The whole topic of money, currency and finance. is arcane. Really arcane. In fact, it's almost as arcane as law ... or politics. With that in mind I must make the following disclaimer. I am NOT an expert in finance or economy. The views here presented should be considered as a broad overview but as far as I can establish, they are broadly true and accurate.
So then, money eh? Our current capitalist system demands that we all need it to live. In fact we are now so dependant upon money that we hardly ever question it's existence or indeed it's necessity. However, the whole debate about divergent economies, bartering and the many other forms of exchange is the stuff of a whole other (and larger) debate. For now, we're stuck with what we've got and we have to deal with it on a day to day basis ... and it's more fundamental to our everyday lives than most of us can ever truly understand or even appreciate. Most people have a broad idea that money is a major factor in our western systems of governance (through taxation if by nothing else) but how many of us truly understand just how fundamental and profound the link between the two really is? How many of us realise that the financial institutions have got our governments by the short and curlies.
How can I defend that statement? Well, first let's look at the nature of our currency. At one time, all money was backed up by a physical wealth or resource such as gold or silver. Money was printed and issued based on the amount of this wealth. The more resource you had, the more money you could produce. Remember, money is basically an IOU or more accurately, a "promissory note". If you live in the UK just take a look at any bank note and you will find these words from the Bank of England; "I promise to pay the bearer on demand the sum of X Pounds." At one time, you could take this note to the Bank of England and demand to have the amount of gold (or silver or whatever) that this promissory note represented. As Danny Shine proves in his blog entry "The Bank of England are Taking the Mickey" if you take a £5 pound note to them now, all they will give you in exchange is another £5 note (or maybe five £1 coins). This is because we are now operating under what is known as "fiat" currency.
What the hell is "fiat" currency? Well, "fiat" is Latin for "let it be so", or, if you want that in plain English, "abracadabra". You see, a fiat currency does not have any physical wealth or resource to back it up because it was created (by central banks such as the Bank of England) out of thin air. It's backed up by NOTHING. Abracadabra and *poof* ... money. Now that in and of itself is odd enough but when you realise that this money is given by the central banks to governments with the demand for interest to be repaid on the initial sum, then it starts to get very sinister indeed.
Let's make this simple to understand and take it back to the time when "fiat" money was first introduced. There is no money yet so "abracadabra" and the central bank conjures up, lets say, £10 billion out of thin air. Poof. It gives this money to the government on the understanding that the government has to repay this initial sum at, say 5% interest. So, the government now owes the central bank £10 billion plus £500 million in interest. Can you see where I'm going with this? There is no money at this point remember, so where the hell is that £500 million going to come from. The answer is that it can't come from anywhere and therefore it obviously can't be repaid. Ever. Hence, governments are constantly and perpetually in debt to central banks. Now, the more money the banks create, the greater this burden of interest and debt becomes. It can have no end and can only result in continual and ever worsening financial debt. This debt gets transferred to the governed. That's you and me folks. It gets worse.
As I stated above, money is now so fundamental to all our lives that banks and financial institutions hold enormous sway and power over society and politics. So much so that if they wanted to increase this power and get even more control over money (and hence more power over people and governments) all they would have to do is make some really, really, astoundingly bad investments (such as, oh, say giving mortgages to people who have absolutely no chance in repaying them) and then just sit back and wait for the whole financial world to go tits up. The banks know that they are safe in doing this because their primary debtors (governments) have absolutely NO choice but to bail them out because if they don't then the whole economy will inevitably spiral up it's own arsehole and implode. Check mate.
Does this sound familiar? Can you think of any recent news that bears out my statements above? Make no mistake about it, banks have governments (and hence you and me) by the bollocks. And the bastards are going to bleed us dry if this is allowed to continue.
Here's a perverse quote from Alan Greenspan, the US Federal Reserve (central bank) Chairman from 1987 to 2006.
"Deficit [debt] spending is simply a scheme for the confiscation of wealth."
a few wispy bits... - A few years back, I was at a BBQ with another gay man, of similar sensibility, were introduced, by an Australian lesbian to the expression ‘pant beard’ whi...
7 years ago