Debt Fueled Economy

ImageWhen the western economies fell apart during the great crash of 2008 something interesting happened over in China. Because Chinas economy is mostly based on exports to the west the course that was predicted was that Chinas economic growth would stagnate and follow the recession taking place in Europe and America. This though did not occur and instead the opposite happened – Chinas economy continued to grow exponentially seemingly without being affected by the turn of events in the west. Obviously, this is fascinating and opens up the question as to how China could direct its economy to continue to grow regardless of the massive loss in exports.

There is a great documentary giving the answers as to why China persisted when the west fell apart – and you can see it HERE. What is shared in this documentary is the secret behind Chinas success. The key is be found in one magic little word:

DEBT!

Yes – China used its banks to super-charge it’s economy through opening up the credit floodgates – allowing for a massive lending spree. The consequences of this grand debt injection can be seen in how entire cities, complete with their own subway system, skyscrapers and monumental cultural and sports facilities, are now sprouting out of what seems to be thin air – this is how fast and massively China is now pursuing it’s growth policies.

It’s really fascinating and in the documentary I referred to they effectively shows just how bizarre this building marathon have started to become. There are some small cities with just some hundred thousand inhabitants that by their municipality have been awarded state of the art theaters and music arenas, of the caliber that you’d expect to see in metropolitan cities such as London and New York. The local politicians have thus taken matters in their own hand and through debt managed to build what in a western country would’ve been unthinkable.

Obviously the debt-fueled economy China is pursuing is not based on supply and demand – instead it’s based on a incessant need for growth. Because without growth there will be diminishment in jobs, and without jobs the political elite of China will have difficulty retaining their positions of power. Thus, from a purely economic perspective, what is happening in China is not very effective as it’s not REAL growth, it’s not REAL commerce – it’s an inflated growth and commerce. Many thus fear that Chinas vast spending is currently creating a massive financial bubble that in the coming years will pop and cause havoc on a global level.

Though, the point I want to bring through in this blog is not whether or whether not the economic policies of China are effective. Instead I want to show the POWER of money – and how one through taking control of and directing the money supply of a country can amass massive resources in the form of workers and raw materials. This is in essence what China has done. They have taken control over the bank institutions in their country and instructed it to through debt support economic growth.

But wait for it, here comes the fascinating aspect of this story.

Imagine what we could do in our countries if we would do the same thing WITHOUT adding on the DEBT. Think about what the effect would be if we as the people would create debt FREE money with the purpose supporting the growth in our countries. Because what is really money but papers and digits? Thus we’d simply take charge of the papers and digits and distribute these throughout the economy to fuel entrepreneurship and economic growth. In the process we would simply decide to not create the money as debt. Simple!

Because one of the major issues with our current economy is DEBT and how almost all money that circulates is DEBT. This have the consequence of placing massive strain on the people involved as there just never seems to be enough money to go around, never seems to be sufficient with money to build one’s life and all the time seems to be to much DEBT.

Thus, consider how our life’s could change if we take control of the money supplies, if we nationalize the banks and make sure that the money inserted into the economy are without debt.

There is a political proposal that as a part of its reinvention of the economic system suggests nationalizing the banks. This proposal is called Living Income and it’s a solution for a world in dire trouble. We do not need to bailout the banks, we need to take control of the banks and make them an asset in the hands of the people, so that we can focus upon building a world that is livable and create a future for our children that is dignified.

Investigate the Living Income Guaranteed and make the decision to stand for a political solution that will make a real change.

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