Wednesday, March 4, 2015

Fractionalized Thoughts of Value

We all know the story of how real gold became "receipts for gold", and how those receipts circulated as "thoughts of value" as "good as gold". Then the receipts were multiplied in the process of fractional reserve banking. And here we are, in very simple terms, today.

Now let us extrapolate to the logical conclusion of this world of fractionalized thoughts of value.

Unlike gold, it is infinitely easy to mass-produce them - such production being an acceptable interpretation of financial derivatives. In that sense, derivatives are an unlimited supply of thoughts of value being traded in the marketplace - just like the thought of value produced 37 seconds before Australia's interest rate decision was publicly released. That particular thought of value was extremely profitable to certain traders, especially those taking advantage of the newly installed laser communication technologies of our modern HFT platforms. But 37 seconds later, that thought of value was essentially worthless, since everyone else trading was able to see and hear about it too. Ahhh, timing ... it's everything is it not?

So ... how do you like this modern world of valuations we live in, where certain people who have access to certain information have certain extremely profitable advantages (even if just for a brief moment in time) over the rest of us? This includes those of us who actually work to produce something of real enduring value to others ... for a living.

Certainly, if you are among the 1 or 2% who possess insider advantages, you no doubt enjoy this state of affairs very much indeed. And if you you are among the 98% or so who do not, you probably either don't care, or don't even know about the great advantages certain thoughts have over others, for a split second moment in time, when the timing is "oh so right".

But consider this 98%-ers. As you work for a living, you are paid in those very same thoughts of value that the 2% use to leverage great wealth, with inside information only they can know. You might want to consider what else they just might know about the thoughts that give value to your wages.

And while it is true that the 2% mostly rape and pillage those piker yield-whores who think they can play this game long-term with so little capital in their trading accounts, and so little real insight into the issues that cause thoughts to change on a dime ... the pikers and the insiders alike all still use a version of your wages to play this game with.

So you must ask yourself ... do you really want to be paid for your hard work, in these momentary thoughts of value, blowing in the wind, subject to change at any time, for any reason?

But alas, you must accept this situation, understanding it for what it is. Your governments tax you in these thoughts of value, and force you to use them as "legal tender" in the repayment of other thoughts of value - and they do buy the necessities of life on a daily basis.

But ... will you SAVE in these thoughts of value, long term, as the product of earnings beyond those that satisfy your immediate needs?

That is the question which gold asks.


  1. Excellent! Does anyone really wants to save in these thoughts of value, long term, as the product of earnings beyond those that satisfy your immediate needs?

    That is the exact reason I no longer wish to expand my business with my excess earnings.

  2. Ahh Judy. I hope your business outlasts the Ex Priv of our currency. That is a thought many wish to change, especially those so tired of so long supporting it. But in either case, I wish you well.

  3. Isn't there a sliding scale here? Is the little old widow who just wants 5% on her CD a yield whore? How is she in the same league as a trading desk levered 30:1?

    And I would keep an eye on this LENR. It may turn out that gold can be printed after all.

  4. What do you think, is she? I think you've answered your own rhetorical question.

    As for printing gold, if anyone could do it, it would be the CB's, yes? Wonder why then, they hold so much of that heavy yellow version ....??