Tuesday, June 13, 2006

De-materialization of money

For years, I carried little pieces of gold, jade and silver in my pocket. I got the habit from my friend Glenn, who enjoyed buying small amounts of gold and silver along with hunting for jade at Big Sur beach in California.

Jade, silver and gold make excellent money tokens. The de-materialization of money started with paper money. Originally, paper money was "backed" by gold, silver or other tangible items. Later, we removed the "backing" or base of the money. Effectively, debasing the money.

Electronic computing turned money into intangible data configurations stored in computers. Actually, "money" is even more intangible than the computer's memory and electrons. It is the meaning that we give to these configurations that define money. Money has absolutely no physical basis at all, not even the electrons. It's all mental.

Money is a matter of conventions of social trust between us, banks, and governments. Inflation, deflation, monetary collapses are proofs of the conventional status of money. That should make us free of the spell of money, but it does not; for we depend on social conventions of trade and exchange for survival in our age of specialization.

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