#1 - Thought Experiment
#2 - Heisenberg Principle (sic)
#3 - ∞ >> x
#1 - Six pieces of land - six people/families -
Five of the pieces of land - wooded and fertile - woods are mixture hardwoods and softwoods
Sixth piece is barren soil - but high mineral contents - gold etc.
No money system, strictly barter.
Year One - Woods harvested with good forestry, crops planted. Mines productive of gold. Everybody has enough for own needs and 30% extra food and crops. Sixth person/family trades refined metals with others for wood needs and food - with 30% of 'production' as surplus 'wealth' for the first year.
How long does this continue ?
Can make it fancier - but basically, all 'mines' are self-limiting - wood/food production is unlimited.
What happens when the 'mines' start declining ?
What happens if the 'gold' is used as a 'unit of exchange' to make the 'barter/exchange system' easier to manage ?
#2 - Heisenberg principle - summation: The use of any object with intrinsic value (such as oil, metals, etc.) as a unit of 'monetary' exchange disrupts the intrinsic value by removing said object from its primary usage and thus CHANGES the 'assigned' value of that object. Simply stated: If one starts using gold for money, aside from it's industrial and aesthetic uses, one artificially INFLATES the 'value' of gold because one is ARTIFICIALLY removing it from the 'supply-demand' balance of it's intrinsic nature.
#3 - Infinity >> X - Infinity is MUCH greater than X - no matter what 'value' is chosen for X. The supply of GOLD is FINITE - some 'X' value. If one USES it to represent 'wealth/payment-4-skills/other' it only goes so far. One can say what one wishes about 'fiat' money - but the fact is that it is able to EXPAND infinitely to keep up with the need for 'money' as an exchange media. Crops, And OTHER RENEWABLE sources of wealth (such as human skills) are INFINITE in nature.
These are THREE fundamentals.
Apply them as one wishes.
QED
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