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/biz/ - Business & Finance


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17548926 No.17548926 [Reply] [Original]

Where does it all come from?

>> No.17548956

Trees

>> No.17548964

>>17548926
Power and blood

>> No.17548976

Or better yet, what are some books that will redpill me on where money comes from and what the economy is propped up by

>> No.17548983

>>17548976
Money comes from noses

>> No.17549270

>>17548926

Since nobody has given you an answer yet, here is my pleb-tier understanding:

1. Money is created out of thin air by an independent entity called a "central bank"
2. The central bank loans money to government and banks
3. The money is then spent by the government or loaned out again by the banks
4. The money eventually finds its way back to banks as deposits
5. If a bank has enough money deposited, it is allowed to borrow more money from the central bank

(repeat ad infinitum)

What is the only thing keeping this circus going? Confidence in the assumed legitimacy of the central bank.

>> No.17549282

>>17549270
What gives paper money value?

>> No.17549290

>>17549270
Does every (what's the word..fiat) currency work like this?

>> No.17549302

>>17548926
https://m.youtube.com/watch?v=vEFlPwA8uEE

>> No.17549359

where are these brainlets coming from holy shit

>> No.17549361

>>17548926
the first lady shits out a brick of money every morning

>> No.17549381

>>17549282
Faith and confidence by force.

>> No.17549384
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17549384

>>17548926
Jews
>>17549282
>>17549290
https://youtu.be/uWcVxssAs2g

>> No.17549388

>>17549282
Paper bills were originally documents entitling the holder to gold stored at the central bank. In 1972 a law was passed and these bills no longer entitled the holder to anything. This law was intended to be temporary. People kept using these bills as paper money and eventually stopped caring that the bills did not entitle them to anything. Paper money does not have value; it's just that nobody has realised it yet.

>> No.17549402

>>17549270
This can be even further simplified by stating the current fiat system is just speculation (what you said is confidence). In the past it was gold so money had intrinsic value, but those days are sailed.

>> No.17549437

>>17549290
Nope. Bitcoin is a fiat currency for example.

>> No.17549440

>>17548926
Staking Bidesk?

>> No.17549448

>>17549270
>What is the only thing keeping this circus going?
Lack of education about the concept of money, international politics, and the oil trade and probably some more reasons.

>> No.17549457

joker never really burned the pile

>> No.17549464
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17549464

>>17549437
>Bitcoin is a fiat currency for example.

>> No.17549488

>>17549388
So then the money that I am given for working a regular job is worthless? That I’m trading my time for paper instead of real tangible assets that have value? Which is slavery?

>> No.17549495
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17549495

>>17549464
The only reason bitcoin has value is purely faith and trust. What other currencies do that?

>> No.17549514

>>17549464
What is the intrinsic value of bitcoin? Room heating? A fiat currency can be digital, decentralised, and have static supply. As long as enough people want to use it it will still work.

>> No.17549515

something has value if:
1. you can exchange it for something else that is valuable. this is why people want fiat cash, because you can use it to buy things you want and need.
2. people want it simply because it is desired. for example, women were tricked into wanting diamonds so diamonds are valuable now.
3. it is useful. note that many metals fulfill this requirement, even something "cheap" like copper is a great conductor of electricity and heat. gold and silver are also useful for many purposes.

fiat cash fulfills 1, and because it does, it also fulfills 2 and 3. as long as it "comes" from a reputable government authority, people don't really care how it is made, as long as it's out there and they can get it somehow. most will get it legally through work or business. some will get it illegally through crime. the whole thing is just one giant game, a system. the value of fiat cash in terms of point 1 above, what you can exchange it for, is constantly changing and has trended downward. your parents and grandparents bought a house for $2000-$60K. Now it costs over $200K-$600K to buy a house.

since the amount of fiat is constantly increasing, you are supposed to invest in things with finite quantity, of high quality, like in "stocks" of a company that is doing well or will do well later on. but this is also not guaranteed because companies can dilute their stocks.

>> No.17549525

What is the source of value?

>> No.17549540
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17549540

>>17549514

>> No.17549548

>>17549495
>>17549514
I don't think you guys know what fiat is. There is no government in the fucking world that maintains the value of Bitcoin.

>> No.17549599

>>17548926
cooperative hallucination

>> No.17549600

>>17549548
Exactly; it is a decentralised fiat currency.
>Fiat money is a currency without intrinsic value that has been established as money
>Fiat money does not have use value

Bitcoin is fiduciary money and fiuciary money is fiat money. It doesn't mean it won't work or that it won't make you rich. It just means that the value of bitcoin depends entirely on the confidence of hodlers.

>> No.17549613

>>17549282
The fact they have to be used to pay taxes.

>> No.17549619

>>17548926

01100110

01100101

01100100

>> No.17549623

>>17549600
Bitcoins intrinsic value is that it is a non confinscatable, decentralized, inflation proof, immutable, digital currency.

>> No.17549698

>>17549488
>>17549515
>>17549525
What I really should have said is that paper money has value but it is market value not intrinsic value. And if the market is functional then the market value will typically reflect the intrinsic value. Desire and use are both aspects of intrinsic value and unless you like the look of Benjamin Franklin or need something to start a fire then paper money has neither; people don't desire money as an end unto itself.

>> No.17549766

>>17549623
What value would a satoshi have to you if there was nobody you could trade it with? Would you download the ledger and marvel at the binary? Would you send it back and forth between different accounts? Bitcoin has market value because the protocol has features which are desireable for trading and people speculate on this. That's fine but it isn't intrinsic value.

>> No.17549809

>>17549766
what about gold though? yes, it can be used as a metal in production, but that accounts only for a tiny part of its valuation.

>> No.17550021
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17550021

>>17549809
Gold is inherently highly valuable mostly because people find it beautiful. It doesn't tarnish and can be easily used in decoration. A large part of the value of gold is just market value but if you could not trade gold it would still have significant aesthetic value. This aesthetic value compounds the market value significantly because it adds confidence to the act of trading and holding gold as a currency.

>> No.17550349

>>17549388
This is what I don't appreciate about humans. If money has no value then take out everything you have in cash and throw it into traffic. Money has value because it is a token of commitment. If I now lawns for a living and i need a dentist to fix my teeth what do I do if the dentist wont accept their lawn being mowed for the next two months as payment?

>> No.17550382

>>17550021
what if they stop finding it beautiful?

also that's like saying fiat cash has some intrinsic value because you can use the paper to smoke a blunt or wipe your ass. it is true, but it accounts for a really small part of the asset valuation.

>> No.17550431

>>17548926
money sprang forth, fully-formed, from Zeus' forehead

>> No.17550470

>>17550382
Papermoney can be constantly reprinted. You can not fake an elementary metal like Gold. Your point is moot. Things are valued for their qualities and their cultural importance, and last but not least for their inherent value(something being rare is a value in an economy)

>> No.17550478

>>17550349
You're right, I wasn't being entirely honest. I mentioned in another reply that actually money has market value because it is useful for trading. Money as a concept has a different value to the paper itself: you can't pay somebody to make an economy function smoothly which is the value of money as a commonly accepted concept. Moving away from fiat money would be extremely damaging in the short term but I think it is necessary for the long term.

>> No.17550514

Nulink

>> No.17550546
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17550546

>>17548926
governments print it then force you to use it. without force, people would converge on the best money (Bitcoin). even with this force, BTC will be what people store wealth in while fiat is spent immediately or saved by buying BTC.

>> No.17550551

>>17550382
They might. In this case gold as a currency would probably be replaced with another currency with inherent value.

>also that's like saying fiat cash has some intrinsic value because you can use the paper to smoke a blunt or wipe your ass. it is true, but it accounts for a really small part of the asset valuation.
Right, I agree. The inherent value compounds the market value because it makes it preferable for trading purposes. Only a small part of the value is inherent but that is preferable to virtually none as with fiat. The market value of scarce goods is also set by the highest bidder and this means that for some the inherent value can be much higher than others. For example an aristocrat would inherently value non-tradeable gold much higher than non-tradeable eggs and milk - and the opposite would be true for a starving peasant.

>> No.17550562

>>17549525
Dunno lol. Economists have been trying ti understand value since the beginning.
I would argue only people and land have true value

>> No.17550566

>>17550382

no one will ever stop finding gold beautiful. it has the longest and best track record in the universe.

>> No.17550577

>>17549698
>poeple dont desire money unto itself
Rationally this would be true, but quantity is a quality unto itself.

>> No.17550608

>>17548976
It's not actual money. It's something traded for different things. A medium. It has no backing so it is not real money. Aka debt based. Just a medium to manipulate and profit off of. It's like a false derivative of real money, despite popular belief.

It still has some power, but it's owned by a private bank. That being the case. Money should be 20% or less due to it being someone else's property, inflation, etc.

>> No.17550649

>>17550577
Would having all the money in the world be desirable? It might be, until you have it because then the market value would disappear. I would suggest that if inherent value is contingent upon market value then it isn't really inherent value. I know where you are coming from though and for some crazy people quantity might have inherent value.

>> No.17550810

>>17549525
>>17550562
Inherent value is completely subjective. If you are hungry food has far more inherent value to you than fire, and vice-versa if you are cold. This is the case for everything. However inherent value manifests statistically in market value and many people value things because of the market value, which is not a true judgement of the inherent value. What is the source of inherent value? I would say it is the id - the primal part of us which is divorced from calculation or reason and can only sometimes be explained via evolutionary forces. People and land tend to appeal to the id. Narrative, music, comedy, a clear starry sky - all things which also tend to appeal to the id. True value is the expression of environmental information so compressed that we cannot justify it without saying "because I like it".

>> No.17550815

>>17550649
For just about anyone the numbers have significant value, its why diamonds cost alot but do nothing over man made diamonds.

>> No.17550823

>>17550810
Youre basically saying value is subjective. I agree, but without two things - people and land - there would be nothing to value and no one to value it. Thus those two things are essential to all value.

>> No.17550840

>>17548926
Trees and octopus blood. Nature turned into worthless garbage. A blank paper to draw on artistic stuff would've been a more honorable reason for sacrificing these creatures.

>> No.17550918

>>17550815
Significant market value but without directly affecting the inherent value. The inherent value of a diamond is aesthetic or for various uses in industry. Now, if you were to give me 1000 diamonds one at a time then my inherent valuation of the diamonds would decrease over time (I would desire each successive diamond less and less). I am not saying scarcity does not affect desire, just that it does so subconsciously because of social reasons and trade, which are not inherent attributes of the object itself.

>> No.17550952

>>17550823
Yeah agreed, though I would generalise it to "culture" and "environment". And if you consider culture to be an abstract part of the environment then I think
>True value is the expression of environmental information so compressed that we cannot justify it without saying "because I like it"
kind of gets at that idea in a roundabout way

>> No.17550953

>>17549525
people

>> No.17550972

>>17550918
Aesthetic diamonds generally arent fungible, because the perceived value qualities arent based on anything except fashion.
Diamonds is just one example, it could be sports cars or handbags or watches.

>> No.17551026

>>17550972
I think you've lost me. Not sure how this ties into
>quantity is a quality unto itself.

>> No.17551036

>>17551026
Im talking about the price. When it comes to aesthetic goods, price is itself a quality.

>> No.17551054

>>17549270
I want to take over the government and make all the previous fiat money be worth nothing just to see normalfaggots seethe.

>> No.17551168

>>17551036
The price of a good emerges from the interaction between people as mediated by a particular currency. I wouldn't say that it is a quality of the good itself, although information about the qualities of the good are sure to be contained in the price. If price was a quality then you could say that a dollar bill has the quality of having a price of exactly one dollar. The qualities of a dollar bill exclude its price which is entirely arbitrary and so I think price must be excluded for all other objects too.

>> No.17551265

>>17551168
You drank too much econ101.
There are many goods that do not follow simple price/demand curves, known as giffen goods or veblen goods. For those goods, price has part of the quality. A 100k watch doesnt tell time better than a 30 dollar one.

>> No.17551347

>>17551054
The government is already working on this pretty effectively. I think they are going to cut rates all the way to zero, maybe even below, and push confidence right to breaking point with more "not QE". If you are going to make free money and be the world's reserve currency, may as well make the most of it while it lasts right? And then a suprise return back to a gold standard or a national digital currency - hopefully the former otherwise things could get pretty dystopian.

>> No.17551537

>>17551265
>A 100k watch doesnt tell time better than a 30 dollar one.
Right, this is exactly what I mean. The uses are the same regardless of what the price is. If you ignore the supply and demand curves then you are left with the value of objects "unto themself". This is what I mean when I say fiat money has no inherent value or inherent desirable qualities unless you are crazy. Pick any craze such as beanie babies or tulip mania - I think you would agree that people did not value the beanies or tulips unto themself, they valued them because of what they thought the price / supply / demand curves would do. I am saying the exact same thing about money only that you have to flip the price / supply / demand curve and pick a tangible asset such as gold or coffee beans or whatever for the "price" axis. People value money because of the momentum of the "price" (as valued in gold or coffee, etc) and the existing curve and not for any inherent reason, ie. fiat currencies are a massive bubble. Hopefully that is coherent - I never studied any econ or anything, it just seems like common sense.

>> No.17551626

>>17551537
>unless you are crazy
Turns out most people are crazy, thats what im saying.
They will buy a 100k watch becuase its 100k and sits on their arm

>> No.17551959

>>17551626
People are sane. Markets are crazy.
And the fiat market has been leading the people for a long time; they have lives to live. The horse bolted and everything seems well and good until the cart starts running away down the hill. This is not the same as price curves for luxury goods; fiat currency is the opposite of a luxury good and each year it is less and less so.

>> No.17552000
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17552000

>> No.17552615

>>17551959
Markets are made up of people derp

>> No.17552719

>>17552615
Right, now pack 500 people into a log cabin with a small door, light the place on fire, and see if they all calmly exit single file. It's going to be hell because everyone knows it is going to be, which is a completely rational fear. Markets are the same.

>> No.17552755

>>17548926
It's mostly digital records created by spending.

>> No.17553353

>>17548976
The Money Bubble by Turk and Rubino was the last one I read. Easy read and very conversational. If anyone else has a book rec, I'm all ears.

>> No.17553872

>>17549282
ultimately the dollar is propped up by the U.S. Military.

People are so dumb and naive they think we spend $700 billion a year on military for keeping.

The U.S. is the world guarantor of security and commerce. End of story. No other nation can project global power like the U.S. and as such the U.S. has control over the world financial system with Allies of course. If you don't play ball then you're Iran, North Korea, Cuba... etc.

Having a financialized economic system with a fiat currency allows elites to basically tax money. Elites tax the entire economic by syphoning surplus value generated by economic activity and increases in productivity.

In the past the elites would just take your shit and kill you if you protested. Now they just do it automatically by basically skimming off everybody. Overall it works decently well because smart people earn more and can invest their money and profit from the scam.

The system is set up naturally so its hard for people to change class unless they do something great or have great talents. The truth is 20% of people are responsible for 80% of all output in society and thus wealth is distributed more or less like that too. The top 20% own 80% of the wealth. Of course you still have ultra-rich and powerful people who keeps their wealth and status by use of raw power in the present or they live off of the legacy of their ancestors who used raw power to violently take from others but those are very few these days.

>> No.17553939
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17553939

>>17548926

>> No.17554066

>>17548926
Peter Schiff AKA the gold boomer meme wrote what is basically a child's book explaining this, called How an Economy Grows and Why It Crashes. I'd recommend reading it desu.

>> No.17554074

(((them)))

>> No.17555318

Printing machine

>> No.17555381

its all made up, people just agree on it for some reason and nobody acts like there is a problem

>> No.17555482

>>17554066
He should write a literal children's book with metaphors for the economy. He's the king of analogies. Do you know the island story or the orange farmer story?

>> No.17555802

>>17555482
lay it on me anon
I'm familiar with his comparing currency to fish

>> No.17555946

>>17549270
FINALLY THE GOYIM ARE WAKING UP
GOYIM UPRISING SOON