Aug 3, 2020
LIVING IN DEBT.
Jeff Bezos has a market stock of 153.1 billion USD, the total of the worlds cash value is nearly US $1.7 trillion in circulation , This is a much more significant amount compared to the total money in the stock market, which is a mere $74 trillion. As of January 31, 2019, there was, including Federal Reserve notes, coins, and currency no longer issued. Money in the form of investments, derivatives, and cryptocurrencies exceeds $1.2 quadrillion. This is what it looks like when written out: $1,200,000,000,000,000 the value of service made all over the world is $86 trillion GDP based on global economy outputs, the worlds debt will exceed $257 trillion. As for money owed by every single person and country in the world, the grand total is $215 trillion, with some 33% of it borrowed in the last decade a world living on debt.
Never in history; had there being so much cheap money in circulation having a higher demand for the central banks to allow the release of paper money into the economy. low interest rate are demanded by different economy, which mean that states can borrow large funds on cheap rate which also means that the rich can do the same without any liability even if they default, its only liable to the extent of the holdings not having anything to do with his whole share which it’s used to buy shares from companies, invested in real estate or other possessions, Making it easier for investors to get their hands on cheap money, living in debt is partially the frame work of any successful business mogul having to live free of charge. Organization are borrowing large amount of money from each other then used to make more money that is then lensed to others making a reversed cycle, thereby no one has the money that backs up the money that is being lend out from the bank. Making the gap between the poor and the rich wider than ever. A system that makes the rich even richer but the others at the receiving end get to lose billions every year to low interest rate. Having a saving accounts is almost as burning money where saver gets 0.02% per year worsen the working class and also increasing the cost of daily expenditure because prices on commodity continues to rises
You may want to ask how all this did happened? for how long had this being going on? And if you think the way I do, why less people are uninformed about this scheme. Well my previous article “money tree” https://link.medium.com/a1FvKyHY56 shared more light on how paper currency gain self-value which led to industrial institution happening to change the way business was done by giving government responsibility to private enterprise which brought about the capital era that we are living at date. Making things worse is the financial industry of today which is run on electronic transaction and current accelerated financial transaction using credit cards on a liberalized economy, where money is used to earn money. This has unleash money into the world benefiting only a few people cause this allow the deals of the bank to explode, major international banks has become investment establishment that funds huge project deals where huge profit are made but having less to do with the real economy leading to more money going into circulation.
Furthermore the money creation process also seems to be something of mystery to academia and even in the board rooms of banking sector where the public who are in the dark. The banks are silence for some reason cause they would have to explain to their customer that it’s them creating the money and them benefiting hugely as the result as explained; Money isn’t neutral after all it’s not the central banks but private banks that generates most of the new money a process known as deposit money creation, money is created when someone goes to the bank to take out a loan, the bank opens an account which issues the fund then in the contract with the individual who is taking out the loan, the banks hopes that person would pay it back someday, that how the original impose to create money comes from banks.. This is news to most people, many thinks a loan works like this; that a saver takes money to the bank to deposit and then the BANKS Loans this money to a customer for reasoning’s of buying a house or running a business but that’s not the case. If someone has savings then the money is packed in the saving account and the advantage for the banks is that the person can’t just take it out but when a bank issues a loan it’s created from nothing, this two process really don’t have anything to do with each other even though it looks that way and even though that’s what the textbook says.
private banks basically creates new money as they wish, this used to be the privilege of princes and government to create money and therefore profit out of nothing this privilege has being in the hands of financial institutions for a long time and in recent times its being unchecked.
This how it’s done; if a customer wants to take a loan for #100k the bank deposit between 1–3% to the central bank, in return the banks is allowed to transfer to the customer account with the push of a button with the intervention of technology, the banks then collects the interest with the creation of deposit money. This is a license to make money, the banks are happy that they can do this cause this give them a free reign that they get to keep the profit with sign ranged that’s a few billion every year. The big banks in particular has massively increased the money generation with electronic money at the push of the button, 90% of our money is just a numbers on a computer in a bank somewhere.
This system would cause living in the future generation and the middle class with having to face the chaos created by what happens when there is more money in circulation which is a ticking bomb. First, when debt rises faster than economic output (as it has been doing in recent years), higher government debt implies more state interference in the economy and higher taxes in the future. Second, debt must be rolled over at regular intervals. Whether in the private sector or government, a debt crisis in one country can and frequently does spread economic pain to other countries. This can happen through a tightening of financial conditions such as a spike in interest rates, a slowdown in trade and economic growth, or merely a steep decline in confidence. This is especially true if the country in crisis is large and intricately linked to the global economy. The 2007–08 global financial crisis showed how a debt crisis can spread like an epidemic and hurt economies worldwide. But with all these been said the rich are still steps ahead of the poor, not only with the knowledge that they have but by owing landed properties and establishment that would exist even after the purge.
This where the problem has always been closing this article cause when I started my research I wanted it to be in form of motivation but I realized the sad state we all are living in. Making me realized that the scripture had talked about this age all along but also gave us hope for a better future to look forward to when the righteous would reign with a just RULER. This could be a cliché for some of you but to it I find comfort in an uncertain world.
