Now it is really getting interesting:
Manufacturing Money, and Global Warming
*************************************EXCERPTS**********************************
Dr David Evans, david.evans@sciencespeak.com 25 October 2009
Executive Summary
Modern money is paper, manufactured by banks out of thin air. Banks make something from nothing. This is the story of the rise and abuse of that great power, a high-level view of the current financial bubble and its causes and consequences.
Modern money is created by debt. The growth of the bubble is tracked by the ratio of debt (money) to GDP (size of the economy). It started at its normal level of 150% in 1982. By 1987 it had reached 235%, the previous record set in 1929 on the eve of the Great Depression. By 2007 it had soared to 340%, and by mid 2009 it was 375%—nearly 20% of GDP is now spent on interest. There is now scarcely any more disposable income for taking on yet more debt. We are hitting the wall.
The financial bubble greatly advantages the banks and the financial smarties who know how to take advantage of the ways money is manufactured. The bubble has been extremely profitable for them. Each time the bubble faltered, it was reignited by the banks and government through loosening safeguards on money manufacture, flooding the economy with easy money, low interest rates, encouraging price bubbles in asset markets, or covertly suppressing interest rates on the bond market (the Clinton strategy). This is easily the world’s biggest and deepest bubble, ever. It has not ended yet. When it does, the debt will have to repaid or inflated away.
The return of the debt-to-GDP ratio to its normal level requires a drop of 15% - 25% of GDP. We can do it fast or do it slow, or politicians can opt for high inflation to try and avoid the pain.
The newest game by the banks is carbon emissions trading. The plan is to manufacture emission credit certificates out of thin air, trade them between big financial companies, and compel the rest of us pay for them by producing real goods and services. The new financial slavery.
Carbon emission permits are the latest paper currency, brought to you by the same folks who profited from the world’s largest financial bubble. Same structure, same modus operandi, same beneficiaries, and the same use of exaggerations, half-truths, and tricky government statistics.
Banks want carbon trading. They do not make a profit from a carbon tax, which would be fairer and simpler. Governments are not offering a carbon tax, only cap and trade. Ever wondered why?
Thanks for your respective explanations.
This is all becoming quite interesting.