Calling a horse a cow, doesn't
make it a cow
Hugo Salinas Price
Jun 6, 2006
I vaguely remember an anecdote attributed to the wisdom of "Honest
Abe" Lincoln. It went something like this:
"Suppose you have five horses, and we agree to call a horse
a cow; how many cows would you have? Answer: "Well, I would
have five cows."
"Wrong! Because calling a horse a cow does not make it a
cow!"
I thought I'd mention this, because it has something to do with
this short article.
A means of exchange, is a unit that helps those who wish
to interchange merchandise or services at a given place and at
given time to carry out their exchanges through a medium that
is accepted by all those engaging in those exchanges.
A payment refers to the discharge of an obligation incurred
by the buyer when he receives merchandise or services: the obligation
of delivering either merchandise or services, or (in the past)
gold or silver, to the buyer, to his satisfaction.
Merchants arrived at the fairs which were held periodically in
medieval Europe [I am indebted to Antal E. Fekete for this example]
bearing very little gold or silver; they brought with them only
the merchandise which they wished to sell at the fairs and came
looking for other merchandise which they wished to buy. They
brought little money, because it was dangerous to travel with
gold or silver.
Upon arrival at the fair, the merchants went to a center where
they could obtain "means of exchange" which were of
the nature of vouchers or tokens for the approximate value of
their wares. They registered their receipt of the tokens at this
center.
With these tokens or vouchers, they obtained the goods they wished
to buy, and when they sold their own wares, they received such
tokens in exchange.
When the fair was over, each merchant had to return the vouchers
or tokens received at the center established for the purpose
of facilitating the exchange of merchandise in order to cancel
their obligation. If a merchant presented for redemption more
vouchers or tokens than he had received, he was given gold or
silver for the difference. Conversely, if he did not have sufficient
vouchers or tokens to cancel his obligation, he had to pay for
the difference, in gold or silver. All merchants strived to make
such exchanges of merchandise as would not obligate them either
to collect gold or silver, or to pay it up to compensate for
a lack of tokens.
The tokens at the fair were temporary means of exchange,
used to avoid the need to carry out purchase and sale activity
with money. When the fair was over, normally each participant
had sold all his merchandise, and departed with other merchandise
which he wished to buy, without having used money to carry out
transactions.
The activity at the ancient fairs demonstrates that the function
of facilitating interchange can be filled by a voucher
or token which is generally accepted for that function, but that
payment does not consist in handing over a voucher or
token, but rather in the final reception of merchandise received
in exchange for merchandise delivered.
All the merchants at the ancient fairs, considered themselves
as paid when they left the fair with the goods received
in exchange for the goods they handed over.
From remotest antiquity, only gold and silver combined in themselves,
both functions: the function of means of exchange and
the function of means of payment.
Closer to our time, paper promises to pay gold and silver upon
demand were invented. Later still, more paper promises to pay
were created, than there was gold available to fulfill all the
promises: this is known as "fractional reserve banking".
Later still - Bretton Woods Agreements 1944 - the obligation
to redeem the paper promise to pay gold was circumscribed to
redeeming only U.S. Dollars and only upon demand of foreign central
banks. Finally, as we all know, in August of 1971, all link between
paper money and gold was severed.
The money that exists in the world since August 1971, is in fact
only irredeemable vouchers; no one can demand the delivery of
gold or of silver upon presentation of these bills we use, not
to speak of the money digits of cyber-money which constitutes
the larger part of money in circulation in the world.
Since this money is not a tangible commodity such as gold or
silver, nor a legal instrument which gives the owner a right
to demand gold and silver upon presentation, this money is only
a pure means of exchange and its delivery in exchange for
goods and services cannot in reality be considered a payment,
which is the discharge and cancellation of an obligation incurred
by the receiver of goods or services: an obligation that can
only be cancelled against the delivery of other merchandise (which
at one time included gold and silver) or services to the seller.
Calling a horse a cow
The holder of this
pseudo-money, of this pure means of exchange, be it a person,
a corporation or a government entity, has not received payment
for work or merchandise delivered - for example oil - until the
holder passes on these vouchers which are called money
to another person, corporation or government entity in exchange
for goods or services. And the new holder of this pseudo-money,
in turn, is now the person, corporation or government entity
who is the "holder of the bag", who has not been paid
for the goods or services rendered. The need to get rid of vouchers
or tokens issued by all central banks of the World, is the prime
cause of the phenomenon of consumerism and of the paucity
of savings.
The fact that in today's world a pure and simple means of
exchange is accepted as payment for goods delivered
and services rendered, denotes an intellectual and moral collapse
on a world scale.
The nations that deliver manufactures and raw materials to the
world - especially to the U.S., the greatest importer of goods
in the world - in exchange for means of exchange (irredeemable
dollar-tickets) are not collecting on their exports. They are
accumulating enormous quantities of dollar-tickets which are
supposedly "the payment" of their exports, when they
are nothing of the sort. Until China and Japan, for instance,
dispose of their dollar-tickets as well as tickets of other nations,
passing them on to others in exchange for goods and services,
they have not collected on their exports.
China has not collected on exports, for some $875 billion of
dollar-tickets: that is the amount of the reserves of the Bank
of China in April 2006. Japan is waiting to collect on $839 billion
of dollar-tickets as of the same date, for their exports. (These
amounts, include of course, tickets issued by other national
central banks, but the larger part of the tickets are of American
origin.)
Mexico, like other oil exporters, has received billions of irredeemable
dollar-tickets in what Mexico supposes is "payment"
for its oil. But, there is no such payment! The central bank
is accumulating amounts of dollar-tickets in amounts never before
seen: imaginary riches which have less substance than a fragile
cobweb.
The people of the world are deluded in a fashion that is the
best illustration of Hindu mysticism: that our material world
is all illusion. Humanity is using and accumulating pure means
of exchange, as if it actually were a payment for its labor and
resources. A tragic error induced by men who are ignorant, irresponsible
and avaricious, if not malevolent and antihuman.
Humanity will pay a costly price in blood and destruction when
it becomes clear that a pure means of exchange - a voucher or
token - is not and cannot be the same as a means of payment.
Even if we call a horse a cow, it is still a horse. We can certainly
call what we use for exchange today money; and we can
regard it as money. But let us be perfectly clear: when we receive
today's money, we are most certainly not receiving payment.
So, is gold money? Call it what you will. But if you get gold
when you sell something, you sure as heck can consider yourself
as PAID.
 Hugo Salinas Price, President
Asociación Cívica Mexicana Pro Plata, A.C.
email: 254hsp@elektra.com.mx
website:
http://www.plata.com.mx
No es lo mismo un medio de cambio,
que un medio de pago
321gold Inc
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