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It Makes the World Go ‘Round — Delayed Splatification, Part II

The literal life-blood of any economy is money. That’s not difficult to understand. But what exactly is money?

It isn’t what you think it is. Better said, it’s much more than you think it is, and much less.

In it’s simplest form of understanding, money is merely a medium of exchange; some “chit” is created by society and passed into circulation to make the exchange of goods and services easier. A dollar, or a thousand or a zillion dollars, are merely meaningless pieces of paper that hold no essential value except to the extent that people are willing to exchange what they own or what they can do in order to have them for future purchase purposes. We accept “cash” because it’s easier; we can exchange it universally, in the moment, as opposed to the hit-and-miss proposition of bartering at that time and in that place our labor or possessions. Without cash, we’d all be holding “will work for food” signs, because that’s how exchange would have to happen.

But the “value” of money comes from the trust the citizenry is willing to place in that “chit”. When we believe that it will hold the same (or better) “power of purchase” that it did at the time it was exchanged for our goods or services, we’re willing to give those goods and services with “chits” as payment. So long as that trust is not eroded, the “chits” have value.

So far, so good.

But there are three important considerations to take with regard to the value of money and how an economy is created around it. The first is that this trust must be present. Closely related to this, the second consideration is that money must hold approximately equivalent (or better) value at the moment of exchange as it is likely to at the moment of future exchange. And third—the least-understood aspect of money, and one you should thoroughly wrap your mind around—is exactly what money truly represents:

Money is nothing more than the effort or ingenuity that a person brings to a problem.

In simplified terms, money itself is an apparition. What creates the real value of money is what can be sold for it and what can be bought for it, and all of that comes down to what effort and/or ingenuity every single person brings to the solving of some problem. If Person A is skilled at repairing plumbing, the effort and smarts he brings to that job is “worth” something. Money is a measure of that worth at that particular time. Person B is skilled at inventing and manufacturing plumbing parts. Money is the worth of that particular skill at that particular time.

The same applies to mowing lawns, or soldiering, or babysitting, or corporate finance, or playing football.

In other words, money is just printed paper. What gives money it’s worth is what you make and what you do.

You, and nearly nine billion others in the world, are money. Your skills, and your efforts. That’s it. The printed paper is just useless paper—but what people are willing to do for that paper is what constitutes money.

That’s why world “leaders” want control of you, and all others like you. Because they can force you, through “policy” and “law” and “taxes”, to do what they want, when they want, to the extent they want. They can take your efforts and skills. That’s how they get “rich”. It’s just that simple.

So why is this important?

Because at any time, you (and others like you) can stop doing what you do; or you can stop trusting the “chits”; or you can stop accepting the “chits” for any reason whatsoever.

If everyone does this at once, money itself collapses and the “rich” are no longer “rich”. If a significant portion of people do this at once, the illusion of an “economy” is wrecked and the world as we know it ends. If the smartest, and/or most industrious people all do this at once, the illusory economy suffers a slow death (together with the world as we know it) and all the would-be Kings crash down with it.

That last part is the basis behind the Ayn Rand novel “Atlas Shrugged”, by the way. It’s a primer on how the true creators, true effort-producers, can collapse the system when the “something for nothing” people finally take control (and by the way, those folks are pretty much in control right now).

We are all, worldwide, in a position where trust in the “chits” is very low (in comparison to previous levels). That’s why we’re seeing prices rising. That’s all that “inflation” really is; lack of trust in the “chits”, and subsequent unwillingness to accept the “chits” in exchange for our goods and services. The more trust erodes, the more “chits” people charge for their stuff/efforts. As that process goes on, it snowballs. Eventually, people may stop accepting the “chits” at all. Or they’ll accept the “chits” of another, more stable nation, but not those of their own country. These circumstances are called “hyperinflation”, and it’s actually a fairly regular phenomenon. It’s happening in Venezuela now, happened in Zimbabwe in 2008, and most famously happened in Wiemar Germany in the late 1920s.

Now bear in mind that the people who are charged with maintaining the illusion of an “economy”–the world banks and, in America, the Federal Reserve—have tools to limit the effects of inflation and restore some sense of “confidence” in the “chits”. The most useful—and devastating, in terms of cost-to-benefit—is the raising of interest rates. This works by slowing the flow of money, essentially “removing chits” from the system altogether. This is very effective, though it risks slowing an economy too much and costing jobs, which is the base measure of the illusory economy to begin with. Remember, what you do and what you create are the basis of money to begin with.

But what if, say, a significant group of people began saying “we don’t want your money at all, at any interest rate”? What if they began direct-bartering for goods and services, keeping the system free of government interference, taxation, etc.?

This would be against the government’s rules, of course. That’s “cheating the system” and, you know, the Kings can’t have that.

Has anyone ever done it, though?

Kinda. Look up the word “Bitcoin” and you’ll find something similar having been done recently, quasi-legally, and growing significant legs over the last few years. This is why governments have been rushing to get into the Bitcoin (and other “alternative currency”) game, pushing to “regulate” it, and finding ways of punishing people who used and profited from this system since it began. You’ll also find that Bitcoin in particular has experienced a massive growth in both participation and subsequent value over that time.

Why? Because people have grown tired of the Kings deciding who gets to be a King in the first place, and making the rest of us pay for it. That, and they’ve lost trust in the “chits” issued by the Kings.

Sadly, as is always the case, the Kings have started getting their fingers into the Bitcoin pie. This, together with the excessive and rapid value growth of the currency, has led to some mistrust (“volatility”), which means the future of Bitcoin is also now questionable. It’s showing some signs that it could go the way of the Kings’ “chits”.

But Bitcoin has proven that alternative systems of currency are viable. The rise of Bitcoin shows that people can and will take their efforts and their ingenuity, and the “worth” thereof, into their own hands…governments and Kings be damned.

What does all of this have to do with inflation, the crashing of the illusion of “the economy”, and the future of real, traditional Americans?

That’s coming in Part Three.

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