what money really means and how to get rich_11

Navigation: Main page » what money really means and how to get rich

Author: what money really means and how to get rich

Today, it's different but not dissimilar. It's not death that is threatened, it's bankruptcy.Now instead of gold or coins, we have an abstract symbol."And we invent a measurement and the measurement is called the dollar. Now, do we have an intrinsic value for the dollar? Now strange as it may seem, implicit in the economic system there really is a utilitarian intrinsic value for the dollar, but it's negative. What I mean by that is the value for the dollar is somewhat determined by the default in bankruptcy laws in society. How unpleasant does it get for you when you go broke for an imaginary buck? So that gives it a value.It's a negative value, and it ties it into the credit system.The dollar is a mythical commodity invented by the government.You and I can't get away with that, but the government can," posits Professor Shubik.

He is getting tired, I notice. It takes him longer to get out a sentence.There are long pauses between words."Money," he says, "is information, reputation and trust."His final explanation is of networks."Trust and information is what a governmental monetary system is about.At a more complex level the whole financial system and banking system is the transformation of small networks where the players are unknown into bigger networks that are known and the words are known and trusted and respected,"

he says."For example, I, Martin Shubik, cannot get a stranger to take my IOU note. So, how do I get a stranger to sell me something? I go to a god damn bank who's got a prime name because they're known by a few million people and have got a reputation. I exchange my IOU note for the bank's note and I pay the individual with the bank's IOU note. And the individual may take the bank's IOU note and convert it into so-called cash money, which is the United States' IOU note: dollar bills. But the IOU notes are such for the United States that they never have to pay them.

"Government money is a purely dynamic concept. The purely dynamic

concept is this: that you can get a system of exchange going where everybody knows that the paper is of no value in terms of eating. But as long as everyone believes that everyone else is willing to accept it, then everyone will accept it. Hence, it's pure information."

Speaking of information, I'm on overload. So, we quickly wrap things up.Besides, the professor is tired.I exit the same way I came.

" . . . and the Nambalese gorilla is nearly extinct . . . "