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| Understanding the Future (Part I) by Tansin A. Darcos 08/12/2022, 9:20am PDT | ||||
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| We all have seen the massive changes in world economic terms over a very short period of time. Going back further, the world changed from what had been the dominant means of trade and commerce for centuries to a much more streamlined model, and now that model is breaking down. Let's look at where we were, where we went, and where we are going.
Prior to the 1800s, worldwide trade was slow and expensive. Make that very expensive. The biggest problem was if you wanted to import something it had to either be something essential for survival, like salt, or luxury goods. The first you had to have; the second you could afford the extra costs of losses in shipping. If you were a merchant in London, or Venice in the 16th century, first you had to either find a middleman going there or pay the cost of outfitting a trade mission to whatever places had what you are interested in. The former (using a middleman who just adds your order to his list of other customers) being much more common, the latter(outfitting a tradingg party or trade mission) being very expensive. I do say 'places,' because international shipping was slow, difficult, dangerous and (as always) very expensive. So you can't depend on just one location; beyond that you probably can't get enough in one place to justify the cost and expense of an international trip on a single commodity. Second, in order to cover expenses on each leg of the trip, the trader might have to buy things along the way to trade from port-to-port. Third, having multiple trade items insulates the trader from the risks of any one commodity falling in value by the time they get back. Fourth, inter-port trade is, if it's in the right direction (buying where the product is cheap and selling where dear) very lucrative; the profit can be much higher; enough to get even more of the product to be brought back than if you only traded one commodity for another. Trade trips were slow, dangerous, and expensive. Slow, because a trip could take six months or more, presuming the person you paid to make the trip came back. Not because they absconded with your funds (possible, except continued trade waa much more luxrative), but because of the dangers. Dangerous, because there were hazards. First, a trip could be ended because of travel conditions (earthquakes, landslides, sinkholes, or insurrections.) Second, bandits could rob and/or kill the traveler(s) to allow the bandits to abscond with your funds. Third, illnesses or diseases contracted along the way could be debilitating (often delaying the journey by weeks or months) or fatal, especiallt the two most common diseases of male international travelers, syphillis and gonnorhea. Pirates on the high seas could steal everything, and if you were lucky, leave you alive. Expensive, because sending a four or five person caravan (or even just a single traveller) has to have food, clothes, travel supplies, ship fares, bribes to local police, road bandits or other government officials, and the equipent to carry whatever they are trading for the goods you want. One trip can produce enough profit to cover the equivalent income of five years of wages for a journeyman carpenter. Take ten trips, reinvest the proceeds, and you can retire, rich. The idea of currency - using printed recipts of something valuable like gold and silver rather than the actual precious metal - is relatively recent, in general only going back mostly to the 18th century (although the Chinese had paper currency as far back as the 8th C.) You might consider currency to be the original non-fungible token; a representation of something valuable rather than the actual item. A piece of currency like a $1 represented a certain number of grams of gold and was supposed to be equicalent. Back about 100 years ago, a man could go to a tailor or haberdasher in any city in the United States and purchase a custom-made three-piece suit for $20 bill or a $20 gold piece (one ounce of gold). Today, $20 is just enough to buy a tie. Now can someone purchase a custom made suit for one $20 1 ounce gold piece (like an American Eagle, Canadian Maple Leaf, Australian Kangaroo, or Krugerrand)? Yeah, you could get two suits now. But currency has one advantage over valuable commodities like precious metals in that a large amount of value is able to be kept in a very small and light package. For example, a gram of silver, now, is about US$0.66 (€0.6293; £0.5361), while a gram of gold is about $57.51 (€55.95; £47.21) . a US$100 bill also weighs 1 gram. So, for carrying 10 kg. of value (about 22 US pounds), in bars of .999 silver or .999 gold, or bands of US$ is about the size of 10 iPhones and in silver is worth about US$6660 (€6293; £5361); for gold, US$575100 (€559500; £472100) but 10 kilos of US$100 bills is about US$1,000,000. (Of course, a bank draft, irrevocable letter of credit, or an American Express Black Card (or any competing no-limit card) for any amount weigh about 5 grams. Of course, in those days before the 20th C. if you even had currency, it probably wasn't recognized outside of the state of issue, "state" sometimes being regions as small as a city today. So the only way you could trade in other countries then was barter: trade a commodity you have for something they want. For thousands of years, gold (and to a lesser extent, silver) were the de facto (if notde jure) money for trade, commerce, and, of course, paying taxes. So, over about the last 200 years, new things happened. We got the telegraph and international telegraph, which would allow immediate communication. We got powered ships, so international (or intercontinental) trade wasn't dependent on where the trade winds blow (orf where there were travel paths for land transport). We got powered travel equipment, so much heavier loads than can be carried by a string of horses or a pack of mules (or dog sled) can be moved. Canals such as the Erie Canal in New York State, the Suez and later Panama Canals cut the time needed to get between points that it made shipping lesser value cargoes possible and less expensive.ter World War II, the former British Empire declined, Japan became a major export power, then China and other countries. Then shipping containers, allowing much more efficient ahipping of goods. Then just in time shipping. The worlds logiatics systems became very efficient at moving products very quickly and meaning much less stock of component parts had ro be kept on hand. But, more than anything else, what made international shipping possible was the armed support of the rule of law. The idea that if people shipping or transporting legal goods would be able to do so unmolested. The British Empire did this so well, that merchant caravans traveling in hostile areas could travel with nothing more for protection than the Union Jack displayed at the front and back of a caravan, because raiders knew that molesting a caravan displaying a Union Jack meant the British Empire would come down on them like Thor's hammer, showing no mercy. Later, when the Empire fell apart, the role of "word's policeman" devolved onto the United States, at one point escorting oil tankers through the Persian Gulf, with the tamkers temporatily flying the U.S, Mechant Flag. This post has gone on long enough, I'll go on to Part II later. or click on this link |
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Understanding the Future (Part I) by 08/12/2022, 9:20am PDT  tDarcos, you're still wrong about what non-fungable means NT by 08/16/2022, 11:48pm PDT The time's nigh that finally information will start to actually trump NT by 08/17/2022, 12:14am PDT Re: Understanding the Future (Part I) by 08/17/2022, 5:37am PDT Re: Understanding the Future (Part I) by 08/17/2022, 8:25am PDT Re: Understanding the Future (Part I) by 08/17/2022, 12:31pm PDT Currency is more than 2500 years old, not 200 years old. by 08/17/2022, 7:01am PDT Re: Currency is more than 2500 years old, not 200 years old. by 08/22/2022, 7:56am PDT My error by 08/23/2022, 6:24am PDT |
