This song is perfect in literally every aspect. It hits so deep and resonates so well…

Written for a student essay. I did pour my heart into writing this, and the result definitely marks a milestone for my learning journey. Obviously this is far from being as intellectually rigorous as I wish it to be, nevertheless I still learned a lot.

縮短網址產生器 - reurl

Many times, I found myself having trouble with putting the feeling “saudade” into words. To me it means the missing, the reminiscing, the yearning for the past (which may very well be the reverie I had in my head.), but it also contains a sense of helplessness, surrendering to reality. It’s like “I won’t be able to change the outcome no matter how hard I try.” Maybe saudade was never meant to be interpreted with words.

so many feelings packed in just one song... https://m.primal.net/Mhqi.bin

Balance of payments tend to be brought into equilibrium under a metallic standard. "If they wish to import more, they must export more." or some form of cutting back on those dispensable goods. It is only when there's further issuance of fiduciary media, that the same amount of goods and services can be imported despite there's a fall in the purchasing power of money. It is because there's more fiduciary media that a fall in the PPM does not throttle imports and encourage exports. A fall in the PPM that is not brought about by issuance of fiduciary media does not "worsen" the trade balance. Only inflation does.

Cantillon effect among countries with different currencies Although the perniciousness of Cantillon effect within a country is generally well known, it would be naïve to believe that it is only applicable domestically. Under the current regime, there are a vast number of fiat currencies. It is often believed that when a country devalues its own currency while the others do not or not to the same extent, it would stimulate exports at the expense of imports. While this is true, it is only one half of the picture, it overlooks the international version of Cantillon effect. Let us now walk through these step-by-step procedures. Let us, say, when Bank of Japan decides to devalue the Japanese Yen in order to stimulate its exports or incentivize the foreigners to visit their country. What would happen then is speculations would establish the lower exchange rate of Yen with other fiat currencies before the prices of goods and services in Japan have risen. This indeed makes Japanese exports more attractive in foreigners’ eyes, but the story does not end here. For the gains that the Japanese exporters make are partly pocketed by the foreign consumers (cheaper goods and services than what were previously available to them). The Japanese exporters then take this extra money to buy goods and services or expand their businesses in Japan before the prices have risen. In this way, the price inflation spreads out in this step-by-step manner. Who are the losers in this scenario, (1) the foreign producers and (2) the Japanese consumers. For the former are forced to sell at the lower prices because of all the cheap exports from the Japanese exporters, the latter because of the Cantillon effect playing out. This international Cantillon effect is even more pernicious than the widely acknowledged domestic one. For at least with the latter, the gains are completely pocketed by the people within that border, but with the former, the exporters are quite literally making gifts to the foreigners, and the loss are mostly borne by the local consumers. To sum up, it all comes down to creating more monetary units does not lead to increase in human welfare. It merely redistributes it.

Under the classical gold standard, there was adverse clearing mechanism not only between banks within a country, but also between countries as well. It acted as a way to self correct the trade balance of a country. If, say, France issues too much fiduciary media and therefore domestic prices rise relative to foreign prices, which in turn makes foreign prices relatively lower, people import goods from abroad, higher domestic prices also discourage exports. These effects “worsen” the trade balance, but only to the extent that foreigners are willing to hold fiduciary media issued by France. When they redeem these papers for gold, France would have to deflate the money supply, otherwise they would lose all the gold and go bankrupt. Deflation then lowers the domestic prices, which would encourage exports, when then would reverse the trade balance. But this mechanism only works when money is redeemable for gold. Under the gold exchange standard in the interwar era and the Bretton woods system, when British pound/ US dollar became the reserve asset for the rest of the world, other central banks need not and cannot hold gold, this created moral hazard (race to the bottom). Instead of holding gold (something they cannot freely create), they now hold pounds and dollars and inflate on top of them ad libitum. Redemption for gold now being outlawed, with it brings the unrestrained deficit of trade balance.

What happened after Bretton Woods: After WW2, European countries return their monies to the pre-war parity, making euro monies overvalued and the USD undervalued, also making imports from the US cheaper and exports to the US more expensive, european countries ran a deficit trade balance at the time whereas the US ran a surplus trade balance. Also during that time, the european countries were advised by the Austrians (hard money type), whereas the US was more inflationist. Over time, as a result the situation reversed, now the euro monies became the undervalued ones and the USD became overvalued, the trade balance situation reversed as well. Now it became expensive to import from the US and cheap to export to the US. The so-called "dollar shortage" became "dollar surplus". With the depreciating USD, european govt became restless upon their USD holdings and started to redeem their USD for gold. But the US govt kept on inflating the USD. This situation cannot last, and thus bring about the collapse of the Bretton Woods.

Money makes exchange value universal.

I'm now more inclined to think that bitcoin does have use-value. Given that store of value is usually, but not necessarily, the function of money, it is a direct use, especially when the money we use today does not have that function. Being a good that is suitable for storing wealth presupposes the fact that it is not liable to change. And unlike any other goods in which use-value is predominant, add more unit of it will not make us better off. So in my view bitcoin will emerge as money (commonly used medium of exchange) just like any of its predecessors before. It will emerge as money based on its direct use (i.e., store of value). Money has value because it can be used in an exchange. In a barter economy, people exchange their goods for certain good because they either (1) want to consume that good directly, or (2) by taking that good they are closer to their goals of obtaining the goods they want to consume directly. People engage in an exchange because they expect to benefit from it. In other words, the good people take has higher salability. In ancient times, cattle had high salability and therefore was used as money because people want it (use-value) and it's durable and not costly to maintain. But over time, with the development of industry, metallic money took its place, and cattle lost its salability drastically. Metal became money because it was useful and people wanted it. From this we can see that salability is subjective and therefore liable to change. The salability of a good is limited by the persons, area and time to which it can be sold, it is also limited by the demand for it. In the case of bitcoin, it pretty much maxes out in all of those criteria. In short, money emerge because people want it and it's useful, and holding it make them closer to the goods they directly consume.

Maybe those on the left tend to think if we get rid of the money printer, the govt can operate more “honestly ”, whatever that means. They see money printer as the root cause of our problems, but I would argue that money printer is the apparatus that exacerbates our problems, the root problems lie in the govt itself. The problem with socialism is that there’s no price for the means of production, but there are prices for the consumer good. With bureaucracy, the problem is the opposite, as we have prices for the means of production, but we don’t have prices for consumer good (education, healthcare, etc). Hence the famous saying ”The government offers them for FREE” So I would say the same economic calculation problem is just as applicable as is the case with socialism. That’s why for classical liberals like Mises, the realm within which govt operates should be limited to law, defense and other goods that he thinks free market cannot offer. And for libertarians like Rothbard, he thinks there’s no exception for which free market fails to provide. But either way, they all agree that govt should be shrunk as much as possible, so that the “ocean of calculation chaos” can be minimized as much as possible.

For anyone to be a seller, it is necessary that his valuation (reserve demand) be lower than any buyer (use demand). Otherwise he would not be a seller at all. Therefore the formation of price does not lie between sellers and buyers, but rather lies in between the least eager buyer and most eager potential buyer(the one being excluded), in other words, it lies in between the marginal buyers.

The world needs economic literacy.

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