Economics, Money, Politics, Property

Government is Right to Fear Bitcoin; it will Remove State Monopoly Power

Government has more than its fair share of power and money. Rather than viewing the government as distinct from big business, I view them as similar beasts, it’s just that government is funded by taxpayers, while big business is funded by government and private enterprise. Continue reading

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Economics, Money

In Greece, Democracy is Dead. The EU will Soon Follow Suit

I was among those cheering loudly as the Greeks stood up to the classroom bullies of the IMF, ECB and EC at their referendum, delighted that they chose, against the terrorist tactics of the Troika, to vote “Okhi” (No) to more austerity. Finally, a triumph of democracy over crony fiat capitalism. Or so we thought. Unfortunately, the man with the mettle, Yanis Varoufakis left the stage too early, and PM Tsipras failed to hold his ground amongst the high power stakes of Merkel, Lagarde and Tusk. Continue reading

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Economics, Money, Politics

GDP: A Great Distraction for Politicians

For many years, governments have focused upon GDP, but with our current global demographics collapse , GDP growth is no longer a relevant means to measure economic health, and it’s time politicians chose a more appropriate yardstick to beat themselves over the head with. Or perhaps it’s time for politicians to acknowledge their powerlessness to affect anything more than what they have for breakfast.

Really, Who Cares?

First of all, who cares about GDP? Apart from politicians and statisticians who want to demonstrate the success or failure of a particular pet policy of the day, does anyone else really care about GDP? Of course you care if the economy is doing well, but can you even tell when it is supposed to be? The fact is, some people thrive in recessions and others lose it all in the bullishest of bull markets; it seems there’s no accounting for individual freedom to make self-informed choices in life. So for a nominal GDP statistic, you could still be living in an area where everyone is doing great business. When you pick up the papers and read about the lives of those wretched others, how much of that do you think has anything to do with you? Not very much, so mind your own business.

There was a long period of time Before GDP (let’s call it BG). People lived their lives, grew up, married, bought houses, had families and grew old blissfully unaware of the means politicians use to justify their existences. With significant global change making its presence felt, isn’t it time the OECD had a cold hard look at Gross Domestic Product, and replaced it with something altogether more befitting of a 21st century world?

I put to you that using GDP as an economic target is not only fallacious, but in our current times it is outdated; out of sync with our new normal fundamentals; an ageing population where one in four is over the age of 55, an increasing environmental awareness, and the realisation (by the younger generation at least) that money on its own doesn’t make you happy, and an impending monetary disaster based upon a mountain of debt (aka our debt based money system). People want to enjoy their lives, to live in more harmony with each other and the planet. In such a frame, why the incessant need for growth growth growth, at the expense of everything else?

Masters of the Universe, or Misguided Fools?

GDP is a hangover from industrial revolution thinking, and our debt based money system which is designed to increase competition and productivity (except with money currently worth nothing, it only encourages highly leveraged speculative activity).

Annual GDP growth as a benchmark of economic activity was given weight by the baby boomer generations. The real boom effect is observed when vastly more children are born and enter their years of maximum consumption. This economic boom coincided with central banks’ tinkering with the economy, giving them the (false) impression that they somehow initiated the success, and could pull strings to repeat the effect.

This reasoning is a bit like a stock broker working in the 80’s thinking that he was a top trader because he was making vast amounts of money, or someone buying and selling property between 1995 and 2015 thinking that they had made great investment decisions. In both instances individuals were just carried along by the crest of the greatest ever bull market in credit, and their success was down to the underlying market conditions, and nothing to do with any action anyone took. A trained monkey could have made a fortune as a stockbroker in the great bull years, and in fact, many did. Central banks have this idea that their tinkering has a beneficial impact, but it doesn’t. The economy is what it is. But when central bankers think their actions have an effect, so they look to see what those effects are by studying spurious statistics; things like GDP.

A Tipping Point

What we have seen since the tipping point of the median baby boomers entering the age of 55 in 2013, is a natural drop in consumption spending, as these boomers save for their retirements. Government controlled central bank ‘stimulus programmes’, in an attempt to keep the golden years of baby boomer consumption going, have injected trillions of new debt into the economy. But you can’t create demand by printing money any more than you can encourage someone who’s eaten their fill to eat more from an enormous buffet, no matter how delicious and exotic the food on offer.

This is what central banks and their misguided leaders are currently finding out, at great cost to their respective economies; you can’t fake demand. You can print more money and give it to banks to play with, and they will just blow up speculative bubbles in property stocks, and derivatives. But the real economy, where the people who can’t counterfeit money live and work, only receives the ‘benefit’ of inflation of the assets the money flowed into, which amounts to an increased cost of living. None of which helps them spend more money, or pay more taxes.

Are They Mad?

Central Bankers really should all be taken away and assessed for soundness of mind. They patently all believe that they have the power to control, manipulate and steady fluctuating markets. But they can’t, and any attempt to tinker just makes things worse. The economy would have fared far better if it was just left alone by the likes of Greenspan, Bernanke, Yellen, Carney. One of their most destructive policies is zero interest rates or ZIRP.

ZIRP

There is a current policy popular with central bankers called ZIRP or Zero Interest Rare Policy. ZIRP may look to be a helpful load off all debtors shoulders, and it does indeed do that, but those with the biggest debts are the financial institutions and the government.

ZIRP favours those with access to credit over those without, making the rich richer, and the poor poorer. Termed by some as an Interest Rate Apartheid; rich people get access to credit at very low interest rates, the very rich (and bankers who conjure the debt into existence) get to play with money at near zero percent interest. Everyone else gets charged more, and thrifty savers are punished for their prudence. Sound fair?

The Bank of England and the Fed have a money printing machine, but it is still debt money, and so needs to be repaid (as Greece is finding out). So the cheap money has to go to work. What do banks do with it? Whatever brings them the best return, which usually means some form of speculation. Derivatives and asset bubbles are two of their favourite ’investments’.

ZIRP also creates zombie institutions and zombie households. Like a modern day Greece, saddled with a debt they cannot repay, the solution is to default on the debt and start again! Wipe the slate clean. Instead the printing presses run, and anyone with savings has the value of their savings deposits shrinking along with the debts of the individuals who overborrowed. Does it sound fair? This point raises a question about the nature of debt money, and how it works most effectively (saving and hoarding should be discouraged to keep money velocity as high as possible)

We need governments in the Western world to acknowledge that with the baby boomers retiring, we must let their legacy statistic “GDP” do likewise, and find a more fitting means of assessing how well we are doing. There will only be a fall off in national income as the boomers retire. A better way to guide economic policy might be to do things which will actually encourage a better quality of life for all.

If you’ll indulge me, I have a few suggestions.

1. The Will of the People

What we’re talking about here is true democracy, not the crony capitalism and crony political system we have at present. Not a political party getting a tiny fraction of the vote and then doing what they see fit, often against the wishes of the voting public. Politicians need to wind their necks in, and start serving us the people, behaving as the public servants that they are supposed to be. A cryptographic voting system based on Blockchain technology would allow individuals to vote for the specific issues they wanted to see enacted, and public servants (our emasculated friends the politicians) would carry out the majority vote within their constituencies. There would be no more focussing on GDP figures to justify the government’s economic decisions. The people would be making the decisions and the politicians would merely be carrying them out.

We would still vote for individuals, locally elected representatives to carry out our wishes, and these poeple would be selected based upon their moral fibre, their character and their sense of fairness and justice. Not upon their policies, or who they know. They would be required, and would be willing to carry out the will of the people.

A lot of members of the public aren’t ready to take on this level of responsibility for their lives, having been content to outsource their decision making to politicians for many years, but once they got the hang of it, and started engaging in the democracy of their local areas, they wouldn’t look back.

2. The Death of Party Politics

The introduction of an alternative voting system (which addresses specific issues rather than political parties) will remove the politicians’ mandate to appease their funders, and put a stop to their Punch and Judy show. Current politics, and the economics which comes out of it, is all geared towards big business, banking and finance who lobby the government (pay them in exchange for legislation which benefits their cause, i.e. makes them richer) and in return they have laws passed and reform takes place in their favour. For their payment, they are given titles in the Queen’s Birthday honours, regardless of their level of integrity of public service.

Under our new voting system, the people would vote directly for their chosen policies, social, economic etc. There would be no election campaign to pay for, fewer brown paper envelopes in exchange for favourable policy, or CBE’s. The politicians wouldn’t be able to enact any law, or hand out honours to dodgy “funders”, without first seeking the mandate of the people.

For example, if people wanted to prevent commercial banks from creating the UK money supply (something which seems perfectly reasonable), it could be voted on cryptographically and enacted into law, and never mind what happens to ‘The City’, or ‘GDP figures’ or ‘London’s reputation as the global hub of money laundering’. Things would have to change, whether the banks liked it or not.

If society felt the need to prosecute certain individuals who broke the criminal law? Not fines for bank fraud, jail sentences. We could vote for that. How about banning the use of derivatives and other questionable financial ’products’ of mass destruction? You got it. Want to have a system which promotes home ownership for young families over rent-seeking buy to let landlords’ return on investment? You got it. Want an economic system geared towards having a happier (and therefore healthier) population? We can do that too. Let’s use happiness as the measure of success instead of our old destructive yardstick, GDP. When governments use GDP as their measure of success, business gets priority over the man on the street, and there’s something very wrong about that.

3. Promote ‘New’ Economy.

People, mostly those who work in politics and economics, think of GDP as productive flow of cash, but little differentiation is given to activities which truly expand the economy, versus those which are rent-seeking. As rent seeking has become largely what the UK economy is about, it’s not surprising. Creating a new business or product increases economy, lending money into existing assets, or zero-sum game bets, doesn’t. Building a new house does add to the economy, and leaves behind more than was there to begin with, increasing the economic value of the world, employing individuals etc.

Financial (rent-seeking) activities and entrepreneurial activites are viewed as the same by government when calculating GDP, when they shouldn’t be. New ventures should be counted, and rent seeking activity of the banking sector, if not penalised, should as least be seen as it is, a tax on the real economy, and subtracted from the real GDP figures

If banks were only allows to lend out 1/3 of their newly created money into residential mortgages, and if exchange rate derivatives and their (wholly distasteful) ilk were banned, banks would be forced to put their newly created money into productive new ventures, ideas which might actually make the world a better place. Your house would also be much cheaper to buy.

The UK could create new demand by actually producing products that people want to buy. Take a look at Apple. It makes over half of its profits selling iPhones. Phones. That’s a lot of phones, and a lot of money, but it works because those phones are desirable and sell all over the world. Even the guy sweeping the streets has an iPhone. What do we do in the UK? We let banks create money, lend it to the likes of you and me to buy property at ever higher prices, and then extract interest payments from us, and gamble with derivatives with essentially free money so they can pay themselves their million pound bonuses. When their gambling goes awry, they come back to their rich parents (Mark Carney and Janet Yellen) who slap them on the wrist and pay off their debts. Nice setup.

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Money

Bitcoin: Change Money, Change the World

If you feel a total lack of interest in politics, you are not alone. Many young people are switching off from government and the state which promises so much but delivers so little. People are seeing the politicians for what they truly are; players in a game which serves only themselves.

Those who do still feel that voting is something worthwhile doing, are usually those with little interest in rectifying the key issues of the day, those who have no idea what is really going on behind the scenes presented by mass media, or those who still inhabit a world where they are getting a good deal from politicians. Typically they are the older, richer, voting population; baby boomers who have benefitted from the crony capitalism and fiat money supply expansion that has made all UK homeowners rich over the last 30 years. Many have a naive view of politics and don’t understand how the system works, and how corrupt and inefficient it is. Continue reading

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Money

Let the Market Decide: Gold coins or Bitcoins?

I found this article on the independent headlined: Bitcoin: “Government to regulate cryptocurrency to avoid money laundering, says Treasury“, which I couldn’t help but comment on. What I found most annoying about the article was the total lack of comment regarding the underlying story.

It’s not the concept of increased security which bothers me. Of course I think that there should be checks to prevent criminal behaviour infiltrating the system. What made me laugh is the failings of the current regulatory system with regards to tackling criminal behaviour including; Fraud, Libor Fraud, PPI Fraud, Exchange Rate Fraud, Mexican Drug Cartel Money Laundering and Accepting money from known supporters of Terrorist organisations.

The banking institutions which were involved in these activities were given a small, token fine, and nobody was prosecuted. They were allowed to carry on as if nothing had happened. And we the public are being conditioned to see mass market fraud as nothing serious, while minor benefit fraud is touted as a jailable offence. PPI Fraud was renamed PPI mis-selling. Mis-selling? Call a spade a spade. The banks ripped us off, knowingly in a massive fraud, and they got away with it scott-free. NOT. ONE. SINGLE. PROSECUTION.

Why would the Treasury be interested in regulating Bitcoin? Banks and big business are in cahoots with the Treasury and so can pretty much do as they please; all sort of criminal behaviour is accepted with little more than a shake of the head and a strong exhalation through the nose.

Also, banks are the current intermediaries of exchange. HM Treasury uses them to extract wealth in the form of taxation from the population. The banks take their cut of course. If you have a job, you need a bank account, and that bank account is where your salary (minus tax and NI) is deposited.

If people started to use a medium of exchange which suited them, like Bitcoin, then two things are going to change:

1. The Treasury has no longer got an eye on your tax affairs. So any ‘bitcoin tax’ you pay is your own business.

2. The banks themselves are redundant. They no longer receive their cut as the middleman in the deal, and wither and die. They may be talking about forming their own cryptocurrencies, but why would anyone use one of their (presumably expensive) systems, when bitcoin is a free P2P service, which effectively removes: banking fees, exchange rates fees, transactional fees or transfer fees.

What is funny is the system of Bitcoin is far more transparent than the current system. The Blockchain denotes the existence of the currency, and the transactions are listed and recorded, unlike the current system of banking.

Who Gets to Choose the Means of Exchange?

I had a thought when I was reading the original article when it said

In a discussion paper published in February, the Bank of England said that digital currencies such as bitcoin showed “considerable promise” and that they showed it was possible to transfer value securely without a trusted third party.

The trusted third party is, supposedly, the bank. Ha! The Bank of England of course would become effectively redundant if bitcoin and other cryptocurrencies where introduced as mainstream means of exchange. While the bank of England may have an opinion on the subject, like its interest in what is a legal tender, but at the end of the day, they don’t get to choose.

They are entrenched in the current fiat money system, because their paper money is what we are currently using as currency. But we could put our faith in some other means of exchange like Bitcoin, and really there’s very little they can do about it.

What’s Good about (Bit)coins?

It may be a fabricated currency, backed by nothing, but it does have value as a means of exchange:

  1. Unlike fiat currency, there is a maximum amount of bitcoins to be created (21m Bitcoins in around 2033). This is written into the bitcoin code.
  2. Bitcoins are transparent and ownership and transactions are registered on the blockchain
  3. Bitcoins are commission free across national borders
  4. Bitcoin transfers incur a very low, effectively free, transfer fee (0.0000009%)

The government can say what they like, if we the people choose to use a particular means of exchange, we will and there is nothing they can do about it. The current monetary system is dying, and when it does finally keel over, a new means of exchange is sought, one which is more efficient, reliable, and un-inflatable.

Bright cookie, Stefan Molyneux from freedomain radio, explains more about Bitcoin and its significance.

 

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Economics, Money

Why Are Bankers So Rich? Part 1: The Problem

Why are people who work in banking so wealthy? Are they really adding that much value to the economy that they deserve 50 times your salary, before their annual bonus? It’s a good question, one that almost everybody has asked at some point or other. We should understand the answers too, as they sit at the very foundation of our economy. Sadly very few people take the time to inform themselves about money, banking and finance, and therefore have little influence to improve things for the better.

Continue reading

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Economics, Money

Why are Bankers so Rich? Part 2: The Solution

So in part 1, we asked the question “why are bankers so rich?” Simply put, because they tax economic exchange by having the power to create money and lend it out at interest. Now let’s have a look at the solutions.

Any financial system based upon  money = debt is not a stable way to do business. A system of banking which is subsidised by the population, and which creates its money supply to be repaid with interest is a pretty shabby setup. The inevitable alway happens: The debt grows until it becomes unsustainable and default (foreclosure) naturally follows along with a credit crunch when the money supply in the economy shrinks suddenly. This is the boom bust cycle, and as long as money = debt, it will prevail, regardless of what Gordon Brown or any other politician might think to the contrary.

Neither is unlimited debt money creation good from the perspective of inflation (of asset and property prices), promoting neglect of the real economy (where people who actually create things of value) in lieu of asset speculation on existing assets like property, derivatives, spread betting.

We might look to change such a corrupt, self serving and hugely criminal system as this which is essentially above the law, but when money talks and bankers have either bought the politicians or disregard anybody who might stop them from misbehaving, including but not limited to: the police, the government and the regulators, it is clear that a different approach is required.

What do You Vote For?

In life we vote for things by the attention to them. Terrorists understand this point while the press who report on their behaviour don’t. Actually I think the press understands that they are giving the terrorists power, but another beheading story is just too juicy to pass up. Cover the story and benefit your business, or ignore the story and serve the greater good? Without the press, terrorism would wither into obscurity; without the press, terrorists are just scared little boys, whistling in the dark.

Likewise, without your attention, your participation and your money, the banks are going nowhere. Dislike HSBC? Switch bank accounts and make a difference, although where you would go, I’m not sure. Maybe stuff some gold sovereigns under your mattress. In this day and age, it’s probably safer than keeping your money in the bank. Education can certainly help to raise awareness and empower individuals, who in turn demand more from their politicians, or boot them out.

Time for an Alternative?

The world has been conveniently set up to involve banks in every element of life. We are moving towards a cashless society. This has benefitted banks in the charges they make on people who use their transaction systems, but it also allows alternatives to spring up.

If a currency is purely a means of exchange which people perceive as having value, then surely it is the people and not the banks, or the government who ultimately decide what has value and what hasn’t.

If the Bank of England pumps another £100Bn into the UK economy, you might feel rightly concerned about the devaluation of the paper money in your wallet. Some people advocate exchanging Pounds Sterling and US Dollars for gold and other hard assets which are finite and therefore cannot be conjured out of thin air.

When the banks go bang this time around, there’s going to be one almighty mess. I just hope the government is in a position to not only safeguard people’s money, but also to allow the rotten system of banking and finance to implode on itself, so that a newer and better system can emerge out of the rubble.

If they prop up the rotten system one more time, if the failing banks are bailed out, there will most likely be civil unrest. And the people will come after the bankers and hedge fund managers. They will have nowhere to run. In the words of Mark Blyth – the hamptons is not a defensible position. There was a reason why in days gone past, the rich built castles on hill tops. The capitalist system should be allowed to weed out the weak entities. And when these fail, we should say good riddance to bad rubbish.

No More “Too Big to Fail, Too Big to Jail”

As organisations reach a critical mass and, like an out of control nuclear reactor, go into meltdown, we should have systems in place to manage the implosion of these businesses deemed too big to fail. Profitable businesses are good, but when they fail this is also good for a healthy economy.

No business should think that it is too big to fail, above the law or above regulation, or too important to be able to take responsibility for its actions.

Hearing that supermarket Tesco is now “too big to fail” seems wrong. I appreciate the brand is a massive one and that many pension funds and the rest have invested in it, that it employs and feeds many people, but while there will be a stir, the world won’t grind to a halt if Tesco goes under.

If a business is deemed systemically important, then it should have in place contingency plans to deal with the liquidation of its business affairs should the worst happen. In the case of Tesco, they should have plans about what to do if the business goes bust. Likewise the Cobra committee should have plans about what to do with the banks when (not if) they go bust in 2016.

Elsewhere the “Too big to jail” moniker adopted for HSBC after a long list of criminal charges, is totally unacceptable. If officials don’t have the will to wade in and potentially upset a lot of very rich, powerful men in the name up upholding the rule of law, they should be deemed ineffective, complicit in the crime, and should be guilty of treason and thrown into prison themselves. More on ‘the force’ later.

If banks break the law on a massive scale, and no individual is fined or held to account, why should the rest of the country follow the rule of law, or pay their taxes? Does fraud carried out on a massive global scale make it more acceptable than a single benefit fraud? Hardly. But it is disregarded just the same. This is morally wrong and should not be tolerated by an advanced economy. The UK is not (yet) a banana republic. Let’s keep it that way.

Bitcoin and the ‘Cryptocurrencies’

Crypto currencies like Bitcoin are interesting, and may well take off in the next 5-10 years. The younger generation are looking for alternatives to the banks who they (rightly) perceive as being mostly a waste of space and outdated. If you want to see the emergence of a digital cash alternative to the banking sector, keep a close eye on cryptocurrencies.

Bitcoin trades are virtually commission free, peer to peer and cut out the banking institutions altogether (bypassing their wonderful lucrative fees). Unlike the clandestine banking sector, Bitcoin transactions are totally transparent, in that anyone can see where the cash has gone via the blockchain public ledger.

Fledgling currencies like Bitcoin are mocked and derided by many, but if they hold some value to those who use them, why should they not be used as a means of exchange? The banks argue that Bitcoin currency can be used for illegal activity, but this is an hilarious argument given the state of corruption, lying, cheating and defrauding that goes on in the banking sector. Surely things can’t get any worse than the current corrupt and criminal activity which is legalised by banks like HSBC, so that argument holds no weight. It just looks like sour grapes at the prospect of being cut out of the deal and losing their criminal transaction fees.

Crowdfunding

Just as people are voting with their wallets and giving the banks the old heave-ho, so businesses which are looking to capitalise their idea to bring them to market can also cut out the middle men.

The banks have had it too good for too long and have been charging for the privilege of creating cash. But the crowdsourcing or crowdfunding method of raising capital also has a great future for business, from well wishers who donate goodwill tokens to see a project realised, to those who want to get early access to a product or service, it is a useful way to cut out the banks and go straight to the end users and see your business funded. Arguably, if the market won’t crowdsource your idea, it’s probably not good enough to go to market in the first place.

As someone with money to invest, you can also lend peer to peer and get far more return than you would from a bank savings account. Banks are in deep do-do, and all the QE in the world cannot save them from themselves. They’re using your money to try to recover their positions, pay their huge salaries and live well, not to give you any returns on it.

If you’re new to the concept, check out this video courtesy of London Real.

Positivemoney.org

Positive money is a UK campaign group which has taken an honest look at the UK monetary system, the ways in which it is broken, and how it can be fixed. Their book Modernising Money takes a look at the problem and their proposals to fix it.

Positive money’s principal aim is to promote a monetary system which serves the population as a means of economic exchange, rather than a privilege enjoyed by and serving the private banking sector; a licence for a few private businesses with the right influence, and power to effectively print money.

Taking away banks’ ability to create money is the first crucial step, followed by the government creation of money and its issuance into the economy debt free so that it can serve the people rather than the people working to pay off to debts to the private banks.

Positive money has an excellent website with some clear and concise strategies to improve the way that money works for society. They also run regular meet up groups to discuss money and to spread the word to the wider population. Educating people on the fundamental question “what is money?”

Unless we educate ourselves and each other of the problem we won’t be able to recognise the right solution and promote it ourselves. A sector which has been allowed to grow to the power and status where it is effectively above the law should not be tolerated in a modern society. This current system has existed for hundreds of years, and unless people wake up to the harsh reality, we will continue to boom-bust our way through life and those who have money will make the rules, soar above the law and do as they please.

…a sector which has been allowed to grow to the power and status where it ‘owns’ the government, self-legislates, self-regulates, and operates above the law, cannot be tolerated…

Enforce the Rule of Law

So meddling has the government become in recent decades, that it is hard to remember why the government was formed in the first place. The government’s role is to maintain order, to uphold the rule of law and to organise public services.

As far as the banks have been concerned the government has been negligent in enforcing the law. It’s time to bring back the rule of law, to penalise those who break it (regardless of the perceived importance of the individual or organisation involved, or the scale of their crime), so that nobody again thinks they are above reproach.

It will take someone with conviction; someone with teeth to make this work; someone like Sir Robert Mark who cleaned up a massively corrupt Met CID in the 1970’s, dismissing nearly 500 officers.

Banks have been shown to be criminal in their dealings, yet onot a handful of individuals have been prosecuted or even fined. A few billion pounds fine is a few weeks profit for a bank, so amounts to nothing more than a slap on the wrist, and those who might be prevented from committing such acts again remain firmly in place.

If we don’t make an example of the ‘rotten apples’, by naming and shaming them out of business, the rotten apples will continue with their rotten behaviour. Would you give your money to somebody who was tried for fraud? So why are these people allowed to continue?

When it comes to enforcing the City of London, The Metropolitan Police Force is about as useful as a chocolate fireguard, as Rowan Boswell Davies, ex Met special fraud squad explains, and unless the police, regulators and government go after and prosecute bad behaviour, such complicit behaviour will continue.

If fraud is committed, however big or small, those responsible should be prosecuted, and if necessary also their managers, directors and ultimately the CEO’s who make tens of millions a year from such dodgy behaviour.

If we don’t have a rule of law, then we have lost control of a civil society, and we are into anarchy, and those who operate in the financial districts are no more than organised criminals, the mafia.

A Return to a Sense of Fair Exchange

I’m afraid we have all been seduced by the rich, cigar chomping, mansion owning bankers and traders. They sold us the dream of house price speculation, and most of us in the UK have bought into it, but at what cost to society? At what cost to the younger generations? Those young people who will be paying your pension for you when you retire?

I would like to see a return to a system where people are not afraid to invest their money in anything other than property, where a fair wage for a fair exchange is the order of the day, not trying to compete with others over a finite pot of cash.

The government can help to incentivise investment, and protect domicile workers and families from asset speculation rather than promoting it. They will, I hope, at some point, please god, get it through their thick skulls than borrowing money to speculate in asset bubbles is not economic growth.

I would like to see people living to their means and seeking a balance in life which they can afford, earn the cash and then buy the house, or the car or the big screen TV, or just rent it when you need it.

Just because a bank is willing to lend you half a million pounds, it doesn’t mean that you can afford it, and neither does it mean you should borrow it. The lender stands to make far more out of the interaction than you the borrower do. If you borrow £1m over 25years at 3% interest, you are paying an addition £422,391 in additional interest payments to the bank, and for what? What hard work do they do to earn this money, to be able to extract this wealth from you? You are indebted to the bank, and over the period you will pay nearly half as much money again to the bank.

We need to understand what true economy is, and to get people expending cash rather than holding it to themselves. What matters in an economy is the flow of money, not the extraction & sequestration of that money by those who hoard it in their fear of lack.

Property should no longer be seen as an investment vehicle, and shame on the government for allowing it to become so. We are talking about families raising their children in a home, not about ‘flipping’ properties or about allowing foreign dirty money to flood the London market and boost prices. It is time to refocus our attention on things that really matter, to reward people who contribute to the real economy, to let people and business stand on their own two feet. No more subsidies. The free market must be allowed to prevail.

In the removal of the banking sector’s power to create money, they would be effectively gelded, and would no longer be able to wield their mighty power and influence. They would return once more to the intermediaries they once were, back in the time of Mary Poppins.

We might then see the young bright minds lured by merchant banks, going into fields which actually move the world forward in ways other than a new financial instrument to securitize junk bonds and flip them to some hapless pension fund. How about a new energy technology which benefits the country and the planet? How about imorphing peoples lives for the better?

It’s also time we reassessed the workplace. No more struggling and suffering in miserable jobs, it’s time to start doing things we enjoy, living our lives for pleasure and giving people fair exchange for their output. But first we need to understand that the banks are removed from the UK subsidy ledger. If we don’t pay subsidies to the banks, we will have more money ourselves to spend in the economy, and if we’re not paying nearly half as much again to live in a house, we won’t have to work so hard.

Living beyond our means

If you look at the UK account deficit, it is clear to see that we have been living beyond our means for far too long. The money that has been spent on us by the government, and the money which we have spent ourselves to live beyond our means has led us to believe that life should give us something for nothing. It’s time to get this turned around in our heads. You don’t get something of nothing, it all costs money and someone somewhere is gong to be paying for it, sooner (or more likely) later.

Successive UK governments have bankrupted the country, privatised assets (sold off all of our publicly owned monopoly assets to private companies) and mortgaged future generations to the hilt with ridiculous vehicles designed only to make financiers rich (PFI and PPP schemes).

We accept near free access to information and we expect things to be largely free to use, healthcare, education, and public spending.

In the near future, we will accept far more ways of exchanging our energy with each other as acceptable means of economy. The economy will morph as big businesses full of worker drones are replaced by very many small individual businesses serving individuals in unique and desirable ways. The economy that they produce will be far more interesting, fun and entertaining. Intangibles, media, even emotional services, will replace financial smoke and mirrors. Businesses which are weak must be allowed to fail, or we face decades of zero growth like Japan. The pain will be short and sharp but we must allow the system to correct itself to grow once more.

 

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Money, Photography

5 Things we can all learn from Ken Rockwell (hint: not much to do with Photography)

When I got interested in Photography, I headed for the internet and spent quite a bit of time on Ken’s site Kenrockwell.com . Ken Rockwell (for those of you who don’t know) is an outspoken photography blogger who gets a lot of publicity, often for his seemingly contradictory remarks about where he stands in the world especially in the battle of Canon Vs Nikon.

I suspect there is a lot of envy out there; many would love to have the page ranking of Ken Rockwell’s site (around 2 million visitors a month), and it’s always easy to criticise. Personally I think Ken is great, and a lesson to us all.

Here are some things we can learn from Ken. Continue reading

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