To be fair, currency and the stock exchange are fairly different systems. Currency roughly keeps track of how valuable/stable that currency is seen to be, while stock prices are largely made up of vibes regarding how well a company is doing. The latter is a game designed by and for the rich to hide and move money while inflating their own worth, while the former is what is being hid. The difference is, everyone has to agree on the worth of the dollar, while only a handful of traders determine the worth of Tesla stock.
Comment on Drop your unpopular opinions here because c/unpopularopinions is filled with popular opinions
arotrios@lemmy.world 3 days ago
Money is imaginary.
It’s an arbitrary point system that distorts real wealth and minimizes the real value of labor and time in the favor of the ruling class. Without the distortion of value money inflicts on wealth, there could be no institutionalized slavery, no billionaires, and no housing crisis. The "invisible hand of the market’ claimed by economists is actually the very visible hand of Wall Street, the Federal Reserve and other central banks around the world actively selecting which types of wealth have value.
Source: Worked in the Stock Market in the 90s on the Options Floor. Watched market makers inflate their wealth by millions by calling down to the trading floor and starting rumors. Insider trading was rampant - I knew PeopleSoft was going to split three months before it did. Thirty years ago it turned my stomach to realize that every element of how we value wealth in this world is defined by drunken ex-frat boys hopped up on coke and Jack Daniels, breaking every rule meant to contain them and laughing when they had to pay the fine.
Today I can’t even look at a stock ticker without feeling nauseous.
Dingo_Kidneys@lemmy.today 3 days ago
arotrios@lemmy.world 3 days ago
everyone has to agree on the worth of the dollar
This is the heart of the shared delusion - that everyone agrees on the worth of a dollar, when in fact, it’s worth is can only be defined personally. And to be more precise, I’d correct your comment to “everyone has to agree on the Fed’s definition of the worth of a dollar”.
If you make $30/hr, a dollar is worth 2 minutes of your time. If you lose your job and get another making $10/hr, that same dollar is now worth 6 minutes of your time, simply because one boss decided you’re worth less than another boss did. This is where the real distortion comes into play - in the perceived value of money versus labor.
Of course, most folks don’t accept a downgrade in value, so instead, they simply make your earned money worth less over time via intentional inflation. The net effect is the erosion of labor’s earned capital and the increase in the value of assets.
An all of this is because we accept their definition of how valuable a dollar is, because we believe we have no other way to earn wealth from our labor, save through money.
Which isn’t true, and hasn’t been true for most of human history. Humans generate wealth by either tending to or exploiting the natural environment. Now, that natural environment is fenced in by property rights, which are governed by the exchange of… you guessed it…
Money.
See, we think that money is wealth. It’s not. Money is a communication of value. And all elements of human communication are imaginary symbols we’ve instilled with arbitrary meaning to build a map of reality.
The map is not the territory. The symbols are not the reality, and they are easily manipulated. Money is one of our oldest and deepest symbols, but we survived before it ruled our minds. If you detach the concepts of wealth, fortune, and happiness from money, you’ll find that your value is far greater than your bank account would suggest.
But to go back to your comment, if you’ve ever done currency trading, you’ll see the two markets are pretty similar and subject to the same levels of manipulation (on a governmental scale in many cases, lookin’ at you China). The game is effectively the same, and it’s still pretty much refereed by the Federal Reserve, as the dollar current is the default currency for most of the world. And the Fed never gets rid of inflation, because without the constant degradation of labor capital, the asset owning class would lose its position of social superiority.
Dingo_Kidneys@lemmy.today 3 days ago
You’re conflating a lot of things as being the same thing and it’s important to draw the lines between them because conflation causes confusion that can and will cause harm if acted on.
Yes, a currency’s relationship with labor fluctuates due to how a market prices labor, but this isnt the fault of currency. It’s a fault with labor markets. In a labor market buyers almost always have an advantage over sellers and as such can devalue labor seemingly at will. This does not in turn change the value of the currency though.
You’re also right to say the Fed has a responsibility to secure market stability and that right now stability is measured in the independant wealth of businesses. However, the Fed is not private, it’s a public structure. It’s been captured by private interests because Americans largely dont understand/care about economic infrastructure. At any point the Fed could raise interest rates to a degree that almost entirely stops borrowing and that would curb inflation the other way. The downside to this is that it would make borrowing impossible for both small and large businesses. The Fed has a very large lever and no discretion. I dont think I need to say that small businesses dying is also not very good for the labor class.
As for your argument on money and self-worth. I largely just chalk this up to being a propaganda campaign to get laborers more interested in currency accumulation over community building. That isnt something that changes with fiscal policy though. That’s a culture issue. I’ve yet to convince anyone though that the two are separate, much less that their culture ought to be changed. The cold reality is that many Americans prefer it this way. They’d rather be a space in a system where they could see themselves as kings over a system without kings but higher standards of living.
arotrios@lemmy.world 3 days ago
Yes, a currency’s relationship with labor fluctuates due to how a market prices labor, but this isnt the fault of currency. It’s a fault with labor markets. In a labor market buyers almost always have an advantage over sellers and as such can devalue labor seemingly at will. This does not in turn change the value of the currency though.
It absolutely changes the value of the currency to the laborer. Labor "buyers’ have an advantage over laborers only because their assets are valued higher than the labor needed to produce them. This valuation is unbalanced and inaccurate, and the inaccuracy is enabled by the concept of currency and exploited by the asset holders. A laborer produces far more value than a landlord, but the system is designed to keep them from accumulating enough assets to ever be a landlord.
Secondly, you’re incorrect regarding the Federal Reserve - it’s a hybrid public/private system:
The Federal Reserve System is composed of several layers. It is governed by the presidentially appointed board of governors or Federal Reserve Board (FRB). Twelve regional Federal Reserve Banks, located in cities throughout the nation, regulate and oversee privately owned commercial banks. The Federal Open Market Committee (FOMC) sets monetary policy by adjusting the target for the federal funds rate, which generally influences market interest rates and, in turn, the American economy via the monetary transmission mechanism.
The Federal Reserve has been criticized for its approach to managing inflation, perceived lack of transparency, and its role in economic downturns. The shift from the gold standard to fiat currency has led to long-term inflation and financial instability, with some calling for the Fed’s abolition or greater accountability through audits
The Fed has been captured by private interests since its inception. They gained legitimacy for the dollar by attaching it to real wealth (gold), and then once they had everyone believing in the strength of the dollar, they rug pulled the wealth that was supporting it. This allowed the asset owning class now to essentially pay their laborers with paper instead of gold. And they can make all the paper they want.
This has worked for about as long as people had faith in America, because the dollar was still considered an “investment in America” and because America had a really good PR team. But once the dollar lost its connection to real wealth, it became a tool of disenfranchisement.
Oh, and ever wonder how the Federal Reserve got started? Spoiler alert, it wasn’t in a congressional committee:
In 1910, Aldrich and executives representing the banks of J.P. Morgan, Rockefeller, and Kuhn, Loeb & Co., secluded themselves for ten days at Jekyll Island, Georgia.[9] The executives included Frank A. Vanderlip, president of the National City Bank of New York, associated with the Rockefellers; Henry Davison, senior partner of J.P. Morgan Company; Charles D. Norton, president of the First National Bank of New York; and Col. Edward M. House, who would later become President Woodrow Wilson’s closest adviser and founder of the Council on Foreign Relations.[10] There, Paul Warburg of Kuhn, Loeb, & Co. directed the proceedings and wrote the primary features of what would be called the Aldrich Plan. Warburg would later write that “The matter of a uniform discount rate (interest rate) was discussed and settled at Jekyll Island.” Vanderlip wrote in his 1935 autobiography From Farmboy to Financier:[11]
Despite my views about the value to society of greater publicity for the affairs of corporations, there was an occasion, near the close of 1910, when I was as secretive, indeed, as furtive as any conspirator. None of us who participated felt that we were conspirators; on the contrary we felt we were engaged in a patriotic work. We were trying to plan a mechanism that would correct the weaknesses of our banking system as revealed under the strains and pressures of the panic of 1907. I do not feel it is any exaggeration to speak of our secret expedition to Jekyl Island as the occasion of the actual conception of what eventually became the Federal Reserve System. … Discovery, we knew, simply must not happen, or else all our time and effort would be wasted. If it were to be exposed publicly that our particular group had gotten together and written a banking bill, that bill would have no chance whatever of passage by Congress. Yet, who was there in Congress who might have drafted a sound piece of legislation dealing with the purely banking problem with which we were concerned?
Despite meeting in secret, from both the public and the government, the importance of the Jekyll Island meeting was revealed three years after the Federal Reserve Act was passed, when journalist Bertie Charles Forbes in 1916 wrote an article about the “hunting trip”
surewhynotlem@lemmy.world 3 days ago
Interesting. So you think greed exists because of money. I disagree because I have kids and they don’t understand money, but they do understand greed.
arotrios@lemmy.world 3 days ago
No, greed is constant, and I don’t mention it above. I make no apologia for human nature, nor do I expect a utopia if currency suddenly disappeared. But if you get to the heart of it, your kids don’t fight over money - they fight over wealth - physical goods. In essence, a person has no need for money itself, only the goods it can buy.
After money detached from the gold standard and physical connection, it became effectively imaginary. As long as money is tied to the physical possession, it becomes difficult to hoard - a prime example is Fort Knox, which, while it hold a huge amount of physical gold that has a large monetary value, the vaults of Knox are dwarfed in comparison to the amount of money held by Elon Musk. In fact, I don’t think there’s enough physical gold in the world to cover Musk’s fortune.
Now, if Musk actually had to keep his wealth in the form of physical gold, he’d never be able to use it or leverage it the way he can with money. The logistics and expense of handling that amount of gold would be insurmountable. It’s very physical nature prevents the inflation and distortion we see with fiat currency. Another example would the millions in paper currrency Pablo Escobar lost to mold and rats - the need to hold the physical wealth effectively eroded it.
But money isn’t attached to gold anymore, or anything physical. It exists as an arbitrary point value within a bank account, and it’s attachment to physical goods only exists because we believe it does.
And in this arbitrary imaginary system, the value of a pile currency can now end up exceeding the total wealth of the world if the powers that be choose to let it.
Just like one man, Musk, is richer than all the rest of us according to this system, when his actual value as a member of society is about that of your average ketamine junkie.
TranscendentalEmpire@lemmy.today 3 days ago
Now, if Musk actually had to keep his wealth in the form of physical gold, he’d never be able to use it or leverage it the way he can with money. The logistics and expense of handling that amount of gold would be insurmountable.
That’s not really how the gold standard worked. The value of gold is also imaginary, so it’s not immune from inflationary forces. If the government wanted to print more money" they would just adjust the value of the gold.
The reason we moved away from this is because the value of gold in foreign markets was difficult to standardize to the value of the USD. Meaning that while we may want to hold the value of gold to a certain USD mark to help control domestic inflation, the value of the gold was lower than it could fetch in foreign markets. When that happened foreign governments would buy up as much gold as they could and begin to deplete our reserves.
Rich people did not have vast vaults of gold, the reserves and banks would just hold onto the gold and keep track of the “ownership” of it on paper, just as we do today. Fiat currency was just an acknowledgement that currency in general has always been a human construct based on trust.
arotrios@lemmy.world 3 days ago
That’s not really how the gold standard worked. The value of gold is also imaginary, so it’s not immune from inflationary forces. If the government wanted to “print more money” they would just adjust the value of the gold.
I was mainly using that example to show how a physical attachment to currency makes hoarding impossible at the scale of trillions.
But you’re incorrect in your last sentence, because the value of gold is not determined by a single government. It’s value is arbitrary and certainly subject to inflation, but only when supply outpaces demand, which happens rarely (Spanish conquest of the Americas being one notable exception) but not to the same extent a non-physical fiat currency can be distorted.
And gold is not imaginary. It is a physical object. It’s not currency (although it can be used as such), it’s wealth. And it’s a more reliable store of wealth than money in a bank account, although considerably less liquid. If all money disappeared tomorrow, gold would still hold value (probably more)… but only to those who have need of gold as a store of wealth.
But here’s the thing, if someone manages to get all the gold in the world, the rest of us still get to eat. If someone gets all the money and buys all the means of production - we only get to eat if we give them our labor.
Now, you actually illustrated my point that money is imaginary here:
The reason we moved away from this is because the value of gold in foreign markets was difficult to standardize to the value of the USD. Meaning that while we may want to hold the value of gold to a certain USD mark to help control domestic inflation, the value of the gold was lower than it could fetch in foreign markets.
In other words, when we attached the dollar (imaginary value) to gold (real value) the value of gold declined because the inflationary pressure inherent in the (imaginary) dollar artificially decreased its value. Thus the distortion of value we see inherent in money. And when the dollar was fully decoupled from gold in 1971, well, remember the Carter years and the oil crisis? In fact, look at our economic stability and inequality pre and post 1971 - economics effectively became a constant boom/bust cycle for most of our lifetimes, and now nearly 60% of the county is underwater.
Because once upon a time the dollar was a symbol of wealth because it was worth gold, and its not anymore. It’s just an point in a rigged system now.
Now imagine if the US only provided gold currency when that
agent_nycto@lemmy.world 3 days ago
This is less of an opinion and more of an objective fact