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The Importance of Knowing the Meaning of Money
8 December 2006
In the subject of economics, the key word is money. We do not possess
a definition of the word money. As a result the subject of economics
is fraught.
This becomes very clear when we see the difficulty of setting interest
rates for the Euro as the Euro is used as a common currency for
different nations.
Hence the headline, the ECB bows to political pressure from Paris.
Other smaller nations than France, are unable to bring any pressure
on the ECB, political or otherwise.
In seeking a useful definition of the word money we need to be
sure that we agree upon the purpose of money.
We use money as a means of exchange, we have no other, once we
advance beyond a barter system of trade.
If we use money for any other purpose than as a means of exchange,
money loses its value as a means of exchange. The real value of
money is only known when money truly stands proxy for that which
is being exchanged. Therefore the value of money is determined by
the cost of bringing to market that for which money must stand proxy.
That cost is determined by the circumstances prevailing at the source
of the product, brought to market for sale at a price which will
ensure future supplies of the product. If the process of creating
and presenting a product for sale, is not financially viable, the
product will disappear from the market.
When attempting to establish a means of exchange which is fit for
purpose, through out the European market place, it becomes obvious
that different currencies are required for each different nation.
A nation being defined as a group of people, who are able to exist
independent of others. Capable are being self-supporting. If they
sacrifice their independence for the purpose of making money fit
for purpose, they forfeit their freedom. Britain will forfeit its
freedom if the pound sterling is replaced by the euro, issued as
credit by a private German bank.
We all need to decide whether those we celebrate on Armistice Day,
gave their lives for no purpose.
Doctor Edward C Hamlyn MBChB
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