{"id":7187,"date":"2015-04-10T05:35:01","date_gmt":"2015-04-10T10:35:01","guid":{"rendered":"http:\/\/olduvai.ca\/?p=7187"},"modified":"2015-04-10T05:35:36","modified_gmt":"2015-04-10T10:35:36","slug":"7187","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=7187","title":{"rendered":"Today’s Money Regimes Are Doomed To Failure"},"content":{"rendered":"

Today’s Money Regimes Are Doomed To Failure<\/b><\/a><\/span><\/i><\/h3>\n

Centrally issued money centralizes wealth and generates systemic inequality.<\/i><\/p>\n

A Thought Experiment on Money<\/b><\/p>\n

Let\u2019s imagine a small mountain kingdom with only ten very scarce and thus highly valued seashells in circulation.\u00a0 These few shells are certainly valuable in terms of scarcity, but there aren\u2019t enough of them to act as a means of exchange.<\/p>\n

One solution to this innate problem of scarcity\u2014money has to be scarce enough to retain value but not so scarce that there isn\u2019t enough of it in circulation to grease trade\u2014is for the kingdom to issue 100 slips of paper for each shell, each slip of paper representing 1\/100th<\/sup>\u00a0of the shell\u2019s value. Now there is enough money in circulation to facilitate trade and each slip retains a store of value equal to 1\/100th<\/sup>\u00a0of a shell. The slips are paper money, i.e. currency.<\/p>\n

This system works well, but the rulers of the kingdom aspire to consume goods and services in excess of what their share of the shell-backed money can buy in the open market.\u00a0 The kingdom\u2019s leaders print another 100 slips of paper without acquiring a shell to back the new slips with intrinsic value. Nobody seems to notice, and so the leaders print another 100 slips. Note that the kingdom didn\u2019t produce more goods and services; its leaders simply produced more money.<\/p>\n

Eventually this excess of paper slips reduces the value of each slip in circulation. What once cost 10 slips now costs 20 slips. This reduction in the\u00a0purchasing power of money<\/em>\u00a0is called inflation, as the price of goods inflates as the money supply is increased while the production of goods and services remains unchanged.<\/p>\n

Let\u2019s assume the kingdom\u2019s leaders avoid the temptation to expand their consumption by printing money rather than first increasing the production of goods and services.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Today’s Money Regimes Are Doomed To Failure Centrally issued money centralizes wealth and generates systemic inequality. A Thought Experiment on Money Let\u2019s imagine a small mountain kingdom with only ten very scarce and thus highly valued seashells in circulation.\u00a0 These few shells are certainly valuable in terms of scarcity, but there aren\u2019t enough of them […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[162,3677,309,536,1100,2589],"class_list":["post-7187","post","type-post","status-publish","format-standard","hentry","category-economics","tag-consumption","tag-exchange","tag-fiat-currency","tag-money","tag-paper-money","tag-value"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/7187","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7187"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/7187\/revisions"}],"predecessor-version":[{"id":7189,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/7187\/revisions\/7189"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7187"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7187"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7187"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}