MONEY = INFORMATION

"Many consumers were caught entirely off guard when money disappeared."
     Though the date of this is still sometime in the future,  it is not far in the future.  The notion that money is an object or thing to be exchanged was long ago replaced, even in beginning economics classes, by the concept of "ability to acquire goods or services".  And this "ability" has a time dimension:  it is the ability to acquire goods or services in the next moment,  but more likely, days,  months,  or even years in the future.  What's the point of saving up for the future,  if the "ability to consume" is lost?
      How can "money" be a "concept"?  If an exchange for something,  shouldn't it be something itself?   And it is something:  information.   Even the simplest ancient coins carried a certain information about who had issued them,  and the value the objects were assigned.  But coins and paper bills have little to do with the contemporary experience of money.   Our money is represented in electronic form in data storage sites associated with financial institutions.  My net worth is what my accounts say it is in computer data,  ie, information.   When I use this "information" to acquire goods and services,  my information changes, as does the information record of the other party in the transaction.   I would have little concern if a robber went to a branch of my bank today and forcibly withdrew a large sum of currency.   It is doubtful that even a tiny bit of it would be related to my accounts.   But woe is me if the bank's storage systems are destroyed,  or worse,  hacked and the information changed.  It is crucial for me to keep a back up record ongoing of whatever the bank says my "information" is worth.  For that is the only way I can prove my "information value" if their computers fail!   Even a temporary failure to access the account can be very scary!   Though some of us still use currency and bills to carry out some minor transactions,   no major financial transactions are currently done in the US  except by information transfer,  whether that be via credit card,  written check,  direct bank wire  transfer,  etc. 
     But this is only part of the story of money as information.  The value of my "information" in the form of my country's valuation of "dollar-information" ( or "ruble-information")  has a relative value to the other information/currency of every other nation.   And currency traders attempt to take advantage of small shifts in the relative value in this market to expand the value of their "currency information" at the expense of other traders.   What causes the momentary changes in these values?  A complex system of exchange payments for trade across countries,  plus investors from outside the borders of the country,  etc,  etc.   These are all "information events".   And this information is calculated by the traders attempting to seek an advantage.
  If someone creates a new form of information-value("money") which claims to pay those who acquire it more in the future than it costs to acquire, it is worth "investing" in this growing information/value.  But how to know that the "investment" will grow in value over time?   The answer is, as many were sad to discover in the last year,  there is no way to know!  This is RISK:  the impossibility of predicting whether the value of a certain investment of "information" will grow over time.  So why not take out "insurance",  ie pay someone a small fee to insure that if my information/investment doesn't grow then they will make up the difference.  This is called options trading, and the other party must calculate the amount needed to cover this risk,  more information is needed, about unknown future events!   (Obviously AIG did not have a clue when they insured bunches of CDOs.) Financial markets have created a variety of ways of trying to "insure" this risk,  including options,  and CDO,  but the collapse of 2008 showed clearly that these are illusions.  They work for small risks but not for risk across the entire market.  Once one realizes that money is just a complex aggregation of information, then all efforts at maintaining or increasing its value do not involve storage in a safe vault!   The safety of banks, etc, is  a combination of data security management both personal and institutional and the ability to calculate and estimate the complex factors that go into the changing valuation of information/money.  The big buildings and vaults of the last century are irrelevant. 

   The only way to manage and expand the value is to manage the information associated with it better than anyone else. In a classical market model with perfect information for all traders this would not be possible.  So financial professionals try to give themselves a differential advantage in information,  which amounts to misrepresentation of the information they are selling to others, as when Goldman Sachs was shorting (betting against) the very investments they were encouraging others to buy!   Of course the financial industry will fight tooth and nail against any effort to regulate and control this manipulation of information.   Without it, there is no basis for significant relative gain of one player versus another.  But without this regulation,  it is impossible for the small investor,  or even the large pension fund investors,  to manage their risk.  The average investor is  limited in the ability to make these estimations and calculations by lack of information,  and so apparently are many professional investors.   The current financial mess was not caused by CDOs,  or Swaps or any other SPECIFIC investment/information device.   

It is the result of the identity  MONEY=INFORMATION.