Re: Long article on the dollar -- but worth reading

On Tue, 21 Feb 2006 02:30:46 -0600, Harlow Wilcox
<Harcox_Willow@xxxxxxxxxxxxx> wrote:

Rumpelstiltskin wrote:

I was thinking of gold as a metaphor for genuine value, and
have no objection to what you point out as the shortcomings of
non-metaphoric gold in our own age. One of our problems is,
I guess, that we don't have anything as rock-firm to represent
true wealth nowadays. I guess wampum is out: an 8-year-old
child in India can turn out a ton of it in just one 18-hour day
nowadays, as long as she maintains constant diligence all day.

I know nothing about Paul except for this article. Gold is an
artificial standard, and pretty soon will be obsolete as a standard
once we achieve the alchemist's dream of making it out of other
elements at reasonable cost. Since we don't have anything
simple nowadays that generally represents wealth, we have the
problem of it being all too easy to sink in to irresponsibility,
while postponing and thereby amplifying a reckoning, as we are
doing in the US today and have done at other times in history.
The famous black tulips of Holland come to mind, when people
who thought they were wealthy were ruined overnight, because
the general population got out of bed one morning and, due to
Saturn having come into unfavourable aspect with Neptune,
suddenly realized that these black tulips were just flowers and
not really worth what they had been said to be worth. We have
hundred-dollar bills instead of tulips, but they're really just paper,
not in themselves bread or internal combustion engines both
of which have real worth but are unsuitable as currency for
varying reasons. I'd better get out my astrological ephemerides
and check where Saturn is with relation to Neptune at the
moment. I hope it's not about to move out of the House of
Franklin.


This is a case when the lessons of history can be extremely valuable.
Gold achieved popularity as a medium of exchange because it was
relatively easy to detect forgery or counterfeiting. Indeed, counterfeit
'money' has been the bane of societies going back to pre-historic times.

Gold and other precious items used in past as media of exchange indeed
possessed some variable intrinsic 'value', and were a physical
representation of 'wealth', but that property was secondary to their
primary function, which was as a medium of exchange. The problem is that
one can't eat gold or silver, or wampum, or keep warm and dry with it,
or in fact do anything of practical value with it. One can, however,
trade the value the gold represents for varying amounts of food, or
clothing, or housing.

The technological revolution of the past few decades has, in fact,
rendered, in this country at any rate, the physical existence of a
medium of exchange practically obsolete. I can count on the fingers of
one hand the number of times I have physically paid for a commodity or
service with 'money' out of my wallet in the past year or so. I receive
statements from banks and brokers that contain written representations
of amounts of "dollars", but they don't have the actual cash either.

The system is still in its infancy - the lack of a difficult to spoof
identity system and identity theft are real problems that must be
addressed - but my preferred medium of exchange is electronic bits and
bytes, not gold or greenback dollars. Since I can use that electronic
representation of 'wealth' to obtain food, clothing, and housing, or any
of my other wants or needs, why should I care about the intrinsic value
of any particular commodity?

All forms of money are merely a convenient metaphor. We are on our way
towards a cashless society, and, barring a world-wide total collapse of
modern society, I don't think it makes one bit of difference. I always
get a giggle out of trying to visualize someone breaking off a chunk of
a gold bar to trade for a loaf of bread.



It didn't make a difference while governments were at least
making a good try at balancing the money it spent with the
money it brought in through taxation and other means, but the
temptation to run up excessive debt because there's nothing
like "gold" to force governments to keep accounts in line with
the real state of national wealth has now poisoned the well of
trust in viability.


.

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