Some years back I pondered for a while and concluded that the monetary
system did not make sense. It seemed to me like a bubble waiting to burst.
This video is a 'must see' for anyone who who has not yet contemplated
where money actually comes from. It also highlights how remarkably
fragile the whole system is...
[DLMURL] http://video.google.com/videoplay?docid=-9050474362583451279 [/DLMURL]
Highly recommended!
Thanks. Will have a look tonight!
I look forward to seeing this, trin. As I PM'd you, I wrote a comprehensive post in reply which was lost. Let's try again:
I actually haven't seen it - I'm a few days away from getting BBand re-established. But I'm guessing ... that this is about how paper money (leading also to plastic) began? And that the only reliable 'money' is something with intrinsic value.
Paper money began, along with coins as portions of them, as simply IOUs from the first banks against deposits of gold, etc. The IOUs could be exchanged as value, since the holder could then go to the bank and claim the real goods with intrinsic value. Obviously PAPER has NO intrinsic value. Without confidence that the system will continue, paper money is fit only to light a fire - it's nothing but paper.
So the whole system relies on trust. That trust nearly broke down with Northern Rock. That was the first bank run in over a century of UK history, and the government is running very scared ... because the ultimate event is that there could be a bank run on all banks i.e. a distrust in all banks, in all savings accounts, and even in the paper money system.
The point is that ideally, and the stated point in the beginning, is that paper is just an IOU for goods you own with real intrinsic value kept in a bank. But the early banks were utterly corrupt, run by thieves - and nothing has changed - so that they got the idea (and banks always do), "We have isued paper notes to the tune of what we actually have, but nobody asks for it all at once, so why not just issue, say, three times the amount of notes that we can actually back?" (This is called huge inflation, by the way.)
Total national bank runs begin when people all realise together that banks don't actually hold their own 'real' money. That it's a con, so they all queue to get it back at once. The result is national economic collapse. [COLOR="Blue"]The thing is, no banking system issuing notes such as we do has ever survived forever: there has ALWAYS been a bank run and a total collapse of the currency in the end. Most people end up broke. And it's little known that this has ALWAYS happened - going back to coinage systems in ancient Rome, many other ancient civilisations, and through every century.
The reason our government stepped in to support Northern Rock (and to reassure people over the media that "all is fine") is that if they hadn't done so, the rot would have spread, and all banks and paper money would have gone into hyper-inflation and ultimate meltdown. It was close.
Economically, it is utterly logical that collapse must come to any system not able to back its notes or coins with total backing of real goods, such as gold. And we are in that situation now. Logic in economics says that a collapse must come. The point is that all bank holdings will become useless and void almost overnight: anyone with "money" in the bank of any kind, in any way, will lose it. It would be better to own bottled water, food tins, and gold coins.
I 'love' the big joke, which is also illegal IMHO, that paper money began with IOUs, having a note on them saying, "I promise to pay the bearer on demand the sum of 1 oz. of gold" (or such). Now we have been conned by bankers, and the governments that told them to do it, to live with notes that say, "I promise to pay the bearer on demand the sum of £20." In other words, you suddenly find your paper is useless as no one will accept it: you take it to a bank and they willingly accept it ...... and give you back another piece of paper! That won't work if or when paper breaks down, which Northern Rock hinted might happen.
Do we all see the farce and illegal con in this? It crept in over the years. And now we are told that if we don't have faith in a piece of paper called £20 it's OK - because we can exchange it (whew!) - but for another identical piece of paper. Our real valued savings "in banks" therefore no longer exist: it's been sold away so that people can make profit from us. They cannot ever pay us all back at once.
It is illegal to counterfeit (print) money. But governments have given themselves the exclusive right to print as much as they like. This is the one and only real cause of inflation. It is actually a legalised monopoly to counterfeit. And it always leads, even if it takes decades, to an economic meltdown. There is no case in history that such a system has ever survived. It's only been a matter of time. And printing more money just buys more time.
Things were safe till the 1930s since we were on a gold standard. Gold was chosen, and gold is a wonderful thing: people always know it has real value. Its value is actually of an esoteric nature. But anyway, the government could only print as much money as they had gold reserves to back. They couldn't inflate, since they had no control over how much gold existed in the world. But this meant they couldn't print 'silly money' for themselves, inflation was not possible, and they had to work within the limits of their real budget. The cursed economist, Keynes, argued that inflation and doing away with the gold standard would be good for "us".
Gold was therefore mocked by bankers since they and the government wanted to print silly money - money from nowhere (otherwise called inflation). This simultaneously gives them wealth from nowhere as if by magic - they just print it at will! - and has the effect of robbing our own money of percentages of value.
To sum up, unbacked money is a legalised criminal syndicate, and we are presently living with it - for as long as it can last.
One way to keep track of how much trouble paper money is in is to follow the price of gold. It's presently at something like a 28-year high, and this means the wise are getting out of paper investments and buying up gold. It may even go through the $1,000-an-ounce roof pretty soon, which is unprecedented. If it does, time to get more active with advice on this thread, since the banks may all be near to going down. And no government can guarantee all banks - government guarantees are again a con trick, as they actually can't cover more than maybe one institution such as Northern Rock, and that to just a very limited degree.
Is that what the video is about? And did you see it, Darren?
V
I haven't yet. I have bookmarked it for a quiet evening but I have been so busy recently with clients and charity work.
Just to add, Darren, that I've added a lot to my post above yours, to make it a kind of mini-essay instead of just random thoughts.
V
After posting on this subject yesterday, I then found out just how much money the government sank into Northern Rock to keep it running (the real motive being to stop a national panic and a run on all banks). They put £22 billion into it. That shows how aware they are of the threat, and how real the threat is. One calculation has it that £22 billion adds up to the equivalent of an increase in income tax upon all working people of ten pence in the pound. But of course it'll be spread out and is initially just another national debt with interest.
The subject of paper money, of its unreality if unbacked by real assets, and that every such system throughout human history has always collapsed, leaving a nation without a currency at first, was a pet subject of mine in the late 1970s. That was the last time many people wise enough, mostly Americans, saw that it was near to happening, and I collected a number of books on the subject. The subject goes quite deep. For instance, the human angle is that it's a conscious conspiracy by the politicians and bankers who originaly take monetary systems off the gold standard.
Well, the years passed. All seemed to totter along. And it got submerged into my unconscious. Northern Rock suddenly alerted myself and friends to the fact that it's 'back' as a threat. And a run on all banks would be a catastrophe for us all. (If there's no monetary system, how do you buy or sell anything, from food to petrol? How do you get paid? Your bank savings are instantly gone. Etc., etc.)
V
Food for thought. Worrying yet the people with the power (and therefore money) would not let it happen, I'd have thought.
That's why the history of unbacked money and inflation is so important: there's not a single example in which it's lasted forever, without collapse. There were many examples in the 20th century. Historically, people in power can't prevent it as it's a natural law that collapse must come in the end. £20 billion just to support Northern Rock, so that the customers of other banks didn't also panic ... seems to show that a run on all banks, not just one, couldn't be stopped.
However, yes, one just hopes that in this day and age something might be figured out. But whatever it would be, it would be Draconian e.g. making it illegal to transfer money into other currencies, into shares, or anything indefinitely, whilst allowing galloping inflation to pay off government debt.
V
I still find it bizarre that they lent money to people whom they thought it might be hard to get repayments from. If a friend asks to borrow money and I know they might not pay it back, I just give it to them and say they can keep it. That's not business, it's being charitable! That these experts package up debt and sell it to other experts really makes me chuckle.
Hi Darren,
'They' were not lending their own money, and get high salaries for making more and more seeming deals. Besides, the way they worked it, they didn't end up with any bad debt, for as you will have heard, their bizarre system is that they can sell-on the debt (without disclosing that repayment is fragile) all around the world, including to UK banks.
I note that in the last 24 hours the head of the world's largest bank resigned ...
Finally saw the video. It's certainly an eye-opener. Crazy, really. Pretty much what you're talking about.
You certainly are a mind full of information V :).
Your sharings here are certainly supportive of the video. It does seem that the bigger the 'fraud', the easier it is it go unnoticed. In this case it seems to be laced into the fabric of our global society. When the question dawned on me I was stunned to find that nobody that I asked seemed to have any answers. I was so thankful to find something that help fit the jumbled puzzle together. It is bizzare that we allow such a sytem to happen in the first place!
The video link above is in cartoon format and makes a rather complex (and often 'dry') subject accessible to all.
For anyone wishing to look at the subject in more detail, there is a three and a half hour documentary here: [DLMURL] http://video.google.com/videoplay?docid=-515319560256183936&q [/DLMURL]
It is American based yet relevant to the rest of the world and makes mention in great detail of England.
This is a subject that concerns everyone of us, whether we like it or not.
I wonder where I've put it - I have a book somewhere on this which is brilliant as it's short and pithy and full of great quotes. Title: "The Occult Technology of Power". I thought 'Occult' would mean - you know, some occultism stuff - but it's in the title as the real "technology" i.e. system of money, is hidden and kept secret from people, as trin originally hinted.
Trin, I get re-established on Broadband in 1-2 weeks, so have to wait to see it 'til then.
V
When the question dawned on me I was stunned to find that nobody that I asked seemed to have any answers.
How did the question first dawn on you? It's rare for that to happen to anyone. (With me, I just learned about this from others.)
I've got 90,000 pounds in my pajamas, I've got 40,000 French francs in my fridge, I've got lot's of lovely Lira, now the Deutsch Marks getting dearer and my Dollar bills would buy the Brooklyn Brigade.
There is nothing quite wonderful as money, there is nothing quite as beautiful as cash, some people say it's folly, but I'd rather have the lolly, with money you can make a splash.
Er sorry about that, Monty python circa 1975, well it's not that off topic!!