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Money, Money, Money!
we can't eat it, so why do we need it?

Here's where more flies land in the ointment. Aside from credit, which is bad enough for you, but worse for governments, there are other factors to complicate the situation. Gold used to be good because it was the same in any language; but paper money...? When every country had its own type - rupee, pound, yen, etc - and its value was based not only on gold reserves, but also the state of the economy, a one-for-one exchange rate would be impractical and unfair. No problem - just invent the money-market. Figure out which country is doing best and its currency becomes the benchmark. All others are then valued as a percentage of the leading currency. It sounds pretty straightforward - an American might pay ten dollars for a barrel of molasses, whereas it could cost a Greek five times that in drachma simply because his country is going through a bad patch and its currency isn't considered reliable. If, however, he had a wad of US dollars it would be a different story. He simply has to buy some in order to get a better deal but, of course, he would prefer a good exchange rate. To achieve this he watches the market fluctuations of his currency against the dollar. He's disappointed - the value of his drachma continues to remain low because nobody trusts or wants it; except perhaps the Russians who, for reasons only known to themselves, are giving a much better rate. It would also seem that America holds their economy in much higher esteem, so he would get more dollars if he first traded drachma for roubles, then used them to buy greenbacks. Uh-oh! We're back to the ABCD barter system!

The difference is that, when money is involved, nothing of use changes hands. Instead of paper buying gold as it used to, it is now buying more paper, understandable in a way because metal is heavy to cart around; but then so is paper, particularly in the sums we are talking about here which are enormous. There would have to be a better way of exchanging money than ferrying packets of banknotes back and forth - how about something representing them, something smaller and lighter? After all, it isn't going to stay in one place long enough to get to know it personally. Surely a single sheet of paper, a kind-of promissory note would be far more sensible? Let's use the letter of credit. Yes, let's! Having come full circle, there we have it, the root of the problem; or at least the beginning of it. We still import and export material goods, but we pay for them with an IOU. Unfortunately, this is merely a promised amount, and if we haven't the readies to cover what we owe, we are in big trouble when settlement is due. That day of reckoning, it seems, has arrived and all of us are found wanting.

We've not only used credit to buy what we need to survive: but, we've seen it as a way to increase our wealth simply by trading something we don't actually possess, not in its physical form, anyway. As ordinary people, we've taken out loans to invest in entities that subsequently went bust. Local councils risked ratepayer's money in schemes and overseas banks that crumbled, losing the lot. Countries were far from immune: Greece fell to its knees, Spain hasn't fared much better, and France is in such deep financial trouble that no-one can possibly afford to bail her out! What a sad world we have allowed to be created that the bastions of proud cultures and traditions should be so denigrated. The one saving grace might have been the United States of America. She was supposed to be the leader of nations, the one to turn to for help and protection, the righter of wrongs, the ultimate defender. But now we learn she is, once again, on the verge of financial collapse. How is it possible that the country every other one owes can't call in her debts and achieve solvency? I just don't understand it.

The past has brought us to where we are now, but it can only take us successfully into the future if we learn by it. We have been gifted with a New Year. Why can't we all just use it to start again? Reciprocal debts could be written off. Next, we pay what we owe and balance the books. Then we'll discover who has been living beyond their means and do something positive to help them get back on their feet. Okay, they might have made a complete dog's breakfast of the country's finances; but, really and truly, who's counting? It isn't the end of their world, and giving them a leg up certainly wouldn't be the end of ours - it's only money! A stumbling block might be the shortage created by the fat-cats, those who have made their fortunes, trillions which is no longer in the system but in their pockets. Perhaps, if they could be encouraged to put some back there would be less of a shortfall. A few with a conscience have already started doing just that, and good on them - there is still hope. With a few more following their example, the fog might begin to clear. And what might we be able to see then? Maybe that being rich or poor is irrelevant; and that money is a mere convenience, but not a way of life.

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