What Is Money? And Why We Don't Use It Today!!

In going through my site tracker I ran across a link online that I had written almost 2 years ago. This was in response to another poster on a financial forum. After reading it again I was amazed that I did such a good job in explaining what money is and it's historic role in the marketplace. I have added some thoughts in red to expand upon my original writing of 2 years ago. Maybe people looking in on this blog might take note and learn why the world economy is in the shape that it's in. Very few people can explain this better then I have done here. These thoughts are taken from what Ive learned from others as well as my own observations. The more that people begin to understand the problem, the sooner we can begin the dialog to fix it.

Yes Jim, you are correct. However, it's not that the "old financial rules of thumb have changed" I would submit that the old financial rules are thumb are being rediscovered. I agree with you in some respects as to how to save but to start with you must have savings that is out of the system. Savings that the "Pin Striped Bandits" cant steal.

Having been in the investment world since I was in my 20s and did quite well I have learned a few things. First off I have learned that the U.S. monetary system and the economy is based upon a massive lie. They are the greatest Ponzi schemes ever inflicted on the world. Once you come to accept this you must go back and relearn the history that has been untaught.

Sadly what I'm about to tell you has not been taught in the western world for over 80 years and there is a reason for that. Everyone needs to understand what money is. Very few people can define money and its role.

To start with money has 5 elements. The 5 elements of money are...
(1) A medium of exchange - something of value to exchange for the payment of goods and services
(2) Money must be easily recognizable - in other words people must be able to easy recognize that medium of exchange as being valid and not counterfeit
(3) Money must be divisible - you must be able to easily make change, to take larger amounts and be able to make them smaller
(4) Money must be a store of value - In other words the ability to buy goods and services must be able to be stored for spending at a later time, also called savings.
(5) Money must eliminate DEBT. The payment of money must be able to eliminate any and all debt that is created in the marketplace.

Sadly what we use as money today only satisfies the first 3 elements of money. Elements 4 and 5 are not elements of what we use as money today. What we use as money is not a store of value and it doesn't eliminate debt.

The store of value element is very important in the role of money. In fact I would submit that is is the most important role. Money is a payment that one receives for the value of their time and expertise. That payment of ones labor is a claim on goods and services in the marketplace. Instead of bartering by accepting goods or services as payment one can accept money that allows that person to buy the goods and services they need that the person making payment doesn't have. The ability to buy the same amount of goods and services at anytime in the future is the store of value. If one can fill up their car with gas when they receive payment for their labor today then they should be able to so so at anytime in the future. Sadly this is not the case because the ability to buy the same amounts of goods and services from ones savings is debased by a hidden tax called inflation. The effect of inflation is an increase in the amount you pay for goods and services in the numbers of dollars. Price increases is not inflation and inflation is not good in any amount because it debases your buying power that you have labored for. Once you begin to understand this concept you can therefore conclude that the store of value element of money being debased is the same thing as SLAVERY. The ability to steal the value of ones savings through inflation means that you must labor even more and harder to keep the same standard of living over time. Therefore inflation by debasing money (creating money out of nothing) is immoral. Money is the store of value of ones labor.

Next is the element of eliminating debt. What we use as money doesn't eliminate debt because what we use as money comes into existence as a direct result of debt. Government doesn't issue money, they issue debt called bonds or Treasuries. The ability for government and the banks to create money out of nothing without laboring for it debases or takes away the value of the existing money supply. The value of the newly created money has to come from somewhere so through a process called inflation it is stolen from savers and transferred to the newly created money supply. And because government and the banks create the new money out of nothing they are the first to receive the benefits of spending that medium of exchange for real goods and services that they have no real or right to claim. They didn't earn the new money they created it. To eliminate the debt used to create the new money would be to destroy or deflate the money supply. This is why the government can not and will not ever get out of debt. They cant allow a deflation to happen.

That brings me to gold and how to best explain gold and its role as money.


Gold is money and a store of value. It is the "Currency of last resort" as Greenspan has stated many times through the years. Gold doesn't pay interest, dividends, doesn't restate earnings, has no lawyers, accountants, CEOs or CFOs lying to you on television. Gold doesn't ask for bailouts, doesn't go Bankrupt and cannot cook its books. Gold cant be debased or printed at the will of a company or government and holds its purchasing power.

Gold sits there as a store of value, is labor intensive, and a one ounce coin will not split into a bunch of half ounce coins at the direction of the "Pin Striped Bandits" on Wall Street. Also Gold is the ONLY asset class in the last ten years to increase in value and retain every dollar of its purchasing power.

Can gold go down? Yes. However that would mean that all essential goods and services must fall as well. Gold is and acts more like an insurance policy. You are insuring that something in your portfolio can never go to $0.00. All paper assets have the ability to go to $0.00. This is what you are insuring against.

As Alan Greenspan former Chairman of the Federal Reserve said ....

"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold (from 1933 to 1975). If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard." Allen Greenspan 1966

Gold is not in a bubble and here is the reason why. Those that say that gold is in a bubble are only looking at the value of gold in relation to its price in the number of dollars it takes to buy it. However I would submit to you that gold has not changed in value at all. Here is the reason why. In January 1999 when gold was at it low it traded at $287.85 an ounce. Crude oil in January 1999 for its low traded at $17.00 a barrel.

When you look at how much crude oil you could buy in 1999 with 1 ounce of gold it comes out to be 16.93 barrels of oil for each ounce of gold. Today gold trades for $1400.00 and oil is trading for almost $90.00 a barrel. Today the same 1 ounce of gold buys 16.13 barrels of oil. In 1999 gold bought 36 more gallons of crude oil then it does today. So in reality, since oil is the main driver of the economy as everyone needs energy to heat homes, fuel cars, run factories etc, Using oil as the basic foundation of to figure out the golds value you can see that gold is currently UNDERVALUED in relation to how much oil gold bought in January 1999.

When you begin to price everyday living expenses such as rent, fuel, power, food, medical expenses, schooling expenses, TAXES, etc you will see that the gold buys the same amount of those essential items you must have for a basic standard of living and quality of life.

Therefore in reality, GOLD is UNDERVALUED at this time. And if you take into account that the Bank of England dumped all their gold on the market in January 1999 pushing its price down, then you have to conclude that gold could really be valued much higher then where it is today when you base the purchasing power of gold in historical terms.

Can gold go down? Yes. However that would mean that all essential goods and services must fall as well. Do you see gas going back to $1.00 a gallon or food dropping by 75%. I don't think so.

Gold is NOT in a bubble. Gold has not gained in value. Paper currencies have declined in value. That is why essential goods and services cost more in paper dollar terms. Now you have to ask yourself where did the value of our dollar go. That value was stolen from us through a process of a hidden tax called INFLATION.

To address what happened in 2008 when gold and silver went down, you have to understand that ALL asset classes declined in dollar value. This was due to the liquidation of debt. Gold declined by 30% yes, however crude oil went from $147 a barrel to less then $40 a barrel. This means that during the deflation period gold purchasing power increased during that time. However, during the last 3 months of 2008 paper/electronic U.S. dollars increased it's purchasing power even faster. This was because the wold economy was going through a deleveraging cycle and the demand for U.S. during this time went up because all market transactions worldwide are conducted in U.S. dollars. The U.S. dollar is the "WORLDS RESERVE CURRENCY" at this time. True, it has been loosing ground as the reserve currency but in 2008 it was still the most dominate currency of the world. This is a status that the U.S. dollar is loosing more and more ground every day. As more and more nations reject using U.S. dollars and look to other currencies as payment to settle trade among themselves, a few of them including China, India, Iran, Russia are turning to their own currencies and gold as the new reserve currency to settle trade debts. Look at gold as a currency and not as an investment.

Before investing in the markets you need real money. Real money is gold and silver.
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Here is Jim's original post that inspired me to respond.
Was thinking the other day about how old financial "rules of thumb" have changed, on many fronts.
Gone are the days from my parents generation where you worked at the same job for 40 years and you got a nice pension for life like my Dad did, now I think you must adapt a "portability" about your job, retirement, health care etc. the onus is now on you not the company you work for.
What I think is important is to "increase the stock in yourself" like improve your marketability by taking courses, learning things/branching out in your field, getting endorsements etc.
I think the old axiom to have 3-6 months living expenses in a liquid account is inadequete, I think it should be more like 9-12 months.
I believe you should save for retirement by first investing in a company 401K (up to and IF they have a company match) then a Roth, the earlier you start the better, it can be done quite painlessly, I've always been a fan of index funds (except my naive early investing days LOL), over time they have proven to be pretty much on par with actively managed funds, why pay the higher expense ratios ? a couple funds have target retirement funds, like target 2035, they automatically tweak as the time moves on.
Invest in your health, eat right don't use tobacco products, drink sparingly, maintain optimal body weight, get check ups, sleep well, cherish friends, family, significant other, don't sweat the small stuff.
Try to save money without doing without, there are so many ways to do it that really add up, the usuals: brown bag it, don't go to Starbucks, watch movies at home, go to library.

Key Underwear Bomber Witness Runs for U.S. Congress

Everyone in the country need to get behind this man. He exposed the government FALSE FLAG TERROR ATTEMPT that happened Christmas 2009 where he and his wife saw the US government get the "Underwear Bomber" on the plane and gave him the bomb to blow it up just before it reached Detroit. The government denied the story at first but later admitted it to the Congress during a formal investigation.

"Just wanted to post something for all of you following along that Kurt Haskell decided yesterday that he is going to run for Congress! Our district is the 7th District of Michigan. Recently, the state lines changed, and John Dingell is no longer in our District. Kurt would be running against a Republican, Tim Walberg, and Kurt will be running as a Democrat."

BREAKING: Kurt Haskell Exposes Government False Flag Operation During Underwear Bomber Sentencing

Kurt Haskell
Infowars.com
Thursday, February 16, 2012

Personal statement from Kurt Haskell.

Every victim of a crime in Michigan is entitled to make a statement in open court regarding the impact of the crime on their life. The statement is limited to the victim’s physical, emotional and financial well being as it relates to the crime. Keep that in mind as you read my statement. Below is a copy of the victim impact statement I gave today at the Underwear Bomber sentencing hearing. When reading my statement, keep in mind that I am a practicing attorney in the State of Michigan. In addition, I regularly practice in the Court the hearings are taking place at and therefore, I am somewhat limited as to what I can say. We were limited to 5 minutes each.

I wish to thank the Court for allowing me these 5 minutes to make my statement. My references to the government in this statement refer to the Federal Government excluding this Court and the prosecution. On Christmas Day 2009, my wife and I were returning from an African safari and had a connecting flight through Amsterdam. As we waited for our flight, we sat on the floor next to the boarding gate. What I witnessed while sitting there and subsequent events have changed my life forever. While I sat there, I witnessed Umar dressed in jeans and a white t-shirt, being escorted around security by a man in a tan suit who spoke perfect American English and who aided Umar in boarding without a passport. The airline gate worker initially refused Umar boarding until the man in the tan suit intervened. The event meant nothing to me at the time. Little did I know that Umar would try to kill me a few hours later as our flight approached Detroit. The final 10 minutes of our flight after the attack were the worst minutes of my life. During those 10 minutes I sat paralyzed in fear. Unfortunately, what happened next has had an even greater impact on my life and has saddened me further.

When we landed, I was shocked that our plane taxied up to the gate. I was further shocked that we were forced to sit on the plane for 20 minutes with powder from the so called bomb all over the cabin. The officers that boarded the plane did nothing to ensure our safety and did not check for accomplices or other explosive devices. Several passengers trampled through parts of the bomb as they exited the plane. We were then taken into the terminal with our unchecked carry on bags. Again, there was no concern for our safety even though Umar told the officers that there was another bomb on board as he exited the plane. I wondered why nobody was concerned about our safety, accomplices or other bombs and the lack of concern worried me greatly. I immediately told the FBI my story in order to help catch the accomplice I had seen in Amsterdam. It soon became obvious that the FBI wasn’t interested in what I had to say, which upset me further. For one month the government refused to admit the existence of the man in the tan suit before changing course and admitting his existence in an ABC News article on January 22, 2010. That was the last time the government talked about this man. The video that would prove the truth of my account has never been released. I continue to be emotional upset that the video has not been released. The Dutch police, meanwhile, in this article (show article), also confirmed that Umar did not show his passport in Amsterdam which also meant that he didn’t go through security as both are in the same line in Amsterdam. It upsets me that the government refuses to admit this fact.

I became further saddened from this case, when Patrick Kennedy of the State Department during Congressional hearings, admitted that Umar was a known terrorist, was being followed, and the U.S. allowed him into the U.S. so that it could catch Umar’s accomplices. I was once again shocked and saddened when Michael Leiter of the National Counter terrorism Center admitted during these same hearings that intentionally letting terrorists into the U.S. was a frequent practice of the U.S. Government. I cannot fully explain my sadness, disappointment and fear when I realized that my government allowed an attack on me intentionally.

During this time, I questioned if my country intentionally put a known terrorist onto my flight with a live bomb. I had many sleepless nights over this issue. My answer came shortly thereafter. In late 2010, the FBI admitted to giving out intentionally defective bombs to the Portland Christmas Tree Bomber,the Wrigley Field Bomber and several others. Further, Mr. Chambers was quoted in the Free Press on January 11, 2011 when he indicated that the government’s own explosives experts had indicated that Umar’s bomb was impossibly defective. I wondered how that could be. Certainly, I thought, Al Qaeda wouldn’t go through all of the trouble to plan such an attack only to provide the terrorist with an impossibly defective bomb.

I attended nearly all of the pretrial hearings. At the hearing on January 28, 2011, I was greatly disappointed by the prosecution’s request to block evidence from Mr. Chambers “as it could then be able to be obtained by third parties, who could use it in a civil suit against the government”. It really bothered me that the government apparently was admitting to wrongdoing of some kind as it admitted that it was concerned it would be sued. It further upset me to know that the government was putting its own interests ahead of those of the passengers.

When I attended the jury selection hearings, I questioned why versions of the same two questions kept coming up, those being:

1. Do you think you’ll be able to tell whether something is actually a bomb? and

2. Do you realize that sometimes the media doesn’t always tell the truth?

I continued to be greatly saddened at this point as I felt the truth continued to be hidden.

When Umar listed me as his only witness, I was happy to testify, not on his behalf, but on behalf of the truth. I never expected to testify, as my eyewitness account would have been too damaging to the myth that the government and media are putting forward. A mere 5 days after I was announced as a witness, there was an inexplicable guilty plea which exasperated me as I no longer would be testifying.In closing I will just say that regardless of how the media and government try to shape the public perception of this case, I am convinced that Umar was given an intentionally defective bomb by a U.S. Government agent and placed on our flight without showing a passport or going through security, to stage a false terrorist attack to be used to implement various government policies.

The effect this matter has had on my life has been astounding and due to this case, I will never trust the government in any matter, ever.
In regards to sentencing, nothing I’ve said excuses the fact that Umar tried to kill me. He has waived his valid claim to the entrapment defense. Umar, you are not a great Muslim martyr, you are merely a “Patsy”. I ask the court to impose the mandatory sentence.

My Hometown Valdez Digs Out From A World Class Snowfall

Extreme snow in Valdez, Alaska from anchoragedailynews on Vimeo.

What is a "Three Percenter"?

With the passage of the National Defense Authorization Act it is time to ask, What is a "Three Percenter"?Under the bill and from Obama himself in statements issued over the last few weeks anyone can be detained, tortured, held without charges, trial, access to lawyers, put into FEMA camps, and killed. He said that he would veto the bill but it was released days ago that Obama wanted these provisions put in the bill. He is like Rick Perry. Oppose a bill then support it. This is the first time in world history that something like this has been put into law. Even the Nazi's didn't write down their plans. That way they could always have plausible deniability. Our government is being totally overt in their plans.

"The Three Percent in 1775.

During the American Revolution, the active forces in the field against the King's tyranny never amounted to more than 3% of the colonists. They were in turn actively supported by perhaps 10% of the population. In addition to these revolutionaries were perhaps another 20% who favored their cause but did little or nothing to support it. Another one-third of the population sided with the King (by the end of the war there were actually more Americans fighting FOR the King than there were in the field against him) and the final third took no side, blew with the wind and took what came.

Three Percenters today do not claim that we represent 3% of the American people, although we might. That theory has not yet been tested. We DO claim that we represent at least 3% of American gun owners, which is still a healthy number somewhere in the neighborhood of 3 million people. History, for good or ill, is made by determined minorities. We are one such minority. So too are the current enemies of the Founders' Republic. What remains, then, is the test of will and skill to determine who shall shape the future of our nation.

The Three Percent today are gun owners who will not disarm, will not compromise and will no longer back up at the passage of the next gun control act. Three Percenters say quite explicitly that we will not obey any further circumscription of our traditional liberties and will defend ourselves if attacked. We intend to maintain our God-given natural rights to liberty and property, and that means most especially the right to keep and bear arms. Thus, we are committed to the restoration of the Founders' Republic, and are willing to fight, die and, if forced by any would-be oppressor, to kill in the defense of ourselves and the Constitution that we all took an oath to uphold against enemies foreign and domestic.

We are the people that the collectivists who now control the government should leave alone if they wish to continue unfettered oxygen consumption. We are the Three Percent. Attempt to further oppress us at your peril.

To put it bluntly, leave us the hell alone.

Or, if you feel froggy, go ahead AND WATCH WHAT HAPPENS."