Popular Economics for Citizens
Accordingly this issue is dedicated to writing about the basics of the economy. Attached 2 power point presentations are recommended for added insight.
While many things in our early years are taught, there are a few things that should have been educated as well. Those are considered economic aspects, like:
• Importance of saving money linked with power of compound interest
• How to get the most out of each dollar?
• What does it mean to earn or pay interest on money?
• What is debt?
• What are taxes?
All of these questions aren’t addressed in many families. Children may be lectured to a limited degree in high school economics, and perhaps they begin to figure out taxes when they earn their first money.
Fundamentals of sound financial education deal with the simple ideas of saving money for something that they would like to purchase, the importance of comparison-shopping, to the complexities of the time-value of money and understanding how to make money work for you.
The irresponsible, and even fraudulent, behaviour of bankers and the financial regulators we trusted to monitor them have left the rest of us in deep trouble with no good financial options. Major banks, including Citibank, Bank of America and others, were on the verge of bankruptcy, and had to be rescued by the Government with our tax money for billions of dollars. Meanwhile, now the economic current is dragging the rest of us down.
My ‘True Economics’ articles are meant to explain citizens more and better about what is happening in our daily life. However the true problem that we have as a society is not these ego-maniacal leaders, they will always come and go, the problem is our inability to commend and promote based on their individually proven ability and talent to get the job done as we see it in our Western democracy. Unfortunately the brain drain which started in the sixties via the "Useful Idiots" in Hollywood and now in the Television and Radio and Newspaper industries, in other words, let's just say the entire mainstream media and entertainment world, has changed our very perception and ability to recognise the fake from the real and to idolise people because of the manner that they project themselves to the masses as celebrity in today’s political environment.
Why is an assumed ‘free-people’ so willing to submit and subject themselves to a bunch of crooked bookkeepers who create money out of nothing -called fiat money- including the interest on it, with just the stroke of a pencil as an entry on their balance sheet with nothing to back it up except the sweat of a brow? This route only leads to a dangerous form of control by an elitist thinking dictatorship. People moan about this and that, what they consider unjust, unfair, unwarranted, undeserved, they complain about brutalities, about crime, about war. But they should be more interested in questions as:
• What is really the truth behind all this?
• Recognize the problems that exist in the world and stem from the control, or the lack, of money?
• Why does nobody get the real message?
• Or are they all really just plain stupid like sheep?
People by definition have a herd instinct and attitude. They want to follow their leader of the pack, without considering whether their leader is the best trained and most knowledgeable. This sadly is inherent to democracy it is the majority that counts and not cleverness. As Churchill once said ‘democracy is the worst form of government, but there is no better’.
Historical, including current events, show that worldwide political movement is headed for one geopolitical government and economy created by the world banking system. It is believed that this is very possible and might be achieved within the next several years due to the current worldwide economic crisis that could propelling it.
For the last 60 years the economy was in continuous expansion. At first, there was a healthy expansion. Consumers had built up savings during and after WWII. They were ready to get back to work in the consumer economy and spend their money. In that period the USA was world's leading lender, leading exporter, and leading in manufacturing, in short leading in everything.
By the '70s, under the Nixon administration the gold backing for the dollar, thus also as world’s reserve currency, was abolished. During the 1980s, the US turned from a net creditor into a net debtor to the rest of the world. By the 1990s, consumers were spending more than they earned and stopped saving at the turn of the century. Consumers became depending on the savings of the people in Japan and China that created a consumption economy with a flood of credit that on its turn culminated to living beyond their means.
As a recessionary occurred, the feds tried to stimulate consumer spending into continued further economic growth by making more credit available. Consumers became addicted to accumulate more debt. As a result the financial industry expanded in an incredible manner, finally culminating in this financial crisis.
The economy, at least for the foreseeable future, will not expand. Growth will be off the cards for everything. Instead of growth, we will enter an economy of sustainability. More centred on improvements of people’s well being with changes for better living conditions. One thing is sure it will be a totally different type of economy than we were used to.
The only way out is for people to realize that fiat currency is not wealth and to work towards creating true wealth that exists within the fruits (products and services) of our labour and to reject the credit (debt) form of society promoted by the banking system.
People have to realize that the key fundamental solution to our economic ills is to create a debt-free society based on human resources and not through the exploitation of natural resources or debt-slave resources. Remarkably all these governmental bureaucratic maniacs, elected officials, media/journalists and think tanks of the world can't even begin to figure out where to start!
Regrettably people in general want to be controlled. Like children, they need to be told how, when, where, who and what for everything in their lives. They are so quick and willing to surrender all their wealth including personal, state and national sovereignty just so they don't have to think, act... or take responsibility for their own lives or that of their family and neighbours, let alone a nation.
These days people on the dole do have to become inventive in using skills. The new upcoming society is blessed once people learn to understand how to survive and care for themselves, their family, friends and neighbours. The new economic environment will be concentrated on sustainability by improving the quality of life. With any luck they will discover hope and faith again.
Future growth industries in this new environment will teach us on food preservation; animal cultivation; weaving; knitting; farming; etc. These 'forgotten' skills will make a remarkable recovery! Could this current global economic crisis be a blessing in disguise? Will it be a return to a simpler place and time when people cared for and had time for each other? So we can live in trust again, provided there will be NO world war.
If all people take at heart what is written in the paragraphs above, together they'll create a better financial world and thus improved society for ourselves but even more important for the generations that follow, kids, grandchildren etc.
Reminder: This crisis has been in the making for the last twenty odd years and no one in charge took sensible measure to avoid it. As long the going was good, why bother you about it? Now people like the 41 year old CFO of Freddy Mae kills themselves, because they were stupid and put in charge above their capability. People in charge per definition are not honest to themselves neither to their electorate. Lets hope that this crisis will bring many back to basics. Avoiding fascism, oligarchy that eventually may lead to dictatorship.
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San Pedro de A, Malaga, Spain