So the financial world is in chaos, and has been for the best part of 2 years. By official accounts, the chaos is now ending, but I find it hard to understand how that could possibly be, seeing as nothing has been done to address the proximate cause. No-one appears to have gone to prison for the sub-prime fraud. The overvalued houses bought with liar loans are still overvalued, even with recent drops. According to this piece on the BBC news site, rumours fly that there are houses repossessed by state-supported banks but not being liquidated, presumably in order to manipulate house prices. Ridiculous lending is still encouraged by government (even though they plead with banks to also not lend ridiculously, which makes it just all the more ridiculous!).
However, that isn’t even the root of the problem. For that you need to watch the Money as Debt II video series on Youtube. While you’re there watch the original series as well, although I think the new series better explains what’s actually going on (even if I’m not necessarily convinced by its solution).
The digital money idea is especially intriguing. It would need to be coupled with something like Cardspace. We need some way of digitally storing your money that would work internationally and digitally but not require a bank. Part of the reason that the banking system is relatively unopposed is that in order to do any kind of trade you need to go through the banking system. They are the gatekeepers. They are holding all the keys.
In any case, something needs to be done about money, because it will prove to be our destruction. The problem is that nobody really understands what money is, youtube videos notwithstanding. What does it represent? Fiat money (that is anything that has no value in and of itself *) used to represent a holding of a precious metal. It doesn’t anymore. I asked a friend in my ward who works in the city about it and he said it represents all assets now, not just gold or whatever.
So instantly the question is how do you know how much money should be in the economy? As I understand it, the current system was put in place to try and resolve that issue. It doesn’t seem to be working. Which means we need a replacement. Any ideas?
*cash is a good example as without the government saying it’s worth £5/£10/whatever, it’s just a scrap of paper worth less than pennies because it’s been used already!