# Not Both

By Marc Gauvin (c) 21/4/2014 rev. April 2015, Aug. 2015, rev. June 2016, rev. May 2017, rev. June 2018, Rev. 12/2020

Do you improve your game by improving your score or do you improve your score by improving your game? Answer that question correctly and you wake up to the nightmare of money ruling the world.  Ignore that question and you continue mindlessly enslaving and being enslaved.

Want to really change the world?  Want to have fun doing it?  How about making this truth go viral as well as this book! And ask the so called experts that are hoarding all the world's assets to explain to the world's Judiciary how in heaven we can owe money?  if money is a measure of the value of goods and services, then it can't also be a commodity and therefore it makes no sense that it be borrowed, invested, lent and it certainly doesn't need to circulate.  I know this seems difficult to believe,  we are so accustomed to "spending" money but in reality all we are doing is reducing and raising our individual balances as we trade the goods and services that are all that circulate.  We accept this cheap analogy of money "circulating" because it is an easy intuitive sell but so are all confidence scams, but if we apply thorough logic as we do below, then it simply doesn't wash.

Fig.1 Transfer of Goods/Services:

Price is the measure of the value of what is being transacted that gives rise to new money (annotation of that Value)

If money is generated by transactions as a record (annotation) OF the value of goods/services being transacted as described by the Bank of England here and here then that record cannot be assigned INDEPENDENT value in and of itself.

Definitions:

Let A ≥ 0 be the annotated value of goods/services transacted

Let B ≥ 0 be the independent value attributed to the annotation of value i.e. "money"

Proof

If A > 0 and B > 0,  then  A+B ≠ A

Therefore for any A, A = A + B if and only if B = 0 !

End of Proof.

In colloquial terms, the value of any annotation of the value of some object or thing A cannot have or be ascribed any independent value B other than zero, because otherwise the value of the annotation would no longer be of A but rather of A+B.

Here in this analysis of the Bank of England's publications, we see how it is clear that money is created as a product of loan transactions and therefore cannot be an input.  I am sure they haven't thought of it that way, but then logic has a mind of its own which is what distinguishes it from nonsense.

### Unit-Cost Destabilization

Another approach is to consider how any systematic unit cost (i.e. percentages of balances) to access money whether explicit or implicit i.e. any direct or indirect cost per unit such as any per unit charge or any time lag delaying access to units for the realisation of transactions,  will necessarily destabilise the value of the "unit of account" as follows:

Let G be any object of trade, let "a" be the cost of G in currency units and "u" the per unit cost for each unit used to represent the value V of G in any of n transactions of G

Then,

V1 = a(1 + u)

V2 = a(1 + u)2

Vn= a (1 + u)n

And  Vn > Vn-1
for u > 0

Since increase in value attributed to G requires the arbitrary summation of units independent or exogenous of the measure of value of G, then it can be affirmed that any such exogenous “interference” is the sole cause of instability of value measure in the system because in the absence of such interference, the system is stable by default!  And the Stable Currency Unit Theorem  holds!  (see:The Beast of Compounding (Latest Draft))

As the change of V is independent of a,  then the change can only be attributed to the inflation of the unit.  Note also,  that it doesn't matter if u is proportional to the sum of negative balances (interest) or to the sum of positive balances (demurrage), all that matters is that it represents a cost proportional to money balances or measure of value and therefore proportional to a per unit cost.  The different direct and indirect costs of u follow:

1. Any delay in transactions due to a lag in time to "access" units of account, may represent a proportional (per unit) cost independent of the measure of value of the goods and services to transact.  For example,  any loss of perishable goods due to delayed access to units to represent value, is an indirect proportional per unit cost.
2. All percent based commission charges on transaction balances are direct proportional per unit costs as a function of transactions.
3. Interest or demurrage charges on account balances are direct proportional per unit costs as a function of time.

Thus, without even applying formal interest or demurrage functions over time, all such "financial" costs per unit destabilise the unit of account. Only when the commodity value of a unit of money is zero,  can money act as a stable unit of account.

Note that by making money scarce or in any way limited in supply,  the direct or indirect "cost" of access to the unit represents such a minimum and necessary requirement for systematic destabilisation of the unit value.

Inflation and Deflation

Thus, there are two types of instability related to money supply.  The first is the direct application of any unit cost for money including but not limited to interest as a function of time (aka usury), this is the root of inflation. The second, is an unbounded demand of goods and service value to access an arbitrarily limited supply of money, this is what is called deflation.

Both of these are, in terms of dynamic systems theory,  instances of instability, the first by requiring unbounded supply of money to satisfy debt and the second by requiring an unbounded supply of wealth to access a limited money supply.  Each can exist independently of each other and both represent a hidden "cost" of real goods and services for the use of money that does not correspond to any finite measure of goods and services in the system.  As shown above, these hidden costs compound across the value chain thus destabilising the perception of value as the cost of goods and services no longer corresponds to any sum of independent values of the value chain components.

To illustrate, consider how if electricity bills were to be charged as a function of the clients' revenue as opposed to the cost of providing the electricity. In this case the cost of electricity would compound as that cost is passed on to others in prices and the cost of electricity would cease to be proportional to any discrete measure of value. Not to mention that by virtue of practically everyone using electricity, the guild of power producers/distributors would enjoy a systemic self perpetuating revenue growth business model independent of any measure of electricity delivered.

This applied to money, is even more egregious when one considers money's sine qua non function as the standard measure of generic value of all goods and services.

### Unfairness vs instability

We must not confuse positive balances that are allocated without providing goods and services with instability of money as a measure. Such allocation may be done for humanitarian reasons i.e. to compensate a social handicap or it may be done as a form of cheating or fraud that although unjust, doesn't render the unit unstable as a measure.

To understand this we must consider the difference between a cost per unit vs a fixed cost. The needy or fraudulent may cost us a fixed amount independent of aggregate value output, this may affect an overall shift in cost in goods and services, but does not result in instability as long as that amount is not made to be proportional to the aggregate value output.

But and as explained above, a unit cost does result in financial tax or tariff that is proportional to the aggregate value of goods and services yet is independent of these.

### Thus, it is a logical error to say that money can act as a "store" or "payment":

Because you must give real value to get it and you only get back equivalent value when you cancel it,  it is an empty store of value.  It is like being given an empty glass when you give away the water that could fill it and when you get the water back,  you lose the glass.   Thus,  money has no value as it only represents what you don't have while you don't have it and thus cannot constitute "payment".  Since it is always empty and in terms of "storing" value,  it matters not what the cup is made of, gold or cheap paper.  And if it is gold, it is payment in terms of its own value and therefore is not ever required to store nor represent any other value.

Break out of  "The Money PSYOP" and give your kids

a future they can be proud of you for by supporting the MSTA