Money, money, money!

Long ago, it seems, money was a symbolic representation of work.  Or, at least, value.  But when money is created simply by charging a fee, what is there behind it to make it worth something.  What has been invested to make this new wealth?  For money, in any amount, is wealth.  We claimed to be a wealthy nation, but a great deal of that wealth was created out of whole cloth.

You may be familiar with the process, for it has happened to countless Americans.  You have a credit card, with a fairly low limit.  Because of one thing and another, you get behind on your payments.  If you were close to your credit limit when you got behind, very quickly the late payment fees put you over your limit, so you are charged an overlimit fee each month, and a late payment fee, because you have not paid off the amount overlimit.

As result of these fees, every month, 60 dollars is created out of nothing.  A bank charging an overdraft fee for each check which comes in while the account is overdrawn does the same thing.  Now, imagine this kind of wealth creation going on all over the country, on a grand scale.  Our economy swells quickly because of all the wealth that is being created, leading people to believe that there is enough wealth in the system to raise prices.

As prices go up, workers demand more compensation, which adds upward pressure on prices.  As prices increase, management decides that the current profit margin is too small, and increases it.  Yet, no work has been performed to create any new wealth, no value has been added to anything, just fees charged.  Now, what happens if the credit card holder defaults on their account, walks away from it?  Where is all that wealth that was created by charging late fees and overlimit fees?  It has just vanished, because those fees cannot be collected.

This is merely one example of how wealth can evaporate, something that wealth has been doing enmass recently.   We must begin doing real work, to create real wealth, not imaginary, accounting trick type wealth, or we all are likely to be homeless.


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2 Responses to “Money, money, money!”

  1. Voncile Says:

    First blog I read after wakeup from sleep today!

    Are you tension? panic?


  2. Bill Cash Says:

    I just stopped by your blog and thought I would say hello. I like your site design. Looking forward to reading more down the road.


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