15. Collectors vs. Inflators

Whether we are realizing profits through debt or monetary expansion, the results depends mainly from psychological mindset of entrepreneurs and their understanding or its origins and plans for its use.

The profit as such existed for long time, only its negative influence on society was not so clearly seen as today, when ownership of the whole world is on sale through shares and bonds and concentration of wealth is reaching its maxims.

When in medieval times baker baked bread and sold it, he enjoyed from his sales (profit, in modern terms if he paid for his row supplies less then he received for finished goods). The same way butcher, selling steaks was happy if he received more than he paid for the pig. Shoemaker sold the boots and he went with the proceeds to the local market where he, as the rest of the folks bought for his money what he needed and did not produce himself. Profit in these times was very local and immediately distributed between professions and what was left usually ended in the pub. One who was hoarding gold pieces ended robbed by thieves or the king. There were not that many options to accumulate capital (currency) forever. If some ruler decided to fulfill his chest too quickly, there were famines, rebellions and consequences were bloody. Wars between nations and fighting the rebellions costed money as well and so accumulated wealth get again into circulations.

Excessive hoarding of money is not a seldom occurrence, such psychological disorder is evident in different shapes as well. For example people are collecting stamps. First album is their pride, they are going through it every day, and they know every item in it by heart. Second and third is filling them with joy how their collection is growing, but they are gradually losing the possibility to enjoy it with full knowledge what they have in detail. Man with 100 albums already does not know what he owns, each stamps are just statistical items. But he is not going to stop collecting. The same applies to postcards, beer mats or cans or whatever else. There are people who collect cats or dogs. Men are collecting women and women are collecting men. Some people are collecting completely worthless junk at their backyard and their neighbors are forced to contact police.

As long as the collector’s passion is restricted to common articles and pleasures, it is only that person choosing whether it makes him happy and how long he keeps it.

In case where certain individuals decided to collect money (hoard profits) it is having quite serious impact to the society as a whole.

Money is currency, which has a function to mediate exchange between people and if this currency is concentrated to collection and deposited at “shelves”, there is a problem in society which is manifesting as missing money in circulation. These must be replaced by new money, otherwise the economy will be functioning at lower gear. Every saved $ must be replaced by new one, which is coming either from printing press or as a new debt, otherwise it will be missed in circulation.

And this replacing is also happening, depending on the needs of the economy and type of government and the policy they choose. Therefore collectors are annually getting their share of new pieces into their collections.

The big question stands, how they will perceive these new additions:

- Will they be happy that they have them without any doubts?
   In that case we can call them classical Collectors.

Collectors are in essence simple hoarders of money and they are easy to please. If money is what they want, this is what they get. Either fresh from print or their own, borrowed by themselves or through their banks to government which redistributes them again and so they end at the final destination accounts, some of these accounts belonging to Collectors. The circle is repeating, there is more and more money at the accounts and collectors are happy that they already belong to millionaires or even billionaires. These are nominal values, they long ago lost ability to spend what they are earning per year.  As their consumption is far below their annual earnings and they have no intention to spend their entire collection (they are collectors after all), their impact to inflation is none.

-Will they be thinking whether they are still getting the fair value for their collecting efforts?
  If so, they can be considered Inflators.

This is more complicated category of collectors. These are trying to get qualitatively same additions and as they are persuaded about their ability to count the value of money they are asking for bigger doses because of existing inflation. The problem is that to fulfill their wish is possible only the same way – debt or monetary easing. But because they are increasing prices in the whole economy, they are lowering the buying power of its consumers. These consumers, in their position of employees are asking for the corresponding pay rises and so the result is a profit, which is nominally higher, but its buying power is the same. The only thing that is more of it at the end is number of nulls at the banknotes and pay slips.

It is important to mention that collectors are not just upper 10 000. Indeed, we all are collectors if we do not spend all our salary and we save something. It is nothing world shaking, every man needs to have some reserve, cushion for the bad times. And it is correct, everybody was already at the situation where he has to draw from his savings and he was extremely happy having them. This however is not changing an inch at the fact that small amounts of personal savings are aggregately forming huge sums of money and more the people are saving, more money are missing in circulation at the side of realizing buying power.

These money are needed to be replaced as well, otherwise the economy starts collapsing.