Monetary Miniseries: Where is the Money? (Part 1)
Where is the Money?
Curious about the world bank and central banks? Why are entire countries in debt? I’ve started a miniseries discussing the shift from banking to cryptocurrency and blockchain.
Transcript of ‘Where is the Money?’
I have a simple question that no one seems able to answer. Some WON’T answer.
Where is the money?
Hi, my name is Jo Roderick, and while I’m not an economist, I take a passing interest in world affairs. In this first part of the money series, I am asking the question that doesn’t seem to bother enough people. I’ve been asking this for decades. Until the cryptocurrency and blockchain movement, it remained unanswered.
I’m a practical, black and white sort of human.
The shenanigans of world affairs, and more importantly the World Bank, make no sense to me. Central banks also defy all logic. They are like rubber bands, pliant and stretchy until you miss a payment.
We are told not to worry about these things, and then patted on the head as if we were children. While some might be sheeple, we are not kids. We are adults and we need to be present and accountable.
I might be a tad dyslexic, but I can do basic maths, and something definitely does not add up. We need to take heed, or we will be the sole recipients of the challenges up ahead. It’s not way off in the distant future because the mess has arrived. The trouble caused by those in power will have to be dealt with by us: the little people.
I’ll break it down into simple, easy-to-understand basics. If you have more of an outlay of funds than you have income, you are in the red zone. We call this debt. Simple, right? We are told not to live beyond our means. Stop shopping until you drop, and put your hard-earnt cash in the bank!
That wasn’t too hard to grasp. What baffles me is how an entire country ends up in debt. Seriously, exactly how does a country go bang?
“Oh dear! So sorry, but we can’t pay you.”
How does this happen? The common folk pay tax, they buy things, there is trade happening, and well … the rest is dull.
We could simply write it all off against the fact that that particular country has gone out on a shopping spree, and hasn’t earnt enough money to pay the bills. Actually, this is pretty much what happens. The country defaults on its payments and sinks into greater debt. Okay, we understand that much ….
Going back to my buying and selling model, Country A spent a fortune on Country B’s products. As a result, Country A is now bankrupt. With this simple equation, we expect that Country B holds all the cash! This is where things become a little grey, and I don’t like grey. It’s an excuse to hide the truth.
The trouble is that when we peer into Country B’s coffers, we see that Mister Money Bags is also broke or only just breaking even. Almost all countries are in now debt. How on earth can that be? Where is the cash? If money has been earnt, and spent, someone MUST hold all the ‘zeroes’.
Yet, everyone is ‘broke’ and piling up the debt. From individuals, to entire countries: the world is bankrupt. Is the World Bank holding the cash? Are they holding us hostage? Where does the World Bank get all its money? After all, they willy-nilly give out loans to nations.
Perhaps closer to the truth is that governments are simply printing out banknotes by the dozen. If you and I print up a few crispy new banknotes, it’s called counterfeiting. When central banks do this, however, it’s okay. It’s to help the economy. Sure, weakening the value of a fiat currency is always a great way to fix financial challenges. Almost as effective as sweeping the dirt under the rug.
Government expenditure has grown at an alarming exponential rate resulting in ever-increasing fiscal demand. Somehow, these bills must be paid. Public officials won’t work for free, so a few extra banknotes are slipped into the system to pay them. No one will ever notice; right? Bribery and corruption swiftly takes care of the balance of the tax money not already squandered.
Uncle Bob from Zimbabwe is the most renowned example of how you cannot keep printing money to pay the bills. The Zimbabwean dollar is now literally worth less than the paper it’s printed on. It’s so bad that Mugabe is encouraging everyone to use South African rands. I think he missed the memo informing everyone of how weak our currency is.
Over time, while we sat by and tut-tuted, we have become ensnared in this dreadful web of deceit and subornation. Now we are subjected to this financial mess. Don’t despair because it’s up to us to change this trajectory. Let’s face it; government has created the problem, and they are yet to fix it. We will have to repair what the authorities have broken.
In the next segment, I am going to discuss the modern version of slavery. Yes, folks … it’s alive and well. You can set yourself free once you recognise it.
Direct Link for ‘Where is the Money?’