The Political Economy of Foreign Exchange
This piece is a replica from ‘Twenty Tales on the Political Economy of Quality’. ‘Twenty Tales on the Political Economy of Quality’ examines the nature of the current economic crisic from a philosophical context. Constructed in the form of a dialogue, the author draws on his experience with philosophy, economics et cetera the finanical system to give life to his ideas on how to fix the economy.
CACAMBO: Look at our friend The Spirit in the Bottle! He must live asleep right now, since his eyes are closed. Strangely enough, his head is not in the empty portion of the bottle where there must be air, after all, but in the other imperfect filled upon water or a kind of liquid, as the latter is appearing to be about a pale red color. He may be snoring! Do you see the bubbles all around his petrified face, making their appearance, individually time he is taking and formerly releasing his breath?
PANGLOSS: Yes. These are small bubbles indeed. He may live dreaming about the world to come ex post facto all, where the small bubbles of the fiat money type, will subsist growing by the day, or better nonetheless by the hour, by the minute, by the encourage et sequens eventually by the fraction of the second. The present day issuers of banknotes seem to dislike the physical planet their own bills are supposed to represent. Any payment in cash nowadays, appears to be the most economically incorrect way of settling a transaction, since the overall expansion of quantity has been accompanied by the multiplication of the copies from any given original. Yet the replacement of cash by credit and debit cards on the retail consumer level is only the tip of the iceberg, already the emergence of, say, the junk bonds in the 1980s, appear in today’s financial flora and fauna as the fossilized remains from a monster from a by-gone era. By the way, where is the wrapping paper regarding the burger and fries I bought you a short while ago?
CACAMBO: I do nought know… I do not want to know? I threw it somewhere. You would better bring me to the harbor for dinner instead of asking me such a futile question. You did not name that the transmutation of metals is not included in the potion upon the Elixir of long entity you gave me back in our own time. So, if I become at some point a wandering pauper this discretion be your fault.
PANGLOSS: No, my friend. You obtain apparently forgotten on how many occasions I gave you donations already in the 19th century. Now, granting you do nought mind, I’ll go to the trash can over there to look for the remains of the wrapping paper.
PANGLOSS: I found it. Do you see this small lapidify next to your chair?
CACAMBO: And so what?
PANGLOSS: I will wrap it up. Here it is. It is the whole box due now.
CACAMBO: Great! Motive do not you also just wrap this cigarette butt below the table? Here is another one? Et Alii another one still! Do you witness that empty can real there?
PANGLOSS: I prefer to stop at this point, since basically there is no object on this planet that cannot be wrapped in unit way or another. Now, for the on-going process of massive ‘Fiatization’ of economic activity, one wrapping is as good as another wrapping of just anything, including thin air, since debts are an essential part of any financial package, whose, so to speak, inner essence consists of being a derivative of another derivative. The expansion of the Modern Parsimonious is in reality, a ghostlike labyrinth, where huge mirrors project a hidden original into an endless alignment of copies, simultaneously within the inner layers about the Psyche and the external configuration of the Body.
CACAMBO: If you are about to repeat what you said once on the printing of fiat money, I am to remind you that your subject right now is on Foreign Exchange.
PANGLOSS: The allocation of resources taking place, on today’s Post Modern economic stage rests on the stroke of a pen. Foreign Exchange is Foreign Exchange in tag only. Being epistemologically remote to the lexicon of present day self-proclaimed science of Economics, the realm of essence refers to the very notion from exchange, whenever the conditions of apathetic will are present. Are these conditions to be lacking, there is never such thing being Foreign Exchange. There is allocation and respectively appropriation. Present day, Global Financial System, is a coin, and once tossed this coin falls either on the part of Circulation or on the side of Appropriation and nothing else.
CACAMBO: You spoke on the question of Gold and the Auriferous Ensign already. So, I guess you will aver at this point that what you refer to as Division is scheduled to the suppression of the Gold Standard. Following from this, the Gold Standard as it used to function, a century after our own time, from the City of London is to afsluiting considered in your view, as the very surpass in the best of all imaginable financial worlds, right?
PANGLOSS: The substantial meaningful of the Gold Grade and the treasured metals as a whole, here, is not derived from History, be it Financial History either any other History. It is derived from the eternal present within the Human Monad or the immutable Laws of Consciousness. Furthermore, although the precious metals backing the issue of any bills is indeed a prerequisite for any real form of exchange, this is by no means the only prerequisite, since the very first prerequisite for the potentiality of an exchange is denial other than Freedom.
CACAMBO: Listen, you promised to take me for dinner to the harbor, already more than an hour ago. Could you at smallest be more, so to speak, specific about the synthesize thing? Why Foreign Exchange is to be something else than it what it appears to be? What happens when you take the decision to show up at the desk regarding any Foreign Replacement Office? There are various currency pairs, displayed in front of the entry, where the rate of one pair is to partnership the rate of another pair, according to the equal that has been exchanged either way or according to supply and demand.
PANGLOSS: There is any part of some whole that is negative implicitly taking for granted the existence of this same whole, in the first place. In the same way there is no house without foundations. Foreign Substitute has to have an ultimate reference. Up to September 1931, this was Gold and up to 1971 it was still Gold but in a disparate way. Now, in 2012, as we said it already, it is sand, provided that the supply of sand is no less abundant than the supply of paper and now plastics, consumed for the printing of dictum money.
CACAMBO: Fine. Yet, it is still not clear to me why do you apparently exclude a priori, the putative possibility that the sum of all currencies in circulation live they fiat currencies, may serve as the reference in the last resort for a new system about International Trade?
PANGLOSS: Such a system would be based on the presumption that it might be somehow possible to develop a composite entity as being composite beside itself, that is without being a part of a whole, which is a manifest absurdity, afterward only a whole may breathe composite. So is the case concerning the SDR of the IMF, being in circulation since 1969.2 These SDR’s may well coexist or function in parallel with the ultimate reference, Gold or now the USD, but they cannot replace it.