Number of Words: 1150
Reading time: 6 min
Have you ever came across the story telling you about vast riches, hidden somewhere deep, or beneath, or both. Have you ever wondered how your life would, or could have been, if you had more money? Even if you are already rich. Would be different, right? Have you ever wondered how it would be, if everyone had more money? How do you think that would turn out? Well, allow me to disappoint you, it would be exactly the same as it is now.
Modern economics is a bunch of complicated shit jargon. Like in many other cases language is used to obscure and to confuse. You should know scarcity is the basis.
Everything has a finite amount. Too much of something lowers its value – this includes the money itself. The problem however, was never about money or paper money. If anything, too much money, or large denominations – many zeroes on each paper, means big problems for anyone not holding some sort of an alternative.
The shortage of money is not, and has never been a problem. Wars never start over paper with numbers and pictures on it – the financial economy. Wars start due to tangible assets, real economy. The problem has always been the amount of tangible assets – quantity, quality and distribution.
Supply and demand
When you desire or need something demand increases. When something is produced supply increases. According to the economic theory the price is determined where supply and demand meet.
If supply goes down and demand remains the same, the price will go up.
If demand goes up and supply remains the same, the price will go up.
If demand goes down and supply remains the same businesses are losing money, so they cut production to reduce the supply and lay off workers.
When interest rates go down → supply of money increases → demand for goods increases → prices inflate. When interest rates go up → supply of money decreases → demanded for goods decreases → prices deflate. Interest rate may be understood as a price of money creation.
overabundance → less profit → cutting production → layoffs → people have less money → less shopping → decrease in demand → more overabundance → even less profit → cutting production more → even more layoffs
scarcity → more profit → keeping production bellow the demand → employment opportunities → people have more money → more shopping → increase in demand → more scarcity → even more profit → increased production, still bellow demand → more employment opportunities
This is why you are keep being told consumer spending and consumer confidence is important. This is why the lack of credit availability or credit crunch is a problem, as that means consumer can not shop as much. They love credit and you love them long time if you take it.
Economists dread deflation. They dread the decrease in a demand, unless it is of their own design. The system, such as it is, can only grow while it expands. Expands or consumes. They like their consumers, that is you, to have a good confidence and spend money.
Economists want inflation. About 3% a year is fine with them. Inflation → prices go up. The system does not like you saving money. Those who save get punished by inflation. The system likes you to borrow money.
As prices go up, your income does not. Each year your purchasing power decreases. When this becomes widespread the economy has a problem. Problem which was inevitable, so they start printing money, to further postpone the collapse.
You know how 1% of population owns everything? Here comes the question: what if this 1% of people would give money away to you, the people? If everyone gets to have ten million money units, and they all want to buy themselves a nice big house, what happens to the price of real estate?
There is an increase in demand, millionaires all around, as far as the eye can see. Has the supply of housing increased to match the demand? No, it has not. Will it? Hardly. So then what? So then the price of real estate is proportionally increased to match the new demand. A house which used to cost 100 thousand money units now costs in millions of money units, which makes everyone just as rich as before. The only difference here is that those, who were already rich and super rich, would then be less rich – why they prefer to be the only ones.
The supply of goods is finite. There are limits to how much of something can be produced. A lot of these limits are intentional in order to preserve the price. As long as people need it they will buy it. Even if it means taking a 30 year loan.
You have one of the most despicable jobs there are – a salesman. Today you have 10 people asking you about a car. Not much to go with but a sucker is born every minute. Then 1% gives their money away. Suddenly you have 100 people asking you about a car. What do you do? You increase the price of the car by factor of 10. Nothing would be gained by showering everyone with money. There is not enough of tangible resources available to buy them.
You can not all be rich. Not in this system. Being rich is scarce. You can not all have everything.
By now it should be clear to you, as to what happens when you go into debt. Let us assume you do not spend as much as you can. Let us be daring and assume you have savings. You desire a house, but still do not have enough to buy it. You borrow money to buy a house. You add to the demand. Your contribution to the demand is artificial, you do not actually have that purchasing power, you borrowed it. But still you add to the demand and the price of real estate reflects that demand. Cheap Credit = Higher Prices.
When yet again you see promises of some sort of riches save yourself some time and direct your attention to something else. The actual change would be in changing the system itself. This or that economic policy wont change much, if anything at all. In fact, when you see them talking about economic policies, know that you are screwed. Deep State and Cabal and their Trillions… Have you ever asked yourself why would someone capable of interstellar travel need to rely on our economy to build their secret space program? I mean, why gimp yourself?
A system where basic goods and necessities are not scarce and have little to no production cost. This way you would not have to work to survive. You would only work to buy what would then be deemed luxury.