E-money is the ultimate form of Fiat if you ask me. All fiat has a history of corruption and collapse (the american dollar and other world currencies are heading that way as well). Fiat money is the money of the statist, since it allows those in charge of the press to create as much money as they need, while dilluting what the rest of us hold.
The question isn't "what form will money be in", the question should be "what assets will back our money". I don't care if its in the form of rice crispies, as long as it is backed by an asset (gold, food, land, space rocks) and has real value.
The question isn't "what form will money be in", the question should be "what assets will back our money". I don't care if its in the form of rice crispies, as long as it is backed by an asset (gold, food, land, space rocks) and has real value.
Tying it to a hard asset doesn't help you. The reason it doesn't help you is that the asset itself is fluid just like the money that represents it: more of the asset can be acquired if need be in order to make the country in question appear "richer", and indeed that was commonly done back when gold was the standard. Acquisition of more of the backing asset is usually a matter of expending sufficient labor (sometimes in the form of the use of the military). Print money simply has a much lower expenditure rate per dollar produced. And as described below, it's highly advantageous to have your exchange mechanism be as fluid as possible.
Money itself is just a means of representing the value of something relative to the value of something else. Usually one of the things whose value is being measured is your labor (when you get paid and then spend the resulting money on something, the price of the something in question is just an indicator of the value of your labor relative to the value of the object you just purchased, and the value of the object is ultimately, more or less, the sum total of the value of the labor used to produce it). Ultimately, since the value of an object is essentially the value of the labor used to make it (which includes all the labor used to generate the raw materials, to process those materials, to assemble the object, and to manage all of that), money simply represents the value of your labor versus the value of someone else's.
In a perfect world, a change in the overall wealth of a country (as measured by the ability of the country to do work) would be instantly reflected in the price of goods relative to the price of labor. Unfortunately, the world is not perfect and there is a delay. And this is the reason for printing more money: so that the price of goods and services does not need to change significantly as the country is able to do more work. Print too much and the society has to adjust the prices to reflect the larger supply of tokens, just as it does if the country does't print enough.
Where things get complicated isn't really within a country's economic system: the currency for that is reasonably well-defined. The complication comes when dealing with other countries with their own currencies, particularly when those currencies are not managed the same way.
The cost of labor in India is lower than it is in the United States. It's lower because the cost of living is lower. But the lower cost of living isn't necessarily a consequence of the lower amount of total work it takes to supply someone with the goods and services needed to live, even when the person in question is living at the same standard of living as someone in the U.S. Nor is it necessarily a consequence of one country being more desirable to live in than another, though that probably factors into it some. Most of the difference is the result of the fact that markets require time to adjust themselves properly relative to other markets.
That's why programmers in India will eventually be paid roughly the same as programmers in the U.S.: the value of their labor isn't really much (if any) less than the value of the labor of programmers in the U.S. -- the hysteresis between the two labor markets just makes it appear that way temporarily. Corporations are now attempting to use that hysteresis to their own advantage, by shifting the demand for work towards markets which have not equalized themselves with the others. And the reason the markets themselves don't adjust on their own is that the labor in those markets isn't as fluid as the Corporate demand for labor, thanks primarily to immigration laws. That means that the labor cannot move to where the demand is. And even if it could, it would take time for the labor to move, and thus for the market to adjust. That time is the very thing which causes hysteresis between the markets.
Yes, it does. It creates stability and mitigates human meddling.
In a perfect world, a change in the overall wealth of a country (as measured by the ability of the country to do work) would be instantly reflected in the price of goods relative to the price of labor. Unfortunately, the world is not perfect and there is a delay. And this is the reason for printing more money: so that the price of goods and services does not need to change significantly as the country is able to do more work
Oh man, you are soooo off course here as to why money is printed, it probably isn't worth it to go into it at this point. Suffice to say the "printing presses" of money are used as a political and fiscal tool at this point, not having anything to do with anything you have described.
What is BEHIND that money... that is the question. (Score:5, Interesting)
E-money is the ultimate form of Fiat if you ask me. All fiat has a history of corruption and collapse (the american dollar and other world currencies are heading that way as well). Fiat money is the money of the statist, since it allows those in charge of the press to create as much money as they need, while dilluting what the rest of us hold.
The question isn't "what form will money be in", the question should be "what assets will back our money". I don't care if its in the form of rice crispies, as long as it is backed by an asset (gold, food, land, space rocks) and has real value.
Re:What is BEHIND that money... that is the questi (Score:1)
Tying it to a hard asset doesn't help you. The reason it doesn't help you is that the asset itself is fluid just like the money that represents it: more of the asset can be acquired if need be in order to make the country in question appear "richer", and indeed that was commonly done back when gold was the standard. Acquisition of more of the backing asset is usually a matter of expending sufficient labor (sometimes in the form of the use of the military). Print money simply has a much lower expenditure rate per dollar produced. And as described below, it's highly advantageous to have your exchange mechanism be as fluid as possible.
Money itself is just a means of representing the value of something relative to the value of something else. Usually one of the things whose value is being measured is your labor (when you get paid and then spend the resulting money on something, the price of the something in question is just an indicator of the value of your labor relative to the value of the object you just purchased, and the value of the object is ultimately, more or less, the sum total of the value of the labor used to produce it). Ultimately, since the value of an object is essentially the value of the labor used to make it (which includes all the labor used to generate the raw materials, to process those materials, to assemble the object, and to manage all of that), money simply represents the value of your labor versus the value of someone else's.
In a perfect world, a change in the overall wealth of a country (as measured by the ability of the country to do work) would be instantly reflected in the price of goods relative to the price of labor. Unfortunately, the world is not perfect and there is a delay. And this is the reason for printing more money: so that the price of goods and services does not need to change significantly as the country is able to do more work. Print too much and the society has to adjust the prices to reflect the larger supply of tokens, just as it does if the country does't print enough.
Where things get complicated isn't really within a country's economic system: the currency for that is reasonably well-defined. The complication comes when dealing with other countries with their own currencies, particularly when those currencies are not managed the same way.
The cost of labor in India is lower than it is in the United States. It's lower because the cost of living is lower. But the lower cost of living isn't necessarily a consequence of the lower amount of total work it takes to supply someone with the goods and services needed to live, even when the person in question is living at the same standard of living as someone in the U.S. Nor is it necessarily a consequence of one country being more desirable to live in than another, though that probably factors into it some. Most of the difference is the result of the fact that markets require time to adjust themselves properly relative to other markets.
That's why programmers in India will eventually be paid roughly the same as programmers in the U.S.: the value of their labor isn't really much (if any) less than the value of the labor of programmers in the U.S. -- the hysteresis between the two labor markets just makes it appear that way temporarily. Corporations are now attempting to use that hysteresis to their own advantage, by shifting the demand for work towards markets which have not equalized themselves with the others. And the reason the markets themselves don't adjust on their own is that the labor in those markets isn't as fluid as the Corporate demand for labor, thanks primarily to immigration laws. That means that the labor cannot move to where the demand is. And even if it could, it would take time for the labor to move, and thus for the market to adjust. That time is the very thing which causes hysteresis between the markets.
Re:What is BEHIND that money... that is the questi (Score:1)
Yes, it does. It creates stability and mitigates human meddling.
In a perfect world, a change in the overall wealth of a country (as measured by the ability of the country to do work) would be instantly reflected in the price of goods relative to the price of labor. Unfortunately, the world is not perfect and there is a delay. And this is the reason for printing more money: so that the price of goods and services does not need to change significantly as the country is able to do more work
Oh man, you are soooo off course here as to why money is printed, it probably isn't worth it to go into it at this point. Suffice to say the "printing presses" of money are used as a political and fiscal tool at this point, not having anything to do with anything you have described.