflation or complete collapse click here.
Right now we are witnessing the collapse of the world economic system which is causing great grief to governments. The problem is what is going to replace it. Not to mention there is fierce resistance from the "haves" who see their power waning as their wealth becomes worthless.
Money originally started out as a commodity. Originally, people exchanged goods according to their wants and needs with one another. Examples of commodities that have been used as mediums of exchange include gold, silver, copper, salt, peppercorns, large stones, decorated belts, shells, alcohol, cigarettes, cannabis, candy, barley etc. These items were sometimes used in a metric of perceived value in conjunction to one another, in various commodity valuation or price system economies. The problem is that it makes trade difficult, so along came a medium of exchange that eventually became money.
Money has to fulfill three things to be useful:
1. It is a medium of exchange.
2. It is a store of value.
3. It is a unit of account.
Now the real hitch is value. The title of this comes from the fact that I read that gold has no real value. I read somewhere that gold's value is subjective. That is
1) The item is useful in satisfying human wants, therefore it is desirable
2) There is a limited supply to satisfy demand.
3) We are told it is valuable even though it can't be eaten, worn, or very useful.
There are actually three types of value in economics, Objective, Subjective, and relative. Objective value is a value set by a marketplace such as a commodities exchange and is otherwise known as market value. It's a bit like the social convention that says "gold is valuable because people find value in gold". Relative value is the attractiveness measured in terms of utility for a given instrument of exchange.
Although value in general is relative. That is even if gold has a market value (Objective), it doesn't matter whether you think it's valuable or not (subjective), it does not affect its objective value. However, the situation in which the gold is supposed to be of value does matter, because value in general is relative to individual and circumstances. For instance to person X, who happens to be stranded on a desert island, gold is not valuable. Its value to him is still objective. That is it won't all of a sudden change price because he decides so, that's a market force. But relative to him the value of gold is, objectively, zero since it isn't useful for exchange. That is there is no utilty to gold.
So, in a situation where the currency has colapsed and one needs food, which is more valuable to the person with food: gold or something they need?
I like to quote the TV show "Jute City": Money in of itself isn't evil, its when people take it from a medium of exchange and make it into a commodity that it becomes evil. Probably more of a paraphrase than a quote, but you get the idea. There is a cruder version of this which is "money is like shit, it's useless unless it's spread around."
Part of the problem is that people have been wanting to accumulate far more money and things than they need. That means the rest of us are stuck in an economic form of musical chairs since the economy is really based upon debt. I know, I just did a literary no-no by introducing debt into this mix about money and value. But really the fiat money has been backed by debt and not by value for some time now. That is the reason for the seeming economic fluctuations. Although to be quite honest, the economy has been in recovery for quite some time now: at least since Reagan-Thatcher came into office.
Why are so many people having trouble making ends meet given the economic recoveries?
Actually, the economic situation is like a game of musical chairs and the recoveries have just been changes of songs.
But the real gist of this is that the gold out there is worthless if it can't be spent. It's nice to think something has value until you try to sell it.
Then you really see the market forces kick in.
20 March 2008
frustrate their navish tricks.
I-95 has been closed for the past three days due to structural problems. Americans believe they are entitled to free highways and cheap petrol. Unfortunately, somebody has to pay to maintain the infrastructure.
As long as it's the other person.
The revolt was due to the fact that the Crown finally sent the Colonists a bill for their defence. Not just an army, but a navy to protect trade on the seas. Nevermind the taxes weren't as high as they were back in Blighty, it's being told they had to pay taxes.
"Tax and spend" is used as a criticism of "liberals", but we are finding the national debt is being increased since it is spend like a drunken sailor by "conservatives". More is spent on the pointless invasion of Iraq than the United States. Damn any source of revenue.
But, debt makes the world go 'round, which is a criticism of most of the world's governments since we are facing a crisis based upon massive lending without any consideration of who will eventually pay the bill.
OPM--Other People's Money
On the other hand, most currency has the words "will pay on demand the sum of" the note's denomination. So, really, we have debt. The War for Independence was based upon debt. Trash paper which was worthless, but was forced upon people to show their patriotism. The British paid in gold.
Of course, The citizens of the United States have gun control, abortion, prayer in school and other wedge issues trotted out so that nothing is done until a crisis arises. Even then, nothing gets done. Something might actually get done if the wedge issues were removed. On the other hand, why bother since it is easier to keep peoples' minds on other things than really deal with serious problems.
Let's have elections which take forever, but don't result in proper representation of the people. George Bush didn't win the last two popular elections, but he won in the electoral college. of course, a parliamentary system would result in new governments every two weeks. Either that, or people would be forced to work together.
The problem is that we have leaders who don't lead, they follow. They follow polls. They follow the money of special interests which pay for their campaigns. Special interests which are at odds with the interest of the American people.
As long as it's the other person.
The revolt was due to the fact that the Crown finally sent the Colonists a bill for their defence. Not just an army, but a navy to protect trade on the seas. Nevermind the taxes weren't as high as they were back in Blighty, it's being told they had to pay taxes.
"Tax and spend" is used as a criticism of "liberals", but we are finding the national debt is being increased since it is spend like a drunken sailor by "conservatives". More is spent on the pointless invasion of Iraq than the United States. Damn any source of revenue.
But, debt makes the world go 'round, which is a criticism of most of the world's governments since we are facing a crisis based upon massive lending without any consideration of who will eventually pay the bill.
OPM--Other People's Money
On the other hand, most currency has the words "will pay on demand the sum of" the note's denomination. So, really, we have debt. The War for Independence was based upon debt. Trash paper which was worthless, but was forced upon people to show their patriotism. The British paid in gold.
Of course, The citizens of the United States have gun control, abortion, prayer in school and other wedge issues trotted out so that nothing is done until a crisis arises. Even then, nothing gets done. Something might actually get done if the wedge issues were removed. On the other hand, why bother since it is easier to keep peoples' minds on other things than really deal with serious problems.
Let's have elections which take forever, but don't result in proper representation of the people. George Bush didn't win the last two popular elections, but he won in the electoral college. of course, a parliamentary system would result in new governments every two weeks. Either that, or people would be forced to work together.
The problem is that we have leaders who don't lead, they follow. They follow polls. They follow the money of special interests which pay for their campaigns. Special interests which are at odds with the interest of the American people.
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