World Money Market A House of Cards

By James Donahue

It is no secret that stock exchanges around the world are reflecting a very unstable financial climate. Money analysts are busy these days pontificating on our television screens about the causes of the unexpected market fluctuations and trying to assure the public that all is well.

Yet there is a general knowledge among the people that all is not well. We have watched the wealthy bankers and money changers in high places run off with the wealth while the conservative Republican Congress moves to “balance” the federal budget by stripping away benefits for the poor, elderly and unemployed.

It is happening all over the world. It has led to riots and unrest throughout Ireland, the UK, Greece, Egypt, Syria, Libya and numerous other places. Recall campaigns are building in state governments across America.

The general public is scared now. People have been so used to living in a materialistic world they shudder at the thought of going without. And we are talking about the inability to not only buy new shoes, cars and fine homes. We see more and more homeless people standing in soup lines after the state and federal food stamp programs run out of money.

The big secret to all of this is that money has always been an illusion. There still is a lot of wealth in the world, but it is now held in the hands and vaults of a few very wealthy individuals. Money in a vault is out of circulation. And while it remains there, it has no value.

Money only has value when it is in circulation. After all, the thing we call money today is merely pieces of paper marked with specific values. As long as we believe it has the value it claims to have, and as long as we believe it can be exchanged for food, clothing or other items we wish to own, the paper has value.

This works the same way with credit cards.

And the richness of our nation, and the value of our financial markets all boils down to trust. As long as people trust the value of the dollar, everything is operating just fine. But when this trust falters, as it has in recent months, chaos results.

Even people with jobs don’t feel secure enough these days to invest in new homes, new cars, new appliances and other things they used to covet. The trend is to pay off those credit cards and other debts and hold on for the bumpy ride that is sure to come.

While the Tea Party Republicans did a good job of throwing the nation’s financial system in disarray, the problem is more complex and deep rooted than the actions of a political party. It lies in the fact that we have been busy since the Reagan years destroying the unions, tearing down controls over the lending institutions, approving free trade agreements with other nations, and allowing American industry to move overseas on a quest for low cost labor.

Our elected leadership, nearly all owned by big corporate powers that paid for their high-cost campaigns, sold our nation down the drain while pocketing their share of the cash.

There was a time in America when families could live on a single income, wives could stay at home and raise the children, and everybody that wanted a job could have one. Students could attend college and graduate without owing their lives to the bank. All of that has disappeared now.

About a hundred years ago people were issued dollar bills in lieu of an equal amount of gold kept in reserve in a mighty vault, carefully guarded by the U. S. military, at Fort Knox, Kentucky. There was an unstated promise that each "green back" could be exchanged, on demand, for gold, so the piece of paper in our pocket had real value.

There used to be a popular phrase that wealth was reflected by "all the gold at Fort Knox." You don't hear that saying anymore because the gold in Fort Knox isn't stockpiled like it used to be. In fact, we wonder if there is any gold left there at all.

Coins in those days were minted in real gold and silver. People could carry these precious metals around in their pockets as assurance that our monetary system was intact. This way of doing things probably has had a lot to do with the stability of the American dollar on the world financial market for so many years.

Eventually, however, the U.S. bankers and money brokers discovered that people would still trust their printed paper money, even after it was no longer backed up by gold. The Creation of the Federal Reserve may have marked the beginning of our troubles. The reserve  created a need for more and more printed money and the United States began selling its gold to pay off its debts. Soon there was a limit on the amount of gold available to back up our currency. But nobody noticed. The dollar didn’t buy as much, but everybody had more dollars to spend so things appeared to be all right.

At about that same time we began issuing plastic credit cards, which got misconstrued as a form of money. We have been operating on a plastic and paper monetary standard now for at least 70 years.

What this means is that the value of the dollar bill is no better than the people's faith in it's ability to purchase goods and services. Once that faith begins to slip, and people understand just how flimsy the monetary system really is, the whole thing has been on the brink of collapsing like a house of cards.

Personally, I am surprised that the system remained as stable as long as it did.

As the ranks of the poverty stricken grow, more and more people are beginning to understand just how corrupt our monetary system is. The middle class is almost completely erased. And the split between those who have wealth and those who have nothing is growing wider and wider. We read recently that there may be an estimated 100 million homeless people in the world. I think that is a conservative number.

We now live in a world of invented fantasy, designed to keep us pacified. Under the influence of our daily dose of Prozac, we sit in our modest little dwellings, deep in debt, watching carefully orchestrated television game shows that turn ordinary people into instant millionaires. We play the lottery. We watch sports figures sign contracts that earn them multi-millions of dollars. We hear stories about political figures, from local levels all the way to the White House, who take big "payoffs" for political favors. The American dream has shifted from having a steady job, owning our own home and parking a car in the garage, to rising up from poverty like Cinderella. But for most of us, that is all it can ever be. It is only a dream. It is not reality.

Money for too long has been the real god of the people. People seemed to be willing to do anything, even kill to get it.

The collapse of such an evil deity might be the very thing the world needs right now.