OK kids, fasten your seatbelts. You think you know money? Well let’s see what you know. Here is another Tour de Force from FOFOA. It is a novel, which is the way I like it. Plenty of lean protein for the brain. I have linked many of FOFOA’s posts in my menu but it is a poor substitute for his entire blog library. I highly recommend everyone that reads this blog read his entire library. It is free. If after just a few of his posts you do not feel you have been enriched, simply move on. On the other hand if you realize you have literally struck gold, consider a donation to help keep his wonderful site free and available to everyone.
Sunday, November 6, 2011
Have you ever wondered what money really is? You’ll notice that everyone you read has a strong opinion about what money actually is, but who’s right? Is money really just one single thing and then everything else has varying levels of moneyness relative to real money?
Is gold real money? Or is money whatever the government says it is? Or is it whatever the market says it is? Is silver money in any way today? Are US Treasury bonds money? Is real money just the monetary base? Or is it all the credit that refers back to that base for value? Is money supposed to be something tangible, or is it simply a common unit we use to express the relative value of things?
Is money really the actual medium of exchange we use in trade? Or is it the unit of account the various media of exchange (checks, credit cards, PayPal) reference for value? Should the reference point unit itself ever be the medium of exchange? Some of the time? All of the time? Never? Is money a store of value? And if so, for how long? Is money supposed to be the fixed reference point (the benchmark) for changes in the value of everything else? Or is it simply a shared language for expressing those changes?
So many questions, right? And how often have you seen these questions even asked, let alone answered? Is money something that changes over time? Or is money’s true essence the same concept that first emerged thousands of years ago? And probably the most important question: Does the correct view of money produce answers that are vastly superior to the blind conjecture prescribed by all other views?