Quote:
Originally Posted by AndyJWest
Nothing has 'inherent value'. The utility anything has depends entirely on circumstance.
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Splitting hairs, the most favourite distracting tactics. Okay, here you get it:
inherent values get attributed by the negotiations of market participants, but the differnce is that they agree on the material value they attribute to ann item or token, may it be a sack of rice or a rare bird'S colourful feather or an ounce of gold. The maket decides these items' value, and that si their inhgerent value. With a bank note, it is different, you use bank notes for bartering not on basis of their material inherent vlaue - which is just the paper and the ink, so a million dollar note still would be worth just pennies in inherent value. The bank note nevertheless gets dealt with as if it had the material value printed on it.
But that is like an ounce of gold in simply bar format, or an ounce of gold minted in a medal or coin. For the coin, you would always pay a little bit more, but when you sell it back to the trader, he nevertheless will often just pay you back the current material value of th gold it contains - that is the inherent value of that 1 ounce of gold. Everything becond that is just a sentimental value. And sentimental valued items are bad items for building reserves and secure your savings in.
In the end, bank notes are no valuable items in themselves, they are FIAT money only, fiat from Latin: "it will be, it shall become". It means money, or value one hopes hat will materialise, so to speak, while it is no value in is current form. In fact a bank note is just a written certificate of debt, which would be okay if the value of the note that is printed on it would equal a security stored in the safe of the bank. You have one dollarnote, becasue it is easier to handle and smaller in weight, but for it you have a security stored at the bajk that equals this one dollar, may it be precious metla or anything else. It is like the ticket you get when you hand over your coat while visiting the opera - you have that ticket, and they have the coat. Yo give back the ticket, and you get back the coat.
Not with the money today! If you demand all money notes tobe turned into material assets again, the system would collapse after less than 1% of the paper money being exchnaged for gold, silver, palladium or whatever they had "in stock".
Two forms of credit there are, the one is reasonable and economically reliable, stable, the other paves the road to disaster. First, there is credit that bases on somebody else not consuming something, and what he saved by not consuming it himself, he lends to somebody. No dysbalance between real world assets and bilance credit in the books until here, everything is fine, you get a coat back when you hand over the ticket. The other form of credit is to hand out notes of debtness (=bank notes) for which no consumer items were saved, you effectively hand out these leafs of paper without them being backed by any securities. And this is lethal for every financial system and economy in the end, always, unavoidably. And this is what they do since over 100 years, excessively, and more and more excessively so. You do n ot get a coat when handing over your ticket, becasue nobody has handed them in a coat as a security in the first. There is no coat you could get.
We cannot escape the consequences of this stupidity. Some fall earlier than others, the sequences of players falling may vary a bit - but in the end falling they all will.
There is no coat you could get, I said above. Its like this with over 99% of the money the banks are doing business with currently!
We wanted to be so sly, we considered ourselves to be so clever with all these super-sly and super-clever "financial products", with all these ways of delaying to calculate the totals and to hide the lack of securities. We are so much at ease with our well-thought out mechnaisms and the big locks on th doors of the safe.
The problem just is: this safe is empty. Your claim for your share of its content, gets you nothing. And all this becasue we beleive ruthless poltical basters telling us that we could endlessly live beyind our means and spend more than we can afford, and that money can be multiplied infinitely by the magic of alchemy. But money MUST be limited in total, global availability, only then it can have any inherent value. Without inherent, market-negotiated value, without money being an ordnary trading good like all others, it is no money, but fraud and theft.
The day the huge masses realise this, is the day when war breaks out in Europe's streets.
Okay. Now I just wait for somebody reminding us of that "you cannot eat gold"; or something different that nevertheless is as clever. For example "Try to buy a leaf of bread with your 1 ounce gold bar". Its pointless remarks like these that really make my day.