Dare I delve into the future of our money? I think I had better!
Money comes in many forms. There is the folding green stuff. There is your credit card. And there is your bank balance which can be accessed by checks, wires, debit cards.
This is the money supply. From this pool of credit (debt) and equity (positive bank balances) dips the commercial world. The more dips that are made, the better the economy runs. However, the flow of equity into that pool has not increased as peoples wages have been generally fixed. So to fill up the pool more, you had to convert th equity in your house into a loan and therewith bump up the account.
People are losing jobs. They have to cut their spending. There are fewer dips into the pool. So more people get laid off. And so it winds down.
Obama is supposedly stimulating the economy with this big spending package. But where is the money going?
Into banks is good as their cash levels need heightening as less money flows through the system. With a bigger cash reserve they can continue to open their doors and make loans etc.
Into welfare is a waste. Rather than promote businesses to create more jobs, it falls into the hands of the unproductive and buys no production. A better plan would be to fund a planting of a forest in the desert, or create a desalination plant off the coast so as to water crops.
Perhaps it is a difficult concept to grasp, but if you put money into the hands of a person who uses it to create more products (= more money) then you will get more jobs and more wealth in the economy which creates the jobs and wages that are needed. However, if you place the money in the hands of a person who spends it on food and clothes and fuel, it buys you nothing. It floats away into a million hands and creates nothing of value.
The USA is melting down. Useless industries are failing.
What is needed is the new industries that will retrain people into the new jobs of the future and create the facilities that will grow the economy.
There is more to this, but that will be later!
Money comes in many forms. There is the folding green stuff. There is your credit card. And there is your bank balance which can be accessed by checks, wires, debit cards.
This is the money supply. From this pool of credit (debt) and equity (positive bank balances) dips the commercial world. The more dips that are made, the better the economy runs. However, the flow of equity into that pool has not increased as peoples wages have been generally fixed. So to fill up the pool more, you had to convert th equity in your house into a loan and therewith bump up the account.
People are losing jobs. They have to cut their spending. There are fewer dips into the pool. So more people get laid off. And so it winds down.
Obama is supposedly stimulating the economy with this big spending package. But where is the money going?
Into banks is good as their cash levels need heightening as less money flows through the system. With a bigger cash reserve they can continue to open their doors and make loans etc.
Into welfare is a waste. Rather than promote businesses to create more jobs, it falls into the hands of the unproductive and buys no production. A better plan would be to fund a planting of a forest in the desert, or create a desalination plant off the coast so as to water crops.
Perhaps it is a difficult concept to grasp, but if you put money into the hands of a person who uses it to create more products (= more money) then you will get more jobs and more wealth in the economy which creates the jobs and wages that are needed. However, if you place the money in the hands of a person who spends it on food and clothes and fuel, it buys you nothing. It floats away into a million hands and creates nothing of value.
The USA is melting down. Useless industries are failing.
What is needed is the new industries that will retrain people into the new jobs of the future and create the facilities that will grow the economy.
There is more to this, but that will be later!
posted by Stephan Hokke at 1:11 AM
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