Money

A penny saved is a penny earned, and I find it easy to save money. At the same time I feel that money is worthless; money can't be consumed. The value of money is as money. I save money because I feel that there isn't very much to spend money on. I live in an age where labor is more valuable than ever before, and it is relatively easy to meet basic needs. But saving money is the responsible thing to do, so I do it.

In any case, it occurred to me that it is also a risky thing to do. This is obvious to many people, I'm sure. But it is an historical fact that the buying power of the dollar has steadily diminished over time. So, it seems risky to store so much wealth for the future in the form of saved money. But now I am starting to wonder whether or not saving money is risky depends on what "money" is. The dollar has certainly depreciated. I understand that this is uncontested, although I haven't done my own empirical research on it. I do understand the argument, however. The argument goes that the dollar is not "backed" by anything and its value depends on its management. Now, this would be true of anything used as money. I believe one necessary characteristic of money is that it must be somewhat scarce. Gold is in fact somewhat scarce. Gold cannot be produced from nothing. That is not true of the dollar, and the claim goes that the quantities of dollars has not been properly controlled by its creators. A progressively greater number of dollars chase the same or fewer goods and the result is less buying power for the dollars. This is easy to understand.

But I'm sure it's only one side of the story. Perhaps the dollar isn't a perfect money, but it may be the best available. There are other advancements of science that for all of there value still are not perfect. Because the dollar is an artificial money, it can be perfectly controlled. In fact, I wonder if physical dollars will cease to be circulated in the near future. If some commodity or physical object were used as money on the other hand, then there can be no central control; what is scarce today might not be scarce tomorrow.

Now I can see what many of the critics of the fed and fiat money are libertarians. Giving the government the peculiar power to manage the money supply has allowed (and will allow) them the ability to bypass the approval of the people for their policies. Governments have no resources of their own, so it if needs money for war it must ask the people for it directly for money or create the money out of nothing. That sounds like a criminal act, but I guess that's the privileged that the creator of money is entitled to.

What's the truth? I don't know. In fact, I don't have a lot of confidence that what I have written above is the truth. I'm just trying to repeat a story I've heard about money in general on the dollar in particular. I would just like to discover some way to store wealth without having to keep up with inflation by making investments that I don't understand.