Friday, October 27, 2017

Ideal Money by John Nash Jr. Part 1

I found out about this in a tweet by one of the people I follow. I really love twitter because I can find new information that I haven't encountered here in my real life/offline conversations. My social circle doesn't include sophisticated financial/technological people, so I am grateful for having twitter that let me follow people who I can learn from.

The tweet I'm referring to had a link on an article that talked about ideal money. It also had a photo of Russell Crowe when he played the character of Professor John Nash Jr. in "A Beautiful Mind" movie. I watched that a few years ago and I loved it, it's an inspirational movie for me. So, when I saw the photo, I remembered the movie and the name of John Nash, so I got interested about the article and about the ideal money that Nash talked about.

Then I tweeted my favorite line in that medium article of rextar4444



Since he really recommended reading about the Ideal Money that Nash presented, I searched and found it online.

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Now, I'm going to quote things Professor Nash Jr. said in this talk cited below:

Nash, John F. “Ideal Money.” Southern Economic Journal, vol. 69, no. 1, 2002, pp. 4–11. JSTOR, JSTOR, www.jstor.org/stable/1061553
At the start of his lecture, he said: "Money can be recognized as a technological development comparable to the wheel and of similar antiquity."
He then gave an example of EZ Pass system as a recent development in technology. In this instance, I already saw the comparison with the history of money, where people used metals, shells, before, then it became paper and then cards and now, it's going to be bitcoin using our cellphones or some other gadgets.

He clearly stated there in the beginning of his talk, that what he wanted to convey to the audience were "remarks about the history of monetary systems and about issues of comparative quality or merit, along with a specific proposal about how a system or systems of ideal money might be established and employed."

This is what I'm most interested in, his proposal on how systems of ideal money can be established. Actually, since I really believe in conspiracy theories, lolz, and since he didn't die of natural death, but in an "accident", I can't help but think that one of the reasons some people would want him dead is this proposal. But, then again, this lecture was given 14 years before his death, I don't know what he was working on in 2015.

Anyways, I'm writing this as I'm reading the article, so I have no idea how he's going to suggest to implement a system for ideal money.

Keneysian economists, Gresham's law, bad money, good money... the things I have no idea of, that I found in his introduction part. Well, at least I can understand the part where he stated his opinion about people being irrational when it comes to money. I agree that we are dependent on it. Can you go out of your house without money? Here in our city, I can walk around a few blocks, but if I want to go to a far part of the city, I have to pay the jeepney drivers, well I can choose not to pay them if I want to cause a scene or go to jail or something lolz. Or even if you have your own car, will the gas stations give you free gas? Will any establishment that sell food, drinks, clothes, give them to you for free? or in exchange for fruits or whatever you have to barter... I don't think so.

We need money, it's already part of our lives. Money is also technology, which means it can be improved. The time has come, with Bitcoin, there is going to be a new financial system...but there is going to be resistance from of course those people benefitting from the current debt system. Just thinking of the IMF and federal reserve, I've no idea how Bitcoin is going to win, but I believe God will make a way, if it's His will that Bitcoin succeeds. Even though I think most of the people in the Bitcoin space are atheists, it doesn't matter, God is right now watching us all and will help anyone who asks for it, God is here in the Bitcoin world, that's what I believe. I mean just like gravity, it's there whether you believe in it or not, if you walk off a rooftop, you're going to fall. Anyways, my thoughts ran away with me again lolz...

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So, I tried to read Keynesian economics in wikipedia, didn't understand a thing, so I googled for a simpler explanation. Found this reddit ELI5
 
Understood it a little. That last part about government fiddling with private businesses ofc is not good. On to Gresham's Law...I am loving reddit now with its ELI5s lolz.

After the introduction, there are so many terms that are unfamiliar, but he explains it anyway, so I'll try to read this for 5 minutes straight and see if I understand some of it lolz.

He referenced a lot of books, I don't think I want to read lolz. Wikipedia says that utility in economics, represents satisfaction experienced by the consumer of a good... I understand that, but I don't understand what Prof. Nash Jr. meant by transfer of utility... transfer of satisfaction? Unless someone give me a concrete example of this, I don't think I will ever understand, so I'll skip it for now... I think most of the text I'm going to read will go over my head, so I'm just going to mention in part 2 of my blogpost, just the quotes and things I understand from his presentation.

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