Friday, November 3, 2017

There Will Be Total, Absolute Breakdown In The World

Multi-billionaire Hugo Salinas Price: “Money, in its highest manifestation, is gold. However, silver can also be money, though not as aptly as gold.

Money is, has always been, and always will be a commodity. Bitcoins, as well as Dollars and all other currencies today, are not and cannot be money, because they are not commodities…

In trade, all commodities exhibit what is called a “declining marginal utility”, with one notable exception.

Carl Menger (1840-1921, Vienna) illustrated the phenomenon of declining marginal utility by the example of a farmer who owns a wheat field. Suppose he only gets one sack of wheat from a crop. This is the most valuable, and he will use the wheat to feed his family. Each successive sack of wheat obtained by the farmer is devoted to progressively less valuable applications; finally, there comes a point where the farmer uses the last incoming sack of wheat to feed his pet canary.

Thus, as we own more of a given good, the less valuable to us is the last good. The “marginal utility” of a good declines as we have more of that good.

Gold is a commodity: we can make jewelry and ornaments out of it, and it has some industrial applications, and gold is also money because if we are to receive a payment, we will apply virtually no discount on the value of the gold we receive, no matter how great the sum is. We will value the last coin received just as highly as the first. It is the exceptional commodity in this respect.

The “declining marginal utility” of gold is, for all practical purposes, non-existent. That is why it is money, as well as a commodity.

Bitcoins and Dollars – and all currencies – are not “commodities”; they are nothing but numbers and have no substance.

Ever since August 15, 1971, when President Richard M. Nixon ceased to deliver gold to the holders of Dollars who had been promised gold in exchange for their Dollars, the world has not been enjoying the use of money. Instead, it has been using simple numbers, and those numbers are now in the trillions upon trillions.

What took place in 1971 was a deadly disconnect between the rational faculty of humanity and the reality of the physical world.

The rational faculty of humanity / “false money” / the reality of the physical world: false money stands between us, and the physical world in which we live.

Humans can act effectively to achieve their subsistence when they approach the problems of the physical world through the medium of money, i.e. gold and to a lesser extent, silver.

Humanity today is struggling to maintain and further the industrial and commercial activity of the world that was established when gold was money. To realize that what we have today is total chaos, all we have to do is to read the daily papers. This chaos prevails because humanity is no longer in contact with the realities of the physical world: rational human activity is disconnected from those realities, by the false money i.e. the numbers, which lie between us and the physical world upon which we must act according to reason.

- Source, King World News