This financial crisis, why did it start, how did it start, how come it was possible in the first place, will it happen again?
We all know it started by people being able to make money by extending loans to people not having a snowball's chance in hell to service those loans. Making money by extending bad loans? That's downright stupid. Aren't there organisations, like governments and government organisations, who are supposed to see that such a stupidity can't happen? Where have they been? What have they been doing? Were they asleep or part of the whole scam?
To understand it all we have to go back to the beginning. Well not quite. We stay this side of the Big Bang and don't even approach moment zero. We start with one unenlightened cave man who put much effort into hunting down an antelope, killing it, skinning it, barbecuing a choice piece of meat to get the aroma to reach the nostrils of his intended partner in commerce. This cave man may have been unenlightened, but he was not stupid. He wanted to trade the antelope for something big. Well, not so big, really. She was kind of petite with disheveled hair and a build to die for. She was the teen-age daughter of his neighbour. This neighbour had the daughter, put effort into raising her at times and at other times convinced his wife to put the effort into raising their tomboy daughter. She was his property, like his wife was. He could trade her, and trade her he would. It was always on the cards. Life just was like that. He was getting on in years and his surviving four sons had families of their own and had no time to hunt for their old man and old lady. Now this young neighbour whose barbecuing meat smelled so heavenly was sure to be a good provider.
So, the trade was made. No money changed hands, but goods with intrinsic value did. The world of commerce operated like this for some time. The big problem with bartering was that one had to find someone who had what one wanted and wanted what one had. This was a problem even in primitive societies. There had to be something anyone could exchange for any goods. Some primitive societies used shells. Coinage and precious metals soon followed. Barter and buying co-existed for a long time. Even today barter is still used.
The problem was that in most cases the exchange medium had no or very little intrinsic value. How was one to insure that the system didn't get out of kilter? Who was to issue the exchange medium and how were they to decide how much of it to issue? The more people came on the scene, the more difficult these problems became.
Ideally, the exchange medium derived its value from the amount of goods and services a unit of it could buy. That means goods and services should increase and decrease in parallel to the exchange medium, or vice versa. It boils down to the same thing. As people increased and the industrial revolution came on the scene these problems became very difficult to manage. How was one to know the total amount of goods and services one should issue currency for? People started to back their currency with things like gold, which was a stupid idea. How can a currency derive its value from something dug out of the ground and put in vaults? Something of which there is much more available than is needed for all its uses? Gold may have been rare in antiquity, but not anymore. New gold fields and production methods have seen to that.
International trade has been around for thousands of years, but with the electronic age it accelerated out of all proportion. Now figures on paper, and even figures stored and moved between electronic mediums, count as currency. The balance between goods and services and whatever is used as an exchange medium has become very difficult to maintain.
Enter the sharks. They've always been around. But they never had it so good. Opportunities to make money out of manipulating money have never been so plentiful.
And there you have it: it is too easy to make money out of manipulating money. Very little thought has been given to how this can be prevented. The greed of some seems to be unlimited while the risk associated with scheming us suckers - yes, in the end someone always has to pay - is negligible. And, of course, people are too easily fooled. Will it happen again? You can bet your bottom dollar. Nothing has changed. These people got to keep their millions, they are not in jail, no effective safeguards have been put in place, such actions have not been criminalised. Yes, it will happen again.
Next time I will ask why the perpetrators are not in jail. What hold do they have over the powers that be that keeps them out of jail? Why did the powers that be not criminalise these actions? Why did they not take decisive action to prevent this happening again? Why reward these people and instances by paying them tax payer money?
Yes, Johnny Nash was right; there are more questions than answers.
Till next time.
We all know it started by people being able to make money by extending loans to people not having a snowball's chance in hell to service those loans. Making money by extending bad loans? That's downright stupid. Aren't there organisations, like governments and government organisations, who are supposed to see that such a stupidity can't happen? Where have they been? What have they been doing? Were they asleep or part of the whole scam?
To understand it all we have to go back to the beginning. Well not quite. We stay this side of the Big Bang and don't even approach moment zero. We start with one unenlightened cave man who put much effort into hunting down an antelope, killing it, skinning it, barbecuing a choice piece of meat to get the aroma to reach the nostrils of his intended partner in commerce. This cave man may have been unenlightened, but he was not stupid. He wanted to trade the antelope for something big. Well, not so big, really. She was kind of petite with disheveled hair and a build to die for. She was the teen-age daughter of his neighbour. This neighbour had the daughter, put effort into raising her at times and at other times convinced his wife to put the effort into raising their tomboy daughter. She was his property, like his wife was. He could trade her, and trade her he would. It was always on the cards. Life just was like that. He was getting on in years and his surviving four sons had families of their own and had no time to hunt for their old man and old lady. Now this young neighbour whose barbecuing meat smelled so heavenly was sure to be a good provider.
So, the trade was made. No money changed hands, but goods with intrinsic value did. The world of commerce operated like this for some time. The big problem with bartering was that one had to find someone who had what one wanted and wanted what one had. This was a problem even in primitive societies. There had to be something anyone could exchange for any goods. Some primitive societies used shells. Coinage and precious metals soon followed. Barter and buying co-existed for a long time. Even today barter is still used.
The problem was that in most cases the exchange medium had no or very little intrinsic value. How was one to insure that the system didn't get out of kilter? Who was to issue the exchange medium and how were they to decide how much of it to issue? The more people came on the scene, the more difficult these problems became.
Ideally, the exchange medium derived its value from the amount of goods and services a unit of it could buy. That means goods and services should increase and decrease in parallel to the exchange medium, or vice versa. It boils down to the same thing. As people increased and the industrial revolution came on the scene these problems became very difficult to manage. How was one to know the total amount of goods and services one should issue currency for? People started to back their currency with things like gold, which was a stupid idea. How can a currency derive its value from something dug out of the ground and put in vaults? Something of which there is much more available than is needed for all its uses? Gold may have been rare in antiquity, but not anymore. New gold fields and production methods have seen to that.
International trade has been around for thousands of years, but with the electronic age it accelerated out of all proportion. Now figures on paper, and even figures stored and moved between electronic mediums, count as currency. The balance between goods and services and whatever is used as an exchange medium has become very difficult to maintain.
Enter the sharks. They've always been around. But they never had it so good. Opportunities to make money out of manipulating money have never been so plentiful.
And there you have it: it is too easy to make money out of manipulating money. Very little thought has been given to how this can be prevented. The greed of some seems to be unlimited while the risk associated with scheming us suckers - yes, in the end someone always has to pay - is negligible. And, of course, people are too easily fooled. Will it happen again? You can bet your bottom dollar. Nothing has changed. These people got to keep their millions, they are not in jail, no effective safeguards have been put in place, such actions have not been criminalised. Yes, it will happen again.
Next time I will ask why the perpetrators are not in jail. What hold do they have over the powers that be that keeps them out of jail? Why did the powers that be not criminalise these actions? Why did they not take decisive action to prevent this happening again? Why reward these people and instances by paying them tax payer money?
Yes, Johnny Nash was right; there are more questions than answers.
Till next time.
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