Letter to the Guardian - 22 August
2013.
KWIK GUIDE
TO MONEY
“Talk of
tapering by Fed exposes…” Guardian 22 Aug 2013, and other confused articles on
money supply were mirrored last night on David Baddiel’s BBC Radio 4, Four Thought, in a talk about credit creation – “Where does money come from?”
 |
| HOME ECONOMICS NEITHER A LENDER NOR BORROWER BE. SAVE 25 YEARS TO BUY A NEW HOUSE. |
Journalists
need to know that Money is simply an ephemeral intermediary “paper /digital”
agent to enable any of us to buy goods or services from the Real Economy – a
car, a house, a meal, a computer etc. The medieval alternative to sufficient
credit and liquidity is for, say car, buyers to save for 15 years from our below
Living Wages before going to the car factory in the Real Economy; which must
wait 15 years before making our car, or medicine, or shoes, or book, or house
etc. It is governments’ duty to ensure sufficient liquidity for our transactions
(personal borrowing, debts) – which the Real Economy generates at about 1% of
global GDP per annum. Currently global liquidity is paralyzed because $32
trillion (80 million jobs – 30 years production surplus) of
tax-evasion-capital-flight is buried by 0.1% of the world’s people in tax-havens
and is only available to the 99.9% via loan-sharks at vast, inflation causing
expense. This paralysis MUST be cured by releasing or replacing the $32 trillion
and allowing it to lubricate our transactions in the Real Economy.
The
Anglo-Saxon Free Market system “lost” about $4 trillion in the 2008/09 bank
crash (with $4 trillion increase in tax-haven accounts) – and perhaps a further $4 trillion by restricting bank-leverage (banks
lending many times their assets); Quantitative Easing (printing paper money) has
only replaced a few hundred billion so far. Much more liquidity is required to
meet our needs in the Real Economy.
The
Money-Economy ought to be nationalized globally, rationalized and regulated. All
incontinent gambling by bent and deranged City bookkeepers should be banned and
the Money-Economy managed on 10 IBM mainframes by a few thousand people. To
start to re-boot the economy; Snowden and Manning have shown that the NSA and
GCHQ have all the data about the illicit $32 trillion (much of it is from
organised crime) so governments could easily repatriate it to the nations of
origin. Is the “ownership” of the tax-free $32 trillion the real “Threat to
Democracy” posed by the published data?
e.g. IF the UK economy
built much needed new houses – say 150,000 homes at £100,000 each, to avoid the
15-25 years savings delay, the Money-Economy, the bookkeepers, MUST immediately
provide an extra £15 billion (of Debt - which is also an Asset) to enable new
buyers. Medieval economics would consign us all to wooden huts, rags, rickets
and bubonic plague. We need inexpensive credit and debt.
Noel Hodson
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