Letters to my sons.

Dear Son,

copper prices have gone through the roof. So much so that the Royal Mint has warned against melting coins.

Coins minted before 1992 are made from copper and are worth twice there face value. Now this is a little odd I think. How can the physical piece of money actually be worth twice the value stamped on it? Quite easily as the coin is only a physical representation of the value of the money but representations of an item have to be true and accurate for that representation to hold. And in this case the whole façade, for me at any rate, collapses and the role of money and value seem rather odd.
 
For the economic system to work a lot of disbelief has to be suspended. How can it be possible to buy and sell money? How can different currencies have different values? Think about a loaf of bread made in France and one made in the UK, imagine that they have been made with the same ingredients and cooked in exactly the same sort of oven. Why should they be different prices when one currency is converted from one to another? The ingredients are plentiful in both countries, the labour cost is exactly the same but by artificial means the prices are different.

There can only every be a finite amount of money in the global economic system, if too much money is sloshing around the system then inflation takes over and the buying power of a certain amount of money is reduced. Because of this golden rule when certain people decide to horde money then others have to go without. One extreme of this rule is private jets and luxury yachts – at the other end is starvation and disease.

While everyone agrees that pieces of paper and metal disks have a certain value and accept the abstract notion that they have a "value" we will continue to need money and starvation and poverty will continue.