Anti-Corruption Infrastructure


#21

Exactly.

An agreed upon value system of exchange. I have an income of X value, I can buy things with that income because others have things that I value and agree to purchase, using money. I don’t have to go perform labor for farmer John, for eggs, milk, etc., or for the bakery, the butcher, the utilities, for whatever, because we all agree on money as a convenient method of exchange.

Greed is what makes it corruptible. Banks aren’t even the problem. Fake money is. The Fed, here in the US, has the ability to create floating decimal-places of money, based upon a percentage of debt. That fake money circulates digitally, creating more debt. That artificial debt is the primary cause of inflation, devaluing the currency, since it doesn’t represent real property, or labor.


(Larry G) #22

Kind of… “money” doesn’t really store value, especially in inflationary modern economies with nation state manipulating the currency and prime rate. The real prime rate actually only accounts for the Time Value of Money, meaning that realizing benefit from spending money now is inherently more attractive than spending the money later. So interest is required in order to compensate for opportunity cost of spending later vs spending now. Points above prime account for the risk of non-repayment. Disruptive events can actually wipe out the value of “money” accounted for in a ledger (past exchanges of value), when faith in the system is lost and debts are reneged upon.

So when we spend “money” to buy gold or real estate or other non-perishable items of intrinsic value, we’re storing value. Simply holding onto the “money” we are actually losing value, slowly over time. This is why we lend it, at interest, to provide the greater value of immediate spending to someone else right now, in return for a portion of that value returned to us in the form of interest on principle later.


#23

The actual value of money over time is a different issue from the fact that money can be stored at one point in time and used at another point in time.

Has someone stored an early Bitcoin and pulled it out of storage today, their money would have gained value.

Nevertheless, regardless of gain or loss, storage happened.

The present value of future money and future value of present money are (as you described, Larry) dependant upon other factors, not on the mere fact that money is stored.

My only intent was to point out that an exchangeable currency provides the potential of storing value in a more convenient way than warehousing particularly popular physical materials.


(Larry G) #24

Not really disagreeing, just pointing out the basic economic principle that money is primarily used to account for exchanges of value rather than having a value in itself, a fact that sadly is poorly understood in general society today.