Something to think about:

BlueJaysBlueJays Posts: 82 Bronze ✭✭✭
Here's something to think about: The classic definition of money includes the expression “store of value”. But exactly what value is being stored in today's fiat money?

Typically value is the output of labor and capital, both of which are energy intensive. In the simplest case, a baker makes a loaf of bread using ingredients, equipment and her own labor, all of which use energy or are the product of other forms of energy. When the baker sells the loaf for money, the money represents the stored energy that went into making the bread. This energy can be unlocked when the Baker purchases some goods or services, such as house painting, by paying the painter. The energy in the money is now released in the form of time, effort, equipment and materials of the painter. Money works exactly like a battery. The battery takes a charge of energy, stores it for a period of time and re-releases that energy when needed. Money stores energy in the same way.

Today, with fiat its most important function "store of value" is missing, due to inflation. The baker makes the exchange with the painter (its personally exchanging energy,labour,time).. but the underlying barter tool doesn't represent that.. it's just a piece of paper with no actual human energy,time associated with it.

with gold our accumulations of wealth make sense because our time/energy is being exchanged with an underlying transactional chip that's extracted from the production of gold (i.e energy, human time ect) which makes all things neutral < on top of all the other reasons why gold is real money.
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Comments

  • GrandpaBrianGrandpaBrian Posts: 679 Silver ✭✭✭✭
    I like the image of a battery @BlueJays . Sadly these days Central Bankers are deliberately destroying savings in the vain hope that they can prop up their economies by getting their citizens to spend fiat money as fast as they can. It is manipulation of the worst kind and a rigged game. It penalizes those who try to be prudent with zero or even negative interest rates. Fiat money is like a battery that can't hold a charge!
  • alberto1110alberto1110 Posts: 103 Copper ✭✭
    @BlueJays that sentence is very strong and i like it" The classic definition of money includes the expression “store of value”...
  • SuebellesSuebelles Posts: 15 Tin ✭
    This is a good presentation, @BlueJays. Energy is the key to how all things work. I had not thought about that as financial before.
  • rohanibuang61rohanibuang61 Posts: 2,379 Gold ✭✭✭✭✭
    True @BlueJays , 10 years a kilo of local sugar cost me RM0.45 but now the price shoot to RM2.85. A kg of cooking oil cost me RM1.35 but now gone up to RM2.50. A single storey terrace house price at RM55,000.00 but now shoot to RM200,000.00(exhorbitant). In term of salary @RM800 but now slightly increased to RM1,000. Before USD1.00=RM2.25 but now US1.00=RM4.35. :'(
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