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37% of Currency


Money in the form of gold which replaced barter is the original form of money. During those decades it only had the exchange value and replaced the otherwise perishable commodities.. It did have even at that time capacity for storage, transport etc. They are the additional values of money. During this period money was only an instrument of exchange. Once the exchange is effected, the use of the commodity exchanged is over. It was a one-time function. Later money (even as other institutions) began to extend its role. The very first role was mortgage. Before mortgage arose the value of the house built or land tilled was confined to living or tilling. House had no more use than living in it. Land had no more use than producing grain. Society matured and discovered a new use for land or house. It was mortgage. This is a secondary use of land. The institution of money gets an extended use. Similarly money has extended its useful function as an institution several times. In my earlier message when I speak of 37% of currency, I confine the definition of money to its first use of exchange. I believe (not sure) the currency in circulation was originally represented by the gold standard. The gold standard itself was determined by the goods and services that could buy gold at that time. So, I assumed the Federal Reserve still governs itself by the original tradition of issuing currency to represent goods and services. The rest of the 73% of 'money' in circulation is not represented by the currency i.e. not represented by goods and services. From this statistical fact (if my fiscal assumption is true) two things can be said.

i) Money has already created 'money'. (73% of money in circulation has been created by 37% of the currency.) Therefore money is creative of money itself. As institutions advance (as in the example of language) they tend to become (often, if not always) thus creative.

ii) This above fact ensures that any amount of money can be created by this creative power. Presently such creative power embraces higher purchase, credit card, etc.. while in future it can extend to unused immovable properties of govt., companies etc.. and more importantly the still unutilised TRUST between man and society.

story | by Dr. Radut