Yes Nick, actually I imagine most of my anthropological brethren would sigh and say something like: if only. But it was rhetorical in my case too. Persuade people to trade anything and because a monetary value makes buying and selling work so easily, almost all people have lost the evaluative skill required for equitable barter. So it is really consigned to nostalgia and the wishful thinking of those who see the big collapse building up when there is so much debt and inflation that it all logjams. As said to me more or less by one of my contemporaries when we did a get together of all living old boys (bar a few too ill or too far away) at the end of 2010, "I live for money, children are grown up and gone and doing well, ex-wife has somebody as well off as me, so my bank account keeps me company". This was a bloke who was so full of ideals when I left in 1966 I would have expected him to stumble into politics, but what I have learned over the years is the seductive power of money makes and breaks takes many hostages to its fortune and failure.
Don't appologise Nick, it's a very valid aside and I agree, we've become slaves and adicts to all this "communication"
I agree brian and it was this point of can we go back to bartering that led me to pose the question in the first place. However reading through the answers and comments, I get the sinking feeling we are stuck with it.
Money is to bartering as e-mail is to letters. I can't see us going back to the old way - no matter how many of us would like to.
Off subject - I started my career when any important information had to be passed by letter, so we actually thought about what we were saying and whether we needed to send the letter. Similarly architects drew it once and we lived with it - rather than making difficult changes on not so easy to change drawings. Now we are instant everything. We are expected to be at the end of a phone, keyboard, screen and make instant changes and react immediately. People send off hundreds of e-mails per day without thinking,just to cover their own derrières. Go back to communicating by letter and people will actually think whether the communication is necessary and the content therein.
Sorry for the asside.
Celeste, you are making very valid points except that I would go further and say that, for instance, In England and France we respectively see governments who do all within their grasp to maintain a façade of affluence that they wish to be taken as the representationare surrounding areas have no idea what provincial form industrial centres are like or the state of agriculture and so on. The people in capital cities, especially those in the finance sectors, believe they are saving the country and thus the EU. What I must quote from you is: 'the Germans and the British and the French have sat on their collective backsides and retreated in to their collective Empires and really done nothing to solve the problem --- which their Banks caused in the first place'. Guys I went to school with coming up to pension age are staying on. Not because their already large enough pensions will not be enough but on the principle that since deregulation there has been so much money to make that they don't want out. Greedy bast'ds. What about the rest of us? They shrug shoulders.
It is an interesting question Lynda and there are plenty of well informed and advice giving dissidents like Joubert as already touched on. The people in government and banking ivory towers do not look or listen. They do not care, they are getting richer. Your citations make excellent example of the thoughts of people who were not only 'raving' lefties but of the real right like Churchill who saw the folly confronting us long and others longer ago.
If I could do so, I would go back to bartering things to avoid using money although bills clealrly need to be paid so OK, but minimalised financial transactions and wish other people would/could try the same. We would put a lot of businesses out of business, so what if it is Intermarché and their ilk. In a way we are now getting like previous empires who sank into corruption and died. I imagine I am too old to see it really happen by my children are young and that saddens me. I doubt Hollande will change much though.
An interesting question... this is an article I was sent recently which might be of interest.
THE JOHAN JOUBERT COMMUNITY
www.jojou.cc
[Community links: Download all interviews with the late Johan Joubert | Reference Material ]
We must learn from Iceland
Truth & Justice Global Informer
In Iceland, the people have made the government resign, the primary banks have been nationalized and it was decided not to pay the debt that these created with Great Britain and Holland due to their bad financial politics, and a public assembly has been created to rewrite the constitution.
And all of this has been done in a peaceful way. A whole revolution against the powers that have created the current crisis.
This is why there hasn’t been any publicity during the last two years: What would happen if the rest of the EU citizens took this as an example? What would happen if the US citizens took this as an example?
This is a summary of the facts:
2008. The main bank of the country is nationalized. The Krona, the currency of Iceland devaluates and the stock market stops. The country is in bankruptcy
2008. The citizens protest in front of parliament and manage to get new elections that make the resignation of the prime minister and his whole government.
The country is in bad economic situation. A law proposes paying back the debt to Great Britain and Holland through the payment of 3,500 million euros, which will be paid by the people of Iceland monthly during the next 15 years, with a 5.5% interest.
2010. The people go out in the streets and demand a referendum. In January 2010 the president denies the approval and announces a popular meeting.
In March the referendum and the denial of payment is voted in by 93%. Meanwhile the government has initiated an investigation to bring to justice those responsible for the crisis, and many high level executives and bankers are arrested.
The Interpol dictates an order that make all the implicated parties leave the country.
In this crisis an assembly is elected to rewrite a new Constitution which can include the lessons learned from this, and which will substitute the current one (a copy of the Danish Constitution). 25 citizens are chosen, with no political affiliation, out of the 522 candidates. For candidacy all that was needed was to be an adult and have the support of 30 people.
The constitutional assembly starts in February of 2011 to present the ‘carta magna’ from the recommendations given by the different assemblies happening throughout the country. It must be approved by the current Parliament and by the one constituted through the next legislative elections.
So in summary of the Icelandic revolution: -resignation of the whole government -nationalization of the bank. -referendum so that the people can decide over the economic decisions. -incarcerating the responsible parties -rewriting of the constitution by its people.
- Crowz Eye via Debi Samuels
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++++++++++++++++++++++++++++++++++++
Subject: FW: Governments
I contend that for a nation to try to tax itself into prosperity is like a man, standing in a bucket and trying to lift himself up by the handle.
Winston Churchill
A government which robs Peter to pay Paul can always depend on the support of Paul.
George Bernard Shaw
A liberal is someone who feels a great debt to his fellow man, which debt he proposes to pay off with your money.
G Gordon Liddy
Foreign aid might be defined as a transfer of money from poor people in rich countries to rich people in poor countries.
Douglas Casey
Giving money and power to government is like giving whiskey and car keys to teenage boys.
P.J. O'Rourke, Civil Libertarian
Government is the great fiction, through which everybody endeavors to live at the expense of everybody else.
Frederic Bastiat, French Economist (1801-1850)
Government's view of the economy could be summed up in a few short phrases:
If it moves, tax it.
If it keeps moving, regulate it. And,
If it stops moving, subsidize it.
Ronald Reagan (1986)
If you think health care is expensive now, wait until you see what it costs when it's free!
P.J. O'Rourke
In general, the art of government consists of taking as much money as possible from one party of the citizens to give to the other.
Voltaire (1764)
The inherent vice of capitalism is the unequal sharing of the blessings. The inherent blessing of socialism is the equal sharing of misery.
Winston Churchill
A government big enough to give you everything you want, is strong enough to take everything you have.
Thomas Jefferson
That is how the first CDS started and were issued. They have changed over the decades since first being issued so that there are no connection between the event and the insurable interest. So, yes and no. I am unaware of any definative decision stating that a CDS is not insurance or gambling. Technical, but significant.
Bankrupt, in my odd little book, does not exist, country to country. Debt currency, and inflation are all illusions.Where something other than a precious metal is changing hands, (ok, precious metal, or other tangible good, like as in barter), it is just a game... much like monopoly, none of it real. The sooner the people on the everyday street realise that, the better.
If the mint is prepared to churn out money that does not exist, and some "speculators" are ready to up, or down the value of a bit of paper on a whim, it holds no water for me.
Money
Get away
You get a good job with good pay and you're okay
Money
It's a gas
Grab that cash with both hands and make a stash
New car, caviar, four star daydream
Think I'll buy me a football team
Money
Well, get back
I'm all right Jack
Keep your hands off of my stack
Money
It's a hit
Don't give me that do goody good bullshit
I'm in the high-fidelity first class travelling set
I think I need a Lear jet
Money
It's a crime
Share it fairly
But don't take a slice of my pie
Money
So they say
Is the root of all evil today
But if you ask for a raise
It's no surprise that they're giving none away
Nick, CDSs are surprisingly like insurance, uncannily so, but they aren't insurance. There's no idea of a claim as such. In your example the default in repayments would trigger the payment of whatever was negotiated to be paid to the UK company in this circumstance. The value of the CDS need bear no particular relation to the thing you are betting on, what matters is the sums you agree to pay versus what you collect of the trigger event happens - and all this depends on the risk judged to be present.
The country which is in debt is in no way helped by the CDS.
Indeed you could observe this transaction, and you yourself could enter into a CDS agreement which has its trigger event being the failure of the country to pay the UK supplier. In that case if they default you get paid, and neither the supplier or the country are affected in any way.
But don't worry, it's not insurance and it's not gambling. Honest.
Christopher can I just make sure I understand CDS. Say a UK company has supplied goods to a weaker country. The UK company could purchase a CDS and should the weaker country default its repayments, the supplying country can make a claim against the CDS in place.
That means that the supplier of the goods is protected, but doesn't necessarilly help the country which is in debt does it?
Or have I got it totally wrong?
Richard usually find that you have to prove that you don't need the loan to be able to obtain it.
There is a great French expression that goes along the lines of:
"A banker will happily lend you an umbrella, but the minute it starts raining, they will ask for it back."
as an aside to all the talk of debt does anyone find it outrageous that if you have no debt,borrowing becomes almost impossible and you are treated as second class because you have no debt, as opposed to being applauded for your ability not to be in debt.
Was this problem the cause of the fall of the Roman Empire..some say the it was.
You have just explained how a writer of the Greek CDS will defend itself. When a Greek CDS -- written to insure against Greek withdrawal from the Euro meets its condition of paymernt, the writer of the CDS will argue in the US court that the holder of the CDS had no "insurable interest" and seek recission of the contract. Apriori, no lost that was insurable and hence no claim need be paid. The writer would only be required to return the actual "premium paid", i.e. restitution damages.
Very clear. Something I wasn’t aware of. Thanks
I also think it’s clear that a leveling or clearing of debt would be utopic, but it would be nigh on impossible to implement.
Would be good though to think we were all worth what we produce, however this thing called money does exist and distorts the picture. And we won’t be going back to an all barter economy. Money is too convenient and easily understood.
Like the revolution idea though, keep it up our sleeves if things do take a further turn for the worse.
I have missed the last few hours as I have been on my mobile, but the snippets that I have seen are very interesting and informative.
Learned more about bonds and debt today than I have in a long time.
I think the conclusion is although we all have opinions, it is very difficult to predict the outcome.
Love the cut and thrust of intelligent debate though.
Thanks Ian. I knew they were of that nature but now a few more people will read this and have their hair turn white or however they react on seeing how their tax payments are used to buy metaphorical Monte Carlo casino chips.
Sorry Ben, meant in the EU, but yes otherwise they are hardly a pin prick.
A Credit Default Swap is simply insurance on acid without any regulation. If a company wanted to insure themselves against some risk they could do so, except that insurance is controlled and regulated. With a CDS, on the other hand, they can go crazy.
It is a mechanism whereby you pay a sum, lets call it a premium, which will then give you a payment in the event that something happens (or doesn't). The company that sells you the CDS then effectively assumes the risk, setting its premium at such a level that it wins most of the time, and makes money. Sounds an awful lot like insurance to me. But here's the thing. You can take out a CDS on something without needing to have or demonstrate any ownership of the thing or loss in the event that the thing happens (or doesn't). Clear?
So it's pretty much gambling. An example. You decide that a Greek Euro exit might be bad for you. You purchase a CDS from AIG (a comapny that was in bother with these, and which, oddly enough, is an insurance company). You agree to pay it 1000 euros a month for five years, and it agrees to pay you 250,000 euros if the criteria are met - in this case Greece exits the Euro. That's what they are. Since you don't need ownership of the thing you are "insuring", and you are sure Greece are going to exit, you might buy the same again. And again. Now you'll collect 750k if the event takes place.
The nasty thing about them is that nobody knows how many are out there, what their criteria are, and what the payouts might be. The practice is unregulated and so the companies selling them keep all that information private. Any particular event can be "insured", and any number of people can "insure" the same thing for any amount they choose or can negotiate.
Contrast that with insurance on a building, for example, that pays 200k for the building to be rebuilt if it burns down. The risk and the exposure is obvious and controlled. If instead 100 people take out CDSs on that building for a total payout of 3 million this exposure is hidden.
I suspect the people writing the, um, let's call them "policies", likely didn't do a marvelous job of evaluating the true risk, and that there was lots of commission involved to oil the wheels of the oblivion machine.
Those involved were and are extremely careful that they are never ever compared with insurance, since if they were they'd need to behave themselves. It looks a lot like gambling to me.