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The Invention of Money

newyorker.com

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Re: The Invention of Money

#41

Post by panarky »

throw0101a wrote: post #27
contingencies wrote: post #18

Debt: The First 5,000 Years is my preferred introduction. Critically this New Yorker account is missing the word 'usury' which was largely agreed to be evil by early religions and societies that experienced its effects...

> ... is missing the word 'usury' which was largely agreed to be evil by early religions and societies that experienced its effects... It should be noted that the reasons we borrow money today is different than why it was done in the past. In the past, the "average" person was usually a farmer, and if they needed to borrow money, it was probably because their crops had failed and they needed to money to buy food to f…

> It was unseemly to lend money to someone who, without it, would die.

"Medical debt is a uniquely American phenomenon, a burden that would be unfathomable in many other developed countries."

"Nearly 60 percent of people who have filed for bankruptcy said a medical expense 'very much' or 'somewhat' contributed to their bankruptcy."

https://www.theatlantic.com/health/archive/2019/03/hospital-...

Re: The Invention of Money

#43

Post by vmurthy »

contingencies wrote: post #18

Debt: The First 5,000 Years is my preferred introduction. Critically this New Yorker account is missing the word 'usury' which was largely agreed to be evil by early religions and societies that experienced its effects...

An interesting trivia: the concept of bill discounting was accepted as a workaround to the usury laws of the time. Source : Niall Ferguson’s “Ascent of money”

Re: The Invention of Money

#44

Post by vishnugupta »

runeks wrote: post #32
TheOtherHobbes wrote: post #26

Earlier quoted context omitted.

Faith is the only real money. The only thing money measures is optimism about the future - both micro ("I am optimistic that you can repay this loan") macro ("I am optimistic this country's military spending and worker-hostile environment guarantees my investment will be protected"), corporate ("I am optimistic about the contents of this earnings call"), and specific ("I have more faith in this asset class than in ot…

> The tangible items that aren't primarily faith-based are land and housing, so they do well as reliable investments. Why are you ignoring commodities? Wheat, iron, oil etc. are all commodities that are much more useful as a monetary base than land and housing because they are orders of magnitude more liquid (meaning you can acquire it and subsequently sell it while incurring a smaller loss).

Here's my educated guess.

The commodities you mentioned work better as a "currency" than "stored value" for an individual. For a physical object to work as a stored value, especially over longer periods, it's got to be durable and convenient to store and protect. Real estate/land satisfies all those as long as the surrounding political situation remains stable.

If the state turns rogue or falls apart then you are better off hoarding (or running away) with gold.

Re: The Invention of Money

#45

Post by heymijo »

throw0101a wrote: post #27
contingencies wrote: post #18

Debt: The First 5,000 Years is my preferred introduction. Critically this New Yorker account is missing the word 'usury' which was largely agreed to be evil by early religions and societies that experienced its effects...

> ... is missing the word 'usury' which was largely agreed to be evil by early religions and societies that experienced its effects... It should be noted that the reasons we borrow money today is different than why it was done in the past. In the past, the "average" person was usually a farmer, and if they needed to borrow money, it was probably because their crops had failed and they needed to money to buy food to f…

I was curious about the markets you described--mortgage and payday. You're right about mortgages being a huge market($10.3 trillion in mortgage debt). [0]

Payday loans:

> In fact, U.S. consumers borrow almost $90 billion every year in short-term, small-dollar loans that typically range from $300 to $5,000, according to a 2018 report from the Office of the Comptroller of the Currency (OCC). [1]

> “Right now, 80 percent of payday loans are taken out within two weeks of a previous payday loan.” [1]

Much smaller by comparison, but yeah, the moral context is still there and it's egregious.

[0] https://www.magnifymoney.com/blog/mortgage/u-s-mortgage-mark...

[1] https://www.bloomberg.com/news/articles/2019-02-14/expensive...

Re: The Invention of Money

#46

Post by vishnugupta »

ak39 wrote: post #34
digitalengineer wrote: post #21

Earlier quoted context omitted.

Then why would it make sense for a country like say China to build up massive (largest ever) hoarse of good? https://tradingeconomics.com/china/gold-reserves

China since 2016 has signed bilateral agreements with several oil-producing nations to receive payments in yuan backed by gold. This bypasses the need for the "petrodollar". This is the most likely reason for China's recent insatiable demand for gold.

My "naive" theory for China to do this is that it's working towards making Yuan an alternate currency for countries to peg their currencies to.

Re: The Invention of Money

#48

Post by Symmetry »

contingencies wrote: post #18

Debt: The First 5,000 Years is my preferred introduction. Critically this New Yorker account is missing the word 'usury' which was largely agreed to be evil by early religions and societies that experienced its effects...

I read that book and mostly enjoyed it than I got to the last chapter and found it was riddled with errors I could easily spot like the in following sentence:

Apple Computers is a famous example: it was founded by (mostly Republican) computer engineers who broke from IBM in Silicon Valley in the 1980s, forming little democratic circles of twenty to forty people with their laptops in each other’s garages.

Reading around, it seems like the rest of the book is similarly accurate.

Re: The Invention of Money

#49

Post by nosianu »

chii wrote: post #35
nosianu wrote: post #24

Earlier quoted context omitted.

How is gold more real than debt? To me debt is far superior. Debt means you have a commitment from a human (directly or indirectly, if the debt is owed by an organization). Gold has no inherent value at all apart from some minor uses of relatively small amounts in the economy. Except by agreement, which debt also has. An example for debt-based I once read somewhere was a kid writing an IOU for garden work. As long as…

It is easier for somebody to have more faith in gold than in someone's promise to pay back a debt (using work or a commodity). Especially in dealings between sovereign entities.

So you basically ignore my comment, where I said something about just that, and write an auto-triggered response, got it. Did I just write to some customer service hotline?

Re: The Invention of Money

#50

Post by nosianu »

runeks wrote: post #30
nosianu wrote: post #24

Earlier quoted context omitted.

How is gold more real than debt? To me debt is far superior. Debt means you have a commitment from a human (directly or indirectly, if the debt is owed by an organization). Gold has no inherent value at all apart from some minor uses of relatively small amounts in the economy. Except by agreement, which debt also has. An example for debt-based I once read somewhere was a kid writing an IOU for garden work. As long as…

You can’t separate debt from money because debt is money owed. And there’s clearly a difference between having something and being owed something.

It is not quite clear to me how your reply is meant to be interpreted, given what I wrote...(?) Did you perchance click the wrong "reply" link?
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