From Commodity Money to Representative Money to Fiat Money

Posted by PITHOCRATES - April 8th, 2014

History 101

(Originally published November 8th, 2011)

The Drawbacks to Using Pigs as Money Include they’re not Portable, Divisible, Durable or Uniform

They say we use every part of the pig but the oink.  So pigs are pretty valuable animals.  And we have used them as money.  Because they’re valuable.  People were willing to accept a pig in trade for something of value of theirs.  Because they knew they could always trade that pig to someone else later.  Because we use every part of the pig but the oink.  Which makes them pretty valuable.

Of course, there are drawbacks to using pigs as money.  For one they’re not that portable.  They’re not that easy to take to the market.  And they’re big.  Hold a lot of value.  So what do you do when something is worth more than one pig but not quite worth two?  Well, pigs aren’t readily divisible.  Unless you slaughter them.  But then you’d have to hurry up and trade the parts before they spoil because they’re not going to stay fresh long.  For pig parts aren’t very durable.

Suppose you have two pigs.  And someone has something you want and they will trade two pigs for it.  But there’s only one problem.  One pig is big and healthy.  The other is old and sickly.  And half the weight of the healthy one.  This trader was willing to take two pigs in trade.  But clearly the two pigs you have are unequal in value.  They’re not uniform.  And not quite what this trader had in mind when he said he’d take two pigs in trade.

Our Paper Currency Evolved from the Certificates we Carried for our Gold and Silver we Kept Locked Up

Rats are more uniform.  They’re more portable.  And they’re smaller.  It would be easier to price things in units of rats rather than pigs.  They would solve all the problems of using pigs as money.  Except one.  Rats are germ-infested parasites that no one wants.  And they breed like rabbits.  You never have only one rat.  Man has spent most of history trying to get rid of these vile disease carriers.  So no one would trade anything of value for rats.  Because these little plague generators were overrunning cities everywhere.  So rats were many things.  But one thing they weren’t was scarce.

Eventually we settled on a commodity that addresses all the shortcomings of pigs and rats.  As well as other commodities.  Gold and silver.  These precious metals were portable.  Durable.  They didn’t spoil and held their value for a long time.  You could make coins in different denominations.  So they were easily divisible.  Unlike a pig.  They were uniform.  Unlike pigs.  Finally, you had to dig gold and silver out of the ground.  After digging a lot of holes trying to find gold and silver deposits.  Which made it costly to bring new gold and silver to market.  Keeping gold and silver scarce.  And valuable.  Unlike rats.

But gold and silver were heavy metals.  Carrying large amounts was exhausting.  And dangerous.  A chest of gold and silver was tempting to thieves.  As you couldn’t hide it easily.  Soon we left our gold and silver locked up somewhere.  And carried certificates instead that were exchangeable for that gold and silver.  And these became our paper currency.

Governments Everywhere left the Gold Standard in the 20th Century so they could Print Fiat Money

The use of certificates like this is typically what people mean by gold standard.  Money in circulation represents the value of the underlying gold or silver.  And can be exchanged for that gold or silver.  Which meant that governments couldn’t just print money.  Like they do today.  Because the value was in the gold and silver.  Not the paper that represented the gold and silver.  And the only way to create money was to dig it out of the ground, process it and bring it to market.  Which is a lot harder to do than printing paper money.  So governments everywhere left the gold standard in the 20th century in favor of fiat money.  So they could print money.  Create it out of nothing.  And spend it.  With no restraints of responsible governing whatsoever.

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The Bureaucrats running the Army waste $5 Billion experimenting with a New Universal Pattern Uniform

Posted by PITHOCRATES - October 19th, 2013

Week in Review

The rollout of Obamacare has been a disaster.  Now we’ve learned that they used ten-year old technology for the big website.  They didn’t test it sufficiently before going live.  And there are political operatives working as navigators collecting our most personal information.  Some even with criminal records.  In other words, it’s a real cluster [deleted expletive].  Or business as usual whenever the government tries to do something (see The Army’s $5 billion waste by Caitlin Dickson posted 10/14/2013 on Yahoo! News).

In 2004, the Army decided to scrap the two traditional camouflage uniforms that had long been used by the military—one meant for woodland environments, another for the desert—and claimed to have come up with a universal pattern that could be worn anywhere and blend in with any environment. The $5 billion dollar experiment with the universal pattern is over as the Army is phasing out the uniform after less than a decade of use. But many soldiers and observers are wondering why it took this long and cost this much to replace an item that performed poorly from the start during a period when the money could have been spent on other critical needs, like potentially life saving improvements to military vehicles and body armor.

The left loves to point to the military as a government success story.  But it’s not the government that makes the military the best in the world.  It’s the people.  Patriots who love their country.  Especially the junior officers and the noncommissioned officers.  Those closest to combat.  Who learn at a steep price the art of war.  Those grizzled veterans of their late teens and early twenties who survive pass their craft on to the kids coming up behind them.  This is who landed at Normandy and fought their way through those beach defenses and went on to win World War II.  These old men in their late teens and early twenties leading the younger guys through the fires of hell and back home again.  Not government.  For all the weapons and all the planes and all the ships would not have done a damn thing unless they were in the hands of America’s finest.

Those noncoms and junior officers who advance through the ranks and the officer corps to leadership positions command larger units.  Turning from tactics to strategy.  Crafting our war plans.  That those noncoms and junior officers carry out.  But, again, it’s these combat veterans that make the military great.  Not the bureaucrats responsible for buying the uniforms.

We can expect more of the same with Obamacare.  For the same bureaucrats that waste $5 billion on a bad uniform design will be running our health care.  Of course under Obamacare we won’t just be wasting billions of dollars.  We’ll be destroying the best health care system in the world.  Which will put all Americans at risk.  Our health.  And our lives.

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The Women in Photo Breastfeeding in Public while in Uniform were Reprimanded for Violating Regulations

Posted by PITHOCRATES - June 16th, 2012

Week in Review

There has been some fallout from that photo of military women breastfeeding their babies while in uniform.  The woman who organized it lost her civilian job.  And the Air National Guard has reprimanded the two women in the photograph (see Woman Behind Controversial Military Breastfeeding Photo is Fired from Her Civilian Job by Lylah M. Alphonse posted 6/15/2012 on Yahoo! Shine).

The woman who organized an awareness campaign that came under fire for featuring two airmen breastfeeding while in uniform has been fired from her civilian job as an X-ray technician, her lawyer tells Yahoo! Shine.

Crystal Scott, an Army veteran, military spouse, and the program director of the Mom2Mom breastfeeding awareness group at Fairchild Air Force Base, was terminated by Schryver Medical, a provider of X-rays, EKGs, ultrasounds, and other medical digital imaging services, on June 1…

Scott — who served in the Army from 2000 to 2006, including a tour in Iraq, and whose husband is still in the military — was surprised by the outrage. “I’m an X-ray tech and I breastfeed in my uniform all the time,” she told Yahoo! Shine in an interview on May 30, the day the controversy ignited. “Granted they’re scrubs. But people do it all the time in their uniforms. If you have a hungry baby, why would you take the time to change completely..?”

First of all we should all thank her for her service.  Which was honorable and selfless.  So few have served in Iraq.  And those who have deserve the thanks of a grateful nation.  Regardless of where you stand on the politics of the Iraq War.  And we should cut our combat veterans some slack.  They’ve earned that.  But this was not just wearing your Green Beret indoors (I remember seeing this once and asked a friend why he didn’t remove his beret.  He said he had served in Vietnam.  And didn’t have to.  But other than that the uniform conformed to regulations.  And wearing that Green Beret indoors only brought honor and respect to the man.  And the uniform.)  This was women pulling their breasts out of their uniform in public.  Drawing attention to them.  And making the uniform look like some tacky prop in an SNL skit.

She was surprised?  A lot of brave men and women have worn that uniform in a combat zone.  Including her.  You just don’t belittle the uniform and all those who have worn it like that.  It should be treated with respect.  And reverence.  But the military is not unfair.  They let their people do things in their uniform that doesn’t draw respect to it.  Like having a bowel movement.  Which uniformed people do behind closed doors (unless they are deployed forward in a combat zone).  But when they emerge from the latrine their uniform conforms to regulations.  And they wear it with respect.  As it should be.  At all times.  All of the time.

The two members of the Air National Guard who appeared in the controversial photo, Terran Echegoyen-McCabe and Christina Luna have been reprimanded because the photo “violated a policy that forbids military members from using the uniform to further a cause, promote a product or imply an endorsement,” the Air Force Times reported.

“The uniform was misused. That’s against regulations,” Captain Keith Kosik, a spokesman for the Washington National Guard, told the Air Force Times. “I want to be very, very clear about this. Our issue is not, nor has it ever been, about breastfeeding. It has to do with honoring the uniform and making sure it’s not misused. I can’t wear my uniform to a political rally, to try to sell you something or push an ideology. That was our point of contention.”

The Air National Guard did not dishonorably discharge these women.  They only reprimanded them.  It may affect their promotion through the ranks.  But that’s the price you pay when you violate regulations to make a political statement.  Perhaps the politics of the situation prevented a more harsh disciplinary action (you never get good press for firing women, especially moms for doing motherly things).  Or it was in recognition of their service to this country.  But in the future when these women breastfeed their babies while in uniform let’s hope they do so behind closed doors.  Where they can safely violate uniform regulations.  And not dishonor those who wore the uniform before them.  And those currently wearing the uniform.  Just to make a political statement. 

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There may be no Regulation against Military Moms Breast Feeding while in Uniform but it Breaks a few other Regulations

Posted by PITHOCRATES - June 2nd, 2012

Week in Review

When I was in college I had a friend that was in ROTC.  This is perhaps the most relaxed military environment there is.  Yet there were some pretty strict standards if I remember correctly.  Especially when it came to the uniform.  Even to the type and color of underwear they wore underneath (for both men and women). 

Cadets could not sling a backpack over their shoulder.  Their suit coat could not be worn unbuttoned.  Shoes had to be polished.  No webbing of the belt could show between the tip of the belt and the buckle.  There was something called the gig-line where the edge of the belt had to align with edge of the pants fly or something.  I think the tie had to be a double Windsor knot.  Even the hat had to be worn precisely (something like two fingers between the bottom of the hat and the eyebrow).  The little button in the back vent of the overcoat had to be buttoned.  There could be no wrinkles.  Or lint.  When a superior officer approached you snapped to attention.  If you were walking past a superior officer you had to snap a crisp salute a certain number of paces before passing.  You couldn’t wear the uniform in a bar or at a party.  Or do anything in it that would draw undo attention on yourself or reflect poorly on the service.  Such as attending some kind of demonstration while in uniform.  The only exception I know ever made to the uniform was for service women in Saudi Arabia.  Who must wear a head scarf so as not to offend the local Muslim population. 

There’s a reason why they are so strict with the uniform policy.  It’s the same reason they spend so much time drilling in formation.  It is to remove individuality.  And to increase unit adhesion.  Everyone is to look the same.  Think the same.  And act the same.  To maintain a high level of military discipline.  So that when you are stationed forward in a combat zone you function like a well-oiled machine.  Swiftly carrying out the orders of those above you.  Without questioning or hesitation.  Because in the chaos of battle it is only that military discipline that keeps people from panicking.  And following orders.  Which allows a unit the best chance of survival in combat.  And the best chance of successfully completing the mission.

Being in the military means you live by another set of rules.  Much of what you did in civilian life you simply can’t do in the military.  You can’t have visible tattoos.  You can’t have piercings and studs on your face.  You can’t have long hair.  Men can’t wear earrings.  Women can’t wear bright nail polish.  So many of the things that civilians take for granted just aren’t acceptable in the military.  So it is surprising that some women think they can pull a breast out of their uniform to nurse a baby in public (see Military Moms Breastfeeding in Uniform Stir Controversy by Lylah M. Alphonse posted 5/30/2012 on Shine from Yahoo!).

At a time when breastfeeding in public is already controversial, pictures of two military moms doing so while wearing their uniforms is sparking outrage…

The U.S. Air Force is supportive of our breastfeeding mothers and installations are continuously adapting to meet the needs of working mothers to offer suitable areas for their parenting needs,” Air Force spokesperson Captain Rose Richeson told Yahoo! Shine in an email. “The Air Force has standing instructions enabling mothers to feed their children, particularly when they transition back to work following maternity leave.” That includes allowing them to pump during the day, and providing private areas for breastfeeding in the Child Development Centers, she said, including the one at Fairchild Air Force Base…

According to Military Spouse Central, public displays of affection — even something as innocuous as holding hands — are not allowed while wearing a military uniform. Also forbidden while in uniform: eating, drinking, or talking on a cell phone while walking, carrying an umbrella that’s not black, and (in some cases) smoking or even chewing gum.

 Publicly breastfeeding definitely singles out these women from their fellow service members.  Their uniforms are not worn to regulations.  I doubt they could snap to attention if a superior officer approached.  And this is a form of a public demonstration.  To raise awareness of breastfeeding while in uniform.

What happens if these women are deployed to a combat zone?  They’re not going to take their babies into harm’s way.  Are they going to switch their babies to formula?  Are they going to pump and ship breast milk home?  Or are they going to get a special waiver and not have to serve in a forward zone?  If so they shouldn’t be in the military.  They should be civilians working for the military.  Who are exempt from combat.  So the military doesn’t have to deal with this kind of publicity with everything else on their plate.  Meeting expanding force requirements while enduring budget cuts.  And sending their people on multiple tours of duty in a forward combat zone.  Stressing them.  And the families they’ve left behind. 

These women may have already served in a combat zone.  They may have seen more combat than any of us will see.  And may deserve more gratitude than a nation can give them.  But there are some things that just don’t belong in the military.  From public displays of affection.  To a breast pulled out of a uniform to feed a baby.  However beautiful and natural that may be.  There’s a time and place for everything.  And breastfeeding in public belongs in the civilian world.  As long as the civilian laws permit it.  For when it comes down to it the business of the military is death and destruction.  And focusing attention on public breastfeeding while in uniform distracts the military from taking care of that business.

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From Commodity Money to Representative Money to Fiat Money

Posted by PITHOCRATES - November 8th, 2011

History 101

The Drawbacks to Using Pigs as Money Include they’re not Portable, Divisible, Durable or Uniform

They say we use every part of the pig but the oink.  So pigs are pretty valuable animals.  And we have used them as money.  Because they’re valuable.  People were willing to accept a pig in trade for something of value of theirs.  Because they knew they could always trade that pig to someone else later.  Because we use every part of the pig but the oink.  Which makes them pretty valuable.

Of course, there are drawbacks to using pigs as money.  For one they’re not that portable.  They’re not that easy to take to the market.  And they’re big.  Hold a lot of value.  So what do you do when something is worth more than one pig but not quite worth two?  Well, pigs aren’t readily divisible.  Unless you slaughter them.  But then you’d have to hurry up and trade the parts before they spoil because they’re not going to stay fresh long.  For pig parts aren’t very durable.

Suppose you have two pigs.  And someone has something you want and they will trade two pigs for it.  But there’s only one problem.  One pig is big and healthy.  The other is old and sickly.  And half the weight of the healthy one.  This trader was willing to take two pigs in trade.  But clearly the two pigs you have are unequal in value.  They’re not uniform.  And not quite what this trader had in mind when he said he’d take two pigs in trade.

Our Paper Currency Evolved from the Certificates we Carried for our Gold and Silver we Kept Locked Up

Rats are more uniform.  They’re more portable.  And they’re smaller.  It would be easier to price things in units of rats rather than pigs.  They would solve all the problems of using pigs as money.  Except one.  Rats are germ-infested parasites that no one wants.  And they breed like rabbits.  You never have only one rat.  Man has spent most of history trying to get rid of these vile disease carriers.  So no one would trade anything of value for rats.  Because these little plague generators were overrunning cities everywhere.  So rats were many things.  But one thing they weren’t was scarce.

Eventually we settled on a commodity that addresses all the shortcomings of pigs and rats.  As well as other commodities.  Gold and silver.  These precious metals were portable.  Durable.  They didn’t spoil and held their value for a long time.  You could make coins in different denominations.  So they were easily divisible.  Unlike a pig.  They were uniform.  Unlike pigs.  Finally, you had to dig gold and silver out of the ground.  After digging a lot of holes trying to find gold and silver deposits.  Which made it costly to bring new gold and silver to market.  Keeping gold and silver scarce.  And valuable.  Unlike rats.

But gold and silver were heavy metals.  Carrying large amounts was exhausting.  And dangerous.  A chest of gold and silver was tempting to thieves.  As you couldn’t hide it easily.  Soon we left our gold and silver locked up somewhere.  And carried certificates instead that were exchangeable for that gold and silver.  And these became our paper currency.

Governments Everywhere left the Gold Standard in the 20th Century so they could Print Fiat Money

The use of certificates like this is typically what people mean by gold standard.  Money in circulation represents the value of the underlying gold or silver.  And can be exchanged for that gold or silver.  Which meant that governments couldn’t just print money.  Like they do today.  Because the value was in the gold and silver.  Not the paper that represented the gold and silver.  And the only way to create money was to dig it out of the ground, process it and bring it to market.  Which is a lot harder to do than printing paper money.  So governments everywhere left the gold standard in the 20th century in favor of fiat money.  So they could print money.  Create it out of nothing.  And spend it.  With no restraints of responsible governing whatsoever.

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