Currency Destruction

Are we all aware that each and every loan or mortgage repayment that we make is instantly destroyed by the lender? (Fees and interest payments are not destroyed.)

Assuming you already know this, what are the wider impications for society?

Below, I briefly outline currency flow, from the cradle to the grave.

Currency creation

Creating currency is illegal and is called counterfeiting. However, Governments do allow banks to legally create currency provided they have your signature on a document promising to repay.



Hopefully you will realise that overdrafts, credit card purchases, car loans and mortgages are the main ways that many of the public are able to legally request the creation of currency.



Large financial entities have accounts with Central Banks. This includes governments, large insurance companies and our pension providers. This mechanism allows a few to create vast amounts of currency very quickly.

Currency flow

Currency is created for a specific reason. As you sign on the dotted line for a mortgage, currency is created which then flows into the property market.

Prices

Wherever currency flows increase, prices will rise and whenever currency flows are reduced, then prices fall.

You are now financially literate

You are halfway to becoming a financial expert.

Currency destruction

Currency is created and flows wherever it was created to flow. A promise was made to repay the freshly created currency and each and every repayment of currency is destroyed.

You are now a financial expert

In fully realising how currency is created, how its initial flow is controlled and knowing where and how the currency is destroyed, makes you one of the financial elite.

Prices

Knowing if wages will rise, if property prices will fall or if pensions will increase or decrease are all important to many people. As a financial expert you can give this some thought and be fully able to develop a valuable opinion and discuss this, or not, with other financial experts.

House prices

For house prices to rise, currency flow into the property market must increase.
For house prices to fall, currency flow into the property market must decrease.
For simplicity, I have assumed that the number of homes remains unchanged. A 10% increase in available homes needs a 10% increase in currency flow for prices to remain unchanged.



In order to risk a prediction of your homes future price, you need to consider the effect of Governments and Banks rules and rule changes affecting the mortgage market. Balance this with the public's perception of the current and future housing market. Remember, for fresh currency to flow into the property market, there must be a mortgage applicants signature and bank approval.

Wages

Rather simply, wages increase when there is an increase of currency into wages. Perhaps, you are beginning to see how simple the financial world is and how much of it is based solely on the opinion of the financial elites, of which you are now a member.

Pensions

Again, this is simple too. Is more currency flowing into pensions or not? Taking into account not just the flow of currency to and from its members but the flow of currency into and out of the investments that these pension providers make. Remembering that earlier in this document I stated that pension providers have accounts at the central bank. As such, vast amounts of currency can be created on demand of a pension provider, if the central bank approves of where this fresh currency will flow to.

The Financial Elite

You are now one of the financial elite. You understand the flow of currency and its effect on prices. You know exactly how currency is created and when it is destroyed.

The wider implications for members of society

We often use the word money when discussing wages, house prices and pensions. We fully believe money to be real and valuable. When we state that someone is wealthy, we are really saying that they have far more money than the average member of society.



Whenever anyone uses the word money, they are simply demonstrating a complete lack of financial awareness. (Or they are deliberately manipulating you.)



As one of the Financial Elite, we will use the word currency. Wages are simply an exchange of our time and energy for some currency. House prices simply reflect the amount of currency available for house purchase. Pensions are an accumulation of currency, access to which is determined by government.



All this currency has been borrowed into existence and there is an obligation to pay it all back. All of it. As each repayment is made, it is destroyed. Those with a large amount of currency will perhaps feel very safe and secure. There is a group who can borrow unimaginable amounts of currency and who never pay it back. The banks don't care as they do get to keep the interest payments and the  repaid principal is only destroyed anyway. This group is called Government and this should not be much of a surprise to anyone.



Critical thought is required to become aware of the deeper and unseen implications of this currency creation, flow and destruction. Superficially, there aren't any problems but there are unstated assumptions which need to be true for this 'financial system' to continue to exist. I don't believe that the 'unintended' consequences of this system are acceptable but very few are aware of what these are . Even fewer can even imagine the possibility of an alternative.



Currently our Governments have massively increased their spending of freshly created currency from our central banks. It will never be paid back so where is all this additional currency flowing and how will this impact upon you and your loved ones?



I can only really be bothered to critically think about this from my own point of view...



I am good, thanks.



They say, 'knowledge is power'. I say, knowledge is a distraction from reality, as the truly powerful are simply aware. What do you say? Comment below.