The root of the unprecedented planetary crisis - now on the horizon - demands to REquestion everything. The 4,000k year old house of cards is about to unravel… fasten your seat belt or take a tour in the Matrix of all illusions that is materialism.
November 16, 2016
WARREN BUFFETT: the price is what you pay, the value is what you get
What Monetarism will never be able to fix:
There is out there, an interest-free monetary theory using precious metals that seems a lot more preferable over fiat currencies but the real problem, un-fixable by man, is the subjectivity of value. Regardless of the currency use’ fiat or hard, who or what does determine value? The creator of a concept selling the latter to a manufacturer or the success of a particular item on the market regulated by demand and supply? Sound monetary theories want us to believe dynamics within a free-market even out and but the fact that an investor will always be on the look out for cheaper investments and more profits margins, arguing from a value standpoint appears rather moot, if not completely fruitless, especially when the machines’ takeover is already happening right before our very eyes. When free markets speak of the flexibility of value regulated by demand and supply, a fancy terminology, they really do mean and refer to subjectivity. As a matter of fact even street cops will be eventually replaced with robots, each costing the system 6 dollars or so per hour. So what is the actual value of a police officer as we speak? Here is another example: it is a certainty that anybody refusing to buy an (expensive) driverless car will see his insurance premiums skyrocket as soon as the latter become safe enough. Such paradoxical sense of value cannot be resolved with monetarism. Moreover, who will be able to afford such a vehicle when jobs are getting scarce?
The real estate market, going through the roof in many parts of the industrialized world, offers the striking evidence that value is purely subjective, even despite the 2008 market crash. Not only because many could easily obtain a mortgage but the sale pitch comparing home ownership with a human right that any hard working individual is entitled to. The demand just followed that mantra and the unprecedented boom occurred – and still is ongoing. Until the mid 1900’s parent could still hope that their children would manage to keep a family estate, but today it is no longer the case. This because existential values have changed and that booming markets distort the perception of value. However, going back to the pre-industrialization era is impossible because time is a device ever changing the sense of value. Moreover, when monetarism is involved, what doesn’t progress does regress and this means that if not competing continually, one stands to be outpaced by others and lose everything at some point. And this is another side effect of using money as a time device. Although retirement is beginning to sound elusive, having a 401k or an IRA is too a form of competition. Although money could have a positive impact if circulating continually, the mentality of hoarding and accumulating wealth makes it impossible. Hundred years or so ago, the German economist Silvio Gesell (1862-1930) had understood this problem pretty well and drafted a monetary theory imposing negative interest rates on any currency that wasn’t spent after a certain time. Of course, his theory never encountered any major success at all because penalizing ‘dormant money’ seems outrageous. But on the other hand, banking loans are so readily available to overspend that interest repayments steadily slow down the pace of world economy.