Thursday, May 30, 2024
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How much longer can this junk money charade go on?


OUR Western money system is an illusion. A fake. Almost a vapour. Our notes and coins have no intrinsic worth as a commodity. The purchasing power and value is entirely on a trust basis.

This is fiat currency, which exists purely by dint of legal force. Its worth is no more than a function of others’ willingness to accept that worth. All the legal tender currencies on the planet have no intrinsic value at all, and it is historical fact that fiat currencies always fail at some point. This is all explained in a film called Money as Debt – perhaps not the most exciting title but with terrifying implications. 

Therefore it is shocking that so few of the profound (and negative) issues generated by our currency system are debated or even acknowledged by our Uniparty politicians. Perhaps the benefits of spending power that can be printed (or rather, these days, created on an electronic ledger), rather than earned, is too heady an elixir to woo voters. Perhaps for the media, too, it is too enticing to be able to create drama, excitement and division.

But the threats and risks generated by intrinsically valueless currency do not go away just because we don’t speak about them. As a society it seems that the more we blinker ourselves to the problems that may be ahead, the more dangerous our position becomes.

The ability to create currency, without reference to production, gives rise to our collective drive to take on debt. Humans naturally seek the purchasing power to buy things now to make their lives better. The assumption is always made that ‘the future’ will provide the production and real wealth to pay off the debt. But judging by the growing debt levels at both private and public sector levels, that day of ‘payback equilibrium’ is set for the twelfth of never, at least for most of us.

Personal debt in the UK stands at £1.84trillion. Public sector debt is £2.6trillion. Both figures are the highest ever, and there seems to be little pretence amongst our politicians that we will ever be able to pay off these debts. They will have to be repudiated via a clear default or currency devaluation (the usual dishonest method used by politicians). Devaluation is also known as inflation, so it could be said that this process has already begun. Successive governments have made this task even harder by setting government handouts and budgets that are linked to consumer price index (CPI) inflation data.

Defaulting on debt is a path a country cannot take lightly. The result is often eye-watering interest rates, mass poverty and a crashing standard of living. Ask any Argentinian, Zimbabwean or Venezuelan.

If the ongoing dishonest debt default (inflation) or possible clean break debt default isn’t enough of a future shock to grapple with, there is something just as insidious lurking in the weeds of fiat currency: the breaking of weights and measures. For centuries, currency has been used as yardstick to measure production of real economic benefits. Commodities such as coal were mined and paid for with other denser commodities in limited supply such as gold and silver. Gold became a proxy for stored, measured production. Gold (and other commodity-based currency) signified actual work done. The real world expense of mining gold, as well as the highly limited supply, meant that it would not be parted with by its owner for anything less than truly valuable goods or services.

But with fiat, the opposite is true. When money can be created on a spreadsheet, with no marginal labour or cost, strange things happen to our prices and our subsequent notions of value. Economists call this malinvestment. Planet Earth has undergone a malinvestment bonanza for the past 15 or so years and there is no escape for its citizens. In every country, a fiat system. For every government, a dishonest set of weights, measures and yardsticks.

Take a step back and ask yourself whether a country with useful weights and measures would exchange hard earned gold for the below listed pork barrel projects and baubles:

–         An army of Equality, Inclusion and Diversity staff in the NHS;

–         Ofwat, a costly water regulator not worthy of the name;

–         ‘Eat out to Help Out’ schemes;

–         Vaccines that are neither safe nor effective;

–         The liar loans of the 2008 financial crisis;

–         Wind farms which operate for a fraction of the working day, sometimes;

–         Solar farms which are often not productive at all;

–         A £100billion scheme to make the rail journey from Birmingham to London a few minutes faster;

–         Out-of-control welfare payments with no measurable increase in UK productivity;

–         Multi-billion-pound support for the forever war in Ukraine

In all these settings, we are able to tell ourselves lies more easily about the nature of the deal, the lack of productive output because reference to production has been completely broken by fiat currency.

Whether the charade of junk-money can continue is open to question. Certainly the inflations of the past few years should give us pause for thought. We now have devaluation operating as a stiff and regressive tax, robbing all honest citizens of purchasing power, via dishonest means and with the attendant spending destined for valueless projects. Even if fiat continues to operate worldwide for decades more, the malinvestment looks set to worsen, forcing lower living standards on millions.

The harsher reality of a globalised sovereign debt crisis should also be considered. If all faith in the currencies of the corrupt West is lost (as always eventually happens), the impacts may range from civil war to nuclear war, perhaps encompassing both as the fight to own real measures of value suddenly becomes clear. Naturally, our Uniparty leaders treat that risk as small to non-existent. Being able to see through this charade will serve us all well. Start with a YouTube film with a boring title!

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Andy Large
Andy Large
Andy Large read law at University of Durham and runs a successful property lettings agency in the North West. He lives in South Cheshire with his family and their badly-behaved cat, Mia.

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