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Today’s ‘money’…pure Fantasy! Let’s think!

May 30, 2014

The word ‘fantasy’ means:  the faculty or activity of imagining things or the action of inventing something, typically a process or device. What we use for our ‘money’ today is a paradox within economics (which has evolved into a fantasy). Money (we don’t use any real money today) is supposed to come from nature and represent a material object which is perceived to have intrinsic value. The entire purpose of money is to serve as a tool and/or proxy for the subjective concept which we call VALUE. Today, however, what we use as our ‘money’ is a digital currency which is ‘typed’ into the computer screen and then transmitted from person to person via our high-speed computers. Historical units of money (coins and paper notes) are now mostly eliminated from our greater global marketplace. A country like Sweden is now almost 100% digital where computers and high frequency pulses of light transmit numerical digits from buyer to seller, trader to trader, lender to borrower, and investor to financial institution. Israel has announced that they will also create a ‘cashless’ society within the next two years.

Machines have replaced live traders and most of our trading transactions are machine driven (within the global marketplace). Mathematical algorithms and financial platforms are used to execute our trades. The current estimate is that from 50 to 70% of all trading volume is now a result of machine transactions and programmed software (algorithms and such). Most of our spending is now done via debit and credit cards where a swipe of the magnetic strip sends pulses of light to a master computer which then sends the signals to the local bank’s computer where the account is stored. Virtual digits are transmitted from computer to computer to solve the exchange of value between buyer and seller. The role of money today is to serve as a form of communication within an environment that is virtual and impersonal (the computer screen). Is any of this sound economics? Where is this leading?

I would suggest that a computer driven financial system is rather unsound and unstable for the longer term. It also destroys the personal aspects of economics and finance and allows machines to control and dictate economic prices and values. We now live within a global communication system (our globe is interconnected and machine driven) which is virtual in nature and which depends on subjective inputs for its existence. Subjectively created algorithms and computer software run our global interconnected system. Central banks are at the center of all these machine driven operations. Central banks now create our computer digits (called ‘money’ by the masses) by merely ‘typing’ numbers into their master computer within their structurally designed buildings (decisions are made mostly behind closed walls). Few consumers understand what is happening within the secret confines of these massive global Central Bank Buildings.

Next week the European Central Bank (ECB) is likely to create (‘type’ into their account within their master computer) new digits (called Euro’s) to expand their monetary base. We now call this QE and/or quantitative easing. Digits are created to increase the financial account of the Central Bank and then these digits are used to purchase whatever they desire (the technical word is ‘asset purchases’). Asset purchases can be whatever the Central Banking Authorities (say Mario Draghi of the ECB) desires to purchase. Our U.S. Central Bank, called the FED, has been doing this same manipulative operation for the past 5 years (QE1, QE2, QE3, etc.). Digits are created (and called money) to artificially pump up select financial assets so that our economy can be manipulated as the Central Planners desire. This entire Ponzi Scheme is meant to pump up asset values and/or manipulate select asset sectors and select prices.

After the new digits enter the greater marketplace, additional machine driven algorithms are used to further manipulate asset prices, interest rates, and derivative instruments. The policymakers desire to effect human behavior (you and I) so that the greater economy can experience artificial growth for those selected sectors chosen for manipulation. This top/down manipulation is now ubiquitous within the USA, Europe, and most of the global marketplace. Central Planners like Ben Shalom Bernanke (2006-2014), Janet Yellen, Mario Draghi, Mark Carney, Stanley Fischer, Jack Lew, etc. can now create digits (call them by names like ‘dollar’, ‘euro’, ‘pound’, ‘yen’, etc.) and then use these virtual computer digits to pump up consumer spending, debt, credit for the greater marketplace. The debt levels are now growing exponentially to levels which many call a huge BUBBLE (bonds, stocks, derivatives, etc.). This BUBBLE will continue to expand UNTIL the expansion is complete and ready for a BURST.

Will our machine drive markets create a better and more prosperous world for the seven billion people on this planet? Will all this Central Planning and official counterfeiting of our money lead to greater material wealth, happiness, peace, and prosperity for the people and our World? How can imaginary units of consciousness (symbols, numbers, and names)…called money…lead to any meaningful end results for mankind? Think! Today, our poverty level in the USA is 15% (almost the same as the 1960’s). The number of people using food stamps is over 48 million. Our National Debt is now approaching $18 trillion. Our total debt (Consumer, State, Local, and National) is over $60 trillion. Our unfunded liabilities are over $120 trillion. Can any of this Debt and Unfunded Obligations be honored (long-term)? What kind of economy are we creating with all our machines, algorithms, derivatives, and QE counterfeiting? Think about what is emerging down the road! Think about the BIG PICTURE! Personally, I don’t view our current economic models as SOUND or SUSTAINABLE. Think about these details! Have a good day! I am:


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