The Most Convulsive Question In Human History
May 24, 2010
– Comments (7)
Who gets to borrow money and how much?
First you must ask what is money. Origninally money was meant to represent the product of productivity. You would produce something and get money in exchange for what you produced. It could have been anything, a product or service.
But sometime after 9/11, money became essentially the product of a loan. We were loaning homeless people $300K to buy the productivity of building a home. We lent private equity funds trillons to buy commercial real estate...regardless of income/productivity being generated.
In the end, the concept of money became morally corrupted...but few of us noticed the change as most of us benefitted from that corruption. Just like Madoff's clients benefitted from his corruption. And the biggest beneficiary was government, which saw a flood of money come in from such corruption.
But around 2006/07 we started to cut off the private sector from borrowing and lending slowed which precipitated the real estate crash. Banks crashed and so did the economy as the lending and spending came to an end........but the most dramatic effect was the decline in tax receipts to a government that needed over $6 trillion dollars per year to maintain its footprint....and that need is growing rapidly as the private sector continues to contract.
The problem was the citizens no longer were productive enough to support their government.....a government which provided them with massive benefits. So what did the bankers do....they started loaning trillions of dollars to governments....and not just the American governments, but governments around the world.
As a result, government spending no longer became a product of the productivity of its people, but rather the function the amount of credit extended. The more a government was able to borrow, the more its people prospered....and no nation prospered as much as America because no nation borrowed anywhere close to America.
But now we are seeing tensions rise around the world.....there is anger developing over the issue of who gets to borrow and how much? Since prosperity is no longer a function of productivity(evidenced by the bankers getting billions in bonuses even though they were insolvent), there really is no reason to limit any nations borrowing capacity under the current system.
If the bankers could lend hundreds of thousands to a homeless person to buy a house so they could generate a commission and make even more syndicating the loan...why not lend to all nations so all people could live to higher standard?
Since we have corrupted the nature of money and now lending regardless of productivity.....what is to limit any nations borrowing capacity? The answer is essentially nothing.
Here is where the tension rise......
Should American civil service workers be able to retire at 40 just because our government can borrow?
What about the Greeks at 53?
Or the Germans at 60?
Now you are going to start to see anger developing over which nations get to borrow and how much....since most economies have morphed into simply welfare states of one sort or another(government spending driving the economy)....those countries that can borrow will prosper....those that can will get really really mad.
Maybe its time to change the nature of money?
Any thinking person can see where this is going.......Welcome to the Digital Age.
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