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Date: 07/07/2016 

The importance of real economy for sustainable growth and economic development

When everyone is becoming crazy about economies and finance, crisis, markets, shares, loans, taxes, and changes in currency rates, we smile. Of course, how is it possible not to become crazy… when all what is being talked about is craziness in itself?

All the modern economy can be considered as fake economy, because it is sustained just by lies.

The first and maybe the main problem in the worldwide economy is about fiduciary money.

A lot has been written about what it is, and how it has been possible to happen. But the matter is that such a big amount of theoretical money does not exist in real money nowadays. It is just a registry of guarantees enclosed in the shape of ones and zeros inside a super computer, and representing the debt created through loans, being just a number, because there are no enough goods or real money to sustain that figure.

It is money that is considered as being real, while everyone knows, that it will never be paid off, and there is nothing behind it to sustain it… that is - nothing with real physical value. As we said… just promises impossible to accomplish.

Economy1

To explain the other big problem, and how it is somehow related to the first one, it is needed to remind what the real use and meaning of money are.

Due to the inconvenience of the interchange of goods according to the value, and due to the concept of psychological value that a good can have for each person at a particular moment, it was agreed to get an intermediate way to determine the value or cost of goods and services of different nature. Then, a common pattern between the parts, which make up a commercial transaction, started to be used.

During a long time, this reference pattern was gold, and during history, many other patterns had been considered as money. For instance, silver, precious stones, or salt, hence the word “salary”.

Economy2

Anyhow, something physical, with intrinsic value and easy to be transported and stored which can be of interest to all the parts.

What is done with this reference pattern is just taking a conventional measure of the value of a good or service.

So, money can be truly thought of as a “metric tape” for marking this reference.

But when it is nothing valuable, and when the psychological price is managed by measuring control of needs or very tight demands, this “metric tape” is “moved” and its length is increased or decreased.

Now, let’s suppose that we need to measure an object with a “changing” measuring tape. It will mark each time a different value, and we will become crazy to understand which one is the correct one.

Then, the pattern became as something moveable, flexible, and, of course, a target of all kind of dirty manipulations. It is not a clear reference, set and fixed as it should be.

Simply… we cannot measure. We are forced to believe that the measure is given by others, and, of course, everyone is “trying to get his share”.

Economy3

An absolute craziness with negative consequences.

If there is something simple to understand, it is a box full of coins.

While coins are there, you can use them.

If there are no coins available, we cannot use them. We simply cannot count in the negative to properly use things that are not there. It is only needed to think that if instead of having coins we would have oranges in the box. Then when there are no oranges, there is no juice.

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Having in mind the mentioned craziness, and not having learnt the hard lesson of the oranges box, many people and entities found a way to produce a big amount of “fake” money used by the fiduciary system, making a little or big scale of speculative operations that seem to increase the real economy or seem to produce “money”.

Sadly, we should say that this is not real money, so these kinds of operations are useless both to the health of economy and for real wealth growth. Because no real increase of wealth is produced. No product is created, no raw materials are produced, no added value is introduced to the market, and no services are provided to meet needs.

So, how these “experts” in economy expect to handle the growth of economy? How do they expect to make any market “sustainable”? We are wondering how they expect to hold the economic development in whatever part of the world with those office tricks with nothing behind but lies, loans and fake money?

Economy5

And therefore we have a question “Can the economic development sustained by making injections of “fake” money create real industries?” After all, no more than the “fakes” will sustain the acquisition of goods from those industries? Or only after being heavily taxed, because governments should return the oranges that had never been in the box, will the industrial tissue be kept?

Trying to create “something” from “nothing” is always tricky - illusionists know it quite well. Of course, at any moment the trick can be spoiled. Otherwise the economy explodes in a thousand pieces leading to correlated social problems that will not contribute to a further fix of these matters in the right way.

Due to this, there is only one secure way which we can trust if we are really interested in the economic development of a society that can be sustained in time. And it is only making activities and operations inside the real economy.

Meaning, on one side a fair frame of reference for money, based on materials with real value and the standard measures and subdivisions to create valuable coins, not banknotes sustained by nothing more than the value of the paper they are printed on.

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On the other side, it shall be held and sustained by all activities based on real economy. This means free commerce of products and services, and transformation of raw materials. Also, for sure, whatever operation that will bring added value to the interchange of those products, services and materials between real people, groups or enterprises, producers and consumers, creators and users, traders and clients.

The concept of free commerce should be emphasized, because where there are restrictions on these activities, the problems begin. We should believe that without the tricky economy and other hidden interests of powers, the economy itself is self-balanced, and it establishes a real position between offer and demand in a natural way.

So far we have been doing commerce since prehistory, nevertheless we are trying to reinvent the wheel but we can assure you that it will not work if it is not round.

There is no need to reinvent what has already been invented. Let it work in its expected terms according to its nature - with no tricks involved.

Categories:

Economy, Development
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