Failure of the world economic system


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Failure of the world economic system

  3. 3. Recession [ri-sesh-uhn]!noun! •  Period of time during which there is little trade, business activity, and wealth than usual!
  4. 4. Soon people can’t feedthemselves! Economic recession! Productivity ?   plummets! People  lose   jobs  
  5. 5. WHAT ARE THE SIGNS?! ?
  7. 7. The worrying level of DEBTS !!!!Debt to Gross Domestic Product ratio, GOLDEN RULE = 60%!Source: Authors calculation using (2012)!
  8. 8. The huge GAP between the poor andthe rich !!!!Global income distribution by population quintiles 1990, 2000, and 2007!Source: Isabel Ortiz (2011)!
  10. 10. Actually there are many more signs…! Political Crime rates! Bankruptcy! instability! Poverty! Foreclosures! Corruption! People Currencies losing jobs! loss of buying Expensive power! health fees! The 2008 Expensive subprime education mortgage! fees! Inflation! And many more….. You can look around to find it yourself !!
  11. 11. You can’t leave the economy alone!Because the subsystems affect each other, but we willget through the economy anyway !! Politics! Economy! Social & Culture! Politics! Science & Environment! Technology!
  12. 12. THE AGENDA!• Introduction!• What is money ?!• Creation of Fiat Money!• Why Fiat Money Fail!• Solution!
  13. 13. To truly understand the problem wemust also understand the concept ofMONEY!
  14. 14. Money can be anything that humansaccept! Three basic functions of money:! !• Medium of exchange!• Unit of account!• Store of value!
  15. 15. Before money there was the!AGE OF BARTER!
  16. 16. COMMODITY MONEY!Money which has intrinsic value, meaning it is worthsomething in it’s own right! Cowrie shells Roman gold coin China 1200 B.C.! 1st century A.D.!
  17. 17. REPRESENTATIVE MONEY!Money that does not necessarily have the intrinsic valuethat it represents, but is backed and could be redeemedby the equal value of commodity money! Banque Generale banknote 1718 A.D.!
  18. 18. FIAT MONEY!Money that has no intrinsic value and is not backed upby the equal value of commodity money, but is madelegal tender through government decree! The U.S. dollar!
  19. 19. HISTORY OF MONEY!Notable events and discoveries of money! Year! Event! Cowrie shells are used as money in present day1200 B.C.! China!500 B.C.! Gold coins are used in Lydia present day Turkey! A form of paper money is used in present day618 A.D.! China!1000 A.D.! Invention of fractional reserve banking in England!15th century First form of modern day banking emerged in Italy!A.D. !1816 A.D.! England adopted the gold standard!1944 A.D! The Bretton Woods conference!1971 A.D.! The Smithsonian agreement!
  20. 20. Now, we are mainly on the fiatmoney system while actually it is the greatest SCAM ever !!!!
  21. 21. THE AGENDA!• Introduction!• What is money ?!• Creation of Fiat Money!• Why Fiat Money Fail!• Solution!
  22. 22. FIAT MONEY is the official money ofany government! Expenditure! Income!
  23. 23. BANKS created the fiat money not thegovernment !! Central Bank! Government! Commercial Bank! Community!
  24. 24. They print money out of THIN AIR andcharge INTEREST to the government !! Government bond! Fiat Money! Government! Central Bank!
  25. 25. Commercial banks also created fiatmoney through the fractional reservebanking!Through fractional reserve banking, banks can give loan up to 9xtheir reserves !! Debt! Loan! Community! Commercial Bank!
  26. 26. QUOTES!“It is well enough thatpeople of the nation donot understand ourbanking and monetarysystem, for if they did, Ibelieve there would bea revolution beforemorning.”!!- Henry Ford!  
  27. 27. In other words money is DEBT!Without debt, money do not exist! Government bond! Fiat Money! Government! Central Bank! Debt! Loan! Community! Commercial Bank!
  28. 28. They created the PRINCIPLE but theINTEREST was never created!So, the amount of debt must exceed or at least in the sameamount of principle + interest created! Debt! Principle + Interest! (P + I)!
  29. 29. If the P + I needed exceeds the debt inthe system the economy will CRASH !Because there isn’t enough money to pay all the debts !!
  30. 30. QUOTES!“If the American people everallow private banks to controlthe issuance of their currency,first by inflation and then bydeflation, the banks andcorporations that will grow uparound them will deprive thepeople of all their propertyuntil their children will wakeup homeless on the continenttheir fathers conquered.”!!- Thomas Jefferson!
  31. 31. With fiat money and fractional reservebanking they receive UNFAIR profits!Because they created a little value but received a lot of value !! Principle! P + I! Goods & Services!
  32. 32. Bankers and a few businessmanreceive the most benefit from thissystem!As fiat money flows into our society, first few money holders canbuy at a normal price while most of the people buy at an inflatedprice. WHY ?!
  33. 33. The insane growth of INFLATION !!!!The Consumer Price Index of USA 1913-2008!Source: Authors calculation using (2012)!
  34. 34. Because not all of the money increasesproduction instead it is spent inDERIVATIVES!Comparison between annual OTC derivatives and world GDP!Source: Authors calculation using IMF (2012) and ISDA (2011)!
  35. 35. This is actually a SILENT THEFT ofwealth by the GREEDY FEW to thepeople !!
  36. 36. THE AGENDA!• Introduction!• What is money ?!• Creation of Fiat Money!• Why Fiat Money Fail!• Solution!
  37. 37. QUOTES! “At the end fiat money returns to its inner value—zero.”! ! - Voltaire! !
  38. 38. Failure history of the fiat money!Shall we learn from history ?!• Roman Denarius (54 A.D.)!• Chinese Paper Money (1200 A.D.)!• French Livres (1715 A.D.)!• US Continental (1775-1780 A.D.)!• French Assignats (1789 A.D.)!• Weimar Inflation (1919-1923 A.D.)!
  39. 39. Because it’s a treason to the value! =   Value! Genuine =   Forced Value!
  40. 40. Because it gives power to createalmost unlimited amount of money! Excessive amount of money in the =   INFLATION  !!!   market!
  41. 41. The insane growth of INFLATION !!!!The Consumer Price Index of USA 1913-2008!Source: Authors calculation using (2012)!
  42. 42. The Inflation Case: Fiat Money!In the 1950s!With US $ 34.72 you can buy a suit!Now!With US $ 34.72 you can’t buy a suit !!
  43. 43. The Inflation Case: Gold!In the 1950s!With an ounce of gold you !can buy a suit!Now!With an ounce of gold you can still !buy a suit !!
  44. 44. Fiat money FAILED to serve as a storeof value ! While GOLD served better! Three basic functions of money:! !• Medium of exchange!• Unit of account!• Store of value!
  45. 45. QUOTES!“The problem with fiatmoney is that it rewardsthe minority that canhandle money, but foolsthe generation that hasworked and savedmoney.”!!- Adam Smith!
  46. 46. THE AGENDA!• Introduction!• What is money!• Creation of Fiat Money!• Why Fiat Money Fail!• Solution!
  47. 47. Return to the “HONEST” money! Government as theSolution! creator of money! Cut unnecessary spending! Be productive!
  48. 48. We must revert back to our HONESTmoney system !Precious metals are by far the best. We can blendthe full reserve and digital money methods.!
  49. 49. Bring back the power to createmoney to the GOVERNMENT!Let us create a debt free money system !!
  50. 50. Cut unnecessary spending !!Stop these needless wars !!
  51. 51. Be Productive !!It’s not the amount of money but it’s the equalitybetween goods & services and the amount of money!
  52. 52. QUOTES!“The world suffers a lot.!Not because of theviolence of bad people,!But because of thesilence of goodpeople !”!!- Napoleon Bonaparte!!