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May 17, 2019 | Monetary History Made Simple!

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:

At my recent visit to Las Vegas and the Money Show, there were two experts who attempted to give the attendees a history of money. These experts were well known economists with a big audience of listeners. But what I discovered is that these experts did not represent history accurately or completely. They did not give the listener full information. Let’s review monetary history to get a more complete representation of what has happened over the years.


There are five or six concepts which give us an understanding of monetary history. These concepts are: barter, value, money, currency, virtual, and cyber. If you grasp each of these concepts I think you will discern our monetary history more fully. You can also teach these concepts to your friends and associates. I will describe each concept and provide some context so that every reader can discern there meaning. Let’s go!

  1. Barter:  economics starts with barter. Think of barter as an activity in a small community or neighborhood where people get together to display there products and then exchange these products for those of others. The products could consist of food items, pottery, jewelry, art, clothes, shoes, and thousands of similar items. Barter is where it all begins and then history evolves from this beginning. What is the purpose of this gathering and exchange situation called barter?
  2. Value:  the purpose of barter is to start an exchange of this concept called ‘value’. We presume that every item that is being offered for barter has some inherent ‘value’. But none of us knows what ‘value’ an item of production might have. Value is a subjective/inner/virtual concept of my mind. Your subjective mind and my subjective mind must negotiate to discover what makes sense in any exchange. Are my eggs worth a loaf of bread? How many eggs for a loaf? For a pair of shoes? For a piece of jewelry? It’s all subjective at the start. But what would help us with this exchange process? Let’s invent a new concept.
  3. Money:  If we all could agree on one item (which we think has ‘value’) then we could simplify this entire barter/exchange process. History has shown that any item could be used as money. But over time the best alternative became these precious metals called silver and gold. These metals became viewed as having ‘value’ (this subjective idea) and then being representative for ‘valuing’ other items. An ounce of silver (for example) might be exchanged for a dozen eggs, one chicken, 10 pounds of potatoes, or a loaf of freshly baked bread. This metal then became universalized within all barter communities and gradually ‘values’ (called prices) emerged for nearly every product. We now had the beginning of a monetary system for our markets. But what also emerged after money? What helps us ‘calculate’ value?
  4. Currency:  After money was invented within a barter community, the next issue became price discovery. What ‘value’ or price should each item being exchanged have (what did people want to pay)? What did the participants in the market desire to pay for each item being offered? To enhance the ‘valuation’ of items so that negotiations became somewhat objective, the marketplace invented a ‘currency’. The American dollar is a currency. It started as a definition based upon a weight of silver (Ag) and gold (Au) but later it became merely a number on paper (a note). The number ($1, $5, $10) could be printed on a piece of paper (a note) and used for price discovery and/or a payment system (a unit of account). It could also be exchanged for money (silver/gold) if the issuing authority desired this option. But what happened in the late 90’s and after as computers became ubiquitous?
  5. Virtual:  our paper notes called our currency became non-physical (mental abstractions) and this allowed our banking authorities to create virtual currencies from their thinking (their mind). The big change happened after our 2008 financial crisis. Bankers discovered that they could merely ‘type’ virtual numbers (derived from their subjective mind) into a computer account. This new technology called a computer (living within a network of computers) could be used to create non-physical currencies by the trillions. The name QE (quantitative easing) was given to this process/operation. Central bankers could now think up a QE number (say $85 billion) and ‘type’ this number into their System Account for circulation to others within their network. What name was given to these virtual currency creations after they entered a particular computer account?
  6. Cyber:  after a virtual currency was thought up by a banker (mentally), the next step was to ‘type’ this currency number into a computer account (their own System Account). This operation created a new name called Cyber money or a cyber currency account. The virtual currency which was within the mind of a banker was ‘typed’ into a computer account and this created this concept called cyber money. QE money (quantitative easing) started with a virtual number in the mind of a Central Banker (say Ben Bernanke) and then his virtual number (say $85 billion) was ‘typed’ into the SOMA (system open market account). Wau La, money could be created from the mind of Ben Bernanke directly. What a change for our overall monetary system. Cyber money derived from virtual numbers in the MIND of a banker and then entered into select computer accounts for spending and investing became the vogue operation. My name for this process is ‘official counterfeiting’ of money so that the marketplace could spend these cyber units on assets and other types of investments. I also call this ‘money from heaven’ as the money units derive from the virtual spirit/mind of the creator/banker.


The above history gives each of you some understanding of where our monetary system has evolved from and why we now use the concept called MMT (modern monetary theory) to describe this idea of virtual money and/or cyber money operations. Our Central Banks have discovered that they can create a cyber currency by merely ‘typing’ numbers into their System computer account. Our commercial bankers can do similar. Is this new system representative of historical Capitalism? What do  you think?


MMT is now in vogue for our politicians and some like AOC have recognized that spending cyber dollars (created out-of-nothing) is a tool for creating global Socialism for the masses. AOC wants cyber money for everyone. Free education. Free medical care. Free environmental infrastructure. It’s all Free as the cyber money comes from virtual money numbers residing in the MIND of bankers. It’s all money from the human spirit. Money from heaven. Money created out-of-nothing. Many say ‘money from thin-air’.


We do not need to worry about our huge debt and/or our deficits going forward. All these numbers (now cyber numbers within computers) can be serviced with new cyber money created from the virtual mind of bankers. Trillions of cyber money units can be created out-of-nothing by merely ‘typing’ virtual numbers into the System computer account and then allowing these cyber numbers to pay for anything and everything. What a change from historical Capitalism. We now can create money from the human MIND.


Where does all this lead? Many see Socialism and/or Communism as the next evolution which is emerging. AOC and her associates in Congress are grasping onto this idea called MMT to change our monetary world. Japan is also grasping onto this idea. Europe is working to understand this idea. And gradually, the entire monetary world may grasp onto MMT (money from heaven or money created from the virtual consciousness of bankers and where spending comes from cyber/computer accounts).


Can you discern what has evolved and emerged for our markets? It is now possible to use Central Bank Policy to create money in the trillions for whatever program our politicians imagine. Read about MMT when you have time. Think about this idea that all is now derived from the virtual mind of bankers. Cyber money is also called digital money. Our world has been virtualized and cyberspace is where all financial numbers reside today. Look at your own cyber accounts (now revealed in your smart phone and/or laptop computer).


The history of money is very interesting. We have gone from barter, to subjective value exchanges, to hard money representations of value, to physical paper notes for value calculations, to virtual money numbers in the mind of bankers (QE), to cyber money numbers within our computers. Our monetary system has gone from OUTER (within time/space) to INNER (within our inner mind/spirit). Look all around yourself? Where is money today? Is it mostly in cyberspace (a computer account)?


What is cyberspace? Is it like observed space/time? Is it physical? Is it metaphysical? What is virtual? What is a digital currency? What is the cloud? Where is our money located today? Why are banks removing all vaults from their bank buildings? Why are bankers negotiating money transactions on their computers? What has happened so that our stock markets can be pumped up continually with new cyber money injections? Why are our Central Banks trading all our markets to prevent a crash?


Who is the power center for all money creations today? Is the Fed and their Board the central planners for all of the U.S.A.? Who are the central planners for Japan, Europe, China, Britain, Canada, etc.? Who decides what is appropriate for our interest rates? Who decides if new QE injections should be created for our markets? Who can pump up our stock markets with new injections of cyber money (indefinitely)? What has happened to historical Capitalism? Think on the above to discern! Have a good day!


I am:

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May 17th, 2019

Posted In: Kingdom Economics

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