Tuesday, June 5, 2018

What Kind of Value

There are a few decent online assessments of money's impact on moral values. Alarmingly, they all seem to omit the singular point of "what kind of money imparts what kind of value. For example:
If everything has a price, does nothing have a value? All money tends to corrupt, and absolute money corrupts absolutely. The love of money is the root of all evil.
All relevant truisms to be sure, but all treat "money" under a broad assumption that Roacheforque labors to dissect and clarify.

We can lament endlessly upon the evils of "money", but our modern society needs money in order to create positive social development. It needs money to function, and sound money can have a huge morally responsible impact.

It is debt based money, the money which intrinsically subordinates all lesser classes to the banking class, that engenders the moral hazard that we have seen on the rise ever since money became "purely debt based". Again, we must consider what is possibly the most insightful post ever offered by FOFOA:
Debt is inherently unstable. This is because debt can be destroyed instantly by non-payment ...  In today's marketplace new debt is created extremely easily and casually. A new debt instrument is issued with the ease of a single signature, and then that debt is traded into the marketplace. A system that is built upon equity positions is much more stable ... as equity agreements are entered into with much more gravity.
Taken into consideration, we can view the QT of US Dollar Central Bank (FED) policy not as gravitating toward an equity based monetary and financial system, but rather by simply altering the price (in its own terms) and flow of debt based money - a rather circular premise. The banking class is not changing money's form, they are simply controlling its flow. Further, all "accommodation" which in essence is a form of "saving the debt" only further erodes it's true basis. More debt to preserve its credibility. More ironic circularity - buoyed by boom-bust cycles.

If and when society's legal tender money morphs back into a real world equity position, it's nature changes drastically. The real world of physical wealth becomes primary, and the derivative world defined by "debt as wealth" becomes secondary. The banking class is thus redefined, and their position in society is restructured to be more socially beneficial.
If price is defined by debt, does nothing have value? Debt based money corrupts, and absolute power in the creation of debt based money corrupts absolutely. The love of "debt as wealth" is the root of all evil.
These statements more appropriately detail the moral impact of our current monetary system. We fail to grasp this little detail - that we inadvertently empower a ruling banking class to enslave us by holding our fellow man accountable to their absolute power ... in the creation of a debt based system of values ... that supersede our social and moral obligation to each other.

We allow the banking class to profit from our willingness to let their money system enslave us, according to a system of "getting ahead". But who are we getting ahead of? Each other.

The banking class plays society much like the political class does, as partners in a system of global banking-class corporatism. They use our willingness to exploit, to "gain at the expense of others" as the basis for our money system. The classes who sink deeper into debt, hold up the values of those with a greater share of equity.

The only cure for such a dilemma is to have competing equity based money systems as an alternative for societies to gravitate toward. China's use of equity agreements in international development partnerships, along with it's development of physical oil and gold markets are one such alternative.

The crypto asset phenomenon is another - though it's equity backing is problematic. Again, easily created money is easily destroyed. Artificial "hardness" eventually subordinates to reality. But most importantly, control over access to the "system" is a huge weakness. Yes there are bitcoin ATMs cropping up that allow you to pay tribute to that concept, but you are being taken. Crypto platforms, even when positioned as an asset class, will not change the nature of debt based currencies.

The exchange rate system is key, as it morphs and as its inputs change in relative value - wherever and however they may manifest. The destruction of wealth through political will reveals the artificiality, the fragility and the partiality of our "debt as wealth" construct. Intrinsically, we know that a beautiful Villa in Monaco has certain wealth in a civilized world. But due to political will, no amount of Turkish lira can buy it today, whereas a few years ago, this was not the case. The villa can always be bought with gold, but the dollar derivative manages it's relative exchange rate, which in turn obscures it's true equity value.

Again, an equity backed money or currency is not so easily destroyed as our volatile debt backed currencies are today. Our most widely held reserve fiat is the author of this instability, and the political will of the regime behind it, which wields the power of systemic access and control.

When the families determine that the BIS needs to intervene, change is assured.

1 comment:

  1. It should not slip by unnoticed that both debt and a number of paper assets has grown massively over recent decades and especially in recent years. The material world of tangible items by its nature has been far more restrained in its growth, this sets us up for massive inflation in coming years. More on this subject in the article below.