Major Coin: Understanding Cryptocurrency for Safe and Effective Trading

A Brief History of Money II: The Gold Standard and Why Money Needs to Change

Stable: When talking about currency, a standard of value which doesn't widely fluctuate in value or get reduced in value due to the high price of another commodity, such as a good or service.

Why Money Needs to Change

Nothing in this world is without flaw. And so, at any time, anything can be improved on. Sometimes the flaws are so big you can't see anything else besides it. Sometimes they are small annoyances we never give a second look to until a visionary comes along to help us see it. But as we look back we can see that all invention moves toward the inevitable and makes what was thought a luxury in the past, an obvious standard of living for the future. The world is becoming more complex as time passes. With increasingly complex problems, we need increasingly complex solutions. Let's take money under the microscope and define our major problems.

First off, for all those fiat folks who claim that cryptocurrency is a speculative bubble, guess what, everything is. You're a bubble, I'm a bubble, Apple inc. is a bubble. It's called entropy. Everything has a lifespan, whether it be a biological life form, a business or an asset. They all follow the same universal principles. The difference in their lifespans has to do with how they are organized. More efficient organization and ability to adapt leads to longer lifespans. If you eat better, you live longer, if a company invests in good employees they will succeed in the long term. Apply that infinitely to all things in the universe. Go ahead, try it, it's kind of fun. As above so below.

But to be more specific about the definition in regards to the economy, we are talking about anything whose price is much more than its true value. The bubble pops when the realization is massively adopted and people sell what they own in whatever it is. Speculative bubbles can happen anytime people get overly excited about a commodity. Like if a rumor comes out (which is untrue) giving the commodity undeserved expectations. Bitcoin is under heavy fire for being nothing but speculation. And at over ten thousand dollars, this may at least be partially true.

But nothing! And I mean nothing is more speculative than fiat money. It has no value whatsoever beyond our belief in it. That is one of the reasons we have market crashes. The fiat economy is so speculative, that banks have been able to sell speculative value for more speculative value on speculation that no one will figure it out before it's too late. Yea, digest that one. That's how the 2007 crash happen. Bad loans were bunched together and sold as bigger packages of bad loans. And eventually it all came crumbling down, because well, no one was getting paid because the money wasn't there.

In the 1920s, the crash was predicated on many things, but one of the most important was the irresponsible behavior of the banks and a moment where people lost their faith in their money. They had only to question the value of the money and it fell apart. That is of course, true of all things, even gold. The intrinsic value of anything is circumstantial, but with gold being a precious metal, it tends to hold that intrinsic value better due to its utility in our physical environment. Paper money without backing is good for starting a fire in the fireplace and sometimes as we have seen, starting a fire in the fabric of our economy.

Governments may print and issue currency, but banks can produce 'wealth' so to speak. Banks made their business loaning out money at an interest rate. And they use your savings to do so. They paid you an interest rate too. It was a bit lower than those who were borrowing and that's how they net a profit.

But then banks started doing something really terrible, which was essentially a crime then, but which is now common practice. They started loaning out more money than they had on the speculation that there wouldn't ever be enough people coming to take their money out in any given time frame. It's called fractional reserve banking and it allows large institutions the power to make money out of thin air. When you and I do it, it's called forgery and we go to jail. When they do it, it's called business and we all pay them.

In my opinion, it is a dangerous system and a fragile system in which we have very little control. Several institutions with many intelligent people work day and night to keep it stable and regulate it. But as we have seen, they haven't done a very good job. A closed system of wealth should never yield outstanding debt, let alone any debt at all. It goes against the laws of the universe. Money should be used to facilitate commerce and nothing more. We made a massive mistake when we decided to use money to make more money on the backs of the naivety and vulnerabilities of others. This is where the world economy stands at present. It is in many ways thievery lacking any real value to human civilization overall. It teaches people to care more for pieces of paper then life, love and the pursuit of happiness and purpose.

Now that I have you all riled up, it's time to talk about the many other ways that money doesn't work ethically, effectively or efficiently. By the time I am done with this chapter you shall be thoroughly repulsed by the idea of money! (If weren't already). You will want to toss those dead presidents to the wind I assure you! But wait, because there is a better way to use them, as you will see in due time.

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Author's Note

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