Sunday, 31 July 2016

Understanding the rigging and wrecking of a money system is simple.

Understanding the rigging and wrecking of a money system is simple.
A giving of something (Goods or work services) for nothing expected in return, is a gift.
A swap trade of things on the spot, at the same time, is a barter trade. It normally involves a haggle over value (Who gets how much for what). It is clunky due the double coincidence of wants. The need to find a trader that wants what you have and haves what you want, before a swap trade can happen. It makes producing perishables for trade very risky.
A swap trade of things with a part not being provided on the spot, with an agreement that the other part will be provided by the other party at a later time, is a contract of credit. It normally involves a haggle over value (Who gets how much for what) and an assessment that the later payment party can be trusted and has the sustainable natural resource ability to complete their end of the deal (Creditworthiness).
A record of the outstanding IOU part of a contract of credit, can be done in various ways. In the heads of the traders. On coins, paper or tokens was predominant in old times. In modern times written on paper or in a computer has become predominant. Anything but that in the heads of traders are physical representations of credit.
When credit becomes involved, the swap trade has evolved from a barter trade into a money system funding structure for trade.
If a money system grows beyond two traders and the physical representation of the outstanding IOU parts of credit become transferable among traders, they evolve into currency.
It smooths the double coincidence of wants, as traders can exchange goods for currency they can then wait to redeem (purchasing power) at a later time, with more choice.
It makes the production and trade of perishables less risky.

It makes large mismatches of credit value able to be smoothed by way of repayment via a greater number of installments than the full value.

A money system funding structure hub acts as a match making focal point of credit for traders who have things surplus to their own needs that are seeking other traders in the same situation.
It is essentially an old fashioned trading post with a modern innovation of a money system to make things easier.
As the number of parties within a money system grows, in order to keep it honest and as useful as possible, a credit clearinghouse administration is required. To ensure that something real was provided into the money system in the first instance and that the sustainable physical means exists to cover the IOU portion for every unit of currency in existence.
That every unit of currency is extinguished from circulation when it is finally redeemed for the outstanding owed value of the credit contract it represents.
Things get out of whack if the administration fails to keep the system honest or the administration itself becomes dishonest.
No matter who is administering the system, private - state or religion, if anyone is able to sneak currency into the system, of which the first part of the credit deal was never provided to the money system or obtain credit without any intent or means to complete their part of the deal (Counterfeit Credit), then successfully pass it off as legitimate purchasing or lending power, they will illegitimately monopolise the the real wealth of the system by fraud and eventually destroy value and faith in the system.
At present the money systems within, or involving groups of nations, are so far removed from the base fundamentals of money, counterfeit of credit so prevalent, that the level of inequality is evolving into violent struggle between honest participants frustrated at why ends do not meet for them, and the counterfeiters trying to keep control of and divert attention away from the imperialist pyramid control fraud they have built.