Money is a tool that is utilized in order to facilitate the trade and exchange of commodities. Money makes commodities more “liquid” meaning easier to exchange. Money allows traders to easily deal with small fractions when exchanging between different commodities. Money is in itself worthless; the true value lies in the physical resources and services that money is simply utilized in order to transact. The barter holds the worth; the value is in the trade and transaction of commodities. Currency just facilitates the trading process making the exchange of goods easy. Money itself has no value. Money enables people to easily make transactions of commodities. Money is worth only as much as the simple functional value of being able to trade items that have real worth. Money has zero physical worth; it is a balanced medium of exchange. We therefore must stop appraising money anymore than the value it has in facilitating the transfer of goods and services.
Method for appraising the value of money
The value of money must be appraised according to actual physical worth within the economic system. The value of money should not be estimated or configured arbitrarily. In order to appraise such value we must first appraise the value of our physical socioeconomic system. We must total up the value and worth of every individual resource and communal service. In order to appraise the worth of a physical resource or service we must understand the physical cost required to produce such resource or service as well as the benefit received from such product. Such cost can be measured in time, energy, materials, labor, and stress. The benefit can be measured by a reduction of cost / loss in the system, increase in profitable gain, and desirability. When the entire economy is extensively evaluated and its total value appraised in physical terms a value can be attached to money and commodities in order to optimally facilitate the transaction of such resources.
Adjusting the amount of money in circulation to optimize transactions
The total amount of money in circulation must be proportional to the quantity and quality of assets possessed by a socioeconomic system. The value of the money is apportioned to a value that will most effectively transact all of the commodities in circulation. The smallest units of currency must be able to effectively transact the least expensive commodities. The most costly and expensive commodities require larger units of currency that can be transacted using small numbers that can be expressed with ease and simplification. The new system must enable people to accurately quantify the physical wealth that a commodity has in possession. The system for establishing the price of a commodity should be transparent and a fair and equitable methodology universally affixed. The amount of money circulating within a society should be based upon a mathematical function designed to optimize the transaction of all commodities. The total amount of money in circulation should represent the total value of all commodities and economic resources within the system. The value of each unit of currency should be worth an amount that optimizes the liquidity of commodities in respect of the population demographics.
The Global Uni
Money should be designed for convenience. The most convenient system of money would be to have a global currency that is accepted universally and which holds stable value. I propose that the name of this currency be called the “Unit”, as in “units of credit”, or “Uni” for short. People will conveniently carry a Uni Card (or micro chip) that will be accepted everywhere…universally. Even though an initial value must be expended in order to develop the system and subsequent value would be added in the increased functionality of trading, the Uni would function as a balanced medium of exchange that does not add or detract value from the economic system. The value of the Uni will be objectively determined by transparent economic analysis with subjective functions democratically agreed upon by the social population. The Uni will offer fairness and equity within the economic market.
Problems appraising the value of currency and amount of money in circulation
Currently there is no legitimate method for appraising the value of money and determining the amount of currency in circulation. It seems as though it is a very experimental approach where they try to raise and lower interest rates and the reserve amount in a trial and error methodology. I think that the lack of a coherent economic understanding is best illustrated by Alan Greenspan’s appearance on the Daily Show with Jon Stewart when he says “I’ve been in the forecasting business for 50 years, more than that actually, I hate to think about that, but in any event I’m no better than I ever was and nobody else is either. Forecasting 50 years ago is as good or as bad as it is today”. In Capitalism the price of a commodity is what ever you can get. And can be quite arbitrary. A seller tries to make the price as high as possible and the buyer tries to make the price as low as possible. Out of this dueling nature comes a compromise; this is the essence of the free market system. In this case there is room for error, greed, abuse, and exploitation. If commodities were appraised by the physical cost required for their production this would give a concrete and transparent view of how much the commodity is actually worth. The value of money can be a function which represents such physical worth.
There currently is no universal method for appraising the value of physical resources. How much is a natural resource worth such as minerals, water, trees, land? How much are the radio waves used for broadcasting worth? How much is energy or time worth? How much is a human life worth? And how are these figures appraised? It seems to me that there is currently a very arbitrary and unnatural method for appraising wealth. For instance, the current economic system may appraise the value of a human life by averaging the amount of money awarded in settlements for wrongful death lawsuits and come up with a figure like 10 million dollars. Capitalist economists do not factor into the equation the natural value which a human being possess that could be appraised in such terms as the cost which has been paid for a person to sustain the quality of life and the higher value being the production capacity of a person’s energy, labor, and services.
Currently because there is an arbitrary method of determining the amount of currency in circulation the value of the currency irregularly fluctuates. The value of the dollar is depreciating rapidly. Our money is becoming virtually worthless. Our dollar has been on a decline for a long time. Now it is worth a 10th of what it did in 1933 and dropping every day. This means the purchasing power is ten times less than which it was back then. Today it takes 5 times as many dollars to buy goods and services as it did in 1971. Since 2001 the dollar dropped 31%. This means that if 30 years ago you had set aside 10,000 dollars even with a rate of 6% inflation by the bank then today that money would still only be worth 1,500 dollars.
Our currency isn’t backed by anything at the moment. Essentially it is just an IOU. It is an IOU for an IOU really. What are they going to give you in exchange if one day the financial system collapses and you want to collect your earnings that was represented in the savings of dollars?
There really isn’t a free market because there is the invisible hand of the Federal Reserve, a private corporation, which determines the amount of inflation and money in circulation. Having a private central bank that controls the amount of money in the system is not a free market but a clear form of regulation. Besides this, every dollar is loaned by the private bank to the citizens on interest. This money is printed out of thin air. Then the responsibility falls upon the citizen to back up the currency with their personal property as collartoral in exchange for money which is worthless. I bet these bankers are laughing well, “all the way to the bank” I suppose would be the expression. I mean imagine: having the privilege to print cash and loan it to people on interest. You need money…just print some. There is an endless flow of money that is accessible at any time and it really works. It is publicly accepted. These people really have the power to just go anywhere at anytime and lend out 10-20-30-100 million dollars on interest. Think about the scale at which this is happening! Every dollar in the economy has been printed out of thin air, loaned out upon interest, then squandered by the government administration which puts the entire nation into a state of perpetual debt whereby all working citizens are forced to pay taxes in order to balance this deficit with at the expense of their own time and labor.
Money - ZeitGeist Addendum
Wikipedia - Monetization
Ron Paul - End of the Dollar Hegemony (Feb 15, 2006)