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To: Don Lloyd who wrote (21443)	7/19/2002 4:40:08 AM
From: Maurice Winn	Respond to of 74559

Don, the value of money is the value of trust. The value of trust is enormous. Trust costs nothing to produce - it's a state of mind. So, with trust and pixels combined, a global currency can be created with near-zero cost, unlike the monstrosity of gold, which has the merit of requiring no trust. But what a weak way of managing transactions when trust is possible. Trust is extremely valuable and there's no reason to leave it out of the human value chain. Civilisation is founded on trust and as our perspicacious idol, Uncle Al, pointed out, we are all dependent on contracts and if only a fraction of these had to be enforced by law, the whole system would collapse. It's trust which holds it all together. So, value can be created out of thin air, by the click of a mouse. Enough value to run the world's system for the exchange of value. That's a very big deal. But it is totally dependent on trust. Which is, I suppose, why they write "In God We Trust" on the money - to try to give it the aura of invincible trust, whereas in reality the trust rests on the politicians and buddies such as Ashcroft, Condoleezza, Congress and co. No wonder that makes people a bit nervous. No wonder the US$ drops a bit. As trust evaporates, the value of the currency is destroyed. That process can be extremely fast once it starts. Hence the flight to gold. People are pre-empting what they think will be a collapse of trust. Uncle Al is concerned about the actions of Uncle Sam in tariffs and other trade barriers, subsidies and stuff. Rightly so. Al is well aware that trust is eroded with such actions. Al knows he is selling trust and nothing else. Americans had better not destroy the trust of people in their currency. They will not like the consequences. That's my theory. To reduce the need for political trust, I think a new cybercurrency representing ownership in shares would reduce the possibility of collapse because the supports would be spread very widely around the world. It would also be more equitable because the profits of control wouldn't go to Uncle Al and co, but to the shareholders of the money [which would be anyone owning the money]. Mqurice

To: Don Lloyd who wrote (21443)	7/19/2002 4:47:51 AM
From: Maurice Winn	Read Replies (1) \| Respond to of 74559

<Unless otherwise restrained, the objective exchange value of any good, including money, tends to fall to the level of its production cost, as demonstrated by the fiat dollar.> There seems to be some network-effect value in money too. Even though it cost nearly nothing to produce, the value is in the network and it's tough for my new currency to get a foothold. The weakness in his money is the dependence on trust in a dodgy political system. The strength of gold is dependent on nothing but the continued value of it in the minds of billions of people. The US$ has an extremely powerful network effect going for it and the cost of production of a new currency might be low, but the trust in a new currency and adoption of it is unlikely to compete any time soon. Mqurice