Monday Moaning: Moneys worth.
Money is a piece of paper that used to be have a value that was measured by gold. Once controlled by true markets instead of banks and money owners. Funny to see thought that I mentioned a market society when a true market society won’t ask the tax payer to help a bank back on its feet. Just because a government said so. But we have become a big consumers driven by an artificial rate of interest. Just lowering the interest has made it easier for people to loan some money but what if the rate goes back up. How would we fare then with all our debt.
So we have let go of a measuring instrument at some time. And started manipulation of interest rates and even the value of money. When we look closer to money the value are a bit not even a byte, and in our hands had the same value as confetti.
Sure it says a Dollar or Euro but due to so much printing it has been reduced to almost zero.
Ever since the 70’s a crisis in the 80’s and last time in 2008 when a bank fell down. I mean bank the institute that should service us with keeping money safe. The interest given was made by the interest they received by loans. But we gave banks more power and see a government to hold a finger in this porridge and stir to their content.
Just wanting to print money to rage a war for example. It reduces money to nothing. African countries have been a great example of that. And even a great country like the USA have invested a lot of money in wars that never will return into the economy. Can we truly justify that kind of spending?
Burning money and letting it go up in smoke reduce to the air we breath.
It is a small example and maybe a low blow but how far has it gone.
In earlier times gold was the standard to which paper got their value from. It was the back bone of the economy. Now we have more bits and bytes rushing through the internet and in clouds than we have gold in vaults. And with that has gold prices go up to even around 1200 Dollar an ounce. Though that is only in word as money pretty much lost its value.
But how could it have lost value. The market has a principal that when the demand is higher than the ???? it takes more pieces of paper to buy. Gold is the same thing. Demand is higher than we can transfer as I mentioned before there is more money going around than the gold can handle.
It suggests that we still have gold as a solid value. But it isn’t solid any more due to us playing with interest rates.
Here in Europe it means that we have a crisis and one guy controlling the banks, printing more money keeping rates low except for Greece. Every one benefits right? Most countries have a debt and low interest rates means that a lot of people would have to pay less taxes to pay of the interest. Yet that is not the case. Because when money doesn’t have any value it means we still need to pay a lot in numbers. Instead of just one piece of paper we have to give a hundred.
For to long now have been changing the ruler or other measuring device to match our needs and directions. Instead of letting the economy measuring itself against a set standard.
Imagine if we change the ruler so it would match perfectly to a single inch instead of a 1.2. It is crazy to think we can do so with money. If a gallon is a gallon we can’t make it in a litre just because we want it to be. But with money we change the rules. We can say one dollar becomes two. If it will keep books balanced.
We play with money and change rates as if it means nothing. Worthless pieces of paper getting a price. And we pay the price when they loose their set value.
It has become unfair that we need to keep economy turning and getting banks back on their feet. What happened to the responsibility for their own loss. Why does that have to fall down on to the consumers and taxpayers.
When we have a company or business we need to also take responsibility of loss instead of relying on new formed laws and rules that have a government safe their asses or better yet the taxpayer. In some ways our economy has taken on distorted forms and has blind sighted us from the real issues and problems.
But this comes from an normal city kid with no education in economics or any other kind for that matter. This is an opinion based on what i see and read. Financial newspapers, news and even the internet. Give it some thought on why we need to safe a bank… Why the government has decided to safe those companies who are on the brink of going bankrupt.
Would it be okay to let it all implode and start all over again. I do not have an answer but it might be not so bad as we think. Also what is a byte worth or what is electronic money worth? If it is nothing than a written bit and byte it is worthless. Yet we believe it to be obsolete.
Yes Progress comes from change, though if the change is made artificially so would the progress be.