*Anarcissie* wrote:
> On Mar 21, 7:09 pm, Mark-T <MarkTanne...@[EMAIL PROTECTED]
> wrote:
>> On Mar 21, "*Anarcissie*" <anarcis...@[EMAIL PROTECTED]
> wrote:
>>
>>> It may be relevant to a discussion of money, but we
>>> have a much more radical proposition before us than,
>>> say, money whose value is designed to depreciate.
>>> Mark-T has asserted that money has no value at all.
>>> I hope he will develop this seemingly paradoxical
>>> idea more fully.
>> It may seem paradoxical, but it's elementary.
>> Money is worth whatever it buys, i.e.
>> whatever people will exchange in trade...
>> 'medium of exchange'
>
> So it is worth something.
>
>
>> You seem to have some curiosity about
>> the nature of money, that's good. It's
>> complicated, and tricky... counter-intuitive
>> in many ways, many common beliefs are myths.
>>
>> All I can do refer some sources...
>> "Money Mischief", by Milton Friedman
>>
>> Last Tuesday, the Wall Street Journal
>> ran an insightful column, by Reuven
>> Brenner, on this topic; he discusses the
>> differences between 'exchange' and 'unit
>> of account'. In particular, how the recent
>> Fed actions, by screwing with the dollar's
>> value, supposedly to "restore confidence",
>> has the opposite effect! Because it
>> destroys trust, people cannot enter into
>> reliable contracts. (inflation, duh) That's
>> how you get recessions. It is worth
>> visiting a library to look up.
>
> I think you meant to say that money has
> no _intrinsic_ value, which I don't think
> anyone here disagrees with. But to be
> usable, money has to have some sort of
> value attributed to it. In the 19th century
> value was attributed to paper money by
> making the money stand for certain
> commodities (precious metals) which
> had previously been used for money.
> In the 20th century, the gold standard
> was abandoned and the value
> attributed to money was loosely
> attached to the CPI, in other words,
> a basket of commodities. Moreover,
> there was a further ****ft from paper to
> pure credit money. See
> http://wfhummel.cnchost.com/
> and for some related discussion on Usenet
> which I happen to know about because
> I participated in them,
> http://groups.google.com/group/sci.econ/msg/bca8f9d4199e8212
>
http://groups.google.com/group/sci.econ/browse_frm/thread/75217ab73fef3f5/584ff471f4576542?lnk=st&q=#584ff471f4576542
> ( http://tinyurl.com/3736cg
)
>
http://groups.google.com/group/sci.econ/browse_frm/thread/8f7c87cf7f55b592/063e90de8deb6f4a#063e90de8deb6f4a
> ( http://tinyurl.com/2o2mfe
)
>
> On the whole, Hummel seems to think credit money
> is a good thing, but we are now observing a great
> deal of economic trouble because its exchange
> value is subject to political manipulation.
Most of the trouble is not due to using fiat money, but to human greed
and stupidity. The whole sub-prime mess is a classic example of greed
and stupidity reaping exactly what you would expect it to reap. Then the
government leaped in to help out its rich buddies instead of letting
them bear the costs themselves.
In a nutshell-
money was lent to people who could not afford the loans. This sparked a
housing boom. The money lent was re-packaged as financial instruments
that were very over-rated by the bond rating companies. Many banks and
other financial institutions then invested in these junk instruments,
backed by over financed mortgages, then were surprised that the whole
thing fell apart.
Alex R
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