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alstry (35.42)

What is Money?

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April 12, 2011 – Comments (39)

Let's see who can come up with the BEST definition of what is money?

Please don't define money by conclusions such as it gets you what you want or it is how we keep score.....

What I am looking for is a definition that explains WHY it gets you what you want or why we use it to keep score....

This may be above the pay grade of the sheep on this board.....so let's see who is a shepard?

By the way, I would be willing to bet that the Gardner Bros have no idea on what money really is....something they sell advice on everyday.....but let's see if they can prove me wrong;)

39 Comments – Post Your Own

#1) On April 12, 2011 at 1:05 PM, alstry (35.42) wrote:

You know most people have little clue about money when the taxpayers are firing teachers over money but giving a few hundred million to a couple banker's wives.

http://www.zerohedge.com/article/matt-taibbi-asks-why-fed-gave-220-million-bailout-money-wives-two-morgan-stanley-bigwigs

This will get interesting as we move forward......

Message to the Gardner Bros...next time you try to sell advice on something....don't you think you should define and understand what you are selling?

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#2) On April 12, 2011 at 1:39 PM, prose976 (< 20) wrote:

Alstry,

Money is simply a standardized instrument for barter or exchange.  It has always had the same problems that could dilute its original value which is based on something tangible (an item or even a service, contract or promise of some sort - i.e. insurance).  It is a promisory note, though the promise part is fluid. 

For instance, if you're all excited to buy a vintage car one day and you pay $10,000 for it, and then a year later you're scratching your head wondering why you paid so much for it, you basically overpaid.  But did the seller promise anything more than the delivery of the car?  No.  But you were buying the happiness and joy, hoping the car might even go up in value. 

Did the seller promise it would go up in value?  Probably not, but when it went down in value, you really got angry with the seller, because now, not only did you overpay when you made the original purchase, but it also went down in value, because vintage cars are just really not the rage any longer.   But that's not fair, you say, because the seller has your $10K and the car is not worth that. 

But now the seller thinks you didn't pay enough money for it because he has someone on the hook who would pay twice what you paid for it.  He wants it back at the price you originally paid, so you sell it to him.  Wow!  You just got your money back, the seller gets to resell it and make $10K profit.  Wait a minute, if the car was worth twice as much as you sold it back to the seller for, then you just got ripped off!

For the person who is happy living without it or is unaware of it, money is worthless.  This person's life, time, talent, efforts have not been monetized.  And he/she has not been quantitized, at least in his/her own mind and psyche.  The person who guages his/her worth on the amount of money made for any effort made, money is very valuable and that person's life has been quantitized and monetized.

The "value" of gold is a ridiculous concept as well, because it's just a metal.  I suppose if you actually create a usable object with it that you can use your whole life, then it has a purpose.  But gold in a bar has no value except for barter or conversion into money, at which point the gold would normally stay in bar form and the money would be used to purchase goods, services, contracts, promises, etc.

Money is no more and no less than an idea of worth that fluxuates with an individuals ideals, needs and requirements. 

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#3) On April 12, 2011 at 1:51 PM, alstry (35.42) wrote:

I will assume the following is the definition:

Money is no more and no less than an idea of worth that fluxuates with an individuals ideals, needs and requirements. 

Not bad....but not complete.

I get to be the law professor since I am the lawyer and this is my class.....so please excuse my arrogance as I am role playing.

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#4) On April 12, 2011 at 1:55 PM, ikkyu2 (99.15) wrote:

Harvard's intro economics class, fondly called "Ec 10," starts its first lecture with the definition of money.  You really can't go on to say much else until you understand it.  When I took this class, it was taught by Milton Friedman and Martin Feldstein, and this is what they said:

Money is a medium of exchange.

Money is a store of value.

Money is a unit of account.

Milton Friedman spent some time explaining that anything that "bills" itself as money, but does not serve the above three functions, is not actually satisfactory money and that people and entities who need to use money will search for alternatives that do serve those functions. 

It's interesting to observe prose976's reply above.  He conflates the exchange function with the value-storage function, omitting the role of time; and he points out that not all entities need money and not all actions are monetized, as if this were somehow a flaw or fault in the concept of money.  Then with an example, he cites an accounting error (you sold your car for $10K when it was worth $20K book value) and also blames money for this.

Most people have similarly sloppy understanding of what money is, and it distorts their ability to make reasonable decisions. 

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#5) On April 12, 2011 at 1:56 PM, mtf00l (45.85) wrote:

One would hope as the teacher you would provide the "correct" answer.

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#6) On April 12, 2011 at 1:58 PM, alstry (35.42) wrote:

Money is a medium of exchange.  Money is a store of value. Money is a unit of account.

Excellent Ikkyu2....much closer and more complete.

But not fully complete.

Good to see Harvard is actually teaching something of value.

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#7) On April 12, 2011 at 1:59 PM, mtf00l (45.85) wrote:

Darn, I was hoping for Alstry's definition first...

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#8) On April 12, 2011 at 2:00 PM, mtf00l (45.85) wrote:

Oddly, some of the wealthiest are Harvard dropouts...

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#9) On April 12, 2011 at 2:02 PM, alstry (35.42) wrote:

mft....you know better than that....but right now it is time to think....something lacking in a system training people to think in a specialized fashion rather than systemically.

It is OK to think specialized so long as the system is in tact...but if the system is failing, you better start changing your thinking.

Why do you think I have stood beside you this whole time despite the ridicule.  There is only three ways to obtain the production of another:

1.  Love/Volunteer

2.  Money/Barter

3.  Force/Steal

Can't you tell when someone loves you?

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#10) On April 12, 2011 at 2:11 PM, mtf00l (45.85) wrote:

Sometimes the message get's lost in the marketing...

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#11) On April 12, 2011 at 2:26 PM, alstry (35.42) wrote:

The great analyst sees through the marketing.....and focuses on the facts.

Never once has Alstry taken anything from you or requested anything from you.

The only thing he said is if we kept printing money, and NOT borrowing or obtaining it from production....soon money, as we currently define it, would have no value.....

And at that point, the only way to obtain goods and services from another would be FORCE and LOVE....

and right now, I don't see a lot of LOVE around the world...except in Northern Japan.

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#12) On April 12, 2011 at 2:39 PM, RonChapmanJr (74.46) wrote:

@ikkyu2 - What year were you?  I was c/o '03.

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#13) On April 12, 2011 at 2:42 PM, Rebkong1 (< 20) wrote:

money is a medium of exchange set up and RECOGNIZED by the powers (governments) of the world  

 

as we saw with our friend vonhaus (Spelling) some forms will not be recognized and even get you put in jail.

 

those holding gold silver, platinum, etc should feel really good about this verdict  

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#14) On April 12, 2011 at 2:44 PM, alstry (35.42) wrote:

Ron,

Why don't you give it a shot...or did you take the same class as Ikkyu2 and thoughts limited to his response?

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#15) On April 12, 2011 at 2:45 PM, alstry (35.42) wrote:

Rebkong...excellent, you added the recognition of the soverign into the equation.

But still not complete.

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#16) On April 12, 2011 at 2:54 PM, Rebkong1 (< 20) wrote:

ultimately its a reflection of self worth = which is why the love of it (yourself)...is the root of all evil

 

 

 

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#17) On April 12, 2011 at 3:00 PM, alstry (35.42) wrote:

No Rebkong....it has nothing to do with yourself....as a matter of fact, just the opposite just the opposite in today's Industrial society.

In a world of self dependence, the argument for evil was much easier....in a world where we all depend on each other for our food, clothing, fuel, and essentially everything else we function with as humans....money is simply a concept, absent love or force, from which we obtain them.

Absent love, forcefully or deceptively taking the production of another, including life and liberty, when you are capable of producing yourself, is the root of all evil.

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#18) On April 12, 2011 at 3:02 PM, Rebkong1 (< 20) wrote:

you are right it is a concept, manufactured to keep tabs of seperating ourselves from each other.. and its in that loving of our own selves most (always wanting more money) do we lose the focus for which all mankind was created ...which is for one another

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#19) On April 12, 2011 at 3:07 PM, alstry (35.42) wrote:

in wanting more money....you are wanting the capacity to obtain more of the production of others by exchange......no more or no less

if you intended to give it away or pursue production for the benefit of humanity....the pursuit of money would not be bad in and of itself.

now let's get back to the definition of money....

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#20) On April 12, 2011 at 3:08 PM, Rebkong1 (< 20) wrote:

its the piece of the puzzle that without it, satan wouldn't have any means to operate ..it's why Yahshua told the rich man to sell all his possession and come follow Him...bc without it...you truly are free to see Life for what is suppose to be seen 

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#21) On April 12, 2011 at 3:09 PM, Rebkong1 (< 20) wrote:

all im trying to say is that money is deeper than you think it is..its may be definable in Your terms, but it was created for things far deeper than you see

 

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#22) On April 12, 2011 at 3:12 PM, swank9 (< 20) wrote:

money is what inevitably ends up strapped to strippers' butts

 

imo.

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#23) On April 12, 2011 at 3:13 PM, Rebkong1 (< 20) wrote:

the ultimate question is why do we really need it??

you are going to have to stretch yourself a lot further than the way the current world operates to see the validity of that question

 

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#24) On April 12, 2011 at 3:26 PM, Rebkong1 (< 20) wrote:

did the israelites need money in the wilderness for 40 years??

 

did Yahshua become a sheep broker on the side?? so he could finance his cave in nazareth...actually Yahshua never would have financed anything b/c that WOULD HAVE BEEN AGAINST HIS FATHERS LAWS!!

  

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#25) On April 12, 2011 at 3:37 PM, Rebkong1 (< 20) wrote:

alstry 

 

the point of all this is get your head in a game that matters...you spend more time on here b/c ??? you are one of His watchmen?? i doubt it...you are serving Mammon...more likely..

 

you are no shepherd to be leading any sheep

 

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#26) On April 12, 2011 at 3:37 PM, mtf00l (45.85) wrote:

See how well this goes when there's no marketing pitch?

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#27) On April 12, 2011 at 3:43 PM, tekennedy (73.13) wrote:

To put the words of adam smith into this thread it is the means of quantifying an exchange of labor as determined through a free market (or otherwise). This definition would apply whether a precious metal or fiat currency. Nice thread btw.

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#28) On April 12, 2011 at 3:43 PM, tekennedy (73.13) wrote:

To put the words of adam smith into this thread it is the means of quantifying an exchange of labor as determined through a free market (or otherwise). This definition would apply whether a precious metal or fiat currency. Nice thread btw.

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#29) On April 12, 2011 at 3:48 PM, L0RDZ (82.15) wrote:

Money is an illusion....

 

 

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#30) On April 12, 2011 at 3:55 PM, mtf00l (45.85) wrote:

You gotta love Wikipedia;

http://en.wikipedia.org/wiki/Money

 

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#31) On April 12, 2011 at 4:00 PM, Rebkong1 (< 20) wrote:

Etymology

The word "money" is believed to originate from a temple of Hera, located on Capitoline, one of Rome's seven hills. In the ancient world Hera was often associated with money. The temple of Juno Moneta at Rome was the place where the mint of Ancient Rome was located.[1

 

rome....the very place Yahshua invited His followers away from...Here is some words for the wise...ANYTHING that comes out of rome..you may want to test VERY CAREFULLY

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#32) On April 12, 2011 at 4:14 PM, badnicolez (< 20) wrote:

Money, in this world, is freedom.

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#33) On April 12, 2011 at 4:43 PM, Rebkong1 (< 20) wrote:

you are a slave to it (world, and money) ,bad, no matter how much you have

i lived the greater part of 35 years thinknig that bad and believe me money is not synonmous with freedom..the world does a wonderful job of protraying that to you but it keeps you visciously apart of its system and you are only "more free" in that system...its all relative 

 

 

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#34) On April 12, 2011 at 5:13 PM, alstry (35.42) wrote:

Let's summarize where we have reached so far:

Money is a means of VOLUNTARY exchange, recognized by the soverign, for the goods and services of ANOTHER

There is more......and I added voluntary because although I could hold a gun to your head to exchange money for your good or service, the money would really be illusory in such a transaction.

Not bad, but we have a ways to go.....

Rebkong:  instead of thinking you are a slave to money...absent love or force, you need money today to obtain the basic necessities of life like food and water....

in the biblical days, most people produced their own food and water and essentially everything else....money was only used by the very rich/slave owners or used relatively rarely.

Since very few were very rich....LOVE or barter was the common means of exchange at the time......

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#35) On April 12, 2011 at 5:49 PM, kenqc (61.90) wrote:

money is the exchange mechanism that allows us to exchange our work efficiently for the goods and services we wish to obtain or need to obtain.

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#36) On April 12, 2011 at 9:20 PM, alstry (35.42) wrote:

It is an exchange mechanism....it is simply a unit of production recognized by the soverign voluntarily exchanged between parties for goods and services.

MONEY MUST BE BACKED BY PRODUCTION OR THE REASONABLE EXPECTATION OF PRODUCTION IN ORDER TO HAVE VALUE

Modern money can be traced back to European Bills of Exchange where such Bills were backed by actual goods.  As time passed and services became a much more important part of economies, production morphed from primarily physical commodities to intangible items. 

However, the connection between money and production, regardless of form, cannot be broken, otherwise the money created has no consideration backing it and is illusory in nature.

It is the principle behind why we don't allow counterfeiting or fraudulent lending practices....it is essentially theft of one's production by the immoral practice of another.

In my next blog we will address why this will lead to the most convulsive period in history.

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#37) On April 13, 2011 at 1:34 AM, ikkyu2 (99.15) wrote:

Ron:  I was c/o '94.  I learned a lot, when I went to class, which seemed to be an unusual pastime for the average Harvard student.

I certainly agree with alstry that it is hard to find something in the U.S., circa 2011, which serves all the proper functions of money.  I have always been fond of the definition of money essayed by Jesus, the Christ: who, when queried about whether taxation was lawful, pointed out the recognition of the sovereign:  "Render unto Caesar what is Caesar's," a highly practical piece of advice which I have been always careful to follow to the letter.

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#38) On April 13, 2011 at 1:43 AM, ikkyu2 (99.15) wrote:

I would also caution Rebkong that people holding gold, platinum, etc would do well not to be too elated at their good fortune.  It has happened - not long ago, in the lifetime of those now living - that the U.S. government has confiscated all gold and other precious specie in the hands of American citizens.  It could easily happen again - by force.

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#39) On April 30, 2011 at 12:07 PM, mhy729 (30.74) wrote:

if you intended to give it away or pursue production for the benefit of humanity....the pursuit of money would not be bad in and of itself.

Leaving out the charity part (nothing wrong with philanthropic giving, it just doesn't fit with the point I am trying to make) I agree that the pursuit (even vigorous) of money isn't bad in and of itself.  The problem imo is that somehow our current economic system has developed a financial system where it is possible to "make money" and lots of it through activities that seem to have little productive value (maybe even harmful) and has thoroughly distorted the equation "making money = being productive = good for society".  If the financial/banking system were to function "properly" through the efficient allocation of capital "credits" generated by the production economy towards further economic development/productivity, and furthermore "earn profits" commensurate to their aptitude in doing so, then I for one would have no problem with Blankfein's statement "We are doing God's work."

In this sense, if greed for money were equivalent with desire to be more productive and/or helpful to productivity, then indeed "greed is good".  Unfortunately this appears not to be so.

---------------------------------------------------------

Money, in this world, is freedom.

No.  Money gives you access to the production/services of others.  If you want or need these products/services, then you want or need the money to pay for them.  Wanting or needing something from somebody else doesn't strike me as particularly "free".

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