Regarding savings, fiat money has no intrinsic value but it does have exchange value.

Fiat money is actually quite a brilliant concept. Not so Debt Based Fiat Money.

The difference is that DBFM is inherently and necessarily inflationary because of the interest component attached to it. Hence the paradox brought about by the following; if one hypothetically collected all the money in the realm to return it to the monetary authority, they would still be out of pocket by the amount of the interest… but having returned all the money, how can they pay interest?

In a situation whereby a country adopted a fixed amount of fiat money, the exchange value of the currency would fluctuate according to people's preference to save or spend. So, if people's preference is to spend, then the exchange value of the currency would diminish in comparison to the value of material goods or services and vice versa.

Thanks for the posting. And the comments, lots of goodies there 🙂

Hölli Vals.

"Not the foundations of Democracy, but Democracy and Free market economics linked. As if the purpose of democracy was the support of Free Market Economics."

as well as the donors you mention, I have to point out this lecture: http://www.youtube.com/watch?v=b9_aYcpxClA

"…a great deal of misunderstanding about the kind of society that American democracy really represents."

He talks about "a tremndous tension of which we're all aware of in our society…a tension between egalitarianism and inequality…a tension born of the evolution in the 16th, 17th and 18th century in England, and a transfer of a particular kind of society onto American soil through the British political traditions."

It's maybe an interesting context for this conclusion from your latest post on offshore banking:

"The largest and most powerful parts of the tax evasion and financial secrecy system are in fact the UK and the US.

Not to transcribe or paraphrase the lecture any further, as I hope you will find the time to hear it through. It's been almost 20 years since, but it's very relevant, and his sense of urgency back then is perfectly in accordance with the current state of affairs. I hope you will find interesting.

Am a bit of a drop out myself. Visited guido's temple of the absurd. Nice commentary. Monetary system is a pet peeve of mine too.

I take your point contending savings should retain their value of exchange, though as I understand it, fiat money, regardless of whether it is debt based or not, has no 'intrinsic value' and so neither do monetary savings.

Lifelong investments in enterprises requiring direct responsibility and involvement such as community friendships, healthy lifestyle choices, developing practical skills, tools, home improvements, cultivating land, etc offer dividends which weather the test of time well.

I hear your dilemma, in the face of systemic inequality, the individual is inclined to play the system in order to protect their private patch even while hungering for a more united response.

I suppose the paradox is that only by endeavouring to provide for our neighbours do we ultimately succeed in ensuring our personal welfare.

p.s. I wholeheartedly disagree that everything begins and ends with money. I consider energy much more fundamental basis and moreover the interplay of energy and consciousness to be the crux.

In terms of enjoying my life, I have done my bit. I dropped out of the corporate world some eleven years ago now and have endeavored ever since to achieve freedom just so I could enjoy life. Hence the epiphany of how we are being enslaved and guided.

I am at pains to make people understand the tyranny we live under. Monetary policy is an unseen evil that touches all aspects of life. But it is unimaginably difficult to make people understand why the quantity of money in circulation may result in, for example, food shortages.

The speculators that are knowingly making out like bandits are the Primary Dealers and the banks that gravitate around them. It is an apparently invisible evil. And yet their actions are perpetrated in broad day light and the logic of the dynamic is deceptively simple.

Let's do talk.

Western monetary policy is, as you say, insane and to blame for a great deal of what is now happening. I would not dispute that for a seecond. Perhaps you and I would disagree about speculators. But then again maybe not completely.

I understand the logic of hedging and from what you say that is, at least in part, what you are doing. But would you not accept that many speculators have been delighted with and been keen partners in Western Monetary insanity? Those are one of the groups of people I do blame. They have the understanding to know what lunacy is being pursued but chose to profit from it rather than help stop it.

Drop me an email and let's talk some more if you wish. It is not my desire to alienate anyone from whom I can learn and with whom I can exchange views and refine ideas.

"How else am I going to protect the intrinsic value of my savings and make a living?"

What if your 'savings' have no intrinsic value?

What if 'making a living' just means providing yourself with food & shelter and enjoying life?

I seem to be a speculator as defined by many politicians. I have been investing in grains and oil for a good many years. I do so because I can see what the monetary authorities are doing and I can calculate the ramifications. Stop the political and monetary idiocy and I'll get out of my positions. How else am I going to protect the intrinsic value of my savings and make a living?

Speculators only exist because of the idiocy and self serving nature of politicians. I am doing nothing illegal. I merely can see what these idiots are doing rather than listening to what they are saying.

Great story.