Solutions For The Ensuing Global Financial Crisis.

One of the key reasons for the global financial crisis that is ongoing is debt in the form of personal, public, corporate and national level. Global debt is 3 times larger than global GDP. In the last 30 years growth via GDP targets has mainly been fuelled with credit, it does not help that this credit is obliged to interest that has to also be repaid on the capital. Einstein once said that “compound interest is the most destructive force in the world”. It is no longer sufficient to keep tweaking with the inept tools that are at the disposal off the financial troika these include quantitative easing and interest rate manipulation. By way of necessity we need to review the global economy for longer term sustainable more transparent and equitable model. It is in my humble opinion that the below should be key considerations to accomplish that meaningful overhaul:

Abolish Private Central Banking (Including BIS, IMF and World Bank) i.e the creation and issuance of money by the Central Bank provided as a loan to the government. Many experts and historians would it is and should be a corrupt practice because the government then need to repay the capital of that loan plus the compounded interest. The solution would be for central government to take back the control and creation of money and any money created should not be done so as debt or loan. It should be provided to government departments such as Health, Education, Welfare, Infrastructure and if need be Defence. The key point is that there would be no repayment necessary of that money created by the state owned Central Bank.

Global Debt Forgiveness is required to wipe out all personal, public, national and corporate debt. This has occurred on several occasions historically. Global economy has always flourished there after!

Bailout should be made directly to the Citizens of the Nation directly to their name and into the bank account designated by the citizen. This can be used to repay any portion of a debt and use the remainder for the normal consumable obligations. This in contrast is more sound and beneficial to the Citizens of the nation then to offer it to insolvent banks in the form of a “bail out” or the recently devastating “bail in” as seen in Cyprus that has been sanctioned by government to allow Banks to seize your bank deposits for their own benefit.

Currency should be money with intrinsic value so any future currency should have the backing of something intrinsic in value such as gold. The current currencies in use do not have anything backing them which give them the intrinsic value which distinguishes them as money compared to a currency. This feature will protect monies inflationary force because it’s supply and creation will be limited. Therefore the invisible tax of inflation and devaluation of our buying power is managed more fairly. In a shocking move likely to crush the US economy overnight if it is a fact; China is refusing to make its new gold-backed Yuan, convertible from or to US Dollars.  The new Yuan will be introduced next Tuesday, April 19 2016. This bold move implies China do not want to exchange their gold backed currency for one they consider to be without value!!!

Scrap 2 laws for every 1 new law because the world is over bureaucratic, on many occasions laws are past after an event to legitimize that illegal act! They do not provide further stability to our global economy. The average person breaks many laws unwittingly that are ridiculous and sinister in eroding our inalienable human rights. Therefore it would be great if a civilian body vetted the potential laws before lobbies present laws for implementation. To de-clutter the bureaucracy; for every new law that is passed 2 should be abolished.

Bitcoin as a parallel monetary system as it is not based on the fiat fractional reserve money creation system. It encompasses sound monetary values such as:

  • Payment freedom– It is possible to send and receive any amount of money instantly anywhere in the world at any time. No bank holidays. No borders. No imposed limits. Bitcoin allows its users to be in full control of their money.
  • Very low fees– Bitcoin payments are currently processed with either no fees or extremely small fees. Users may include fees with transactions to receive priority processing, which results in faster confirmation of transactions by the network. Additionally, merchant processors exist to assist merchants in processing transactions, converting Bitcoins to fiat currency and depositing funds directly into merchants’ bank accounts daily. As these services are based on Bitcoin, they can be offered for much lower fees than with PayPal or credit card networks.
  • Fewer risks for merchants– Bitcoin transactions are secure, irreversible, and do not contain customers’ sensitive or personal information. This protects merchants from losses caused by fraud or fraudulent chargebacks, and there is no need for PCI compliance. Merchants can easily expand to new markets where either credit cards are not available or fraud rates are unacceptably high. The net results are lower fees, larger markets, and fewer administrative costs.
  • Security and control– Bitcoin users are in full control of their transactions; it is impossible for merchants to force unwanted or unnoticed charges as can happen with other payment methods. Bitcoin payments can be made without personal information tied to the transaction. This offers strong protection against identity theft. Bitcoin users can also protect their money with backup and encryption.
  • Transparent and neutral– All information concerning the Bitcoin money supply itself is readily available on the block chain for anybody to verify and use in real-time. No individual or organization can control or manipulate the Bitcoin protocol because it is cryptographically secure. This allows the core of Bitcoin to be trusted for being completely neutral, transparent and predictable.
  • Dis-intermediates-It encourages removal of anyone that does not add value to the service. E.g be your own secure bank without banks. This eliminates the trust we purchase from a middleman, e.g bank, government, insurer, broker; allowing removal of non value adding middle men for transference of property rights.
  • Largest p2p network ever-The Bitcoin intrinsic value is in the protocol (technology) on which other services will be developed e.g Contracts without lawyers.  This is known as Bitcoin 2.0 is likely to disrupt our society and economy positively in ways we can’t imagine.
  • Deflationary in nature-Limited in supply to 21 million Bitcoins, means their value is likely to keep rising long term. Since their inception in 2009 their value has increased 1000’s of percent relative to fiat currencies, as can be seen here.

The above potential global solutions would cause short term disruption and pain, but as we have seen with the case of Iceland; long term equitable gain will prevail.

 

 

De Dollarization? Why, When, What?

The US Dollar is the worlds reserve currency. With global QE it looks like we are in a quasi currency war with the Euro, Yen, Yuan and oil. There is talk that the US may lose
it’s reserve currency status in the future. What will replace it? A basket? Bit Coins? How likely is this to happen? How soon will this happen?

Undoubtedly the process of de dollarization is unwinding. This partly is due to US sanctions on foreign nations e.g Russia. Who have been forced to develop direct trade with partners settling in direct conversion from importer to exporters currency for settlement. Thus passing the necessary conversion of their own currency into USD. Russia also developed an alternate to the SWIFT monetary system. The Brics have also set up their own development bank to compete with the World Bank. Many countries are repatriating their gold holding from the US. There is also a movement by the financial troika to ban cash and make a completely cashless society where spending/transactions are completely digitally controlled through the worlds exchanges/banks.
In light of these events the USD is loosing it’s reserve currency status. The big question is what will emerge to take over.
China’s yuan currency, which Washington has long alleged was manipulated, is “no longer undervalued”, the International Monetary Fund said on May 26th 2015. It is being internationalised (embraced onto global systems).
There will most likely be a reset of global debt and currencies will all be revalued relative to their debt and assets. There will be some kind of new currency created with the backing of precious metal and or a blend of currencies with the Yuan making up the largest % of that basket. It could be through SDR’s i.e Special Drawing Rights. However as well as gold, bitcoin is likely to do well during the global currency reset due to people looking to preserve wealth by buying portable assets!

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