Cashtration
Recently, we’ve witnessed the bank holiday in Greece, the limitation as to how much the Greek people can withdraw from their accounts each day.
Not surprisingly, the mainstream press have focused on images such as the one above – a queue at an ATM – and discussed the difficulty of the Greek people in trying to run their lives on the €50-€60 that they’re allowed to withdraw each day.
The press then comment poignantly that “Something needs to be done.” The implication is that “someone”, either the banks or the government, need to find a way to deliver these people more money, so that they can continue to function economically.
Of course, the problem, and the very reason for the bank holiday in the first place, is that the money simply doesn’t exist.
For many years, governments have been attempting to expand the economy by encouraging debt. Governments (most notably the EU and US) have borrowed far more than they ever have in history, to the point that they’re now facing insolvency.
Further, the average citizen has been programmed to think that he can get ahead through increased debt. As a result, personal debt has risen to an unprecedented level.
But in order for someone to borrow, someone must offer to lend, and, of course, the banks have been the lenders. Banks typically make their profits by taking in deposits, then loaning out that money to others, making their profits on the interest.
This is a system that began in Europe hundreds of years ago and, although it has repeatedly resulted in disaster, continues to be the standard by which banks operate.
Theoretically, it’s a workable idea.
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