Sunday, September 6, 2009

Money as Product

Is money a product?
! Preposterous! Next question.
No, no let’s go back, I want answer.
Hmm… Do we have a definition? Clean, unbend, principal definition? Yes! Product is the “result of an act or process”. Now how do we quantify “result”? Using money obviously. So money, the product is quantified by money. I hope it is not just me to see the problem here. Everything that surrounds us works on some kind of feedback (economy, sociology, politics, biology, physics…). Money is no exception and treated as a product is short-circuiting the vital and all-present principal of feedback. What makes it worse is that all the aspects of our material presence is interwoven by money.
Few “in plain sight” examples of the problem; Oil is obviously running our energy hungry economy. Last year we saw price of this vital resource changing by 400% in a half a year! Such abrupt price shifts could only be generated by manipulations at the source-code level. More recent example; Banks that received bail-out riches from us – most profitable now – they just returned the money!
Let’s see the genesis of the problem and follow real product in it’s journey;
Product is researched, designed, marketed, produced, delivered, distributed and sold. Each of this activities takes months if not years. With each of this activities there is some amount of money associated. We can visualize this like two interconnected layers. Now if we weaken the vertical bonds between real product activities layer and investment layer, but allow to create horizontal bonds in the investments in the some layer, relationship timing problems will occur. The changes required to research product and ultimately sell it are much slower then the changes taking place in the investment layer and that layer taking the lead of the process, makes it chaotic as the coherence of the slow process is lost and replaced by the chaos of the money market. Wall Street should not manage economy, it should be it’s gauge.

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