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Friday, September 16, 2011

Why money is an illusion

Money is a human construction, when we were a neolithic non-cultured species, money was a concept yet to be conceived. Perhaps it was a random intuition that briefly and dimly flickered in the consciousness of people more concerned about what was in front of them than what could be, for better or for worse, a 'reality'.
Image source: Anna Cervova

Illusions are thought to be deceptive, misleading or misrepresentational of reality. Money is believed to be an essential necessity, and indeed, it is in the world we have created for ourselves, but it is not per se a requirement for living which is what contributes to its illusory qualities. Rather it is an a priori deduction which is a conceptual abstraction that can be actualized through a printing press, and not a definitive empirical requirement for life.

In more concrete terms, look at the value of the dollar. It's not directly based on  or 'backed' by any physical collateral such as federal real estate, presious metals etc. The dollar's value is based on perceptions of its value, belief in its worth and what it represents. Currency trader's decisions aren't always if ever based on evaluation of the dollar's actual wotrh under controlled experimental research conditions for accuracy. In other words, it's based on perceptions, beliefs, indicating financial metrics, and changes in market conditions. 

It's kind of like faith! maybe that's why it says 'In God We Trust" on the back of a dollar bill.

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