Is money an obselete concept?

Discussion in 'Business & Economics' started by Magical Realist, Feb 11, 2016.

  1. Magical Realist Valued Senior Member

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    Think about how often money actually changes hands anymore. You go to a restaurant and use your debit card to pay the check. Electrical impulses are sent back and forth to your bank paying for the meal. More and more the act of payment is being reduced to an electronic communication act. The idea of a symbolic piece of paper or metallic coin is fading into oblivion. How shall we define money now? As stored labor? As credit? As a social agreement between two computer systems? What is being quantified in the concept of wealth?
     
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  3. joepistole Deacon Blues Valued Senior Member

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    No, money is still needed though the need for physical currency is waning.
     
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  5. Michael 歌舞伎 Valued Senior Member

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    Most of the time we use fiat currency, as opposed to 'money' (one of the properties of money is it is a long-term store of value). That said, so long as we live in a world with limited resources, sound money is crucial towards maintaining our highly complex societies. Absolutely crucial.

    Could that money be purely electronic? Sure. It suppose it's up to whatever people want to use. I remember this woman who used to live nearby. Her whole life she bought silver. A little here. A little there. People would give her some silver coins for gifts. Not that she didn't have other assets, she owned her home, had a normal family. But, she liked to buy silver - said it'd be for her 'silver' years. Well, needless to say, she lived out the last of her years quite nicely. The point being, regardless as to what form 'money' takes, so long as you're using it freely - then who's to say what you 'should' or 'shouldn't' use. And, as long as there are limits, we'll require money.
     
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  7. Michael 歌舞伎 Valued Senior Member

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    I read this on ZeroHedge:
    A sad state of affairs indeed.
     
  8. pjdude1219 The biscuit has risen Valued Senior Member

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    you know for someone who likes to pontificate perhaps you should learn something before you run your mouth. this right here shows you don't actually understand what money is. the fact you deferentiate between fiat currency( which if we get really technically most of the money used through history has been directly or indirect fiat currency) and money shows gross economic ignorance. money has 4 properties. means of exchange, unit of accounting, a store of value, and standard of defered payment. can you prove your claim that fiat currencies doesn't have these. facts please not your usual lies and making shit up.
     
  9. Michael 歌舞伎 Valued Senior Member

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    Here's something interesting regarding NRIP:

    Japan has had ultra-low rates for years and its economy has been terrible. Trillions of debt in Europe now trades at negative interest rates and its economy isn’t exactly booming. Denmark, Sweden and Switzerland all have negative interest rates, but consumer spending isn’t going up there. In fact, savings rates have been going up in lockstep with the decrease in interest rates, exactly the opposite of what the geniuses at the various central banks expected.

    Why is this happening? Simply, savers are scared. Lower interest rates have wrecked their retirement plans. Say you were doing some financial planning 10 years ago and plugged in 3% from your savings account. Now its 0%. You still have to plan for your retirement. Plug in 0%. What happens to your planning now? 0% compounded for X years is 0%. The math is simple. So in order to have your target savings at retirement, you need to save more, not spend more. But for some reason, the economists that run central banks around the world can’t see this. They are all stuck in their offices talking to one another and self-reinforcing this myth that they can drive spending up by reducing the rate of return on investments. Want to see consumer spending go up? Don’t wreck their savings plans so that they are too scared to spend. But that’s too simple. Instead, central banks use a chain of causation that doesn’t exist to try to create change 3 or 4 steps down the line. It hasn’t worked, and it won’t work. It isn’t in an individual’s self-interest to go out and spend their money on more “stuff” in order to spur economic growth.
     
  10. Michael 歌舞伎 Valued Senior Member

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  11. Edont Knoff Registered Senior Member

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    I favor this idea:

    Money is the power to buy something. Based on agreement among traders and other users of currency, money is just the power to buy something. It's a shortcut for trades, and it's storable as long as the agreement of the users of the currency holds (once a trader distrusts the power of money to buy something, no amount of money will get you their goods anymore).

    Money became very abstract, and most likely only exists in from a sort of agreement, sicne it's no longer substantial (no coins, no valuables, just numbers).

    I think all the other connotation like "stored labor" have become obsolete, even that it's definitely possible to trade labor for money.
     
  12. Plazma Inferno! Ding Ding Ding Ding Administrator

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    Some time ago, I posted about Denmark's aspirations toward cashless society. It's hard to tell how good idea this may be, but it shows that large economies obviously started thinking how to get rid of today's concept of money.
     
  13. Edont Knoff Registered Senior Member

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    It's a cost-saver and if e.g. shops and markets do not need to keep cash, they won't be targets for robbery, so it also enhances the safety of markets in some regions (where the police is too far). While I like cash, I can see the benefits of an electronic currrency.

    Some people are afraid that the ones in power can disable electronic cash for unliked individuals, cutting them from their savings, and also make them helpless since they can't even buy food anymore without access to electronic cash. It's debated how substantial this problem is, but it exists, at least in theory.
     
  14. Michael 歌舞伎 Valued Senior Member

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    Cash is extremely common in Japan. While they've had electronic wallets for over 20 years, generally attached to your train pass, Japanese still favor cash transactions. I'd also say Japanese favor people service over self service and demand high quality. As I've mentioned in the past, its not uncommon to see piles of cash within hands grasp. With the exception of the occasional tourist (like an Australian moron who stuck up a 7-11 with a knife) you never read of thievery. It just never happens.
     
  15. joepistole Deacon Blues Valued Senior Member

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    Well, that's not what the data says, but then you were never one to care about evidence and reason.

    https://en.wikipedia.org/wiki/Crime_in_Japan#Yakuza
     
  16. joepistole Deacon Blues Valued Senior Member

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    Well, if you began reading credible sources rather than sources like ZeroHedge and looking at real data the world might not look so dire. Moving to a "cashless" society does nothing to help or hurt negative interest rates.

    Additionally, no country has introduced or even contemplated negative interest rates at the retail level. Negative interest rates are a tool reserved for central banks to encourage banks to loan money.

    And here is the thing, if we had responsible fiscal policies, negative interest rates would never be required. To date, the US central bank hasn't seriously considered negative interest rates, and it has no plans to use negative interest rates in the US in the foreseeable future. However, Yellin (Chairperson of the US central bank) indicated a few days ago, the US central bank is looking into negative interest rates and examining the possible ramifications of such a move on the US and world banking systems. It's a wise thing to do in a world of increasing uncertainty.

    Unfortunately, in recent years responsible fiscal polices have been difficult in Europe, Japan, and the US. With the rise of Republican radicalism in the US and Republican control of both houses of congress, responsible fiscal policy is no longer available to policy makers as it was in 2009 - 2011 when Democrats last controlled both houses of congress and the presidency, and it likely will not be an available remedy for at least another 4 years due to Republican gerrymandering of congressional districts and Republican Party radicalism.

    Monetary policies were never intended to replace fiscal policies as economic remedies. But in a world in which responsible economic policies have become increasingly difficult, monetary policy has become the only game in town, and that is deeply troubling and unfortunate.
     
    Last edited: Feb 13, 2016
  17. Michael 歌舞伎 Valued Senior Member

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    LOL
     
  18. Michael 歌舞伎 Valued Senior Member

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  19. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    Paper money is worse than obsolute - very damaging to modern society. In last month or so, there have been several proposals to eliminate the larger denomination bills as they mainly facilitate illegal activity (importation of drugs, or just simple evasion of taxes). I proposed a very definite plan for doing this back in 2005 at: http://www.sciforums.com/threads/end-paper-money-big-drug-deals-save-us-economy.51113/

    Here are the key ideas from item 3 of that nearly 10 year old post:

    " Existing paper money to become void on fixed schedule as follows:
    All bills (not bonds and treasury notes, etc.) greater than 1000 dollars are void in 3 months and all printing of new paper money terminates immediately.
    All 1000 dollar bills are void in 6 months.
    All bills >100 dollars in 1 year.
    All 100 dollar bills in 2 years and all 50 dollar bills in 3 years.
    All 20 dollar bills in 4 years and all 10 dollar bills in 5 years and all 5 dollar bills in 10 years.
    Two dollar and one dollar coins would be used for the small purchases, circulate and replace the corresponding paper bills which are destroyed when they enter any bank after 10 years.

    The "underground economy" (cashpayments) is huge but totally untaxed. The tax bill of honest taxpayers could be reduced by approximately 1/3 if it were taxed, as it would be if all transactions left an electronic record. Those records, like IRS records, should not be available to the public, only to the IRS.

    There are many more dollars in circulation (or in coffee cans etc.) outside of the US than inside of US. Time must be provided for their holders to spend them, or perhaps convert to their currencies, but as no one wants to just hold dollars, this option will disappear prior to the “voiding date.” Thus, this plan will greatly boost US exports, help get US out of debt, and may even prevent the collapse of US economically. It certainly will end the imported hard drug problem, as the risk of large scale buying from Columbia, Afghanistan, etc. will be too great, if done via "electronic money" and be physically impractical if the drugs lords are to be paid in the new 1 and two dollar coins. "

    What do you think of my plan, now that bankers are suggesting a lesser version of it?
     
    Last edited: Feb 15, 2016

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