Two Old Codgers

How the World strikes us

MONEY IS THE . . . . . . . .
A common saying is “Money is the root of all evil”. In fact the proper quotation is by the apostle Paul, in his first letter to his young disciple, Timothy,“For the LOVE OF MONEY is a root of all kinds of evil”.

If you think about it there is a real difference. Money can be good, it oils the wheels of trade between individuals, companies and even Countries.

The love of money, on the other hand, causes great inequalities, envy, avarice, greed crime and even wars. But that's the big picture. what about the stuff you carry about with you - Coins, banknotes and even credit cards? Let’s not get bogged down with dates and actual values but not so long ago we had the ‘Gold Standard’. This meant our money was measured in gold. a pound had a measurable value, that value now varies and the only real measure of its value is “Public faith”.

That public faith is remarkable. Let’s say in the eighteenth century a tradesman had a weekly wage of £1. Each week he would receive a gold sovereign or at least some silver and copper coins.

One day his employer gave him a piece of paper, a banknote worth £1. Last week he received tangible, weighable lumps of metal worth twenty shillings, today he gets a bit of paper worth, possibly a fraction of a penny but it bears a message from the bank which says “I promise to pay the bearer on demand the sum of …”,” and is signed by a cashier at the bank.

The gold coin was also pretty useless. About the only thing you could use it for was to make jewellery or perhaps a false tooth but at least you could weigh it and it was tangible. Bank notes on the other hand are simply bits of paper (or in modern times bits of plastic) you can’t even wipe the dishes with them.

However, we have a blind faith in them. You receive a monthly wage from your employer. At one time you at least received a pay packet containing coins and banknotes. Now, you don't even see it. A computer holding all your details does something mysterious and an amount is transferred to your bank account. Nothing actually moves, not even those useless bits of paper. We simply believe that a certain sum is now ours. Where is it? Perhaps there is a box in the bank holding our hard earned wages. Not really, it’s just as the same as the money we owe on our mortgage, the pension we are promised when we stop work or even the National Debt - It is some sort of imaginary thing.

For instance the UK National debt is rapidly approaching two trillion pounds. I don’t know about you but I have difficulty in visualising a million of anything let alone a trillion.

Here’s what half a million in £50 notes looks like.

One trillion would look something like this.

The thing is you could never see this because a trillion pounds would consist of twenty billion £50 notes and there are only about 260 million such notes in circulation,

Two questions strike me, the first is, where is this pile of money and, if it is a debt, to whom are we indebted ? Searching the internet I discover there are just three poor Countries that don’t have a National debt, they really are poor countries and there is no way they could lend the money to the rest of the world.

I have worked out that all the dozens if not hundreds of countries that do have a national debt don’t in fact owe it to anyone. It is just one of those fictional figures that floats around us. It is a sort of vague promise that one day we will make a surplus and the debt will magically melt away. If it doesn't and we tip over the precipice - watch out!

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