Category Archives: Money

Economic theory, how to deal with banks. 3

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The revolutionary government will allow the bank of England rate to rise by up to 0.5% per month for the first year if market conditions require such an increase. Artificially low interest rates for the banks are a major cause of economic bubbles. Quantitive easing is another. Payday loan for you 4000 % or more, loan to a bank 1% or less. The Revolutionary government policy of 6% for banks and an absolute maximum for you of 26% is, apparently, truely revolutionary. The maximum rate for paying of you credit card will be 1% per month, around 13%. It will be the lenders job to check your ability to repay any loan, and this will be retrospective. If they should have reasonably known that you would be unable to pay the loan, when they gave it to you, and you have made reasonable efforts to pay, then the amount you owe will be fixed as though the rate was always 13%, the rest will be written off by the loan company.
So what is the Economic theory?
Wholesale Interest rates should lead to a balance of savings and loans, and stability of the currency. Usuary should be illegal. The solution to unemployment in the longer term is to be found by providing stable conditions for industry, reasonable levels of taxation on industry and workers, savings to be encouraged and loans to be directed to productive use  and not to speculation.

Economic theory, how to deal with banks. 1

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This is intended as a guide for the leader of the revolutionary governement. He or she will need some understanding of economics in order to stand up to the banks and the rich in general. It’s not that hard, but they will try to convince you that it is. Banks have the power to create money and charge interest on it when they lend it to you. They just have to lodge about 10% of the amount they loan with the central bank, (Bank of England). They gamble with your savings on the markets. They collude to rig the markets, remember the LIBOR scandel. Banks were accused of lying about the interest rate for inter-bank loans.
There are 2 main economic theories, one says the government can manage the real economy by borrowing in the bad times, adjusting interest rates and printing money.
The other theory is that anything a government does is almost certain to make things worse in the medium term. Leave the free market free and it will work. Both have a point, though neither work well, but the UK has tried both at different times, and seems to be trying both at once at the moment. It is also cutting normal peoples incomes, robbing their savings with inflation and  interest rates of less than 1%, whilst allowing companies to charge 4000%  interest on loans to the poor, and now needs to make further cuts in govenment spending so as to lend money to the international monetary fund, yes really.

Silver shillings

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I announced on the 8th of August that the revolutionary government would give a supplement to manual workers in the form of shillings like the old victorian shillings made of sterling silver. The rule for the exchange value of these shillings into normal pounds is that the value never goes down but each time the real value of silver increases enough to put the value of the shilling up by 50 pence the Bank of England will announce an increase.

Silver has risen from £17.90 to  £19.20 today, or you could say it now takes over £19 to buy something that cost less than £ 18, just 16 days ago. This makes the shilling £5.36
Not sufficient for the bank to anounce any increase, the value is still £5. It could be a year or more before there it reaches £5.50 and triggers an increase. I bet you wish you had some shillings though.  Get a manual job, and vote for the revolutionary government and you will.

Manufacturing industry workers need encouragement

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The world is changing. For 200 years England was the most powerful force in managing world trade, certainly together with the other major world powers. The trade certainy wasn’t all fair, but the monetry system worked. If the king increased taxes, the workers would have to earn money and then give the actual coins to the kings men. Ask too much and revolution would threaten. At least then it was fairly clear when you were being robbed.

For the last centuary world trade has been based mainly on the dollar. First it was backed by gold, and this was abandoned in the 1971. There have been many financial booms and busts. A gram of gold in 1914 cost about half a crown, now it costs £ 33 or 264 times as much. Or, a penny in 1914 would buy more  than a pound buys now. In fact gold has risen in price in real terms, but even so the pound has shrunk to about 1/100th of its value in 1914.

The Chineese used american dollars for their international trade and bought US bonds with their savings for many years. They stopped last year as they felt the rate of devaluation of the dollar exceeded the interest and so they are loosing money.

Between 1999 and 2002 Gorden Brown sold 60% of the UK’s gold reserves. The UK  sold about 395 tons of gold  at an average price of about US$275 per ounce. current price $1.600; The UK holds 310 tons of gold reserves. France for example has 2435 tons.

The revolutionary government will abolish working tax credits and instead give workers in manufacturing and construction industries, a new currency equivalent to the victorian shilling, which will be legal tender and exchange initially as one shilling equalls five pounds. It will be issued in real sterling silver coins containing 5.24 grams of silver. Each eligible worker will receive 5 shillings a week from the government via the post-ofice as a supplement to their wages. No bank account may be created in the new currency. Credit unions may open accounts, as these have to be fully backed by sterling or storing the new coins.

Money should represent work.

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The new government will need to make changes to the whole meaning of money. Money should be a devise to facillitate work and commerce, and avoid the need for barter. That way you do work, get money and use it to buy goods and services, which are provided as the result of someone elses work. Untill the first world war, the money in use was worth something, it was made of silver, and larger sums of money were gold or paper backed by gold. For 200 years from about 1700, England controlled a large part of the words economy, with its Empire, and as a result of the Industrial revolution. It more or less managed to keep money stable througout that time. A shilling would buy around the same amount througout that period. There were problems of course, but they were not caused by money itself. Now most people only have a figure on a bank’s computer screen.