Finance

This is something we have been unwilling to examine very closely – thinking somehow, that money was immoral. And best not discussed in polite society.

The American attitude towards finance and banking has been especially ambivalent. Everybody wants money – and wants to keep it from everyone else.

Thomas Jefferson’s attitude toward money was typical – he borrowed recklessly from British banks (he died heavily in debt to them) – but opposed the creation of an American bank. He wanted America to remain agricultural (including the use of slaves) and not to become industrial.

This led directly to the American Civil War – that the North, with its strong industry and financing – won over the South – that had little of either.

Much later, we now have a tremendous need to understand our economy – and an equally strong need – to not understand it! What is going on in our minds? Perhaps it is the belief that money is dirty, but highly desirable at the same time. An attitude we inherited from our Christian ancestors.

I have a solution. We could make all financial transactions visible, so everyone could see what was going on in the Economy. This could easily be done with plastic money – the banks do this already, but do not make these transactions visible. Paper money would also have identifiers – each bill with is own serial number. When they are deposited in a bank, they would be scanned – and a record of these deposits made visible. This would also make money laundering impossible. The idea here, as you can see – is making the economy visible. Making it part of the Information Economy.

This will never fly – it will not even be considered. People do not want understand the Economy.

Or much of anything else.

Is Socially Responsible Capitalism Losing?

New Yorker

Many factors contributed to the troubles of these companies, but Cappelli notes how “vociferously the investment community seems to object to being nice to employees. It’s a reminder that, in the corporate world, things are constantly yielding to the finance guys.”

I would put it differently – we live in a society that is hostile to people – but friendly to Business. Business enhanced by the Computer, the Market, and the Media. And the fast buck.

Morality does not matter.

It takes guts to stand up to this monster – and most companies do not have this.

Turkey’s Akbank Facing $4m liability after Hack

Finextra

One of Turkey’s largest banks could be liable for up to £4 million after suffering a cyber attack on the SWIFT global money transfer system, according to Reuters.

Note the many links at the bottom of the page. This is why I have not kept up to date in Fintech – there is too much going on there.

If I was much younger, I would consider becoming an expert in this field. You young guys and gals might try this – there is plenty of money there.

Panama: The Hidden Trillions

NY Review

Costa Rica, where I live, is sandwiched between Nicaragua to the north – and Panama to the south. I have traveled in both places – and I thank my lucky stars, that I don’t live in either one of them.

But I know people who are going to Panama to make their fortune. Corruption, for them, is a golden opportunity.

This was true, much earlier, in the American Canal Zone. Where lots of Americans made lots of money – much more than they would have made back home. My friend Jerry was one of them. He knew Noriega personally – before he ended up in an American prison.

Jerry was a friend who gradually lost his mind, after he had lost his money – like many of my friends – and ended up being taken care of by one of his daughters.

Panama is now part of the corrupt global banking that is described so well in this article – that reviews six books. The extent of this corruption – many trillions of dollars – is unbelievable.

ANOTHER BLOW TO HOLDING BANKS ACCOUNTABLE FOR THE FINANCIAL CRISIS

New Yorker Magazine

I have read this article several times, and I still do not understand it. What it seems to be saying is that Wall Street lawyers have won again – with the help of the Second U.S. Circuit Court of Appeals.

Or, to put it another way – the banks control the economy, and the financial health of all of us. We do not control them – they control us.

The Way Money Could be Managed

The way we handle money now is a mess – but could be fixed fairly easily if would just scrap what we have now and start over. Here is a list of what would have to be done:

  1. All money would be artificial money, each unit of money (each coin) having its own serial number – like paper money, which is also artificial money. A good place to start would be a coin worth $100. Existing price lists could be used – as they are now. Smaller transactions could use the same money as is being used now.
  2. This new money could be interchanged at any time with conventional money – using standard exchange rates. I do the same thing now – I use my American debit card at an ATM down here to get American Dollars changed into Costa Rica Colones.
  3. Regulating the banks (a big problem now) would be easier if their internal records were also made public.
  4. The amount of money in circulation would be adjusted to keep the price of money the same.
  5. The transactions for each coin – where it is, and where it has been – are recorded for everyone to see. It would be in a public database anyone could query. This would be a big database – but something Big Data and the Computer Cloud could handle easily.
  6. Spending money (and earning money) could be easily handled by any smartphone – or any computer. This is already being done – but  a universal system would make this much easier.
  7. Each time a coin is used (usually with many other coins) a new record would be made for that group transaction.
  8. Banks would be clearing houses for all transactions (as they are now). Bank accounts would be the only storage places for money.
  9. Drug transactions would have to be legalized – which would greatly reduce the level of drug-related crime.
  10. Everyone and every organization would have to be clearly identified and located. This would make big money the equal of small money.

This would make all illegal activities more difficult – because they would be difficult to finance.

The general idea is that we should control our money – instead of letting our money control us.

Incompetence and Deceit

It’s sometimes difficult to tell these apart. And lots of people want to keep it that way.

I can remember an incident in my own family. My brother’s daughter had no income – but wanted a condo anyway, No problem! The Real Estate salesmen said – you can move in right away.

My brother was suspicious, and asked if the Phoenix area hadn’t been overbuilt. They told him it was not! Which was a complete lie – it was one of the most overbuilt areas in the nation. But he and his wife helped their daughter move in to her new condo anyway.

The daughter could not make her mortgage payments, so she had to move out and rent her condo to someone else. This was happening all over Phoenix – the housing bubble burst – and contributed to the Financial crisis of 2007-2008.

Was this incompetence or deceit? Or both?