Detlev Schlichter explains why our current paper money system will collapse

Money Comments Off

Jan 202012

This Adam Smith Lecture debunks several important myths.
Firstly that our current paper money system is the norm. Its not, its exceptional, and has only been around since Nixon took the dollar off the gold standard in 1971, since then the entire world has been on an elastic ever expanding paper money system and this has never happened before.

Secondly, we dont need to have an elastic fiat paper system in order to expand the economy.

Thirdly, fractional banking creates boom and bust cycles and this cannot be avoided or managed by the state except to make matters worse i.e. by artificially propping up the inevitable and delaying and increasing the size of the bust. He makes an interesting point that fractional banking will cause this whether its on a gold standard or not, although the pure paper system is far better at creating even bigger booms and busts.

Fourthly he makes it clear that this is not a crisis of capitalism and explains that this is not capitalism at all. Its a rigged system disguised as capitalism which has stolen the control of money from those that own and need it ,i.e. the people and given it to the banksters and politicians.

His grim conclusion, after explaining that all paper money systems either end voluntarily or end in disaster, is that it will end in the latter which doesnt surprise me at all given the power the politicians , generals and bankers appear to have over us all. Depressing but I’d rather understand why we’re doomed than be ignorant so I invite you to watch and find out more.

The Secret of Oz

Money, Politics 2 Responses »

Dec 052011

Fantastic documentary explaining the evils of central banking by Bill Still. This film is a essentially an update to his earlier award winning documentary The Money Masters.

Watch this and you’ll never think the same way about money, banks and governments again.

But before you watch this I suggest you watch the following first in the order I suggest,

1.Money as Debt – an animated film thats reasonably short but really explains how money and banking works and screws up the world.

2.The Money Masters – Bill Still’s earlier lengthy but masterful documentary

Dont forget to comment – I really want to hear people’s views on these really important films

4 alternative investments for savers

Investing Comments Off

Dec 052011

Savers and investors are having a rough time at the moment with interest rates being at historically low rates and inflation creeping up to over 5%. (Though we should of course be thankful that we are fortunate enough to be savers rather than borrowers)

I’ve spent far too long on the internet looking at moneysupermarket thinking somehow I’m going to suddenly find a bank or building society that will pay over the odds. It ain’t going to happen.

However I have found 4 very interesting sites that may help the saver and help borrowers and businesses too. Thats because none of them are banks and all of them offer an alternative to using the banksters. Ive started investing with all of them and I will be giving my views and updates on how they are performing in future posts.

Market Invoice

My favourite at the moment as I think it offers the best risk to reward at the moment. It basically allows you buy a businesses’ invoices thus advancing them cash and charging a fee (typically 1.5% per 30 days). It’s very much like factoring except that businesses can offer single invoices and theres a lot less hassle involved.

Pros: Annualised returns 15%+

Cons: Its very new and only folks with £50k + are currently accepted.

Zopa

Probably the best known, Zopa brings ordinary borrowers and savers together in an online peer to peer marketplace. Borrowers are classified according to a risk score and lenders make informed choices about what returns they want from lending to different classes of borrower. Risk is minimised by dividing up your loaned amount into lots of small loans so you could be lending to a hundred people, the idea being that you are less likely to get get significantly hurt by the inevitable few that default on their loans

Pros: Slick website with complete transparency of information about default risk, start with very small amounts

Cons: Lower rates (6-9% p.a.) although still potentially much higher than the traditional bank.

Funding Circle

Funding Circle is like very much like Zopa except that its for lending to businesses. Theres a wealth of information about the companies you can lend to or you can set up automatic lending (like Zopa) based on interest rate criteria you choose

Pros: Slick and transparent website, one feels more in control of risk than on Zopa

Cons: Theres not much filtering of businesses and the rates reflect that theres probably too many investors and not enough companies on board yet

ThinCats

Thin cats is like funding circle but is much smaller with fewer opportunities however the filtering of companies is stricter hopefully meaning the likelihood of default is less plus the rates are quite a bit higher. This site feels a bit more ‘grown up’ than Funding Circle and would perhaps suit larger investments.

Pros: Greater due diligence, higher rates being achieved

Cons: Less opportunities and the site is not as slick as the competition

Anyway all the above have the potential for being business heroes in the brave new world of post financial crisis we all live in so I hope they will all thrive and provide us all with the liquidity and income that the banks (and governments) have so cruelly denied us.