From: "J. Walter Plinge" <b.ob@accesinternet.com>
Date: Fri, 23 Feb 2001 12:27:30
Subject: Money divides Trade into Two Parts
FREE TRADE AND FIAT MONEY FUN
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Money divides Trade into Two Parts
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Instead of making trades directly, apples for oranges for instance, where things are about
as clear as they can be, Money divides trade into two parts; one of Earning Money
and the second of Spending Money.
Consider Barter:
A trader such as Marco Polo might leave his home with a string of colorful glass beads in
search of exotic goods. Suppose he finds himself in India and he trades his beads for a
flask of safron. When Marco returns home he could use this rare safron to buy many times
the amount of glass beads than he had started with. And the trader in India would also be
able to trade his or her new glass beads for many times the amount of safron originally
spent. Both sides benefit.
Now consider the African spinach farmer. Modern technology can put the spinach farmer in
touch with buyers in Europe or the US who already know where the cheapest spinach in the
world is to be found. If spinach is selling for $4 a bushel, the buyer might, if he or she
is feeling benevolent, offer $4.02 per bushel.
If the trade goes through, the buyer in the North will be able to exchange his or her new
purchase for many times the original investment and the African farmer will be able to
trade his or her newfound fiat Money for . . . nothing more than the value of the
spinach they just sold. Marco Polo would not like this deal. This is a raw deal. Some
would call it “shrewd business” but that only goes to demonstrate the extent of
moral and ethical degradation of the North.
Trade is about trading that which is abundant or exotic in one area for the same in
another area, to the benefit of both parties. Money is abundant in New York; spinach is
abundant in Africa. But the New Yorker never quite offers up his Money in the same
abundant fashion that the African offers her (or his) spinach. Money just doesn't work
that way, especially when the illusion is created that money is scarce - and it will
ALWAYS be scarce at the bottom of the Trickle Down Fiat currency
systems we now use. Money also clouds the issue because it is infinitely divisable.
International traders even divide pennies into fractions to appear more precise. This
makes them feel good, but really, it's just a con.
Interestingly it is the African who caves in to the power of Money, when it is the African
who holds the real power. New York for instance has a three day supply of food at any
given time. If food growers held out for reasonable prices, New Yorkers would quickly be
eating Federal Reserve notes for survival. But that has never happened yet. Such is the
power of Money.
Money also confuses trade because it divides trade into two parts. The Southern
farmer’s attention is distracted by the Money in the same way that the bull is
distracted by the red cape. They miss the point. The farmers see the Money as the end of
the trade when it is actually only half the trade. If they saw the trade for what it was -
a bushel of spinach for a bushel of spinach plus two cents - they might be less inclined
to trade.
Money manipulation has been going on in Southern nations for hundreds of years and in that
time Southerners have been conditioned to a totally false understanding of the value of
Money. The switch to fiat money (with no commodity backing like gold or silver) 30 years
ago, has only made things worse.
Barter is more clear. If the spinach farmer were to trade his (or her) product for, say,
carotts, the value would be more transparent; if s/he was offered 5 carotts for a bushel
of spinach, his or her suspiscions might be roused. But that kind of clarity is not
available when money is used. The farmer compares her (or his) spinach to $4.01 from this
buyer and $4.03 from that buyer, when the actual value may be closer $7 or $12 a bushel.
When one considers the developmental loans that the North makes to the South, through the
World Bank and International Monetary Fund, things get worse. Usually the interest
payments mean that two to three times the amount of the original loan must be paid by the
South. The net result then becomes: the farmer pays two or three bushels of spinach for
what is essentially one bushel of spinach — and when the structural adjustments
program devalues the African currency, the net result then becomes: the farmer pays four
or six bushels of spinach for what is essentially one bushel of spinach.
To the New York businessman there is no degree of inequity that is unconscionable.
Classical economists will say that this is the nature of the market and the market is
infallible. In truth, it is the nature of Fiat Money and it's ability to decieve and
manipluate. The chant of "free markets" and "free trade" tell only
half of the story. It is a simple rule of economic life that markets consist of Labor,
Merchandise and Money. When one of those is restricted, there is no free market.
When the labor force is fixed in one place and cannot move freely, by passport and
visa laws; when refugees are turned away because they are "economic migrants" it
is just connery to suggest that Money (and merchandise) should move freely without borders
in the name of "free markets." It is not a "free market" when
the labor market is under constraints. The chant of "free trade" by economists
is bogus, self-serving and nasty and when economists and educators fail to present the
whole story of free trade to students or to the public, they are a part of that nastiness.
Here is a link to a terrific example of that nastiness by Dr. Edward Flaherty, College of
Charleston. "Does Trade With Poor Countries Hurt The US" http://members.home.net/flaherty15/poor.htm
One hardly has to read an article with a title like ''Does Trading With Poor Countries
Hurt the U.S.?'' to get a whif of the distortion of reality it might contain. This is a
masterpiece of half-truths straight from the "Doctoral" program of the U.S.
educational system. It describes a fanciful world where manual laborers in the US earn $10
per hour and shoes cost $10 a pair. If you liked Alice in Wonderland, you'll LOVE this.
Cheers
Walt
b.ob@accesinternet.com