The Economy Is Fake

Written on April 12, 2024

For almost all of human history, there has been trade in things that have value. For example, a cow is exchanged for a sheep, or grain is exchanged for vegetables.

Eventually they came up with the idea of using something valuable as a means of trading, so that no direct exchange has to take place, but a good can be exchanged with something else that retains its value. This was precious metal in almost every successful society. A precious metal that can be used for a long time and will be desired for a long time, for example gold, silver or copper.

Recently, these precious metals have been replaced by paper money in most countries. Although this paper money itself has no value, governments linked this money directly to the gold they had in their vaults. Each piece of paper was worth a certain amount of money, because it could always be turned in to your government for how much gold it was worth.

While the United States was at war with Vietnam, they had a huge shortage of money to pay for their war. Previously, the only way to get more money for a government was to exchange goods with another entity for money, because each country's money was directly tied to the amount of gold it had in its vaults. And if you want more gold, you have to trade something in return.

Instead, they decided to do something different. They disconnected the US Dollar from the amount of gold they had in their vaults. This means that the US Dollar was no longer tied to the amount of gold that the US government had in their vault, which allowed them to print an infinite amount of money to pay for their war, without this money being backed by anything. In short, the population could no longer exchange their US dollars for gold with the government.

The major drawback to this ordeal is inflation. Every time you print more money, that money loses its value because there is more of it in circulation. Part of what makes something valuable is its scarcity.

We as a population experience this as things becoming more expensive. Although it may seem like the products we are buying are becoming more expensive, it is actually your money that is losing its value.

The same applies to the money you save for later. The longer you have the money, the less it is worth due to annual inflation and the less you can buy with it in the future. Essentially, the money you own is being stolen and you don't even notice. This is why inflation is considered a hidden tax.

This is the reason we have to go to work ad infinitum. In theory, after you saved a certain amount of money, you should be able to stop working with the money you earned. But instead, we have to keep working nowadays, because the money we set aside for later depreciates so quickly that in a few decades it will be effectively worthless.

This is also the cause of the consumer society we live in today. Since money is effectively worthless, why not spend it? This is why, when people buy something that, instead of depreciating in value — the money we use today — increases in value — like precious metals, stocks, real estate or even bitcoin — they often change their entire mindset from constantly spending as much as possible to spending as little as possible to be able to get as much as possible of what they're investing in. Because they can finally save for their future.

20 US dollars might buy you something nice now, but in a few decades those same 20 US dollars will no longer be worth anything. Instead, precious metals such as gold retain their value, allowing you to maintain the same purchasing power over time.

To put an end to this need for constant consumption and constantly working far too much for far too little money, we desperately need hard money back — money that is directly linked to something valuable that retains its value over time, such as gold — which makes it worthwhile to save again and which makes work rewarding again, giving people a reason to save their money and consume less.