Blog 17 LETS Hear It For Greece!

                  Could Greece escape the Law of Money?

To do so could be a critical poke in the eye to a world monetary system that is rigged to make the rich richer, and richer, and richer still, by keeping the rest of the human race in perpetual debt.

Let's go back to Arthur Banks (Blog 16). What would his community look like if Arthur continued to issue his generous little gift slips? Let's say they averaged 20 transactions before they got back to him, and that some of them never did come back to him. What would his neighbourhood look like?

I would say, very prosperous.

There would be more money to do more things with - like buy better food, see more movies, have more toys, repair more potholes. Now, wait a minute, you say. Repairing potholes is the town government's job. Yes, so suppose the town government accepted Arthurnotes for tax payments, and then used the Arthurnotes to pay its employees for repairing the potholes. Would that work?

 

In fact, there many such local currencies - hey are sometimes called L.E.T.S., Local Exchange Token Systems. Look up the "Hours" of Ithaca, New York, which has been a local currency operating since the early 1990's. An Ithaca "hour" was valued at ten American dollars. Or look into Argentine's monetary collapse, when the LETS carried the ball and kept the local economies functioning.

So lets cheer Greece on. When pushed to the wall, lets see it go it alone with its own internal currency. Without debt charges eating up the nation's sustenance, Greece has a lot going for it: tourism, agriculture, its strategic location between the oil of the east and the vehicles of the west. For a more exciting read on this point, check out the very compelling article by David Olive in the Toronto Star (July 10th. I think), "What does Greece need? The last thing it's getting."

Most great historic movements have started with a single impetus.

Which reminds me - am planning to visit Iceland soon. Will tell you about it.

Greece: Changing the  Channel   Blog 16   July 6 2015

What’s wrong with Greece? Depends on whose propaganda you believe. One answer (heard in the the locker room this morning): “Well, they’ve just been living beyond their means. Spending the money they don’t have.” 

Cogs Blog Comment: 

Well, Dan, that’s applying the basic, number one rule for household economics - you have to earn it in order to spend it. However, sadly, applying the basic rule for household economics to the global monetary system just ain’t relevant. IT JUST DOES NOT APPLY.  Repeat: IT DOES NOT APPLY.

Then there’s Rule Number Two for household economics (if you borrow it, you have to pay it back) That one does not apply to the global monetary system either. In fact, if everybody - folks, governments, corporations - tried to pay back their debts, there would be no money left to buy anyone’s daily bread, not even your favourite bank teller's.

Now with that introduction from the gym scene, let me address the big challenge I have set for this blog and the next one - to explain why what looks like common sense for the household does not apply to the global money system  as it now exists.

Let’s introduce a solid citizen, call him Arthur Banks. He dresses well, takes trips, pays his bills. His neighbour, Chuck Chaplin, wants to buy something, say, a poodle for his wife.  But he doesn’t have any money. Arthur, however, just over the back fence, asks “How much does the dog cost”

Chuck says, “$200 bucks.”

 Arthur says, "Just tell Peter the Pet Man that I will cover the cost of the poodle. Here, I’ll just give you a note that says I’ll pay him $200.”

Would that work? Would the wife get her pooch? The probable answer is yes. Right? And why?

Because Peter believes Arthur is good for the 200 bucks. He holds in his hand a piece of paper to prove it. 

Peter believes. Do you know the Latin  word for “he believes”? It is the word “credit”. Yep. Credit, in Latin, means “He (or she) believes.” So when the world’s big banks stopped believing that two of their big friendly competitors could meet their obligations-to-pay, they dropped. them like a pair of tarantulas.

But to get back to Art, Chuck and Pete. Let’s follow the note. Suppose that Peter persuades the farmer who supplies his bird seed to take Arthur’s little note in exchange for a load of bird feed, and the farmer explains to his hired hand that Arthur is good for the payment and pays her with the note. She lives in a flat in the village, and pays her landlord the rent with the note. Imagine this going on indefinitely until somebody takes the tattered and torn piece of paper back to Arthur and gets the two hundred. 

So far, what has Arthur bought with his $200?

1 dog $200

1 load of bird seed    200

1 week’s farm labour   200

1 month’s rent   200______

            $800

Pretty good for a hand-written note. It’s almost like a miracle. That little note is almost like money. $800 dollars dropped into the local economy, just like that. It’s certainly better than trying to barter a poodle for a month’s rent, isn't it?. 

I’ll leave you with a question. Could the Greeks do that?