More on world situation.

September 21, 2008


More on world situation.

A sequel to D81.

            I would like to say a little more on the current very involved world situation. More specifically – on the global credit crisis.

       In an ideal society, everyone would be glad to give to whoever asked of them. This is clearly not the case!(I mean without material reward.)

       So originally we traded. Barter.  Where if you wanted a cow, you might find someone who would let you have one in exchange, say,  for your six sheep.  This method of trade was very irksome.  Came gold,etc.which could be exchanged for about anything.  Being so desired by many.

      Promissory bank notes came next.  Where the bank would let you have so much gold in exchange for one.

      However, they REMOVED the promise!(After coming off the gold standard. Step two DOWN THE DRAIN.

      It is what you get used to.  And the money method continued.

      Originally, U.S. had gold  to the value of the promissory bank notes they issued.

      Is that so today?

     I understand most U.S. gold has gone to China!

     Paper tokens rapidly become worthless as soon as people REALIZE that there is no gold or anything BACKING them!!

     The only thing that keeps trade alive is HABIT!!

     Shops,etc. do not refuse to accept bank notes.  – YET!!!!

     However, when you just print any amount you like, people, including business people increasingly become aware that the tokens(bank notes) are depreciating in value in direct proportion to the amount of bank notes printed!!

    Because they KNOW that all that you are increasing is the number of tokens in circulation.  If they no longer represent anything(promise gone), then they rapidly become worthless paper!

     Of course, as long as people REGARD banknotes as having some intrinsic value of their own, all is well and good!(I wonder what THAT could be!!)

     However, this state can only continue for so long! 1. The value of the currency concerned depreciates against other currencies. Even if it doesn’t internally(within the nation).  Without world trade countries collapse.

     2.  As people realize that the tokens are becoming increasingly worthless, because more of them, and little if anything to back them.,(U.S. has SOME gold.) they turn more and more to other currencies and commodities.(The tokens are simply representations of the nations wealth, which all inhabitants share in.)

     This is Hyper Inflation.(Zimbabwe is a superb example today.)

     YOU CANNOT INCREASE THE NUMBER OF TOKENS(bank notes) WITHOUT decreasing the individual value of each one!  Per the amount of gold BACKING them!!(It is far more convenient to carry a token on you, that a sheep swung around your shoulders!!)

     There is only a certain psychological value in the bank note tokens THEMSELVES.  As that fades trading and business confidence evaporates!!

     The final result is disaster. And HAS TO be!!

     Gaining a few months or years this way is poor solace.(But for reasons I cannot fathom, the perception is that SOMEHOW, we can go on for ever doing this!!)(Printing more and more money!!)

     Bank notes HAVE NO INTRINSIC VALUE!! Just PAPER.(Mere tokens of DECREASING psychological ACCEPTANCE value.)

     That is decreasingly recognized by all and sundry as of any value!!

     Bank notes are not wealth!!

     Nor is gold,etc. But gold is far more popular with the people than PAPER!!(Its weight and value drive one towards silver. BULLION COINS I am talking about.

     How long do you think it is going to be before most people grasp this?! And what then happens to trade and business??

    Issuing a new currency simply postpones the day of doom. As does increasing the denominational values of the old currency.

   You either ensure that you have items of REAL value, or gold(tokens that people see more value in than PAPER!!!!

   In a good society, it might be possible to accept BANKNOTE TOKENS as PASSPORTS to trade and business.  But how good is society??

   As it would be increasingly pointed out that the tokens themselves have no value!!

     Money is only of token value.

    We would slide back to barter. Unless gold was re-introduced as standard.(There simply is no better token value alternative. Unless it be silver.)

    If you destroy people’s confidence in paper tokens, they will increasingly turn to gold and silver!!(What else except material goods – which leads back to barter.)

   You CANNOT consume WITHOUT eventually exhausting the supply. THAT is the dilemma facing our leaders.

    The only interim hope is to STOP printing more bank notes, and LET things take a NATURAL course. THEN, if caught in time, things would return to normal! But NO WAY can you AVOID the PAIN of that transition!!!!

     Surely our leaders are not that mad?!

     OR is it that somehow they know that the end of this cycle of existence IS NEAR!!!!(In which case – it will be an increasing race between wealth vanishment and DOOMSDAY!!!!)


      Vic Conway

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