Three entries back in this blog the subject is "National Debt and Money Supply"
The pro and con positions got bogged down in a dispute about whether or not the Money Supply equaled the National Debt.
The problem was that money exists as a number in so many accounts in so many different places that if some of those accounts are not included then the computation will certainly result in a difference. The con position can then say that the premise is wrong (you fool). It does not add up.
If all dollars in the money supply are given a unique serialized identity they are then defined as a singular entity instance of the collective class of the object money. Each uniquely serialized unit may be associated with a total aggregate of money expressed as a totalized number sum in some account. However it is not necessary to go to each account in which the money may exist in order to get a total of all money in the money supply. Go directly to the dollar units an count them, regardless of account.
The National Debt is an account. It is the parent of child sub accounts. Among all the child accounts they hold the total of the National Debt. Create a comprehensive list of all the accounts and the total is the sum of the parts and debt equals money supply (or not). Accounts are always changing as new ways are devised to slice and dice money into different accounts. The supply of money is however fixed exactly to the dollar unit at any given time.
Count each of the unique singular serialized dollars in the system and it equals the total dollars in the total account. Call it the National Debt or call it the Money Supply. It is the same.
Since money exists forever once it is brought into existence as a serialized unit, there is a child class of Money Supply called Money Suspended from Circulation (withdrawn from circulation and therefore, in that state, not having access to its own methods that money in circulation has) as well as a child class called Money in Circulation. The state of money can determine what methods and behaviors it has access to.
A sub class of Money in Circulation might, in association with the account it is in, Money in Circulation, Foreign. Money in Circulation could be sliced and diced to a number of sub-classes based on its relationship to other object like time and place. Sub-classes are limited only by their information value.
Saturday, October 27, 2012
Object vs Functional Approaches to System Design
Object Oriented System Design and Implementation is far superior to Functional Oriented System Design and therefore currently dominates as the system of choice for the creation of integrated complex information systems.
Legacy functional systems are being redesigned in accordance with object oriented methodologies because they are more efficient in creating and controlling complex conceptual information systems.
Money is the product of functional design and is a legacy system requiring redesign because the system is failing.
Money is the most entrenched functional design based legacy system in the world today and the most resistant to change.
While the business of money incorporates object oriented design concepts they are employed as an object approach to redesign of lower level functions. Object oriented system design however is a totally integrated approach. Usually this approach is from the top down. However when it is from the bottom up, it builds an inertia into reforming the next upper level. Eventually it evolves to the top. It must evolve to the top unless there is resistance to its progress by those that do not benefit, or are in fact seriously harmed by its progression.
The closer to the top that the object oriented approach of mapping functional components of legacy relational systems to things and their methods the greater the resistance to change by people who are closely related to and benefit from the existing inefficiency of the legacy functional designed based system.
Double entry bookkeeping was created 4 or 5 hundred years ago. While the concept may remain valid, its functional implementation is becoming increasingly less efficient and must be redesigned.
Object oriented methodology is the only way to redesign the monetary system.
Money is a Super Class object. In order to be an object it must have a unique identity at the instance of an object level. A serialized dollar unit of value. That is the object building block.
There is no other alternative to positive money replacing debt money. Debt is a lower level child of money, not the parent. Functional creation of money that only gives it function can no longer be the fundamental driver of the monetary system purpose which is to enrich banksters.
The money must exist as an object to serve the public purpose, not a functional product numerical result of an accounting debit and a credit object to serve the banksters.
Money as a number was designed to be manipulated by people running the system in which it is used. It is only a number that knew how to do nothing other than what the creators of number wanted to do with it.
Legacy functional systems are being redesigned in accordance with object oriented methodologies because they are more efficient in creating and controlling complex conceptual information systems.
Money is the product of functional design and is a legacy system requiring redesign because the system is failing.
Money is the most entrenched functional design based legacy system in the world today and the most resistant to change.
While the business of money incorporates object oriented design concepts they are employed as an object approach to redesign of lower level functions. Object oriented system design however is a totally integrated approach. Usually this approach is from the top down. However when it is from the bottom up, it builds an inertia into reforming the next upper level. Eventually it evolves to the top. It must evolve to the top unless there is resistance to its progress by those that do not benefit, or are in fact seriously harmed by its progression.
The closer to the top that the object oriented approach of mapping functional components of legacy relational systems to things and their methods the greater the resistance to change by people who are closely related to and benefit from the existing inefficiency of the legacy functional designed based system.
Double entry bookkeeping was created 4 or 5 hundred years ago. While the concept may remain valid, its functional implementation is becoming increasingly less efficient and must be redesigned.
Object oriented methodology is the only way to redesign the monetary system.
Money is a Super Class object. In order to be an object it must have a unique identity at the instance of an object level. A serialized dollar unit of value. That is the object building block.
There is no other alternative to positive money replacing debt money. Debt is a lower level child of money, not the parent. Functional creation of money that only gives it function can no longer be the fundamental driver of the monetary system purpose which is to enrich banksters.
The money must exist as an object to serve the public purpose, not a functional product numerical result of an accounting debit and a credit object to serve the banksters.
Money as a number was designed to be manipulated by people running the system in which it is used. It is only a number that knew how to do nothing other than what the creators of number wanted to do with it.
Clever, Very Clever Stephanie Kelton
The prior post discussed a debate between two positions on the National Debt.
At this link
http://neweconomicperspectives.org/2012/10/pete-peterson-has-won.html
Stephanie Kelton presents a position that we have already lost the debate to Pete Peterson:
The US is broke. Government deficits are de facto evidence of a government gone wild. We’re careening toward Greece. Entitlements are the root cause of our fiscal woes, and the Chinese are coming for our grandchildren. How many Americans believe this garbage? My guess? Most of them.
Pete Peterson has won and the American people have lost. There is no effective counter narrative, not even from the left. Nearly all “progressives” have accepted the fundamental premise that the federal government is like a great big household.
Very sly, Stephanie and thankyou for confirming at the end of the comments you cleverness in framing it this way in your response to the quote of the previous commenter:
“We just have to fight harder. And I’m willing to help.”
Excellent. Maybe there is a method to my madness….
What we need is a debate. Maybe like the prior post in this blog.
What we have is a debate. Between doves and hawks. Now a three way debate with Owls. The Two Party Doves and Hawks own the debate like they own politics with a joint agreement that no third party intrude to crash their framing of the issue.
There is no opposing issue nor position allowed as far as they have framed it. Deficit reduction is required. Should we have more or less?
Let's go head to head on the issue of reducing the deficit or increasing the deficit.
First job: Reframe the issue in terms other than deficit.
The National Debt is our National Savings. It is our Money Supply.
At this link
http://neweconomicperspectives.org/2012/10/pete-peterson-has-won.html
Stephanie Kelton presents a position that we have already lost the debate to Pete Peterson:
The US is broke. Government deficits are de facto evidence of a government gone wild. We’re careening toward Greece. Entitlements are the root cause of our fiscal woes, and the Chinese are coming for our grandchildren. How many Americans believe this garbage? My guess? Most of them.
Pete Peterson has won and the American people have lost. There is no effective counter narrative, not even from the left. Nearly all “progressives” have accepted the fundamental premise that the federal government is like a great big household.
Very sly, Stephanie and thankyou for confirming at the end of the comments you cleverness in framing it this way in your response to the quote of the previous commenter:
“We just have to fight harder. And I’m willing to help.”
Excellent. Maybe there is a method to my madness….
What we need is a debate. Maybe like the prior post in this blog.
What we have is a debate. Between doves and hawks. Now a three way debate with Owls. The Two Party Doves and Hawks own the debate like they own politics with a joint agreement that no third party intrude to crash their framing of the issue.
There is no opposing issue nor position allowed as far as they have framed it. Deficit reduction is required. Should we have more or less?
Let's go head to head on the issue of reducing the deficit or increasing the deficit.
First job: Reframe the issue in terms other than deficit.
The National Debt is our National Savings. It is our Money Supply.
National Debt and Money Supply
This is a fascinating debate at Debate.org:
http://www.debate.org/debates/The-United-States-National-Debt-is-the-Amount-of-Money-the-United-States-has-Created-not-Borrowed/1/
The debate:
My position is that the United States National Debt is not how much the United States has "borrowed", but it is how much the United States has created.
Con Position:
If my opponent is correct that national debt = total amount of money created, then the total money supply should exactly equal the national debt. It doesn't.
The debate proceeds based on the fact that there is a dollar amount difference between numbers reported as National Debt and Money Supply.
The National Debt is equal to the nation's Money Supply
The National Debt is not equal to the nation's Money Supply
The con position takes the debate down into the weeds of numbers that do not jive so the fundamental issue gets lost in the weeds and it goes around in circles at that level.
The pro position is the one I vote for. The con position's only defense is to take the issue down into conflicting number weeds. This is a "bottom up assembly" approach that negates the top level statement because the numbers chosen at the bottom do not add up.
The pro position in order to defend has to specify what numbers are missing at the bottom that, when include, add up and validate the premise. In order to do that acomprehensive top down breakdown of the entire conceptual structure to the granular level is required.
Generally, the system was built from the bottom up to the benefit of the system designer(Banksters) as well as using the designer's framing of the problem domain in terms of debt (money borrowed) rather than the framing of a system designer that has the public interest objective as the top level objective from which a top level breakdown to supporting elements is made to serve the top level proposition.
Bottom Up Assembly of a conceptual system is dominated by a high (variable from predominant to complete) degree of close relationship to the functional approach of what functional processes are required in relationship to other functional processes. Things needed to do these processes are then created that own things upon which to operate.
Top Down Breakdown of a conceptual system is dominated by a high (variable from predominant to complete) degree of close relationship to the object oriented approach of what a thing is in relationship to other things. Processes necessary to implement these relationship are then created. They are created as methods (functions) owned by the objects in the system that are invoked by passing a message from one object to another.
http://www.debate.org/debates/The-United-States-National-Debt-is-the-Amount-of-Money-the-United-States-has-Created-not-Borrowed/1/
The debate:
The United States National Debt is the Amount of Money the United States has Created not Borrowed
Pro Position:My position is that the United States National Debt is not how much the United States has "borrowed", but it is how much the United States has created.
Con Position:
If my opponent is correct that national debt = total amount of money created, then the total money supply should exactly equal the national debt. It doesn't.
The debate proceeds based on the fact that there is a dollar amount difference between numbers reported as National Debt and Money Supply.
The National Debt is equal to the nation's Money Supply
The National Debt is not equal to the nation's Money Supply
The con position takes the debate down into the weeds of numbers that do not jive so the fundamental issue gets lost in the weeds and it goes around in circles at that level.
The pro position is the one I vote for. The con position's only defense is to take the issue down into conflicting number weeds. This is a "bottom up assembly" approach that negates the top level statement because the numbers chosen at the bottom do not add up.
The pro position in order to defend has to specify what numbers are missing at the bottom that, when include, add up and validate the premise. In order to do that acomprehensive top down breakdown of the entire conceptual structure to the granular level is required.
Generally, the system was built from the bottom up to the benefit of the system designer(Banksters) as well as using the designer's framing of the problem domain in terms of debt (money borrowed) rather than the framing of a system designer that has the public interest objective as the top level objective from which a top level breakdown to supporting elements is made to serve the top level proposition.
Bottom Up Assembly of a conceptual system is dominated by a high (variable from predominant to complete) degree of close relationship to the functional approach of what functional processes are required in relationship to other functional processes. Things needed to do these processes are then created that own things upon which to operate.
Top Down Breakdown of a conceptual system is dominated by a high (variable from predominant to complete) degree of close relationship to the object oriented approach of what a thing is in relationship to other things. Processes necessary to implement these relationship are then created. They are created as methods (functions) owned by the objects in the system that are invoked by passing a message from one object to another.
Friday, October 26, 2012
noun is a verb --
I will add this as a totally original thought to the body of information that Google searches.
It is an original thought expressed in quotes that when entered in a Google search prior to my introduction of the expression did not exist.
"thing is what a thing does only if it does one thing"
A thing is only what a thing does if it only does one thing.
A thing is defined by what it does only if it does one thing and the thing it does is exclusive and not related to no other thing.
Noun equals verb
Who I am is what I do only if I do one thing.
or
Who I am is the composite of all things I do?
Nothing can be discretely defined by what it does unless nothing else does what it can do.
It is an original thought expressed in quotes that when entered in a Google search prior to my introduction of the expression did not exist.
"thing is what a thing does only if it does one thing"
A thing is only what a thing does if it only does one thing.
A thing is defined by what it does only if it does one thing and the thing it does is exclusive and not related to no other thing.
Noun equals verb
Who I am is what I do only if I do one thing.
or
Who I am is the composite of all things I do?
Nothing can be discretely defined by what it does unless nothing else does what it can do.
Money Paradigm: Public Debt is Private Savings
In a prior post I examined the spirited conflict of ideas between Karl Denninger and Mike Norman on Lauren Lyster's program.
Perhaps what we may have here is a failure to communicate. The reason for the failure might be illustrated by the classic face and vase paradigm shift.
http://www.maxdstandley.com/art_info/face_vase.html
Perception shifts from a face to a vase or vice versa depending on which is perceived first.
Some people cannot make the paradigm shift therefore the other object does not exist (is impossible to exist) for them.
It is perhaps entirely only coincidental that the Public Debt is the mirror image of Private Savings as presented by the MMT graph exactly like the illusion above. It can be seen two ways, two different things. Some can't see it as anything other than one thing. Not because of visual perception interference of some kind but as thought process interference.
Looking at the picture as either Public Debt or Private Savings determines what the primary aspect of the picture is and what methods are used to change it. Choosing one or the other determines which leads and which follows and by what mechanisms it does that over time.
What has really happened over time to date to create the symmetrical cyclical chart and what those things were it is what will continue to happen from this date forward. Karl and Mike each claim different causal factors, therefore different conclusions for actions based on their perception of which big picture is chosen.
The face and the vase is the classic example of a paradigm shift. It is a visual example.
I think the day will come when the classic conceptual example of a paradigm shift in our social world will be when society suddenly shifted its view of money from one of debt money to asset money. We currently have a debt money system. How quickly and how easily could the shift be made?
Could it be the next Berlin Wall.
The world does not change quickly. Historically true. However it is changing at an increasingly greater rate (more Quickly). Physical changes directly related to conceptual changes previously constrained the rate of change. In the Information Age, concepts relating to the organization and management of things in our physical world have become increasingly separated from their physical constraints. We can still talk on the telephone like people did in 1910. The physical constraints to doing that (wires) have disappeared.
Because the physical constraint of wires necessary to talk on the phone have literally disappeared, subsequent progress and changes in the less tangible physical world of space and time have happened quicker. The shift from analog to digital information being carried on radio waves was (relatively) painless and quick with great benefit.
Things can change even quicker in the conceptual world. Except for religion.
Might it be possible that Karl will someday see the face instead of the vase and instantly see the light? Or will it be Mike?
I bet on Karl shifting. A shift is a change at the speed of light. Must be a formula to express that.
(When will the last telephone pole be protected as a World Heritage artifact like we put cathedrals on the same list.)
For the MMT people: Can you somehow devise the Public Debt/Private asset graphic to be a Face/Vase visual paradigm shift to illustrate your point?
Neat trick if it could be done but that is exactly what you have to do in the minds of those that you present it to. It must be exciting when you see that shift happen during a presentation. Maybe only a small percentage of those in the room. That however is what teachers thrive on. The light goes on nd somebody gets it.
Money Paradigm: Public Debt is Private Savings
Is that right or wrong?
Is it the better way to look at things leading to better solutions to the problem domain. Positive Solutions that we can't get to by looking at it in any other way? Or, if we don't change our way of looking at the problem will take us into equal symmetrical negative territory below the line balancing in a mirror image increases above the line measuring degree of ignorance?
Now there is an interesting concept to express in a graphic chart: Degree of ignorance related inversely and directly, to the penny, as a mirror image of our inability to solve the problem. Problem solution therefore defined as approaching, over time, the zero point where neither ignorance not problem exist any longer.
Is that the end point goal of the human race on the micro and ultimately macro level.
Macro level: Heaven on earth.
Perhaps what we may have here is a failure to communicate. The reason for the failure might be illustrated by the classic face and vase paradigm shift.
http://www.maxdstandley.com/art_info/face_vase.html
Perception shifts from a face to a vase or vice versa depending on which is perceived first.
Some people cannot make the paradigm shift therefore the other object does not exist (is impossible to exist) for them.
It is perhaps entirely only coincidental that the Public Debt is the mirror image of Private Savings as presented by the MMT graph exactly like the illusion above. It can be seen two ways, two different things. Some can't see it as anything other than one thing. Not because of visual perception interference of some kind but as thought process interference.
Looking at the picture as either Public Debt or Private Savings determines what the primary aspect of the picture is and what methods are used to change it. Choosing one or the other determines which leads and which follows and by what mechanisms it does that over time.
What has really happened over time to date to create the symmetrical cyclical chart and what those things were it is what will continue to happen from this date forward. Karl and Mike each claim different causal factors, therefore different conclusions for actions based on their perception of which big picture is chosen.
The face and the vase is the classic example of a paradigm shift. It is a visual example.
I think the day will come when the classic conceptual example of a paradigm shift in our social world will be when society suddenly shifted its view of money from one of debt money to asset money. We currently have a debt money system. How quickly and how easily could the shift be made?
Could it be the next Berlin Wall.
The world does not change quickly. Historically true. However it is changing at an increasingly greater rate (more Quickly). Physical changes directly related to conceptual changes previously constrained the rate of change. In the Information Age, concepts relating to the organization and management of things in our physical world have become increasingly separated from their physical constraints. We can still talk on the telephone like people did in 1910. The physical constraints to doing that (wires) have disappeared.
Because the physical constraint of wires necessary to talk on the phone have literally disappeared, subsequent progress and changes in the less tangible physical world of space and time have happened quicker. The shift from analog to digital information being carried on radio waves was (relatively) painless and quick with great benefit.
Things can change even quicker in the conceptual world. Except for religion.
Might it be possible that Karl will someday see the face instead of the vase and instantly see the light? Or will it be Mike?
I bet on Karl shifting. A shift is a change at the speed of light. Must be a formula to express that.
(When will the last telephone pole be protected as a World Heritage artifact like we put cathedrals on the same list.)
For the MMT people: Can you somehow devise the Public Debt/Private asset graphic to be a Face/Vase visual paradigm shift to illustrate your point?
Neat trick if it could be done but that is exactly what you have to do in the minds of those that you present it to. It must be exciting when you see that shift happen during a presentation. Maybe only a small percentage of those in the room. That however is what teachers thrive on. The light goes on nd somebody gets it.
Money Paradigm: Public Debt is Private Savings
Is that right or wrong?
Is it the better way to look at things leading to better solutions to the problem domain. Positive Solutions that we can't get to by looking at it in any other way? Or, if we don't change our way of looking at the problem will take us into equal symmetrical negative territory below the line balancing in a mirror image increases above the line measuring degree of ignorance?
Now there is an interesting concept to express in a graphic chart: Degree of ignorance related inversely and directly, to the penny, as a mirror image of our inability to solve the problem. Problem solution therefore defined as approaching, over time, the zero point where neither ignorance not problem exist any longer.
Is that the end point goal of the human race on the micro and ultimately macro level.
Macro level: Heaven on earth.
Thursday, October 25, 2012
Object Class Cash
This document describes the process of getting from a relational data base to an object oriented system:
https://docs.google.com/viewer?a=v&q=cache:YZ9OTnXzBu4J:journals.cluteonline.com/index.php/RBIS/article/viewFile/4470/4558+&hl=en&gl=us&pid=bl&srcid=ADGEEShEy84_x_mBiqWY9wdiu4kAPTX8MCPdoT05ZyHS0yZBq43KVKlJE_1iWKKqTEaPu2v4fO-MF8Vh0p3MTvO4ozf3hUA-P7q9sK9H78jpYgve7pIrOEwOWp__-LOE-Bk1nZd-q8wB&sig=AHIEtbSsjUJ8pOo_B0dbprS2e6FiKDgPJg
It is titled:
A Mechanism for Converting a Relational Data Base Into an Object Oriented Model.
The discussion of the Object Model in the beginning is fairly simple explanation of what it is and what it does. What it does is make information management more efficient.
In the course of information management evolution information was put into relational data bases. Then the object model came along and was a better method of organizing the info existing in relational data bases to a management model of the business enterprise.
The conversion from relational to object model involves mapping things in the relational model to their classes in the object model.
Account is thing in the relational model that has many pieces of information in it that are to be mapped to its object model class. One of those things is Account Balance which in the conversion process maps to the object class called class. Cash becomes an object entity with properties and methods to do things in response to messages to do something sent to the object Cash by other objects in the system that require something to be done by cash. Cash knows how to do many things like take the information sent to it by the requesting object and return a new value to the message sender (new balance maybe) as well as send messages to other objects (if necessary) to do things they know how to do.
As a result of the conversion process, account balance becomes something more than a cell in a spread sheet. It becomes an intelligent object, perhaps with subclasses and maybe even different states of being that dictate different methods that it knows how to do and requirements to pass messages on to other objects in the system to do things they know how to do, maybe even change the state of another object so it can do things that state requires with the information sent to it.
What is important here is that the business world is changing to an Object Model Management system. It all started with an adding machine long ago that grew into card punch systems and functional programming then more intelligent relational systems and now object oriented systems with more intelligence to do things. A more complex underlaying system but one that reduces the front end complexity to a simpler, more manageable user interface that is a more efficient means of Enterprise Management.
Banking is a Business Enterprise. It most move along the evolutionary path of Enterprise Management technology. Today the state of the art is the Object Model that integrates design all the way down to programming and automates much of that programming as a result of an exceptionally well constructed object model.
Banks must concede that Money is a Super Class Object in their system, not just a number in an account in a double entry accounting system. Money can continue to be just a number in an account depending on how the system user wants to view it but in the total system it is a thing. Money is the central thing in a banking system. It is what a bank creates, it is what a bank sells, it is what a bank wants and gets for what it sells.
Money is an object. It must be managed as an object. It is the core object in the Banking Enterprise Model. Customer Account as the core object around which the Banking system is organized is an historical point in evolutionary progress. It can continue to be viewed as circumstantially necessary as a most important thing but the conceptual structure object model really elevates the Object Cash as the focus of the object driving the business enterprise.
Cash does not exist as a conceptual Super Class in today's banking enterprise model. In order for it to exist as an object the system must be built on real 100% total reserve banking with each unit value of cash having unique identifying serial number.
While bankers may resist this concept, it will increasingly become more like the position of creationism versus evolution. The logic of the object model alone, much less politics dictate a paradigm shift in the conceptual structure of the money world.
There are two big things grinding against each other here. One is the established concept of the banking business enterprise and the new concept based on an object oriented model.
Looks like a "Let there be blood" situation.
https://docs.google.com/viewer?a=v&q=cache:YZ9OTnXzBu4J:journals.cluteonline.com/index.php/RBIS/article/viewFile/4470/4558+&hl=en&gl=us&pid=bl&srcid=ADGEEShEy84_x_mBiqWY9wdiu4kAPTX8MCPdoT05ZyHS0yZBq43KVKlJE_1iWKKqTEaPu2v4fO-MF8Vh0p3MTvO4ozf3hUA-P7q9sK9H78jpYgve7pIrOEwOWp__-LOE-Bk1nZd-q8wB&sig=AHIEtbSsjUJ8pOo_B0dbprS2e6FiKDgPJg
It is titled:
A Mechanism for Converting a Relational Data Base Into an Object Oriented Model.
The discussion of the Object Model in the beginning is fairly simple explanation of what it is and what it does. What it does is make information management more efficient.
In the course of information management evolution information was put into relational data bases. Then the object model came along and was a better method of organizing the info existing in relational data bases to a management model of the business enterprise.
The conversion from relational to object model involves mapping things in the relational model to their classes in the object model.
Account is thing in the relational model that has many pieces of information in it that are to be mapped to its object model class. One of those things is Account Balance which in the conversion process maps to the object class called class. Cash becomes an object entity with properties and methods to do things in response to messages to do something sent to the object Cash by other objects in the system that require something to be done by cash. Cash knows how to do many things like take the information sent to it by the requesting object and return a new value to the message sender (new balance maybe) as well as send messages to other objects (if necessary) to do things they know how to do.
As a result of the conversion process, account balance becomes something more than a cell in a spread sheet. It becomes an intelligent object, perhaps with subclasses and maybe even different states of being that dictate different methods that it knows how to do and requirements to pass messages on to other objects in the system to do things they know how to do, maybe even change the state of another object so it can do things that state requires with the information sent to it.
What is important here is that the business world is changing to an Object Model Management system. It all started with an adding machine long ago that grew into card punch systems and functional programming then more intelligent relational systems and now object oriented systems with more intelligence to do things. A more complex underlaying system but one that reduces the front end complexity to a simpler, more manageable user interface that is a more efficient means of Enterprise Management.
Banking is a Business Enterprise. It most move along the evolutionary path of Enterprise Management technology. Today the state of the art is the Object Model that integrates design all the way down to programming and automates much of that programming as a result of an exceptionally well constructed object model.
Banks must concede that Money is a Super Class Object in their system, not just a number in an account in a double entry accounting system. Money can continue to be just a number in an account depending on how the system user wants to view it but in the total system it is a thing. Money is the central thing in a banking system. It is what a bank creates, it is what a bank sells, it is what a bank wants and gets for what it sells.
Money is an object. It must be managed as an object. It is the core object in the Banking Enterprise Model. Customer Account as the core object around which the Banking system is organized is an historical point in evolutionary progress. It can continue to be viewed as circumstantially necessary as a most important thing but the conceptual structure object model really elevates the Object Cash as the focus of the object driving the business enterprise.
Cash does not exist as a conceptual Super Class in today's banking enterprise model. In order for it to exist as an object the system must be built on real 100% total reserve banking with each unit value of cash having unique identifying serial number.
While bankers may resist this concept, it will increasingly become more like the position of creationism versus evolution. The logic of the object model alone, much less politics dictate a paradigm shift in the conceptual structure of the money world.
There are two big things grinding against each other here. One is the established concept of the banking business enterprise and the new concept based on an object oriented model.
Looks like a "Let there be blood" situation.
Wednesday, October 24, 2012
Operating out of Savings
When I sail I always, if possible, sail upwind. It is banking wind, otherwise called beating, or perhaps working upwind, to eventually sail with the wind at my back and, hopefully, following seas.
I am debt free. 69 years old and sailing down wind. I do not owe money to anyone except the money that accrues in my utility accounts until I am billed for what is due (and immediately paid) at the end the month.
I operate financially totally from my savings. My savings is my money supply. That is my micro-economics.
As a nation, we operate from our money supply. Our money supply on the macro level is our savings. Our debt free money that is ours and owed to nobody. We call it our National Debt.
If our National Debt is always equal (to the penny) to our National Savings and National Savings is our Money Supply then.........
Why do we call it our National Debt?
Living in debt is to varying degrees living in fear. Trusting in ourselves and our savings is a different situation.
Hmmmm......
I am debt free. 69 years old and sailing down wind. I do not owe money to anyone except the money that accrues in my utility accounts until I am billed for what is due (and immediately paid) at the end the month.
I operate financially totally from my savings. My savings is my money supply. That is my micro-economics.
As a nation, we operate from our money supply. Our money supply on the macro level is our savings. Our debt free money that is ours and owed to nobody. We call it our National Debt.
If our National Debt is always equal (to the penny) to our National Savings and National Savings is our Money Supply then.........
Why do we call it our National Debt?
Living in debt is to varying degrees living in fear. Trusting in ourselves and our savings is a different situation.
Hmmmm......
Money is No Object - Stephanie Kelton
Money is No Object:No Theory, No Controversy Stephanie
Kelton, Ph.D. University of Missouri-Kansas City FPA Experience
2012, San Antonio, October 1, 2012
Stephanie gave this same presentation as a segment of this link which is a brilliant discussion:
http://neweconomicperspectives.org/2012/10/modern-money-and-public-purpose-2-governments-are-not-households.html
Her statement that "Money is no Object" has been ringing in the back of my mind since I heard it many days ago here:
http://neweconomicperspectives.org/2012/10/modern-money-and-public-purpose-2-governments-are-not-households.html
I woke up this morning realizing the meaning to me of this statement in different terms (discussed in the prior post) than she used it, the traditional meaning: Money is no Constraint.
Her statement that I listened to several days ago came back to me in the strangest of ways this morning. After writing the prior post I thought: Why not google "money is no object" and see if it by chance (extremely small chance) it might have been used in the context that I now see it (Object Oriented view).
Bingo! First page of hits. Stephanie Kelton! Wow! She is now one of my most admired people among women along with Yves Smith!
Awesome!
This statement reconciles our two different views of money as no object:
If money was in fact an object cornerstone upon which an object oriented debt free monetary system was developed then money would be no object to constrain the operating of the system!
It appears to me that the only place, the only category where money exists as an object in the monetary system today is the National Debt. Our National Debt is not debt it is Our National Savings. There is no negative money, owed money, aspect to it. It exists as an entity object called money.
Our National Debt is our Money????? What kind of an upside down world is that?
Maybe it is the right side up view of the upside down money world we are living in.
The world is round, not flat????
Debt should not be the cornerstone foundation of our monetary system?
Is black really white? (Is red ink really black ink?)
How about this for a conclusion:
The National Debt, the big negative thing that plagues us, is turned into our National Savings and the cornerstone of our debt free money system when we simply re-design the system (by asserting power that is strictly and only the sovereign right of our government) to create money and spend it into circulation. What we once called our National Debt becomes our National money supply? The perpetually unspent (but revolving) pool of money called savings at the macro economic level that we use as a medium of exchange?
This is something that I have to think about: Money as a medium of exchange is the SuperClass object in an Object Oriented Monetary System.
Money already exists as a SuperClass object but we call it our National Debt?
Boggle my little mind!
Stephanie gave this same presentation as a segment of this link which is a brilliant discussion:
http://neweconomicperspectives.org/2012/10/modern-money-and-public-purpose-2-governments-are-not-households.html
Her statement that "Money is no Object" has been ringing in the back of my mind since I heard it many days ago here:
http://neweconomicperspectives.org/2012/10/modern-money-and-public-purpose-2-governments-are-not-households.html
I woke up this morning realizing the meaning to me of this statement in different terms (discussed in the prior post) than she used it, the traditional meaning: Money is no Constraint.
Her statement that I listened to several days ago came back to me in the strangest of ways this morning. After writing the prior post I thought: Why not google "money is no object" and see if it by chance (extremely small chance) it might have been used in the context that I now see it (Object Oriented view).
Bingo! First page of hits. Stephanie Kelton! Wow! She is now one of my most admired people among women along with Yves Smith!
Awesome!
This statement reconciles our two different views of money as no object:
If money was in fact an object cornerstone upon which an object oriented debt free monetary system was developed then money would be no object to constrain the operating of the system!
It appears to me that the only place, the only category where money exists as an object in the monetary system today is the National Debt. Our National Debt is not debt it is Our National Savings. There is no negative money, owed money, aspect to it. It exists as an entity object called money.
Our National Debt is our Money????? What kind of an upside down world is that?
Maybe it is the right side up view of the upside down money world we are living in.
The world is round, not flat????
Debt should not be the cornerstone foundation of our monetary system?
Is black really white? (Is red ink really black ink?)
How about this for a conclusion:
The National Debt, the big negative thing that plagues us, is turned into our National Savings and the cornerstone of our debt free money system when we simply re-design the system (by asserting power that is strictly and only the sovereign right of our government) to create money and spend it into circulation. What we once called our National Debt becomes our National money supply? The perpetually unspent (but revolving) pool of money called savings at the macro economic level that we use as a medium of exchange?
This is something that I have to think about: Money as a medium of exchange is the SuperClass object in an Object Oriented Monetary System.
Money already exists as a SuperClass object but we call it our National Debt?
Boggle my little mind!
Money is a Joke
Here is the joke:
Money is no object,
Sooo,,,, where is the joke? What is the punch line?
Like money, it is hard to get,
It is a type of joke that is a play on words, that is a sub-class child of the SuperClass:Joke.
It inherits the Class attribute of funny in a very subtle and small way. It must do that in order to be a joke, if it does not have some aspect of that attribute it is not a joke, it is something else.
Here is the play on words necessary to get the joke:
Money is no object. It is only a number (which of course is an object called a NumberObject. There is no object identified as money that has attributes (in the digital world) that make it any different, either more or less than the SuperClass called numbers.
Our concept of money is as an object that has a number.
To banksters, money is no object.
Banksters do not print physical money or conceptual digital money by pressing number keys on a keyboard. They do not create the object called money. Bankers create unique accounts. All accounts belong to the Super Class of objects called Accounts. Once they have created the account then they can put a number in it.
In the dual entry world of double entry bookkeeping, two accounts are actually created. One for the asset aspect of the number and one for the liability aspect of the number. The rule is that the net of these two accounts always balances to nothing.
So, what has the banker done? The bankster created something out of nothing that always balances in two accounts to nothing until the number in both accounts is ultimately nothing.
Money is no object in the world of Object Oriented thinking other than a number.
My goal has been to define what money is. To me it is an object. It is not in the current system. That is the problem. It is debt. In a debt free money system at the macro level (there will always be loans and debt as a sub system component of the total money system) money must become a SuperClass object sharing just one of its attributes with another SuperClass of objects called Numbers.
At the operating system level, Money exists as a unique Superclass dominating the conceptual structure of the system. Currently, Account is the SuperClass that dominates the conceptual structure. Account, or ownership of the money is simply a user view of Money called MyMoney.
Money is no object,
Sooo,,,, where is the joke? What is the punch line?
Like money, it is hard to get,
It is a type of joke that is a play on words, that is a sub-class child of the SuperClass:Joke.
It inherits the Class attribute of funny in a very subtle and small way. It must do that in order to be a joke, if it does not have some aspect of that attribute it is not a joke, it is something else.
Here is the play on words necessary to get the joke:
Money is no object. It is only a number (which of course is an object called a NumberObject. There is no object identified as money that has attributes (in the digital world) that make it any different, either more or less than the SuperClass called numbers.
Our concept of money is as an object that has a number.
To banksters, money is no object.
Banksters do not print physical money or conceptual digital money by pressing number keys on a keyboard. They do not create the object called money. Bankers create unique accounts. All accounts belong to the Super Class of objects called Accounts. Once they have created the account then they can put a number in it.
In the dual entry world of double entry bookkeeping, two accounts are actually created. One for the asset aspect of the number and one for the liability aspect of the number. The rule is that the net of these two accounts always balances to nothing.
So, what has the banker done? The bankster created something out of nothing that always balances in two accounts to nothing until the number in both accounts is ultimately nothing.
Money is no object in the world of Object Oriented thinking other than a number.
My goal has been to define what money is. To me it is an object. It is not in the current system. That is the problem. It is debt. In a debt free money system at the macro level (there will always be loans and debt as a sub system component of the total money system) money must become a SuperClass object sharing just one of its attributes with another SuperClass of objects called Numbers.
At the operating system level, Money exists as a unique Superclass dominating the conceptual structure of the system. Currently, Account is the SuperClass that dominates the conceptual structure. Account, or ownership of the money is simply a user view of Money called MyMoney.
Tuesday, October 23, 2012
How Far Can Banksters Go With Object Oriented System Design?
The answer? All the way to the Super Class of Account dominant class determining structure of the system. The fundamental question in creating object oriented systems is: Now that we have named the Super Class, what is a uniquely identified instance of the Super Class that makes it different from all other instances of the class.
A numbered account is a unique instance of the Super Class of objects called Accounts. The rule is that no two or more accounts can have the same unique identifying numbers. Just ask any Swiss Banker.
Financial Accounts are often used as textbook examples for object oriented programming.
The Super Class: Financial Accounts has sub-class accounts of various types. For example, checking, saving, etc. All inheriting some attributes and methods from the Super Class: Financial Account. One thing they all deal with, is Money.
This link for example:
Money as a data element of an account is defined a variable called "balance". A numeric value object in the Super Class: (for simplicity) Numbers that has the attributes of all numbers and can do all the things that numbers know how to do: add, subtract, etc.
The concept of money to a bankster is a numerical balance in an account. An account balances, in the macro analysis and macro management system to a asset/liability balance in another account. Money is a number in an account, that is all it is. A number initially created out of thin air brought into existence when it was initially put into an account by the bankster as a loan, moves among accounts of different holders during its existence and finally goes out of existence as the loan is repaid.
The only concept of money being an object to a bankster is cash currency dollar bills and coins. In that form it is a minor thing and is the least of a banksters concern except probably as a the pain in the butt detail that banks have to take care of.
When a business defines itself in an object oriented model the system analyst looks for all the main objects that the business deals with in order to model their business. All businesses deal with money so that is obviously one of the major objects in the system to model in some way. In a prior post in this blog I discussed a comment about the danger of object oriented modeling creeping into the banking world. I conclude that the danger is that in modeling the banking world there will be an inclination to treat money as an object, not just a number called a balance and construct the object model accordingly.
I can see the scenario. An object oriented system designer looks at the business practice where accounts are a major object class, sees that money is only a data element number in an account and is inclined to model it as major object class in the management system. Taking the idea to management the system modeler is told: We don't do business that way. If the system analyst says that it would be more efficient this way I expect that they would be efficiently fired.
In the world of positive debt free money it becomes an object class in the system. Money is a Super Class with many subclasses. In all cases a unique instance of digital money at the unit level with a unique serial number identifies it from any other unit instance. It might be a digital dollar but essentially it is a unique object no different than a serialized, denominated paper dollar bill.
On some of the money/economics blogs there is a person who comments on and attacks any idea that suggests that money is an object with the implication or flat out statement that positive debt free money is an object that cannot exist. He says that is the wrong idea of money. Money is only a balance in an account.
An account as a Super Class in Java:
http://java.about.com/od/workingwithobjects/a/useinheirtance.htm
Here is programmer that is as puzzled as I am that money is not treated as a class of object in programming:
http://martinfowler.com/eaaCatalog/money.html
http://www.codecodex.com/wiki/Money_Utility_class
"A large proportion of the computers in this world manipulate money, so it's always puzzled me that money isn't actually a first class data type in any mainstream programming language. The lack of a type causes problems, the most obvious surrounding currencies. If all your calculations are done in a single currency, this isn't a huge problem, but once you involve multiple currencies you want to avoid adding your dollars to your yen without taking the currency differences into account. The more subtle problem is with rounding. Monetary calculations are often rounded to the smallest currency unit. When you do this it's easy to lose pennies (or your local equivalent) because of rounding errors.
The good thing about object-oriented programming is that you can fix these problems by creating a Money class that handles them. Of course, it's still surprising that none of the mainstream base class libraries actually do this."
Is LoanedMoney a sub-class of Money or a state of money? I can imagine a number of sub classes (or states) of Money when money is all serialized and digital in value units of one in a real money system replacing a debt money system.
A numbered account is a unique instance of the Super Class of objects called Accounts. The rule is that no two or more accounts can have the same unique identifying numbers. Just ask any Swiss Banker.
Financial Accounts are often used as textbook examples for object oriented programming.
The Super Class: Financial Accounts has sub-class accounts of various types. For example, checking, saving, etc. All inheriting some attributes and methods from the Super Class: Financial Account. One thing they all deal with, is Money.
This link for example:
Money as a data element of an account is defined a variable called "balance". A numeric value object in the Super Class: (for simplicity) Numbers that has the attributes of all numbers and can do all the things that numbers know how to do: add, subtract, etc.
The concept of money to a bankster is a numerical balance in an account. An account balances, in the macro analysis and macro management system to a asset/liability balance in another account. Money is a number in an account, that is all it is. A number initially created out of thin air brought into existence when it was initially put into an account by the bankster as a loan, moves among accounts of different holders during its existence and finally goes out of existence as the loan is repaid.
The only concept of money being an object to a bankster is cash currency dollar bills and coins. In that form it is a minor thing and is the least of a banksters concern except probably as a the pain in the butt detail that banks have to take care of.
When a business defines itself in an object oriented model the system analyst looks for all the main objects that the business deals with in order to model their business. All businesses deal with money so that is obviously one of the major objects in the system to model in some way. In a prior post in this blog I discussed a comment about the danger of object oriented modeling creeping into the banking world. I conclude that the danger is that in modeling the banking world there will be an inclination to treat money as an object, not just a number called a balance and construct the object model accordingly.
I can see the scenario. An object oriented system designer looks at the business practice where accounts are a major object class, sees that money is only a data element number in an account and is inclined to model it as major object class in the management system. Taking the idea to management the system modeler is told: We don't do business that way. If the system analyst says that it would be more efficient this way I expect that they would be efficiently fired.
In the world of positive debt free money it becomes an object class in the system. Money is a Super Class with many subclasses. In all cases a unique instance of digital money at the unit level with a unique serial number identifies it from any other unit instance. It might be a digital dollar but essentially it is a unique object no different than a serialized, denominated paper dollar bill.
On some of the money/economics blogs there is a person who comments on and attacks any idea that suggests that money is an object with the implication or flat out statement that positive debt free money is an object that cannot exist. He says that is the wrong idea of money. Money is only a balance in an account.
An account as a Super Class in Java:
http://java.about.com/od/workingwithobjects/a/useinheirtance.htm
Here is programmer that is as puzzled as I am that money is not treated as a class of object in programming:
http://martinfowler.com/eaaCatalog/money.html
http://www.codecodex.com/wiki/Money_Utility_class
"A large proportion of the computers in this world manipulate money, so it's always puzzled me that money isn't actually a first class data type in any mainstream programming language. The lack of a type causes problems, the most obvious surrounding currencies. If all your calculations are done in a single currency, this isn't a huge problem, but once you involve multiple currencies you want to avoid adding your dollars to your yen without taking the currency differences into account. The more subtle problem is with rounding. Monetary calculations are often rounded to the smallest currency unit. When you do this it's easy to lose pennies (or your local equivalent) because of rounding errors.
The good thing about object-oriented programming is that you can fix these problems by creating a Money class that handles them. Of course, it's still surprising that none of the mainstream base class libraries actually do this."
Is LoanedMoney a sub-class of Money or a state of money? I can imagine a number of sub classes (or states) of Money when money is all serialized and digital in value units of one in a real money system replacing a debt money system.
Designing Object Systems - Banksters Greatest Fear?
Designing Object Systems is a 1994 paper that can be viewed here. It is good stuff, for its time, about object oriented system design.
www.syntropy.co.uk/syntropy/designing-object-systems.pdf
I found this selection to be interesting because it presents the conflict between an object system design and the existing rigid and disciplined design management process (the one that is currently working, as old as it may be).
The introduction of new techniques, new ways of organising software and new working practices is likely to change matters in the future. Although we are not convinced that component-based software reuse will bring significant benefits as quickly as many people claim, it is clearly a factor which, if carefully managed, could make some aspects of software construction more routine. As important will be the impact of standardised software architectures, giving designers a head-start by providing proven frameworks for particular kinds of systems.
For the moment, though, we feel it necessary to separate clearly the design process from the management process. The design process is the process by which the designer’s skills are harnessed and directed. As befits a creative process, it cannot be rigid and constraining. By contrast, the management process must be rigid and disciplined because it is the basis for important commercial decisions, the kind of decisions influenced entirely by logic not beauty, and underwritten by the root of commerce: money.
Double entry bookkeeping is the oldest of money system designs underwritten by the root of commerce: Money. Is it surprising that in my prior post regarding double entry bookkeeping I cite one person that sees Object Oriented System design as a great threat to the system.
The significance of a thing in this fear oriented, threat oriented world is determined by the degree of fear it instills and the meaning of the threat to those that fear it.
Is object oriented thinking the greatest threat to the banking system. That is a strange situation. Object orientation is the current chosen methodology for managing systems. Banks use it to model and implement their systems. Big business uses it for all their business, uses it to essentially define their entire business structure. If the application of the object model says that the business must restructure practices based on what the object model obviously points out is the best conceptual structure for the business practice, the business will implement it.
The object model tells me that debt free money is the best object model for the banking system.
The banking system is smart. It is a big business. It knows object oriented system design and its application to business practices. Their fundamental system, the balance of debt to assets where all money is debt money (bank asset) balancing the liability created by loaning the asset is challenged by a better system.
That better system in my opinion is to retain the double entry system up one notch from residing at the bank level to residing at the government level where all money created by the government is a conceptual liability but is a real object asset at the bank level. That is a shift in power to create money to the government which is its sovereign right.
Where else might I find a growing fear on the part of big banking about what might be the result of applying our best object oriented system design and implementation methodologies to their business of money? Will banksters begin an inquisition of object oriented heretical economic thinkers that say debt free money is the super class object of the money system that must replace the old system of debt money?
I should search around with google to find signs of bankster fear of applying object oriented thinking to the core of their business model. Fear expressed as unreasonable response to the truth.
www.syntropy.co.uk/syntropy/designing-object-systems.pdf
I found this selection to be interesting because it presents the conflict between an object system design and the existing rigid and disciplined design management process (the one that is currently working, as old as it may be).
The introduction of new techniques, new ways of organising software and new working practices is likely to change matters in the future. Although we are not convinced that component-based software reuse will bring significant benefits as quickly as many people claim, it is clearly a factor which, if carefully managed, could make some aspects of software construction more routine. As important will be the impact of standardised software architectures, giving designers a head-start by providing proven frameworks for particular kinds of systems.
For the moment, though, we feel it necessary to separate clearly the design process from the management process. The design process is the process by which the designer’s skills are harnessed and directed. As befits a creative process, it cannot be rigid and constraining. By contrast, the management process must be rigid and disciplined because it is the basis for important commercial decisions, the kind of decisions influenced entirely by logic not beauty, and underwritten by the root of commerce: money.
Double entry bookkeeping is the oldest of money system designs underwritten by the root of commerce: Money. Is it surprising that in my prior post regarding double entry bookkeeping I cite one person that sees Object Oriented System design as a great threat to the system.
The significance of a thing in this fear oriented, threat oriented world is determined by the degree of fear it instills and the meaning of the threat to those that fear it.
Is object oriented thinking the greatest threat to the banking system. That is a strange situation. Object orientation is the current chosen methodology for managing systems. Banks use it to model and implement their systems. Big business uses it for all their business, uses it to essentially define their entire business structure. If the application of the object model says that the business must restructure practices based on what the object model obviously points out is the best conceptual structure for the business practice, the business will implement it.
The object model tells me that debt free money is the best object model for the banking system.
The banking system is smart. It is a big business. It knows object oriented system design and its application to business practices. Their fundamental system, the balance of debt to assets where all money is debt money (bank asset) balancing the liability created by loaning the asset is challenged by a better system.
That better system in my opinion is to retain the double entry system up one notch from residing at the bank level to residing at the government level where all money created by the government is a conceptual liability but is a real object asset at the bank level. That is a shift in power to create money to the government which is its sovereign right.
Where else might I find a growing fear on the part of big banking about what might be the result of applying our best object oriented system design and implementation methodologies to their business of money? Will banksters begin an inquisition of object oriented heretical economic thinkers that say debt free money is the super class object of the money system that must replace the old system of debt money?
I should search around with google to find signs of bankster fear of applying object oriented thinking to the core of their business model. Fear expressed as unreasonable response to the truth.
Savings
This website presents the fact that almost half the population has less than $500 in savings.
http://www.huffingtonpost.com/2012/10/22/americans-savings-500_n_2003285.html
"Nearly half of Americans don't have more than $500 saved up, according to a recent study by CreditDonkey.com, a credit card comparison company. Of the roughly 1,100 Americans polled, 41 percent reported having less than half a grand of readily-accessible savings at hand. "
I have seen this stated before describing a more or less amazing lack of savings. Another way of looking at it is the percentage of income saved. This chart show historical saving rates:
http://research.stlouisfed.org/fred2/series/PSAVERT/
Currently it is around 3%. 10% is generally recommended by financial advisers, 20% for early retirement.
In the comments on the Huffpo story someone submitted: Yes, but 90% have cable TV and half have smart phone. Another comment:
"Who wants to bet that at least half of these people have a cell phone (not the obama phone)? Annual Cost $600/year. Half drink alcohol cost $312/year (calculated at $6 per week very conservative). 10% smoke weed annual cost $1,300 ($25/ quarter 1 quarter per week that's if they smoke cheep mexi).
It's about choice"
Ironically, the comment was accompanied by a screen name and an icon picture of his tattooed arm.
While about half have saved less than $500, the other half has saved so much more. 500 dollars saved from their life time of work, whatever period that may cover and half the population did not just graduate from high school this year, is a poor showing of spending choices for that half excluding those that are spending all their income to feed themselves.
When I graduated from high school in 1961 I had $200 saved from a paper route and owned a motorbike.
There is class division in this country and perhaps this is the real division. The disgust that savers have for non savers. Non savers being stereotyped as making poor spending decisions and lacking in character. Because they spend on things they want but do not need, those that work hard and save have to support them with government entitlements. We pay, to a great extent, for their lack of savings that they could have made instead of squandering it on instant gratification beyond their relative needs for an adequately comfortable life style.
The sector that probably despises the non-savers the most is the top 5% of the savers. Those that have their savings in investments. The rest of the savers despises them on the grounds that they are moral and financial slackers. This is a class division that nobody wants to throw the spotlight on and is not overtly talked about, even less than race, I think. I, myself have disparaged non savers as "liquor store mentality" who have no concept of deferred gratification. They want it all, they want it now.
However, in our consumption oriented society it is the non-saver that that is the champion of consumption. The rockstars of consumption are those that go into debt for things they do not need and probably cannot continue to pay for. They power the economic engine of the country. They proudly wear their class badge of membership: The tattoo.
Our National Debt is equal to our National Savings according to Randy Wray. Our National Debt, each persons share is about $50,000 per person.
If we all have $50,000 in savings then lets all get tattooed! We can afford the indulgence.
If almost half have saved less than $500 which is nothing compared to $500 then the remaining half have saved, on average, $100,000.
We really are, by so many measures, a half and half nation. How many people with less than $500 in savings will vote for Romney?
How in the world can I reconcile the idea that our National Debt is our National Savings since the beginning of our country with the statement that almost half of the population has savings of less than $500? Perhaps it is because they might have only $500 they can put their hands on but actually they have a future potential of receiving in entitlements a great amount of the National Savings to compensate for their lack of current savings?
This is a moral problem, an equity problem, a financial problem.
The savings rate of China is discussed here:
http://www.washingtonpost.com/world/asia_pacific/getting-chinese-to-stop-saving-and-start-spending-is-a-hard-sell/2012/07/04/gJQAc7P6OW_story.html
Those pathetic Chinese just do not understand the importance of spending everything they get as quickly as they can get it, or even quicker by spending money they do not even have yet. What are they saving it for? Their old age when the Chinese custom of the children taking personal responsibility for elder care is no longer workable because of the limits placed on child bearing by the government? Saving for retirement? Personally saving for retirement without substantial dependence on government?
What a Republican idea!
http://www.huffingtonpost.com/2012/10/22/americans-savings-500_n_2003285.html
"Nearly half of Americans don't have more than $500 saved up, according to a recent study by CreditDonkey.com, a credit card comparison company. Of the roughly 1,100 Americans polled, 41 percent reported having less than half a grand of readily-accessible savings at hand. "
I have seen this stated before describing a more or less amazing lack of savings. Another way of looking at it is the percentage of income saved. This chart show historical saving rates:
http://research.stlouisfed.org/fred2/series/PSAVERT/
Currently it is around 3%. 10% is generally recommended by financial advisers, 20% for early retirement.
In the comments on the Huffpo story someone submitted: Yes, but 90% have cable TV and half have smart phone. Another comment:
"Who wants to bet that at least half of these people have a cell phone (not the obama phone)? Annual Cost $600/year. Half drink alcohol cost $312/year (calculated at $6 per week very conservative). 10% smoke weed annual cost $1,300 ($25/ quarter 1 quarter per week that's if they smoke cheep mexi).
It's about choice"
Ironically, the comment was accompanied by a screen name and an icon picture of his tattooed arm.
While about half have saved less than $500, the other half has saved so much more. 500 dollars saved from their life time of work, whatever period that may cover and half the population did not just graduate from high school this year, is a poor showing of spending choices for that half excluding those that are spending all their income to feed themselves.
When I graduated from high school in 1961 I had $200 saved from a paper route and owned a motorbike.
There is class division in this country and perhaps this is the real division. The disgust that savers have for non savers. Non savers being stereotyped as making poor spending decisions and lacking in character. Because they spend on things they want but do not need, those that work hard and save have to support them with government entitlements. We pay, to a great extent, for their lack of savings that they could have made instead of squandering it on instant gratification beyond their relative needs for an adequately comfortable life style.
The sector that probably despises the non-savers the most is the top 5% of the savers. Those that have their savings in investments. The rest of the savers despises them on the grounds that they are moral and financial slackers. This is a class division that nobody wants to throw the spotlight on and is not overtly talked about, even less than race, I think. I, myself have disparaged non savers as "liquor store mentality" who have no concept of deferred gratification. They want it all, they want it now.
However, in our consumption oriented society it is the non-saver that that is the champion of consumption. The rockstars of consumption are those that go into debt for things they do not need and probably cannot continue to pay for. They power the economic engine of the country. They proudly wear their class badge of membership: The tattoo.
Our National Debt is equal to our National Savings according to Randy Wray. Our National Debt, each persons share is about $50,000 per person.
If we all have $50,000 in savings then lets all get tattooed! We can afford the indulgence.
If almost half have saved less than $500 which is nothing compared to $500 then the remaining half have saved, on average, $100,000.
We really are, by so many measures, a half and half nation. How many people with less than $500 in savings will vote for Romney?
How in the world can I reconcile the idea that our National Debt is our National Savings since the beginning of our country with the statement that almost half of the population has savings of less than $500? Perhaps it is because they might have only $500 they can put their hands on but actually they have a future potential of receiving in entitlements a great amount of the National Savings to compensate for their lack of current savings?
This is a moral problem, an equity problem, a financial problem.
The savings rate of China is discussed here:
http://www.washingtonpost.com/world/asia_pacific/getting-chinese-to-stop-saving-and-start-spending-is-a-hard-sell/2012/07/04/gJQAc7P6OW_story.html
Those pathetic Chinese just do not understand the importance of spending everything they get as quickly as they can get it, or even quicker by spending money they do not even have yet. What are they saving it for? Their old age when the Chinese custom of the children taking personal responsibility for elder care is no longer workable because of the limits placed on child bearing by the government? Saving for retirement? Personally saving for retirement without substantial dependence on government?
What a Republican idea!
Monday, October 22, 2012
Double Entry Book Keeping - The Math
This is a mathematical explanation of double entry book keeping:
http://www.mathblog.ellerman.org/2010/02/the-math-of-double-entry-bookkeeping-part-ii-vectors/
Good luck in understanding it!!!!!!!!!!!!!
Assets must equal liabilities plus something called net worth, which is the difference between assets and liabilities.
Something = Something plus the difference between the two somethings.
Equals (=) means something is the same as another thing when all the figuring is done. Each thing is expressed in a different way but the bottom line relationship is that they are the same when all the computation is done.
Reduced to the simplest terms double entry book keeping is really this:
Money total amount equals Money total amount. Asset or liability is merely a state characteristic of money. Money is Money. It is only one thing.
The following is from Wikipedia at this link:
http://en.wikipedia.org/wiki/Equality_%28mathematics%29
"An equation is simply an assertion that two expressions are related by equality (are equal)."
and:
"Equality is always defined such that things that are equal have all and only the same properties. Some people define equality as congruence. Often equality is just defined as identity."
Any (two or more) objects that have all and only the same properties are equal. They are the same object, there is nothing that makes them different except by assigning a different state to them.
This is the Object Oriented programming explanation of objects and their states:
http://docs.oracle.com/javase/tutorial/java/concepts/object.html
Money is Money.
Book keeping treats money as two different things; assets and liabilities, different objects based on their state even although money is a single object having two or more states. That might serve the view and purpose of the book keeper but it has also been the view imposed as a foundation for development of the monetary and financial conceptual systems.
More from the previous Wikipedia link:
"Software objects are conceptually similar to real-world objects: they too consist of state and related behavior. An object stores its state in fields (variables in some programming languages) and exposes its behavior through methods (functions in some programming languages). Methods operate on an object's internal state and serve as the primary mechanism for object-to-object communication. Hiding internal state and requiring all interaction to be performed through an object's methods is known as data encapsulation — a fundamental principle of object-oriented programming."
This guy, a programmer, seems to have some problem coming to grips with what double entry book keeping is and what it does in relationship to the object oriented approach of thinking of money as a single object:
http://tech.groups.yahoo.com/group/domaindrivendesign/message/1462
He says: "How can behavior be equivalent to identity? This does not make sense to me."
Absolutely. Behavior is not object identity. It is something a thing does. What a thing does is not its object identity.
That is the real problem with the current money system. What money does and the state that it is in as been the dominating cornerstone conceptual foundation of the system. The identity of money is determined by its behavior, what it does, not by what it is.
The programmer, Ralph, concludes:
Perhaps computerized bookkeeping systems are all wrong. But I doubt that
object-oriented programming has anything to do with it. If it is a problem,
it clearly predates object-oriented programming.
Does anybody else understand this? If so, I would appreciate an
explanation.
"It took all of my free time today to write this message, and I just don't
have time to do it. In fact, there were several things I should have done
instead. So, I probably won't post more on this subject, but I would
appreciate it if other people could follow up. You understand this as well
as I do. You can ask Dan questions as well as I can."
I feel your pain, Ralph!
Ralph's comments were in response to this post by Dan:
http://tech.groups.yahoo.com/group/domaindrivendesign/message/1460
This is the thread in which the posts appear:
http://tech.groups.yahoo.com/group/domaindrivendesign/message/1462
Ralph was the first of a long list of comments on Dan's post. This is the last line in Dan's post:
"The more that object oriented programming got into controlling business transactions the more that these 600-year-old business patterns have gotten obfuscated. The problem is worldwide. It cannot go on; it must be corrected, the danger is immense."
It certainly is immense!
Object Oriented System Design and Implementation is the conceptual tool creating the Information Age. It does so objectively in accordance with principals of the Object Oriented model. It applies the same model to all conceptual structures. 600 years ago a system was designed to serve the special interests of those that designed it for a specific purpose. It is about time the system that has caused world wide problems be brought kicking and screaming into the Information Age technology of system design.
This paper discusses semantic modeling in accounting systems and double entry bookkeeping:
http://books.google.com/books?id=5sA0bjSIIRcC&pg=PA19&lpg=PA19&dq=double+entry+object+oriented&source=bl&ots=09zsf5IovM&sig=v3x6UIcP504iG9TTERRchGKKkgI&hl=en&sa=X&ei=3L6FUN-4Kom9iwLI3ICgDw&sqi=2&ved=0CDAQ6AEwAg#v=onepage&q=double%20entry%20object%20oriented&f=false
http://www.mathblog.ellerman.org/2010/02/the-math-of-double-entry-bookkeeping-part-ii-vectors/
Good luck in understanding it!!!!!!!!!!!!!
Assets must equal liabilities plus something called net worth, which is the difference between assets and liabilities.
Something = Something plus the difference between the two somethings.
Equals (=) means something is the same as another thing when all the figuring is done. Each thing is expressed in a different way but the bottom line relationship is that they are the same when all the computation is done.
Reduced to the simplest terms double entry book keeping is really this:
Money total amount equals Money total amount. Asset or liability is merely a state characteristic of money. Money is Money. It is only one thing.
The following is from Wikipedia at this link:
http://en.wikipedia.org/wiki/Equality_%28mathematics%29
"An equation is simply an assertion that two expressions are related by equality (are equal)."
and:
"Equality is always defined such that things that are equal have all and only the same properties. Some people define equality as congruence. Often equality is just defined as identity."
Any (two or more) objects that have all and only the same properties are equal. They are the same object, there is nothing that makes them different except by assigning a different state to them.
This is the Object Oriented programming explanation of objects and their states:
http://docs.oracle.com/javase/tutorial/java/concepts/object.html
Money is Money.
Book keeping treats money as two different things; assets and liabilities, different objects based on their state even although money is a single object having two or more states. That might serve the view and purpose of the book keeper but it has also been the view imposed as a foundation for development of the monetary and financial conceptual systems.
More from the previous Wikipedia link:
"Software objects are conceptually similar to real-world objects: they too consist of state and related behavior. An object stores its state in fields (variables in some programming languages) and exposes its behavior through methods (functions in some programming languages). Methods operate on an object's internal state and serve as the primary mechanism for object-to-object communication. Hiding internal state and requiring all interaction to be performed through an object's methods is known as data encapsulation — a fundamental principle of object-oriented programming."
This guy, a programmer, seems to have some problem coming to grips with what double entry book keeping is and what it does in relationship to the object oriented approach of thinking of money as a single object:
http://tech.groups.yahoo.com/group/domaindrivendesign/message/1462
He says: "How can behavior be equivalent to identity? This does not make sense to me."
Absolutely. Behavior is not object identity. It is something a thing does. What a thing does is not its object identity.
That is the real problem with the current money system. What money does and the state that it is in as been the dominating cornerstone conceptual foundation of the system. The identity of money is determined by its behavior, what it does, not by what it is.
The programmer, Ralph, concludes:
Perhaps computerized bookkeeping systems are all wrong. But I doubt that
object-oriented programming has anything to do with it. If it is a problem,
it clearly predates object-oriented programming.
Does anybody else understand this? If so, I would appreciate an
explanation.
"It took all of my free time today to write this message, and I just don't
have time to do it. In fact, there were several things I should have done
instead. So, I probably won't post more on this subject, but I would
appreciate it if other people could follow up. You understand this as well
as I do. You can ask Dan questions as well as I can."
I feel your pain, Ralph!
Ralph's comments were in response to this post by Dan:
http://tech.groups.yahoo.com/group/domaindrivendesign/message/1460
This is the thread in which the posts appear:
http://tech.groups.yahoo.com/group/domaindrivendesign/message/1462
Ralph was the first of a long list of comments on Dan's post. This is the last line in Dan's post:
"The more that object oriented programming got into controlling business transactions the more that these 600-year-old business patterns have gotten obfuscated. The problem is worldwide. It cannot go on; it must be corrected, the danger is immense."
It certainly is immense!
Object Oriented System Design and Implementation is the conceptual tool creating the Information Age. It does so objectively in accordance with principals of the Object Oriented model. It applies the same model to all conceptual structures. 600 years ago a system was designed to serve the special interests of those that designed it for a specific purpose. It is about time the system that has caused world wide problems be brought kicking and screaming into the Information Age technology of system design.
This paper discusses semantic modeling in accounting systems and double entry bookkeeping:
http://books.google.com/books?id=5sA0bjSIIRcC&pg=PA19&lpg=PA19&dq=double+entry+object+oriented&source=bl&ots=09zsf5IovM&sig=v3x6UIcP504iG9TTERRchGKKkgI&hl=en&sa=X&ei=3L6FUN-4Kom9iwLI3ICgDw&sqi=2&ved=0CDAQ6AEwAg#v=onepage&q=double%20entry%20object%20oriented&f=false
Deficits Are Our Savings! -- MMT
Deficits are our savings! This is the MMT view of our National Debt.
This is from 2011 but remains the basic MMT position written by Bill Mitchell http://modernmoney.wordpress.com/2011/04/18/deficits-are-our-saving/
http://bilbo.economicoutlook.net/blog/?p=10384
Government finances are not the same as household finances regarding debt. This MMT view of public debt vs private debt is so counter-intuitive that the common public thinking is that government debt must be treated the way household debt is treated: If there is too much debt, the debt burden becomes to great, we must pay down our debt to get it back to reasonable levels. To do that we must apply austerity to our spending and shift expenditures from buying things (buy less) to paying down debt.
The banksters would cheer for the idea of paying down private debt (rather than default). On the other hand, they are in the debt business and the greater the debt the more they make. They make even more when they create debt and then shift the risk associated with the debt to someone else.
Reducing the total National Debt as well as Annual Deficit in spending is the popular political idea. More popular with the Republicans, the party that favors Banksters and Wall Street the most. Dems favor them just somewhat less. They differ in the mix of adjusting taxes and spending to do it.
We are being blindly driven by ignorant devotion to the notion that we must reduce government debt. We are being driven by fear of inflation. Fear of anything has become the weapon of choice to manipulate our society for the benefit of whom?
Whom? Just ask who has benefited so far and have they benefited enough at this point to say enough benefit in power and money is enough?
Deficits Are Our Savings. Deficits Equal Savings. They always equal savings to the penny. I will accept this as a fact. If it is a fact and we all accept it as a truth then the whole situation changes.
Annual deficits are equal to our annual savings. Total National Debt is the accumulated National Savings since the founding of our nation.
The most recent presentation of this idea by Randy Wray:
http://neweconomicperspectives.org/2012/10/modern-money-and-public-purpose-2-governments-are-not-households.html
Bill Mitchell's conclusion:
"The point is that whatever the mainstream economists say the policy agendas they advocate cannot be justified in terms of the financial issues they hide behind – crowding out, inflation, sovereign insolvency etc.
Once you understand the way the monetary system operates their agendas become transparently ideological and intent on redistributing real output to the rich and way from the poor.
They might be clothed in the sophistry of the market and supported by mathematical models but when you distil the arguments down to their essentials you realise they just represent a crude and unsophisticated grab for wealth."
What is the end game objective of those that would defend and promote with all they have (providing there is a return on that investment) the idea that the annual government budget must be balanced (or even run a surplus, not a deficit) and the total National Debt must be reduced through austerity?????????????????????????????? Talking about the rich here, the 1% or near 1% sycophants, stooges, and paid enforcement thugs in politics and academia?
What is in it for them: The general public can no longer afford to own things. They must rent them from those that own the asset like a house, land, cars, etc. Austerity sells the family china to pay down debt so that it must be rented back in order to set the table.
When rents increase beyond the ability of people to buy back what they previously owned but sold to pay down debt it makes holding and retaining ownership of those things worth even more, far more than those that once upon a time own them can ever hope to own again by buying them back.
They can only own them again by taking them back.
Austerity is being imposed on Europe to return the population to feudal status.
Austerity does not even have to be imposed upon the people of the USA. They will vote for it when they vote Republican, somewhat less of it when they vote Democrat.
We have met the enemy and it is us. People are so easy to fleece. It is an elegant accomplishment to get them to go so willingly and eagerly to the fleecing. Just like getting those that have so little to vote benefits to those that have so much. Play on their hate, fears and ignorance. Get them to vote against their own self interest.
This is from 2011 but remains the basic MMT position written by Bill Mitchell http://modernmoney.wordpress.com/2011/04/18/deficits-are-our-saving/
http://bilbo.economicoutlook.net/blog/?p=10384
Government finances are not the same as household finances regarding debt. This MMT view of public debt vs private debt is so counter-intuitive that the common public thinking is that government debt must be treated the way household debt is treated: If there is too much debt, the debt burden becomes to great, we must pay down our debt to get it back to reasonable levels. To do that we must apply austerity to our spending and shift expenditures from buying things (buy less) to paying down debt.
The banksters would cheer for the idea of paying down private debt (rather than default). On the other hand, they are in the debt business and the greater the debt the more they make. They make even more when they create debt and then shift the risk associated with the debt to someone else.
Reducing the total National Debt as well as Annual Deficit in spending is the popular political idea. More popular with the Republicans, the party that favors Banksters and Wall Street the most. Dems favor them just somewhat less. They differ in the mix of adjusting taxes and spending to do it.
We are being blindly driven by ignorant devotion to the notion that we must reduce government debt. We are being driven by fear of inflation. Fear of anything has become the weapon of choice to manipulate our society for the benefit of whom?
Whom? Just ask who has benefited so far and have they benefited enough at this point to say enough benefit in power and money is enough?
Deficits Are Our Savings. Deficits Equal Savings. They always equal savings to the penny. I will accept this as a fact. If it is a fact and we all accept it as a truth then the whole situation changes.
Annual deficits are equal to our annual savings. Total National Debt is the accumulated National Savings since the founding of our nation.
The most recent presentation of this idea by Randy Wray:
http://neweconomicperspectives.org/2012/10/modern-money-and-public-purpose-2-governments-are-not-households.html
Bill Mitchell's conclusion:
"The point is that whatever the mainstream economists say the policy agendas they advocate cannot be justified in terms of the financial issues they hide behind – crowding out, inflation, sovereign insolvency etc.
Once you understand the way the monetary system operates their agendas become transparently ideological and intent on redistributing real output to the rich and way from the poor.
They might be clothed in the sophistry of the market and supported by mathematical models but when you distil the arguments down to their essentials you realise they just represent a crude and unsophisticated grab for wealth."
What is the end game objective of those that would defend and promote with all they have (providing there is a return on that investment) the idea that the annual government budget must be balanced (or even run a surplus, not a deficit) and the total National Debt must be reduced through austerity?????????????????????????????? Talking about the rich here, the 1% or near 1% sycophants, stooges, and paid enforcement thugs in politics and academia?
What is in it for them: The general public can no longer afford to own things. They must rent them from those that own the asset like a house, land, cars, etc. Austerity sells the family china to pay down debt so that it must be rented back in order to set the table.
When rents increase beyond the ability of people to buy back what they previously owned but sold to pay down debt it makes holding and retaining ownership of those things worth even more, far more than those that once upon a time own them can ever hope to own again by buying them back.
They can only own them again by taking them back.
Austerity is being imposed on Europe to return the population to feudal status.
Austerity does not even have to be imposed upon the people of the USA. They will vote for it when they vote Republican, somewhat less of it when they vote Democrat.
We have met the enemy and it is us. People are so easy to fleece. It is an elegant accomplishment to get them to go so willingly and eagerly to the fleecing. Just like getting those that have so little to vote benefits to those that have so much. Play on their hate, fears and ignorance. Get them to vote against their own self interest.
Sunday, October 21, 2012
The Implacability of Things
The subject line is the title of what I read at this website:
http://publicdomainreview.org/2012/10/03/the-implacability-of-things/
"Jonathan Lamb explores the genre of ‘it-narratives’ – stories told from the point of view of an object, often as it travels in circulation through human hands."
In grade school I wrote a story about a coin passing from hand to hand. The different places it went, what it bought, lost and found again. The sorrow of the loser the joy of the finder. Once it was swallowed. The nun did not like that part of the story.
Money used to go from hand to hand. Coins and dollar bills still do. The story of their travels would be interesting. Only 3 percent of our money travels this way now. Everything else is on the digital express.
Now digital money travels from account to account. Hardly interesting since there is no real travel, the adventures of where it accompanied someone from the time it was acquired for something, maybe nothing, and the time it was paid for something, or nothing, and what those things may have been. The value of those things relative to the value of the money depending on time and place.
Money moves digitally in the modern world. Moves everywhere, sometimes transforming itself into different currency domains. As quick and as ephemeral as it may move it is just a quicker more efficient model of the old had to hand mode of travel and exchange. Used to be it was in the owner's pocket or under the mattress now it is in an account.
Stop all the money! Just like when the music stops playing everyone sits in a chair and stays there as the music plays on.
Instead of going from account to account where money in the account is just an aggregate total number of dollars, make the system operate by accounts going from dollar to dollar.
Novel idea.
When digital money goes into an account it is not uniquely identified at the unit one dollar level. Only totals of dollars are added.
If each individual digital dollar was uniquely serialized and became a static record, theoretically residing forever in one safe computer computer space then the only thing that would change when money is received or expended is the account number of the current owner of that digital dollar.
Accounts, manually maintained by hand and then digital were a more convenient container into which to put money. They existed for the same reason that money denominations were put on paper dollar bills. It was simply a more efficient way of handling aggregate amounts of transactions made in dollar units.
The concluding statement of the website: (I thought I could do long sentences!)
"Whether it is owing to its origin and terminus in the narratives of slaves, or to its coincidence with the financial revolution and the growing unaccountability of mass human behaviour, or to the growing appetite for print ephemera, or to the end of feudal tenures and the resulting anomalies of personal portable property, or to the irreversible metamorphoses precipitated by the holocaust, ordinary things situated in banal circumstances develop a salience that has nothing to do with symbolism or hidden meaning. They are just there, eying their human adversaries, implacable and meditating affronts."
Computers can now process immense volumes of numbers and transactions. It is not unreasonable to propose making money a static record and the owner account the variable entry. What is fixed and what is variable makes a big difference in the operation and efficiency of an information system.
If (and I would like to say the inevitable when) we go to 100% real money, 100% real reserve banking then the "It" story would not be about the interesting travel of money itself but the accounts, the associated people and the purpose of the transaction associated with the changing of the account temporarily owning the dollar while plays host to owner.
http://publicdomainreview.org/2012/10/03/the-implacability-of-things/
"Jonathan Lamb explores the genre of ‘it-narratives’ – stories told from the point of view of an object, often as it travels in circulation through human hands."
In grade school I wrote a story about a coin passing from hand to hand. The different places it went, what it bought, lost and found again. The sorrow of the loser the joy of the finder. Once it was swallowed. The nun did not like that part of the story.
Money used to go from hand to hand. Coins and dollar bills still do. The story of their travels would be interesting. Only 3 percent of our money travels this way now. Everything else is on the digital express.
Now digital money travels from account to account. Hardly interesting since there is no real travel, the adventures of where it accompanied someone from the time it was acquired for something, maybe nothing, and the time it was paid for something, or nothing, and what those things may have been. The value of those things relative to the value of the money depending on time and place.
Money moves digitally in the modern world. Moves everywhere, sometimes transforming itself into different currency domains. As quick and as ephemeral as it may move it is just a quicker more efficient model of the old had to hand mode of travel and exchange. Used to be it was in the owner's pocket or under the mattress now it is in an account.
Stop all the money! Just like when the music stops playing everyone sits in a chair and stays there as the music plays on.
Instead of going from account to account where money in the account is just an aggregate total number of dollars, make the system operate by accounts going from dollar to dollar.
Novel idea.
When digital money goes into an account it is not uniquely identified at the unit one dollar level. Only totals of dollars are added.
If each individual digital dollar was uniquely serialized and became a static record, theoretically residing forever in one safe computer computer space then the only thing that would change when money is received or expended is the account number of the current owner of that digital dollar.
Accounts, manually maintained by hand and then digital were a more convenient container into which to put money. They existed for the same reason that money denominations were put on paper dollar bills. It was simply a more efficient way of handling aggregate amounts of transactions made in dollar units.
The concluding statement of the website: (I thought I could do long sentences!)
"Whether it is owing to its origin and terminus in the narratives of slaves, or to its coincidence with the financial revolution and the growing unaccountability of mass human behaviour, or to the growing appetite for print ephemera, or to the end of feudal tenures and the resulting anomalies of personal portable property, or to the irreversible metamorphoses precipitated by the holocaust, ordinary things situated in banal circumstances develop a salience that has nothing to do with symbolism or hidden meaning. They are just there, eying their human adversaries, implacable and meditating affronts."
Computers can now process immense volumes of numbers and transactions. It is not unreasonable to propose making money a static record and the owner account the variable entry. What is fixed and what is variable makes a big difference in the operation and efficiency of an information system.
If (and I would like to say the inevitable when) we go to 100% real money, 100% real reserve banking then the "It" story would not be about the interesting travel of money itself but the accounts, the associated people and the purpose of the transaction associated with the changing of the account temporarily owning the dollar while plays host to owner.
Is Debt Free Money an Option
The following is a long idea dump produced entirely for my own benefit to kick around ideas as the seemed to present themselves as I thought about (and strayed far away) from the ideas of the website in a related line of thought that probably only I understand. Nobody reads this all anyhow. It is for my own benefit like everything else on this blog.
-----------------------------------------------------------------------------
Presentation of and comments upon the subject title of this post are at this link:
http://www.macrobusiness.com.au/2012/10/is-debt-free-money-an-option/
A good presentation but the big picture created by the nature of the aggregate comments is excellent. Many different views are presented by individual comments. The best way to draw a line to divide the comments into two absolute groups for macro analysis is to decide which of two things the comment is focused on by asking the simple question:
1. Is the comment talking about what money is?
or
2. Is the comment talking about what money does?
Because it is most likely that the comment addresses both aspects of money:
Start Sidebar here:
For agonizing clarity I will restate the two aspects of money which are the same two aspects of any thing and every thing. There are only these two fundamental aspects of a thing in our world and there are no more than two aspects of a thing, everything else being a derivative of these two macro aspects of a thing:
1. What a thing is,
and
2. What a thing does.
End Sidebar here!
That is a simple view of all things. But it is not that simple but the key to understanding this contradictory statement is this:
. All things exist exist in the natural world only in relation to another thing in the natural world. I am talking about the natural world here. Clarification is agonizing isn't it but I hope you understand I am talking about the natural world.
A thing cannot "do" some thing in the natural world unless it does it in relationship to another thing.....in (not leaving anything to abiguity here) .....the natural world. In other words, if a thing cannot "do" anything in relation to anything else then it can't exist in the natural world. If it could exist in the natural world without any relationship to any other thing in the natural world then to satisfy the rule that it can only exist in relationship to another thing in the natural world then if it was the one and only thing in the natural world with nothing else to do anything with then it would have to "do something with the only thing to do something with: ITSELF! That is a relationship that by definition cannot exist in the natural world. If it did then we are really dealing with not one thing but two things that we perceive as one thing until we can see it in reality as two different things.
If a thing exists only and exclusively in relationship with itself and absolutely (emphasis on absolutely) nothing else (called a recursive relationship) then it does not exist, cannot exist, in the natural world. It can only exist in the supernatural world. If that "writing on the wall" does not take you to the logical conclusion of what that thing is (clue: Thing) and its implications as to how we have created our concepts that explain this situation then I have not been clear enough nor capable enough to lead you to the water.
Back to the real world and the Idiots Guide to "Things and What Things Do".
The comments on http://www.macrobusiness.com.au/2012/10/is-debt-free-money-an-option/ deal in various degrees with what money is and what money does. In most the degree, mostly one or the other is obvious, a few have a fine line. Beyond making an either/or division in to two categories:
1. Either the comment talks mostly about what money is.
or
2. The comment talks mostly about what money does.
It is possible to analyze the comment and determine what percent of the comment talks about what money is and what percent talks about what money does on a sentence by sentence basis.
Whatever way it is sliced and diced, macro or micro level, the forest or the trees I believe that the results are the same. Mostly we think, conceive, express, structure our concepts, live our daily lives based primarily on what things do, not what things are in the plural. In the singular, which is called a uniquely identifiable instance of the class a thing is in, we talk mostly about what a thing does rather than what it is. What is thing "is" is usually fixed by its definition in the dictionary. We usually don't argue about that, we just accept as the given then get on to talk about what a thing does with maybe some ramifications that might go back to redefining to some degree what a thing is.
When the redefinition reaches a tipping point we realize that what we previously defined as one thing is really a different thing all together worthy of a different dictionary name and definition. In the larger scheme of things and where the new term and definition fits in that bigger scheme of things might be more important than the existing thing and its traditional relative importance in the scheme of things. Consequently, the new reality of a thing with a new word to define it challenges the old reality of the thing that has the ownership of the traditional word to define it. The conservative word to define it, the old word (and its meaning) being the best word.
I think that that the concept of "Spin" deals entirely with what a thing does, not with what a thing is. If the old thing that we once defined it to be is really something else in reality, maybe totally different, that essential difference in what a thing factually is can't be addressed because it acknowledge the new thing exists. The new thing can only be addressed in terms of what it does, not what it is. Defenders of the previous (continuing to exist unchanged thing) can only address the new thing in terms of what it does, not what it is a present what it does as contrary to what the existing thing does.
Focus the discussion and analysis on what things do and the debate and analysis goes on forever. That is the best defense of those that do not want to change what a concept is. Do not go head to head on the basis of what an old concept is compared to what the new competing concept is to defend the old concept that may deserve revision. An existing concept definition of what a thing is holds the high ground in the battle. Honestly dealing with a head to head analysis on the basis of what two things are (the result of which require some change in relative importance in the greater scheme of things, maybe essential change (not just a battle but a war of ideas) is certainly not the way to defend against change of the existing concept. The only way to defend the existing concept is to focus on what the new competing concept does. That strategy takes the conflict down into the confusing complexity of what a thing does.
Go to where conflicting things are analyzed on what they do and the war is likely to be lost to the concept that holds the high ground based on its accepted definition of what it is. That is true because what a thing is defines its nature which is limited, on the other hand what a thing does can be many things. The variety of actions a single basic thing can do are numerically immense in the operating the scheme of things. That is a law of nature and information. Actions a thing does introduces great complexity even if what that thing is remains conceptually simple.
If you are in conflict and losing the war on what your concept is then your only plan is to attack what the opposing concept does. What a thing does in terms of different identifiable actions deriving from what it essentially is means that some of the specific things it does will not be optimal and therefore reasons to throw the new baby out with the bath water that washes it. Nit pick the details of the adverse action results of the what the opponents concept does . Frame the selected actions. If you do an excellent job of framing the actions then the opponents concept becomes defined by an inflated perception of what it does that defines in weak minds what the concept essentially is and its superior benefits of adoption/replacement.
It is human nature for most people to build concepts of what a thing is by observation of (a function of) what a thing does. It has been that way for all of human history. Humans look first at what a thing does to create concepts of what a thing is. A thing is as a thing does. Somewhere along human history it started to change. First with realization of what things are in the natural world in spite of what they may appear to be because the natural world is based on natural laws for us to discover, not the rules or concepts we may wish to impose upon it. The world is not the center of the universe.
This is the Information Age. Information is conceptual and has its own "natural laws" applying to conceptual structures not so much different than the natural world. The fundamental law in both worlds structured on the same concept: What a thing is and what a thing does in relationship to other things. Ours is an object oriented natural world that extends itself into an object oriented conceptual world. First we organized (continue to organize) the natural world by what it is and what it does. It is like we reversed engineered (so far) the natural world creating the blue print schematic of the operating system (what the natural world is) and what the natural world does (its operating programs).
The natural world was created for us. We are creating our own conceptual world. What better methodology to apply than what was used to create the natural world. Physical and conceptual things are simply things. The same rule of creating the entire system is to first create what a thing is and then, by its design it will find, and then do (in time) the thing that it was designed to do. Create the right fundamental thing and and its actions will evolve to enable its functions. Some evolving lines might die out, others will survive.
Money is debt. It is time to change what money is but we are sidetracked or intentionally mislead in our progress to change by those that have a sub-optimized special interest in perpetuating an existing dysfunctional system. They perpetuate it because they know what money is, it is debt, and how to manipulate it. Debt free money as discussed by the website hints at the need to change what money is. The discussion of it by those that cared to comment shows that comments focus mostly, just like we generally are inclined to focus on everything, on what money does not what money is.
Debt is one of the multitude of things that is done with money. That is a function of money, what money is used to do, a single sector of what money does. A created negative object of money to balance the created positive object of money. That is the dual nature of money that divides it in to two different things, an asset and a liability so that the two different things can relate to each other by some some sort of primary action called a loan. Bankers created that system with their primary focus on what money does (for them) not what money is (or should be, which just might not really be what is in their sub-optimized self interest) in order to enable it to do what it was designed to do.
A Money System with no equally, to the penny, balancing debt is a concept totally inconsistent with the current banking system. That is why the government had to introduce positive money with no balancing, to the penny, debt aspect to it..............
Get this because it really is astounding:
However, we call that positive money that is in our bankster debt money system the National Debt! Our positive money is our national savings! There would be no savings in a total debt money system. How in the world can we call our national savings our National Debt and then focus on reducing the National Debt (equal reduction in savings).
One of the comments on the web site called attention to a site that defines the true nature of our National Debt:
http://neweconomicperspectives.org/2012/10/modern-money-and-public-purpose-2-governments-are-not-households.html
Is this perhaps the ultimate irony of focusing on what a thing does and defining it, elevating it to essential fundamental object in the conceptual structure scheme of things based on what it does, not what it is?
Is Randy Wray trying to explain to us that Money as savings is something that money is? Money as National Debt is just one of the functions that money does as an action?
In the Bankster system all debt money in the system existing as loans by the bank has to balance the the amount of asset money on the banks balance sheet and loans have to someday be payed off.
To think that the National Debt is our National Savings and that there is political desire for austerity to reduce our National Debt and therefore equally reduce our National Savings is incredible.
-----------------------------------------------------------------------------
Presentation of and comments upon the subject title of this post are at this link:
http://www.macrobusiness.com.au/2012/10/is-debt-free-money-an-option/
A good presentation but the big picture created by the nature of the aggregate comments is excellent. Many different views are presented by individual comments. The best way to draw a line to divide the comments into two absolute groups for macro analysis is to decide which of two things the comment is focused on by asking the simple question:
1. Is the comment talking about what money is?
or
2. Is the comment talking about what money does?
Because it is most likely that the comment addresses both aspects of money:
Start Sidebar here:
For agonizing clarity I will restate the two aspects of money which are the same two aspects of any thing and every thing. There are only these two fundamental aspects of a thing in our world and there are no more than two aspects of a thing, everything else being a derivative of these two macro aspects of a thing:
1. What a thing is,
and
2. What a thing does.
End Sidebar here!
That is a simple view of all things. But it is not that simple but the key to understanding this contradictory statement is this:
. All things exist exist in the natural world only in relation to another thing in the natural world. I am talking about the natural world here. Clarification is agonizing isn't it but I hope you understand I am talking about the natural world.
A thing cannot "do" some thing in the natural world unless it does it in relationship to another thing.....in (not leaving anything to abiguity here) .....the natural world. In other words, if a thing cannot "do" anything in relation to anything else then it can't exist in the natural world. If it could exist in the natural world without any relationship to any other thing in the natural world then to satisfy the rule that it can only exist in relationship to another thing in the natural world then if it was the one and only thing in the natural world with nothing else to do anything with then it would have to "do something with the only thing to do something with: ITSELF! That is a relationship that by definition cannot exist in the natural world. If it did then we are really dealing with not one thing but two things that we perceive as one thing until we can see it in reality as two different things.
If a thing exists only and exclusively in relationship with itself and absolutely (emphasis on absolutely) nothing else (called a recursive relationship) then it does not exist, cannot exist, in the natural world. It can only exist in the supernatural world. If that "writing on the wall" does not take you to the logical conclusion of what that thing is (clue: Thing) and its implications as to how we have created our concepts that explain this situation then I have not been clear enough nor capable enough to lead you to the water.
Back to the real world and the Idiots Guide to "Things and What Things Do".
The comments on http://www.macrobusiness.com.au/2012/10/is-debt-free-money-an-option/ deal in various degrees with what money is and what money does. In most the degree, mostly one or the other is obvious, a few have a fine line. Beyond making an either/or division in to two categories:
1. Either the comment talks mostly about what money is.
or
2. The comment talks mostly about what money does.
It is possible to analyze the comment and determine what percent of the comment talks about what money is and what percent talks about what money does on a sentence by sentence basis.
Whatever way it is sliced and diced, macro or micro level, the forest or the trees I believe that the results are the same. Mostly we think, conceive, express, structure our concepts, live our daily lives based primarily on what things do, not what things are in the plural. In the singular, which is called a uniquely identifiable instance of the class a thing is in, we talk mostly about what a thing does rather than what it is. What is thing "is" is usually fixed by its definition in the dictionary. We usually don't argue about that, we just accept as the given then get on to talk about what a thing does with maybe some ramifications that might go back to redefining to some degree what a thing is.
When the redefinition reaches a tipping point we realize that what we previously defined as one thing is really a different thing all together worthy of a different dictionary name and definition. In the larger scheme of things and where the new term and definition fits in that bigger scheme of things might be more important than the existing thing and its traditional relative importance in the scheme of things. Consequently, the new reality of a thing with a new word to define it challenges the old reality of the thing that has the ownership of the traditional word to define it. The conservative word to define it, the old word (and its meaning) being the best word.
I think that that the concept of "Spin" deals entirely with what a thing does, not with what a thing is. If the old thing that we once defined it to be is really something else in reality, maybe totally different, that essential difference in what a thing factually is can't be addressed because it acknowledge the new thing exists. The new thing can only be addressed in terms of what it does, not what it is. Defenders of the previous (continuing to exist unchanged thing) can only address the new thing in terms of what it does, not what it is a present what it does as contrary to what the existing thing does.
Focus the discussion and analysis on what things do and the debate and analysis goes on forever. That is the best defense of those that do not want to change what a concept is. Do not go head to head on the basis of what an old concept is compared to what the new competing concept is to defend the old concept that may deserve revision. An existing concept definition of what a thing is holds the high ground in the battle. Honestly dealing with a head to head analysis on the basis of what two things are (the result of which require some change in relative importance in the greater scheme of things, maybe essential change (not just a battle but a war of ideas) is certainly not the way to defend against change of the existing concept. The only way to defend the existing concept is to focus on what the new competing concept does. That strategy takes the conflict down into the confusing complexity of what a thing does.
Go to where conflicting things are analyzed on what they do and the war is likely to be lost to the concept that holds the high ground based on its accepted definition of what it is. That is true because what a thing is defines its nature which is limited, on the other hand what a thing does can be many things. The variety of actions a single basic thing can do are numerically immense in the operating the scheme of things. That is a law of nature and information. Actions a thing does introduces great complexity even if what that thing is remains conceptually simple.
If you are in conflict and losing the war on what your concept is then your only plan is to attack what the opposing concept does. What a thing does in terms of different identifiable actions deriving from what it essentially is means that some of the specific things it does will not be optimal and therefore reasons to throw the new baby out with the bath water that washes it. Nit pick the details of the adverse action results of the what the opponents concept does . Frame the selected actions. If you do an excellent job of framing the actions then the opponents concept becomes defined by an inflated perception of what it does that defines in weak minds what the concept essentially is and its superior benefits of adoption/replacement.
It is human nature for most people to build concepts of what a thing is by observation of (a function of) what a thing does. It has been that way for all of human history. Humans look first at what a thing does to create concepts of what a thing is. A thing is as a thing does. Somewhere along human history it started to change. First with realization of what things are in the natural world in spite of what they may appear to be because the natural world is based on natural laws for us to discover, not the rules or concepts we may wish to impose upon it. The world is not the center of the universe.
This is the Information Age. Information is conceptual and has its own "natural laws" applying to conceptual structures not so much different than the natural world. The fundamental law in both worlds structured on the same concept: What a thing is and what a thing does in relationship to other things. Ours is an object oriented natural world that extends itself into an object oriented conceptual world. First we organized (continue to organize) the natural world by what it is and what it does. It is like we reversed engineered (so far) the natural world creating the blue print schematic of the operating system (what the natural world is) and what the natural world does (its operating programs).
The natural world was created for us. We are creating our own conceptual world. What better methodology to apply than what was used to create the natural world. Physical and conceptual things are simply things. The same rule of creating the entire system is to first create what a thing is and then, by its design it will find, and then do (in time) the thing that it was designed to do. Create the right fundamental thing and and its actions will evolve to enable its functions. Some evolving lines might die out, others will survive.
Money is debt. It is time to change what money is but we are sidetracked or intentionally mislead in our progress to change by those that have a sub-optimized special interest in perpetuating an existing dysfunctional system. They perpetuate it because they know what money is, it is debt, and how to manipulate it. Debt free money as discussed by the website hints at the need to change what money is. The discussion of it by those that cared to comment shows that comments focus mostly, just like we generally are inclined to focus on everything, on what money does not what money is.
Debt is one of the multitude of things that is done with money. That is a function of money, what money is used to do, a single sector of what money does. A created negative object of money to balance the created positive object of money. That is the dual nature of money that divides it in to two different things, an asset and a liability so that the two different things can relate to each other by some some sort of primary action called a loan. Bankers created that system with their primary focus on what money does (for them) not what money is (or should be, which just might not really be what is in their sub-optimized self interest) in order to enable it to do what it was designed to do.
A Money System with no equally, to the penny, balancing debt is a concept totally inconsistent with the current banking system. That is why the government had to introduce positive money with no balancing, to the penny, debt aspect to it..............
Get this because it really is astounding:
However, we call that positive money that is in our bankster debt money system the National Debt! Our positive money is our national savings! There would be no savings in a total debt money system. How in the world can we call our national savings our National Debt and then focus on reducing the National Debt (equal reduction in savings).
One of the comments on the web site called attention to a site that defines the true nature of our National Debt:
http://neweconomicperspectives.org/2012/10/modern-money-and-public-purpose-2-governments-are-not-households.html
Is this perhaps the ultimate irony of focusing on what a thing does and defining it, elevating it to essential fundamental object in the conceptual structure scheme of things based on what it does, not what it is?
Is Randy Wray trying to explain to us that Money as savings is something that money is? Money as National Debt is just one of the functions that money does as an action?
In the Bankster system all debt money in the system existing as loans by the bank has to balance the the amount of asset money on the banks balance sheet and loans have to someday be payed off.
To think that the National Debt is our National Savings and that there is political desire for austerity to reduce our National Debt and therefore equally reduce our National Savings is incredible.
Saturday, October 20, 2012
Center of the Universe
The AMI, monetary act and the recent IMF paper is the only place to go, it is a paradigm shift and with it a whole new world of "what money is" and that drives what money does.
Just for the sake of speculating on possibilities in the new world of real money (no fractional reserve banking, spending by government created money into the economy) I have blue skying the idea of "what could be the nature of money" in this new system that implements the IMF paper. What a wonderful world it could be!
The nature of a thing and its relative importance in the scheme of things is what revolves around it. A paradigm shift happened when the earth was no longer the center of the universe or conversely, you did not fall off the farthest end of the earth but found yourself back where you started. The perception of the physical construction of the universe changed totally with those paradigm shifts that brought our concepts in line with reality.
The strongest bond that money has to anything is who has it. In this digital world, even more so than in the past "pocket money world" who has it is identified to an account and accounting number. I would say that without exception, digital money does not exist (cannot exist) without association to an account, even unclaimed money or negative money has to have an account number. Money goes into or out of an account. The account is a fixed static record for its lifetime. It exists until it is abolished or replaced with a new account number.
Today an account number is the fixed center of the money universe around which everything revolves. It always has been. Nothing wrong or wrong headed thinking involved in that status. Until the digital age, there was no alternative for centering everything around money itself being the fixed, central, primary record. That was OK, the way it had to be before computers. It is not like ignorance or failure to recognize the reality that the earth is not the center of the universe.
100% real money instead of debt money means that once money is created it can exist forever. It does not come into and go out of existence to come into existence again as debt money does. Information engineering says: pick the constant, unchanging thing upon which to build the conceptual system structure. For example: We did it when we chose individual rights. People come and go. The rights of freedom exist forever. We naturally choose things that are everlasting to be foundations of our concepts.
Here is the paradigm shift:
Now: Money is the variable thing. The account it resides in is the (relatively) fixed thing. Money goes into and out of the account. Hey, its my money! To me my bank account is the center of my money world as well as the total money world.
The paradigm shift after full IMF paper trasition: Money is the fixed thing. The account it is associated with is variable, changing all the time. Money itself becomes the center of the system. I still perceive my account as the center of my money world.
In the real 100% money world there is an absolute amount of known money in existence. If each unit of that money (one dollar) has a unique digital serial number it becomes a perpetual fixed record. Once brought into existence it lives forever (or as long as we need money to keep score) the ownership of that dollar is determined by the account number associated with it. If may be withdrawn from circulation for control purposes but it still exists with a special purpose account number. Transactions of money as a medium of exchange take place on the single digitized, serialized one dollar unit level. That whole process is as transparent to the user as is the fundamental digital process that got this email from me to you.
Conceptually, it is as if I said to the keeper of the system: Take 100 of my single digital dollars, cross of my name and put Joe's name on them plus a time and date. The keeper of the system selects 100 of my dollars at random and does it. How to handle the small change? Let free private enterprise figure out how to do nickles and dimes.
Trillions of dollars transacted every day? The system can handle it. Look at IPV6 on google to see what the system can handle at the level of trillions of uniquely identified websites. It gives 1 followed by 35 zeros as the unique possibilities.
This is a seed thought. Change the center to the true center or a better center that is enabled by technology and the new view gives limitless possibilities.
The sad reality is that we could never do this in the USA. China could. The scenario would make a fascinating science fiction novel. Like 1984? It is all about money. Whoever has the best money system rules as the center of the money world. So, who rules when we have one world money? The best player, not the owner of the ball or the score keeper.
Tuesday, October 9, 2012
Real Money Full Reserve Banking
Thanks for the link. http://www.positivemoney.org.uk/ is the British counterpart of our own organizations that are proposing 100% real money to replace our 100% debt money private banking system. I had not looked at the site for some time and I'm pleased to see that good logical thinking is not exclusive to the USA just like science is not exclusive to the USA.
A couple of weeks ago I was overjoyed to find the IMF paper on Full Reserve Banking (100% real money). It is an excellent presentation of the idea as well as the method to transition from fractional reserve banking to full reserve banking. That is what has to change to make possible my concept of uniquely serializing every single digital dollar and having the name of the financial entity (person if all corporations are in fact persons) owning/possessing the dollar change from the old owner to the new owner as money is used as a medium of exchange.
The IMF Paper is a restatement of the Chicago Plan devised to resolve the banking problems of the Depression. Unfortunately, not implemented then although the total plan was a "go nuclear" threat to the banking system that forced them to accept some controls. The repeal of those controls as well as lack of enforcement is what caused our current recession and economic problems.
An excellent plan then, an excellent plan now and now we have the technology in computer systems to implement it.
IMF Paper: http://www.fullreservebanking.com/
Wikipedia description of full reserve banking: http://en.wikipedia.org/wiki/Full-reserve_banking
Kucinich's plan is fundamentally a real money banking system: http://www.monetary.org/
100% real money means that once money is created it never really goes out of existence, it lives forever. It might be pulled out of circulation for various control reasons and more can be made as necessary. The total amount is finite but in sufficient abundance to do what money does. It is obvious that every single unit must therefore be identified for control. If that is done then the unit of money becomes the real dominant record in the money system, not the account of the holder in which and aggregate amount of money resides although that account will always be the apparent dominant record of the money system to the the owner of the money. Just like you view Dancing with the Stars a a program you like but essentially it is a collection of ones and zeros in a technology system that brings the program to you. You do not care about that but that is the foundation of the system. That system changed for analog transmission to digital transmission recently. A big change in the nature of delivery but little impact on most viewers.
Tuesday, October 2, 2012
Whose Money is it Anyway?
Excellent post:
http://spartancapacity.blogspot.com/2012/08/who-money-is-it-anyway.html
Especially this:
"What does a "pure exchange" medium, controlled by the state, actually mean? It means that money is created by the state for the purpose of exchange of tangible goods and assets. It means that banks can no longer generate profits by exploiting loopholes in the calculations of global stock markets. It means that your money will never "evaporate" from banks as the money in circulation would be linked to state backing. It means that banks can no longer bet on the economy the way a gambling addict bets on horses because they no longer have the ability to generate "vitrual" money endogenously using fractional reserve banking. Fractional reserve banking is another way of saying that a bank lends out 10 times more money that it actually has so that it can maximise its profits at the risk of catastrophic cash-flow shortage. Basically writing cheques that will bounce - and hoping they don't get cashed in too soon to avoid them bouncing."
http://spartancapacity.blogspot.com/2012/08/who-money-is-it-anyway.html
Especially this:
"What does a "pure exchange" medium, controlled by the state, actually mean? It means that money is created by the state for the purpose of exchange of tangible goods and assets. It means that banks can no longer generate profits by exploiting loopholes in the calculations of global stock markets. It means that your money will never "evaporate" from banks as the money in circulation would be linked to state backing. It means that banks can no longer bet on the economy the way a gambling addict bets on horses because they no longer have the ability to generate "vitrual" money endogenously using fractional reserve banking. Fractional reserve banking is another way of saying that a bank lends out 10 times more money that it actually has so that it can maximise its profits at the risk of catastrophic cash-flow shortage. Basically writing cheques that will bounce - and hoping they don't get cashed in too soon to avoid them bouncing."
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