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Old 03-11-2010, 04:02 PM   #1
Fredkc
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Join Date: Sep 2008
Location: Riverside, ca.
Posts: 898
Default ... on debt as money

Doug Casey on Surviving Financial Apocalypse Now


Interviewed by Louis James, Editor, International Speculator


Let's talk about debt.

Doug: Sure. This is a story that's going to end very badly for a lot of people. I've said this before, in many different ways, but I think it's worth saying again, because most people just don't grok it…

L: Grok. From the Martian word for "drink" and "understand." In Heinlein's novels, water was a critical element of Martian culture – makes sense, for a desert planet. When you grok knowledge, as when you drink water, you don't just hold it in your mouth and spit it out. You take it into yourself, it goes into your blood, and eventually into every cell in your body; it becomes part of you. This is heavy-duty understanding… Sorry for jumping in with the spontaneous lecture. I just suspect many readers will not know the term.

Doug: Or put another way, in the negative case, most people just don't get what money really is – and what it isn't. They take it as a given, as part of the cosmic firmament. But it's not. A prime example of this is the mistaking of debt for money, a phenomenon David Galland pointed out in a Casey's Daily Dispatch a few weeks ago. This is why the entire world's monetary system today is headed for a disastrous failure. And this is absolutely inevitable. There's no way around it.

L: Why?

Doug: Because you can't use debt as money. As I've pointed out before, Aristotle, in the fourth century BC, was the first person to define what money is. And what is it? It's a store of value and a medium of exchange.

The paper we use today is a medium of exchange – it got that way because governments made it illegal not to accept it – but it's not a good store of value. And it's rapidly and radically becoming less of a store of value. What we use as money today is actually not money; it's currency. Technically, that's simply a word that indicates a government substitute for money.

What does make for good money? Again, Aristotle gives us the answer. It's something that has five characteristics: it's durable and divisible, consistent and convenient, and has value in itself.

[ the rest... ]

Note to Peace & Love;
I you don't know of it already, Lew Rockwell's site is one of The Best (INHO) on "real" financial thinking, and also re. the politics of freedom.

Fred
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