THE MONEY DON

Ce que nous comptons faire maintenant c’est organiser des formations et promouvoir des discussions enrichissantes autours d’articles et d’extraits de livres ou d’études faites par des autorités - à défaut de sommités - sur les différents volets du thème principal de ce Blog qui est : l’ A R G E N T.

La sélection des textes sera subjective, bien sur, mais tout lecteur sera libre de proposer et de déposer tout texte qu’il jugera utile et digne d’être porté à l’attention de l’audience. Aux autres maintenant d’apprécier et d’enrichir. Tout ce que nous cherchons c’est de créer une synergie de groupe et faire profiter au maximum chacun, des connaissances, de l’habileté et de l’expérience des autres.

Cela nous apprendra à mieux cultiver la modestie et à ne point oublier que la sagesse n’est l’apanage d’aucun monsieur, d’aucune dame à l’exclusion des autres.

Cela dit, il est bon de rappeler que, ce que nous voulons savoir sur l’argent c’est tout… T O U T : son histoire (sa création et son évolution), son utilité, sa valeur, comment le considérer, comment en gagner, comment le multiplier, comment et ou le garder, comment le gérer, comment et quand le dépenser, quels sont ses bienfaits et quels sont ses méfaits.

Ce qu’on cherche en quelque sorte, c’est « dé-taboutiser » le bonhomme.

En fait, il faut l’avouer, nous connaissons peu du sujet argent, au même titre que le sexe… ce sont des tabous. A la simple évocation du sujet on sent des crispations : tu vois les gens baisser la voix, jeter des regards autour, s’humecter les lèvres, s’éclaircir la voix et s’engager frileusement en commençant par des questions, histoire de tâter le terrain. Là, je parles des preux : ceux qui osent s’engager. Les autres, n’en parlons pas.

Et dire que ces deux sujets sont vitaux, fondamentaux pour notre existence sur terre. Si nous sommes là, c’est grâce à l’un : le sexe, et si nous y restons c’est par la vertu de l’autre : l’argent.

Pourquoi ne pas en parler alors ?

Déposer et signez vos commentaires. Ne serait-ce qu’un ou deux mots.

Un commentaire négatif vaut mieux que pas de commentaires.

THE DON

The History of Money

Remarks by Chairman Alan Greenspan
At the Opening of an American Numismatic Society Exhibition,
Federal Reserve Bank of New York, New York January 16, 2002

The other day I told a spendthrift friend that I had to deliver a short address on the history of money. He responded, "I understand the history of money. When I get some, it's soon history." Fortunately, not all market participants are as spendthrift as my friend. Savers have been in sufficient abundance since the beginning of the Industrial Revolution to enable investment to further material well-being. Money, as a store of value, was an early facilitator of savings and one of the great inventions of mankind. Saving and investment is very difficult in a barter economy.The history of money is the history of civilization or, more exactly, of some important civilizing values. Its form at any particular period of history reflects the degree of confidence, or the degree of trust, that market participants have in the institutions that govern every market system, whether centrally planned or free.To accept money in exchange for goods and services requires a trust that the money will be accepted by another purveyor of goods and services. In earlier generations that trust adhered to the intrinsic value of gold, silver, or any other commodity that had general acceptability. Historians, digging deep into the earliest evidence of human practice, link such commodities' broad acceptability to peoples' desire for ostentatious gold and silver ornaments.Many millennia later, in one of the remarkable advances in financial history, the bank note emerged as a medium of exchange. It had no intrinsic value. It was rather a promise to pay, on demand, a certain quantity of gold or other valued commodity. The bank note's value rested on trust in the willingness and ability of the bank note issuer to meet that promise. Reputation for trustworthiness, accordingly, became an economic value to banks--the early issuers of private paper currency.They competed for reputation by advertising the amount of capital they had to back up their promises to pay in gold. Those banks that proved trustworthy were able to broadly issue bank notes, along with demand deposits, that is, zero interest rate liabilities. The profit that accrued from investing the proceeds at interest was capitalized in the banks' market value. In the mid-nineteenth century, equity capital/asset ratios were often several multiples of today's ratios.In the twentieth century, bank reputation receded in importance and capital ratios decreased as government programs, especially the discount window and deposit insurance, provided support for bank promises to pay. And, at the base of the financial system, with the abandonment of gold convertibility in the 1930s, legal tender became backed--if that is the proper term--by the fiat of the state.The value of fiat money can be inferred only from the values of the present and future goods and services it can command. And that, in turn, has largely rested on the quantity of fiat money created relative to demand. The early history of the post-Bretton Woods system of generalized fiat money was plagued, as we all remember, by excess money issuance and the resultant inflationary instability.Central bankers' success, however, in containing inflation during the past two decades raises hopes that fiat money can be managed in a responsible way. This has been the case in the United States, and the dollar, despite many challenges to its status, remains the principal international currency.If the evident recent success of fiat money regimes falters, we may have to go back to seashells or oxen as our medium of exchange. In that unlikely event, I trust, the discount window of the Federal Reserve Bank of New York will have an adequate inventory of oxen.

Bounama Diallo
Maney matters

The History of Money

Remarks by Chairman Alan Greenspan

At the Opening of an American Numismatic Society Exhibition,

Federal Reserve Bank of New York, New York January 16, 2002

The other day I told a spendthrift friend that I had to deliver a short address on the history of money. He responded, "I understand the history of money. When I get some, it's soon history." Fortunately, not all market participants are as spendthrift as my friend. Savers have been in sufficient abundance since the beginning of the Industrial Revolution to enable investment to further material well-being. Money, as a store of value, was an early facilitator of savings and one of the great inventions of mankind. Saving and investment is very difficult in a barter economy.The history of money is the history of civilization or, more exactly, of some important civilizing values. Its form at any particular period of history reflects the degree of confidence, or the degree of trust, that market participants have in the institutions that govern every market system, whether centrally planned or free.To accept money in exchange for goods and services requires a trust that the money will be accepted by another purveyor of goods and services. In earlier generations that trust adhered to the intrinsic value of gold, silver, or any other commodity that had general acceptability. Historians, digging deep into the earliest evidence of human practice, link such commodities' broad acceptability to peoples' desire for ostentatious gold and silver ornaments.Many millennia later, in one of the remarkable advances in financial history, the bank note emerged as a medium of exchange. It had no intrinsic value. It was rather a promise to pay, on demand, a certain quantity of gold or other valued commodity. The bank note's value rested on trust in the willingness and ability of the bank note issuer to meet that promise. Reputation for trustworthiness, accordingly, became an economic value to banks--the early issuers of private paper currency.They competed for reputation by advertising the amount of capital they had to back up their promises to pay in gold. Those banks that proved trustworthy were able to broadly issue bank notes, along with demand deposits, that is, zero interest rate liabilities. The profit that accrued from investing the proceeds at interest was capitalized in the banks' market value. In the mid-nineteenth century, equity capital/asset ratios were often several multiples of today's ratios.In the twentieth century, bank reputation receded in importance and capital ratios decreased as government programs, especially the discount window and deposit insurance, provided support for bank promises to pay. And, at the base of the financial system, with the abandonment of gold convertibility in the 1930s, legal tender became backed--if that is the proper term--by the fiat of the state.The value of fiat money can be inferred only from the values of the present and future goods and services it can command. And that, in turn, has largely rested on the quantity of fiat money created relative to demand. The early history of the post-Bretton Woods system of generalized fiat money was plagued, as we all remember, by excess money issuance and the resultant inflationary instability.Central bankers' success, however, in containing inflation during the past two decades raises hopes that fiat money can be managed in a responsible way. This has been the case in the United States, and the dollar, despite many challenges to its status, remains the principal international currency.If the evident recent success of fiat money regimes falters, we may have to go back to seashells or oxen as our medium of exchange. In that unlikely event, I trust, the discount window of the Federal Reserve Bank of New York will have an adequate inventory of oxen.

Bounama Diallo

Maney matters

GREEN THE BAILOUT

WE DON'T JUST NEED A BAILOUT; WE NEED A BUILDUP
Many things make me weep about the current economic crisis, but none more than this brief economic history:
In the 19th century, America had a railroad boom, bubble and bust. Some people made money; many lost money. But even when that bubble burst, it left America with an infrastructure of railroads that made transcontinental travel and shipping dramatically easier and cheaper. The late 20th century saw an internet boom, bubble and bust. Some people made money; many people lost money, but that dotcom bubble left us with an internet highway system that helped Microsoft, IBM and Google to spearhead the IT revolution.
The early 21st century saw a boom, bubble and now a bust around financial services. But i fear all it will leave behind is a bunch of empty Florida condos that never should have been built, used private jets that the wealthy can no longer afford and dead derivative contracts that no one can understand. Worse, we borrowed the money for this bubble from China, and now we have to pay it back, with interest and without any lasting benefit.
Yes, this bailout is necessary. This is a credit crisis, and credit crises involve a breakdown in confidence that leads to no one lending to anyone. You don't fool around with a credit crisis. You have to overwhelm it with capital. Unfortunately, some people who don't deserve it will be rescued, but, more importantly, those who had nothing to do with it will be spared devastation. You have to save the system.
But that is not the point of this column. The point is, we don't just need a bailout. we need a buildup. We need to get back to making stuff, based on real engeneering, not just financial engeneering. We need to get back to a world where people are able to realise the American Dream - a house with a yard - because they have built something with their hands, not because they got a "liar loan" from an underregulated Bank, with no money down and nothing to pay for two years. The American Dream is an aspiration, not an entitlement.
Real foundations
When i need reminding of the real foundations of the American Dream, i talk to my Indian-American immigrant friends who have come to the US to start new companies - friends like K.R. Sridhar, the founder of Bloom Energy. He e-mailed me a pep talk in the midst of the financial crisis - a note about the difference between surviving and thriving. " Infants and the elderly who are disabled obsess about survival", said Sridhar. "As a nation, if we just focus on survival, the demise of our leadership is imminent. We are thrivers. Thrivers are constantly looking for new opportunities to seize and lead and be No. 1". That is what America is all about.
But we have lost focus on that. Our economy is like a car, added Sridhar, and the financial institutions are the transmission system that keeps the wheels turning and the car moving forward. Real production of goods that creates absolute value and jobs, though, are the engine. "I cannot help but ponder about how quickly we are ready to act on fixing the transmission, by pumping in almost one trillion dollars in a fortnight", said Sridhar. "On the other hand, the engine, which is slowly dying, is not even getting an oil change or a tuneup with the same urgency, let alone a trillion dollars to get ourselves a new engine. Just imagine what a trillion-dollar investment would return to the economy, including the 'transmission', if we commited at that level to green jobs and technologies."
Indeed, when this bailout is over, we need the next president - this one is wasted - to lauch an ET, energy technology revolution with the same urgency as this bailout. Otherwise, all we will have done is, we bought ourselves a respite, but not a future. the exciting thing about the energy technology revolution is that it spans the whole economy - from green-collar construction jobs to high-tech solar panel designing jobs. It could lift so many boats.
"In a green economy, we would rely less on credit from foreigners and more on creativity from Americans", argued Van Jones , president of Green For All and author of the forthcoming The green collar economy.
"It's time to stop borrowing and start building. America No.1 resource is not oil or mortgages. Our no.1 resource is our people. Let's put people back to work, retrofitting and repowering America... You can't base a national economy on credit cards. But you can base it on Solar panels, wind turbines, smart biofuels and a massive programme to weatherise every building and home in America".
The Bush team says that if this bailout is done right, it should make the government money. Great. Let's hope so, and let's commit right now that any bailout profits will be invested in infrastructure - smart transmission grids or mass transit - for a green revolution. Let's "green the bailout", as Jones says, and help ensure that the American Dream doesn't ever shrink back to just that: a dream.
By Thomas L. Friedman
The New York Times News Service