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Money and Financial Boom and Bust Cycles – an inevitable outcome?

Hilights


Money, Finance & Taxation,Public Arena

Money and Financial Boom and Bust Cycles – an inevitable outcome?

Summary

In ancient times, the concept of Money allowed for a steady loss of value in accordance with Nature’s laws? Overtime as the Money transactions become safer or more secure and the financial systems allow for the concept of increasing value of Money due to compounding interest the financial system itself begins to operate in cycles of ‘Boom’ and ‘Bust’. The very values of which ‘Money’ is a store of, began to fluctuate and when coupled with increasing interest thereon such fluctuations led to lack of Trust which again further exacerbated the ‘Boom’ and ‘Bust’ cycles.

We now once again need to value ‘Money’ more systematically and in ways that are in accordance with Nature’s Laws and also arrive at more realistic ways to determine the interse exchange value of Money when dealing with other countries.

Highlights:

  • Concept of Money – Flaws in the extant financial Systems – Cause for Boom and Bust Cycles – Ensuring circulation of money – Barter systems – Exchange rate mechanism

Quotations for consideration:

* “The 1st panacea of a mismanaged Nation is excessive inflation of the currency; the 2nd is war. Both bring a temporary prosperity; a permanent ruin.” – Ernest Hemingway.

* “An economist is an expert who will know tomorrow why the things he predicted yesterday did not happen today.” – Laurence J. Peter.

*  “Expert predictions have a lousy record. An expert will always have an explanation for anything in hindsight, and will rarely accept that his earlier prediction was wrong. There is not much risk for experts who make predictions, as their rules for play are “Heads: I win, Tails: You forget we had a bet.”- Dan Gardener

* “The difficulty lies not in the new ideas but in escaping from the old ones” – John Maynard Keynes.

*“Money is like manure; it’s not worth a thing unless it’s spread around encouraging young things to grow” – Thornton Wilders

Background:

  1. Wealth – understanding it.

In 1985 the world wealth was about US$12 Trillion against world asset / resources value (all resources) of also about US$12 Trillion.

By 2000 the world’s asset value remained at around US$12 Trillion (n 1985 dollar value) allowing for new discoveries replacing used resources, while the total wealth grew to US$200 Trillion, an over 16 times multiple. Most of such wealth comes from knowledge and skills which remains with the people and cannot be confiscated or usurped. Employees in such fields are competent to negotiate for themselves and don’t need any Union to collect fees to argue for them. The real assets of the Companies in such fields go home with their Employees each night and the Companies can only hope they return the next day. In such merit / performance based organizations, it is only the incapable / incompetent who seek Non Functional Upgrades (NFU) and protection from being fired, as is being allowed in public sector and Government jobs.

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