[Heal the Bern] What Makes Money Valuable?
This is the first video in a series I'm making called Heal the Bern -- a series dedicated to presenting economic concepts in an easily approachable way
In this video, I discuss what makes a substance valuable as a currency, and dig into some of the implications this has on social issues and policy.
Want some STEEM?
I will pay 20 STEEM for a transcript of this video; or 30 for synchronized subtitles. If you'd like to do it but need a better offer to make it worth your while, drop a note in the comments and I'll consider it. :)
[Edit] Two people have made transcripts and subs, so this offer is no longer available. You can see the subs/transcript on the video page on youtube, just hit the More menu and select Transcript
what I find fascinating is too look at how prisons inmate create their own currency when there is no US Dollars around (cigarettes, ramen noodles, etc.)
These are very insightful words.
Exactly. That's really the point of this video, is to stress that idea. We don't often think about the externalities involved when we choose to imbue a currency with the value of our labor, but those externalities are very real. In the case of Federal Reserve Notes, we're funding perpetual war simply by accepting their dollars as payment for our valuable work.
The interesting question is this: do we subsidize the FED when using Steem Dollar?
I guess not. We take the benefit of a ubiquitous currency but skip the evil subsidizing bit - am I right?
Right, because demand for SD does not increase demand for FRNs. If anything, demand for SD decreases demand for FRNs. An SD is a dollar worth of debt from the holders of Steem Power. A FRN is a dollar worth of debt from US income taxpayers.
When using LEGAL TENDER DOLLARS, a person is subsidizing the LEGAL slavery system.
The words "THIS NOTE IS LEGAL TENDER" on a dollar note mean "THIS PIECE OF PAPER IS AN UNCONDITIONAL OFFER FOR LAW".
If you accept these dollars, you accept to be bound by the legal acts, codes and statutes of those who back these dollars.
You've probably heard these 2 before : "The only vote that counts is how you spend your money" and "The consent of the governed" ?
Well if you "vote" for/by using legal tender dollars, then you consent to be governed by the laws of those who back those dollars... And we all know what those dollars are backed by : The legal system most of us are sick and tired of.
id feel bad taking your 30 steem and spending 8 bucks at rev.com. so ill just let you know. rev.com will transcribe and caption it for you for a buck a minute. theres also a bunch of similar options on fiverr, iirc.
I should also point out that I'm preferring to pay Steem rather than FRNs, for reasons alluded to in the video. :D
ill be perfectly honest... im in the proccess of reinstalling and i don't have the sound card working yet. I noticed the post because i follow you , but i havent actually seen the content yet.
If its an anarchist take onthe virtues (or lack thereof) of FRN's im sure ill consider it an abomination, but ill give it a look anyway. :-)
Im curious as to how you differentiate steem from the federal reserve.
EDIT: ok i got it up on my phone watching now.
I've actually already got that on my list of videos to make! :) I had to make this (and a few other) videos first, though, to lay the groundwork and prerequisite understanding for that video.
Haha, that's what we call arbitrage, my friend, and it's completely fair. But a couple of others have already done it now, so I'll pay them and perhaps use something automated in the future.
@sigmajin - why would feel bad. If you know sth that other doesnt that is your leverage. That is why people pay for sth they dont know or for the information about. Look you could take those 30 Steem and add value to it telling @modprobe that he can use next time if you want to.
It's really that simple. You know how to cook and you let ppl pay for that. For you its simple for them not.
and one more - maybe @modprobe want to save his time and dont want to do this by his own - time is money :) I dont know what drives @modprobe - but I feel bad when some would feel bad about taking money for something he can do what others dont or want
OK my take: The federalal reserve is actually 12 banks, not 1 bank. Their ownership governance and oversight is a matter of public record.
I get that you probably understand the difference, but you're drawing a lot of parallels between coommodity money (which obv the USD is not) and fiat money that don't really hold up. As should be obvious from the name, fiat currency is valuable because of government fiat (which someone already mentioned).
The fed can create money kind of, but they can't really without commerical banks and borrowers. That is to say, they can only create money to give it away and pump it into the economy. its not like the chair of the fed has a scrooge mcduck style swimmin vault and some or all the money they create does (or ever could) go there.
Part of the reason people don't understand this is because they confuse currency with money. FRNs are currency, but its not really correct to call them money. It never has been.
Saying the federral reserve creates money by printing FRNs is like saying that a valet can create cars by printing valet tickets.
To really understand the dollar, you have to understand that there is the dollar in currency, but that it is also backed by a real dollar in money.
A real dollar isnt made of paper, it just exists in a ledger as a bank balance.... why does the grocer accept your dollar bill? its not because of force, or value perception or anything except the fact that his bank will take it. Why will his bank take it, because the federal reserve bank will take it and give him a real dollar (a dollar in bank balances) for it.
The fed is 12 banks in principle, but all 12 were created and have always been controlled by the same group of people. We don't know exactly who those people are.
They have no transparency (why don't you try to go into a Federal Reserve building sometime? You can't), they are not part of government (government is beholden to them, as government uses their money and is not willing to rock the boat and jeopardize their privilege of unlimited inflation), and we know remarkably little of their inner workings. As with everything in the modern financial sector, they say one thing is happening, but if anyone ever tries to verify or audit any of that, they are silently ignored (or silenced and ignored).
FRNs have no backing whatsoever. Originally they pretended they were backed by precious metals, but that was never real backing as it's always been a fractional reserve. They claim they have still have gold reserves, but overtly deny that anyone may redeem their notes for that gold, and they haven't let anyone see this gold in decades. Does the gold even exist anymore? There's no way to tell for sure, but if it does, there's no good reason they won't let anyone check it.
We haven't had real dollars in a century. All we have is FRNs, which is like a carton of milk without the milk in it.
The milk is bank balances. Its been that way for 50 years or so. You might think that balances in an electronic ledger is sour milk (so to speak) but thats whats there is. Its really no different from a crypto currency.
I actually didnt know they still claimed to have gold reserves, thats kind of crazy if true. I can't imagine what relevant justification there is for them to keep precious metals on hand.
history trivia -- when was the first us paper currency printed? this surprises people a lot. I think the history of the "greenback" and where the notion of a dollar bill comes from would be an OK vid for your series.
Bank balances of what, though? Of FRNs! So the 'milk' is just another empty carton. It's just cartons filled with cartons. There is no milk, anywhere. Fundamentally, the only thing backing FRNs is debt, which is to say, nothing at all, just an empty hole where they pretend something will eventually be. But government debts are never intended to be paid off (there is no asset with which to pay it), so that hole will always be empty, growing without bound, until it simply implodes.
replying here due to nesting. just like a bitcoin. Or an ether. or a steem. but there's a video about crypto coming up, so ill let you address that there.
regardless, That entry on the Feds ledger is still a thing. It exists. It can be evaulated according to your five characteristics of money.
And these ledger enteries have all five of the the characteristics you discussed.
they are divisible
they are fungible
they are widely accepted
their supply is predictable
their creation subsidizes an activity. The fed puts dollars into circulation by lending them to commercial banks, which lend them to businesses to conduct commerce.
These ledger entries can take the pepsi challenge and beat gold or silver on any of the criteria for what makes something a good unit of money.
no of dollars. money that exists on an electronic (but not distributed) ledger, just like steem or bitcoin (except centralized). WHat, did you think the crypto guys thought of it first? They didn't. All they figured out was how to make it work without a central trusted actor. A FRN is not a dollar. Anymore than a valet ticket is a car. Or those absurd coins you always see pictures of are bitcoins. The real dollar simply exists electronically.
When you give up your real dollar at the bank (the dollar of balance in their electronic ledger) the bank gives you a green valet ticket, that has no value except for the fact that somone can later go back to the bank and present it in exchange for that electronic balance that you gave up.
People deny this, even finance and economics people, but what replaced the gold in the gold standard wasn't fiat currency, it was tick marks in an electronic ledger.
The grocer takes a $100 bill because he knows he can exchange it for something that he considers valuable (a $100 entry in an electronic ledger at his bank). His bank accepts it because they know they can exchange it for a $100 entery in the fed's electronic ledger.
Precisely. At the end of the day, it's nothing but an entry in the fed's ledger, which is backed by nothing. It's an empty carton, there is no milk.
attraction is the key!
I like the question - what are you subsidizing ? What kind of system. That is why I do my best to switch to DAC and crypto. What worries me most in this are all sort of scams. People who are using the new idea to make money not to evolve.
Well, if you're wondering what the creators of Steem see as its long-term purpose, @dan / @dantheman has conveniently posted it for us: https://steemit.com/steem/@dan/steemit-s-evil-plan-for-cryptocurrency-world-domination
Great video/post @modprobe! i was just thinking about crypto-currency values the other day, and this video really helped me make sense of it.
please keep posting fly as fuck content!
There is a funny error in the transcript at 2:22.
Haha, thanks. Fixed! :)
Good Talk @modprobe! You have a good radio voice.
How do I send you subtitles? Or transcript?
You should be able to add them directly on Youtube. In the
Moremenu under the video, hitTranscriptand selectAdd Subtitles/CCin the language dropdown.ok
Adding now being submitted for review. Cheers!
Good stuff. Paid! :)
Thanks Very Much! Anything I can help with that within my reach please don't hesitate to extend offer I will be more than happy to try and help!
Update. Subtitles completed. It may be waiting to complete fully upon review but they are on now.
(J.C) SomeofeverythingalotofLove
My Channel for caption added
So I whipped up a transcript for you, where should I send it?
Please post if you already have them submitted by someone else, Thanks!
You should be able to add them directly on Youtube. In the
Moremenu under the video, hitTranscriptand selectAdd Subtitles/CCin the language dropdown.Thanks @modprobe, but it looks like there is already an automated subtitle on the video. Also, I only wrote up the transcript (not supported for English), so I didn't time it out to create a subtitle file. When I tried to upload it I get "Unknown subtitle file format". No worries... Still liked the video and think its something everyone should consider - even in crypto. Cheers!
Yeah, it appears the automated subs are better than I'm used to. I'm impressed. Anyways, I paid you anyways. Thanks! :)
I actually figured it out and I'm half-way done! Thanks for the payment, I was actually just going to copy-paste it up there piece meal to see if it would be a better option than the automated version. Sometimes the automated reads like 70's kung-fu flicks subtitles.