On January 20 2010 04:20 Chef wrote: Using paper for money is only slightly more arbitrary than using precious metals for money (in terms of their value to a given individual in practical terms).
Also, don't post when your drunk anymore.
I think it's actually LESS arbitrary than using gold, since the price of gold varies like crazy whereas most 1st world nations have a pretty stable currency.
I don't know if this was mentioned, since I only read page 1 and 3 (I'm going to bed pretty soon), but have you ever thought about why gold is valueable and therefore able to back a currency? Because it's rare. That's it. Of course it has the bonus of looking pretty, which is how they got the idea in the first place, but if there were tons and tons of this stuff lying on every streetcorner, it wouldn't be damn well valueable, would it now? Money, like gold, is 'hard' to obtain, or atleast it requires you to do something: Work. So money is in a sense (As it has been mentioned) a symbol of work. In fact, if we could put a value on every nice thing in our life we ever did, we would be able to live without money at all. We would just trade our nice-guy points for stuff and that'd be that. In a perfect world, anyway.. People still needs to believe in the value of the points to let them have something for it. There was a beautiful novel written on this: http://tqft.net/wiki/Maneki_Neko It is a great read, and I really do recommend you to read it!
On January 20 2010 07:32 Lovin wrote: I don't know if this was mentioned, since I only read page 1 and 3 (I'm going to bed pretty soon), but have you ever thought about why gold is valueable and therefore able to back a currency? Because it's rare. That's it. Of course it has the bonus of looking pretty, which is how they got the idea in the first place, but if there were tons and tons of this stuff lying on every streetcorner, it wouldn't be damn well valueable, would it now? Money, like gold, is 'hard' to obtain, or atleast it requires you to do something: Work. So money is in a sense (As it has been mentioned) a symbol of work. In fact, if we could put a value on every nice thing in our life we ever did, we would be able to live without money at all. We would just trade our nice-guy points for stuff and that'd be that. In a perfect world, anyway.. People still needs to believe in the value of the points to let them have something for it. There was a beautiful novel written on this: http://tqft.net/wiki/Maneki_Neko It is a great read, and I really do recommend you to read it!
comodity which will become as "money" doesnt depend on how does it look or something... but in jail money are cigaretes in germany after WW2 it was cigarets and alcohol... u right that rare thing are becomin money but today money is just paper which goverment force us to accept and govermetn[central bank] is makin more money doing inflation and stealing from us
Just to be a smartass, nobody trades in "money". Money is just the concept of value (labor or precious resources). The paper notes we pass around are currency, which represent value. Money is not a tangible object.
On January 20 2010 05:35 MasterOfChaos wrote: Money is worth something because people believe it is worth something.
This. The value of paper money is entirely dependent on the people's trust in it. If I think your pretty green paper rectangle with a 100 on it is worth my pair of shoes, then we can make a trade. As long as I am convinced I can get something else for that 100, I am willing to accept the 100.
It brings up some interesting questions, philosophically and sociologically.
Good question. People spend their best years working for money and sometimes do terrible things to their own friends and family for it. Yet very few people actually stop to think about what money actually is.
Money is a store of value. Currency is a medium of exchange. What is value? For example, why is gold valuable? Value is something people "value".
Most people think of this in terms of material use, for example, a hamburger has a set value because it can feed you. What wealth and value really are though, and always have been, is the ability to inspire, control, and most importantly cause other people to believe in something. Many times wealth is simply an appearance. Using this principle, rulers in the past have been able to accomplish great feats such as building the pyramids. Why spend so much energy and time building the pyramids? Because they inspired and controlled other human beings, and caused them to believe in something. People thing gold is valuable simply because it is rare, which is true, but the physical attractiveness actually makes it very useful for the purposes I've just described. So that is one way it has value. The value of a king's crown and scepter, for example, is nearly immeasurable.
Money itself kind of reflects the morals of a culture, it reflects what they value and what they are willing to accept as value.
Today, modern money isn't just a piece of paper. It is backed by something, which is known as debt. The dollar you have in your pocket represents money that someone, somewhere, owes to someone else. The reason this can be true is because all our money is created by private banks making loans. New money is created when a loan is taken out, and money is destroyed when a loan is repaid.
The "value" in our money is someone's promise to repay a loan. Thats what its backed by. Its not just some arbitrary agreed upon medium of exchange. Another type of money, for example, is a bond. Its almost like cash. The bond literally refers to bondage; debt refers to slavery. So this is what makes our money worth something.
Watch the youtube series "money as debt" to understand what our money is backed by.
edit: If it doesn't make sense to you, the reason our FRNs (federal reserve notes) have the power that they do is because they are the only way to repay debts. They have a monopoly on debt repayment. When you borrow money, the agreement is to pay the original amount of FRNs back plus additional FRNs for interest. You can't just pay them their original dollars back and pay the interest in barley or something. This is known as usury, the practice of money creating more money. If all loans are in FRNs, and they all must be repaid back, this creates a huge demand for FRNs because everyone needs them. They can't use other forms of value because the contract demands more FRNs than originally given out.
All it took was one bank printing a special piece of paper and loaning it out, in conjunction with government sanctioned monopoly (legal mandate "This note is legal tender for all debts"), to create our money system. It used to be that all banks had their own banknotes, which were backed by gold in the banks' vaults. That was our money system previously.
On January 20 2010 05:35 MasterOfChaos wrote: Money is worth something because people believe it is worth something.
This. The value of paper money is entirely dependent on the people's trust in it. If I think your pretty green paper rectangle with a 100 on it is worth my pair of shoes, then we can make a trade. As long as I am convinced I can get something else for that 100, I am willing to accept the 100.
It brings up some interesting questions, philosophically and sociologically.
Not entirely correct. It is the note with legal monopoly on debt repayment...you have to pay your taxes and mortgage with FRNs. The power grab in 1913 that no one understands.
Money is not pegged (held in a constant value in proportion to) to medal (gold, silver, etc.) like it used be. Therefore, you can argue that it has no "intrinsic" value b/c you can control its supply artificially (if every country starts printing money infinitely, its value will go to zero), whereas that's not the case for gold, a natural product.
I recently attended a really interesting lecture, during which the prof spoke about how reality in our world consists of solid, natural, mind-independent facts (eg. molecules, bacteria, the Milky Way), and at the same time there also exists a mind-dependent but simultaneously objective reality (eg. money, marriages, property). I think it's pretty interesting how these social and economic facts are accessible to our minds as knowledge in the same objective manner as mind-independent ones are, yet their existence is completely dependent on our very perception of them as facts..
EPT
