This post is an analysis of money with the goal to blow away the types of disinformation that clouds economic topics. This article’s purpose is not to touch on everything, but to discuss some important ideas. Most readers should have a clearer view of economics when done.
THE CASHLESS CONCEPT FAILS ON 1/1/16. The PTSNB are moving us to a cashless society, based on computer-controlled transactions. On the first day of the year, the cashless Oyster card readers in London failed, and public transportation attendants had to wave passengers through on buses, trains, etc. Originally fares were to have been increased that day, & instead users got free rides. The major malfunction is just a glitch, a minor speedbump as the U.K. continues towards becoming a cashless society. A quarter of all Brits think that cash will not be needed in 5 yrs. While the masses are being groomed to think that a cashless society is better, the PTSNB are neglecting to warn people that individual control over finances is lost when people go to a cashless society. The govt. & banks (i.e. the elite) are now in control of your money.
MONEY IS NOT WEALTH. It is associated with wealth, but wealth is a deeper concept. In many ways, some Amish are wealthier than those in the world with big bank accounts. The movie Devil’s Advocate gives us a view of that.
ECONOMICS IS NOT A SCIENCE. It was Sir Isaac Newton who taught the world that economics (like physics) could be reduced to scientific laws. His attempt at this was his important book “Philosophiae Naturalis Principia Mathematica”. After that Economics was viewed as a science. The major problem with this is that science is based on predicting cause & effect. Economics is not predictive because it is too complex. It often fails to follow their economic “laws”. The economy is like an ecological system—very complex and inter-related. It is dynamic—and like an ecosystem things are born & die. Change also takes place. In the real world, economics is an inadequate theory that is often non-predictive. In order to sound intelligent, sophisticated economic leaders like to gubber up their sentences with complicated, unintelligible language; their words are so thick with meanings and are heavy & dark like oil that won’t flow. Greenspan, head of the Federal Reserve described his Fedspeak, “If I seem unduly clear to you, you must have misunderstood what I said.”
HOW WEALTH IS CREATED. A. HARD PRODUCTIVE WORK. It never seems to amaze me that Americans (incl. economists) often fail to realize that hard productive work produces wealth. During my lifetime, Americans would complain about the Germans & Japanese economies—as if they were acting unfair—and never admit that the Germans & Japanese were being successful because they were doing skilled hard work. Hard work—it is a concept that eludes many people. The Amish show the value of hard work. They can successfully live like in the 1800’s because they work.
HOW WEALTH IS CREATED. B. A TRUSTED MEDIUM OF EXCHANGE. Money (a trusted accepted medium of exchange) is crucial for an economy. Barter does not work as well as an universally accepted medium of exchange. Gold, silver, platinum, greenbacks: as long as the money is an honest medium of exchange and there is a sufficient amount it works fine. Part of what helps the Amish is that we have a medium of exchange called money. Money allows for meritocracy to function. Those who are able to produce get paid. Mexican workers can make money, whether they are liked by the general public or not. Anyone can make money—it can create equal opportunity. No matter who you are, when you have money you can purchase something. This is where socialism stifles the creation of wealth. People are paid not to work, and those who work have their money taken away…. Changing channels slightly… Conquest and commerce are also means to gain wealth. I have written before about how the elite make easy money from carry trade. Conquest is basically theft on a grand scale, it is simply a reallocation of wealth…similar to socialism, which is a reallocation of wealth also.
HOW WEALTH IS CREATED. C. CREATIVE TECHNOLOGY. The success & thriving of the Amish horse & buggy economy is dependent upon the benefits of modern society that spill over into their lifestyle. This could be the subject of an entire book. I am talking about the benefits of technology. Technology+structuring & organization which is birthed from the creativity of the human mind is one place where real economic growth occurs; this is true even with the Amish, who think of creative ways to work around the limitations that they have placed on themselves (such as no electricity or phones in the homes, & no airplane trips). One genius Amishman invented ways to convert water power to drive all the tools that electricity would propel, and runs his extensive shop by water power. Lyndon LaRouche & his followers push technology as the answer for today’s global problems. While I believe they overemphasize technology as the primary answer, I do believe that it is a major contributor to wealth. For instance, a frig & modern packaging allows produce to last longer, which preserves one’s wealth of food.
THE NOBLE SAVAGE WITHOUT TECHNOLOGY DECEPTION. The “noble savage” is more of an illusion than reality. If any place had the “noble savage”, then it was Hawaii—nearly a paradise with a strong, big race of people. Niihua Island has been a private island since 1864 set up to preserve the Hawaiian race & culture. Yet the pure Hawaiians isolated there from the modern world consider their island a jail and want to leave it to go to the modern world. Only the threat that they can never return keeps some in place. They don’t view their ancient culture as ennobling them. The benefits of technology should not be discounted. Today, we are being propagandized to think that we can only sustain the world if we dump modern technology, for instance, exchange cars for bikes. Fear mongers claim sustainable growth can only come without technology. They claim that the end of the world is arriving with overpopulation…like I say, they don’t understand the power of creative human thought (which is a divine aspect of the Creator that humanity wields).
DECEPTIONS. Central banks (like the Fed) were created by the elite for the elite, not to help everyone gain wealth. Supposedly, there is a normal equilibrium to an economy. This is a highly theoretical ideal concept that is divorced from reality. For instance, this much sought ideal is where supply=demand, and no. of workers=no. of jobs. The govt. is supposed to create this if it doesn’t exist. Economists think that inflation reduces unemployment (and “prove it” with a Phillips curve). The Amish have no unemployment because they believe in hard work…they need no govt. manipulating the value of the cash. Is this socialist U.S. govt. promoting wealth creation or its destruction? Constant manipulations by central banks & govt.’s make it difficult to discern patterns. Don’t believe the countless lies they spin. For instance, the Obama administration claims publicly to want a strong dollar, but behind the scenes does all it can to promote a weak dollar. Meanwhile, while the govt. spins stats, real incomes have been dropping. Economists are not sure how to even define “the real economy” …is it things produced or money & credit?? After Newton, traditional economists said that things produced were the real economy, and money & credit were tools –merely “symbol economy”. But Keynes felt money & credit were the real economy & production was a function of money & credit. I merely bring this to the front, to pt. out that economists are not even sure how to define an economy. Some science!
WHERE ARE WE HEADED? The globe is de-Americanizing. At home, the future value of land & homes can’t be predicted. The same dynamics that caused massive failures in the economy before (like 2008) are still with us. Printing money does not necessarily create wealth—hard productive work is a much surer way. Trade is often a win-win. We are told that there is a trade imbalance with China, but what is not brought into the equation is that Chinese, and people everywhere, reinvest their money into America, so the money comes back in other ways. China has its own problems. Their approx. 43 million small companies borrow at high interest rates from “shadow banks”. Loans by state-owned banks were allowed and then the loans went bad. So the bottom line is that small entrepreneurs in China are having major problems. Their “solution” in their controlled economy was for the govt. to weaken the value of its yuan. So even if the IMF has allowed China to gain reserve currency status (like I foretold) China continues to have massive economic problems—some caused by the fact that it has a controlled economy—when reality is that economies are complex like ecologies—and simple theories fail to predict what is going to happen. What will work is hard work, creativity, win-win trade, an honest money and for govt.’s & central banks to admit they don’t have the answers to everything.