The Debt and The Power (part 2)

The States retained the right to coin money, for centuries the coins have been made in real metal and their value was always linked to the price of the metal of which have been made of.
The trick of issuing a currency that contains a number of precious metals minor then the one indicated was generally discovered immediately by merchants.
If the test found out a minor quantity of metal, the price of the good that they were going to sell increased in proportion.
There is no way to determine the intrinsic value of a good but that we can always determine the price.
On the contrary, the value cannot swing by definition, because when we talk of values we are always refer to an absolute.
With the fake money of paper, the power of the financial system has increased beyond limits, becoming huge, but at the same time this giant shows fully today its heaviness and fragility.
As long as between the money of paper and the goods has been maintained some correspondence, in fact, the process of growth of the weight of the financial world in economy was limited to the speed of capital accumulation.

In fact, its development depends on the growth of the economic system, which by the effect of invasion of finance, sees progressively to reduce the means necessary to its development.
The breaking of the hard link between the emissions of money and the economic value of them has determined uncontrolled huge growth of the financial system that we are facing. Nowadays the trade of real goods and the real economy is just a fraction of the financial trade activities.

Let’s say that Mr. Smith want to open a business and ask a loan of 10.000 euro to a bank because of course without money Mr. Smith can not do anything. The bank, by granting this loan, has not provided its own riches at all, but has simply increased the mass of circulating euro of 10.000 units.
In the face of the money that was given to Mr. Smith there is nothing but the wealth that the same Mr. Smith will produce if the activity will be successful.
In other words, asking a loan for a business we pay to the banks the right to work!

If the company financed has good end and is able to produce wealth, and pay the debt everything is fine otherwise the monetary mass created from nothing remains without justification and ends up in inflation. The bank has not wasted it, is just someone else problem.

The moments of economic crisis, is often accompanied by inflation, the system, however, seems to ensure elasticity in the creation of monetary mass.
The problem is that the growth of the economic system is always accompanied a growth of total debt of the system. This is what happening in Japan since 10 years with a debt that represents 140% of GDP interest rates next to zero and no more possibility to increase taxes.
It leads to a crisis without end of the economy, alternating years of stagnation to others of economic decline
More perverse effect of economy of the debt is that real power of the society is delegated to banks and financial institutions that decide the fate of households, businesses and Nations.
Politic becomes more and more a farcical representation, voided of any real content, having lost all contact with the effective power held instead by banks and financial institutions.

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