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3. Medium of Exchange

Revised November 13, 2013

This article is the third article in the series of articles covering Axiom four, “Maintain a Constant Money Supply.”

A medium of exchange began to be needed and wanted in order to make the transfer of production value more efficient and practical.

With the absence of a defined money unit, we found products being traded in ratios to each other by the Producers to satisfy their needs and wants or demands.  This was the system of exchange in economics before the money unit was conceived and developed.  The money unit became the medium or intermediate step where value could be transferred during the sale of products on the Open Market.  The money unit with its newly transferred value could be used to purchase other products.  The symbol of the money unit, used for the value transfer, has had many forms down through the ages.

Production Value is the exchange value commodities, trades, goods and services have in relation to each other when exchanged on the Open Market, a Market that is open to all on equal terms. 

 Value is importance, worth or usefulness of a commodity, trade, good or service.  Competition among commodities, trades,  goods and services on the Open Market establishes the importance, worth or usefulness of each commodity, trade, good and service.  This competition is propelled by the forces of demand.  The needs and wants, placed in terms of demand, thrust forth by the Producers, establish the importance, worth or usefulness of commodities, trades, goods and services.  Competition on the Open Market along with the demands of the Producers gives commodities, trades,  goods and services their value.

Demand is a directed force put forth by Producers driving the competition on the Open Market.  The competition doesn’t just happen by itself; it is driven by a directed generated energy force.  This directed energy force is created by Producers.  It is an energy force directed in the direction of prosperity.  This force gives the Open Market its life.  The Open Market is like a living entity driven by the directed demand energy created by the Producers.

You could say the Open Market is like a living entity.  The Open Market gets its energy from the Producers.  This energy comes from commodities, trades, goods and services marketed on the Open Market and from Producer directed demand forces.  The Open Market is living, it is dynamic.  Producers create the Open Market by placing their commodities, trades, goods and services on the Open Market.  They then generate demand energy which they use to direct the competition among commodities, trades, goods and services.  Producers put life into the Open Market.

When non-producer and counter-producers enter into a Market they pull energy out of the Market.  They pull the market into recessions and depressions.  They pull the life out of the Market.  They suck the energy out of the organizations, societies, nations, mankind and the environment.

When the Market is broken down to its basic terms; we are really exchanging energy for energy.  When a non-producer or counter-producer enters into a Market they suck the energy from the Market.  They take commodities, trades, goods and services out of the Market without exchanging self-produced commodities, trades, goods and services for them.  They in effect take energy out of the Market without replacing it with energy of their own.  This act drains the Producer, families, organizations, societies, nations, mankind and environments of energy.  It brings about a state of economic decline and puts Producers, families, organizations, societies, nations, mankind and environments on a path receding away from prosperity.

There is only one true Market.  That true Market is the Open Market, open to all on equal terms.  Whenever non-producers and counter-producers enter into an Open Market even very slightly that Market is no longer open to all on equal terms.  It is a Market with a negative energy flow.  That energy flow is out of the Market.  This gives a receding economic condition.  When we have a true Open Market energy is flowing into the Market.   This gives a prosperous economic condition.  It is very important to maintain a Market where energy is flowing into the Market.  This leads to prosperity.

The Standardized money unit is the constant unit of measure that represents production value.  It also represents energy, wealth, capital and power.

A Constant Money Supply standardizes the money unit as a unit of measure for production value and Producer generated energy.  It is very important to maintain a Constant Money Supply. A Constant Money Supply gives a positive energy flow in the Open Market and maintains the Market as an Open Market.

An expanding money supply is a money supply that is not held constant. An expanding money supply causes a negative energy flow in the Open Market.  Money received by expanding the money supply without placing production on the Market causes a negative energy flow away from the Market. In this case the energy flow is from prosperity to recessions.  The economic conditions for individuals, organization, families, societies, mankind and environment are on a declining path.  Expanding money supplies destroy Open Markets and prosperity.

When the value of the dollar was floated in 1971 it was taken off the Gold Standard.  The money unit was floated.  Then the money supply could be expanded by a Central Bank at the whim of the operators of the Bank.  The dollar was now not standard.   It was no longer a standardized unit of Measure.  The result for the United States is an economic system that is no longer standardized.  Today this economic system is operating with a money unit whose value is altered anytime the central bank expands the money supply.  The Gold Standard was removed, as a way to maintain a Constant Money Supply.  The removal of the Gold Standard allowed the money supply to be expanded by the Central Bank.

Before 1971 the money supply was held constant by defining each ounce of gold to be equal to 35 dollars.  The amount of dollars allowed to be in circulation was equal to 35 times the number of ounces of gold held in a vault.

Expanding the money supply is like allowing the Meter or Pound to be arbitrarily changed in size and weight.  This would be allowing these standardized units of measures to change over time.  This would cause chaos throughout the societies.  Floating a money unit, instead of holding it as a constant unit of measure, is an idea made by counter-producers and non-producers.  From the moment they float the money unit, and from then on, they can continue to steal their money value, energy, wealth, capital and power from the Producers by expanding the money supply.  There is a belief that money supplies must be expanded to maintain economic well being.  When Producers and only Producers of the money are rewarded, money supplies can be held constant and the economic systems move toward more prosperity.  Expanding money supplies rewards non-production and counter-production.

A Constant Money Supply maintains a very stable Medium of Exchange

 Money, as the Medium of Exchange, is the intermediate step used during the exchange of commodities, trades, goods and services on the Market.

When money came into existence, money added a step in the exchanging of commodities, trades, goods and services on the Open Market.  Instead of exchanging commodities, trades, goods and services directly for other commodities, trades, goods and services; the commodities, trades, goods and services were first exchanged for money.  The value of the commodities, trades, goods and services was transferred to the money unit.  The money unit was then used to exchange for other commodities, trades, goods and services.  Value contained in the money unit was then transferred to another Producer for his/her commodities, trades, goods and services. This is when the money unit became the standardized measure for the value of commodities, trades, goods and services.  This is why it is very important to maintain a Constant Money Supply.  When the money supply is not held constant but allowed to expand, the money unit as the Medium of Exchange loses its standardization.  When the money unit loses its standardization economic systems get destroyed.

 It is much easier to transfer production value to a money symbol, a Medium of Exchange, than it is to transport commodities, trades, goods and services around to make exchanges directly among them.   Once the product value is transferred to the money symbol, the Medium of Exchange, it is much easier to make purchases of other Producer’s commodities, trades,  goods and services. The concept of a money unit came into existence to act as an intermediate step during the exchange of commodities, trades, goods and services.

Commodities, trades, Goods and services must be exchanged on the Open Market in order to determine the correct production value for each commodity, trade, good and service.  When commodities, trades, goods and services are exchanged on a Market that is not an Open Market, not equal to all on equal terms, production value will not be correct.  For example; in Markets where monopolistic practices are allowed, the production value created through a monopolistic individual or organization will usually be incorrectly higher.  Monopolistic practices are a form of rewarding non-production and counter-production.  Rewarding non-production and counter-production will lower money value.

Only where all Producers are in the Market on equal terms and only Producers are allowed to participate in the Market will the production value of all commodities, trades, goods and services exchanged on the Open Market be correct.

Rewarding non-production and counter-production places more money in circulation in relation to commodities, trades, goods and services on the Market.  This leads to fewer commodities, trades, goods and services being on the Market in relation to money in circulation.  The money value goes down as the non-producers and counter-producers bid up the prices of the existing commodities, trades, goods and services on the Market.  When money is given to non-producers and counter-producers they are taking money without placing commodities, trades, goods and services on the market.  This causes more money to be in circulation.  This money is found in the pockets of non-producers and counter-producers.  They use this money to bid up the prices of commodities, trades, goods and services on the market.  This will cause money to lose valueIt requires more money to purchase the same products.  Inflation is the result of having fewer commodities, trades, goods and services on the Open Market in relation to money units in circulation.

In conclusion; during Marketing, value is transferred from commodities, trades,  goods and services to the medium of exchange measured in money units.  Money units become packets of value and can be much more easily transported over distances and used to purchase other Producers’ production. The money unit, used as a unit of measure along with a Constant Money Supply, increases the efficiency of and standardizes the economic system.  A medium of exchange composed of money units was established.  This medium of exchange becomes standardized when the money supply is held constant.

Producer Rewarded Open Market Economics
The Science of Economics
By R P Obrigewitsch
June 29, 2012

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Friday, June 29th, 2012 Constant Money Supply No Comments

2.02 Attention Vacuum and Producers

Revised November 2, 2013

Part II

Getting back to the attention vacuum left behind, the Producers generate energy to be used in their production.  It is important to secure their attention vacuum.  This attention vacuum leaves an opening for the non-producer and counter-producer to move in and steal the money, value, energy; wealth, capital and power the Producers create.  Non-producers and counter-producers have lost their ability to produce energy that can be used in the production of commodities, trades, goods and services.  When they get into this vacuum they can piggyback off the Producer and steal the produced energy, money, value, wealth, capital and power the Producers have created.  They invest this stolen money-energy to take over control of political systems. 

The Producers have their attention focused on the action of production.  Their attention is placed into the future.  They have left their attention vacuum unsecured.  Producers are honest and trusting individuals.  They believe everyone is honest and trusting.  This is where they get into trouble with the non-producers and counter-producers.  They have left in their attention-vacuum an opening for the non-producer and counter-producer.  These non-producers and counter-producers occupy the vacuum left behind by the Producer.  The non-producer and counter-producers will tell any type of lie or create deception (smoke and mirrors) to convince the Producer the non-producer and counter-producer is honest and trusting.  Usually the Producer discovers the non-producer and counter-producer very late.  This is when the economic system starts to recede.  Even then the non-producers and counter-producers flash their deceptive smoke and mirrors.   They select the Producers as the reason why the system failed.  The non-producers and counter-producers will attempt to pin the economic failure on the Producers. 

A major part of what has filled the vacuum is the rewarded non-producer/counter-producer political system.  They use this political system to control the Producer Society.  The Producers have made a major omission.  They have failed to secure their attention-vacuum.  The Producers can secure their attention-vacuum by taking full responsibility for ALL the money, value, energy, wealth, capital and power they have created.  They can secure themselves by knowing and applying the Producer Rewarded Open Market Economics technology along with the Technology of Democracy.   With their attention-vacuum left unsecured, Producers have, many times in the past, been made into SLAVES.

Many people today have a very high dislike for government and politics.  This is because the political system to a large part is a system owned and operated by the non-producer/counter-producer for the gain of the non-produce/counter-producer on the backs of the Producer.  It should be stated more correctly; the political system, today, is a system owned and operated to a large part by the non-producer/counter-producer, for the destruction of the non-producer/counter-producer and the Producer.  This is why people dislike the government and politics today.  They don’t like to be lead down the non-producer/counter-producer path of destruction.

The following Axiom has been noted in the past: any time non-production is rewarded a society tends toward recessions and depressions.  The corollary would be: any time production is rewarded a society tends toward prosperity.

It is very important to remember that the prosperity of every person on the planet is tied to all other individuals on the planet.  We are all tied together economically.  The Market and the trading of commodities, trades, goods and services on the Market is what tie us together.  Anytime anyone on the planet places a demand for commodities, trades, goods and services on the Market it affects the value of all other commodities, trades, goods and services.  It also affects the value of all money throughout the world.  Anytime anyone on the planet places newly created commodities, trades, goods and services on the Market it affects the value of all other commodities, trades, goods and service and the value of money.  Anytime money is taken without an exchange of production for it, this out-exchange action decreases money value and increases product value.  The Producer loses purchasing power.  The non-producer/counter-producer has stolen the Producers’ purchasing power.  We are all connected economically whether we want to be connected or we don’t want to be connected.

If we, all on our own accord, follow the natural laws of economics and politics we will all prosper abundantly.  When we allow non-producers and counter-producers into the economics system and into the political system, we will all tend downward toward economic collapses.

Anytime an Economic system is tending downward you can bet there are non-producers and counter-producers in the political power mix.  Anytime a political system is frustrated and upset you can bet there are non-producers and counter-producers in power stealing money, value, energy, wealth, capital and power from the Producers.

Producers are good and trusting individuals.  It is unreal to the Producer that anyone would carryout the destructive activities non-producers and counter-producers are capable of carrying out.  During a recession or a depression, when the Producer finally discovers the destructive activities of the non-producer and counter-producer he/she has a deep economic hole out of which to crawl.  First, the Producers have to find the correct cause of the economic recession.  This is tough because the non-producers and counter-producers works 24/7 discrediting everything the Producers find as the cause of the economic problem.  When the correct reason for the economic recession is found and enough Producers are convinced of it, they have a whole non-producer/counter-producer operated political system to overcome and correct.  When they have overcome and corrected this non-producer/counter-producer political system, the Producers can expand the economic system towards prosperity again.  They can expand the economic system by applying the Technology of Democracy and Producer Rewarded Open Market Economics a Capital Producing System.

Producer Rewarded Open Market Economics
The Science of Economics
By: R P Obrigewitsch
February 22, 2012

 

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Wednesday, February 22nd, 2012 Producer Rewarded Economics No Comments

5. Free Market vs. Open Market

Revised November 18, 2013

This article on Free Market vs. Open Market is an article comparing the two types of Markets.

I will start with the definition of a Free Market; a Market in which prices are determined by the forces of supply and demand, without government regulations or restrictions. (Thorndike/Barnhart Dictionary)

The definition of Supply is; the quantity of any commodity in the market ready for purchase, especially at a given price. (Thorndike/Barnhart Dictionary)

Supply is the most important part of the definition of Free Market.  Supply and Demand is; the interplay of the quantity of goods offered for sale at specified prices and the quantity of goods purchased at those prices in the Free Market. (Thorndike/Barnhart Dictionary)

There must be this interplay of goods offered for sale and goods purchased in order to have a Market of any kind.  I will expand that to say, there must be interplay of commodities, trades, goods and service offered for sale and purchased.  This interplay of commodities, trades, goods and service offered for sale and commodities, trades, goods, and services purchased establishes a Market.  This is how all Markets are established. Non-producers and counter-producers take money out of the Market without offering any supply in return.  When they take money without offering any supply in return they are really stealing the money, value, energy, wealth, capital and power from the Market and the Producers.

Examples of non-production and counter-production are; speculation on commodities, excess military spending, wars, farm subsidies, monopolies, corporate welfare, expanding the money supply by banks, any receiving of money without an exchange for it, or insufficient exchange for the money and any other form of welfare.

We will use speculation as an example of rewarding non-production and counter-production.  There are two types of speculators.  There are speculators who buy commodities with the intent to take delivery and then take delivery of the commodities.  They either consume the commodities or convert them into new products they place on the Open Market and receive money in return for.

Then there are speculators who buy shares in commodities with no intent to take any delivery of the items at all.  They buy low and sell high.  They are there to make money with no exchange in production for it.  They simply offer no production in return for the money they take from the Market!   They offer no supply in return for the money they take out of the Market.  There was no intention to take possession of the commodities for their personal use or for use in future production.

This violates Free Market principles to the extreme!  There must always be Supply placed into the Market and it must be worthy of exchange for any money anyone takes out.  These speculators who buy shares in commodities without taking possession of the commodities are rewarded Non-producers and counter-producers.  They are stealing money by simply shuffling paper.  This is not production.  When they bid up the price of oil and sell it at a higher price, without taking possession of it or using it in future production, we the Producers pay a higher price for gas at the pump.  The Non-producing and counter-producing speculators are taking the money from you with no exchange to you for the money.

The Producing speculators buy shares in commodities.  They take delivery of the commodity.  They convert the commodity into new production.  The Producing speculator then exchanges the new product “supply” on the market for money.

The non-producing and counter-producing speculators buy shares in commodities.  They do nothing with the commodity.  They turn around and sell it at a higher price.  This action of purchasing commodities with the purpose of buying low and selling high places a demand on the commodity.  This demand causes the price to go up.  When non-producer and counter-producer speculators purchase shares in oil the price of oil increases.  This speculation causes the price of gas at the pump to rise.  These rewarded non-producing and counter-producing speculators are taking your money with no exchange for it, to you or to the Market.

Supply, in the definition of Free Market, states explicitly that there must be commodities, trades, goods and services placed on the Free Market in order to have a Market and in order to have a working Market.  Since Non-producers and counter-producers don’t bring a “supply” to the Free Market they must not ever take any money, value, energy, wealth, capital or power from it.  This is a very important factor in the definition of Free Market.

This Free Market they use today, and call a Free Market, is not a Free Market.  The one thing, “supply,” that is expressly needed to have a Market is not strictly enforced.  In fact in today’s world there is no “true Free Market” in existence.  If people don’t bring a true supply, a commodity, trade, good or a service, to the Market when receiving money, there is no Market.  It can’t exist.  When a Market does exist the non-producers and counter-producers destroy it.  Exchanging supplies is what a Market is all about.  If one comes to the Market with no supplies and demands money, he is not creating a Market.  Without supplies, no exchange could possibly take place and therefore no Market could exist.

The Open Market is a Market in which prices are determined by the forces of supply and demand, without government regulations or restrictions.  It is “open to all Producers on equal terms” and restricted to the participation of Producers only.  Only producers can create and construct a Market.  Non-producers and counter-producers cannot create and construct a Market.  They can only destroy and destruct a Market.

The Open Market, “open to all Producers on equal terms,” is similar to the Free Market.  The Free Market, which we have seen, is  being “attempted” to be established today.  The Free Market is based upon the dynamics (forces) of supply and demand.  So is the Open Market.  They both are based on being free from government regulation and restriction.

The reason I say, the Free Market is being “attempted to be established today,” is because the non-producers and counter-producers continue to destroy the Market while the Producers work to create it.  It is not a Free Market in the sense that everyone must place a “supply” on it in order to receive money. The definition of freedom used in the Free Market is, “anything goes in this Market,” which includes the destructive forces of the Non-producer and counter-producer.

The Free Market is attempted to be established today because the Producers are attempting to create a Market while the non-producers and counter-producers work in destroying it.  The most the Producers can do is attempt to create the Free Market.  As the Producers build the Market up, the non-producers and counter-producers tear it down.

The Free Market does not give equal access!  It is the opposite of equal access.  The Non-producers and counter-producers have access to steal the money, value, energy, wealth, wealth, capital and power with no supply (commodities, trades, goods and services) required in exchange for the money.  The Producers are required to provide supply in exchange for their money.  Equal access means; in order to receive money, you must always exchange supply, “a commodity, trade good or service,” for the money without any special advantages.

Non-producers and counter-producers don’t do that.  They work, 24/7, developing schemes to take money, value, energy, wealth, capital and power from the Market without exchanging “supplied” commodities, trades, goods and services for it.  The non-producer and counter-producer out-exchange actions destroy the Market, Society, Nation, themselves and their families.  The Non-producers and counter-producers, like vampires and parasites, suck the energy out of the Society and the Nation.  On the other hand the Producers, create the energy for a Society and a Nation to prosper with.  This created energy, by the Producers, is what gives a Nation its power and strength.

Non-producers and counter-producers can only do one thing when participating in a Market and that is destroying it.  The “Free Market” is in a constant struggle to establish itself.   This is because the non-producers and counter-producers continue to steal the money, value, energy, wealth, capital and power from it with little or no “supplies” exchanged for it.  The Free Market is constantly attempting to be established by the Producers in the society.  These attempts continue to be beaten back by out-exchange Non-producers and counter-producers.

With these constant destructive thrusts, by the Non-producers and counter-producers one could only conclude, their purpose is to destroy the Free Market.  This continued destruction of the Free Market leads to the destruction of the Society, Nation, themselves and their families.  This destruction of the Market is an observed activity in societies where non-producers and counter-producers are allowed to participate in the Market.

 

Producer Rewarded Open Market Economics
By RP Obrigewitsch
October 12, 2011
Revised October 14, 2011

 

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Wednesday, October 12th, 2011 Open Market Economics No Comments
 

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