The strange value of the Pound

[dxcxdzv]

This idea popped into my mind during a regular day.
Every morning before going to work and do my capitalism's wheel job I buy a 500mL can of energy drink. It has a price of £1.95.

It would look obvious that I give to the cashier two pounds, two coins of £1 or one coin of £2 are the two most likely outcome to this decision.
And that's basically what I do.
But one day, while checking the coins in my wallet I looked at one of them (a £1 one) and saw the picture on the other face and thought "Wow, this one is nice". And guess what? I took another coin and kept this one in my wallet.

And it made me realize that if I had spared this coin, kept it, it meant that I consider it of a greater value than the one I gave to the cashier.
Yet, those two coins represent the very same value, which is £1.
But I thought "Some may have thought this as well and spared a coin".
And you know that if within a given population one object is preferred to another it will have a superior value.
Does this mean that this £1 coin has a value... superior to £1?

The coin I've spared in particular? No, not really, as I made my choice on a superficial aesthetic criteria that is not likely to be recognized by a significant majority . If the cashier had agreed on the superior value of this coin an alternative exchange would have been supposedly possible.

I then checked on the Internet to find studies on this precise case, in vain.
I, however, seen that scarcity was a criteria when determining the value of Pound Sterling coin, of course this seems obvious, but I'm talking about recent coins (I am not talking about coins with a certain default or whatever that could classify them as collection item but of coins classified as standard of value).
The scarcity of a certain picture on a £1 coin (this is valid as well for 50p, £2 and so on) can modify its value (by ~500% for the most extreme case I'm aware of).

So, does this mean each £1 coin has actually a different value according to the picture present on it?
Yes and no, the value of money is the value you want to give it, or, more precisely, the value at which you are likely to exchange it.
So if everybody were aware of a significant number of pictures and the relative value of the coins they're on you could have a whole bunch of legally identical coins that are not so identical.

This brings even more questions, for example, can a £1 coin be valued below £1?
Or even, if we lived in such a world, as there would probably be a market in where the value of each coin would be discussed (in the case we strictly take into account only scarcity to modify the value the main factor at a national scale would be the number in circulation and as this number can't increase the value of a given coin is likely to simply increase without experiencing - in the most probable cases - any significant fall) would we see a convergence of prices? I can easily imagine that from one town to another the local scarcity of a coin can be taken into account and then bring differences in prices which would lead to compulsive arbitrage until each value is stabilized nation-wide (if we're strictly talking at a national scale).
You can quickly see that this would be messy as hell, not only because each £1 coin would have a different value but because it'd be difficult for you to check in an everyday transaction the current value of a coin and to agree of an exchange with a tierce(1), even in a perfect arbitrage-free world this would be difficult. In the end the tierce or even you may lose confidence in the values of each coin and all prices would converge towards a single value (which could be £1 as well as the market's average value, or perhaps the confidence will totally disappear on the £1 would be valued to 0). And if that happens a whole part (all?) of the market would fall, be destroyed.
In the end, considering a different value for each coin in an everyday life would be pointless, huh?

Scarcest coins, however, are likely to fall into the category of collection items, but as probably a majority of the population isn't aware of the potential value of a given coin this is not a valid reasoning when it comes to everyday transactions.

Therefore I think this is why my cashier wouldn't accept a sole £1 coin as payment for a £1.95 can under the pretext that it is "Kinda scarcer than the two other £1 coins I have in my wallet".

A personal rambling people, there is a lot to say on this subject, I wanted to talk a bit on the dilemma that I have to confront every morning because I ain't sleep enough.

Cheers.

-----------------------------

(1) One tierce on the point of a given exchange may also consider a whole different value for a coin based on his personal criteria according to the context the transaction is operated in.

[Flapjack]

I have always thought this myself! :) Also...
This idea popped into my mind during a regular day. I buy a 500mL can of energy drink. It has a price of £1.95.

You get ripped off;)

[WhoWhatWhen]

Firstly, I just want to say that this was a hell of a lot thinking over coins and bills. I like it.

Are you basically saying that one has more value over the other because it's appearance? By value I mean you would rather have one than the other.

[Vlerchan]

Does this mean that this £1 coin has a value... superior to £1?
Yes and no. It's market value is still £1 (as measured in some basket of goods) but that claims nothing about what subjective value it might hold.

In the same sense, when I turn my nose up at a pair of jeans because those jeans are too expensive, that does not mean the jean are worth less: there market value remains the same.

Or even, if we lived in such a world, as there would probably be a market in where the value of each coin would be discussed (in the case we strictly take into account only scarcity to modify the value the main factor at a national scale would be the number in circulation and as this number can't increase the value of a given coin is likely to simply increase without experiencing - in the most probable cases - any significant fall) would we see a convergence of prices?
It's more than possible, in the same sense that there is a separate market for antique coins.

Homogeneous goods tend to converge in market price.

not only because each £1 coin would have a different value but because it'd be difficult for you to check in an everyday transaction the current value of a coin and to agree of an exchange with a tierce(1)[.]
What's being described sounds like barter, with an unusual focus on the derived-utility of coins, over more practical items.

[dxcxdzv]

Are you basically saying that one has more value over the other because it's appearance? By value I mean you would rather have one than the other.
Yes, but more concretely its scarcity. Based on its appearance.

Yes and no. It's market value is still £1 (as measured in some basket of goods) but that claims nothing about what subjective value it might hold.

In the same sense, when I turn my nose up at a pair of jeans because those jeans are too expensive, that does not mean the jean are worth less: there market value remains the same.
That is why I'm talking about a significant number of people.
I find the example of jeans quite obscure. The price at which the buyer is ready to sell it to you is fixed, so theoretically the fact that you find it too expensive is not going make its price decrease.
However if a significant amount of people (Put aside the targeted customer or whatever, otherwise it's going to drift away from the subject) find it too expensive it means that average price on the market(let's naively suggest a beautiful B2C context) at which your jeans is ready ti be bought is lower than the one at which you're ready to sell it.
You're selling In The Money, but apparently you won't have any (or enough) buyers to maintain the current price.

It's more than possible, in the same sense that there is a separate market for antique coins.

Homogeneous goods tend to converge in market price.
By homogeneous you mean identical?

What's being described sounds like barter, with an unusual focus on the derived-utility of coins, over more practical items.
I wouldn't say barter (though this as far as I know not in incompatibility with the
principles of Common Law), just describing a regular situation of using coins for a random transaction in the case that secondary factors (not recognized in the first place as significant) come to be taken into account in the valuation of the money used.

[Uniquemind]

All things that have value are valuable because of a collective agreement that it has value for a large flexible set of people.

Money is only a placeholder of such value, which attempts to time-lock in various mathematical units, what value is from an abstract concept to the physical, the side effects are the endless hunger for growth, limited resources of actual utility, and therefore inflation, which despite painful economic contractions (we call them recessions and depressions) is a problem nobody has learned to solve, only slow down.

[Vlerchan]

The price at which the buyer is ready to sell it to you is fixed, so theoretically the fact that you find it too expensive is not going make its price decrease.
Yes. That's what I'm claiming. The market value remains the same since my demand is not large enough to influence the price. So, regardless of whether I value the jeans at the sale price or not - like regardless of whether you value a coin at it's face-value - the market value is unchanged.

If there is more than one person, then the price can be influenced upwards or downwards depending - thus suggest that the displayed market-price was displaced from the actual equilibrium market-price.

By homogeneous you mean identical?
Yes, given perfect arbitrage of course.

Of course, if this coin was qualitatively different, then just look at the market for anqtiue coins to see what happens.

[...] which despite painful economic contractions (we call them recessions and depressions) is a problem nobody has learned to solve, only slow down.
Is the problem being referred to 'endless desired-growth' or 'inflation'?

It's possible to solve the latter, though it has historically resulted in worse contractions.

[Just JT]

That's so much deep thinking I think I got a headache
But....it did remind me of one of the better times with my dad. He used to collect old coins. And he was explaining what made an old coin so valuable....any guesses?

[dxcxdzv]

Yes. That's what I'm claiming. The market value remains the same since my demand is not large enough to influence the price. So, regardless of whether I value the jeans at the sale price or not - like regardless of whether you value a coin at it's face-value - the market value is unchanged.

If there is more than one person, then the price can be influenced upwards or downwards depending - thus suggest that the displayed market-price was displaced from the actual equilibrium market-price.

Demand curve is shifted, basically.


I've made a bit of research and the fact that the picture minted on coins is changed annually is actually really old in Britain(12th Century at least). Though it wasn't a consecutive practice over the years.
This was apparently of great importance to affirm the role of the monarch in the validation of the money.


And he was explaining what made an old coin so valuable....any guesses?
Sorry, but I'm not sure I fully understand what you mean.

[Just JT]

Sorry, but I'm not sure I fully understand what you mean.[/QUOTE]

You mentiond about the value of a coin in the original post, it just reminded me of what my dad had said about how a coin, an old coin becomes more valuable than its face value. It's not the age, or condition that have the most impact on the value. Rather how many coins were produced, and of those, how many less are known to be still in existence.
That's all, just reminded me, maybe a little off topic, but not really cause for what ever reason, one coo had more value to you that the other, even though they equated to the same face value in the end.

[yeehaw]

Every morning before going to work and do my capitalism's wheel job I buy a 500mL can of energy drink. It has a price of £1.95.

What a rip off...

I guess you have a point here, just because you find a coin "pretty" and you would rather keep it than spend it this one time it's still valued at £1... right?

[dxcxdzv]

Just JT
Yeah, I see.

twentyonehorizons
I know the can is actually kinda expensive. But I have to take two buses to go to work. I manage to get the first one at a specific hour that permits me to - once in the transit area - go to a specific shop, buy the can and go to the bus stop and needing only to wait less than 4 minutes (less than 2 minutes without any traffic perturbation) before the second bus arrival. This also permits me to never be late at work.

Concerning the coin that's basically what is discussed just above.

[yeehaw]

twentyonehorizons
I know the can is actually kinda expensive. But I have to take two buses to go to work. I manage to get the first one at a specific hour that permits me to - once in the transit area - go to a specific shop, buy the can and go to the bus stop and needing only to wait less than 4 minutes (less than 2 minutes without any traffic perturbation) before the second bus arrival. This also permits me to never be late at work.

What if there's a long queue at that specific shop? Or they don't sell the energy drink you like and you have to spend a couple of minutes to think about an alternative?

[Stronk Serb]

When looking at coins that are still in circulation, the shinnier one is worth the same as the old used one, but when looking at coins out of circulation, the scarcer, the better. It might have an arbitrary aesthetic value, but it's worth the same. Same goes for paper bills. Nobmatter how beat down it is, it's worth the same, assuming it has the watermark and is by law deemed not devalued. Here you can take devalued money to the central bank and get issued brand new bills, they pull the defaced ones out of circulation and replace them with new ones. I also find it funny that the copper for US 5 cents is de facto worth mire than the 5 cents. Here in the nineties on smaller bills, the paper the bill was printed on was worth morebthan the bill.

[dxcxdzv]

What if there's a long queue at that specific shop? Or they don't sell the energy drink you like and you have to spend a couple of minutes think about an alternative?
There is between one and two cashiers at the moment I come to the shop.
Also the frequentation rate, it never went higher than 4 people (which is a case that happened basically two or three times only), the speed at which a client is treated makes the whole frequentation problem insignificant.
I already drank all their stock of Relentless but I can also by Monster Mxx'd or Redbull. Please take in consideration that due to the actual popularity of the last one this problem will probably never happen before I leave the UK.

When looking at coins that are still in circulation, the shinnier one is worth the same as the old used one, but when looking at coins out of circulation, the scarcer, the better. It might have an arbitrary aesthetic value, but it's worth the same.
This is the general consensus, yes.
However my thoughts were about what would happen if this general consensus came to be questioned.

Nobmatter how beat down it is, it's worth the same, assuming it has the watermark and is by law deemed not devalued.
The legal nature is indeed very important.

Here you can take devalued money to the central bank and get issued brand new bills, they pull the defaced ones out of circulation and replace them with new ones.
I'm not sure to get what you mean.

I also find it funny that the copper for US 5 cents is de facto worth mire than the 5 cents. Here in the nineties on smaller bills, the paper the bill was printed on was worth morebthan the bill.
same goes with the 1 and 2 cents coins for the Euro. The relation between the face value and the materials' value (used ti make the coin or the bill) can make strange paradoxes.
Back in the day in England (and a bit everywhere as well) when coins were made out of gold or silver the values of each of these metals were a significant factor for the country's economy.

[sqishy]

Sorry for not getting into this before, I've been watching it though.

If you're taking about the strange property of money in how a given displayed intended value (i.e. a coin or note), can be perceived as having a different set value because of the happenstance rarity of other money with the same intended value, then I share your wonder.

In other wording, it is worth asking if the original inherent intended value of some money is actually effectively overridden by a perceived higher/lower value, based off the rarity of other forms of money with the same original value?

Basically, is the 'recommended' 100 euro note's original value of 100 euro, really just actually 150 euro or something similar, because of the rarity of 100 euro notes with the letter combination in its unique ID? Why can some notes be sold for a value greater than what they display?


Hope I make sense, I know I can appear to be hypocritical in preferring to not be dry and technically-spoken.

[dxcxdzv]

In other wording, it is worth asking if the original inherent intended value of some money is actually effectively overridden by a perceived higher/lower value, based off the rarity of other forms of money with the same original value?

Basically, is the 'recommended' 100 euro note's original value of 100 euro, really just actually 150 euro or something similar, because of the rarity of 100 euro notes with the letter combination in its unique ID? Why can some notes be sold for a value greater than what they display?
That's what the thread is about, the possibility of money to be perceived as a different value than its actual face value.
I quickly came across why using some similar coins (or even notes) on a criteria like scarcity for standard of value wouldn't be sustainable.
A certain coin or note can however fall into the category of collection items, which wouldn't make it valid as a regular transaction tool.

This is where the legal part is important, as I said above. The coin or note is said to be worth this precise amount because it is the one recognized by the issuing institution, legally recognized.
If you pay something by check the issuing bank is what creates the confidence.
However if one day it is considered legally valid to value each Pound coin according to the scarcity of the picture present on them, this is more or less the scenario I described.

Why can some notes be sold for a value greater than what they display?
Because the value of an object depends on the value you think it's worth. Money is legally defined and thus fiat money is deemed to be valued by its face value.
But, as i said, modify the legal framework and you got a complete different story.

[sqishy]

That's what the thread is about, the possibility of money to be perceived as a different value than its actual face value.
I quickly came across why using some similar coins (or even notes) on a criteria like scarcity for standard of value wouldn't be sustainable.
A certain coin or note can however fall into the category of collection items, which wouldn't make it valid as a regular transaction tool.

Can collection items not still be used as bartering even between the collector and someone else wishing to pay to have it?



This is where the legal part is important, as I said above. The coin or note is said to be worth this precise amount because it is the one recognized by the issuing institution, legally recognized.
If you pay something by check the issuing bank is what creates the confidence.
However if one day it is considered legally valid to value each Pound coin according to the scarcity of the picture present on them, this is more or less the scenario I described.

Why can some notes be sold for a value greater than what they display?
Because the value of an object depends on the value you think it's worth. Money is legally defined and thus fiat money is deemed to be valued by its face value.
But, as i said, modify the legal framework and you got a complete different story.

This is a fuzzy area for me regarding my view on economics. The value of money can change depending on perception of value, but it's not necessary if this perception is based on an analysis of what the value means in the economy it is in. If economics is, crudely, a study and practice of that which sustains a human population through self-managed direction of resources, then (leaving aside currency) where do valuable collectibles and rare forms of money come into this?

It's fuzzy so my explanation may not be great; basically I feel that something isn't holding consistently overall here, that something is wrong, but I'm not sure where yet. I don't get it.

[dxcxdzv]

Can collection items not still be used as bartering even between the collector and someone else wishing to pay to have it?
Well, in short, yeah.
But to go deeper it kinda depends of the circumstances. Even if it's legally valid to not use "regular money" in great commercial contracts as shown in Chappell & Co Ltd v Nestle Co Ltd (1960). It just has to be valued.
Still, the idea to use items with no clear face value in an everyday transactions is dangerous.
Not dangerous in a harmful way but in the way that it is not proficient.

This is a fuzzy area for me regarding my view on economics. The value of money can change depending on perception of value, but it's not necessary if this perception is based on an analysis of what the value means in the economy it is in.
The value of money can change depending the confidence you have in it, principally.
If you take two very identical (in absolutely everyway) communities, unable to enter in contact with each other and having both a perfectly stable economy.
If in the first community there is 100¤ (¤ is a sign for arbitrary currency, i.e. it can be $, €, £ or whatever you want) and in the second community there is 1,000¤. If the two communities' economies enter in contact, directly or indirectly (through merchants for example) the ¤ of the first community will worth more than the ¤ of the second community. Just because it the first community you can buy more goods (or simply more valued goods) with 1¤ than in the second community with the same amount of money (1¤).
The value of an object in a society is not bound by some sort of natural laws, Aztecs didn't really care about gold, they had all over the place, but Europeans, us, our economy was very dependent on the amount of gold present in our territories (as I said by taking England as example).
However, at that time gold had only a small technological value, i.e. it wasn't extremely used (compared to today's industry's demand).

If economics is, crudely, a study and practice of that which sustains a human population through self-managed direction of resources, then (leaving aside currency) where do valuable collectibles and rare forms of money come into this?
Humans do have different types of needs. At a moment one individual might consider that he wants something just because it's rare, because it's a piece of history, or whatever.

[LRSSS02]

Personally,I think That The United States Dollar Is Much Better

[Ragle]

It's probably just a collector's value, when some people collect those coins.

[sqishy]

Well, in short, yeah.
But to go deeper it kinda depends of the circumstances. Even if it's legally valid to not use "regular money" in great commercial contracts as shown in Chappell & Co Ltd v Nestle Co Ltd (1960). It just has to be valued.
Still, the idea to use items with no clear face value in an everyday transactions is dangerous.
Not dangerous in a harmful way but in the way that it is not proficient.

I'll look into that case.



The value of money can change depending the confidence you have in it, principally.

The present value in the present economic environment is at least partly dependent on the perceived future environment.

I'm fuzzy on whether this is alright, or if it gives too much influence on the present by the perceived future. For example, is it okay that the value of money within doing transactions that are mostly/entirely within the present/near future, is affected by the perceived further-off future that these transactions simply are not part of?

I get the reasoning that the economy must be conscious of the future and plan in advance, but there has to be a point where too much emphasis is placed on this.

Does it create a risk in giving actuality to a future economic environment, through only perceiving it? As another example, trying to avoid something through worry, but in doing so actually making it happen, like some bad placebo. The currency markets' present values and their changes are partly determined by anticipations of the future, some of it probabilistic in nature.

Hope this makes sense.



If you take two very identical (in absolutely everyway) communities, unable to enter in contact with each other and having both a perfectly stable economy.
If in the first community there is 100¤ (¤ is a sign for arbitrary currency, i.e. it can be $, €, £ or whatever you want) and in the second community there is 1,000¤. If the two communities' economies enter in contact, directly or indirectly (through merchants for example) the ¤ of the first community will worth more than the ¤ of the second community. Just because it the first community you can buy more goods (or simply more valued goods) with 1¤ than in the second community with the same amount of money (1¤).
The value of an object in a society is not bound by some sort of natural laws, Aztecs didn't really care about gold, they had all over the place, but Europeans, us, our economy was very dependent on the amount of gold present in our territories (as I said by taking England as example).
However, at that time gold had only a small technological value, i.e. it wasn't extremely used (compared to today's industry's demand).

I get you with this, thanks for the explanation.



Humans do have different types of needs. At a moment one individual might consider that he wants something just because it's rare, because it's a piece of history, or whatever.

This is true yes, but I was saying that half for opening speculation on if the 'essential economy' and its money should be unified with the 'non-essential economy' and its money. Could they be separate? I'm not convinced with using non-essential items in the same value system as essential ones. I know the distinction between non-essential and essential can be argued to be arbitrary, but there is a clear difference between water, groceries and energy supply than (e.g.) collectible antique items.

[dxcxdzv]

I'll look into that case.

It's a pretty funny one. :p

The present value in the present economic environment is at least partly dependent on the perceived future environment.

Indeed, for example on the sharemarket the value of the share can be defined by what the investors will think the future value will be.
To be clearer, a company whose is promised to a bright future (or at least if a significant amount of people thinks so) will see its shares' price increase as investors expect an increase of their portfolio.
This is why rumors are a very important factor on the financial markets, because people always try to anticipate.

I'm fuzzy on whether this is alright, or if it gives too much influence on the present by the perceived future. For example, is it okay that the value of money within doing transactions that are mostly/entirely within the present/near future, is affected by the perceived further-off future that these transactions simply are not part of?

I think money is safer on this issue than shares, for example.
When talking about money, the factor of confidence can be determined by the general health of the country it is affiliated to, the volume of transactions operated in this currency etc.
And actually it's not a matter on if this is okay or not, it is "natural" and humans will always try to anticipate.

I get the reasoning that the economy must be conscious of the future and plan in advance, but there has to be a point where too much emphasis is placed on this.

Some parts of the financial markets are literally only based on what will be the future value of an asset. CFDs and Futures being two examples of this.

Does it create a risk in giving actuality to a future economic environment, through only perceiving it? As another example, trying to avoid something through worry, but in doing so actually making it happen, like some bad placebo. The currency markets' present values and their changes are partly determined by anticipations of the future, some of it probabilistic in nature.
I'm not sure to entirely follow you, but, anticipating the future also aims at reducing risks. If you're an investor and you anticipate a fall in the value of a certain asset you're very likely to throw it away (by selling it) to preserve your capital. If multiple investors anticipate the same thing as you the market's confidence in this asset will fall and so its value will.
Now, it is still possible that the market's confidence falls without any clear reason (by that I mean investors lose confidence whereas there is actually nothing bad that will happen). An example of this is when there has been this hoax about a terrorist attack at the white House with Obama injured, markets experienced a terrifying fall (what I like to call "a cliff"), when this info has been confirmed fake the markets literally came back to their initial point just as fast as they have fallen.

This is true yes, but I was saying that half for opening speculation on if the 'essential economy' and its money should be unified with the 'non-essential economy' and its money. Could they be separate? I'm not convinced with using non-essential items in the same value system as essential ones. I know the distinction between non-essential and essential can be argued to be arbitrary, but there is a clear difference between water, groceries and energy supply than (e.g.) collectible antique items.
Progress is not the flower of Austerity.
I don't see how you can differentiate those two.
Perhaps you're talking about Veblen goods.
But whatever the case I don't see the relevance in having two currencies within a same economic context.
The whole point of money is to facilitate exchanges, whether these exchanges concern food, shelter, or a ridiculously expensive dress.

[sqishy]

It's a pretty funny one. :p

The battle of the chocolate bar wrappers.



Indeed, for example on the sharemarket the value of the share can be defined by what the investors will think the future value will be.
To be clearer, a company whose is promised to a bright future (or at least if a significant amount of people thinks so) will see its shares' price increase as investors expect an increase of their portfolio.
This is why rumors are a very important factor on the financial markets, because people always try to anticipate.

Yes, I've seen that.



I think money is safer on this issue than shares, for example.
When talking about money, the factor of confidence can be determined by the general health of the country it is affiliated to, the volume of transactions operated in this currency etc.
And actually it's not a matter on if this is okay or not, it is "natural" and humans will always try to anticipate.


I recognise that it is most likely the way this works is due to human psychological nature, yet I am speculating if there is a better way overall to do things, even if it may seen counter-intuitive to many/all without good details.



Some parts of the financial markets are literally only based on what will be the future value of an asset. CFDs and Futures being two examples of this.

Quite so.



I'm not sure to entirely follow you, but, anticipating the future also aims at reducing risks. If you're an investor and you anticipate a fall in the value of a certain asset you're very likely to throw it away (by selling it) to preserve your capital. If multiple investors anticipate the same thing as you the market's confidence in this asset will fall and so its value will.

Yes, judgements and actions are made on the level of risk perceived. It works best overall, but there is no guarantee that every practice of this will yield the best achievable outcome.



Now, it is still possible that the market's confidence falls without any clear reason (by that I mean investors lose confidence whereas there is actually nothing bad that will happen). An example of this is when there has been this hoax about a terrorist attack at the white House with Obama injured, markets experienced a terrifying fall (what I like to call "a cliff"), when this info has been confirmed fake the markets literally came back to their initial point just as fast as they have fallen.

Is there any permanent 'damage' felt by this lapse of the markets' stability?

Where would the Brexit reaction fall into this, in your eyes?



Progress is not the flower of Austerity.

I'm not sure what you mean in this context.



I don't see how you can differentiate those two.

[...]

But whatever the case I don't see the relevance in having two currencies within a same economic context.

I don't see the need for a presumption that essential services and products can be themselves exchanged for non-essential services and products, indirectly through the came currency as a mediator here.

Personally I don't like the idea of doing that.



Perhaps you're talking about Veblen goods.

I don't think so.



The whole point of money is to facilitate exchanges, whether these exchanges concern food, shelter, or a ridiculously expensive dress.

Then perhaps my alternate approach needs a different name, this thing being an analogy to money/currency.

[dxcxdzv]

I recognise that it is most likely the way this works is due to human psychological nature, yet I am speculating if there is a better way overall to do things, even if it may seen counter-intuitive to many/all without good details.

And what would other way be better? If you're not taking into account the risk you're literally just like a blind guy running in a forest.

Is there any permanent 'damage' felt by this lapse of the markets' stability?
At a macroeconomic level, I don't think so.
But I can imagine that some smart-ass sold all of his assets when hearing of this news and got butt-hurt when it revealed to be fake.

Where would the Brexit reaction fall into this, in your eyes?
If you're thinking that the fall of GBP/USD (£/$) is irrational... hell of a no.
Of course there is always this "panic" moment that makes the so called cliff but the dangers are real.
London is financially deeply linked with the EU members, weaken this link leads to concrete problems, and not only for the UK and the Pound.

I'm not sure what you mean in this context.
I mean that excluding a certain feature because it seems irrelevant at first sight never led to progress, and therefore growth.

I don't see the need for a presumption that essential services and products can be themselves exchanged for non-essential services and products, indirectly through the came currency as a mediator here.
Whatever may the product be, it has a value (beside what we consider as valueless like water or air, even if those two can be estimated as well), this value is expressed in a unit, this unit can be the Dollar, the Euro or the Republican Datary, whatever.
This is the fact of giving a quantified value to things that permit "easy" exchanges.
If you exchange essentials for non-essentials it is barter, but still if you exchange a PC master race that's worth $3,000 with junk, you exchange it with $3,000 of junk, theoretically.
Having two currencies or whatever is literally useless, it'll just make exchanges more complicated and God knows humans like efficiency.


Then perhaps my alternate approach needs a different name, this thing being an analogy to money/currency.
This can also be an interesting topic.

[sqishy]

And what would other way be better? If you're not taking into account the risk you're literally just like a blind guy running in a forest.

I'm absolutely fine with taking risk into account for the future, but I am saying that there isn't necessarily no other better way to do things. Sure, we have systems that work and their processes are clearly apparent to us, but we can be open to systems which still give us the desired effect, but whose processes are not as easily understood by general human intuition.

Hope you get what I mean here.



At a macroeconomic level, I don't think so.
But I can imagine that some smart-ass sold all of his assets when hearing of this news and got butt-hurt when it revealed to be fake.

Alright, it literally pays to react too quickly :D .



If you're thinking that the fall of GBP/USD (£/$) is irrational... hell of a no.
Of course there is always this "panic" moment that makes the so called cliff but the dangers are real.
London is financially deeply linked with the EU members, weaken this link leads to concrete problems, and not only for the UK and the Pound.

I wasn't making reference to the fall of currency values, only wondering what you take is with brexit in this.



I mean that excluding a certain feature because it seems irrelevant at first sight never led to progress, and therefore growth.

I go with that.



Whatever may the product be, it has a value (beside what we consider as valueless like water or air, even if those two can be estimated as well), this value is expressed in a unit, this unit can be the Dollar, the Euro or the Republican Datary, whatever.
This is the fact of giving a quantified value to things that permit "easy" exchanges.
If you exchange essentials for non-essentials it is barter, but still if you exchange a PC master race that's worth $3,000 with junk, you exchange it with $3,000 of junk, theoretically.
Having two currencies or whatever is literally useless, it'll just make exchanges more complicated and God knows humans like efficiency.

This easiness/efficiency here isn't favourable to me. When I meant two currencies, I meant two currencies that are not exchangeable between them. The value of one is specifically not allowed to be expressed as a value of the other.



This can also be an interesting topic.

I might set up a thread with this someday.

[dxcxdzv]

I'm absolutely fine with taking risk into account for the future, but I am saying that there isn't necessarily no other better way to do things. Sure, we have systems that work and their processes are clearly apparent to us, but we can be open to systems which still give us the desired effect, but whose processes are not as easily understood by general human intuition.

There are "systems" where preventing loss is prioritized to the maximizing of profit (which is the actual main incentive to the prevention of loss).
Perhaps were you thinking of something like that?



I wasn't making reference to the fall of currency values, only wondering what you take is with brexit in this.

Ah, I thought.
I was remembering your position on Brexit, that's why.


This easiness/efficiency here isn't favourable to me. When I meant two currencies, I meant two currencies that are not exchangeable between them. The value of one is specifically not allowed to be expressed as a value of the other.

I don't like to speak in the absolute, but that's impossible. Or at least that's unsustainable.
Humans to evaluate things thanks to a commonly shared scale.
What you're saying is equivalent to establish two distinct measurement scales for the same things without the possibility to compare those two scales.

[sqishy]

There are "systems" where preventing loss is prioritized to the maximizing of profit (which is the actual main incentive to the prevention of loss).
Perhaps were you thinking of something like that?

Perhaps; I meant that human intuition does not necessarily see all possible ideas that could do better than it already can. In other words, human intuition doesn't have to be the driving seat when it comes to running a system, as long as that system fulfils a set desire of course.



Ah, I thought.
I was remembering your position on Brexit, that's why.

Yes.



I don't like to speak in the absolute, but that's impossible. Or at least that's unsustainable.
Humans to evaluate things thanks to a commonly shared scale.
What you're saying is equivalent to establish two distinct measurement scales for the same things without the possibility to compare those two scales.

Yes, we like conveniences like commonly shared scales; they put some order on an otherwise messier environment.

I am saying that necessary products/services for our survival should not be convertible into unnecessary products/services by a common scale. I do not want to exchange things, for which some of those things have a fundamental life-giving capacity that is simply not in some other things. What value are we supposed to be basing the scale off otherwise?

Using one unified scale that puts them together is treating them with a misplaced sense of value, in my view. Keep the essential apart form the nonessential. Do you get me?

What do you see monetary value to be fundamentally? What is the value perceived?

[dxcxdzv]

Perhaps; I meant that human intuition does not necessarily see all possible ideas that could do better than it already can. In other words, human intuition doesn't have to be the driving seat when it comes to running a system, as long as that system fulfils a set desire of course.
Well, this is something to be developed.


I am saying that necessary products/services for our survival should not be convertible into unnecessary products/services by a common scale. I do not want to exchange things, for which some of those things have a fundamental life-giving capacity that is simply not in some other things. What value are we supposed to be basing the scale off otherwise?

Using one unified scale that puts them together is treating them with a misplaced sense of value, in my view. Keep the essential apart form the nonessential. Do you get me?
It is not as simple as putting the necessary goods on one side and the 'rest" on another. It rather almost entirely depends of the current relations of supply and demand.
For example in The Economic Organisation of a P.O.W Camp (1945) R.A.Radford described how one good may be unnecessary for one person but necessary for another (there are probably way older analysis and theories about this but this one is the first that came to my mind).
On the other side you may think of "necessary" goods with the angle of the Keynesian consumption function, and thus determine a certain set of "necessities" that is the autonomous consumption.

However, as I said, this is not as easy as putting a "limit", a "frontier" between both.
The mechanisms of supply and demand can be quite complex, but we observe that goods are valued in accordance with what people are ready to exchange it for, whether it's other goods or money, it doesn't matter.


What do you see monetary value to be fundamentally? What is the value perceived?
The value of money is another story, basically money aims at quantifying the value of goods and facilitate exchanges, it has three functions (you probably already saw that somewhere else): medium of exchange (a commonly accepted medium, opposed to barter), unit of accounting (quantify the value of goods, give a commonly accepted measure) and store of value (money has to represent something valuable).

For the latter, it previously had a link with precious metals (most famous one being gold).
Today it is rather based on the confidence people have in institutions like banks. When a central bank creates money it increases its assets of the wanted amount and writes the same amount in its liabilities (basically, its debts). Private banks go through a similar process.
Of course here I simplified it at the maximum possible but the advantage of the technique is that it doesn't create any real disequilibrium (which wasn't really the case with gold).

[sqishy]

Well, this is something to be developed.

Yes.


It is not as simple as putting the necessary goods on one side and the 'rest" on another. It rather almost entirely depends of the current relations of supply and demand.

Let me put the idea another way. Have two economic systems run by a common governing system, the essential goods/services one being smaller than the non-essential goods/services. The governing system is responsible for how both economic systems interact with each other, mostly in a logistical way. They are superimposed.



For example in The Economic Organisation of a P.O.W Camp (1945) R.A.Radford described how one good may be unnecessary for one person but necessary for another (there are probably way older analysis and theories about this but this one is the first that came to my mind). On the other side you may think of "necessary" goods with the angle of the Keynesian consumption function, and thus determine a certain set of "necessities" that is the autonomous consumption.

This variance in the 'threshold of necessity' between people could be factored in through some medical examination or whatever similar. Let's keep it to the essential tools needed to sustain people's physiological and psychological health such that they are independent enough 'thereafter' to do whatever they want/need to do. Each is responsible for themselves past a certain frame of guaranteed sustenance.



However, as I said, this is not as easy as putting a "limit", a "frontier" between both.
The mechanisms of supply and demand can be quite complex, but we observe that goods are valued in accordance with what people are ready to exchange it for, whether it's other goods or money, it doesn't matter.

The system can refuse people requesting if they can trade between the two economic systems; it would be illegal.



The value of money is another story, basically money aims at quantifying the value of goods and facilitate exchanges, it has three functions (you probably already saw that somewhere else): medium of exchange (a commonly accepted medium, opposed to barter), unit of accounting (quantify the value of goods, give a commonly accepted measure) and store of value (money has to represent something valuable).

It's basically (in this view) an entity created to quantify value within an object, to quantify the relative values between this object and another, to permit exchange of objects between owners for their value, and to 'preserve' this abstracted value for a future exchange.

I feel like there are a few processes going on here which interrelate to 'produce' money, but each one is basing off this value.



For the latter, it previously had a link with precious metals (most famous one being gold).
Today it is rather based on the confidence people have in institutions like banks. When a central bank creates money it increases its assets of the wanted amount and writes the same amount in its liabilities (basically, its debts). Private banks go through a similar process.
Of course here I simplified it at the maximum possible but the advantage of the technique is that it doesn't create any real disequilibrium (which wasn't really the case with gold).

I get this here, but I still want to know what this value means to you. What is it fundamentally going on here, what is the raw essence as it were?

When you see a lot of 50 euro notes, or an ingot of gold (hypothetically), what does that mean to you, that seeing a rock or a cloud does not mean?

[Bleid]

Does this mean that this £1 coin has a value... superior to £1?

Good analysis in your post.

However, we should take care lest we run into the trap Aristotle described (http://classics.mit.edu/Aristotle/sophist_refut.1.1.html),

"Some people, however, omit some one of the said conditions and give a merely apparent refutation, showing (e.g.) that the same thing is both double and not double: for two is double of one, but not double of three. Or, it may be, they show that it is both double and not double of the same thing, but not that it is so in the same respect: for it is double in length but not double in breadth." - Aristotle

Is it that the £1 coin could have a value superior to £1, or is it that instead, it is only the aesthetic value that has increased, and not the monetary value of £1?

Also consider, even if monetary value is a function of aesthetic value, is it,

A £1 coin > £1,

or is it that, say,

A (1.5 * £1) coin > £1

[dxcxdzv]

Let me put the idea another way. Have two economic systems run by a common governing system, the essential goods/services one being smaller than the non-essential goods/services. The governing system is responsible for how both economic systems interact with each other, mostly in a logistical way. They are superimposed.
It'd be then wiser to prioritize or "secure" the access to necessities rather than trying to separate "kinds" of goods.


This variance in the 'threshold of necessity' between people could be factored in through some medical examination or whatever similar.
I don't think this is really relevant. The Classical interpretation of necessity, which is what is needed and to an extent wanted by the individual may be limited but is the only way you can distinguish necessities between people.


Let's keep it to the essential tools needed to sustain people's physiological and psychological health such that they are independent enough 'thereafter' to do whatever they want/need to do. Each is responsible for themselves past a certain frame of guaranteed sustenance.
Yeah, this is more clear. This joins the idea of securing the access to certain necessities. Briefly, everyone has clothes, not everyone has Lamborghinis.


The system can refuse people requesting if they can trade between the two economic systems; it would be illegal.
See first quote.



It's basically (in this view) an entity created to quantify value within an object, to quantify the relative values between this object and another, to permit exchange of objects between owners for their value, and to 'preserve' this abstracted value for a future exchange.
This is not really "in this view", this is what it is ; whether one accepts it or not is of little importance.
Money has to represent a certain value because people don't give confidence in notes or numbers in themselves, they give confidence in the ability of those notes and numbers to be exchanged for something concretely valuable, this initial confidence being started by the emitting institution.



I feel like there are a few processes going on here which interrelate to 'produce' money, but each one is basing off this value.
What do you mean?




I get this here, but I still want to know what this value means to you. What is it fundamentally going on here, what is the raw essence as it were?

When you see a lot of 50 euro notes, or an ingot of gold (hypothetically), what does that mean to you, that seeing a rock or a cloud does not mean?
What I think is of little importance, as a significant number of people (roughly, society) is ready to exchange one particular money for concretely valuable goods (like a pizza) this de facto places this particular money as something valuable in itself.
technically I wouldn't see a difference between a 50€ note and 50€ of rocks, except that the note will be more easily transportable and exchangeable, which makes the overall cost of using rocks greater than using notes.
If I see 50€ of gold however I'm likely to choose the gold as 1) 50€ of gold is not really heavy (for a 24K one), 2) it is easily exchangeable and 3) it's value increases over time.
The simple fact that money has value is due to the fact that it has an accepted value. yeah, tricky I know.


However, we should take care lest we run into the trap Aristotle described (http://classics.mit.edu/Aristotle/sophist_refut.1.1.html),

"Some people, however, omit some one of the said conditions and give a merely apparent refutation, showing (e.g.) that the same thing is both double and not double: for two is double of one, but not double of three. Or, it may be, they show that it is both double and not double of the same thing, but not that it is so in the same respect: for it is double in length but not double in breadth." - Aristotle

Is it that the £1 coin could have a value superior to £1, or is it that instead, it is only the aesthetic value that has increased, and not the monetary value of £1?
I don't see the point. If a significant number of people gives it a value related to the scarcity of whatever picture is present on it then its value will differ from its face value (theoretically). Nobody claimed that this would be a wise choice though.


Also consider, even if monetary value is a function of aesthetic value, is it,

A £1 coin > £1,

or is it that, say,

A (1.5 * £1) coin > £1
Sorry, I don't get your point.

[Bleid]

I don't see the point. If a significant number of people gives it a value related to the scarcity of whatever picture is present on it then its value will differ from its face value (theoretically). Nobody claimed that this would be a wise choice though.

You mention face value, yet you also mention value related to scarcity of the picture.

What then is the face value according to you, if not that of the picture?

[dxcxdzv]

You mention face value, yet you also mention value related to scarcity of the picture.

What then is the face value according to you, if not that of the picture?
There is no "according to me", stop that people.
Face value is the value writen on the note/coin, this is basically how you know how much it's worth.

[Bleid]

There is no "according to me", stop that people.

You're the one writing your posts.

Face value is the value writen on the note/coin, this is basically how you know how much it's worth.

Apparently, it isn't.

If a significant number of people gives it a value related to the scarcity of whatever picture is present on it then its value will differ from its face value.

Correct? Or are those people in that significant number mistaken on what face value means?

[dxcxdzv]

You're the one writing your posts.
I'm not creating the information, this is fallacious.



Apparently, it isn't.

This is the whole point of the thread, fiat money losing its face value as indicator.



Correct? Or are those people in that significant number mistaken on what face value means?
This is not the point, you don't seem to have understood the topic here.
Nobody cares of any potential mistake.

The point is to discuss what would happen if such a scenario occured and how this scenario is highly improbable, I already detailed that briefly in my op.

[Bleid]

I'm not creating the information, this is fallacious.

Oh, well I'm not creating the information in my posts either, so I suppose you're being pretty fallacious thinking you're responding to me, aren't you?

Let's do away with that little game. You're the one making your posts. If you're making posts with claims you disagree with or don't hold, without quoting some other source, then that isn't the problem of someone responding to you.

This is the whole point of the thread, fiat money losing its face value as indicator.

What does this mean?

[dxcxdzv]

Oh, well I'm not creating the information in my posts either, so I suppose you're being pretty fallacious thinking you're responding to me, aren't you?

Let's do away with that little game. You're the one making your posts. If you're making posts with claims you disagree with or don't hold, without quoting some other source, then that isn't the problem of someone responding to you.
I think things like the functions of money are famous enough for not having to justify. I'm not holding what I'm saying as a personal point of view, I'm reporting commonly accepted definitions among both "public" and academic spheres.
The fact that I am writing them does not mean they only are what I may think.


What does this mean?
When you take a note of 50€ you know it's worth 50€ because it is written on it and it has the signature of Carney-senpai (for post-2010 at least).
However the point of the thread is to start with the idea that this face value, that number, isn't the only thing indicating the value of the item (monetary, here a 50€ note) anymore.

If you prefer, the value of the object discussed (here, the £1 coin) can now be influenced by the object in itself and thus is being greatly behavioral.

[Bleid]

I think things like the functions of money are famous enough for not having to justify.

The popular belief argument as we both know, is not considered justification.

I'm not holding what I'm saying as a personal point of view, I'm reporting commonly accepted definitions among both "public" and academic spheres.
The fact that I am writing them does not mean they only are what I may think.

That's fine. Just ensure that those sources of information are cited so it is not misconstrued that it's your claims.

When you take a note of 50€ you know it's worth 50€ because it is written on it and it has the signature of Carney-senpai (for post-2010 at least).
However the point of the thread is to start with the idea that this face value, that number, isn't the only thing indicating the value of the item (monetary, here a 50€ note) anymore.

If you prefer, the value of the object discussed (here, the £1 coin) can now be influenced by the object in itself and thus is being greatly behavioral.

Wasn't it already influenced by the object itself, due to its face value being a part of the object, or am I confused?

[dxcxdzv]

The popular belief argument as we both know, is not considered justification.
No this is not a "popular belief argument", it's the expectation that your interlocutor knows a minimum about what he is saying. And this is why I expect from you.


That's fine. Just ensure that those sources of information are cited so it is not misconstrued that it's your claims.

If you've been through some of my posts you will remark that I happen to mention sources, but you can understand that mentioning or quoting an academic work for every single claim being made on a regular basis wouldn't really be sustainable.


Wasn't it already influenced by the object itself, due to its face value being a part of the object, or am I confused?
An object like a coin nowadays only has as value the one written on it, at least for the regular coins. So no the object in itself doesn't influence the transactions in which it is used.
In this thread I came with the idea that one may consider a coin of a greater value than its face value for the picture represented on it, aesthetics isn't really viable so I initiated the idea of scarcity of the picture.
It does not mean that any of this make any realistic sense, pictures on the coins have been changed quite regularly since a long time in England, as far as I know there has never been such considerations.

[Bleid]

No this is not a "popular belief argument", it's the expectation that your interlocutor knows a minimum about what he is saying. And this is why I expect from you.

This, however,

I think things like the functions of money are famous enough for not having to justify.

is.

If you've been through some of my posts you will remark that I happen to mention sources, but you can understand that mentioning or quoting an academic work for every single claim being made on a regular basis wouldn't really be sustainable.

It doesn't need to be academic if it's mentioning someone else's words for the sake of bringing them up. I only mention sources because you stated things, then when I brought up those things you stated, claimed it was not you, but others, who stated it. The lack of clarity there was the reason for a source, not because the material needed credibility.

An object like a coin nowadays only has as value the one written on it, at least for the regular coins. So no the object in itself doesn't influence the transactions in which it is used.

This appears to contradict itself. How is the object's value regarded by what is on the object, but yet, the object does not influence the transactions it is used?

[dxcxdzv]

This, however,
is.
It doesn't need to be academic if it's mentioning someone else's words for the sake of bringing them up. I only mention sources because you stated things, then when I brought up those things you stated, claimed it was not you, but others, who stated it. The lack of clarity there was the reason for a source, not because the material needed credibility.
I don't understand why you're being a dick, actually.
You're just bringing up my own words with giving little importance to the context rather than trying to argue concretely on the subject of the thread.
If you want such a kind of discussion, PMs exist.



This appears to contradict itself. How is the object's value regarded by what is on the object, but yet, the object does not influence the transactions it is used?
If tomorrow instead of minting coins in copper I make them in steel, the value of the materials will be inferior. Still, if I (I, as the central bank) mark those coins as £1 they will be used as medium of exchange for a value per unit of £1. In such current cases the value of the materials is not exceptionally important, it used to be, back in the days but since then we headed to higher level of abstraction concerning money.
The object is really just there to represent the value of £1 in a concrete manner, in reality it is just debt.

[Bleid]

I don't understand why you're being a dick, actually.
You're just bringing up my own words with giving little importance to the context rather than trying to argue concretely on the subject of the thread.
If you want such a kind of discussion, PMs exist.

I've simply been asking you about your statements to get clarity on what you're reasoning about, since you claim I'm not understanding and don't know what I'm talking about. Then, when I don't understand the explanation due to what I think is insufficient justification or if I think the reasoning is off, I've brought it up. That's what a discussion is.

If tomorrow instead of minting coins in copper I make them in steel, the value of the materials will be inferior. Still, if I (I, as the central bank) mark those coins as £1 they will be used as medium of exchange for a value per unit of £1. In such current cases the value of the materials is not exceptionally important, it used to be, back in the days but since then we headed to higher level of abstraction concerning money.
The object is really just there to represent the value of £1 in a concrete manner, in reality it is just debt.

But surely, no store would accept a stone as currency if I wrote "£1" on a stone and it was marked just as the coins are, while not being the coins, correct? But then, if I give them the proper, £1 coin, now I can use it as currency.

Hence, it would seem, some objects can be used properly as currency (and thus, in transactions) while others can't?

[dxcxdzv]

I've simply been asking you about your statements to get clarity on what you're reasoning about, since you claim I'm not understanding and don't know what I'm talking about. Then, when I don't understand the explanation due to what I think is insufficient justification or if I think the reasoning is off, I've brought it up. That's what a discussion is.
I'm not saying that you don't know what you're talking, I'm rather expecting that you have some present knowledge on the subject.
Bringing up my words to try to find a leak or whatsoever is really irrelevant, at least in the way I'm interpreting your says, but as I said if you want such a kind of discussion you have other ways to discuss, I prefer, here, to concentrate on the subject.
And to answer you more clearly, my knowledge and the way I use it come from various sources and courses. When I define money I don't give my interpretation I'm using the one used and recognized by the experts of this branch.
Hence, I'm not expecting you to interpret the consequences of a quantitative easing or liquidity trap on the €/$, but just to be aware of some things.

This however does not mean I speak absolute truth or that my says are guaranteed 100% unbiased but I'm constantly trying to be the more objective possible. Sorry that your interpretation differs from what I mean.



But surely, no store would accept a stone as currency if I wrote "£1" on a stone and it was marked just as the coins are, while not being the coins, correct? But then, if I give them the proper, £1 coin, now I can use it as currency.

Hence, it would seem, some objects can be used properly as currency (and thus, in transactions) while others can't?
This is because one object is legally recognized by the central power, with the issuing institution (being the central bank) insuring the confidence.
Fiat money also needs to be hard to fake so people can have confidence in the nature of the object.
Coins and notes nowadays are carefully created, taking into account a specified size, a specified weight etc.
This is then not a question of the nature of the materials used, it is a matter of the confidence people have in it thanks to this sort of "backup" from the issuing institution and the legislation of the community the transaction is operated in (for example a store in the US may not accept your Euros).

[Bleid]

I'm not saying that you don't know what you're talking, I'm rather expecting that you have some present knowledge on the subject.
Bringing up my words to try to find a leak or whatsoever is really irrelevant, at least in the way I'm interpreting your says, but as I said if you want such a kind of discussion you have other ways to discuss, I prefer, here, to concentrate on the subject.

It isn't in attempts to find a leak, it's in attempts to reconcile all the statements together with clear understanding.

And to answer you more clearly, my knowledge and the way I use it come from various sources and courses. When I define money I don't give my interpretation I'm using the one used and recognized by the experts of this branch.
Hence, I'm not expecting you to interpret the consequences of a quantitative easing or liquidity trap on the €/$, but just to be aware of some things.

This however does not mean I speak absolute truth or that my says are guaranteed 100% unbiased but I'm constantly trying to be the more objective possible. Sorry that your interpretation differs from what I mean.

This is because one object is legally recognized by the central power, with the issuing institution (being the central bank) insuring the confidence.

Of course! But the central power needs to have recognized some object, doesn't it? We need some object that can hold the property of being the currency? Even if that object is the digital record of having currency, as with online banking?

Fiat money also needs to be hard to fake so people can have confidence in the nature of the object.
Coins and notes nowadays are carefully created, taking into account a specified size, a specified weight etc.
This is then not a question of the nature of the materials used, it is a matter of the confidence people have in it thanks to this sort of "backup" from the issuing institution and the legislation of the community the transaction is operated in (for example a store in the US may not accept your Euros).

Agreeable.

But again, it's a fact of the object, whether it is easily fake-able or not, and so if it was easily fake-able, and people could reproduce the currency objects, the value they represent would decrease, even if they were sanctioned by authority?

[dxcxdzv]

Of course! But the central power needs to have recognized some object, doesn't it? We need some object that can hold the property of being the currency? Even if that object is the digital record of having currency, as with online banking?
Yeah, that's why money needs to be difficult to fake.
Demand deposits in opposition to fiat money aren't constituted of a properly talking concrete object. You can then only rely on the confidence, which is not that hard as this kind of money is not deemed to be used in an individual transaction but in banking.
You then don't have to search confidence in the nature of the potential object, if tomorrow you own an apartment and receive a monthly rent:
The renter sends you the money from his/her HSBC account to your Barclay's you aren't gonna wonder if the money is fake or real, it has been sent by a commercial bank to another commercial bank. Your bank tells you how much there is and everybody is happy with that.


But again, it's a fact of the object, whether it is easily fake-able or not, and so if it was easily fake-able, and people could reproduce the currency objects, the value they represent would decrease, even if they were sanctioned by authority?
Technically you still can nowadays fake fiat money, however the potentially faked amount is very likely to be too small in regard of the actual money supply to have any significant macroeconomic effect.

[Bleid]

Yeah, that's why money needs to be difficult to fake.
Demand deposits in opposition to fiat money aren't constituted of a properly talking concrete object. You can then only rely on the confidence, which is not that hard as this kind of money is not deemed to be used in an individual transaction but in banking.
You then don't have to search confidence in the nature of the potential object, if tomorrow you own an apartment and receive a monthly rent:
The renter sends you the money from his/her HSBC account to your Barclay's you aren't gonna wonder if the money is fake or real, it has been sent by a commercial bank to another commercial bank. Your bank tells you how much there is and everybody is happy with that.

Technically you still can nowadays fake fiat money, however the potentially faked amount is very likely to be too small in regard of the actual money supply to have any significant macroeconomic effect.

Oh, I see. So does that mean that even if faking currency was as easy as breathing, it wouldn't really have an impact on our economy?

[dxcxdzv]

Oh, I see. So does that mean that even if faking currency was as easy as breathing, it wouldn't really have an impact on our economy?
If it were that easy it will surely have a significant negative impact on the economy. The confidence in the entire money related might fall as well.
It's because that actual fiat money is hard to fake that there are little impacts.

[Bleid]

If it were that easy it will surely have a significant negative impact on the economy. The confidence in the entire money related might fall as well.
It's because that actual fiat money is hard to fake that there are little impacts.

Of course. Well put.

And so then we've come to a case where the object in and of itself is influencing the transactions where it is used, in that, the object in and of itself is not easily fake-able, and if the object were easily fake-able, then it would have a significant negative impact on the economy.

[sqishy]

It'd be then wiser to prioritize or "secure" the access to necessities rather than trying to separate "kinds" of goods.

[...]

Yeah, this is more clear. This joins the idea of securing the access to certain necessities. Briefly, everyone has clothes, not everyone has Lamborghinis.


That could be one form of the idea.



I don't think this is really relevant. The Classical interpretation of necessity, which is what is needed and to an extent wanted by the individual may be limited but is the only way you can distinguish necessities between people.

My suggestion was an attempt at the arguably subjective or non-quantifiable (mathematically) meaning to necessity.



This is not really "in this view", this is what it is ; whether one accepts it or not is of little importance.
Money has to represent a certain value because people don't give confidence in notes or numbers in themselves, they give confidence in the ability of those notes and numbers to be exchanged for something concretely valuable, this initial confidence being started by the emitting institution.



What do you mean?

Money is an entity which is being supported by more than one idea and viewpoint on things. It has three functions for you, not one.

Take the analogy of a number in mathematics. A number usually includes, for example, three things: sign, magnitude and notation. The notation is a presentation of the number to you as a form that your perception picks up on and processes in memory, the magnitude can mean some certain quantity of change / quantity of distance from a reference entity (zero), and the sign can mean some certain direction that that magnitude can be 'done' (+1 can mean 1 km eastwards, but +i can mean 1 km northwards).

The number is an idea, but one which is working off multiple other ideas. It's a group of co-working ideas which are seen my most people as only one idea. Hope this analogy makes sense.



What I think is of little importance, as a significant number of people (roughly, society) is ready to exchange one particular money for concretely valuable goods (like a pizza) this de facto places this particular money as something valuable in itself.

technically I wouldn't see a difference between a 50€ note and 50€ of rocks, except that the note will be more easily transportable and exchangeable, which makes the overall cost of using rocks greater than using notes.
If I see 50€ of gold however I'm likely to choose the gold as 1) 50€ of gold is not really heavy (for a 24K one), 2) it is easily exchangeable and 3) it's value increases over time.

It's the contrary for me as I see it, what you think of money is the most important thing here. Society's acceptance and use of money can only happen if most/all people in the society have a certain mental relationship with money of acceptance and willingness to use it.

With the concretely valuable goods (our nice pizza here), it's valuable because it has the capacity to give you a pleasant existence of some length (you eating it), along with it giving sustenance to your body for contribution to further existence in the future. It's all about perceptions of capacity of certain entities to present a beneficial experience in quality and/or quantity to you.

Would you agree that this is what the value in concrete items means, or do you see it differently?



The simple fact that money has value is due to the fact that it has an accepted value. yeah, tricky I know.


I think things like the functions of money are famous enough for not having to justify. I'm not holding what I'm saying as a personal point of view, I'm reporting commonly accepted definitions among both "public" and academic spheres.
The fact that I am writing them does not mean they only are what I may think.



Yes, but it has to be accepted because of some reasoning/motivation, which hopefully generally/universally means more than just peer pressure. Economics is more than this.


If it were that easy it will surely have a significant negative impact on the economy. The confidence in the entire money related might fall as well.
It's because that actual fiat money is hard to fake that there are little impacts.

This is why I am spurring onward to find out what money means to you personally, as it matters fundamentally to how the idea of money manifests in technological use at all.


(I may appear in a difficult comeback mode, but I only seek more info/ideas, as (mostly) always.)



Bleid

I feel that you tend to discuss the premises and presentation themselves of ideas in threads more than just taking the premises as a given and going from there with the OP on the idea. By all means both can be talked about in ROTW, but the latter deserves priority for sake of what I see as some fairness in giving the OP some breathing space for a minute. :P

[Bleid]

Bleid

I feel that you tend to discuss the premises and presentation themselves of ideas in threads more than just taking the premises as a given and going from there with the OP on the idea. By all means both can be talked about in ROTW, but the latter deserves priority for sake of what I see as some fairness in giving the OP some breathing space for a minute. :P

I place a great significance on clearly defining what is being talked about before I can continue further in some cases.

For example, if I was provided the topic of a 'three-sided-square', I would not know what to do with that and would see it necessary to first secure what exactly that means before I speak on the subject. That is most often why I start that way.

However, in the case of Reise's thread here, it was with different intention. I generally did agree with the analysis in the OP and wasn't targeting the premises so much as working towards the conclusions myself, with Reise's answers as assistance, even if it may not have seemed that way. My last response, along with ones prior to that are very much in line with the same sorts of things that were brought up in the OP, regarding the context of the currency changing the value, and the mentioning of the coin not holding the value printed on it (thus the example of fake-ability).

[sqishy]

I place a great significance on clearly defining what is being talked about before I can continue further in some cases.

For example, if I was provided the topic of a 'three-sided-square', I would not know what to do with that and would see it necessary to first secure what exactly that means before I speak on the subject. That is most often why I start that way.

However, in the case of Reise's thread here, it was with different intention. I generally did agree with the analysis in the OP and wasn't targeting the premises so much as working towards the conclusions myself, with Reise's answers as assistance, even if it may not have seemed that way. My last response, along with ones prior to that are very much in line with the same sorts of things that were brought up in the OP, regarding the context of the currency changing the value, and the mentioning of the coin not holding the value printed on it (thus the example of fake-ability).

Alright, I won't delve further into this.