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August 3, 2017 | The Most Important Concept in Economics, Finance, Trading!

Donald B. Swenson: Born January 24, 1943, Roseau, Minnesota. Graduated H.S. 1961, Moorhead High, Minnesota. Graduated College 1968, Moorhead State University, Minnesota. Designated member of Appraisal Institute (MAI), 1974. Employed with Western Life Insurance Company, 1968 – 71; Iowa Securities Company, 1971 – 73; American Appraisal Company, 1974 – 81. Part-time teacher/valuation consultant/bartender, 1979 – 2008 (taught workshops at Waukesha County Technical Institute, Wi. and Madison Area Technical College, Wi.). Retired 2008 (part time teacher/blogger), AZ. Self educated economist/philosopher/theologian:

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There is one concept in economics that is foundational to all of economics and money. Few seem to comprehend the nature of this concept. Few seem to view this concept as part of one’s consciousness. Most traders and investors view this concept as inherent within objects (matter). What is this important concept of economics? The concept is called ‘Value’. Think of a barter marketplace where goods are traded without any money or currency. Think of people trading their products and objects with each other without any official money or currency. What is happening in this type of marketplace?

What is happening is that people are negotiating trades of ‘Value’. If I produce eggs and you produce peanuts, then we can trade these items between us. How many eggs for a cup of peanuts is up for negotiation. We bargain and negotiate until we reach an agreement. What are we bargaining about? We are bargaining about the ‘Value’ of what we desire to trade. This barter marketplace is where economics started. But what is a serious problem which emerges from a barter marketplace? The problem which emerges is coming to an agreement where various ‘coincidences of wants’ differ.

Gradually, over time, this problem was resolved by traders ‘inventing’ this concept called Money. Gradually, a money commodity was selected to serve as a ‘proxy’ for this non-material concept called ‘Value’. Keep in mind that this concept called ‘Value’ is an inner concept of my/your consciousness. Value is not some ‘thing’ which is attached or which is inherent within a good or commodity. Value is an internal concept of my/your consciousness (our subjective mind). Consciousness is that non-material source (entity) which activates my brain and which allows me to negotiate, communicate, think, and calculate an agreement to a trade.

Money tends to serve as a substitute for this fundamental concept of economics called ‘Value’. With the invention of a money item (say a silver coin of one ounce), we can now trade all kinds of products without worrying about this idea called the ‘double coincidence of wants’. We can use this ‘proxy’ for Value (called a silver coin) in lieu of direct trading of products. This makes calculating ‘Value’ more easy as we develop prices for various items to be exchanged. Price discovery allows new trades to occur without any serious haggling over how many of my objects should be traded for your objects. This ‘double coincidence of wants’ concept tends to disappear with the use of Money.

The history of Value and then the invention of Money leads eventually to an invention of an official currency unit (such as ‘dollar’) to make trading of value more easy to calculate (or measure). Generally, an official government institution will invent a ‘name’ for a currency unit which they desire to declare as legal tender (say dollar) and then units of dollars (math) will result in a paper note(s) with numbers. Paper notes make calculating ‘Value’ (prices) more easy and efficient for buyer and seller. If people in the marketplace have confidence in the paper currency and the issuing authority, then all works rather well (at least for a season).

If people lose confidence in the issuing authority, then people generally desire some historical money (like silver or gold) in exchange for their currency notes. Keep in mind that most currencies were originally ‘tied’ and/or ‘defined’ in terms of some commodity which initially emerged in a barter marketplace as this ‘proxy’ for Value. In America, the original ‘proxy’ of this non-material concept called ‘Value’ was silver and later gold. So, the history of money reveals that all economic activity STARTS with this non-material concept (of consciousness) called ‘Value’. VALUE is fundamental and foundational to all economic activity and international commerce.

Today, few understand the above history and why VALUE is the core concept of economics. Most think that the PROXY for Value (a money item like our dollar) is foundational. But, in reality, this non-material concept called VALUE is really the core concept of economics. Think about this history and also the NATURE of this concept called VALUE. The concept derives from our subjective consciousness (see my prior missive on consciousness) and then we trade VALUE (via some proxy) so that trade and commerce can occur. Today, all is corrupted within economics and the system is soon to collapse. Our money is corrupted and the concept of ‘Value’ has become corrupted. Think on the above to learn why a collapse is coming to all our global markets! Enjoy! I am:

Some additional images to consider:

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Venezuelans (today) barter diapers for food and toilet paper for created products from a customer! This is the beginning of economics and it continues today at many venues! The core concept in trading is this non-material concept (of consciousness) called VALUE!

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In India, the above lady waits for a customer so as to barter her products. The core concept underlying of all barter transactions is this concept called VALUE!

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This gentleman has a group of products which he will barter for other products! Wants and needs are key! Value is foundational to a trade!

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Today, the smart phone is a handy device to use for the barter of your products with others who have products to exchange. Value is the core concept to negotiate!

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Barter is the foundation of all economics and trade. The core concept (non-material concept) is this concept called VALUE!

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Today, many nations also barter for products and exchange VALUE to complete a transaction! The trend is growing as various markets collapse!

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August 3rd, 2017

Posted In: Kingdom Economics

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