How Does Money Work?!
let me preface this with one statement - this is a wide open topic with no "immediate" relation to CREI, REI, or any I ... 
i still haven't figured out how money works in the states, here. if none (less than half) of it's backed by gold anymore, then how in the hell can't i just wire some obligatory arrangement of numbers across the world and buy freshly removed african elephant tusks from Sierra Leone? I need to figure out BEFORE I GO TO SLEEP TONITE how i can have my share of the dream in ambiguous paper money. i have yet to see an actual million in cash in person. i've seen pics and i've seen it on paper (almost even made that paper mine) before but i've never counted it with my hands.
since nobody ever comes to do biz with the standard silver briefcase full of dead prezes, i want someone to really think and tell me how i can get a long account from somewhere without havin to break knees or necks to get it. 
as dumb as this is on the cover, have you ever really thot about how certain people get to use this and others don't?? it's not so light of an issue.
man, i need sleep - this is what 46 straight hours'll do to ya!
jack are you asking what makes our money worth what its worth?
[addsig]
nah, i just want to know how to get some. not just check writing money - the kind that trump has access too - the invisible boundless kind. hahaha.
... or just thots on how it should be done will suffice.
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actually wheeler, now that i've reread your statement - ... YES! i want to kno what makes our money worth what it's worth too ... this will help get me where i'm going.[ Edited by jackman on Date 12/22/2003 ]
I am no economist so let me say i am not speaking as an expert on the subject. so i am going to S.W.A.G it
(Sophisticated Wild A$$ Guess)
Bonds, interest rates, inflation, federal reserve........economy...etc.
Phuewy on all of it. I think it has boiled down to perception. We are told it is worth so much (what will buy a loaf of bread) and we beleive it. Think about it there are enough diamonds in circulation to render them worthless but, we are told they are worth so much and we beleive it, even pay it (thanx to women)
ad in convenience, who wants to lug around a bunch of big heavy stuff to trade. You cant chop up one acre of land into 1 square inch of property and trade it for a meal! So money in my opinion is a marker you hold for when you want to trade it. Offer enough of your markers to someone and you just "bought" something
So the idea is how to get enough of the light weight, easily recognized, perceived valued markers to TRADE for anything you want when you want to, without going to jail. even the "markers" get heavy,and stolen so they got replaced with debit cards, creditcards, wire transferes...etc.
hmmm. ?? im working on that. maybe some of you could give us some ideas??
I have one: I think it boils down to sales and algebra.
Youve got to sell one into believing there stuff is not worth many of your markers then you gotta make the other side beleive you stuff is worth MORE of there markers..MUCH MUCH MUCH more so they have to borrow some of someone elses to give you!!!
_________________
B.G. & Wheeler D. LLc Inc.
(A division of: Half Vast Enterprises)
[ Edited by WheelerDealer on Date 12/22/2003 ][ Edited by WheelerDealer on Date 12/22/2003 ]
beautifully put wheeler - that sounded like a bit more than a swag.
so, markers huh ...
and all this time i thot markers were extra long, tubes of lipstick and fingernail polish - at least that's what my little girl (2yr old) shows me.
The dollar isn't backed up by gold anymore, it is simply backed by the belief that our government isn't going anywhere, there is and will continue to be a liquid market for dollars, and the source of the dollar is controlled (US government is the only entity that can make more of it to dilute it)
The value of the US dollar rises and falls in relation to other countries currencies directly and indirectly to the above.
Real world example of effecting the dollar: a terrorist ploy to destabalize our economy - print billions of US currency and get into circulation thereby destabalizing the dollar because the above would not be believed anymore.
As far as how do you get ahold of them in massive quanties? Only 3 ways I know of.
Spend less than you make.
Print your own for a short time before you go away for a long time.
Convince others with huge quanties of money that you can help them keep more of it, or get more of it.
I'm waiting for Lufos's explanation. He adviseed FDR to go off the gold standard and is Allan Greenspans confidant. LOL
interesting rehab. so it's not even close to 50% anymore, huh?!
hey! anyone wanna start a new gubbyment with me running it?! i have very cool money with rei gurus on the bills!!
sammy, i almost knew from the beginning of this thread that my most entertaining friend Lufos would have a contri here. hahaha.
i'm waiting too.
what is a gubbyment? Nevermind im a duntz i get it.
_________________
B.G. & Wheeler D. LLc Inc.
(A division of: Half Vast Enterprises)
[ Edited by WheelerDealer on Date 12/22/2003 ][ Edited by WheelerDealer on Date 12/22/2003 ]
Yes, Yes, Dear Allen he just will not listen. Keeps trying to make things work just by adjusting the interest rate. Really,
Banker Fugger tried that when he excused Charlie da first from having to pay off his loan. Dear Charlie had pledged the Whole Damn Holy Roman Empire. All that Banker Fugger asked was permission to loan money throughout the Holy Roman Empire. He got it ! Small matter, just changed the whole world. Suddenly it was ok to be a Merchant. Big improvement, those damn swords were always tripping you up.
When we went off the Gold Standard the ploy was we would substitute this strange thing called an Erg. It was supposed to represent a unit of human energy. You know how long does it take one man to plant 10 rows of rice. Or how long must you shovel dirt to equal a pile about six feet by five feet.
Many years after the Air Force trying to keep me out of the Pentagon, a corrupting influence sent me to the London School of Economics. I asked them the question. Define an Erg? They hemmed and hawwd and finaly threw it back to me. Ok Yank (another word for a Jerk in Grt. Brit) suppose you give us a term. Quickly I volunteered. an UGH.
Shortly afterwards I was returned to the US. Wonder why?
Needless to say way back then nobody could come up with a good measurement so, they did the next best thing.
They asked Kid Yellow Gloves, then reigning King of the Conmen. His advice, on how to handle the money problem,. was quickly accepted.
PRINT IT.
Guess what the Treasury has been doing it ever since.
No I am not Republican, nor a Democrat. I am a searcher for Green Piece, never had a green piece, wonder what it is like?
Hope fully Lucius
You realy wanna know how the money works Jackman? No you dont. You do?
Well, why dont you read this article and then let me know if you got more questions so I can ask Allen to respond to them direclty. By the way, smart guy that Allen, on his house he got and COSI/COFI mortgage and sugest you do the same on your scooter
http://www.apfn.org/apfn/money2.htm
[addsig]
As always Lufos comments leave me scratching my head but a little bit wiser. Thanks man!
I don't know if they still do it but the Horseshoe Casinos used to display 1 million in cash.
If your a big gambler and are willing to take a big risk read the book "Nothing Down for the 90's". The book will get you to thinking. One big word of caution the author went broke.
This book changed my way of thinking about RE. I don't use a lot of the stuff in the book but I look at RE diferently now.
lacashman, was it truly a mil? i've seen a few displays like that but always thot they're probably just a top bill and styrofoam underlays.
omega! man, i can't always clearly understand what you're saying gramatically (but that's ok), but that article was great! that's exactly what i was asking - since it's all fake money anyway, why can't i have access ... great post, man!
kingmonkey, i feel the same - i know i'm learning something when lord lucius speaks, i'm just not always sure what! hahaha. thass the beauty of his talk, every tidbit of info learned, comes into play at some point in ur life - even matrices (the fourth and highest level of calculus i took at pitt). amazing how that happens!! that's why i love to listen to people older and wiser than i.
jackman,
Benny Binion (Horseshoe Club) had a large display of a horseshoe built with 10 President Wilsons ($100,000.00) around the horseshoe.
Visitors for many years would have their picture taken in front of the display.
I asked Benny if he was drawing any interest on the money, his reply was "everyday in the casino."
John $Cash$ Locke
To understand how money works, you need to look at the evolution of money.
Imagine money does not exist, and we're living un the USA 200 years ago. I am a farmer and grow corn. I have all the corn that I need, but I need pork. My neighbor wants corn, but only has pork. We would haggle over how much corn is worth one pig, come to an agreement, and then trade. This is money in it's most crude form. If people suddenly hate pork and no one buys it, the money system has failed.
That is a simple transaction, but what if I want pork, the guy with pork wants chicken, the guy with chicken wants beef and the guy with beef wants corn??? Suddenly the equasion (to obtain pork) becomes a lot more complex. ...And what if I needed to travel 100 miles to buy pork? How would I transport that much corn? Can you imagine how long it would take you to get the things that you need??? Solution: Money.
Money is simply a medium that can be exchanged for goods and services and is used as a measure of their values on the market. Money, of course, must somehow reflect value. Obviously dirt and rocks are not a good medium to use for money, because they are abundant. Gold and silver have been prefered mediums, because they are impossible to counterfeit. They can be found, but that requires risk and work.
Money is simply an idea. Gold only holds the value that we give it. If suddenly gold were considered ugly and useless by everyone, the gold market would crash. Same holds true of paper money.
Money does, however, follow the laws of supply and demand. If suddenly everyone found hundreds of pounds of gold in their back yard, the value of gold would drop. The same thing happens when the federal government prints money that does not replace old currency. The supply of money increases without any goods or services being added to the economy. The effect is the overall value of money declines. That is what we call inflation.
Imaginary money is created all over. Isn't an "IOU" (I owe you) imaginary money? What if you have an IOU for $100? Couldn't you sell that piece of paper to someone for $90 and let them collect it from your buddy??? Welcome to the secondary note market!
Similar things happen in the stock market. When a company needs money, they might sell off a portion of the company in exchange for money. After an IPO, that portion of the company can be bought, sold, traded, gifted, just like that corn that we were talking about above.
Finally, perseption is NECESSARY for our system to work. Afterall, if the dollar lost it's value, how many of us have as much GOLD as we have "money"? Is the barter system a better system??? It isn't, as long as the system maintains it's integrity.
My biggest complaints about how the government does things are these.
#1. Inflation: Inflation is simply legal counterfeiting of money by the government. Every time this happens, they've stolen a fraction of a penny from each and every dollar in my wallet. Pretty Clever, ey!
#2. Dollars vs percentages: Have you noticed that when you're paying the government, they take a percentage of what you make (tax bracket, sales taxes, etc.) Whereas you're in an "income bracket" ($40,000). Percentages are always the same. Income brackets, however, are not. As the economy inflates, more and more people move into higher tax brackets, YET have less spending power than they did before.
As far as making more of it...it's easy. Money grows on trees! It's true. Sometimes it looks more like an apple, orange, grapefruit, or wallnut. It may be the tree itself that you have to process. All you have to do is take a raw product, transform and transport it, and you've created money (aka value). 70% of the surface of the earth is covered in water. Yet take a bit of that stuff that is practically free for us, add some sugar and color, and suddenly it's worth about $2 per gallon courtesy of Coca Cola. Yes, my friend, money does grow on trees. You just need to know how to pick it!
Here are a few articles from another favorite website of mine that might shed some light on your questions.
http://money.howstuffworks.com/bank.htm
http://money.howstuffworks.com/question237.htm
http://money.howstuffworks.com/credit-card.htm
http://money.howstuffworks.com/startup-capital.htm
http://money.howstuffworks.com/mortgage.htm
http://money.howstuffworks.com/stock.htm
http://money.howstuffworks.com/credit-card.htm
...speaking of diamonds, this article is fascinating and proves your point
http://howstuffworks.lycoszone.com/diamond.htm
Good Post Hibby!
Reminds me of the monetary economics I read back in B-School(All thats is of no use...Iam learning more out here on this site!!! from some of the real pros!)
While I concur with you on the inflation part,I think its a necessary evil,too much of inflation is bad for the economy and a no inflation as its maintained in a totally controlled enviroment(are there is any such markets anymore?) leads to stagnation of the economy and thats why they have the federal bank as a regulatory mechanism,to maintain the equlibrium,purportedly a regulatory mechanism atleast as they claim!!!
well this is my views...lol...read it with a caveat!!!!!
john $cash$: very cool. i kno of benny binion b/c of my slight gambling problem about 10 yrs back. hahaha. but i've never been to horseshoe to see that - actually never gambled off the "new" strip. so 'ol wilson is on the $100k note huh?!
hibby: great post too, u don't sound like a youngbuck at all. i thought i remembered you saying in a post a few months ago that you were fairly young (if i'm wrong, accept my apologies). u have a good head on your shoulders!
Jackman...27 years old, and thank you!