Wednesday, February 8, 2012

Five minute money lesson; or, Let them eat cake

Found this great piece at Incogman's site. It was posted by "Pat". Read it through to the end because it has a strong conclusion. You'll finally understand why we're getting poorer; and why we're going to get a lot poorer.



Money is a measure of value. It is NOT a commodity. There are only two commodities in economics: goods and services. Money is merely a medium of exchange and a measure of the relative value of goods and services. A certain group has introduced the idea of treating money itself as a commodity – and not just a medium of exchange.


The most basic trade relationship is barter: “I'll trade you two of these for one of those.” So, where does money come in? Money is simply a medium for expediting trade. Almost anything can be used as money: gold, silver, wampum. Even funny green paper. 

Money must be accepted by the masses as a medium of exchange, and be portable and durable. Money won’t quickly rot like a fish will and it can be carried around and easily exchanged for a wide range of goods and services.


In my city there are Farmer's Markets. On the weekends during good weather, farmers bring fruits, vegetables, meat and baked goods to trade for things that they want. Do you need money to trade goods and services? Not at all. You can trade something you have for something the farmer has. 

However, suppose you don’t have anything the farmer wants – but you want something the farmer has? Money can be used as a mutually agreeable means of exchange. Money simplifies trading.


Money is an arbitrary medium for trading. Literally anything can be used as money - so long as people accept it as such. Money is what a measuring cup is to flour - a way for measuring something more valuable than itself.


Imagine that you are baking a cake and you you need 2 cups of flour. The cup is a measure of the volume of the flour you're going to use.
A cup of flour is about 125 grams on average. You use a cheap paper cup to measure out the volume of one cup of flour. The paper cup has almost no value. So, when you go to bake your cake you measure out 2 cups of flour.

You don’t use “2 cups” - you use 2 cups *of flour*. And there’s the difference: two cups of FLOUR makes a cake. Two cups make a...? You see, it’s the flour that has the value.

MONEY - A Measuring Cup of Value

Money works exactly the same way. Only goods and services have economic value. Money is a measuring cup. A certain group has tricked people into thinking that money itself is valuable – and not merely a measure of value. They treat money as though it's a commodity - and charge interest for its use.
So, what’s wrong with treating money as a commodity? Because it allows the money makers to determine the value of goods and services - and to arbitrarily raise (or sometimes lower) the price.


Let’s go back to our cake analogy. Remember you need 2 cups of flour to make a cake. Let's imagine you have a job that pays in flour. Your job pays you 2 cups of flour a day. You have a family and you only eat cake. Each day, your family eats 1 cake, so when you bake a cake you can afford it because you make 2 cups of flour a day. 

But let's say someone has a monopoly on all the cups. They are the "Official Cup Makers". What if one day they decide to reduce the cup's size by half? To feed your family you now need 4 cups of flour a day. But your job still pays you only two cups a day. 

Consequently, instead of eating every day your family can only afford to eat every other day. Your employer rejoices because they're now paying you half of what they did previously; but before long rising costs are causing them grief too. They look for ways to save money - and payroll is their single biggest expenditure.


As we mentioned above, the only things that have real economic value are goods and services. Our money makers are like a cup makers monopoly - and they are stealthily robbing you by *shrinking the monetary measure of economic value*. How? By printing up more money and putting it into circulation. 

When you're forced to sell off your assets to feed and house your family, the same money makers who've been quietly bankrupting you come along and buy them up for a song. Finally, they come for your food and your house.

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