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The Future of Money
Snuggums writes "Apparently some major forces at play in the tech money world. People like Vint Cerf, Tim O'Reilly, Andre Durand, and Cory Doctorow are teaming up with Tom Frey and the futurist think tank, DaVinci Institute, to dive into the forces at play with a Future of Money Summit later this year. They've even tapped a Nobel Prize winner and Visa founder, Dee Hock. They're hoping to answer questions like; what kind of money you'll be putting into vending machines 25 years from now; when will cash disappear; when will our current banking system become obsolete; and who gets to own money in the future?"
It will all be Microsoft Money(tm), the newest version of the game "Monopoly!"
"Apparently some major forces at play in the tech money world."
Apparently some english majors at play in the Slashdot world.
Who gets to own money in the future
Isn't wide circulation the point of money? Or do you mean "who gets to circulate money?
O'Caml: The language of choice for discriminating hackers.
Yet another dup. When other still on the front page.
It getting worse and worse. Don't blame CmdrTako this time
Cashless society
Is this a test, or all dups are made on purpose to teste if readers pay attention
-------
I wish I could clone myself, so I could have as many dups as Slashdot stories
...walk around saying, "Dude, I am so money"?
I'll form my OWN solar system! With blackjack! And hookers!
$995 per person before April 15, 2003
$1,195 after April 15, 2003 up to the day of the event.
That's not the future of my money.
The rich still need something to wipe their arse with!
Dont you know that cash is unpatriotic? Please refrain from using it anymore. Make everything electronic so we have an excellent paper trail to ensure domestic security and civility. What you don't like it? You must be one of them...
at my apt. complex they installed new washer and dryers w/cash card readers. I find it slightly inconvienient b/c I have to goto the main building to fill the card w/cash (but it does take credit card and debit). Other than that, it is slightly easier b/c I don't have to store $15 in quarters for laundry day.
I stopped using cash about 3 years ago. I keep two checking accounts and one savings account. I have a seperate check card for the second checking account and I transfer money to it for purchases (even at the grocery store just incase someone hits and extra zero and empties my account).
Once Wendy's and drug dealers take CC's I am set.
Ill be happy. Or would you be comfortable paying by credit card for a copy of 2600? How long before ashcroft starts checking up on those "obvious" criminals.
All Troll + "offtopic" mods are meta moderated as "Unfair", because you abused the system.
Why does it still take 5 damned days for a transaction to "clear" when I move money from one account to another? Has anyone actually ever challenged any banks/building societies to justify this delay?
Code, Hardware, stuff like that.
I have to say that the web site for the summit has the flavour of both the snake-oil salesman and the loony right millenarian.
All that is missing is the exhorting not to put your money under the bed - because that's where the commies are.
i say we all look to the future by looking to the past. we could all go back to being horticulturalists, or even further to hunting and gathering. that sounds like a great idea.
but, in all seriousness.... does the idea of people gettign together to talk aboutt he future of money make anyone else nervous? i seem to remeber something like that being in the book of Reveltaions of S.t John at the end of the New Testament...
jsut a thought
xao
xao
http://TheHillforum.hopto.org
The original and the dupe are both by michael...
/. has been hacked? ....
Either michael is not all "there" or perhaps he has multiple personalites...
or maybe
"In-depth conference where thought leaders will debate cutting edge changes and visionary thinking in the world of money"
... but my mind wants to see "loss leaders" ....
- Future of Money Summit
It says "thought leaders"
-kgj
what kind of money you'll be putting into vending machines 25 years from now
with current inflation on video games, i'd guess 20's oughta be doing well by then...
These geezers are cruising for a bruising...
Is Slashdot in the business of granting Nobel prizes now?
"gold standard" money
By the way, the gold standard was generally a bad idea, keeping gold from other purposes.
Have any of you gone shopping for things when you have no paper money on you? It's so much easier to write a check, swipe a credit card, even a debit card. If paper money is eliminated, sure it's less to deal with, but I think people will start spending their cash and draining their savings. Just look at credit cards. Before credit cards, credit problems didn't exist. You could only spend the money you actually had. Now, if they eliminate paper money in exchange for cards storing credits, people will just draing their cards so fast without thinking. They'll put more on them, then drain them again. It's great for the economy, but do you think we're really ready for this kind of responsibility? The amount of credit card debt says no.
... all my commies were eaten by the Boogeyman!
-kgj
The Future of money can't be with Banks (or at least I hope not), cause shit they're making money hand over fist here in Canada.
Shit, when banks take up more than half of the top 10 most profitable companies you know something is up.
Plus, how do they justify raising simple banking fees EVERY year? Debit, no thanks, I'll use my CC's which don't cost me a dime.
While I'm at it, I'd really like to stop writting checks. Be your own bank, stock your pillowcase!
R4NT.com - A great many people think they are thinking when they are merely rearranging their prejudices.
Way to go... shows how fucking good of a readership you are.
How about one step forward and think about when all money in any form dissapears... When our first nano-appembles appear capable of creating exact duplicates of things, atom by atom, then we have a whole new bag of cats to deal with... How far away are those machines? How far away was the TV from the radio; the space shuttle from the first airplane? 25 years may bring a new world to us all.
"Your superior intellect is no match for our puny weapons!"
Where does this Slashdot obsession with a cashless/e-gold/alternative currency come from?
Money has been around for 3200 years. Trade "I'll give you 2 sheep for one cow" has been around for thousands more.
I remember hearing these "cashless society" arguments in 1980. I look in my wallet 23 years later, and I still have a wad of cash in there, along with a credit card and ATM card. Sure, much of my purchasing is electronic, but it's far from cashless.
Now people are again saying "We'll be a cashless society in 25 years", and I still don't believe them. I've heard it before.
It reminds me of the "computers will solve all your paperwork problems. We will be a paperless society in 25 years." Cash is not going away anytime soon just because some money-geeks think they found an alternative.
As Ivanova from Babylon 5 said:
"Every time somebody says we're coming into a paperless society, I get 10 more forms to fill out."
"Can of worms? The can is open... the worms are everywhere."
So is this just to put us all on notice that some rich people are going to get together to talk about money?
I'll consider myself informed, but forgive me for not participating in the random posts that will result.
Once drug dealers take plastic, the DEA is set.
....
I read (somewhere, back in the late eighties?) that a majority of twenty dollar bills tested positive for micro-traces of cocaine
-kgj
I knew all that salt I was hoarding would come good again one day !!!
Do not try to read the dupe, thats impossible. Instead, only try to realize the truth
What truth?
There is no dupe
I was thinking recently about the various currencies I have with which to buy food.
Mostly, of course, I can spend real, American dollars to get food (or anything else). But the money my parents paid for my meal plan at my college comes to me in the form of 9 meal credits per week and 150 "Entree Plus points" per semester. The Entree Plus points work like money, except that I can only spend them at certain places that, for the most part, only sell food.
If you subtract $150 from the amount my parents paid for my meal plan, it leaves $13 or so per meal credit. So, when I go to the cafeteria and have a bowl of cereal, it costs my parents $13. Interestingly, when I go to the convenience store in a nearby dorm to cash in my meal credits for food, each credit buys me at most $4.55 worth of food.
Basically, my school has two proprietary currencies. The irony is that wherever I can use one of those currencies, I can also use real money if I so choose. Next year methinks I'll go without a meal plan. The future of money: increased ease of use through open standards.
I found the meaning of life the other day, but I had write-only access.
I know the future of money:
In future, the money will either be in my bank account or my wallet
More to the point who gets to decide when to increase or decrease the money supply. Your use of the word valuables in this context appears to refer to the notion that money needs to be backed by something like gold. It doesn't.
(one again putting on my flame-retardant suit)
Karl Marx has already explained exactly where money is going to go... into the ash-heap of history.
We're already starting to see it. How much anger are you seeing over corporatism and capitalism in general? Everyone is fed up: THE SYSTEM DOESN'T WORK. Everyone knows it, but so many people are afraid to face it. They're afraid of what might replace it. "Better the devil you know, than the devil you don't".
But there is a better way! Do your research. Look at some of the alternative political parties.
The future is a moneyless society where everyone shares everything equally. We all do the jobs that we are best at, not the ones that you HAVE to do to "make a living". Everyone contributes to the public trust, and everyone shares in the public trust. No money needed!
There are so many people afraid right now, but I see that as a sign of hope. Finally everyone is seeing the absolute black soul of capitalism and are searching for something better. Soon we will be tearing down the walls of corporations, and the whole idea of "ownership" in general. Just like music and software shouldn't be owned, neither should physical resources, either. Everything should be publically owned. And no ownership means no need for money.
All of this was predicted over a hundred years ago. Read about it and learn.
--
From each according to his ability, to each according to his needs.
There is a "whole fucking market behind it". Vegas hookers to be exact.
All joking aside, there is a huge economic/financial impact on the control of actual money entering and leaving the market. It's called Monetary Supply and the Fed controls it very well (to keep inflation etc away). Intermediaries and Markets was by far the most difficult Finance class I took in getting my degree (probably because Dr. Stanhouse is a leader in the nation in studying this topic, he's at OU from Notre Dame I believe).
the problem with credit cards today is that people under 18 cannot have their own. How can we instill hardworking qualities in our young people while denying them the right to use their money as they choose?
No need to post anon, michael. We know it's you.
Contributions paid for Bush II's failed 2000 presidential campaign: $20million+.
Airline tickets for pro-Bush attorney to bully Florida vote counting: 4million plus.
Cost to democracy when a Supreme Court makes a nakedly partisan ruling: PRICELESS.
HECK.
It has ALREADY come true: Without the right political connections, even money has no value!
what kind of money you'll be putting into vending machines 25 years from now
I already rely on cash only as much as absolutely necessary. With a debit card, I can pay for any credit card transaction directly out of my checking account, and more and more places are accepting credit cards every day. Hell, in bigger cities, you can even use a credit card in places like a Jack in the Box drive thru. In 25 years it'll be even more pervasive.
Some places now are even supporting debit cards directly and require me to enter my PIN... all the better, that extra layer of security is a little comforting. If my card is ever stolen though, I'm limited in liability to $50, thanks to credit card laws that apply even though it technically isn't a credit card, and I keep a little nest egg tucked away in an unrelated account to tide me over while the bank tracks down and fixes any unauthorized use of my main account.
Sure, it's not exactly a model of privacy since every purchase I make is logged on my account, but I consider the security of my money more important as a real issue than the nebulous fear that someone, somewhere is going to exploit the fact that I like buying cheeseburgers for lunch.
NO CARRIER
A rule where I worked was we'd all go out to eat lunch as a group but you had to have cash for your part because there is nothing worse than a table of 6 people all paying with debit cards. See your server in an hour.
A manager would rip you a new one if you constantly paid with a CC/debit card.
My hungry Imperialists ate your Boogeyman!
The point is that the original article (the dumb little one about the cash cards, which are nothing new) should have been a small aside on this one.
Slashdot is all scalped material anyway - there's no "news" that's new. Thus the job of the "editors" should be putting together all the fragmented story suggestions into discrete coherent topics. VERY occasionally they manage to do this. Mostly they don't.
More coherent topics would definitely improve the signal/noise ratio. It's not just an idle criticism. It's part of the reason this site is dying.
The only cashless socieity I see is one where people don't use money, in any form. Other then that, there will always be cash, and if there isn't cash, there will be gold.
Read Neil Stephenson's Cryptonomicon (excerpt) for an interesting (but fictional) account of what needs to happen to make it real.
http://www.futureofmoneysummit.com/advisoryboard.p hp
I wish I had mod points (what happened to that system, anyway... they only give mod opints to people they like now?). I'd give this one a +5 Funny! I almost wet myself when I read this I was laughing so hard.
You keep your spending money in your primary account?
I thought the future of money was gold-pressed latinum. Slips, strips, bars, and bricks!
When money become electronic a different
type of economy becomes possible.
Like a system where the users issue the
money them self see
Lets
Damn the Hungry Imperialists!
If they hunt the Boogeyman to extinction, what will be left to frighten the children?
-kgj
E-money is the ultimate form of Fiat if you ask me. All fiat has a history of corruption and collapse (the american dollar and other world currencies are heading that way as well). Fiat money is the money of the statist, since it allows those in charge of the press to create as much money as they need, while dilluting what the rest of us hold.
The question isn't "what form will money be in", the question should be "what assets will back our money". I don't care if its in the form of rice crispies, as long as it is backed by an asset (gold, food, land, space rocks) and has real value.
The value of money needs to be manipulated to keep it from inflation and deflation swings.
Snicker... Marxists/communists/etc. are the last people on earth who should be telling people that their "system doesn't work". They can't even understand human nature.
---If you can't trust a nerd, who can you trust?
But still will be based in the way we see money today, even if exist better conceptual ways to give value to work, ideas, etc, the actual economy is very based in the money per se, not in actual value of things.
The other thing I believe that could change (maybe in more than 25 year) is some way of unified money and values around the world, that the same product cost the same anywhere (in similar amount of hours of work or something like that, no mean US dollars)
I've heard the arguments for 'cashless societies' before.. mostly they circle around the real argument and come at it from the 'save the trees from being cut down for paper' or 'avoid losing your money!' aspect.. but the REAL issue here is whether people should have the right, and the ability (since those two don't always go together!) to conduct exchanges of value without said exchanges being recorded/observed/surveilled by the government or other outside parties. Even so-called 'digital cash' plans are not 'true' cash in that respect - many of such plans I've seen include 'fingerprinting' or 'user identification' which make them more like debit cards for all intents and purposes - except that, unlike a debit card, they also have the added disadvantage of not having corroboration of their value elsewhere, so if you lose it, you're still screwed (unless the person finding it is nice enough to check the user ID and return it to you). They totally skip over the privacy and anonymity of true 'cash'. And don't get started on how digital cash with 'user fingerprinting' will be safer than good old dumb folding money (or, horrors, gold) - if you don't have a user identification system check every time a transaction is completed, then there will be no way to check whether 'stolen' money is being used in a purchase, and thus no way to get your stolen money back.. so, if you want privacy, you can't really have security, and vice versa.
Ah, but then of course there are the ideas like e-gold, which combine privacy (ie, encryption and anonymous digital IDs) with security (ie, no one but that user can use the money).. like a Swiss bank account.. except, of course, the gov's are doing all they can to shut them down, under the guise of 'preventing terrorism' (but I think their real complaint is 'we can't get at the money for taxes')..
France and Germany, of course!
Where will the idea go from here? Well, we have to ask ourselves what the problem with the money system is for that. We have gotten off of the gold standard (or other standards, for other currencies), so there is nothing but consumer confidence holding up any currency's value now. The only steps to be taken from here are to further consolidate world currencies into a single, accepted currency.
But will it be the dollar or the euro, and will wars be fought over it? I have a feeling that many stubborn states with long-established monetary systems will never be friendly to the idea of a universal monetary unit, especially one that emphasizes the weakness of their economy.
Gah... I could ramble on and on. I'll stop here though. :-)
We intend to eat them too... that's why we're called Imperialists...
Picture a world where everything required for basic comfortable living is so abundant that it's free. Free food, shelter, energy, health care, transportation, entertainment, etc.
In this world, money is not required to live or even to have some fun. Then what is the purpose of carrying money?
Some things will still be scarce, but they won't be necessities.
Will this world occur? How will we behave in such a place?
Know your pads. One time pad: good for cryptography. Two timing pad: where to take your mistress.
You're absolutely right. None of the hard digital cash crowd is there, just a bunch of hand-waving, bandwagon-hopping types. Don't look to the institute for any sort of real innovation and breakthroughs.
It's worth reading Dee Hock's writings. He sounds like a collectivist nutcase at first. But this is the guy who designed how Visa, the organization, works. He got all the big banks to sign on. And he was a mid-level guy at a small bank when he did it.
Few people outside the banking industry understand what Visa really is, let alone how it's organized and governed. Internet people should. It's a good model for shared infrastructure, like Internet backbones.
Visa is a major corporation organized as a cooperative. Its members, and owners, are banks. Visa sets standards and runs the backbone network that transfers credit card transactions between banks. Visa doesn't issue credit cards or do financial transactions itself.
The details of how that works politically are complex. Yet it does work, and a lot better than, say, ICANN. I'm not going into how it's done; read Dee Hock's book.
Here's a reference which says the rumor is true.
And I tend to believe Snopes.
"Can of worms? The can is open... the worms are everywhere."
There is a face and name to this evil!!!!
I hope all of you /.ers see the consequences here. Firstly without cash the govt will know eveything you buy and when you buy it.
Also all of a sudden all of these banks and other get a peice of your money for the 'convience' of not using cash.. and then when it catches on they will charge you for the privilidge of using cash. If you recall, when ATMs first came out they were all free to use because it saved the banks money as oposed to have everyone seeing bank tellers. Then they started to charge you to use the bank tellers because it cost them more then if you used the ATM. Then they charge you to use the ATM as a convience fee.
So you are going to be charged a fee to replace your card that has an intentional limited life span, you will be charged to transfer funds to it, you will be charged an electronic transaction fee when you use it. Its like an infinite infusion of middlemen.
I am leery of replacing money with anything else. Money, cold cash, is anonymous. One can purchase something without a paper trail pointing at you. Credit cards, check cards...they all scream your name and just give fodder to databanks that can be used to profile you, violate your privacy, or feed the tyranny of the Patriot Act I and II. No thank you.
If you insist on replacing money with something else, that something else better include an anonymous form equivalent to cash or it just wont cut it.
In Bushworld, they struggle to keep church and state separate in Iraq as they increasingly merge the two in America.
People under 18 can have checking accounts.
Not everywhere. I had a bad experience with this, myself. When I was about to start college, my mom went with me to get a checking account. We went to a local branch of a national chain of banks (so I would be able to access it easily at school as well as at home).
Because I wasn't 18 yet, they wouldn't let me have a checking account. Period. Not even if my mother co-signed for it.
Now, I was about to go to college. When I'm 400 miles away, I have to pay some of my own expenses, like books and non-cafeteria food. I wasn't asking for a credit card, just a way to write checks and pay my bills.
I ended up getting a checking account (with a debit card, no less) from my parents' credit union. It was the only place I found where a minor could have a checking account - and I didn't even need a co-sign. Unfortunately, they're only in my hometown - but their level of service makes them worthwhile to me. And I still remember that none of those other banks would give me an account 4 years ago.
Have you read the Moderation Guidelines Addendum?
I just like a paperless bathroom, it only works for the Japanese.
Banaaaana!
Perhaps you missed the part in the Bible where it mentions putting your cloak up as collateral.
either way. If they accept credit cards it doesn't always reflect in price because for a 2.5% loss (visa, mc) or 4.5% (amex) they don't have to screw with bounced checks, getting robbed because they have loads of cash on hand.
Not to mention if they do adjust the rate you don't get a "discount" for buying with cash as that doesn't give the store any benefit (people would avoid using cards there).
That clears that up. For a second there I thought you might be putting most of your money in a checking account.
How does tieing it to something tangible like gold keep money from fluctuation? Gold's value relative to other goods varies, you know.
The reason it's illegal to give you credit (not that anyone would anyway) is that it's illegal for a minor to enter *any* kind of contract. You could maybe get one if your folks cosigned.
I've always been baffled by people saying "you can't get a credit card until you're 18" stuff. I had a credit card during my entire senior year in high school and I didn't turn 18 until the summer after. Maybe Mastercard made a mistake or something but it sure made buying crap a lot easier. It's possible that one of my parents co-signed -- I honestly don't remember. But I never had any problems with it. In fact, I'm now in my early 30s and I still have the same damn card! (of course, I have multiple cards nowdays).
GMD
watch this
You are incorrect in associating paper with wealth. There is no connection. That dollar bill in your wallet is no more or less money than a digit in a Wells Fargo computer. Both represent a unit of confidence in the issuing body - the US government. That is all they represent. You cannot redeem that dollar bill for a fraction of preciou metal. You cannot redeem the bill for a piece of a brick of a government building. You are not assured of receiving a set unit of a foreign currency for it either. It is a fiat currency. It has no inherent value. The paper bill is simply a physical container for a fractional unit of confidence in the US government, nothing more or less.
Sometimes it needs to lose value. And I'm not talking about manipulating it free of other concerns, I'm talking about manipulating it in response to demand on money.
What you are referring to is the growth in the money supply through the Fed down to the fractional reserve banks. M3 money has grown by leaps and bounds in the Greenspan era. This and only this is the source of the stock market bubble.
Or, alternatively, when phone/telecommunications systems go down. Anyone who was in Manhattan on September 11th and the days immediately following will probably recall that many stores had either ceased accepting cards at all, or had set up special lines because only a few of their readers were working. This was due to the incredible call volumes that were jamming up the city's relatively limited numbers of long-distance circuits.
Fortunately, most of the ATMs were up and running (though a few had run out of cash, because so many people were using them where previously they'd just relied on their check/credit cards.)
I love my check card, but I'm pretty sure it won't be there for me on that occasion when I most desperately need it.
You can't even create good arguments. Please, go back to wearing black, and sitting at the book store smoking cigarettes and talking about how crappy things are. After that you will probably go home to your upper-middle class home and sleep well. Then, when you wake up, go to school and pay attention. They might teach you how to make an arguement that makes you sound less like a monkey on acid.
Don't sit here saying shit like "Why does it seem that the more socialist a country is, the less anger there is toward that country in the world?". This sort of statement just screams "adolescence". Like the statement previous, it asks a question that has no real answer and simply begs the reader to answer it for you. No one gives a shit about what you are saying (except people like me who enjoy pointing out 15 year olds trying to act adult), so, why not answer it? It's so common to see people utilizing questions, while attempting to make the simple act of questioning into some profoud action. Well, it's not. It never will be. Answer the fucking question in a logical way, and people will listen to you. Stop trying to act intelligent by challenging other people to do the thinking for you. Choosy moms chose Jif for you in your 6 figure home of capitalist oppression.
"Pretty funny how that works -- the more a country embraces policies of compassion and fairness, the more liked they are in the world." Pretty funny how impotent the "liked" socialist nations are. They are powerless. Do you understand the idea of power? Other countries will decimate a weak populace, and socialism breeds weakness. You state it yourself. If you disagree with me, please define "compassion and fairness" to *refute* me.
Easier to be 15 and read childhood social/political philosophy than to accept reality, isn't it.
Go back to touching your privates and reading Sartre, you spoiled little bitch.
Go back to Massachusetts, pinko!
Yea, maybe they can have checking accounts, but what can they do with it? They can't write checks, can't get a debit card... So it's useless. I don't see why they shouldn't give out debit cards, the kids couldn't lose more than they have, so the bank doesn't take a big risk...
I think you mean 'Some illiterate nerds at play in the Slashdot world.'
precious metals have no value.
Trust me on this. The banks and the governments can burn the paper money and even remove the official coinage from the streets, but people will just start trading under the table in *hard* currency with real value as a result.
They always have.
And you thought that guy down the street was a whack job when he started hoarding gold.
KFG
Many of the debit cards have something called a virtual wallet intended for mini payments, but loading money just costs too much, 0.5 euros, 3 % or something, totally crippling this mechanism.
To be widely successful, a new system should have no additional costs when compared to cash. If it involves additional costs, people are not going to change. Many people are willing to change money (=a lot of positive associations) only for something that is better in every aspect.
-- Imperial units must die --
The existing banking system will continue ad infinitium because there's too much money to be made the way things are now. Noone would ever propose something different because they can already quantify the amount of money they make now. There would be too much risk in something different.
Gorkman
If you want to know what's next just do some traveling. Anyplace but here in the USA you will find debit cards and such everywhere.
So why not here? Because the banks here are making a nice 3-5% on EVERYTHING we do, usually paid by the merchant. It's a 3% tax right into the banks pocket.
Don't expect to see any of these futuristic (meaning 20 years ago everyplace else) technologies in the US anytime soon. Powerful rich people will not give up their $300B yearly drain on our wallets easily.
- Adam L. Beberg - The Cosm Project - http://www.mithral.com/
>I have to goto the main building to fill the card >w/cash (but it does take credit card and debit).
The problem I see is that it's probably easier to get the money in than to take it back out of such a 'stored value' system again.
If you're lucky, it's something like laundry, where you'll use the services later. Even then, though, the firm offering the account service gets to use your money for free until you request it be applied to some goods or services.
You want an easier laundry day? Ask them to set the machines to accept $1 coins.
It's just like a fascist dictatorship, without the punctual rail service!
Lets look at the currency called the American Dollar.
It is no longer backed by gold, as you said. Instead, it merely is backed by a promise that it is worth something. How is this different from a gold-backed currency like the old American Dollar. Well, since the old dollar did not actually come attached to a piece of gold and in fact was not even exchangable for gold it's last 40 years.
So, what is the difference between the two? Little. Both are backed by promises. The only difference is what the promise is. If you cannot trust the US to back the current dollar, why could you trust them to back the old one, in the absence of proof that it is equivalent to gold?
With E-Money, you have to trust the issuer that they exchanged real money for it and did not just "print it". Do you trust them?
This is one of the largest obstacles for E-Money.
She will suffer for you to use it but only at a ususious rate, (like father, like daughter.)
MSBPodcast.com The opinions expressed here are my own. If you don't like 'em... Think up your own stuff.
We here in New Zealand have had a great system that has been in use for many years now called EFTPOS. You can use you banks cash card ANYWHERE.
:)
Even some of the local flea market stalls have this available.
I hardly carry physical cash on me any more and I know a lot of other people out there are starting to do this.
Even the banks are supporting this by making new bank accounts with lower fees if you do everything electronically.
People visiting us from overseas love this system and find it hard going back
This is the future of money.
I'm sure I'm not the only one here who has has a debit or credit card no longer be able to be read by the machine at the till after a bit of wear and tear. What happens when your cash card with your life savings on it can't be read anymore?
Michael was referring to Robert Mundell, who sits on the summit's advisoryboard and won the 1999 Bank of Sweden Price for Economic sciences in Memory of Alfred Nobel. Often Mistaken for a Nobel Prize, because the Nobel Foundation disingenuously treats it as such in their announcements and on their web site, this award has nothing whatsoever to do with Alfred Nobel, his endowment or his vision. The award is totally politicized, disproportionately awarded to the U of Chicago school, and frequently goes to fringe cranks like Ronald Coase.
The great economist Gunnar Myrdal, who sat on the board of the Bank of Sweden, argued for the prize's abolition. In 1974 Myrdal shared the award with Freidrich Hayek. Basically, Myrdal felt that if ideologue hacks like Freidman and Hayek won the prize it was meaningless.
Nothing against Mundell, but that prize is a load of crap.
It is cowardly, and a betrayal of whatever it means to be a Jew, to act as a white man
-James Baldwin
These conferences are primarily interesting because of the people that attend them, yet by pricing their conferences like that they are virtually guaranteeing that the only people who turn up are Sun and Microsoft's [insert conference buzzword here] evangelists, and a bunch of journalists.
Speaking as someone who has been cashless for the past 3 weeks (too lazy to go to the ATM, plenty of cash in my checking account), a plastic life ins't too horrible. My primary complaint is with 2 aspects:
1) Slow bandwidth. Sometimes those who accept credit/debit cards use dial-up modems to authenticate. This causes me a few extra minutes in the checkout line and a few dirty looks from the people in line behind me. I visited a Home Depot today (for phone line punch-down baords, if you must know) and their system was lightening-quick. Every quicker than cash. With $40/mo. DSL lines, makes you wonder why the rest of businesses haven't signed up.
2) Lack of credit/debit card support. I want all my cabs to support this. I want fast-food restaurants to support this. Everytime I buy something, I should be able to swipe. (I understand the cab/wireless dilemma, but why doesn't Wendy's have swipe stalls at the drive-thru?)
We are 90% there in terms of economical technology. But there is still a sort of stigma associated with using a piece of plastic to buy things. Like you can't afford it. Why is this?
--banks, starting with central banks on down, ARE one of the biggest scams running. Start with the premise they can "loan" you money-called fractional reserve, ie, they only have a fraction of what they can claim as a reserve- they don't have, then charge you "interest" on it. Sweet deal for their fat tushies.
Governments like to own the "money" because of the lawful thievery that goes along with this "central banking" and "tax" scam. Big bankers run the world, run the wars, finance all the sides. bah humbug, filthy creatures. Back a long time ago the founders flirted with paper money, it was a disaster (not worth a continental), they went back to precious metals based money, that worked until they switched again.
People who love fiat money also really believe that they can pick any day and the high numbers represented by the 'stock market' figures are all magically "worth" all this money and all this "stock" can all be changed into "money" that can purchase goods and services. I mean buck for buck,, like all the stock could be cashed in/sold at once and be "worth" what they are quoted at that day, ALL of it.. Past bubble I can't tell ya how many people I talked to who put x cash in, their magic beans dot bomb stock went to x3, then they "lost money", like every single one of them somehow could have gotten this high point "money". Just amazing, pure fairy tale, but so many so called adults still believe this.
It don't matter, people who can understand the difference between "wealth" and "money" will continue to do well, people who won't will one day wake up "bankrupt" and wonder why it happened when they were "rolling in dough" before, and "all set" with their "secure job".
People really have only two choices when it comes to learning from history, they "do" or they "don't".
The only times that fiat money has been a problem, in general, is in third-world countries, and fixing the currencies against the dollar (Argentina) or going to a dollar economy (Ecuador) doesn't seem to have helped them much anyway. Printing money with the purpose of "diluting" cash (raising the real rate of inflation) is not inherently evil, either; in fact, a large number of economists are currently arguing that the Japanese need to print a whole lot of money, intentionally generating inflation and therefore discouraging savings, in order to revitalize their economy and end their ten-year-long recession/depression. (I.e., if your savings start being worth less, then you will have an incentive to spend, which would probably help end Japan's deflation and revitalize the economy. The other thing that's killing them is subsidizing companies that really should be allowed to die, but that's another issue entirely.)
If you're that wrapped up about having your money backed, rent a space in a vault and convert all your money to gold. It's gone up recenty anyway in the uncertainties of the war, and likely will continue to do so until this situation has blown over, so it's probably a decent investment. No one's stopping you. But for the rest of the world, I think fiat courrency is fine.
"I buy food and groceries using my ATM card."
How hip of you.
Debit cards are for suckers. But I guess "hip and trendy" sort of proves my point.
The funny part is Debit (ATM) cards are a bad deal for the consumer, and you trumpet your use like you're somehow doing youself a favor.
If you're interacting with humans, cash is always faster. Electronic is only faster if you can avoid dealing with any human for the transaction (i.e. credit card in gas pump).
And of course, only a moron (aka "Trendy") uses a debit card because legally they have almost no protection from overcharges or theft. I hope you don't find out how true that is. Or maybe I do, just to shatter your little cocoon.
"I love my check card, but I'm pretty sure it won't be there for me on that occasion when I most desperately need it."
Take a look at your rights with overcharges and theft with a Debit/ATM/Check Card. Compare that with a Credit Card.
Note the difference.
Note how the laws are stacked massively in the consumer's favor for credit cards. Those same guarantees (aka maximum $50 liability, right to challenge transaction, etc) simply don't exist for check cards.
They're a bad deal. Don't use them.
Paper money is fungible. It is easily understood and accepted anywhere.
A set of digits in a Wells Fargo bank is subject to what Wells Fargo decides you do or don't have.
Wells Fargo says I have $2000 in their bank. Great.
Whoops, due to a programming error (or something, Wells Fargo won't say), you now have nothing. Whoops.
Sure, dollar bills can be lost or destroyed, but because they represent a relatively small amount of value (unless you walk around with a briefcase full of cash), then your exposure and liability are small.
No, a digit in a bank and cash may be the same in principle, but in fact, they are a lot different. Hope you never find out how different.
...is that you will give it all to me.
Banking laws straight out of 1929 tightly regulate how Banks handle money. No replacement is on the horizon and all claims to the contrary are pure Bullshit. Any Future Bank transaction technology will run against existing "Check" payments processing. ChargeCard Law (ie. AmEx, VISA) are more flexible but add costly guarantor obligations. Checking account law is viewed as the "platform of choice". And nothing (globalisation,PaxAmericana or 911) can change that unless those 1929 laws are rewritten.
Okay, I guess I misunderstood your understanding of the issues. I assumed your beef was with Nixon's switch from the gold standard.
But you say that the real problem started in 1933 when we stopped exchanging notes for gold. That the dollar became fiat then.
Well, I guess I have to say then that the enormous growth and wealth of the US since 1933 does not support your claims that a fiat currency doesn't work.
Today's economy is impossible without the trust in those that they will pay you what you say. This not only goes for our currencies, but for promissory notes (checks) and other financial instruments.
How could we conduct business without lines of credit and promissory notes? Every transaction would have to be delayed until the payment owed was remitted in real cash the gold that backed it.
I'm sorry, the modern financial system is based upon trust any many levels. There is no more risk in accepting a fiat Dollar than there is in accepting a check, or delivering goods with an invoice for 90 days payment.
Perhaps you should spend less time being insulted and more analyzing the true basis of commerce.
What a joke: Far-sighted academicians doing preparatory work for our Brave New Capitalist Future...
Listen: you can re-arrange the deckchairs on the Titanic all you want -- but the boat is still going DOWN.
Flame away.
Ooh! Me! Me! Pick me! Please?
Dollar bills can be repudiated at ANY time. The US is on its fourth currency. Anyone holding bills from the previous three hold nothing.
Why should banks charge you for debit cards, or electronic routing of payments? Their whole business is runs on databases anyway, so the marginal cost of adding this functionality is virtually nil. In fact it saves money. It costs them a lot to hire tellers, and handle cash, which must be counted, packaged, shipped, and stored. So the more they can encourage you to *not* use cash, the better it is for them.
Unfortunately, they've also discovered they can get away with charging service fees at ATMs. So this is a double whammy of profit for them, and a double whammy ripoff for you. They replace the teller with a cheaper machine, then charge you for the "priveledge" of using it.
Here's a secret, though -- when you need cash, just go to a grocery store and use your ATM to buy something you need anyway, and get some extra cash back. It doesn't cost you anything extra. If you didn't need anything, then you at least get a soda or something for your $1.50, instead of nothing at the ATM!
I don't understand why people patronize traditional banks at all. Mine has no regular locations for customer services -- I make my deposits through the mail or electronically, make payments with checks or debit card, and manage the account either online or by phone -- all for free. They even pay interest, and rebate up to 4 ATM charges a month. It's FDIC insured and everything. I don't understand why people waste their time "going to the bank." And I certainly don't understand why banks waste all that money on high street real estate.
You have to have inflation under debt currency, otherwise you find yourself struggling under deflationary pressure. Our money is created in the form of loans, so when you get 100K to buy a house it is created into the economy, but has to be returned over time plus interest. So every loan adds money to the economy, and then returns back to nothingness. To pay the interest though, someone else needs to go into debt to keep to make up the difference. There is a natural debt creation/destruction cycle in fractional banking, Fiat money doesn't stop it, it just magnifies the timeframe and magnitude.
Inflation isnt "good" for an economy, just in ours it is better than the alternative, which is crushing deflation. There is only about 1T in M1 money supply in the US, and there is in the ballpark of 8T in outstanding debt. Paying off debt very quickly contracts the money supply. We have to keep borrowing money to keep from contracting. If you really trust politicians and bankers to do the right thing with your money, more power to you. We'll ignore for now that on the watch of these two groups we have seen:
I'm not ready to pat these people on the back just yet. They have yet to solve the problem inherent in fractional banking and the creation of debt.
You seem to be saying that Fiat money doesn't collapse, because ours hasn't yet. Name the oldest Fiat currency on earth, and what is the longest time a Fiat currency has ever lasted in History? Not one Fiat currency has ever stood the test of time. The US has already gone through a couple Fiat currencies that have collapsed before the federal reserve note was created.
This is the kind of crap governments pull with money... "The printing of such large sums created a major problem. Paper, engravers and printers were hard to find. In desperation, the Secretary of the Treasury recommended that counterfeit money be utilized. Anyone holding a counterfeit bill was supposed to exchange it for a government bond and the government would stamp it "valid" and spend it." That was the confederacy did to their Fiat money.
Fiat money almost always dies the same death, uncontrolled inflation due to state spending. It also usually results is some very socialist measures as governments try to stop people from running from it. If you get a chance, read up on what happened to Rome when its Fiat money hyperinflated, its pretty funny how they attempted to control prices. I can't name any good links off the top of my head, but this one looks like it has some good examples.
more and more kids are turning to video games (baby boomer's children, so there are a lot of them), so more and more money is going into the video game market - it most certainly is inflating... the word "inflation" may not be right, but it's the same idea. i used to be able to play claw for 25 cents (1 year ago).... now it's a dollar from the same bowling alley. if you've ever been to the sega place in the irvine spectrum (CA.. i doubt many of you know what i'm talking about), it costs a dollar to play the average video game... which is ridiculous, but oh well. I remember it used to be a lot less money there. There can still be inflation in certain markets, even if the general economy is experiencing deflation. Take Japan for example... video game prices are going up (more than the extra cost of making them these days)
R&D budget for developing paperless wallets - $50m
Promotional and advertising costs to get everyone to switch - $12m
Looks on granny's face when she's told her matress-stuffed with dollar bills isn't valid currency any more - priceless
There are some things money can't buy. For everything else, there's Mastercard. Accepted worldnarrow^H^H^H^H^H^Hwide.
Somehow, institutions will need to be established to keep track of everyone's net worth. What happens when crackers manage successful attacks on these? Shudder.
...in fees etc. to the checking accounts, for the ``privilege'' of having more than a limited number of transactions per month?
I could go completely cashless, if I didn't mind losing 5% of my income to bank fees...
Perhaps you can volunteer at this and get in for free?
I have volunteered at conferences including Unsenix, Interop, WWW Consortium, and others and have allways received complementary admission.
It may be too late for this one, but if you become aware of stuff in the future (> 6 Months), you might have a better chance of getting in.
Especially if you off to do a key role, such as head up registration, logistics, whatever.
Mark
Cleara
Get real. The ones who should be in prison are their creditors. Everything about the credit card industry is criminal.
Of course, what I'm really afraid of is that my wife may be the highest bidder. "What's this? You bought a pak of cigarettes, 3 beers and a Maxim?"
That's nice professor, but here in the real world the chance of the dollar bill you have in your wallet being repudiated at ANY time is about the same as a meter strike hitting your house - even if they do so, there would probably be a period where you could exchange the "repudiated" money for the new, real money.
Furthermore, in terms of real-world use the original responder had a great point. No matter what kind of amazing chip you have in your pocket now or later, you are probably always going to have currency of some sort. It's just easier to deal with sometimes than any kind of smart chip would be, and far more portable in that just about anyone, anywhere will take a dollar bill whereas a smart chip is only going to be usable where there's a reader. For personal transactions it's going to be a long, long, long time before anyone is going to be able to exchange money with any other person on the planet via smart chips. Until that happens we'll have currency as people need to be able to give other people money outside of business transactions.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
It always seemed to me that our system worked pretty well, and that gold-based money was problematic because it meant the money supply (literally!) was in the hands of caprice
Or am I missing something? I am certainly not an expert on these things, and would love to hear a spirited defense of Gold.
Here's my nightmare vision of the future of money:
People access their e-money via Microsoft Passport. Passport may only be accessed via Palladium compliant hardware and WINDOWS. Passport will also require a Palladium compliant user identification device such as a subdermal chip. Those password things are just too insecure and fingerprint scanners are foiled with jello.
I know, I know... Someone get me my glass of warm milk and I'll go back to bed.
i read one of the panelists books awhile back (actually after a reference on slashdot :), the future of money by bernard lietaer. his main point is that "money is an agreement," which under that definition simplies the commonly understood definition -- a unit of account, a store of value, a means of exchange. so the scarcity of money in a society is a scarcity of agreement (echoed in dostoevsky's dream of ridiculous man btw, "if only we all agreed, it could all be arranged at once.")
:) and that there'd be fewer financial and economic catastrophes if 'alternative' currencies were promoted and in some cases legalized to fill gaps not serviced by 'traditional' money. in the US, for example, i think the federal reserve's monetary policy 'levers' are increasingly blunt tools to regulate business cycles and the economic environment. having myriad interoperating systems of currencies could provide for a more stable and balanced system. one of the more interesting non-fiction books i've read in the past few years!
from there he talks about how to create monetary systems that foster more agreement, creating money on demand with no inflationary consequences, such as Local Exchange Trading Systems (LETS) and HOURS. he also talks about demurrage currencies (used after WWI in austria--the worgl experiment--with interesting speculation that if it had been allowed to succeed, WWII may never have occurred!) and commodity buffer stocks originally advocated by keynes following WWII at bretton woods as the basis for the international monetary system (gold with the US dollar as reference currency was chosen instead--the white plan--and i think it was nixon who took us off the gold standard to finance the vietnam war more easily).
anyway, his point is that fractional reserve fiat based currencies are good for some things, but not suited for others (kind of like operating systems
also btw, that same poster who dropped the lietaer book on me also had an interesting post on dee hock oh and, another cool take on money is keith hart's the memory bank. sorry to see he's not on the panel.
I can't wait until they replace checks - oh wait they already have, its called a check card. Wish someone would tell that stupid lady in the front of the line at the supermarket that such great things exist.........
You mean like in Argentina, where without warning people were prohibited from accessing cash accounts????? Doesn't anyone read the news anymore???
Governments can default on debts (Russia), disembowel currencies (Thailand), etc with almost no warning! In fact by default these actions are done without warning as a run on the bank would negate the action in the first place.
The reponses I am seeing (including yours) seem to be woefully ignorant of the sorry history of fiat currencies. Thats the way the government(s) like it! They don't want you to know that over three hundred fiat currencies (including some in the US!!!) have been repudiated in recent economic history. If you knew the sorry history of fiat currencies you might horde precious metals (like Warren Buffett, who owns a moutain of silver).
The cash in your pocket has no inherent value! There is no counterargument. Read some history.
You appear to be the only other poster here who has even a vague understanding of what a fiat currency is.
Since movng from the gold standard the dollar has lost, what, 75% of its value? What has followed is one crisis after another. LTCM. Russia. Peso Crisis. Thailand. Argentina. Actually the crises have been happening about every twenty four months. How many similar crises occurred under the gold standard??
The premise of a gold-backed currency is that some things have more lasting value than nation states. Gold is one of them - for five thousand years it has represented wealth and traded as such across cultures.
Banks trade treasury notes as the currency of the highest levels of banking. The Fed can redeem those notes by creating a cash account out of nothing. They can do this by law. This is how money is "created". The fractional reserve system of lending provides the appearance of money being created at the lower levels of the lending tree, presuming there is not a run on the bank.
The economy grew more before the fiat currency than after it. The economy grew more before their was a Fed than after it. These are not opinions, they are facts.
I'm sorry, the modern financial system is based upon trust any many levels. There is no more risk in accepting a fiat Dollar than there is in accepting a check, or delivering goods with an invoice for 90 days payment.
Yes, but this risk isn't zero like you think it is. For example, Argentina. With almost no notice, depositors were prohibited from accessing accounts. Governments cannot succesfully manage currencies!! Over three hundred fiat currencies have been repudiated. By that, I mean, made worthless. Why do people think this can't happen here???
I've got to ask this... since the founder of VISA is Dee Hock, is there any connection with his name and the term "Going into hock" ?
note: I looked it up and it appears not - but I was hoping it would be up there with 'Bobbies' (British Police, 'Peelers' prior to that) and "going for a crap" (the toilet) for slang terminology created from the inventor/instigators name.
-- Game Development Blog
I don't care if they'd be offended. Russia is definitely 3rd world. Germany may not have been, but the conditions were exactly the same.
Your first answer is non-responsive. I talk of risk, you talk of growth before and after a certain time. Then, you go beyond that to pretend to know the reasons.
As to the "before the Fed" period, we had a Fed during most of the period you spoke of. The "Fed" was J.P. Morgan. He performed most of the functions of the Fed before there was a Fed. So I think your treatise that the period you speak of represents a period without a controlling force such as the Fed is incorrect.
As to your second point, I never said there was no risk. I never even said the risk was low (altough I believe it is). I merely said that the risk was lower than other risks which are assumed as part and parcel of business.
Your comments about the failure of fiat currencies are misleading. It isn't as if backed currencies were never repudiated. If you use currency issued by a government, you lose that money if the government fails, whether the currency was backed or not. At the moment the backing government fails, it becomes a fiat currency. And thus your argument is circular.
I understand your feelings about fiat currencies, but please try to stick to facts. Please try to speak to logical conclusions.
And please do not try to say that the period before 1933 and after 1933 only differed in how our currency was backed. There are many other factors which changed the growth climante in the US in that period.
I have no idea where you came up with this.
The dollar is ahead against the Pound Sterling as it was in Nixon's time ('73? don't forget the currency conversion in the UK in the intervening period). The dollar is ahead against the French Franc and the Deutschmark (altough there are extenuating circumstances there). I believe it is way ahead against the Yen, although I am not quite certain.
The Dollar has been the strongest currency in this time period since Nixon. It has been a great investment.
One think it hasn't done well against is gold. That's true, but if you are so jacked on the investment value of gold, then BUY GOLD. The dollar has whupped silver in this period (silver dropped over 75%). Furthermore, if you had bought gold at $450, you would be way behind now.
Note that LTCM, although a spectacular failure pales next to the effect of Enron, et al. Yes, LTCM threatened to destabilize the markets, but it didn't due to some good work. Enron, et al destroyed more wealth in the US than LTCM ever did. And more importantly, with more people who couldn't afford to lose it.
What makes you think that LTCM or Enron couldn't happen on a gold standard? Do you think LTCM wouldn't have found other things to lose money on if currency swaps didn't exist?
No one is beating you down. You're not that important. The world revolves without both of us.
We are arguing with you because your statement that our currency has a finite lifespan now is itself fiat. You sure are convinced of it, but your facts do not convince others.
You'll be able to laugh when your gold becomes incredibly valuable versus our dollars.
You are so quick to quote Alan Greenspan. Does his recent performance convince you that he knows well how to handle difficult financial situations? Also, this is the man who said we cannot be buying back all our financial instruments because they would destroy wealth by removing strongly-backed securities? Are the US T-Bills backed any differently than our fiat Dollar? No, either is backed by the full faith and credit of the US government. No more, no less. These instruments have value, and so does the Dollar. Greenspan knows it and so should you.
Finally, fiat is not capitalized. Just because there happens to be an automobile group with the same name (whose name actually is FIAT) doesn't mean you capitalize it.
Future of Money = Gold.
Its been too long since we had a good ole middle
class destroying world wide bout of hyperinflation.
After years of bearing up OK, Greenspan has finally convinced himself and others that he can fix the economy by printing more money. We still haven't completely gotten over the last free-money boom, and this war thing is also hanging over our heads, so I don't see the printing presses slowing down anytime soon. The sad thing is that since the US has performed less theft-through-inflation than most of the other regionalized protection rackets, their currency is wide spread. Gonna make the crack-up even more painful.
Get yourself some bullion now.
First, let me say that the price that they're charging doesn't seem to be a whole lot more than what you'd pay just to go to a foreign country across the ocean. So it isn't extremely high. You might say that it raises the cost enough to internationalize the process, so that a person is as likely to attend from Argentina or America as from Australia or Germany. But they might have done better, if they wanted it to be available to poorer people everywhere, to start it at the national level in each country, and not have the admission price.
That said, lets not forget that money and power symbolize each other. Now, Microsoft and Sun have power. Gnu does not. What does GNU have? Strength. Strength can resist power, but it doesn't move things.
So you're having a conference on the future of money. The goal here isn't just to predict, it is to predict, and then move people in that direction. That's a function of power. To allow "strength" to be represented would actually stop the whole process.
So for what they want to do, they *definitely* want to price it out of the range of Joe Programmer. This way, they are more likely to succeed at their goals.
That said, yes -- it is priced out of the programmer's range, but Microsoft uses other peoples' code anyhow -- so it shouldn't matter to them.
The problem in this is that if you are building a whole structure while completely ignoring the populace, your structure is going to be unstable [as will be the case with the WTO, too]. A government functions best by legitimately representing on its virtual battlefield all forces that could possibly overthrow the government. If a government fails to represent one of the major forces, or does so too inefficiently, it is likely to sooner or later fall in a characteristic fashion:
(1) Power of the Populace. Represented by: locally elected representatives, with more universal sufferage helping it function better. Characteristic failure: civil unrest, violent revolution without resulting government, anarchy.
(2) Power of Group. Represented by a Senate, chosen by the major politically active groups of people [professional, or ethnic, or other]. Characteristic failure: (1) Babel effect, people developing their own languages (2) balkanization (3) civil war
(3) Power of the Charismatic Leader. Represented by a president or king. Characteristic failure: inability to respond to external threats. Usually the country gets conquered.
(4) Power of the wise leadership: Represented by judges. Characteristic failure: corruption by government leaders.
(5) Power of money: Represented --INEFFICIENTLY-- by lobby groups, but ideally represented by a regularly auctioned house with the power to block new legislation, but not with the power to craft or submit legislation. Characteristic failure: Bribes invading every other part of government, and making them fail.
The fact that they are ignoring the power of the populace seems rather unimportant right now, but if not corrected, it could result later in masse civil unrest. In other words, whoever follows them without getting the approval of their populace is likely to find themselves in a phase similar to Russia after the Bolshevik revolution but before the Communist revolution. Which phase won't necessarily result in Communism, but could as easily result in that as anything else. France had something similar that resulted in an unstable republic, for example. Rome had something similar that resulted in them losing all their slaves, and becoming a city state that was a symbol of power without any real power. Thus, it attracted conquest and reconquest.
Correct Horse Battery Staple: 72 bits of entropy. Enter "Correct H" into google. When it generates the phrase, that's
Tying it to a hard asset doesn't help you. The reason it doesn't help you is that the asset itself is fluid just like the money that represents it: more of the asset can be acquired if need be in order to make the country in question appear "richer", and indeed that was commonly done back when gold was the standard. Acquisition of more of the backing asset is usually a matter of expending sufficient labor (sometimes in the form of the use of the military). Print money simply has a much lower expenditure rate per dollar produced. And as described below, it's highly advantageous to have your exchange mechanism be as fluid as possible.
Money itself is just a means of representing the value of something relative to the value of something else. Usually one of the things whose value is being measured is your labor (when you get paid and then spend the resulting money on something, the price of the something in question is just an indicator of the value of your labor relative to the value of the object you just purchased, and the value of the object is ultimately, more or less, the sum total of the value of the labor used to produce it). Ultimately, since the value of an object is essentially the value of the labor used to make it (which includes all the labor used to generate the raw materials, to process those materials, to assemble the object, and to manage all of that), money simply represents the value of your labor versus the value of someone else's.
In a perfect world, a change in the overall wealth of a country (as measured by the ability of the country to do work) would be instantly reflected in the price of goods relative to the price of labor. Unfortunately, the world is not perfect and there is a delay. And this is the reason for printing more money: so that the price of goods and services does not need to change significantly as the country is able to do more work. Print too much and the society has to adjust the prices to reflect the larger supply of tokens, just as it does if the country does't print enough.
Where things get complicated isn't really within a country's economic system: the currency for that is reasonably well-defined. The complication comes when dealing with other countries with their own currencies, particularly when those currencies are not managed the same way.
The cost of labor in India is lower than it is in the United States. It's lower because the cost of living is lower. But the lower cost of living isn't necessarily a consequence of the lower amount of total work it takes to supply someone with the goods and services needed to live, even when the person in question is living at the same standard of living as someone in the U.S. Nor is it necessarily a consequence of one country being more desirable to live in than another, though that probably factors into it some. Most of the difference is the result of the fact that markets require time to adjust themselves properly relative to other markets.
That's why programmers in India will eventually be paid roughly the same as programmers in the U.S.: the value of their labor isn't really much (if any) less than the value of the labor of programmers in the U.S. -- the hysteresis between the two labor markets just makes it appear that way temporarily. Corporations are now attempting to use that hysteresis to their own advantage, by shifting the demand for work towards markets which have not equalized themselves with the others. And the reason the markets themselves don't adjust on their own is that the labor in those markets isn't as fluid as the Corporate demand for labor, thanks primarily to immigration laws. That means that the labor cannot move to where the demand is. And even if it could, it would take time for the labor to move, and thus for the market to adjust. That time is the very thing which causes hysteresis between the markets.
Use 'slashdot stuff' in the subject line in any email you send me if you want to get past the spam filter.
For non-U.S. residents it is a bit suprising that all geeks here really only discuss the monetary/banking system inside the U.S.. Please please listen: In other countries things are alreay waaay different.
E.g. I mean, here in Germany we have a banking system with fully functioning direct deposit/direct debits which can be used by almost everybody, not only big business. These direct money transfers work at small cost (probably $0.10-$0.30 per transaction, but not something like 1% of the amount) and usually with at most 1-2 days of delay. This is the reason why something like Paypal wasn't necessary at all in Germany -- the German banks already offer these services by themselves.
We have the bank-independent online banking protocol HBCI, with a free implementation here and GnuCash supporting it. This means that for a direct deposit (money transfer) I can directly enter the destination account in a GUI form in GnuCash, enter my secret RSA key passphrase, and *pow* the money goes its way. Same way for statement retrieval -- no screen scraping anymore or browser incompatibilities. HBCI is a full protocol so all these business actions are fully specified in that protocol, and no web browser is needed anymore.
cstim
I haven't seen much discussion here about alternatiev economic systems. Most of the talk is about whether we have cash or electronic cards. Why not talk about more interesting stuff, like altering the way money itself works. Ever heard of demurrage? Neither had I until I read some stuff over at transaction.net - the concept of negative currency is a fascinating one.
If you've ever read the Mars trilogy, you'll probably have some idea of the kinds of things I'm thinking about: limitations on the size of corporations and so on. Basically Capitalism version 2 (or 3).
In the future we won't use money in vending machines. Or credit cards, debit cards, or biometry.
We'll still use vending machines, however; we'll be prying them open with a jagged metal bar we ripped from the shattered remains of a destroyed car, hoping that the rats and other scavengers missed a dessicated candy bar, while we keep an eye out for the psychotic gangs that terrorize the wasteland. If we do find any food in the vending machines, we head back to our barricaded shelter on the outskirts of the city, with a finger on the trigger of the sawed-off shotgun we always keep next to us, hoping to survive another day in the post-nuclear world.
George Orwell had it right - all except the title: Instead of '1984', he should have used '2004'.
Before long all newborns will be required to have a chip implanted - ostensibly for 'monetary' transactions, and census...
In reality we will just be so many cattle - branded and equiped with radio transmitters so we can be watched and herded as needed by the powers that be.
Doesn't anyone see the problem with this system?
Lodragan Draoidh
The more you explain it, the more I don't understand it. - Mark Twain
I understand the theory behind our Fiat money, but the problem remains. A massive buildup of debt is still created due to the debt nature of our system. If people stop going further into debt, then the economy shrinks and deflationary pressures kick in as money is sucked out of the economy from loan payments on existing debt. All the talk about how fiat lets our money supply remain fluid are nice, but the debt creation/destruction cycles are catastrophic under fiat. Fiat doesn't work, it can in the short run, but reality always catches up with it.
Noone has given me an example yet of a Fiat money that has stood the test of time, or that didn't expire in a massive failure.
Yeah, I think I only mention that about thirty times in different postings.
Yes, it does. It creates stability and mitigates human meddling.
In a perfect world, a change in the overall wealth of a country (as measured by the ability of the country to do work) would be instantly reflected in the price of goods relative to the price of labor. Unfortunately, the world is not perfect and there is a delay. And this is the reason for printing more money: so that the price of goods and services does not need to change significantly as the country is able to do more work
Oh man, you are soooo off course here as to why money is printed, it probably isn't worth it to go into it at this point. Suffice to say the "printing presses" of money are used as a political and fiscal tool at this point, not having anything to do with anything you have described.
Would a cashless society mean that everyone will have to bring their own card reader along with them to the poker game?
"Full house! Hand over your cards!" [swipe swipe swipe]
The thing I love about fiat currency is it seperates the wheat from the chaff, since it takes a certain subtlety of mind to understand how it really works.
please give us an example of a successful asset backed system that didn't collapse then.
How does tying money to say...gold, help stability when as new gold is discovered in the ground our monetary policy is thrown into chaos?
What happpens when the soldiers come and take the silver away from you then? Nothing is safe by your argument. Anything of value can be taken, it's up to you to keep in somewhere that the government is stable enough it will not be taken from you.
I'm talking about stable currencies - not just the US, but something like the Euro or the Pound. Can you honestly argue those are going to be repudiated any day now? Or ever, to the point where what you have really has no value?
You live in a world of theory that seems to have no basis in practical reality. What do you do know for currency, trade rare cheeses with others?
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Wow...to lump all of those monetary policy challenges together as all signs of the same problem is wrong on just so many levels.
Asset money doesn't collapse, it never has, it never will. Gold, silver, land, grain, gems, etc all have value today. The only thing that fails under asset systems are the banks who over-extend themselves in fractional banking (printing unbacked notes). The money never collapsed, the institutions did.
That debit cards enjoy the same protection as credit cards has not always been true and may not always be the case. The law is different for debit cards that work as credit cards, but Visa and Mastercard have voluntarily limited debit card liability to the same $50 as their credit cards. Expect that to change if they lose too much to fraud.
The law for debit/check cards matches that for regular ATM cards. $50 if reported in 2 days, $500 from 2-60, and all of it for >60 days. No liability for additional transactions once the bank has been notified.
I find that 20% of my monthly expendures are still in good-old-cash; the rest checks or charge cards. Id guess that "mini debit cards", e.g. phone cards $20 - $100, could replace that, if accepted everywhere.
George Bush has taken the initiative for creating the Cashless Society of the Future (TM).
By decimating the government surplus, stock market, jobs, welfare, social security, and domestic investment, he has ensured that none of us will have any cash at all for a very long time.
These are my friends, See how they glisten. See this one shine, how he smiles in the light.
The public consists of everybody but me, as far as I'm concerned. Why should I trust others to keep my best interests at heart?
We're human beings, not cellular atomata. Granted the difference is slight... :-)
I remember reading Tom Peters years ago. Nordstrom's or some such company prided themselves in having a single page "Employee Manual" that said something like "In all matters, follow your own best judgement".
What Hock's quote means to me is that _if_ you have intelligent people, give them guiding principles and _leave them be_. Do not Mickey Mouse them with complicated rules. If you do, you will just be setting you, them, and your enterprise up for failure.
My father is a blogger.
I always imagine that the answer to the secret of the three seashells occupies the same lost, mystic text as an explanation of what the "dreaded Rear Admiral" from Milhouse's traumatic childhood might be. No clue on either count but quite curious.
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[hjioasdvbnuio;buip^&(FTSD$%*VYUI:buio;sdf}[asdf'
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Now look what you've gone and done! You've broken it!
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