Saturday, 20 November 2010

Won't work mate.....

Much as I share some of the widespread distaste for Bankers' economic misdeeds, I can't help but feel Holby's latest wheeze won't work, even if it is sanctioned by such luminaries as Eric Cantona.

The plan appears to be that everyone should go to their bank or building society on the 7th of December 2010 and withdraw as much money as they can, thus causing the banking system to implode or collapse. The idea presumably is to somehow punish all those greedy bankers for causing the current economic crisis.

If anyone can be bothered to read this, might I say that everyone withdrawing all their money might turn out to be a massive economic own goal.

My reasoning is as follows; Because money is the means of exchange, it's value is relative. In itself, it is not a commodity, but rather an enumeration of work done. Linking it's value to a specific commodity, say gold, is only useful as long as gold is esteemed at a certain value. If gold were to become worthless because it was no longer considered as a valid means of exchange, then any currency linked to it would also lose it's purchasing power. Therefore; money is not a commodity in itself, more a measure of relative value. In short; a currency is only worth what is agreed. If enough people decide that a currency is worthless and sell lots of it for other currencies, its value drops like a rock into a gravitational singularity.

Furthermore, if people do like Holby suggests and withdraw all their money, in order to safeguard the interests of those people who own the banks and various politicians will take steps to 'safeguard the money supply' by ordering the printing of more money so that the banks don't go short. The resulting inflation will only hurt those who withdraw their money only to stuff it into a metaphorical mattress. Likewise, buying items that may hold their worth against inflation, such as land or other commodities, will only protect their investment so long as those commodities are 'agreed' to be worth that much.

So making an assumption that Holby and chums do manage to crash the banking system, the money they've withdrawn, without the backing institutions as personified by those 'eeevil bankers' automatically becomes valueless, and all the poor buggers still with savings lose everything. Take enough money out of an economic system and you end up rather like in Weimar Germany. Because, rather like Space and Time are inextricably bound together, so are Banks and Money. Whether you like it or not, the Banks are the money.

Kind of like trying to stop time, and then finding out all the rules supporting your little pocket of space / time no longer apply, and so by proxy, neither do you. Especially true for those with an urban lifestyle and no real material holdings in land or foodstuffs. That's if you ask me. Not that anyone will of course.

No comments:

Related Posts with Thumbnails