Many of us have read the news reports about high levels of inequality in the world today and many have experienced the adverse effects of unfettered globalisation. Economic analysis clearly shows that since the financial crisis of 2008/09, the major fiat currencies of the world have been manipulated and devalued because of central bank interference.
When fiat currency is spent locally, much of it’s value disappears from the community and into the hands of multinational corporations.
In response to this centralised manipulation, a few paper based local currencies have been born. Whilst some of these have had a moderate uptake, their use is limited by a lack of community awareness, small scale business adoption and the fact that they remain outside of the digital domain.
Cryptocurrencies are, by their nature digital and decentralised (peer to peer). They are free from manipulation by centralised authorities. What if there was a platform that allowed decentralised trading of cryptocurrencies and smart tokens without having to rely on a counter party for liquidity? What if this platform also allowed communities to easily create their own digital currencies and smart tokens by simply using a chat bot?
Such a platform exists and it is called the Bancor Network. Once registered on the Bancor Network one has access to a unique decentralised trading environment. The growing range of smart tokens on the Bancor Network are fully liquid for each other due to the Bancor Network Token (BNT). What this means is that the availability of a smart token for trading is not dependent on other parties selling the same quantity of the smart token.
The number of potential use cases for community currencies that will be created on the Bancor Network is huge. Bancor can revolutionise the way money is created and how it is used and therefore change the world economy for the better.
On the 27th February 2014 the Royal Bank of Scotland announced losses of £8,200,000,000 for 2013. This brings total losses since 2008 to £46,000,000,000 which is more than the £45 billion that the bank received from the taxpayer when it was bailed out in 2008. Money well spent then!
The bank still has £38,000,000,000 of highly toxic loans on its books. There was talk of moving this debt out of the bank and into a so called ‘Bad Bank’ to be looked after by the state. Hold on a minute! RBS is already 82% owed by the taxpayer, what difference does it make?
The scary fact is that RBS has a £1,900,000,000,000 balance sheet that it is trying to unwind. This figure is nearly one and a half times the size of the whole UK economy! It has just recently been announced that RBS directors are sharing a £18,250,000 share deal! RBS is trying to compete in this insane financial world where banks are being kept alive by money printing, but RBS is broken and rotten to the core, it will probably take the whole country down with it.
Meanwhile Fred Goodwin at just the age of 55 is enjoying his £342,500 per annum pension that he has been claiming since 2009. Not a bad reward for steering one of the world’s largest banks into bankruptcy. He is currently working as a charted accountant; I really don’t think that this is a good idea and I fear for the company he is working for.
In my opinion, ‘Fred the Shred’ should have been fed through the shredder! Seriously, why isn’t this guy and his cohorts in prison? Actually, no that would be a further waste of tax payer’s money! I think working in a homeless shelter for a few years on the minimum wage would give Fred the reality check he needs.
The giant US bank, JP Morgan, has just announced record profits of $6,500,000,000 for the first quarter of 2013. This is an astonishing amount of money considering that the US economy is struggling; the growth figure for the last quarter of 2012 was just 0.4%.
The main contributor to these profits was the investment banking division. Yes that’s right, the same area of banking that led to the financial collapse of five years ago. As a consequence of that crash, the US taxpayer bailed out JP Morgan the sum of $25,000,000,000 in 2008.
The other large US banks such as Citigroup and Goldman Sachs have also announced big increases in profits. It seems that the Federal Reserve’s stimulus package of buying $85,000,000,000 worth of ‘assets’ every month is having quite pleasant repercussions on Wall Street.
JP Morgan said that there are signs the US economy is “healthy and getting stronger”. Healthy and getting stronger for who? Elsewhere in the country we learn that there are 47,000,000 people living on food stamps. That’s nearly one in five US citizens and it’s an unprecedented number.
At the beginning of April, the Californian city of Stockton was granted permission to file for Chapter 9 bankruptcy protection. This is the largest US city so far to go bust. Detroit is a much larger city that could be heading the same way.
It seems that the actions of the Federal Reserve since 2008 has created two parallel economies or even realities. The rich are getting richer and the poor are getting poorer.
There are many people in the UK who have, over the last fifteen years, decided to borrow too much money. As the economy has turned sour The Bank of England has tried to help out these over stretched borrowers by keeping the base rate at the historic low of 0.5% for four years. Additionally it has pumped £375,000,000,000 into the ‘economy’ (QE) which has helped to sustain house prices. The UK government has also come to the rescue by providing up to £80,000,000,000 of ‘cheap’ money to banks (FLS) so that they can offer even cheaper mortgages.
Unfortunately the Funding for Lending Scheme has had a negative impact on savers because banks no longer have to rely on attracting depositors. Thanks to low interest rates and FLS the current rate of return being offered on savings products is appalling. Most savings accounts offer a rate which is far below inflation. Effectively savers are losing out on billions of pounds of interest whilst the cost of servicing mortgage debt has been reduced significantly.
As we are ‘all in this together’ I think savers should do even more to help out over-stretched borrowers. Perhaps a proportion of the interest paid on ISA’s could be redirected to mortgage accounts to reduce the cost of borrowing even further. After all it’s not the fault of highly indebted consumers that we are all in this economic mess. They were under pressure to take on more debt by the banks; it was very difficult to say no. The overwhelming desire to compete with the neighbours leads to a re-mortgage, a new car, house extension or exotic holiday. I’m sure many savers feel deep sympathy over borrower’s unfortunate circumstances.
