Sunday, July 31, 2011

Interesting Stuff

Mankind has achieved quite a bit of interesting stuff over the years.
Disregarding the occassional war we’ve managed to raise our overall standard of living to levels never before seen.
But we have built on the quicksand of paper money.
When we base our “wealth” on a piece of printed paper, then we are truly at the mercy of our collective behaviour.
Some people want to print more of it
Others are very adept at gathering it
Some rely on being given it
Others want to borrow it
Some want to lend it
Others want to decide how it is distributed
Some have received it but produced nothing of value in return
Others want to steal it
Some want to give it away
But what really counts is the only real fact.
Compounding interest.
One day we will awake only to discover that we can no longer produce enough real stuff to cover the mortgage
Now that will be interesting

3 comments:

Andrei said...

One day we will awake only to discover that we can no longer produce enough real stuff to cover the mortgage
Now that will be interesting


I think we are just about there Lou.

Mort said...

at $380m principle a week if we ain't there already , we soon will be.
Thanks Bill! (end the Culling of the NZ economy sooner or the creditors will come take what we have left in the not too distant future).

2 redeeming features are that NZ produces food, and that isn't going out of fashion. But that isn't enough, we need to export more, and smashing the productive sector with expensive energy generation isn't going to improve output. The petrochemical industry needs a good push. Onshore coalseam gas with either electricity generation or exportation would be a bonus too. (1-2 week's borrowing bill might actually pay for it, and at least you'd have something decent to show for the money, the yield being cheaper electricity to drive other so called knowledge industry.)

The other feature worth mentioning is that currently NZ is losing the race for printing cash, with China and the US outstripping us, so theoretically our currency should continue to solidify against the USD. Up until the next sharemarket crash happens that is of course...then all bets are off.

Anonymous said...

Andrei is right.

What is particularly sad is that a ponzi scheme such as fiat paper and fractional reserve banking is legal. Paper has no value beyond the confidence of those using it.

There's a couple of good films about money - The Money Masters and Millenium Money. The latter was an Australian award winner despite it painting a dire picture.

When it goes pop its going to hurt for sure.