"The first is that it should be a store of value."

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RayTomes's picture
Status: Bronze Member (Offline)
Joined: May 20 2009
Posts: 67
"The first is that it should be a store of value."

This is the first chapter that got me to think about something a little differently. I had always regarded money as a kind of chain letter that eventually must come unstuck. Of course in the old days that wasn't necessarily so if we do really obey "The first is that it should be a store of value". Soon you say "the US dollar pretty much constantly loses value over time – a feature which punishes savers and enforces the need to speculate and/or invest". There is a lot of truth in that sentence. It has become such a mark of our age that even intelligent people accept it as a normal thing to have to speculate in investments.

Of course there is not and never has been a perfect store of value. In extreme circumstances value will be lost even without any wrongdoing by government agencies. For example, if there were a million old retired people with lots of savings and only a thousand people left in the work force, then those savings cannot cause the thousand to be able to produce enough food for the million. My example is extreme, but fluctuations in demographics are very important as causes for depressions. The present demographics are not indicative of us entering a depression now even though unemployment is climbing rapidly.


pleaseremoveme's picture
Status: Silver Member (Offline)
Joined: Jan 24 2009
Posts: 115
Re: "The first is that it should be a store of value."

But it should also be a medium of exchange, and that is an important cause of trouble: the more money is used as a store of value, the less is available as a medium of exchange. The purpose of all the quantative easing is to offset a shortage of money for exchange that is the concequence of more and more money being used as a store of value.

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