Currency

BIBOCURRENCY - CURRENCY

WWW.BIBOCURRENCY.ORG

INTRODUCTION

LEARN

· STABILITY

· CURRENCY

· STABLE CURRENCY SYSTEMS

MORE ADVANCED

· REVIEW OF MONEY AND CURRENCIES

· FORMAL BIBO CURRENCY SPECIFICATION

· FORMAL STABILITY ANALYSIS

Most people until recently, have never thought methodically about what money or currency is and in fact for most, everything they think they know about it has been acquired through social conditioning rather than a scientifically coherent process that can leave no doubt as to what EXACTLY currency is. Here, we present an unequivocal logical description of what currency necessarily does in any money system.

1. A currency always relates a number with the value of a thing of value:

A certain amount of units of currency will represent different amounts of different things, because the accepted value of different things is not equal but different. Therefore, currency units allow us to represent in numbers the “value” we wish to attribute to different things.

2. Currency creation always requires the pre-existence of things of value:

Money only makes sense if there is something of a value worth measuring to at least two individuals. Just like it only makes sense to measure and record the length of something that exists, it only makes sense to record the value of something that exists.

Therefore, the creation of money requires a transaction of wealth. And in fact just as in the current system, the creation of money requires a transaction called a pledge where something of value is forsaken. Just like when you sell something you forsake the thing in exchange for so many units of currency into your current account.

Today and always money has been created as a debt or as an instrument to represent debt. Why? Because money’s only purpose is to represent the value of the things we transact and every time we transact a thing of value the value moves between the parties to the transaction. The party that receives the thing “owes” the thing until it is paid off and the party that forsakes the thing is “owed” the value of the thing.

Conclusion: Money is only created out of transactions NEVER THE OTHER WAY ROUND!

3. Currency reduction:

Whenever a positive account entry is used to cancel a negative account entry (i.e. pay a debt) each cancels the other out reducing the amount of money in circulation at that moment.

Conclusion: Paying debts removes currency from circulation.

4. Why we need currency:

The only useful purpose of currency is to be able to represent value AND its divisions without having the need to physically divide the things that have value e.g. a house or a service that takes many hours to complete. So, currency offers a means to trade the value corresponding to a piece of a building for that of an ice cream cone or part of a twenty-hour study course for say a meal.

Conclusion: The only reason we need currency is to REPRESENT value and its divisions without having to divide the things that have value.

5. Currency being only an abstract representation of value cannot ever be scarce:

The idea of currency being scarce is nonsensical because the abundance of currency units depends on the existence of transactions NOT THE OTHER WAY ROUND,

Conclusion: It makes no logical sense whatsoever to limit the transaction of things of value on the basis of there being a “scarcity” of currency.

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