-=(Warning)=- My Blogs are more like white papers then minute Blogs. Don’t enter unless you got at least ten to twenty minutes to read and some education to comprehend
Fiat Vs Commodity cash.
For some of you, understanding that fiat money is the blight of society.
For those wondering if I’m talking about Italian cars,.. Fiat money is money that has designated value because it is agreed upon by the institutional entity issuing it and the people who use it.
Quick example. Paper money. It takes the same resources to make a $10 dollar bill as it does to make a $1000 dollar bill. It is only worth ten dollars because the US treasury sez it does, and the thousand dollar bill represents its value because the treasure sez it does, not because they used a thousand dollars worth of paper in it.
Commodity money is money that is back by or made of commodity, such as gold coins. The coin is worth what it is because it is made from actual gold which has a value to it.
A $20 dollar gold coin is much smaller then a $500 dollar gold coin. That is commodity money.
Ok, now for the psychotic rant and a fix.
The blight of society is, all fiat money will eventually reach a value of zero. And as a world wide fiat society we are well on our way.
As a kid finding a dime in the street (yah, I’m old) meant a bag of candy, as in, a whole small bag of candy not just a couple candy bars. I could go to the nickel and dime store (They where called that because most things where under a dime.) and get a pretty nice toy, (which if I still had, would be a collector item worth hundreds of dollars.)
The candy machines with bubblegum and such where a penny for a big jawbreaker.
Now because the fiat money gets devalued over time, now 5 dollars almost make that same bag of candy.
Meaning that the fiat money, U.S. dollar, has devalued by almost 500% since I was 5 years old.
So unless your money is making interest to match or exceed this rate your retirement isn’t going to mean crap and you will be working through your retirement because you won’t be able to afford the basics.
The founding fathers of our nation knew the hazards of this and as such designed the U.S. to be a commodity country. So that the money you earned as a boy would have the same value when you retired at 60. Or in their case when you where 50.
Growth is slower with a commodity structure; however it is stable and doesn’t collapse like during the great depression. The other problem is the U.S. was never designed to be a debited nation our forefathers would be very upset with us right now.
We didn’t have a national debit until World War II, then it was like a teen with a charge card, and now our children are going to be corporate slaves to foreign nations because our generation could not control their spending. That is pissing me off to no end.
This really, really pisses me off, to know no matter what I do, unless I have 500% above what it takes the average person to live on, I won’t be retiring because the devaluation of the U.S. dollar is increasing in an exponential rate.
As the saying goes. The good news is, you’ll be a millionaire! The bad news is, so will everyone else. (This is really a true statement if you make 40k a year, in 25 years you have made a million dollars!) Meaning, you need to be a Billionaire to be what we think a millionaire is, and a millionaire will be what we currently think someone bordering on poverty is 40 years from now.
The problem: The U.S. was a commodity nation, when the world global market came to be, when everyone else was fiat, they coveted the U.S. dollar because it was a commodity and actually worth something. The other nations where sucking out our gold supplies from our nation as they cashed in the dollars.
So we stepped it down, to silver, and then dropped it all together in the interest of saving our gold and silver reserves.
So in the end we decided to screw over our future generations for the sake being in line with all the other unstable nations of the world. (As in financially unstable.)
The answer (Can’t bitch about something unless I can give a fix for it.)
(You can go to sleep now, unless you’re a Micro/Macro economics major)
Commodity/Time-fiat money:
So we would still be circulating the paper money that is only worth the paper and ink that is printed on however it is backed by commodity like in our gold standard days,
HOWEVER it would only be considered commodity money for the Citizens. So a dollar today would be a worth a dollar 40 years from now and not $0.008.
The issue of other nations draining our gold reserve would be rendered mute by the fact that the commodity (gold) would be held in trust only for the nation’s citizens. So if other nations grabbed our money it would be considered a fiat cash for our goods and services to them. They could not cash it out and take our gold supplies overseas it would only be good in the U.S. boarders, so they would need to come back and spend it here, or trade it for products/services. otherwise it is useless outside of our boarders. (though worth a bunch to foreign nations as it is inflation proof to them for our stuff.)
The other problem of others coming into our boarders and cashing the fiat for the commodity backing, that would also be rendered mute by the fact that the gold reserves are being held in trust. Meaning it is locked up. So the gold is there but can not be cashed out as it stays in our reserve to represent the money printed.
Simply having the Gold in the amount that is issued by the national reserves means it doesn’t devalue and doesn’t go through the massive inflation/deflation swings that causes grandma to sell her house that she purchased for $25k, because the taxes are now being levied for a house worth $500k with her fixed income of $28-30k (that was what she was making when she retired some 30+ years ago.)
Granted there isn’t near the same amount of money floating around, but then our $1 would be the equivalent to $500 so products would cost much, much less. A loaf of bread would still be a nickel. So we wouldn’t need such a large amount of cash floating around for people to function.
Now for the equalizer: Time.
Commodity alone doesn’t fix things. The other part of my money equation is that the money is also linked to time, not just commodity. That is a national average of time tables would be linked to the money. Meaning if it took a person an average of 5 minutes to make a loaf of bread (considering bread is done in batches and when all the loafs are done the average is 5 minutes per loaf.) then it would be tied into the cost to prevent price gouging (you know like with oil prices where they are making double digit profits when the gas goes up, suggesting the price never needed to go up or they wouldn’t be making such disproportionate profits.)
So:
1 hour basic unskilled labor would be equal to 1 CT (Commodity-Time) dollar/hour (Basic labor not requiring an education or any skill, sweeping, picking berries, etc.)
1 hour of basic labor = 2 CT Dollars/hour, (labor requiring pre-high school education, such as being able to read, but still unskilled labor anyone can do in their sleep.)
1 hour of Standard labor =3 CT dollars/hour (High school education, reading writing, basic math perhaps, some thinking required.)
1 hour of semi-skilled labor=4 CT dollars/hour (minor collage or apprentice for skilled labor positions.)
1 hour of skilled labor=5 CT dollars an hour (Collage degree required, or skill such as journeyman level classification jobs with technical skill requirements, any skilled trade skills)
So with money being tied into this structure, all regulated services such as medical field, communications or anything else regulated by society would be within reach of even the unskilled section of society, so those who don’t want to work “much” could still afford healthcare because doctors can’t charge way beyond reasonable levels. (in today’s structures even middle income people can not afford medical without insurance because it would break them or strip them of all assets including the house they live in.)
Everyone could afford education if they wanted it. And those in the skilled positions could afford the much nicer things in life such as having nice houses, decent cars etc. So they are not capped at just above poverty like with communist money markets, like with old pre-collapse Russia
Of course things that have no designated hour time/set, such as unregulated services, artists, implementing new technology, can charge more to recover costs and fund further development. So it is possible form someone to charge 6+ CT dollars/hour as agreed upon by all parties involved. Such as painting a tricked out car for example, something that is personal skill that others can't be taught because of needed skill and raw talent.
Foreign trade would be converted value by estimating what the value to creat such an object would be in our boarder. (Cars: Basic cars, luxury cars, commercial vehicles, boats planes, Electronics, furniture, toys, etc.) We can calulate what their dollar is worth to ours and go accordingly.
So things in foreign lands would be comparable to what they pay for things. If it cost $200,000 yen for a car in Japan, our trade value to them would be about the same, as we always update the exchange rate. However cars coming into the Nation would still only cost us $500 bucks for a new car. Just because they have unreasonable inflation doesn’t mean we would. It would still hold the same value as it did 35 years ago. so years down the road when it costs $300,00Yen for the same type of car in Japan, we still only pay $500 for the same car. (starting to see the picture here?)
So global markets would mean nothing to us as it all costs the same inside of the U.S. the only reason why it means so much now is we are fiat cash, they are fiat cash and when we swing or they swing in value it kills us or kills them as to cost of items go way up or way down.
So something that 35 years ago cost 1 month of wages would still cost the U.S. citizen 1 month of wages instead of one year to three years worth of inflated wages. I.e. Cars being the current $35k+ instead of $500 under this structure.
The stable structure would probably lead other nations to follow suit. Families could still afford to live a quality of life on a single income, and those who work full time could easily afford basic heal needs and education. So we keep freetrade intact without having to be communistis in nature to save our economy and allow everyone a piece of the pie. Those who drive to be super rich can still achive this, markets expand and comeate/grow/advance unlike the communistic nature which kills open markets and shifts power to a small group instead of the nation at hand.
This system would almost wipe out the government's control over the nation finantualy so they would never go for something like this.
We would continue to accumulate gold silver to expand our reserves to help deal with increasing population.
I would suggest to start off with one CT Dollar is worth 1/10th of a troy ounce of gold and freeze it at that. That is the current worth of one hour of typical average income for lower-middle income to have food on the table and heat in the house in todays standard. of course this structure would also lock in the value of gold. (or the commodity in question being used)
So 1/10th of a troy ounce is woth 1 CT dollar now, and still worth 1 CT dollar 150 years from now. Though with advancement in technology, items would only get cheaper as we could produce more with the same ammount of time and effort.
The only inflation of value would be gold, if we increased the value, such as setting 1 CT attached to 1/15th of a troy ounce instead of 1/10th.
Then the value of gold went up, however a car would still cost us $500 CT dollars.(or actualy maybe only $420-300 CT Dollars because we can now make 1.6 cars with the effort it used to take to make 1 car.)
So retierment is still grand and medical and food is still for everyone. So it all ends in, Do you want to work. Those gainfully employed would indeed be gainful in their employment. Those wanting to be bums would still be pennyless bums. There is no fixing lack of effort in a human.
If you don't want to work or do anything, you still have the freedom to starve if that is what you really want to do.
OK Folks those armed with shotguns, now is you turn to shoot this full of holes. I don’t have my full structure down but hopefully enough to flesh out the concept.