Enter the Bitcoin, I think if he wants a solution he should look at bitcoin a deflationary currency for tips.
but it bothers me to see this contradition in the article how he says, that bitcoin is a self fullfilling prophecy that people will accept it yet just a few paragraphs down claims that the reason people use gold was because people thought it was of exchange value... I'm confused
Gold’s value comes in part because it has nonmonetary uses, such as filling teeth and making jewelry; paper currencies have value because they’re backed by the power of the state, which defines them as legal tender and accepts them as payment for taxes. Bitcoins, however, derive their value, if any, purely from self-fulfilling prophecy, the belief that other people will accept them as payment.
and then ....
Even when people relied on gold and silver coins, what made those coins useful wasn’t the precious metals they contained, it was the expectation that other people would accept them as payment.
He is completely ignoring the fact that someone sometime had to begin accepting coins because they were a useful measure of exchange... can you see the similarities with a certain...
to save you the trouble of reading it, people bartered the most useful item of exchange. Bitcoins strength is it's security (administered by the miners) and also the ease with which it can be transferred converted into any form of goods from point A to B. I've been looking at online adds with people trading video cards, services directly on the forums for Bitcoins... I think something is happening here and this article may make things clear.
http://moneymorning.com/ob-article/schiff-us-will-win-currency-war.php?code=3243#.UW3uJbXvs-cMaybe it will become apparent to you after reading that article that there is something very disturbing happening... The markets have always crashed when the stock markets reach record highs... I know economic theory, the cost of hiding and preventing the markets to autocorrect themselves is devastating...I am very afraid.
http://www.bloomberg.com/news/2013-04-16/bitcoin-dreams-endure-to-savers-crushed-by-cpi-argentina-credit.htmlThe emergence of moneyAnatolian obsidian as a raw material for stone-age tools was distributed as early as 12,000 B.C., with organized trade occurring in the 9th millennium.(Cauvin;Chataigner 1998)[15] In Sardinia, one of the four main sites for sourcing the material deposits of obsidian within the Mediterranean, trade in this was replaced in the 3rd millennium by trade in copper and silver.[16][17][18][19]
As early as 9000 BC both grain and cattle were used as money or as barter (Davies)(the first grain remains found, considered to be evidence of pre-agricultural practice date to 17,000 BC[20]).[21][22] The importance of grain with respect to the value of money is inherent in language where the term for a small quantity of gold was "grain of gold" <http://books.google.co.uk/books?id=3FomAQAAIAAJ&pg=PA62&dq=weight+of+one+wheat+grain&hl=en&sa=X&ei=jzXfT47IF8Wp0QW_37mKCw&redir_esc=y#v=onepage&q=weight%20of%20one%20wheat%20grain&f=false The Bankers magazine, Volume 25] Herring, Farrell and Sherman 1871 – Retrieved 2102-06-18</ref>[23]
In the earliest instances of trade with money, the things with the greatest utility and reliability in terms of re-use and re-trading of these things (their marketability), determined the nature of the object or thing chosen to exchange. So as in agricultural societies, things needed for efficient and comfortable employment of energies for the production of cereals and the like were the most easy to transfer to monetary significance for direct exchange. As more of the basic conditions of the human existence were met to the satisfaction of human needs,[24] so the division of labour increased to create new activities for the use of time to solve more advanced concerns. As peoples needs became more refined, so indirect exchange became more likely as the physical separation of skilled labourers (suppliers) from their prospective clients (demand) required the use of a medium common to all communities, to facilitate a wider market.[2][25]
Aristotle's opinion of the creation of money[6] as a new thing in society is :
When the inhabitants of one country became more dependent on those of another, and they imported what they needed, and exported what they had too much of, money necessarily came into use.[26]
The worship of Moneta is recorded by Livy with the temple built in the time of Rome 413 (123); a temple consecrated to the same god was built in the earlier part of the fourth century (perhaps the same temple).[27][28][29] The temple contained the mint of Rome for a period of four centuries.[30][31]
