Money is debt and banking is a joke

 

"The problem with fiat money is that it rewards the minority who can handle the money, but misleads the generation that has worked and saved money." - Adam Smith, the first economist. The father of capitalism.

Have you ever wondered: How more money is printed? I wondered the same thing when I was sitting in the lecture hall.People like to print as much as they want.  Or how money became valuable when it was invented.  It also circulates through different countries.

Until I found the book: James Rickards' Currency Wars, a true science book. Don't confuse it with Song Hong Bing's "Currency War". From this book, recently, tiktok and facebook emerged many financial experts with conspiracy theories about jewish oligarchs. In fact, it is no different from a fictional story with subjective imposition, disguised as a research work.

James Rickards is an economist who designs economic war scenarios and tests them for the US Department of Defense and the Pentagon. He even came up with a scenario that recently came true: Russia and China joined hands to kick the dollar out of international payments.

In a nutshell, he explained about printing and issuing more money as follows:

Previously when there was still a gold standard. A country's money is backed by gold in the national treasury. When you want to issue more money, you must also have the same amount of gold in your inventory. This ensures that the monetary circulation mechanism and inflation and deflation indicators are automatically adjusted.

Today, when the whole world has abandoned the gold standard. One way for governments and central banks to issue more money is for new money to be backed by bonds. And a bond is a debt, that's right, friend, it's a debenture, nothing more. It is promised by the government to repay the debt, with taxes that the government collects later.

That is, the central bank is borrowing the tax money of the future to consume for the present. Ridiculous. They print new money, and tell people: they guarantee it the value of a note, for an unknown amount of money in the future.

It is really very very reliable.

Once there are bonds, the central bank offers them for sale. Partially recovered in local currency and foreign currency (foreign debt). Newly printed money will be brought out through attractive interest rate loan packages or stimulus packages, rescue, debt redemption, companies. In the first stage, the market will absorb all this new money. If there is inflation. It will be regulated by: The central bank will sell foreign currency, or continue to offer bonds, or stocks that they own to collect local currency.

In essence, money is now debt.

Mr.Baker has 10$ deposited in the bank.  The bank keeps 1 dong, the remaining 9$ is lent. You borrowed that 9$ from the bank to buy Flower's land. Ms.Flower took 9$ and deposited it in the bank.  The bank owes Mr.Baker and Ms.Flower 1$ of deposit interest. But you owe the bank 2$ of loan interest. Lend more times that amount.  The more debt the bank has, the more interest it will earn. From only the initial 10$, through countless loans, debts are continuously created with interest. This is the money created out of nowhere.

At this point, someone will object: that interest will be taken from another bank.

But people just think about it. There is no limit to the number of times a bank can lend a loan. The money in circulation is limited. So the amount of interest generated is infinite from the debt.

The more banks involved in this scenario, the more complicated the path of money becomes, giving people the illusion that it just flows from one bank to another.

Money is now more than paper, it's just numbers on the screen, with confidence in the government and the future.

What happens when people rush to withdraw money in banks? What happens when the government has too much debt to pay? The economy collapsed. Because it was built on a castle with an air foundation. There is no actual asset corresponding to that amount, both paper and virtual. The more we borrow from the bank, the poorer we become by it. And the future that we think is secure thanks to the money we have in the bank, in the safe at home, is uncertain. The future of the economy, the future of people, especially the underdeveloped countries, has never been as fragile and fragile as it is now. Because underdeveloped countries will be forced to borrow their money by the IMF, World Bank and other financial institutions to get out of the economic crisis.

The global economy, the global supply chain means that we are no longer autonomous. From what we eat, to the medicine we drink and the air we breathe, is all governed by money. And the currency can be dominated by foreign individuals and organizations.

"All money is a matter of trust." - Adam Smith