Re: The budget deficit creates wealth

On 2006-10-31 10:04:01 -0400, Herman Jurjus <h.jurjus@xxxxxxxxx> said:

royls@xxxxxxxxx wrote:
On Fri, 27 Oct 2006 16:44:44 +0200, Herman Jurjus <h.jurjus@xxxxxxxxx>
wrote:

royls@xxxxxxxxx wrote:
On Fri, 27 Oct 2006 00:01:35 +0200, Herman Jurjus <h.jurjus@xxxxxxxxx>
wrote:

royls@xxxxxxxxx wrote:

[snip, snip, snip, snip]
Garbage. Paying back the debt only led to the Great Depression
because the US Federal Reserve money system _defines_ money as debt.
[snip, snip, snip, snip]

Just curious: how else would you suggest they define money?
Historically, there are three kinds of money: commodities, tokens, and
debt. Commodity money is defined as a form of wealth widely accepted
in exchange. Gold is perhaps the best-known commodity money, but many
other commodities such as cattle, cowrie shells, whiskey and wampum
have also been used. IMO gold makes an excellent commodity money, but
in the modern world, it would be economic suicide for any country to
adopt a gold monetary standard: it would be a guarantee of prolonged
deflation.
Token or fiat money is defined as a non-wealth medium of exchange
recognized (usually exclusively) for settlement of legal debts (taxes
and judicial awards). Tokens can function very well also, but because
of the temptation of capturing seigniorage, there must be strict
control of their issue, or inflation runs away.
It seems to me then that commodity-money is very much like token-money, but without the possibility to 'strictly control issue' (e.g. gold found in a newly discovered part of the world). Or do i overlook a more fundamental difference between these two kinds of money?

Commodity money consists of wealth. Token money is just tokens.
Think of it as the difference between a cow and a picture of a cow.
The government can tell you that the picture is worth something, but
the cow is worth something even without the government telling you so.

Agreed about the 'direct' value of the cow.
But in what sense does gold have such value, other than as a token accepted by others as valuable?

Gold is used for wiring in semiconductors.
It is tough and ductile in alloys for dental appliances.
etc etc

It has some unique and useful properties of which corrosion resistance
is one. Various of these properties lead to it being good for jewelry
in addition to its industrial uses.



.

Relevant Pages

  • Re: Overriding the S-Chip Veto
    ... I thought that was an outrageous amount of money for a fairly ... If money could still be made of gold, ... The modern pound, ...
    (soc.retirement)
  • Re: (some) Old Templars do not die/Long and Speculative
    ... Those taxes were 3 bushels of corn from each. ... Knight demanded payment in money instead of bushels. ... But not inventors. ...
    (soc.history.medieval)
  • Re: Does anyone know available PhD position about biophysics?
    ... of special relativity, which has applications in a gazillion different branches of electronics. ... My point is precisely as you say: people don't go into science to make money. ...
    (sci.physics)
  • Re: And another thing Adam
    ... You want better mgmt, go ahead, five years from now there will ... solution is to send them more money. ... Also why did the old TnDOH route I-40 through Overton Park? ...
    (misc.transport.road)
  • Re: Another Scientific White Elephant?
    ... would the taxpayer want to keep funding something that's expensive and might not return anything for its investment? ... All through my life I remember criticism from mostly conservative elements about all of our "stupid, wasteful, inefficient" government programs (because private industry is always smart, efficient, etc.) and yet there are tons of examples where a govt program, and funding, were made available and private industry managed to morph the whole program into a boodle fund whereby corporations made a lot of money and nothing ever came out of it. ...
    (sci.research.careers)