Why Do We Use Credit Instead of Money as Dollars?

The barter society.

SOCIETY, in its most basic state, conducts trade by means of barter. As it develops, it still conducts trade on this basic principle. One person exchanges his commodity for another.

Whether it is gold and silver coin, private loans, or dollar bills, they all are merely instruments used to facilitate trade, or barter. The goal is to exchange one quantity of goods for another. These instruments allow exchanges to occur without requiring both sides to supply precisely the commodity the other party wants. This "coincidence of wants" is avoided when using instruments.

As a society develops, barter becomes inconvenient. Thus, the first instruments of trade, the precious metals (gold and silver) are used as a measure of value. They are portable, steady in price, and capable of subdivisions. The government can fix a stamp on them to certify their quantity and purity.

Using Money in Trade.

The precious metals, when uncoined (as bullion) are themselves commodities. However, when minted as money, they are used merely as a measure of value of other commodities. They may be converted back into commodities, at any time. This is one recommendation for their use in trade.

Since money (gold and silver) has so many advantages, why use credit (dollars, notes, bills) in trade rather than money?

More advanced trade.

While money (gold and silver) is portable, to carry it in quantities carries risk and inconvenience.

Suppose ten manufacturers in Detroit sell their products to ten stores in Cleveland. Further, suppose ten manufacturers in Cleveland sell their products to ten stores in Detroit. It would be unlilkely that the ten stores in Detroit would need to send money to Cleveland, once all transactions for a year are finished. Instead of trading money and incurring the expense of transport, security, and handling, it is better to just keep track of the transactions in a record, and settle at some point in the future.

The process of keeping track of the transactions during a year, would involve sending letters from place to place. They would acknowledge the receipt of goods and who is owed. So, the Detroit stores would have a record of their obligations to the Cleveland manufacturers. The manufacturers would receive letters from the stores saying the goods have been received and that they owe an amount.

These letters are called bills.

Now, suppose the Detroit stores have customers who owe them money in Cleveland. Rather than send money to Cleveland to pay the manufacturers, they would use their letters to instruct their customers to pay the manufacturers instead.

The manufacturers use these letters or bills and exchange them for money, from the customers. Thus, the letters become a "bill of exchange."

Bill of exchange.

A "bill of exchange" allows the debt of one person to be exchanged for the debt of another; and the debt, due in one place, for the debt in another.

Credit and debt are simply opposing sides of a lending exchange. With the advantages of credit in cost, convenience, and security, it is used in the form of dollars in our transactions today, rather than money.

Panic of 1907

Although the headline referred to events in New York, Boston Post readers knew exactly what it meant. Effects of the financial crisis were certain to reach beyond Wall Street.

Financial panics and bank runs were all too common during the 19th and early 20th centuries. Some were more severe than others, but most followed the same general pattern. The misfortunes of a prominent speculator would undermine public confidence in the financial system.

Panic-stricken investors would then scramble to cut their losses. And because it wasn't uncommon for speculators to double as bank officials, worried depositors would rush to withdraw their money from any bank associated with a troubled speculator. If a beleaguered bank couldn't meet its depositors' demands for cash, panic would quickly spread to other banks. (Remember! There was no federal deposit insurance until 1933. If a bank failed, depositors had little hope of ever seeing their money again.)

With far less government regulation of the financial system than there is today and with no government welfare "safety net," many Americans suffered sudden and dramatic reversals of fortune when a panic struck. Even in a relatively mild panic, fortunes evaporated and lives ended in ruin.

estimating value of type-in traffic

In my experience, industry keyword phrases are married to keyword search and therefore are married - to some degree - with direct navigation. It's common sense at work: If a popular generic phrase within an industry is "blue velvet widgets" there will be a direct navigation activity as well as that specific phrase appearing in the SERPs.

Start keyword search via industry channels.

Exceptions need to be made for highly spammed subjects.

Whilst I'd love to know traffic levels before registering a domain I tend not to sweat that issue and instead I focus on the converted-lead value to an enduser of direct navigation traffic and on the prospect of market growth for a traffic-targeting domain.

In layman's terms, if FuzzyBlueWidgets.com only gets 3 type-ins a year BUT if the sale of a FBW results in a $10,000.00 commission AND IF one of those visitors were to consume/purchase/lease/hire/whatever a FBW what is the value of that domain and it's traffic?

You might get 10,000 visits to a popular joke or stupidity domain and that domain might make $1,000/year versus 3 visits and $10,000/year. Which is the better traffic domain?

Keep in mind that domain parking may not make you $10,000/year but that may not be your end game. At some point, some savvy new entrant to the wonders of WWW traffic, may awaken to the idea that the domain you hold may produce very targeted and profitable traffic. To THAT enduser what is a domain that yields $10,000/year likely worth?

You may have to wait awhile. You may have to employ interim measures to increase your yield - such as offering a lead-gen partnership. You may wish to increase traffic by building a microsite and then, in time, flipping the site to an enduser-consumer of that traffic.

Traffic volume is only one factor to consider.

How do you succeed with Google's Adsense program

Let me give you an example.

Suppose an advertiser has a maximum bid of $5.00. It is for websites which convert clicks into leads or sales well (i.e. a relevant and targeted site). The advertiser is paying far more for a click from this site than say, a less relevant website. One which displays the advert because of a slight mention in the content. It doesn't convert well to leads or sales for the advertiser. Therfore, the site owner of this website is fortunate to get .10-.20 cents for the click. On the other hand, the relevant and targeted website owner may get as much as $1-$2.

The moral is to create individual pages which are highly relevant and targeted. This way, the most relevant adverts are shown. This provides the best conversions for the advertisers, thereby maximizing what your clicks are worth.

I say a lot more is in the publishers control over CPC's than some people think.

Suppose 'depression treatments' is covered in your website. Be sure the content talks about the BENEFITS of GETTING treatment. Mention how it's good to find websites with mailing lists and such to join. There's a high chance visitors click one of the ads to a website covering depression treatment. Plus, there's even more chance they sign-up to anything once they get there. Thus a lead is created, and your CPC's rise.

I'm starting to believe the premise a HIGH CTR is more likely a *bad* thing, in most cases. It is because users are just clicking before you've told them what to do. Or, they click thinking it's part of your content. The BEST way to MAXIMIZE earnings is to drive ONLY users who are on a mission planted in their head by YOU, to the Google Ads. If an advertiser is bids $5.00 per click, you want to have as much of that as possible by converting for them. You do not want to send them irrelevant clicks which only drive your CPC down.

increase in single-parent homes

Look at what has changed in the last 50 years. Marriage is not as an attractive an option as it used to be for our grandparents. Back in the day folks didn't have careers....they had a "job". Not as many people were going to college so folks got married earlier. Economically it was the only way for most people to survive. The man worked, while the woman took care of the home and raised the children. Nowdays.. more people can live "ok" lives without marriage.

Thanks to more people getting educated, more women working, and the availability of credit. Social programs REWARD women for having children and not getting married. Back in the day people did not just get married out of pure "lust", they got married because it made the most practical sense for surviving.

Nowadays folks gets married simply because of a "tingly feeling" they have for a person... without dedication to the more practical aspects of combining 2 sets of resources to improve the lot of future generations. The pro-feminist movement hurt women from being considered "marriage material" in the eyes of men. Women take on NON-attractive masculine traits to establish careers.

Just as most women don't want to marry a femmine acting man. Most men don't want to wife up a masculine acting women. Marriage is no longer imperative for most peoples day-to-day survival as it once was.......... I feel the marriage rate will continue to decline.

oil dependency

Moving away from a petroleum economy will take years, not a few weeks. To use non-petroleum energy sources, you need 1) production, 2) a delivery infrastructure and 3) consumption (i.e. hydrogen home water-heaters, ethanol cars).

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Since each of those three factors depends on the other two to be profitable, this change will come as a slow spiral of support. It will start small and slowly build.

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Currently, we are totally dependent on petroleum. The oil companies continue to make money on short-term volatility. A change to a non-petroleum economy will only begin when the general public percieves it is *certain* petroluem will only get more expensive in the future. This might make them buy a flex fuel vehicle next year. This is provided they see enough E85 pumps at the gas station while on their way home, from work.

www and no-www domain names

Suppose you have a properly configured website. It has non-canonical (e.g. example.com) hostnames redirected to the canonical (e.g. www.example.com) web host. The internal hyperlinks are utterly consistent. In this case, no back-end canonical processing from the search engines is required. The spider only needs to "discover" URLs in the the website, once. It does not need to follow every possible linking path through the website.

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Take a misconfigured website. Multiple hostnames directly resolve to content, without canonical redirects. Internal linking is inconsistent. Here, the spider has to traverse all linking paths. It has to maintain a count of various hostnames and page names used in linking, while comparing page contents along the way. Next, it has to use some sort of algorithm voting to determine "probable" canonical hostname. Once you add inconsistent backlinks from other websites, and it is a bad dream becoming a nightmare.

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Processing requirements from the two cases differ by several orders of magnitude. It is likely in the second case, multiple crawl cycles (possibly taking weeks or months) are required to determine a probable canonical hostname, even for a small website. For a website with 100,000 frequently changing product web pages and the process may never finish.