FIAT MONEY AND ECONOMIC GLOBALIZATION

By James Constant

gov@coolissues.com

Because developed states cannot balance their budgets against the natural forces of economic globalization, central banks are left printing more money to keep states alive. In effect, the role of fiat money is the creative downsizing or destruction of developed states and the transfer of power and wealth to the newly emerging undeveloped states.

Economics is a social science that analyzes the production, distribution and consumption of goods andservices[1]. It is about a human activity which, like all living matter, requires energy to survive, live and reproduce. As to humans, energy manifests as goods and services produced and consumed. While goods and services are demands by humans, the production, distribution and consumption of goods and services are supplies by humans. There is a correlation, therefore, between economics and observed human activity. Lets look into this correlation further.

Observe what happens when a small test culture is deposited in a petrie dish which provides its nourishment. The culture multiplies and grows until it covers and consumes the entire nourish- ment provided by the dish and then dies. It is reasonable to expect that the same will happen to the human species in a large petrie dish called Earth. In the meantime, there are some observable differences between the two species. One difference is that human activity includes the production, distribution, as well as consumption, of goods and services. Another difference is that the Earth petrie dish is bedeviled by natural and man made events at different times and places. What we learn directly from the laboratory and Earth petrie dish models is that a species grows, expands or dies when energy (nourishment, goods and services) is or is not available. And, from the Earth petrie dish model we learn that natural (storms, floods, hurricanes, earthquakes, etc.) and man made events (wars, revolutions, financial, etc.) disrupt production and consumption, and their commencements and effects are observable but unpredictable.

Like all creatures humans have basic needs for survival, food and shelter. Also, unlike other species, humans have unique wants for pleasure including entertainment, power and wealth. Observation shows that most people in the undeveloped parts of the world lack basic needs and struggle to survive, and most people in the developed parts of the world have their needs and some if not all wants met. And, in all parts of the world, only few people have all their needs and wants met. Thus, in undeveloped states, most people live in poverty and few people live in power and wealth. In developed states, most people live in powerless comfort and few people live in power and wealth. Accordingly, there is a correlation between people's needs and wants and the degree of development in each society and in the world as a whole. This correlation is observed as a social pyramid.

In sum, The Earth petrie dish contains numbers of developed, developing and undeveloped states. Consumers in each state put demands on producers to supply goods and services, now increasingly by trading with other states. In every state, we have a social pyramid characterized by classes. At the top are those in power and wealth and important producers, at the bottom are consumers and in between are lesser producers and a middle class of consumers. The most important producers are part of or closely tied to the state. They benefit from laws, rules, regulations and support by the state.The numbers of each class increase from top to bottom and depend on development of the state. Social pyramids are also evident in lesser groups such as the family and corporations. Economics, therefore, creates social pyramids and global trading through human activity of consumers and producers.

In what follows, I will try to articulate how global energy, in the form of the production, distribution and consumption of goods and service, flows between developed and undeveloped countries, how fiat money in that flow downsizes the developed countries and upgrades the undeveloped ones.

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