M3 Money Figures Flash Warning Signs

[the_austrian]

They would use whatever was availalable and best served them as a store of exchange value and was portable and divisible enough to be used in flexible exchanges.

Are debts to the banking system valid, how would you plead if you don't want to pay back your Fractional-reserve mortgage?

[Guest Steve Cook]

And they wouldn't use ciggies because?

They

Don't

Have

Any

Desire

For

Them

Therefore in a market money is an item that people want for itself.

Neither - I have no idea why you think I would.

Would you work for such evil people?

You defend "legal tender" as if it has some magical reality to it over and above any other lent into existence promise to pay merely as a consequence of the state's capacity to enforce it.

You, therefore, defend one of the primary weapons of that state that it uses to control and suppress the free trade of people

You are therefore the the most fundamental apologist possible for the state you so laughably pretend to despise

Edited September 29, 2009 by Steve Cook

[Injin]

You defend "legal tender"

Nope.

You, therefore, defend one of the primary weapons of that state that it uses to control and suppress the free trade of people

Nope.

You are therefore the the most fundamental apologist possible for the state you so laughably pretend to despise

Again - nope.

Why do you think I defend legal tender?

Would you work for such evil people?

[Guest Steve Cook]

Nope.

Nope.

Again - nope.

Why do you think I defend legal tender?

Would you work for such evil people?

Do you or do you not consider "legal tender" to be "real" money whilst at the same time consider "credit" to be "false" money?

I also note you become pathetically monosyllabic and resort to tired ad hominems when cornered. I would imagine I am not alone in this observation

Edited September 29, 2009 by Steve Cook

[Injin]

Do you or do you not consider "legal tender" to be "real" money whilst at the same time consider "credit" to be "false" money?

That's right.

I also note you become pathetically monosyllabic and resort to tired ad hominems when cornered. I would imagine I am not alone in this observation

Would you work for such evil people?

[Guest Steve Cook]

That's right.

On what precise basis do you consider state-enforced lent-into-existence "legal tender" to be "real" money and institutional-lender lent-into-existence "credit" to be "false" money?

Would you work for such evil people?

More pathetic ad hominems.

answer the question

Edited September 29, 2009 by Steve Cook

[Injin]

On what precise basis do you consider lent into existence "legal tender" to be "real" and institutional lender lent into existence "cedit" to be false?

Contracts are denominated in it, it has real physical presence and it's generally believed to be money. All the contrtacts are written in it and performance of those contracts relies on it changing hands - even if you think the state is the greatest thing since sliced bread the currenct system is a load of ********.

Credit is piggybacking on top of it and is a fraud even if you think the state is the greatest thing since sliced bread and should run the money supply.

More pathetic ad hominems.

answer the question

Would you work for such evil people

How is a rhetorical question an ad hominem, state paid educator Steve Cook?

[Conrad]

so SC you suggest that Barter Town is the lowest common demoninator and Injin is a FIAT appologist?

[Guest Steve Cook]

Contracts are denominated in it, it has real physical presence and it's generally believed to be money. All the contrtacts are written in it and performance of those contracts relies on it changing hands - even if you think the state is the greatest thing since sliced bread the currenct system is a load of ********.

Credit is piggybacking on top of it and is a fraud even if you think the state is the greatest thing since sliced bread and should run the money supply.

Contracts are denominated in "legal tender"as a consequence of state coercion. So, by your own arguments, such contracts are invalidated. Unles, of course, you wish to defend that states right to use such coercion?

It is generally "believed" to be money because there is no other choice of money medium available. again, you guessed it, becasue of state enforcement/coercion. Wanna defend this again do we?

Would you work for such evil people

How is a rhetorical question an ad hominem, state paid educator Steve Cook?

I'm not paid by the state. However, even if I was, it would be irrelevant to you answering the question and is evidence of yet another pathetically transparent attempt to deflect attention away from the central hypocricy at the heart of your defence of state sanctioned legal tender

[Guest Steve Cook]

so SC you suggest that Barter Town is the lowest common demoninator and Injin is a FIAT appologist?

Yes to the first

It starts with real world stuff. This eventually gets too cumbersome to directly barter and so a stand-in becomes inevitable. As long as the relationship between the stand in and the thing it is standing in for remains transparent, thing will go along ok. As soon as the connection is broken we get problems of fraud. State sanctioned fraud is no different in principle to institutional lender fraud. The difference merely is one of degree and enforceability, not type

To the second, I am saying that injin is a state-enforced fiat apologist. The worst kind of fiat apologist there is

to paraphrase....

"it’s money cos the state says so..."

Edited September 30, 2009 by Steve Cook

[Injin]

Contracts are denominated in "legal tender"as a consequence of state coercion. So, by your own arguments, such contracts are invalidated. Unles, of course, you wish to defend that states right to use such coercion?

There might not be coercion. States have many supporters. I doubt very much whether Mervyn King is really forced to take sterling.

It is generally "believed" to be money because there is no other choice of money medium available. again, you guessed it, becasue of state enforcement/coercion. Wanna defend this again do we?

I'm not defending it, merely showing how even if you are a 100% state supporting loony, the current system is still a fraud.

I'm not paid by the state. However, even if I was, it would be irrelevant to you answering the question and is evidence of yet another pathetically transparent attempt to deflect attention away from the central hypocricy at the heart of your defence of state sanctioned legal tender

I don't defend legal tender. I support peoples right to contract in anything they want to and not be defrauded.

Why do you think I do?

[Guest The Relaxation Suite]

http://www.telegraph.co.uk/finance/comment...uble-ahead.html

People have a tendency - especially when under the groupthink that takes over on forums - to think that extremes will happen. If you read the debate the two scenarios presented are: deflationary collapse and economic/social apocalypse, or hyperinflation nightmare and economic/social apocalypse.

I know this is kind of fun, but the reality is always somewhere less extreme. My view is that we have slow and frustrating deflation on the menu for several years - managed gently by printing - then a return to an inflationary boom like the 1990s/2000s. That's my two cents at them oment, anyway. I absolutely believe people who bought houses in 2008/2009 bought prematurely.

[inspector]

Money, is, by definition, a promise to pay

Whose definition are you using ?

[Tuberider]

Because they need to have an accounting system whereby they can keep tally of favours owed. A physical real world commodity is useful for this purpose. Cigarettes are sufficiently portable and divisiable as to suit this purpose.

These cigarettes represent a promise to pay. The fact that they can be consumed hinders their use as money, if anything. However, people will use what is available.

Also, given that you have admitrted that there is no difference between the mafia style imposed monetary system I have outlined and the monetary system we currently have in the real world, does this mean you would defend neither or both.

if you dont smoke in prison, you better start. otherwise barter is impossible.

[Guest Steve Cook]

if you dont smoke in prison, you better start. otherwise barter is impossible.

Actually, if you don't smoke in prison, cigarettes are a more efficient form of money for you than if you do since you are not likely to see your exchange value go up in smoke, literally

The thing about cigarettes used as money in prisons is something of a red herring. This is because of them also being a consumable commodity. The purest money has no intrinsic value in and of itself. That's the point. If it does, then it ceases to be purely and solely money. Of course, in prison, as elsewhere, people will use whatever is at their disposal for monetary purposes. Cigarettes have the advantage of portability and divisibility. Two very important qualities required by any monetary medium.

Pure money only has value insofar as it universally represents and stores the exchange value of everything else. If it is pretty, then all the better (as in gold and some other rare metals. Though, it should be said, gold has other very good qualities for use as money that make it fairly unique such as rarity, lack of degradability, lack of reproducibility etc) However, attractiveness is not an absolute prerequisite. This is why humans are prepared to kill each other for otherwise essentially worthless pieces of paper. They are prepared to do this because of the universal exchangeability of these pieces of paper for things that do have intrinsic value as opposed to the merely extrinsic (by proxy) value of money. Killing for money is, in truth, the by-proxy killing for those things that money can be exchanged for.

Edited September 30, 2009 by Steve Cook

[Guest Steve Cook]

Whose definition are you using ?

By the above I mean that money has no intrinsic value in and of itself. In it's purest form the value of money is entirely extrinsic. That is to say, it's value derives from the things that it can be exchanged for.

As a thought experiment, consider that tomorrow, all note denominated in sterling were to be suddenly declared as void, having no state-sanctiond exchange value whatsoever. However, all holders of such notes were told that if they took them to their nearest bank they could be exchanged for the all-new euro-dollars which did have exchange value.

How many holders of sterling do you imagine would decide to continue to hold onto them because they considered them to have value in and of themselves (intrinsic)? On the other hand, how many of those holders of sterling do you think would be prepared to stand in queues for however long it took to exchange their sterling for the new euro dollars (extrinsic)?

We both know the answer to the above, don't we?

Money, by definition, only has a by-proxy value for the things that it can be exchanged for. Money is, by definition, a promise to pay (exchange) in other things whose value is notionally stored in that money.

Edited September 30, 2009 by Steve Cook

[Guest Steve Cook]

Most of our money, credit money, is backed - it is backed by the collateral of land.

And whilst exchange rates are not firmly fixed, the very fact of affordability places a bound in exchange values. A bit like the ERM ' snake' if you remember that.

Land is not easily exchanged as money which is why we use fiat. It is transportable bits of exchangeable land.

EDIT: Just arguing for the sake of it really.

In the end, yes, all money is backed by raw resources. One of most fundamental of all being land, the fount of all those resources (see my sig). However, even land itself is a by-proxy holder of the most fundamental value of all, energy. This is all about energy in the end. The energy embodied in prodcuts/services or the energy embodied in the things that we can then transfer to other products/services. The above statement is backed up by the fact that, in the modern world, we now have fantastically wealthy people who are wealthy becase of their direct control of raw energy (hydrocarbons). Thus the historical link between land and wealth has been broken. This was only ever a temporary blip in human history though. The wealth is returning to the where it was before, the land, in and of itself. The original source of energy by what could be sustainbably harvested from it.

In a usury system of money creation, sometimes the creation of money can run significantly ahead of the resources that back it. When this happans we get monetary-inflationary-driven prices rises in those resources. If the system were left alone, the money supply would organically self-regulate back to a point where the money supply was once more in equilibrium with the economc need for it. This process would be largely via the default of debt, debt repayment and reduced borrowings.

The only way to avoid the above, organic self-regulation is to print. Printing is essentially borrowing from future, as yet to be realised, resources. This is do-able in principle for as long as the future will provide those resources. If it can't then the whole house of cards comes down.

What we are living through is the beginning of that collapse.

Edited September 30, 2009 by Steve Cook

[inspector]

By the above I mean that money has no intrinsic value in and of itself. In it's purest form the value of money is entirely extrinsic. That is to say, it's value derives from the things that it can be exchanged for.

As a thought experiment, consider that tomorrow, all note denominated in sterling were to be suddenly declared as void, having no state-sanctiond exchange value whatsoever. However, all holders of such notes were told that if they took them to their nearest bank they could be exchanged for the all-new euro-dollars which did have exchange value.

How many holders of sterling do you imagine would decide to continue to hold onto them because they considered them to have value in and of themselves (intrinsic)? On the other hand, how many of those holders of sterling do you think would be prepared to stand in queues for however long it took to exchange their sterling for the new euro dollars (extrinsic)?

We both know the answer to the above, don't we?

Money, by definition, only has a by-proxy value for the things that it can be exchanged for. Money is, by definition, a promise to pay (exchange) in other things whose value is notionally stored in that money.

So that definition is yours ?

And it only includes notes ?

[Guest Steve Cook]

So that definition is yours ?

And it only includes notes ?

The definition is inevitably born of the logic of the use of money. If you would point out the specific flaws in the logic of the argument I have set out, I am happy to hear them

It includes specifically any fiat money that is created by usury including notes, coins, numbers electronically stored in databases etc.

In more general terms, it may include any physical commodity that is used primarily as a store of value of everything else. However, when we get into the realm of commodity based money, we also find that it may contain value in and of itself (intrinsic), as in the use of salt for money that has occurred historically. Under such circumstances, such a commodity might be seen as both money and a real world commodity simultaneously. I would further argue that this tends to make it somewhat unstable as a purely monetary medium.

As it turns out, the most commonly used form of commodity based money is gold. The reason for this relates to my previous points. Gold (at least historically) has had little use value due to being a very soft metal and being too rare to use on any mass scale. However, these limitation are, for monetary purposes it's strength. Hence its use as money. Being pretty also helps of course.

I should say however, I am no gold bug. Indeed, in the modern world, gold has actual real world use value that, by the logic of my own argument, mitigates against its use as money.

I should also note I have no problem with a usury created fiat money system. The problems arise when they are not subjected to free markets. In a free market of money, the supply would naturally fall and rise (self-regulate) according ot the economic need for it. What we have at the moment is an artificial propping up of that money supply. From a macro-level perspective, one could of course provide an argument for why this propping up is a good thing since it tends to smooth out the peaks and troughs of economic activity. However, it is based on an implicit expectation that future economic growth is inevitable.

It's not. In fact, the reverse.

Edited September 30, 2009 by Steve Cook

[inspector]

The definition is inevitably born of the logic of the use of money. If you would point out the specific flaws in the logic of the argument I have set out, I am happy to hear them

It includes specifically any fiat money that is created by usury including notes, coins, numbers electronically stored in databases etc.

In more general terms, it may include any physical commodity that is used primarily as a store of value of everything else. However, when we get into the realm of commodity based money, we also find that it may contain value in and of itself (intrinsic), as in the use of salt for money that has occurred historically. Under such circumstances, such a commodity might be seen as both money and a real world commodity simultaneously. I would further argue that this tends to make it somewhat unstable as a purely monetary medium.

As it turns out, the most commonly used form of commodity based money is gold. The reason for this relates to my previous points. Gold (at least historically) has had little use value due to being a very soft metal and being too rare to use on any mass scale. However, these limitation are, for monetary purposes it's strength. Hence its use as money. Being pretty also helps of course.

I should say however, I am no gold bug. Indeed, in the modern world, gold has actual real world use value that, by the logic of my own argument, mitigates against its use as money.

I should also note I have no problem with a usury created fiat money system. The problems arise when they are not subjected to free markets. In a free market of money, the supply would naturally fall and rise (self-regulate) according ot the economic need for it. What we have at the moment is an artificial propping up of that money supply. From a macro-level perspective, one could of course provide an argument for why this propping up is a good thing since it tends to smooth out the peaks and troughs of economic activity. However, it is based on an implicit expectation that future economic growth is inevitable.

It's not. In fact, the reverse.

So, if gold ( or indeed salt ) were to be used as money would it still only be a promise ?

[Guest Steve Cook]

IIRC, there are countries (Iraq was it?) which still use money which has been declared out of circulation.

It is just about knowing whether the token you are holding will have value to another. It's a game of trust, but most people rightly or wrongly are happy with it. The only time it becomes a problem, is when the government/banks start debasing it, which then may lead to repudiation.

If 60m others think a tenner is worth something, who am I to swim against the flow?

absoloutely

My specific problem with injin is his pathalogical avoidence of the reason why 60 million think a tenner is worth something

He is forced to argue that people view money as having an intrinsic value in and of itself because to admit that its value is extrinsic (based on what it can be exchanged for) would be to admit that such value was entirely state-enforced. Given his argument that state-issued "legal tender" is "real" money when compared to institutional-lender-issed "credit", this in turn requires him to defend that state enforcement.

Given his stated antipathy to all things state derived, he is forced to be a hypocrite.

and if there is one thing I can't stand......

Edited September 30, 2009 by Steve Cook

[Guest Steve Cook]

So, if gold ( or indeed salt ) were to be used as money would it still only be a promise ?

If it were used as money alone, then it would, by definition by only a promise. However, as I have said, when we enter the realm of commodity based money, we are bound to find a blurring of the distinction between the extrinsic value embodied within it (a promise to pay in a commoduty that is actually wanted for it's intrinsic value), and the potental intrisic value in the commodity based monetary medium in question (salt).

Which is why directly-unbacked (though indirectly backed), usury generated fiat (which is explicitly nothing more than a promise based on confidence) might be seen as the purest monetary form of all. However, in order for it to not end up in tears one of two things must pertain. either you let it rise and fall in supply via the process of usury based lending (on the upside) and debt default/debt repayment/redeuced borrowings (on the down side) or you print when during the downside in the expectation that future economic growth will soack all of the newly created money up.

We have used the latter strategy for the most part over the last century or so. Sometimes to spectacularly disasterous effect (Wiemar). Though, sometimes, I am prepared to concede, to good effect in that it has smoothed out the downsides. However, this approach rests implicitly on the foundational assumption that future economic growth (being based on futuer access to resources) is perpetual and inevitable. That we can borrow from that future in order to mitigate against the downside today.

It's not and we cant.

Edited September 30, 2009 by Steve Cook

[Traktion]

We both know the answer to the above, don't we?

Money, by definition, only has a by-proxy value for the things that it can be exchanged for. Money is, by definition, a promise to pay (exchange) in other things whose value is notionally stored in that money.

IIRC, there are countries (Iraq was it?) which still use money which has been declared out of circulation.

It is just about knowing whether the token you are holding will have value to another. It's a game of trust, but most people rightly or wrongly are happy with it. The only time it becomes a problem, is when the government/banks start debasing it, which then may lead to repudiation.

If 60m others think a tenner is worth something, who am I to swim against the flow?

[inspector]

If it were used as money alone, then it would, by definition by only a promise.

If gold or salt were to be used as money alone, what would the promise be ?

What are they a promise of ?

[Guest Steve Cook]

If gold or salt were to be used as money alone, what would the promise be ?

What are they a promise of ?

a promise to pay in food, tools, services etc etc etc (subject to any territorial limitations on the use of that money)

A promise to pay in all things that are not money

by definition

Edited September 30, 2009 by Steve Cook