Tuesday, March 06, 2007

A Fairy Tale World

Noted silver money advocate, Hugo Salinas Price, offers up the following editorial on money's current role for Financial Sense Online, entitled, "A Fairy Tale World".

Here is an excerpt from that article:

The World is exchanging goods and services by various national means of exchange. We are using those same means of exchange as a vehicle for savings. We are denominating credit contracts in any one of various national means of exchange. The predominant means of exchange is the US dollar.

However, a means of exchange voluntarily accepted as such, by those who participate in exchanging goods and services, by those who use it as a vehicle for savings and by those who denominate credit contracts in it, is not per se money.

Money must, sine qua non, function not only as a means of exchange, but also as a means of payment.

The world, as of February 2007, does not possess a means of payment. In economic terms, payment is the exchange of something for something. In today’s world, when units of what is called money are tendered in payment of a purchase, or in settlement of a balance after an exchange, or in settlement of debt, there has been in reality and economically no such payment.

We are in these cases using the term “payment” merely as a legal convention and a leftover from a previous era, when payment did in fact exist and govern all economic activities.

What's he on about? Read the full article and find out.