I have read every where that quantitative easing is not working and hence, the latest craze of helicopter money suggested. The article then argued that that wouldn't work as well.
The article explained:
Money is just a future claim on the resource or promise of reclaiming an effort (a debt). Therefore, it has no jurisdiction to maintain its real worth. If for anything, the government-of-the-day ("god") would like to devalue it asap so that the god need not honour as much true debt.
Imagine for a moment the god prints vast amount of money and give it to a group of people. These people then go to a desert place and start to build roads, buildings, schools, power plants, drainage systems, train lines, and every possible basic infrastructure. In no time, a city is built. The people within the city are happy. They get good jobs and great cash flow. They are provided with jobs like administrators, accountants, engineers, lawyers, doctors and managers to run the city proper.
But, if the god stops printing money, then it dawns upon the city dwellers that the city can no longer sustain itself. The city so far has generated nothing new or creative. It is just a city of consumers. Without continuous supply of new money, there would be no piped water or gas to run the electricals. Food supplies dries up as no one could pay for these imports. One by one, people starts to leave and soon, the abandoned city is only inhabited once again by tumbleweed, the true resident of the desert.
Money in quantitative easing or helicopter money has no bearing to the economic cycle. Unless the economy is allowed to recycle itself through boom and bang, destroying and regenerating every now and then, the economy would not self-heal. When that happens, the sickness of excesses is going to accumulate and release at one go. The end result is either a super duper big depression or worse, a world war.
It further argued that unless money is deployed in fulfilling research and development needs (r&d is always about improving efficiency in resource utility and hiking wealth generation) and thereby creating true wealth generation, the other way is going the way of leeches of money such as the bankers or god's wasteful servants. In time, these leeches became too greedy and thereby killing the host that once fed them.
A Nation of Renters
Fast forward ... It is sad that since the printing press belongs to god, it comes as no surprise that in time to come, all assets / resources would be concentrated back to the god. When that happens, the nation has no choice but to become renters rather than owners of income-generating assets.
Let's work an example:
Imagine a nation has 1 trillion in money value and hence, imagine further that it can equate more or less squarely with the 1 trillion units of assets of the nation in total. Therefore, each dollar in money can own / purchase a unit of asset belonging to the nation.
Let's state further, if an asset owner now wants to paint his shop for $2, he asked the painter to come and finish the job. Since the asset owner has no money, he decides to borrow it from the bank. The bank agrees and charges a small fee for the lubrication service and hold his assets as collateral. The painter now holds a $2 claimable debt from any one he so chooses to engage subsequently, be it a food supplier or teacher of his children. If the painter finally claims it, in the eyes of the bank, the asset owner would have owed the bank 2 units of asset. If the asset owner can't fulfill his obligations, his assets would be liquidated for compliance. This is how money is claimed as a form of a debt.
Back to the economy. One day, instead of allowing the economy in recession to correct itself, the god of the nation decided to print another trillion worth of money to "rescue" the economy (the god feared that by allowing the economy to go into recession, it would be hard on the nation and the nation might rise against the god). Such a need to print arises because the tax and toll collections of god is always way below the break-even point and the god needs to pay its leeching servants. Printing of money becomes an easy way out.
Now, with no additional input, each unit of asset is now worth $2. To purchase a unit of asset, nothing short of $2 will do, there is simply no discount.
As a wage earner, there is not an iota of chance to get a 100% increase in wage from the company, so is the business owner in doubling his product prices since none of his customers get 100% wage increase. The net result is that none of the populace will have the increased purchasing power to pursue the asset game. The final and net result is they have to turn to renting to get by.
Be it shops, factories, warehouses, residential houses or anything near tangible, all would be so out of reach to all that the residents have no choice but to do sharing. By sharing, I meant renting of equipment and all asset classes in order to reduce the cost of businesses.
There is no further need to expound the concept of renting. It simply means the lack of ownership and the cost of renting is always heavy interest bearing but yet insufficient for tenants to convert easily to ownership. A death knell ...
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