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The Cost-of-Living Crisis that our Politicians have caused: How can it be that we have less when we receive and spend exactly the same amount, whilst others seem to have a lot more?

February 9, 2022 Leave a comment

To deal with the Lockdown and the related issues which were unnecessary and of their own making, Chancellor Rishi Sunak and the Johnson Government embarked on a profligate money printing bender.

It has been an obscene public spending spree that has not only led to the explosion of public debt. It has accelerated all of the deep-seated financial and economic problems that the UK already had before the Covid Pandemic arrived.

So, what has this all got to do with me, you might ask?

It’s a good question. Especially if you didn’t get any free Furlough money or didn’t have a grant of some kind that you didn’t really need or weren’t expecting to be fire hosed via the local council into your business.

Money is money and its value stays the same, doesn’t it?

Well, the answer is no. The value of money doesn’t ever stay the same – because money only represents value and is not the value of anything itself.

This is a crude example of what is happening, but it will hopefully illustrate the point:

  1. Let’s say that £1000 is all the money that exists. Alongside, there are £1000 worth of goods, £1000 worth of property and £1000 worth of services that have that have value, but that value can only be exchanged by using the £1000 that exists.
  2. You own £100 of the money that exists and that money is sat in your bank account or in bank notes in your hand.
  3. One day, you go out and buy £20 of property, £20 of goods and £10 of services and still have £50 left in your bank account or in banknotes in your hands, which at any time on that day will buy the same things all over again.
  4. The next day, you wake up to find that the Government has printed another £1000 of money and put it in someone else’s bank account or straight into their hands.
  5. But whilst the government printed twice the money, only the same amount of goods, property and services or ‘output’ exists.
  6. Because the total amount of money has doubled overnight, the value of those goods, services and property that exist have also doubled over night.
  7. Now, when you go out to shop for the £20 of goods, the £20 of property and the £10 of services you find that the prices have doubled, and you can no longer buy or afford the same that you previously had.

So, increasing the amount of money in circulation whilst there is no corresponding rise in production, goods manufactured in sold or service output simply means that there is more money available in proportion to everything that can be sold.

What makes the situation worse, is that most of the money that has been printed by the Government has gone into the hands of people and companies that are already very rich, who see and understand what the government is doing and then push up prices, knowing that the government will turn around and print even more.

Meanwhile, throughout this process, those on the lowest wages have effectively gained nothing. They instead find that the same amount of money they earned as last month, will no longer cover the cost of the same foods, goods and services. Sooner or later, they will have to borrow or go into debt, secure a higher income or apply for benefits. Or if that’s not possible, go with out in one or many different ways instead.

To call money printing to solve problems that could have been avoided and the Politicians themselves created is a travesty borne of ignorance, stupidity and self-interest, is only made worse by the reality that the political classes have colluded with the finance sector to allow banks to do exactly the same things, not just over the past two years, but for decades of real time.

Printing Money doesn’t solve problems – it just creates many more by helping the rich and punishing the poor.

The future is bright for digital finance, but today’s Crypto Currencies are as worthless as the FIAT money system they intend to replace. Money must find its place and function without misplaced belief:

January 19, 2022 1 comment

Whilst my interests, writing and commentary in the public sphere appear overtly political, I recognised long ago that every part of life feeds into the cauldron of politics. It’s what the more academic amongst us would colloquially call political economy.

Within a highly febrile environment that increasingly makes less and less logical sense, it makes sense to keep an eye on financial and economic commentary online amongst the channels where real news is still available. It is here that the utterly bizarre nature and the cold-hard reality underpinning trends which are affecting the UK and the whole world, seem to have completely escaped public consciousness and any form of collective rational concern.

We are experiencing a period of history where there are so many elephants in the room, it seems incredible that society hasn’t already been completely flattened by the now trampling herd.

That isn’t to say that a travesty of great magnitude isn’t on its way.

Amongst the dangers that 50 years of FIAT Money, its impact upon financial dealing, the markets, normal life and the Bitcoin-driven rise in cryptocurrencies that were supposedly created to counter it is where much of the coming chaos is likely to begin.

Money isn’t real. Money isn’t a thing. But the belief that we have been conditioned to have in it and the obsession we have with material wealth and the way our lives and status can now be measured by it all to facilitate profiteering and greed certainly perpetrates the myth that it really is.

Money is valueless. It began as a unit or practical means of exchange and up until 1971 when money was de-linked with the value of gold, it at least had a form of tangible value attached to it. Even if that tangible value was based on collective mutual trust to the existence of a precious metal in remote form that we all knew as The Gold Standard.

Creating a situation where that assumed trust in there being real value underpinning the transactional notes and coins in circulation was manipulated to allow people believe that every penny that they have in their pocket or bank accounts has a measurable value. However, in practice it has now been over half a century since it was any such thing.

A FIAT or ‘created’ Money system was always going to be open to abuse, once those ‘on the inside’ had figured out how to get any rules and regulations. Over five decades they have consistently influenced legislator change so that they could effectively create more money and malevolently creative systems to generate more of it whenever they liked. The Great Financial Crisis (GFC) of 2008 was just a taste of what is to come and was only perceived as not being worse than it was because Governments created money for the banks and therefore massive public debts for us that there has been a mysterious mainstream lack of will to talk about.

As this perverse system has increased a cultural belief that money is a real thing, with the perception that it is inherently more important than the product, service, employment or output that generated it, a process of addictive gambling has increasingly taken place. Finance houses, markets and central governments too have effectively created more and more money without that money itself having any practical (or logical) link to gold, products, services, employment or anything else. It has created a growing disparity between what people who have bought into the idea believe to be real and what actually exists. In terms of value, people literally don’t know or understand what is real anymore.

It is a system where the rich get richer and the poor get poorer simply because the rich get more and more of the money as it increases in circulation, whilst the money that the poor have loses value against the goods, services and property that have explosively inflated prices that continually remain easily affordable to the rich.

Whilst it doesn’t fit the narrative of the establishment, big business or the financial sector for everyone to understand that money is created as they see fit and that debt is effectively just a means to enslave the unknowing poor, those responsible have used the publics unwitting trust of historically revered occupations to engage in what beyond the safety of the rules they have created for themselves would be recognisable as criminal acts

No one openly talks about any of this, and the mainstream media leave the subject well and truly alone. The truth of what they have and what they are doing sits conveniently hidden in plain sight and anyone who questions it likely to be cast aside and awarded a tin foil hat as they are unceremoniously thrown back into the masses of the great unknowing.

Yet there are increasing numbers of very intelligent, often highly educated but nonetheless ethical people who are becoming aware of the mechanics of how the travesty of what we call money actually now works.

Indeed, it was one such person who saw the value in creating a finite or limited amount of a currency that sits outside of the influence of arguably corrupt central governments, big business and the financial sector. It was this whole sorry story that brought Crypto or Digital currencies into being primarily as Bitcoin and now in different guises that are growing in number daily.

On the face of it, the blockchain technology that underpins crypto effectively means that even the smallest fraction or percentage of one crypto coin or equivalent unit has or can have a unique identification. It appears to give tangibility or reality to cryptocurrencies that money in the FIAT system doesn’t currently have.

Such coding means that if all money were to be in circulation in that same digital form and no other, every coin or part of it could be traced, located and tracked at any moment in time. It is for this reason that our increasingly technocratic and tyrannical governments and the greedy big businesses that influence them are desperate to digitise central currencies and push all of the privately generated versions as we know them aside.

The flaw in the thinking, whether it be a private, untied crypto or a digital central currency run by the government instead, is that blockchain technology gives genuine value to this ‘money’ right down to the most microscopic level.

The reality is that blockchain, like money is neither real nor a thing. No matter how clever, these blockchain derived digital currencies are no more than a reference tool, a label, a system of measurement and like money intrinsically before it, it is no more than a unit of exchange

Tragically the value of both money and crypto today is still based on the same giant myth or a massively overvalued shared belief.

At some point – perhaps within the 12 months from the time of writing, a financial collapse will take place affecting everything that FIAT money has touched or relates to. Money, nor any other form of currency based on nothing other than thin air will continue to exist and the correction that follows as everything in life returns to its unmanipulated value will be a process most painful for those who have made their life revolve around money and material wealth, when they could and should have exercised more considerate concerns.

It sounds very doomsdayish I know. But many of those who lurk daily within the finance and economic bubbles and play or rather bet on the markets know that those with power and influence have now created far too much money – relative to all the goods and output that genuinely exists. Indeed, the patterns and behaviours associated with everything to do with money, how it is made and how it is managed are following little in terms of any kind of logic. They more savvy amongst them know that the figures and data that is available foretells a cataclysmic change.

In terms of corrections, the pendulum is about to swing wildly the other way from where it has been held for a very long time.

The real value of goods, property and output will be realised as it becomes set against the wild speculation and explosive inflation that printing money has allowed.

We are likely to find that money or new forms of digital currency will go right back to their basic function. One that allows what is in effect multiple-transaction bartering of all the things that are necessary for life such as labour, basic food and the things that we genuinely need to live, so that money becomes purely functionary again, rather than being revered as some perverse value store.

It will serve no legitimate purpose for only one form of currency to exist. All forms of currency will become very localised with perhaps umbrella versions that do link to government to allow the payment of taxes and facilitate travel and the movement of goods between different areas.

The reason this doesn’t make sense today is because it is in the interest of those with influence for it not to do so. Yet tomorrow might be the beginning of a new day for us all when it most certainly will.

It is events now that will decide.

This. Is. Not. Enough.

March 26, 2020 3 comments

Everyone needs the Government to do more.

What the Government has done for us financially is not enough.

Paying people just enough so that they might be able to service their bills only helps the banks, the finance sector and whoever owns property and capital further up the chain.

This isn’t fair. It is making profit from misery. It is going to hurt many more than it will save.

It isn’t fair that so many people are riding the clutch on debt and just about managing in normal times.

There is no way that prioritising or showing preference to creditors during a national crisis is in any way fair on all of us now.

The madness has to stop.

The Government must ditch the complicated solutions and lack of consideration for the impacts and consequences that the decisions they are making will really have.

EVERYONE MUST BE TREATED THE SAME

It doesn’t matter if you are Self-Employed, Unemployed, a Shareholder, Zero-Hours Worker, Professional, Key-Worker or Business Owner.

EVERYONE MUST BE TREATED THE SAME

The only way to deal with this crisis equitably and in a way that will work for EVERYONE and put us in the best place possible for us ALL to pick up our lives and resume them as near as possible to how they were before, is to shut down the normal flow of money until normal business can be resumed.

STOP THE BILLS, THE INTEREST AND THE ACCUMULATION OF DEBT FOR EVERYONE

Don’t piss about with clever ideas that sound great when they are shared from a lectern during a TV briefing, but only end up helping some, and then in too many cases only part of the way.

EVERYONE WHO HAS LOST INCOME DUE TO THE SHUTDOWN SHOULD RECEIVE EXACTLY THE SAME 

£94 a week is enough for any one person to feed themselves and buy the necessary essentials IF THERE ARE NO OTHER BILLS TO PAY.

KEY-WORKERS, ANYONE else who is able to continue working or ANY BUSINESS that continues to trade will get the immediate bonus of having a payment holiday – which is a very fair and balanced way for the Country to say a big thank you for all that they do.

Anything else is simply setting us ALL up for a great fall.

Businesses are already closing and will not reopen.

Jobs that have been put on hold will never return.

The Crisis DOES NOT need to be made worse for any of us than it already is.

The Government can do this and it can do it quickly.

THIS IS THE HELP THAT EVERYONE NEEDS!

Coronavirus 3

Government MUST NOT bailout airlines, banks or any privately owned business during the CV Crisis. It should provide standstill legislation that trickles down to support EVERYONE and not just those who believe they are too rich to fail

March 16, 2020 5 comments

Reading over the weekend that Virgin Airways boss Richard Branson is seeking a £7.5 Billion Government bailout for the Airline Industry because of the Corona virus crisis gave me quite a jolt. Not because of what it says about the exponential impact of the worldwide outbreak of this horrid virus on British based airlines. But because of the long term implications of another government writing out cheques to underwrite privately and shareholder-owned businesses as they did so in response to the 2008 Financial Crisis without any consideration for the long term impact that it still has for us all.

To be straight to the point; it is not the responsibility of any government, the Taxpayer, public purse or whatever you want to call it, to bail out private business and especially not in such profit-orientated times.

It simply doesn’t matter matter how bad the consequences might seem for staff, shareholders or anyone else involved. These businesses are not run as a public service. They exist to enrich the people who own them, not to prioritise the wellbeing of the people they serve.

It is certainly not legitimate for any politician, elected or otherwise to underwrite the rescue of any privately or shareholder owned business so that it can again become profitable whilst the public is saddled with a debt for doing so that has not or never will be repaid.

Whilst we might all be at least concerned if not genuinely worried about what the coming days and weeks will bring, there are remarkably few businesses or organisations that will not be affected in some way. Within these, staff will have to change where they work or be laid off if they have not already done so, and in a large proportion of cases they will find themselves with a reduced income, whether that be from losing work completely or finding their hours lowered or indirect income reduced from a reduction in expenses or some other specific way that they would normally accumulate what they count as being pay.

Small businesses are going to fail. Especially those that are owner led and may have none or very few employees, where margins literally pay a living wage to the owner and nothing more. Other businesses, if not all of them, will have to lay off many staff.

Without clever thinking on the part of Government and politicians which really starts to join up all the dots and goes way beyond the brainstorming of Dominic Cummings current weirdos and misfits team, businesses that were not only viable a few weeks ago, but also very profitable will overnight become a permanently lost cause.

It is genuinely the case that like birth and death being the great levelers that they are, Corona virus does not see wealth, status or any other factor as being a mitigating factor against its dark and malevolent cause.

Nobody has the right to be treated better or differently to any other in this Country. If this Government is to succeed in leading us all through a crisis of what could very well become an indeterminate length, it is essential that Politicians on all sides put equitable thinking and the consequences and knock-on effects of all this and how it is going to effect people and businesses alike at the heart of their decision making and at the centre of what should now be a purely non-partisan cause.

Whilst we have many experts who are putting forward their opinions and trying to pressure the government to change policy and go in different ways, the reality is that whether these ‘experts’ are economists, mathematicians, scientists or doctors, none of them are experts on the full and comprehensive complexity of the snowballing issues that this crisis is building. Even the political leaders themselves have never dealt with a situation like this one and none of them have a specific historical example to look back on which could be shoehorned into use as a blueprint for managing this 2020 pandemic.

The time to question the ability, decision-making and motivation of any politician is at election time. Not when a crisis of this magnitude comes to call.

For better or for worse, right now, we have the politicians that the electorate gave us and we MUST give them the support necessary to get something done that for some if not all of us is never going to feel right.

The question should therefore be not whether our Politicians are suitable for the jobs that they had in December – because public opinion has already concluded that for us.

The question must now be whether our Politicians can now adapt and think differently to the way that they historically appear to have always done so – without foresight, empathy or any reasoned ability to look beyond the situation that appears to be right in front of their faces and then think through the implications of everything that their decisions and responsibility will now touch and lead to not just one, but potentially many steps beyond.

When big names like Branson come calling and are given an immediate public spotlight because of the fickle world of media and celebrity we have been living in until now, we must all look to see and consider the realities that roll out beneath, in front of and beyond the self interest that drives these people and see the impact of every single decision government and influential people now make as being part of the same very big cause which is actually theirs, mine and yours.

Why does anyone want a bailout?

Right now, there are lots of businesses and whole industries asking themselves and looking to our Political Leaders to answer the question ‘who will keep the lights on’?

But it is not the responsibility of the Government and therefore the Taxpayer (that’s you and I…) to keep any business functioning when it cannot trade – no matter what the circumstances or cause.

To do so – with the way that our economy currently works – will help them now, whilst causing long-term pain for us all.

Sounds harsh I know. But if a business stops trading and isn’t doing anything, so needs to be ‘mothballed’ even temporarily – what are the costs and how can or rather how should those costs be met in order to keep that business viable for when ‘normality’ can return?

Contrary to common parlance, no business is too big to fail and no individual is too financially rich to fail – that is if politicians are genuinely doing their job. It is only fear and lack of ability to take responsibility on the part of the people we have elected to lead us that drives decision making otherwise.

So no, in 2008, the Banks should never have been bailed out. And certainly not in a way that they could resume paying bonuses to staff almost immediately and then return to profitability whilst we the public will continue paying for what was a commercially created – and therefore avoidable mistake, now and for potentially many years to come.

The difference between the banking crisis and the Corona Virus crisis is that in 2008, the implications of a financial meltdown were assumed because of the ideas we all have about money, what happens without it and how we all perceive it to be the controlling force within our lives. In 2020, the implications of the Corona virus are all about how the spread and presence of a real disease WILL genuinely affect us all – not just about how we feel and respond emotionally – and in some cases irrationally – to it in our thoughts.

Income, what we ALL face and the trickle-down solutions that we ALL now need

Today, businesses are worried about trade and therefore income.

People and employees are worried about jobs and being able to work and therefore income too.

But why is income so important?

Income is important because we all have to live – which other than for food pretty much means to keep paying bills.

But who takes money from us when we pay the bills?

If we remove basic food and essential items from the equation, its commercial interests, whether it be for phones, TV, utilities (such as water, electricity, gas etc), services, loans, leases, rents or anything else.

So when we are all facing a situation that has the ability to leave none of us untouched, why should any of those private interests be able to continue to profit from what is essentially a genuine crisis, public emergency and therefore public cause, when any one of them in isolation will be able to resume their profit making activities without anything standing in their way once the Corona Virus crisis is over and life in the UK returns to something like what we agree to be the norm?

The answer is that they shouldn’t.

And it is now that Boris and all of the wannabe politicians and advisors who surround him and inhabit our political system need to stand up to these interests that are indirectly responsible for so many of the ills that we face, simply because money and profit are their one an only motivation and cause.

The Government has the power to grant a moratorium on all non essential payments and financial activities such as the accumulation of interest in every sense possible.

The Government can also underwrite the actual cost of providing essential utilities and services during this crisis period without any profit being payable to any of the private interests or shareholders who are involved in providing the ‘public’ services that we will all continue to need.

Standstill Legislation: extraordinary measures for extraordinary times

No individual can survive on around £90 per week in what we would now call ‘normal times’ and for any politician to say otherwise is to tell a disproportionate lie.

However, if the Country comes to a standstill – as it is quite reasonable for us to now expect it will do so, the suggested £90 per week, per individual or thereabouts that the DWP would pay through ‘Universal Credit’ or whatever the benefit paid to those laid off from work as a result of the crisis would be, would certainly be enough just for food and essentials per person. That is if ‘Standstill Legislation’ halted the requirement for all other bills to be paid and Government takes control of essential services so that everyone can function within their homes with no travel or any other form of expenditure required.

Done in blanket form, without exception for any company, industry or anyone else involved, Standstill Legislation would not only be a fair, but very practical solution to effectively shut down the wider, profit-based nonessential goods economy and put it on hold until we are all ready and able to move forward with life in this Country as one.

Legislation could include but not be restricted to:

  • The temporary halt of all loan, mortgage, lease and credit card payments for all people and businesses, with payment plans resuming for full schedule beyond
  • The temporary halt to all interest accumulation on credit for all people and businesses with interest only becoming applicable once again once we move forward as one
  • The temporary halt to all council tax and business rate payments for all people and businesses with Central Government picking up the tab for revenue income flow for local authorities in-between
  • The implementation of anti-profiteering legislation for all businesses able and continuing to function throughout the shutdown period requiring margins to either reflect pre-crisis trading or those of the specific industry in the period before
  • Employers being able to lay-off staff until the crisis ends, with permanent staff being able to resume their positions as soon as the crisis ends unless the business can demonstrate that normal trading cannot be immediately resumed
  • Universal Credit or rather a ‘basic income’ payable to all those out of work because of the crisis purely for food and essential items
  • Government control of all essential and previously publicly owned services (Gas, Electricity, Water, Transport etc)
  • A temporary extension of VAT payment windows to at least 6 months from 3 for any business continuing to trade during the Shutdown Period
  • Staggered Taxation support for businesses that have been able to remain trading, applied relative to drop in trading
  • Suspension of all EU derived working hour legislation – including removal of the restrictions on driver hours, driver cpc training etc.
  • All tickets for holidays and events to be honored within 12 months of normal activates being resumed or repaid – with the choice being that of the customer, or refunded by default if the event or holiday cannot be honored for ANY reason which is identified at that specific point
  • Supermarkets being required to focus on essential foods and items only with rationing in place for items that are in genuine short supply

If there is one very good thing that can come from the Corona Virus outbreak and the crisis that has created, it will be the opportunity for politicians and big business to recognise how none of their actions or decisions take effect in isolation or in the targeted way that they might think. Echo chambers are only something that exists on the internet, not in real life.

The reality is that Corona Virus is not only exposing us all to a potentially life-threatening illness. It is also demonstrating how the lives of all of us are already exceptionally vulnerable, and that Government already has the ability to address the weaknesses of an unrestricted economic system where private interest and profit making at one end of the spectrum are indirectly or otherwise making life misery for many others in a wide ranging and incalculable number of different ways.

Yes, the suggestions that I am making would be only on a temporary basis and that is how it would have to be once normality returns. But until politicians actually start doing their jobs properly, taking responsibility and making life better and more equitable for everyone in many different and far-reaching ways, the chaos and hardship that the Corona Virus is now revealing will continue to be an example of the daily struggles than many British people face until we all start thinking and behaving like we are one.

 

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