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Yes, you are right about the connection between war and financial bankruptcy. History shows it over and over again, but no one reads history, not even the fringe financial commentators. They think the Federal Reserve alone is responsible for our problems. Most never even mention Iraq.

I am really amazed that only a few people now and then make the connection between war and red ink, when it is so clearly visible via history. Ron Paul does this, which is why I am afraid he may not live until 2008 to run for president.

D. F. Facti

It's the crap they propound in graduate school economics programs and business schools which are endowed - maybe I should spell that en DOW ed - by big business.

History is bunk. So sayeth Henry Ford.

The testosterone empowered males and females running the world have no need of introspection - - - they are masters of the universe. How dare we ask questions?


You are probably right, DF Facti. That does seem to be their general attitude.

Elaine Meinel Supkis

Ask the French Peasants how to talk to the elites...they managed it. So did the Russian Peasants in 1917. As Mao said, 'Power grows out of the barrel of the gun,' and arming peasants to fight sometimes backfires.


At least credit Calculated Risk when you "borrow" one of his nice graphs!


Wow. That's some ancient economics there - "the mineral value of the actual coin" hasn't mattered for over a century. The paper and ink in a dollar bill has never been worth a dollar.

The idea that money is a "storehouse of value" is an old one, no longer useful - we don't trade a certain number of grams of gold for groceries and haven't for a long time.

In today's world, money is a measuring tool for value. It provides a way to compare disparate things in terms of some standard: how long do I need to pound this keyboard to pay Hugo Boss for a suit? How many suits does Mr. Boss need to sell to buy a new Porsche?


A bit more on this topic... since the late 90s I've carried a plastic item in my wallet called a "debit card" - it's a credit-card-like thingy that I use at the grocery, the gas station, etc. instead of coins, bills, and paper checks (I haven't written a paper check in years.) There are a bunch of coins in a cupholder in my car that I use for parking meters, and I keep maybe $20 cash in my wallet for the cafeteria, but the vast majority of my transactions don't involve physical "money" at all - they involve the movement of electrons from the vendor to my bank, and from my bank to the vendor's bank. So "money" in my world is an abstract yardstick I use to compare the value of my time vs. the value of something I want, and to make purchases on that basis.

It's not the tenth century any more!

Elaine Meinel Supkis

Dear Rouser,

Tell Calculated Risk I will never ever refer to him or link to him again.

Anyone clicking on the link would discover where it came from. But I find irritable followers of various gurus to be a major annoyance. So it is better to not connect with them.

This is the problem with many sites and is why I have ceased to refer to other bloggers: it is a real pain. Once, I had dreams of bloggers refering to each other. But they have thinner skins than the major media who have pretty thin skins as it is.

People should be happy ANYONE connects! We are all very small fish in a very big ocean. As for Calculated Risk: he steals stuff ALL THE TIME. He seldom says more than one or two sentences, he simply hijacks other people's stuff. Isn't that charming.

So original.

For his followers to yap at me about this is hilarious. He should at least post as much original context as I. This is why my standing in Google and other search engines rises by the day: they grade us according to original content and my blog is at the very top of all blogs when it comes to both originality and careful use of links! I NEVER see Risk's stuff when I google financial information, for example.

Many of my readers come via google. They type in questions and I am on page 1. Top ten, ranked right after the BBC and NYT! Ha.

Elaine Meinel Supkis

Smith: if you truly believe hard mineral stuff has no value, please donate all your coins to me. I will add them to my hard coin collection.

Pennies worth $0.02 shows clearly that anyone holding real pennies and MELTING them will be richer than someone who has pennies in some number system and nothing solid. Double your money. Can you see the problem here? I hope.


Rouser, JSmith,

Good points. So it is obvious that you do not negotiate with your bosses for trade of goods. You don't say "Mr. Bossman, I will work three hours for you if you will give me a new suit". Instead you use a commonly recognized exchange of value we call "the dollar". Now if the amount of dollars in circulation were fixed and as long as everyone agreed to the use of dollars, you'd be fine. You could even argue that an increase in the number of dollars in existence based on some marker of economic growth would work. The problem is, once you give someone (anyone) the printing press you are counting on them not to get greedy. And somebody, if not them then their heir apparent, *always* gets greedy. And then they start printing dollars. And once they start they have to do it faster and faster. And before long people start to question the value of those pieces of paper. And then we are off to the races (the inflation races). I'm not a big beleiver in the gold and silver standard. But I do like the idea that money must be tied to *something* otherwise that printing press lever (or now days "button") is just too tempting.


Elaine Meinel Supkis

100% correct, Z.

Couldn't put it better. Anyway, I have the means for melting pennies. Unfortunately, it is illegal to make them worth something by melting them. So all I can do right now is complain. And scavange copper.


"if you truly believe hard mineral stuff has no value, please donate all your coins to me."

"I do like the idea that money must be tied to *something*..."

That's what Marx (Karl, not Groucho) called "commodity fetishism. And it's odd that the mineral stuff most valued through history isn't one that's good for a whole lot, as it's rather soft as minerals go. If use-value equaled fetish-value, structural steel would be the medium of exchange.

As far as I'm concerned, they could stop printing "dollars" tomorrow. Bits get transmitted electronically from my employer's bank to mine, and from my bank to the banks of entities I deal with. The "dollars" I use the vast majority of the time are just numbers on monthly statements - inbound and outbound.

But it seems as though there are still some people who want to haul it around in a sack!

Elaine Meinel Supkis

Wiping out 'bits of memory' is very easy. Wrestling metal from my grip is much, much harder.

Note how many banks collapsed in the past because of 'numbers' being suddenly wiped out. Like famous, old banks going kaput in one day!


You remind me of Long John Silver's parrot...

"Pieces of eight! Pieces of eight! SQUAWWWWK!"

Do you have a hole in the basement floor where you've stuffed sacks of krugerrands or something?


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