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Money
Human nature matters
I’ve read about 100 books on money, including many tomes by the acknowledged experts of economics. Throughout my studies I noticed the authors overlook or minimize a vital aspect of economics one that could transform the theory and practice to benefit everyone in society. The more I researched the more...
Human nature
An old Sufi story tells of a long ago king who heard stories about an enormous and strange animal in a faraway land. He was curious to know more about it and sent his wisest men to learn what they could and return to inform him. His wisest men set...
IOU future-value money
An IOU can also be a promise of value that will be created and produced in the future. It’s a subtle, but important difference when it comes to money systems, and the common frame of commodity, commodity-backed and fiat ignores this important difference. Civilizations throughout time have monetized both kinds...
IOU present-value money
We have discussed tangible commodity money, now let’s consider money that represents a commodity or real asset with an IOU (keep in mind we are using the traditional but misleading frame for defining money systems by their token). An IOU can be a receipt for something of value in the...
Key Questions
Here are the key questions to ask of any money system. It is helpful to clarify the answers before a group moves on to discuss the pros, cons, and specifics. Who Decides? What community will use this money? Who will decide on the money system? How will agreement be reached?...
Making a deal with the devil
The Banker Imagine you are very good at juggling IOUs from others with IOUs you issue. You are a person of stature, and exude trustworthiness; your IOUs serve as money in the community because people trust you will be good for your debts. You create new money by issuing loans...
Math matters – exponential growth
The difference between linear and exponential growth must be absolutely clear to understand our money system and its impact on our lives. Any growth by a percentage is exponential. When we talk about a 3 percent annual growth rate for our economy, we are talking about exponential growth. When we...
Math matters
A money system designed for exponential growth cannot be sustained and produces predictable undesirable outcomes. Understanding the unbending mathematical reality of a pyramid scheme helps explain why this is true. A pyramid scheme is any financial scheme that requires an exponentially growing number of participants and pays early-in participants with...
Money and bankers
Before we discuss the money systems prevailing over most of the past millennium, let’s make the distinction between a money system and a financial system. Nearly all money systems today are entangled with banking and finance. So, it’s worth spending a few pages to be clear about what are the...
Money is as money does
Money is a tool Money is a social technology that makes it easy to exchange goods, services, property and value. Money circulates, facilitating millions of exchanges every second of every day. A single unit of money can facilitate many transactions. Money serves as a propeller for the economy, but whether...