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Thursday, October 6, 2011

The neutron bomb of disasters

Economic collapse is the neutron bomb of disasters. The disaster hits, everyone gets “wiped out,” yet all the material things are still standing. The buildings are still there. None of the factories have disappeared. All the farms are still intact.

Unlike a real neutron bomb, the people are still standing too. The only thing that’s really disappeared is the medium of exchange. Since our “money” has no intrinsic value anyway, it’s like losing nothing at all. Most money isn’t even in paper, but ones and zeros in a computer somewhere.

In a more perfect world everyone would blink their eyes, shake their heads, and realize that the whole fiat currency thing was a bad idea. They wouldn’t go right out and replace it with another make believe money system. Perhaps the smart thing would be some sort of elaborate barter system. Maybe something like the barter networks that are springing up in Greece right now.

Those barter networks function just fine on the local level, and there’s no intrinsic reason the whole world could not operate on a similar system. Instead of dollars, we could be trading things like hours of labor or calories of energy.

The problem that Greece has is that it’s one of the first to hit by the financial neutron bomb. Those areas less affected, like Germany, are heavily invested in the old imaginary system. They want the real things in Greece: land, resources, and labor, to be turned into these imaginary “Euros” and sent back to the rest of the EU. The best thing for Greece, and other countries and regions in the same boat, is to say no. Eventually those financial bombs will hit the rest of the world and everyone can wake up from the bad dream.

It’s not the collapse of the fiat currency that’s the problem. It’s all those obligations and relationships that are held over as the money itself disappears. Those imaginary monetary units have been concentrated in a relatively small number of hands. Right now it’s possible to trade those imaginary units for real things: houses in the Hamptons, yachts, pretty cars, and sexual favors from much younger women. Of course, those people want to keep the game going as long as possible.

Those with big imaginary numbers want the economic disaster to happen slow enough that they can take the last real things from people who still have stuff. As long as police and the military will accept those imaginary units, they can provide real enforcement. The way those with big piles of ones and zeros want the game to play out is for them to get all the stuff.

It’s a silly rigged game. It’s hard to see how silly as it’s the one we were born into. It’s like being born into a bizarre religious cult. Growing up, you don’t notice how crazy the cult is. If most of the world is in the same crazy cult, it’s even harder to become sane. The only people not in the cult are those who’ve been kicked out -the ones without any money.

The good news is that they might have kicked too many out of the cult. After the initial shock, many are shaking their heads and saying: wasn’t that crazy? Let’s not do that again. Lets find other ways of exchanging things of value. Now if only those crazy cult members would leave us alone. Of course, you can’t be too hard on those cultists. Most of the sane people believed the crazy doctrine once too.

Now that tiny percentage of the people who understand the game are really worried. Their only real talent is running a crazy cult. They fear everyone will go sane. Then they’ll be unable to exchange their imaginary money for real things. They have few other useful skills. They fear no one will love them.

They might be right.

-Sixbears

6 comments:

  1. I think more and more people are beginning to see money like the way you describe, its just a means to an end. A way that everyone can trade on equal footing - as long as you have it. If its gone, but you have tangibles (i.e. food, medicine, etc.), the lack of money really doesn't matter - you still have what you needed the money to buy anyway.

    Mom was born in 1937 in a migrant family of 12 in south Texas. Nobody knew they were poor, because everyone was in the same situation - very little money. But they all lived in a small farming community, where friends and relatives were there to help others who needed it, and accepted it when it was their turn. No embarassment - it was just your turn.

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  2. Anon: 1937 wasn't all that long ago in the big scheme of things. Many of us should be able to return to that mind set.

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  3. My father-in-law always told me not to save a lot of money but rather spend in on things you can use to survive, like garden equipment, etc. He said the time is coming when we will have to trade things and sevices when the money fails. He has been dead for a lot of years, but what he said is still true.

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  4. Dizzy, your father-in-law had wisdom. I also believe in spending money on experiences that build memories.

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  5. sixbear i think greece is going to do what iceland did and tell the IMF and europe to get $#^&*$.Bartering local or between nations will increace in the near future.Read anything on countries with a VAT tax bartering is a large part of private party deals.when countries defalt comodity swaps are made.Let colunbia defalt and the coffee dry up whos in worst shape columbia,s president or or own after caffine withdrawl hits the public?

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  6. It'd be better for Greece if they went the way of Iceland. Coffee? Yeah, that's what I worry about. Just bought 35 pounds of organic fair trade green coffee. That should hold me for a bit.

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