"balancing the imbalances"

We could start reminiscing events where we loose something, or anything that you usually call as yours. That you will then realize things around you might be something that is 'Made available' for you. That nothing is eventually yours

Similarly when you is the country you live in, which within the lands and the waters lay immense wealth none of your forefathers knew about. But you knew that somehow parts of it had been 'removed' , as you see it disappearing before your eyes. And that you realized you have failed to identify what wealth really was, and fooled by the ever increasing 'substitute' that carries no more than the numbers assigned on its side.

to be continued...

Something to ponder in the year ahead

Why we should avoid usury, brief explanation.

1. If you think usury adds your wealth. Think Again
2. The ideal way of getting wealth in a fiat monetary system is by producing necessary product, adding real value to raw produce. not through interests (from deposits or lending)
3. Your money is no longer backed by gold reserve. It only represents the amount of product absorbable in the system, including gold.
4. It is said that banks control the amount of money in the system through interest rates, to control inflation and foster economic cycle. But this is not without any loopholes.
5. For the money lender, it multiplies money with no risks of loosing any (with no work / products produced) . also without any consent made on the industries the money is lended to.
6. For the borrower (who are mostly business owners), it's a chance to continue production even without provable demand, or forseen value in the product.
7. This makes the rich reluctant to invest their money through cooperation. Creates growth in industries of unrealistic values. Makes the gullibles, including the rich who lended their money, wanting (instead of needing) to consume more. And the cycle continues.
8. In turn, interests would only add unnecessary debts obligation in the system. and eventually reduces the true value of the overall economy (i.e. the products value represented by money). How? 
9. The money you spent to buy a product partly contributes to pay the interest charged on lendings, borrowed from banks by the producer to sustain production.
10. To pay it, producer accumulates all the costs incured, and strategize on unit pricing that is enough to cover the costs, targeted profit, debt + interest, and anticipate future inflation.
11. Thus the increment on the already high marked-up price represents no real improvement whatsoever to the product. Hence, the no real added-value.
12. In turn, society will be reluctant to consume inferior products at high price, as companies eventually figured ways to influence perception of value through marketing.
13. Marketing may not be cheap. Company pays billions to get awareness, some openly tricking viewers into believing that a product is valuable.
14. Add that to the interests the company must pay and the cost of buying (if the customer use CC to pay). Re-think on the true value of the product.
15. Plus, imagine the amount of interest obligation of the overall companies involved, from the extraction of raw materials, manufacturing..
16. ...promotion, distribution, all the way to retail companies. They have to pay the interests. But somehow consumers bear them all, through price.
17. /thus, you could imagine how valueless the price you pay for a product due to the interest obligations charged along the system.

However, you could also imagine the opposite, when all interest obligation is taken out of the system....

1. ....how it will eventually restore the values of product, and the consecutive effects on the society as both producers and consumers will be free of any additional burden that contributes none to direct improvements.
2. Any lendings with expected addition in return should also automatically bear the loss in a form of risk with previously agreed portion/percentage of profit/loss, similar to that of investment / cooperatives.
3. Somehow the best investment / business cooperation will be of any products related to necessities, as it will be of sustainable demand.
4. In longer terms, only products of real values will survive, as price will be reduced to its sensible value, and no value will be added on insensible needs. Any increase of value will represent immediate increase of quality.
5. Thus such non-usurious society will see perfect valuation of products, of which the value of  money is represented. Hence "wealth" will be at its maximum power of exchangability.

Therefore, wealth are actually the necessary products available and consumable, by whatever amount of money we have. Continue reading on the understanding of money to get a glimpse of why.

God Knows Best. Wallahu a'lam

Somehow it gets clearer how money is not the value (in our system)

In an imaginary place where money did not exist, humans exchange their goods to fulfill each others need. One might be a farmer, another might be a fisherman, and another knows how to weave cotton into clothes. Here we can see cclearly that value stays in the product, demanded by need. Let's now multiply the number of people to 300 with 100 different skills capable of producing 100 different products (goods and services) of different qualities, each with different speed of completion, and different value equivalance. A pair of clothes equals to 20 fishes, or 15 fish with two lobsters, or 50 tomatoes and 20 cabbage, or during hurricane season when fishing is hard, we can get it with 10 scoops of clam. So far money is not needed. But when the quality of the product varies from a person to another, somewhat the rule will be hard to be applied. The people feel they need somehtingelse that could value the products more precisely so that they can exchange it with other products that match the value.

And therefore, money is introduced. The poeple create coins that functions as an exchangeable items with different values stored in it. A big coin, and a half smaller coin, and another quarter coin. the story then continues to ; as the people getting prosperous, and knowledgable to create more innovative products, more and more coins needs to be made. but then people were starting to have trouble keeping their money or carrying them to buy something expensive. which then force the authority to introduce a legal paper that represents certain amount of coins. In order to get these paper, they need exchange it with their coins in a bank operated by the government, People then started buying their needs with the paper, and exchange it with coins to buy less expensive things anytime they like.

Reading the earlier paragraph, although it was not mentioned of what the coins were made of, How many of you actually imagined that the coins are made of gold  or silver? and how many of you imagined that the paper money is a wallet-sized paper with big numbers printed on both sides?... I'm sure many of you did. somehow that also came up in my mind, because that's how we were told about the history of money during school. Right? Although some of us might not have the experience being in the age when coins contains real gold, we might have gotten the idea from movies describing the middle ages where gold coins are still in use. or somewhere else. but somehow we know that it was still in use some times ago.

I want you to go back to the first paragraph but then continue to paragraphs below :

And therefore money is introduced. The ruler of the village came up with an idea to solve the problem. He came up with a type of paper that could represent value of certain products. The papers consist of numbers. 1, 5, 10, 20, 50, 100, and 1000. Those are legal papers that are used to value the goods or service produced by the people. It is issued by a trustworthy government agents acting as appraiser under oath whose job is to determine the value of items being sold in the market

For example, a watermelon is valued as 15,  thus 10 watermelons are entitled for 10 papers of each 10 and 5. This means that if he could get people presents demanding for all his watermelons, the apraiser will give the seller all the entitled papers for what he had sold. He then will be given a chance to exchange the papers for what he had demanded, such as 2 kilos of oranges valued at 15 and 2 Kg of meat valued at 100, and 10 pieces of carrots valued at 20. He spent 135 points of the 150 points he earned before. he now has only papers worth 15 points left and decided to be kept by the govt agent under a certain account. the watermwlon vendors was also given a chance to give the authority of the mandate through donation or lending. Such act will be revered as kindness, and receive an honour of acknowledgement.

In a larger extent, as age grows, many people wanting more and more improvements in the product quality,  new products started to be invented. To match this, the government then produces more paper and distribute it to all the producer and vendors in the market. all addition of value is done by the apraisals of the gov't agent, based on verified addition on production process such as labors, or raw items. As more papers are circulating in the market, more rise in the amount of needs occured. The people also saved more points in the govt banks for future exchange.

This describes pretty much what our money now should be about : a due-exchange paper. Reason being, paper money is merely an instrument to value products, which derived likely from a barter system, which facilitates a non-direct obligatory exchange of products there and then. The paper itself worth none. The truth of wtis would somehow easily felt by those living in a rather small, and closely related community or village because the people's need is simple, and the needs are usually easy to fulfill. They do not value more on the amount of paper hold., because there is no point for them to hold more money, because not much of expensive things available or being produced, and that also would not give them any value as it also did not match to any of their needs.

Ideally speaking, in a paper money society wealth is in the product, as it is the one that contains true value to human. Somehow the people should fairly understand that wealth does not lay in the amount of points hold, but the amount of products produced and demanded, because that is basically why paper money is issued in the first place.

With these understandings I guess we willl easily know that when we abuse our authority to value the invaluables, somehow imbalances will start to occur gradually. Ilegal addition of value to paper money can be defined as addition of demand towards products that did not exist, and somehow, in turn, people will value things that are not initially valued for money, sometimes things that are virtually not exchangeable. Later on, creation of false needs will be rampant, and people will be outrageously demanding for it too. Somehow poeple will also demanding for other things that has never been available for exchange. In a stage where addition is permanent, the demands will turn to addictions. This is when people will start loosing their sanity and judgement.

God Knows Best. Wallahu a'lam.

Further on what (I think) should be done in such currency system

As discussed earlier in my twitter, in our current fiat monetary system which based itself on products, --if this is what we are in now-- somehow we and any other country applying this system, should :

• Restrict any illegal addition to the overall value of the money without adding any true value whatsoever into the economy, that is usually done through charging interests on lending or deposit; Valuing the invaluables such as buying time, wisdom, policy or politics that is other than the products involved in the exchange. Such practices will only reduce the value, or not devalue, all commodities that pose the true exchange value as products. (beware of the balancing nature of any imbalances)
• Fix its currency value towards other currencies (preferably to those which has already been fixed to another) as it only acts as a measurer that helps traders to denote the value of the products to be exchanged. as it contains no value in it. and the cost of procurement should only be incured to govt tax account.
• Restrict exchanging currencies with additional returns / charge whatsoever, and limit the exchange market to within government banks only. any cost incured during exchange should only be incured to govt tax account.
• Restrict overvaluing services that contributes very little to any line of production or consumption, as it will only create vague values, or in other words, reduce the definition of value. Somehow art or entertainment should be fall into this category.
• Protect the minds of the people. Why? Because it is the denominator that builds the perception of value. Good minds make good judgement.
• Charge taxes only on what the government could provide to creates additional value, such as in facilitating the trade.

Well, if everything sounds like it's only about products, producing and consuming and nothingelse, eventually I think that's what ideally our money should only concern. right?

God Knows Best, Walahu a'lam.

continue reading on How money is not what holds the value

Having said that...

With these understandings, I think somewhat paper money has many possibilities of being over valued or devalued. reason being ; as it is valued on all products produce in a country or certain region, there is possibility of each product valued differently else where, even some probably devoid of value at all, which then should turn the valuation of certain currency of the paper money into a relative state, which should turn countries with 'outrageous' valuation of invaluable goods to having the worst currency value.

Secondly, in such system ideally the government should have somewhat authority on the goods being produced within the country, and strict policy on exchangable goods and their exchangeability, and also forbiding on usury (in broader terms, not just in a form of debt interest).

Thirdly, somewhat, this paper system is ideally applicable only in a strict authoritarian system where it is equiped with high authority in monitoring production and exchange activities.

And lastly, in such system, as money printed is accounted by the products produced, as some goods become less valuable along the time, so does the amount of money it represents, therefore to balance this, the system will create exchangeable goods with ever-increasing value (i.e : the space; land/house/office) which might need to be reconsidered as having the attribute of exchangability,  I mean the cost of land prepping, utillity integration, and expenses to build the building is the value, but isnt the patch of land should just be administer-able, hence non-monetize-able? Havent we then overvalued things a bit, or in turn, shouldnt this be accounted for possibility of the least valueble being valued alot ? hence, the consumption of inferior goods (i.e. the balancing of imbalance system)

In the end, Somewhat I tend to think that usury will only create fraudulant trade because there's no whatsoever true value added in the increment of price due to interest obligation, whether it is in a timely tradeoff exchange, or through interest-laden-finance scheme during the production and consumption. The amount of paper money itself is only the reflection of products produce, thus monetizing the availability of a paper currency (adding extra value to the availability of paper money) is in itself fraudulant, as it contains no whatsoever value, and providing it should be the authority of the government.

Thus when someone is holding up their money, they're only saving their wealth (power of exchange). Pursuing them to make their wealth available to others (lending) by adding extra 'wealth' as an exchange is in itself self-abusive, as in turn, they're only making their wealth less valuable. In other words, if a person do not want to bare of losing, he/she should not dare of adding. Alternatively, we should not be reluctant to risk our wealth as it is the proof that we belief that God has pre-determined Rizq for every one of us, and that we will never be left astray in anyway as long as we try to find it. God Knows Best.

Continue reading on some restrictive measures which I think should be made important

PS: Somewhat i'm highly interested to find and learn about the value of gold as an exchange and its effects being the sole legal mode of exchangeability. I've read few articles somewhere, and I hope to get more of the basic fulfillment of gold in the economy. Rabbii zidni 'ilma warzuqni fahma.

Along with that, The Understanding of Money (from what I have understood so far)

What is a printed square paper truly worth?

Some countries used to back the value of the paper with the real exchangeable goods, which is the gold. I used to learn this in school and believe that it is always so (until recently) . My initial understanding of the paper money was that the amount printed is the authorized portion of the total value of gold reserved in the bank. Thus, when i buy something, let say a laptop worth Rp 5 million, using 50 pieces of Rp100,000 notes, i'm giving the shop the authority of that gold to the store owner as an exchange of the laptop received.

Lately, i often pondered about the real gold that is in the reserve. Ideally when there's a hike in the economic activity, there should be an addition to the gold reserve in the central bank. But then how come the value of the paper money is still highly reluctant to the so called inflation rate, which is fluctuative depending on the domestic production of goods in the country or GDP. which means, that if i were to trade back the gold coin that i had previously exchanged with some printed money (which i considered as a certificate of gold ownership) , i will need different sum of paper money instead.

Somewhat I'm begining to see that our economy is no longer based on the gold reserve, rather by the amount of exchangeable goods in the country, including gold, which somewhat later turn the society into a what i would probably call : Government administered barter system. YES! somewhat I feel that we're back at the age where 'money' had not existed. (the apostrophe refers to the real exchangeable value-laden money, the gold and silver system). Because the current day money is the representation of product in the system be it good or services. When the demand of product increases, the money should be printed more. But when the money gets stuck in the system (no goods are exchanged due to shoratges, indicated by the hike of price), the money would not have more value if it is printed more, thus the inflation.

But then, ARE WE in this ideal system yet? looking at the amount of 'products' that some of us might produce, or the over valuation of certain goods/services, or the gullibility of our consumer society towards ads/promotions, are we really ready to adopt this system?

Ideally this system will not encourage people to save certain goods, as anything that is owned is virtually exchangable, the value of goods will depend on the needs, and the needs will depend on the minds. thus the stability of economy should possibly depend on the perception of the availability of the goods, and the gullibility of the mind. Thus in this system the ideal way of getting wealth ( power of exchangeability) is by producing goods that matches the needs of the people.

However, there's what we call as 'interest' and interest rates that are charged to certain amount of money borrowed from the central bank, which consecutively charged over its business derivatives through bank or financing institution. How would these affect the balance of product and the amount of printed representation of the product (i.e. paper money)? somewhat i'm poised to think that the emergence of valueless product or the irrational valuation of goods in society, came from such practice of interest/usury/riba in the system. somewhat, in order for us to fulfill the balance, in other words, to match the amount of money 'virtually' produced due to interest, we need to produce the unnecessary goods/service and influence the mind of the consumer to make it somewhat necessary, or to match the value of the goods the business eventually provide. it's probably what is called the act of opening new markets (in marketing we study how people acts and learn how to create needs and make people wanting something new they've never wanted before).

Ideally also, within this system, there shouldnt be any illegal exchange of money, which could derive from non-productive/goods-related services, an abuse of power to exchange for non-fulfillable needs (Ideally needs should be restricted to be of basic sustenance of human only, and the rest should be called wisdom or policy that is not exchangeable whatsoever), or simply an incremental value of the lended money. so if this happened, something might have happened in the mind that encourage someone to do so. I reckon 'the irrational urge' (we know who).

Consequently, with the presence of these unlawful exchange, imbalances will occur. and somewhat I tend to think that riots / earthquakes / disaster, anything that destroys is just another way of balancing the imbalances, basically matching the true value by turning some parts of the overall goods devoid of value, due to false valuation of the invaluables.

All and all, just follow what God has ordained to us, including to avoid usury.

God Knows Best, Wallahu a'lam.

Continue reading on How I think this monetary system should only be conducted (ideally)
or  A brief simulation on how paper money had been introduced, and my imagination on how it should have come about

Next : The Alternatives

All I can think of now is to have an alternative of mechanism to distribute and administer corporative projects to manage the fund. something that is based on the five principles of Indonesia. something like 'Penyaluran Insentif Kerjasama berdasarkan Pancasila' or 'Corporative Partnership Incentives Based on the Five Principles' that is implemented all the way to the end credit reciver, be it macro or micro producer. And it's not a free money, but a shared responsibility to develop the nation through business partnerships.