Just to get this out of my system, I’ll tell you what I think of the current crisis in the monetary system. It starts off with a fictional story, and explains why we need to get rid of the monetary system, and why you should have physical gold in your safe.
Suppose I have a nice big bar of gold, sitting in my very safe personal walk-in vault (hey it’s my fantasy). I can’t do much with a bar of gold so I decide to sell it to you for a thousand dollars. I suppose you don’t have a cool walk-in vault, so I offer to keep it in the vault for you. You leave with a certificate.
The money is safely stored together with the gold. Suppose my neighbour also wants to buy a bar of gold. I show him the one in my vault and sell him that same bar of gold. Nobody will know, the bar is in my safe, and both owners can come to see it without knowing they’re not the sole owner.
Everything looks okay, but what I’ve done (except for the plain fraud) is devaluate your dollars, compared to the gold bar which is still in my vault. By now you should probably have noticed that I’m a bank.
Because nobody can check what I’m doing in my safe, I can keep this up for quite a while. With all the money, I can loan money to people, and charge interest. Now I’m creating more money from money which wasn’t real to begin with. When people loan money for their houses, I effectively own their houses because the money they lent from me is not real.
We can go on and on, reselling fake dollars on stock markets and so on. Now suppose somebody defaults on his morgage. By now I am entangled in my own web of money-shoving, so I have to sell that house to be able to pay my debts to other people.
Eventually, the system collapses and people will partly start seeing what I’ve done. Because everybody now depends on my created system, it can not be undone without hurting people. So the governement steps in and keeps my little system in place, and even gives me a big bonus for doing god knows what.
Looks familiar? I personally think that pumping money in our defective system is not going to help in the long run. The system is not based on real value, it’s based on pumping around money, and devaluating it in the process by adding more virtual, non existent money. All people involved in keeping this system alive for their own benefit should be severely punished for knowingly tweaking the system for their personal gain.
Last week, the ING stock dropped 27 points. Our “smart” Dutch governement pumped a large sum of money into the bank. Now, the stock is 20 points back up. Guess who profited from that? Exactly, stock brokers who thankfully used the governement-provided tip. While it is illegal to have trading tips, this one actually is provided by the governement itself. Nice huh?
Our tax money is going to the wrong people, no matter what we do because we’re at the wrong end of the crooked system.
I have a morgage at the ING for our small but way too expensive apartment, and I still think that our governement should not have done this. We should round up the people who actually think this is a good system, and punish them by at least moving them to the wrong end of the stick, where we are. Get their money and use it to undo at least some of the damage they did to the world.
And yes, it will hurt. We will have to start over. But guess what? If done right, it will be equally hard for everybody. It may look like your house drops in value, but what actually happens is that the true value of your currency goes up. If I’m not mistaken that’s what people usually want for their countries.
And yes, it will have to be done globally. Although it may have started in America, the concept of the monetary system is a worldwide problem. Look at that bank in Iceland.
The new monetary system will probably also be based on gold, because we can’t come up with somehing better than that. So what you want to do is get gold. But not on paper. Actual, physical gold, preferably not as jewelry, because that’s usually impure and harder to sell because it’s value is not always measured in weight.
But what we really need to do the most, is take all (yes, ALL) the money, cars and houses from people who take our money, devaluate our houses, and get a large Christmas bonus for it. Everybody complains about it, but nobody does it.