1. It’s amazing how you can make something less-dirty simply by cleaning it.
2. It’s amazing how you can understand how something works better simply by learning about it.
The first point was proven to me by cleaning my bathroom a bit. My toilet still does a bit of the leaky leak, but that should be fixed this evening.
The second point is more in regards to finance and banking, prompted by the DEBTPOCALYPSE.
It’s not this guys fault, really, but it’s nice to blame him. Frankly, he asked for it by running for president.
Through the Khan Academy, I’ve been getting myself lurned. I’d suggest checking it out. It’s open-sourced education via Youtube videos on a wide variety of topics. Hopefully, it takes off in a good way…self educating has never been easier. Maybe it’s bad to make self-educating easier, and will create a long term deficit in the number of people who really explore new concepts, but I have no problem using it as a springboard.
Instead of ranting about one thing or another, I’ll distill it down to how it’s adjusted my thoughts on America’s financial situation, which also is indicative of the world’s economic state. I will also be drawing some connections to ister Buckminster Fuller’s opus, Critical Path [amazon.com].
Important concepts that I am the first to ever realize
1. Gold, precious metal, or any physical commodity that serves [little to no] purpose in and of itself for value is to be understood simply as a representation of wealth.
Wealth used to be represented by real value, which is to say, milk. Or a goat. Or me building you a house. Just kidding, I won’t build you a house. If you have a cow, it can produce milk if it is cared for and fed regularly. What it takes to sustain a cow is sustainable and renewable. The cow will graze, drink water, make baby cows, and produce more milk. The baby cows will grow up, produce milk, or maybe be slaughtered for fun in a bullfight. I can start with two cows, and with proper care, my wealth will increase. In the same way, trees grow, value can be added, and the level of wealth in the world can continuously increase.
Assume that all the gold in the world was already mined, and no more could be artificially created. We now have a static level of gold. We’ll call it 100 gold, mined by our orc peons in the mines. Nothing I can say or do will make the gold create beautiful babies.
Our papermoney used to be tied to gold. Until recently, I believed our papermonies should be linked to the actual value in gold. After considering the implications of the above, this doesn’t need to be the case. Papermoney reflects wealth, not an amount of gold. However, the amount of gold in the world CAN be tied to wealth…you just need to divide the value of gold up more and more, and it gets more purchasing power as the ratio of wealth to available-gold increases. Boom, deflation. I could buy one hamburger with one gold today. Tuesday, I can buy two hamburgers with one gold. This is the goal of all humanity; more hamburgers. Inflation only lets you buy a slider instead of a full burger for one gold. You can see it’s a very complicated gold-for-beef system.
Anyway, the point is, gold is not money, papermoney is not money, wealth is money. Wealth can be tied to a number of things; right now, its not. Go learn more about it yourself.
2. Fractional reserve banking doesn’t have to be so bad.
It’s just a higher level of abstraction. If you don’t know what it is, go find out. However, it seems FRB has led to numerous bubbles that pop. Therefore, it’s bad. Just like socialism is always bad. Always. I don’t believe that, actually. FRB allows for investments to generate MORE wealth. The issue is that the wealth that is generating is just based in our own financial system.
If you use FRB to invest in real wealth-generating endeavours, it allows for, more wealth to be generated! Instead of one hamburger-producing plant, you get two! Double the economic output, and if you didn’t have a FRB system, it would have been much more difficult to start up. Finance used to build up finance…well, talk to the current economic situation to find out what that’s like.
I apologizing for deciding to stop defining terms and concepts. No I’m not. This is America, take some responsibility for yourself and learn.