Money is not Real, Not Really.
Posted: Sunday, February 22, 2009
by Tex Norman
Money is a medium of exchange. It came into existence because we needed some way to exchange something with generally accepted value for stuff that is of value to the buyer. Obviously, the first way to get what you need is to find it, or make it, or grow it yourself. The first people who had awareness, and knew what they were doing got what they needed by their own efforts, or the efforts of their family, or clan, or tribe. We were food gatherers, scavengers, and eventually hunters. We made the tent we lived in, we made the clothing we wore, and we found water to drink and stuff to eat and that was that.
With the storage of goods, we had more leisure time, leisure in the sense that every awaking moment was not dedicated to basic needs, and there was time to make fancier tools, better clothing, and footwear, more elaborate clay pots, and eventually metal goods like swords and plows. Other people may want some of these extra fancy stuff, but they had a problem bringing enough shoes with them to buy a set of clay cooking pots, or an iron sword, or an iron plow.
There was an old MASH television show where Hawkeye needed new boots because he had a hole in his, and it was a cold Korean winter. To get the boots the soldier in charge of uniforms needed a tooth pulled and the dentist was putting him off. So Hawkeye begs the dentist to do the guys teeth so he could get his boots. The dentist wants a weekend pass to some place in Japan , so Hawkeye attempts to get the pass, in exchange for the dental work in order to get the boots and on and on the show went with bartered deal after bartered deal arranged and, in the end, like a house of cards, all the deals fall through. This is the problem with bartering. It works OK when it is between two parties, but once you involved three or six, or a hundred, it just gets too complicated to be sustained.
Money became distilled value. Money was value in a small space, the space of a gold coin, or a silver coin, or a copper coin. Money became more valuable when it was backed by the full faith and backing of a powerful king or government. Over time, so much faith was put in the money backed by government that the money itself no longer had to be made of gold or some other precious metal. Money would eventually be made of paper, and still it retained its value. One person would give away a plow, or a tent, or a chair and they would accept a piece of paper that they accepted was equal to, or of greater value to that the commodity which they have given in exchange.
As people began to see money as valuable, it was the money and not what money could buy that became important.
The chief value of money lies in the fact that one lives in a world in which it is overestimated.
H.L.Mencken
When I was about 10 I got a toy tool box that included a working brace and bit drill. I used this hand drill to bore a hole through a nickel, and then I put the nickel on a string that I tied around my neck. As soon as older people saw my handmade pendent I was informed that I had broken a law, I had defiled money, that I was a criminal because I damaged money. The shocked reaction of adults sent me a powerful message. I could drill a hole through a toy soldier and hang it around my neck, but I to damage money was to commit some sort of sin. Money was sacred. Money was holy.
This is odd when you remember that money is just a medium of exchange, it is just a representation of value, and was never real value itself.
Money is not real. It is a conscious agreement on measuring value.
John Ralston Saul
Today the barter thing just would not work because most of us don't make anything of value. I provide services, and perform risk/safety assessments to keep children safe from abuse. I don't grow food. I don't build houses. I don't produce anything you can put in your pocket. Millions of other people do the same thing. We don't produce value we use value, we move assets, we sell insurance, and most of this stuff is not real stuff it is idea stuff.
Money is not real. Money is valuable because we believe it is valuable. If we stop believing money has value and it becomes what it is, paper covered with print, or alloys stamped with little pictures. You might remember pictures in your history books showing people wall papering their homes with worthless, inflated German Marks. The money had so little value that it was just glued to the wall because that was cheaper than paint or actual wall paper.
All this is important to remember today when we have a value crisis going on, not just in the United States , but in the entire world. Our economy has lost a couple of trillion dollars it is time to ask, "Where did those trillions of dollars go? " I mean, if you listen to those clabber-butt legislators talk a trillion dollars you'll learn that:
A trillion-dollar stack of $1000 bills would measure just over 63 miles high. Meteor Blades Wow. That is a lot. I've seen paper money and it isn't all that thick, so imagining how many it would take (by thickness) to measure 63 miles, is a lot of paper money. If we have lost one, or two, or five trillion dollars then that is a lot of something to lose. It seems like you'd notice if that much stuff was missing, right? Where did it all go?
The answer is, of course, it didn't go anywhere, because it never really existed anywhere but in our minds. To explain myself, let me use my last house. I found a house for sell for $90,000. I offered $80,000 and they seller took my offer. What did I buy? Did I get a $90000 house at a $10000 discount? Did the seller lose $10000? Yes, and no. The house was obviously worth $80000 to the seller or he wouldn't have sold it to me. He may not have gotten as much as he wanted, but the act of selling set the price of that house in our minds at $80000/
Nine years later I went to refinance my home, and so I had it appraised and I was told that my house was now worth $289000. Was I $209,000 richer? Well, maybe I could borrow that much money, but I thought the value of the house had jumped higher than seemed logical to me.
After being in the home eleven years I attempted to sell the house for $225,000 and after it was on the market for a year I finally sold the house for $176,000, but out of that money I paid the buyers closing costs. Did I lose money because I sold the house for less that the old $289K appraisal? NO! I never had that extra money that money existed only in my mind.
If value is more mental than physical, then part of the solution to our economic crisis is mental as well. If we have hope, if we believe things are getting better, if we feel that the dollars have value, and that that value is going to increase, then we feel OK, and if we feel OK, and if we all feel confident, then at least part of the economic crisis is healed. We have jobs because business feels that there will be and there are demands for goods and they need employees to make those goods. Once the employees have jobs, well, they have needs, and so the belief that demands will grow turns out to be true because now people have jobs and pay checks and they act on their needs and wants by buying stuff.
The problem is, in part, that you can't just make the masses think and believe stuff. Thinking and beliefs and values come from within, and are not effectively imposed on us from some outside force. I believe things will get better. I have lived through many lesser recessions in the past and if the best predictor of the future is the past then our past tells us that we get over these economically hard times. You hear them say that this is the worst recession since the Great Depression, but you don't hear them say that what is happening now, bad as it is, is still not as bad as the Great Depression. When our unemployment figures are 8 to 10% and the Great Depression unemployment figures exceeded 25% it is easy to say, this is bad, but not as bad as it has been in the past AND we got over even that horrible Great Depression. We are still a rich nation. We are still a resilient people. We have great natural resources and none are greater or more natural than our American spirit.
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Top-level comments on this article: (3 total). The scary part is for us in this situation is that we are already retired and can no longer work. I know that God will always provide a way for His children and that is who I look to.Thank you for sharing your thoughts. Linda DI am having a very hard time with money. A flat tire could send us tossing on a stormy sea because we have just barely enough to live IF there are no problems. And there are always problems. But I do believe things change. Things fall apart. Then they go together. And then they fall apart. On and on. I went on a mission trip a few years back to Haiti and I saw poverty that was staggering to me. The poorest among us are rich compared to most people there. Poverty is relative. It does not make your struggling less of a struggle. It does not make my worry and stress go away. But sometimes it does help to count our blessings and to remember that there are others who are worse off. I do hope that things come together for you soon. Peace be with you. tex
Tex, I say ditto to Linda's remarks. But you know, money is definately a must, and unfortunately, our dollar value is going down with the abundance of money that is now being made, or will be made that does not equal the gold reserves. It seems harder to make, and harder to manage. Between the IRS, and our Federal Government, we are in a sorry state. I am really ticked off at AIG. They are by far the most stupid of leaders that I have ever seen or heard tell of. but I did enjoy the read, and I totally agree with it as well....lots of research and wisdom went into this....Your fan, and friend , Gary.Dear Gary: One late night comedian guy asked what AIG stood for and decided it stands for And Its Gone! I have lots to write about on what is happening now, but work has made it hard for me to be home long enough to write! The big shock of these AIG bonuses is that it represents less than 1 Percent of the total amount of money already given to AIG as a bailout. We are angry and we should be, and AIG and the Big Money people of our world have a culture in which they have no sense of shame, no bottom to their greed, and no long term logic to their actions. Thanks for reading, and please consider writing something on these topics either for Searchwarp are for Kerplop. The more we sound off on these issues, the more likely some of our writing will be seen on on of the search engines of the net and the more our voices are heard the more likely it is that slowly my voice and your voice will be heard by those in a position to make real changes to what is going on.
Democracy is enslavement. work a job for something that doesnt even exists only to cough up most of it to pay of your debt...i hate american way of life
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