A Quote,
"It is useful not only to allow the serious student of the natural sciences to see the result of research but also to initiate him in to the secrets of the work shop in which the end product, after much toil and effort, is shaped. I consider it an error in scientific communication that, most of the time, merely the polished and flawless results of natural research are displayed, as in an art show. An exhibit of the finished product alone has many drawbacks and dangers for both its creator and its users. The creator of the product will be only too ready to demonstrate perfection and flawlessness while concealing gaps, uncertainties, and discordant contradictions of his insight into nature. He thus belittles the meaning of the real process of natural research. The user of the product will not appreciate the rigorous demands made on the natural scientist when the latter has to reveal and describe the secrets of nature in a practical way. He will never learn to think for himself and to cope by himself. Very few drivers have an accurate idea of the sum of human efforts, of the complicated thought processes and operations needed for manufacturing an automobile. Our world would be better off if the beneficiaries of work knew more about the process of work and the experience of the workers, if they did not pluck so thoughtlessly the fruits of labor performed by others."
Selected Writings: An Introduction To Orgonomy - Wilhelm Reich
~~~
StealthFlation!!! Got Gold? | Zero Hedge
http://www.zerohedge.com/news/2014-12-01/stealthflation
In the Comments was this,
Mon, 12/01/2014 - 12:30 | 5504980 AetherialOne
AetherialOne's picture
Money is an idea backed by confidence. My two page long treatise What is Money? from 1996 proves this idea out to be 100% correct. Fiat paper currencies are not money, they are a scam, every one of them that has ever been tried out. If you make a list using the alphabet as your guide, you will find over 600 of them that have failed before you even get out of the letter B!! How much more proof do you need to see the truth?
My paper WIM? will be pasted in here if it is allowed.
What is Money?
One of the most esoteric, confused, convoluted and obfuscated subjects that has ever been debated in the history of mankind is the subject of money. And from money, we go into other subjects such as banking, inflation and finance. But let's start with money first and get it properly defined, so that we can make some sense out of the whole mess, OK? And after we get money properly defined, we can then use that concept to think with and come up with good answers to some very perplexing questions. When you start to think about a problem with the components of that problem properly identified and named, it will be much easier to see the real causes and effects going on. So here we go now.
All that money is, is "an idea backed by confidence". That's all, nothing more or less than that. And in that word confidence is buried the fact that certain people have agreed upon something to function as a medium of exchange. That medium of exchange is money, regardless of whether it is wampum, diamonds or precious metals. The confidence factor then comes into strong play here and is the whole basis of that medium of exchange. Money acts as a sort of "lubricant" in the dry mechanics of an economy. It's just not always feasible for a person to haul around his crops, goods or livestock in search of someone who is willing to trade with him somewhere for what HE needs. So what do people do to get around that? Well, they use an intermediary which we call money.
When people agree that some quantity of the money represents a certain amount of labor, it can then be exchanged with someone else for a similar amount of represented labor. And that's the main thing that money does. It represents the fact that a person had to do some kind of work to come into possession of that amount of money. Usually. Now when someone either steals goods or money, or creates some "money" through some bogus means, then the confidence factor suffers and it becomes worth less and less over time. When governments print up fiat currency which has no real value behind it, it's not worth as much as actual money, something which DOES have real value behind it.
When you have two people, and one of them has to sweat out in the hot sun or work in freezing cold to earn a living while the other one does little or nothing, then there is a disparity and animosity between them. Why should one toil away while the other one is able to loaf and still eat? Welfare programs, and this includes government jobs which produce no real products (almost all government jobs fall into this category by the way!) run by governments with unlimited access to fiat currencies ALWAYS cause at first an "inflation" of the fiat currency, and then a total collapse of it. Now I'm not saying that we shouldn't look after and care for those who cannot work due to some kind of disability, but it should be done with real compassion, and NOT with the viewpoint of making someone dependent upon the government so that they then agree with all kinds of insane laws just to keep the bread and butter coming in. These economic collapses are always the result of a socialist/communist/fascist type of government. And they never last more than several decades at most. The saddest part of the whole thing is that through the manipulation of the history books, people do not know the true causes of these engineered monetary debacles, and so repeat them with great regularity.
Let's look at gold as money. It takes a certain amount of labor and equipment to locate and then collect this metal. Now back in 1925, an ounce of gold would buy a man a pretty nice suit, and today, an ounce of gold will still buy a man a pretty nice suit. Why is that? It's because back in 1925, the ounce of gold required a certain amount of time and labor to locate and collect it. Today, it still takes about the same amount of time and labor to locate and collect an ounce of gold. Please don't get confused now over the fact that "dollars" today don't equate with dollars in 1925. If we were still on the gold standard, the number of dollars that were equal to one ounce of gold in 1925 would still be the same today.
Because of the fact that our "money" is no longer backed by anything of real value, it takes more "dollars" to equal the one ounce of gold. Why is that? There are several reasons why, so let's take a look at a few of them now. First off, when these "dollars" are printed up willy-nilly, they lose most of their value right there. A big reason is that the "dollars" are all printed up with the exact same amount of ink and paper to them, regardless of their denomination. There isn't twenty times more ink and paper in a twenty "dollar" bill than there is in a one "dollar" bill, is there? So with each bill having the exact same value, they all become worth the same as the lowest one. And not just according to what's printed on it, but what it's actual intrinsic worth is. As it costs less than 5 cents to print up a fiat currency "dollar" bill of any denomination, that's about what it's really worth. And in actuality, these pieces of inked paper are Federal Reserve Notes with no value to them, other than the fact that someone down the street or around the corner may be willing to trade something of real value for them. They are also known as debt bearing corporate notes, because the corporation known as the U.S. Government has been bankrupt since 1933, but not formally acknowledged as such until 1939 with the court case of Erie R.R. v. Tompkins case.
Another reason that these fiat currency, debt bearing corporate notes lose value is because of computerized electronic bookkeeping entries being used instead of actual money changing hands. Every time that some government agency buys some goods or services with nothing but a change in bookkeeping entries, a bit more confidence is knocked out of the "money" and thus we have "inflation". All that inflation is is "a decrease in the perceived purchasing power of a fiat currency". That's all it is, folks!! Forget all of these stupid proclamations that inflation is due to an "over supply of money" or some such clap trap. If that were really true, then just by taking money out of circulation we would be able to solve inflation. But it doesn't. What it DOES do is make it even harder to purchase goods and services, and then the economy really tanks, big time.
When John and Jane Doe perceive that they will need a greater amount of fiat currency tomorrow in order to maintain their lifestyle of today, they then have two choices. One, they can work more hours in the day, or two, they can charge more for the goods or services that they provide to the society in general. And since they can work only so many hours per week, they must then increase the rates which they charge. And so begins a vicious circle of everyone down the line doing the exact same thing until it comes back around to John and Jane Doe and then it starts all over again. And when thinking of inflation, think of it not in terms of things becoming more expensive, but rather in terms of the fiat currency becoming worth less and less, which is the truth of the matter. The instability of fiat currencies and economies becomes much easier to understand once you can do this.
When fiat currency is given to people for no reason, or loans are defaulted on, there too, more and more confidence is knocked out of the fiat currency and it becomes worth less and less. This idea that there are "money multipliers" in an economy is just so much hogwash. There is absolutely NOTHING which can multiply human labor, and since money is supposed to be based upon human labor, there cannot be any money multipliers. See how simple this is? Granted, there may be more efficient methods found to do certain things, but they always come with some kind of a cost attached to them. There's no such thing as a free lunch. Someone, somewhere, somehow is paying for it.
Let's go back to gold mining for a moment and look at a few things in more detail. When a person goes out into the wilderness to look for some gold, he must take with him food, clothing and equipment to survive with and make the discovery and collection of the gold possible. And while he is collecting that gold, he cannot possibly be planting and growing food or weaving cloth for his clothes or making a shovel either for that matter. So the prospector come miner must EXCHANGE some of his labor for these items in order to start his new pursuit and continue in it once he has found a place that has some gold in it.
Mining is not like farming or ranching where the product grows and multiplies itself. It costs pretty much the same to obtain an ounce of gold no matter where it's found or the process used. The result of a man panning a few nuggets and flakes out of a riverbed by himself, or a huge mine employing thousands of workers which makes several ingots per day equates to about the same overall cost. People must be paid a wage unless they are slaves, and machinery must be bought, powered and maintained in order to get the gold out of the dirt each day. This is why there's no economy of scale (cheaper due to more volume) in mining and consequently the value of the gold stays on par.
When Mr. Tailor sells his fine suit for an ounce of gold, it's because of several reasons, but the most important one is that the sum of the labor involved in the making of the suit from raising the cotton or wool to the weaving of the cloth and then the sewing of the pieces together requires the amount of labor that the ounce of gold represents. With some allowance for a profit of course! If there's no profit in a venture, it will fail of course. And when governments step in to prop up a failing venture or support one which never had a chance of succeeding in the first place, we again get a lessening of the confidence in the monetary system and that's our old "friend" inflation coming to pay us another visit. And with friends like that, who needs enemies?
Where actual gold and silver specie are used, there's NEVER any inflation, if a free market enterprise economy is used. The reason for that is very simple. If someone gets out of line and tries to get rich quick, someone else will come along and pick up the business that the first person loses due to the price increases. And if the quality level between the two providers is about the same, the first one will drive himself out of business rather quickly!
