Probably a dumb question, but that’s a specialty so all good.

How much of the totality of human efforts (or not, just generalize ‘behaviours’) is going into keeping currency stable? I mean some portion of human behaviours must be to service and maintain the integrity of systems of exchange.

I mean what proportion of all efforts go toward making money (the dollar/currency) work?

Perhaps there are many separate parts to your question:
1) Government controlled stability
2) Bank & insurance controlled stability
3) Multinational influenced stability
4) Speculator controlled stability
5) Payroll confidence
6) Purchaser confidence
7) Resource price uniformity
8) Other

The Wikipedia article on hyperinflation describes 39 separate incidents of hyperinflation, starting with “Angola experienced high inflation from 1991 to 1995. It was a result of exchange restrictions following the introduction of the novo kwanza (AON) to replace the original kwanza (AOK) in 1990.”, “Argentina went through steady inflation from 1975 to 1991. Democratically elected on December 10, 1983, President Alfonsin inherited a foreign debt crisis and record budget deficits, resulting in US$43 billion foreign debt, with Argentina’s entire trade surplus going to debt service.”, “Armenia experienced high inflation and hyperinflation from January 1992-December 1994. Its first episode of hyperinflation was due to the use of the Russian ruble after the dissolution of the Soviet Union.”

1) I vividly remember an incident when the the shadow treasurer John Howard deliberately tried to destroy the stability of the Australian dollar by telling everyone to take their money out of the bank. Only the rapid response by Bob Hawke saved Australia from total disaster.

The greatest cause of financial instability is war. Writing in 2011, “Every major war in the past century brought inflation to some degree”. So you can see that diplomatic efforts to keep the peace count as work in keeping currencies stable.

Loans between difference countries act to stabilise the economies of those countries. During the American Revolution the fledgling county of America defaulted on government loans from Europe.

2) It is in the interests of banks, insurance companies and other financial institutions to foster financial stability. In Australia, the legislated need for banks to keep a certain fraction of their money in liquid form aids stability.

3) Ditto

4) The Black–Scholes model is a mathematical model of a financial market containing certain derivative investment instruments. If speculators agree on the same pricing structure then even speculators help to even out price fluctuations.

The commodities market was originally intended as a way of stabilising prices that would otherwise be influenced by vagaries such as unseasonal weather and plagues.

Another stabilising influence against natural disasters is insurance.

…

7) It is even possible to see “refrigeration”, other methods of “food preservation” and the “development of crop strains with extended shelf life” as stabilising influences on currency. They help to ensure close-to-uniform prices for resources throughout the year. Similar resource price stabilisation is seen in the global agreements on oil pricing.

8) Does bankruptcy law help to ensure national financial stability?

> 8) Does bankruptcy law help to ensure national financial stability?

I even read in the book Superfreakonomics that theft devalues currency, because an item obtained by theft is valued less than one that is purchased. So in that light, you can see that even the operation of the legal system against theft, fraud and destruction of property can be counted as work in stabilising the currency system.

Once a percentage were apportioned can this be factored into economic efficiency measurements, and over some percentage could it be said the system doesn’t actually work.
Theoheretical as it is I’m toying with the idea (thought experiment) that it doesn’t work (long term).
Idea being that referencing in a time-linear way doesn’t measure (represent) what’s going on properly in complex systems, that the money system (as is) only works as it does because of the distortions it introduces, reproducing those distortions as a force of physical reality.

>>the system doesn’t actually work.

Of course it doesn’t.

The rotten system stinks and has never functioned satisfactorily for any reasonable period of time.

The most rotten stinking instruments in the stinking rotten system are the stinking rotten stinking derivatives.

“In 2002, Warren Buffett, called derivatives, which include CDOs, ‘‘financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal’‘. He said the risks were not only for individual investors but to the whole financial system.”

Read more: http://www.smh.com.au/money/sunk-by-housing-derivatives-20100629-zi5b.html#ixzz2xm1sg25b

transition said:

Probably a dumb question, but that’s a specialty so all good.

How much of the totality of human efforts (or not, just generalize ‘behaviours’) is going into keeping currency stable? I mean some portion of human behaviours must be to service and maintain the integrity of systems of exchange.

I mean what proportion of all efforts go toward making money (the dollar/currency) work?

Well the difference between lending and borrowing rates of interest (for long term well secured loans/deposits) is something of the order of 2%, so I’d say that was the order of the effort that goes into maintaining the system.

>How much of the totality of human efforts (or not, just generalize ‘behaviours’) is going into keeping currency stable?

I’ve probably expended a few calories complaining about PayPal’s ungenerous exchange rates.

Ian said:

>>the system doesn’t actually work.

Of course it doesn’t.

Of course it does.

Certainly there have been times when it has not worked very well, but it is ridiculous to suggest that it does not work at all.

The Rev Dodgson said:

Certainly there have been times when it has not worked very well, but it is ridiculous to suggest that it does not work at all.

If you define working as stumbling from one unstable state to another, yeah it works fine.

I’ve often thought of starting a kibbutz over here but no one is interested

It’s amusing , you see people on fuck all pay living from hand to mouth still climbing onto “hope” and all the brainwashing of the “free economy”. They don’t get it – they are just a battery to be used and thrown away once it’s past it’s use by date.

Me? Well once I realised how the economy works I just used that protect myself from it, I still tell the odd punter that will listen but they’ll forget (they always do)

The advanced species will do away with all money.

Have you lived on a kibbutz before wookie, for a substantial amount of time? I know a few that have, it’s no the sunlit uplands I’m fairly certain you think it is.

It seemed to me that the only way to survive within this system was the kibbutz.

In Palestine the kibbutzim are like islands of calm inside a huge hamster wheel . Because everyone works any load to be carried is always lighter. Everyone gets a say, everyone has a house, everyone goes on holiday , has a car, is educated etc. all you have to do is contribute , simple really.

poikilotherm said:

Have you lived on a kibbutz before wookie, for a substantial amount of time? I know a few that have, it’s no the sunlit uplands I’m fairly certain you think it is.

Unfortunately no I haven’t

I unwisely was persuaded by some lunatic to leave and descend into hell

Yes been on a kibbutz but not for that long

One day I might return to just see how it’s organised at a practical level

The problem was that kibbutzim were forced to take in anyone – that’s where things went wrong – no one was on the same page.

The kibbutz won’t tolerate drug taking ( or didn’t when I was there) .

Drugs destroy a work ethic, you end up carrying lots of people that can’t get out of bed

I’m fairly sure alcoholism isn’t liked much either – you become a liability

Outside of not taking drugs and doing work I’m fairly sure they didn’t care what you did

The kibbutz won’t tolerate drug taking ( or didn’t when I was there) .

Drugs destroy a work ethic, you end up carrying lots of people that can’t get out of bed

I’m fairly sure alcoholism isn’t liked much either – you become a liability

Outside of not taking drugs and doing work I’m fairly sure they didn’t care what you did

transition said:

Probably a dumb question, but that’s a specialty so all good.

How much of the totality of human efforts (or not, just generalize ‘behaviours’) is going into keeping currency stable? I mean some portion of human behaviours must be to service and maintain the integrity of systems of exchange.

I mean what proportion of all efforts go toward making money (the dollar/currency) work?

Money is bought and sold just like anything else, so any problems with the currency (like printing too much money (inflation) or living beyond your means), will be reflected in the value of the countries currency. You can have runs on various currencies where everyone wants to sell, which will drop the currencies value, but that is when the counties Reserve Bank buys these monies back in order to stabilise the exchange rate. These monies that have been bought back cheaply, are later resold (when the currency has recovered) to countries who need them for trade and in so doing making a profit, which then goes into the Treasury coffers.

I’ve often thought of playing the currency game

Whilst I’ve got the mortgage it’s too risky

How the American has retained it’s value is beyond me

Maybe America has so much debt that news of more debt just get absorbed like a sponge and no one cares

wookiemeister said:

How the American has retained it’s value is beyond me

Maybe America has so much debt that news of more debt just get absorbed like a sponge and no one cares

US government debt is around about 100% of GDP which isn’t overly high. If you want to see a country with high government debt you need not look any further than Japan.

wookiemeister said:

I’ve often thought of playing the currency game

Whilst I’ve got the mortgage it’s too risky

Google High frequency trading…you’ll love it.

poikilotherm said:

wookiemeister said:

I’ve often thought of playing the currency game

Whilst I’ve got the mortgage it’s too risky

Google High frequency trading…you’ll love it.

That’s where machines play the market I think

wookiemeister said:

I’ve often thought of playing the currency game

Whilst I’ve got the mortgage it’s too risky

Not only risky, but the margins are not particularly high and the banks take most in exchange rates. A few years ago I bought some foreign currency and the bank charged me 5% of the value involved. Around eighteen months later I changed it back into Aust dollars and was charged another 5% exchange rate, making a total of 10% of the money involved going straight to the bank.

wookiemeister said:

I’ve often thought of playing the currency game

Whilst I’ve got the mortgage it’s too risky

Binary options are the latest craze in finance. Now everyone can play the derivatives game.

PermeateFree said:

wookiemeister said:

I’ve often thought of playing the currency game

Whilst I’ve got the mortgage it’s too risky

Not only risky, but the margins are not particularly high and the banks take most in exchange rates. A few years ago I bought some foreign currency and the bank charged me 5% of the value involved. Around eighteen months later I changed it back into Aust dollars and was charged another 5% exchange rate, making a total of 10% of the money involved going straight to the bank.

The bank probably realised people were playing currency and figured 5 percent would be enough to stop it but not drive away business

PermeateFree said:

wookiemeister said:

I’ve often thought of playing the currency game

Whilst I’ve got the mortgage it’s too risky

Not only risky, but the margins are not particularly high and the banks take most in exchange rates. A few years ago I bought some foreign currency and the bank charged me 5% of the value involved. Around eighteen months later I changed it back into Aust dollars and was charged another 5% exchange rate, making a total of 10% of the money involved going straight to the bank.

Your doing it wrong.

Witty Rejoinder said:

wookiemeister said:

I’ve often thought of playing the currency game

Whilst I’ve got the mortgage it’s too risky

Binary options are the latest craze in finance. Now everyone can play the derivatives game.

You are playing high stake poker, except everyone can see your hand.

wookiemeister said:

PermeateFree said:

wookiemeister said:

I’ve often thought of playing the currency game

Whilst I’ve got the mortgage it’s too risky

Not only risky, but the margins are not particularly high and the banks take most in exchange rates. A few years ago I bought some foreign currency and the bank charged me 5% of the value involved. Around eighteen months later I changed it back into Aust dollars and was charged another 5% exchange rate, making a total of 10% of the money involved going straight to the bank.

The bank probably realised people were playing currency and figured 5 percent would be enough to stop it but not drive away business

This is where people are just going overseas for some domestic reason.

poikilotherm said:

PermeateFree said:

wookiemeister said:

I’ve often thought of playing the currency game

Whilst I’ve got the mortgage it’s too risky

Not only risky, but the margins are not particularly high and the banks take most in exchange rates. A few years ago I bought some foreign currency and the bank charged me 5% of the value involved. Around eighteen months later I changed it back into Aust dollars and was charged another 5% exchange rate, making a total of 10% of the money involved going straight to the bank.

Your doing it wrong.

you’re.

The only way to make money nowadays that’s guaranteed is to pay down any debt you have

Every time you pay down debt the bank has just lost

The government is trying to create more debt to offset this and of course create more taxes

In the last few days we’ve seen carbon tax and travel allowances now included as taxable income. They are furiously closing up the loopholes for joe average whilst encouraging rich people to take tax deductible debt, not to all the subsidies paid to people like gina rineheart

Wakonomics lesson is in.

poikilotherm said:

Wakonomics lesson is in.

Rather than just making smartarse remarks, why don’t you give reasons for them, so we can all have a laugh.

I haven’t done so bad

I saved my money, waited for the GFC, bought a house at a low rate which stayed at a low rate with a three year honeymoon rate ( whilst only a few months before it was only a year long).

Threre was a blip a year or so ago where rates soared and I was tempted to fix my rates at 7 percent – even had the paperwork in my hand when I had an unusual conversation with the prat who was organising the loan. Something stank badly ) I had grave suspicions all along and I was tipped over the edge , by backing out I saved thousands of dollars.

Banks and so called opinion pieces are always telling you to fix your rates when it’s bad for the bank to be on variable – banks want to suck the blood out of you.

I saw some opinion piece from some chick recently. Suspicious I googled her and found another of her opinion pieces telling people that in jan of this year the rates would never be higher and to fix your rates in at some ridiculous level now!!

Unfortunately I can’t afford to lose money or get sick

It’s why whilst people are dying off like flies and losing money hand over fist I’ve always managed to use my brains and balls to know ballshit when I hear it whenever I hear it. Not always immediately but certainly after some reflection.

It’s what’s kept me relatively healthy and keep paying down my debt

Paying down debt for the average joe is the sure way to make money – guaranteed, it’s why they are trying to raise taxes so people can’t do that.

By the time everyone else realised this I’ll have paid most if the mortgage off and then the government can trash the economy

PermeateFree said:

poikilotherm said:

Wakonomics lesson is in.

Rather than just making smartarse remarks, why don’t you give reasons for them, so we can all have a laugh.

Ain’t no one got time fo dat.

This sounds like a very interesting and reasonable question.

I’m sorry that I do not have the answer.

dv said:

This sounds like a very interesting and reasonable question.

I’m sorry that I do not have the answer.

Gees, have you moved to Canada or something…??

dv said:

This sounds like a very interesting and reasonable question.

I’m sorry that I do not have the answer.

You’re a disgrace.

poikilotherm said:

PermeateFree said:

poikilotherm said:

Wakonomics lesson is in.

Rather than just making smartarse remarks, why don’t you give reasons for them, so we can all have a laugh.

Ain’t no one got time fo dat.

Suppose when you work in a Chemist shop, time must be tight. Is it Pension Day?

wookiemeister said:

I’ve always managed to use my brains and balls to know ballshit when I hear it whenever I hear it. Not always immediately but certainly after some reflection.

I take it you don’t read a lot of your own work??

Raising taxes is the sure fire way for the government to lower the inflation rate

1 in a “free market “ tax increases always increases unemployment and thus stabilises the economy . Increased taxes allow governments to take MORE debt not less

You’ll notice that the liberals are taking more debt not taking less

It’s the perfect storm increasing unemployment and increased debt but the currency will be fine

diddly-squat said:

wookiemeister said:

I’ve always managed to use my brains and balls to know ballshit when I hear it whenever I hear it. Not always immediately but certainly after some reflection.

I take it you don’t read a lot of your own work??

I just have to rely on what works and work out stuff for myself

All I did was follow the breadcrumbs and from the few then deduced how the while thing worked

The laws of wookiemeister have always saved me from doing something silly

diddly-squat said:

wookiemeister said:

I’ve always managed to use my brains and balls to know ballshit when I hear it whenever I hear it. Not always immediately but certainly after some reflection.

I take it you don’t read a lot of your own work??

I just have to rely on what works and work out stuff for myself

All I did was follow the breadcrumbs and from the few then deduced how the while thing worked

The laws of wookiemeister have always saved me from doing something silly

diddly-squat said:

dv said:

This sounds like a very interesting and reasonable question.

I’m sorry that I do not have the answer.

Gees, have you moved to Canada or something…??

This was started by transition. It’s newsworthy

diddly-squat said:

wookiemeister said:

I’ve always managed to use my brains and balls to know ballshit when I hear it whenever I hear it. Not always immediately but certainly after some reflection.

I take it you don’t read a lot of your own work??

I just have to rely on what works and work out stuff for myself

All I did was follow the breadcrumbs and from the few then deduced how the while thing worked

The laws of wookiemeister have always saved me from doing something silly

Well of course the real answer is percentages… minus one.

Thats why wealthy countries need to devalue poor countries.

It’s simple mathamagics.

If a stock goes up by 10% and then down by 10% you lose 1%

If a stock goes down by 10% and then up by ten…

Yeap you got it, you also lose by 1%

36.17% wook