Our ancestors of just a little over a hundred years ago may not have known much about “that new fangled telephony or that darn horseless carriage”. However, most of them did know when they were getting screwed on the exchange of their labor for “junk money”. “Don’t take any wooden nickels“, comes to mind. They wanted something of comparable value for their work. Back then, “Paper money” would not be accepted as a “medium of exchange” unless it was backed by something of proven value such as gold or silver. Most were also smart enough to know “you don’t get something for nothing”. My how things have changed!
So, why do we accept paper money as a valuable “medium of exchange”? First, what is a medium of exchange? When individual producers exchange their products for other products, we have a direct exchange of goods; “bartering”. As the division of labor became more diversified, bartering became very cumbersome; enter a “medium of exchange.”
Originally this medium of exchange was referred to as money; however, in times of old, money referred to a specific commodity usually gold or silver (sometimes other commodities were used). In other words, money was the actual commodity used as the medium of exchange.
The concept of money has changed over the years. We all think in mental images. If I say, "visualize a car”, do we all think of the same car? Of course not, we all have our own idea of what “car” means; yet we all know what a car is. In our not so distant past, if you asked someone to visualize money, they would probably think of gold or silver coins or even "gold dust" as during the California Gold Rush.
Today, when we think of money, do we think of a commodity (gold or silver) or do we think of paper currency? To most of us, the mental image of “money” has changed to be represented by paper currencies such as the U.S. Dollar. Very few of us think in terms of an actual product or service from our labor or a real commodity as our true medium of exchange.
My personal opinion is that we have been educated (indoctrinated) to make this mental image of our current U.S. Dollar (“Federal Reserve Notes”) represent our concept of money and therefore capital and wealth. It is by this false concept of “paper money as wealth” that we allow ourselves and our real production to be exploited by the elitist central planners at the Federal Reserve Bank with the complicity of our government rulers and the corporatists who finance them.
By believing that money is wealth, we accept this fraudulent idea that paper money is valuable even when there is nothing behind it but claims against our own individual production. Federal Reserve money, in fact all paper currency, is nothing more than a "substitute” medium of exchange. We need to mentally separate paper money from a true commodity based medium of exchange.
All central bank’s or even the U.S. Treasury’s paper or digital money is only a substitute for something else. The Federal Reserve Note (our current "fiat (legal tender by law) money") is claimed to be backed by the “Full Faith and Credit of the United States”. This means it is a substitute for the labor and production of every American producer (collected through taxes and currency debasement (inflation)).
Even commodity-backed "paper money" is still only a substitute for that commodity; gold, silver, or whatever it’s convertible into. Only the actual gold, silver, or the products of our production are true mediums of exchange. Everything else is just a substitute.
It’s about time we wake up and stop accepting the Federal Reserve Note "mental image" of money as a production-backed medium of exchange and instead see it for what it really is; at best a substitute and at worse “counterfeit production.”
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