07 Apr 2012 14:25:If, like me you travel in many countries the idea of one bank note being more valuable than another fades into insignificance if the chap you are buying dinner from wants CEFA when you have Euro in your pocket. Is it too late to return to the ancient concept of money as a means of exchange?
Notional relative values (exchange rates) of different means of exchange (currencies) are more to do with speculation than trade and further damage to the wealth of individuals is caused by the enormous premium we pay to support trading in currencies. the trader produces nothing, adds no value, provides no service, simply takes a margin based on forecasting skill (called gambling in other areas of life).
The solution to this problem is to have a single currency across the whole world; then currency would be what it should be, a means of exchange. The mechanism already exists to produce the currency - The World Bank but then that would mean reforming the world bank to make it what it was originally concieved as - the lender of last resort.
The idea that the solution to our current problem lies in the reinvention of currencies based on national borders is peddled by politicians on the basis that national control of the means of exchange will make the citizens of the nation richer - or put another way the greedy for power leading the greedy for wealth.
Our current problem was caused by people buying things which they could not afford. If a company incurs debts greater than its assets it is legally required to cease trading, why not apply that to individuals? It would cause some pain but only to those who brought the pain on themselves. Using the family home to fund non-essential spending has always been a recipe for disaster A great deal of property in Spain was purchased with money borrowed in that way and can surely only be described as non-essential spending
The risk has always existed that the lender may recall a loan. It is the fault of the borrower for not assessing the risk properly if the result of their borrowing leads to the loss of assets. One heard no complaints from those who sold properties at the height of the property boom which had been bought some years before for peanuts. What right have those who guessed badly to complain now? One might even suggest that using the money so borrowed was another example of greed so maybe the speculator deserves th fate of the gambler!.
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