Monday, 25 May 2009

The Tyranny of Economics

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."


Tuesday, 19 May 2009

The Real Expenses Scandal

Ian Hislop, editor of the satirical magazine Private Eye, recently said on the TV show "Have I Got News For You" that the current frenzy of revelations about MPs expense claims is like Christmas for satirists everywhere. I'd say that it's more like Christmas, Easter, and your birthday all rolled into one.

In one sense however, the ground zero issue of the expense claims almost pales into insignificance when we observe how the majority of MPs have acted since these revelations have gone public. The very fact that they tried their damnedest to stop this information from coming out should be enough to make even the most die-hard statist cringe but the constantly regurgitated justification of "I was only following the rules guv" (an excuse which wasn't acceptable at the Nuremberg war crime trials) should have them literally baying for parliamentary blood.

But no, we have the weak chinned, like Stephen Fry, babbling on about how trivial the whole matter is. I once thought that Stephen Fry was an intelligent free thinker but if even he is unable to see the implications of such dishonest dealings in parliament then one must truly despair. These MPs are the people who we trust to oversee (to a large extent) our "free" market economy, a large part of which consists of the property market. Does Mr Fry not find this synergy of power and vested interest disturbing? Does he not perceive the vast difference between a salesman bunging a few extra miles on his travel expenses compared to nigh on 600 MPs stealing the hard earned cash from the tax payers pockets to the tune of an annual £24,000 each? And this from "poor" politicians who "only" earn £64,000 a year. Aw bless. A person on Incapacity Benefit would be lucky to get £64,000 in benefit over two decades.

Incidentally, if you wish to find out just how mundane and anally retentive Mr Fry really is, then I challenge you to follow him on Twitter for more than 3 days without losing the will to live.

And then we have what appears to be the vast majority of subscribers to "Stupid Weekly" who think that the way to resolve this injustice is to call a general election so that we can replace this batch of free-loading corrupt power-trippers with a new lot. Hello? Anybody home? Whilst the massive response to the question "Can Politicians Recover From The Expenses Row?" on the BBC Have Your Say message boards is encouragingly "NO!", less encouraging are the number of people who fail to realise that changing the jailers will NOT change the jail. Surely anybody with two brain cells and five spare minutes must surely realise now that "democracy" is a sham and that our current model of "government" is fundamentally flawed. There is no sticking a plaster on it here or fiddling with this bit there to make it work.

It's fundamentally flawed.

So the real scandal here is that although the great British public now have ample evidence that our style of government is "unfit for purpose" and now have an ideal opportunity to press for (at the very least) total reform, they choose instead to attempt to rearrange the deck chairs on the sinking Titanic that is parliament. When more people start realising this self evident fact, then, and only then, will I dare to feel a modicum of hope that true change for a better world is around the corner.

"The most dangerous man to any government is the man who is able to think things out for himself ... Almost invariably, he will come to the conclusion that the government he lives under is dishonest, insane and intolerable." H. L. Mencken (1880 - 1956)


Sunday, 17 May 2009

Mission Statement

So here I am. I've arrived. I've finally decided that it's time for me to start my own blog. Now, every blogger must have a reason for blogging, be it ridiculously trivial or supremely important. My blog is probably going to fall somewhere in between those two extremes.

So what's my reason.

Well, I suspect that it's not going to be that much different from any other blogger. Namely, I want to voice my opinions. Everyone loves the sound of their own convictions and I'm in no way immune to that delusion. The thing is that I continually find that my world view (be it right or wrong) conflicts sharply with the one constantly presented to me by all branches of populist mass media and the "received wisdom" which it creates among the population. I even find that those outlets which purport to be "rebellious" are not really deviating that much from the "party line". For instance, I find those who lobby for less poisons in the food which we buy, quite frankly ridiculous.

So I'm giving you, dear reader, fair warning. The blogs which I intend to create are going to be a bit ... erm ... off the wall. I hope to be rattling some cages and provoking a lot of "outside the box" thinking. For a big clue about what's coming, take a look at my avatar. If you don't recognise it, it's a piece of street art produced by the artist Banksy. I can think of no better image to sum up my attitude and conviction. A revolutionary anarchist who wants to throw bunches of flowers at you. Where could there possibly be any harm in that!