270
13 Democratic Capitalism
Such developments did not come as a surprise. As interest rates for debts have
been higher than interest rates for savings, debts increased more quickly over time.
To compensate for this, new money had to be created, which—in the fiat currency
system
4 of today—happens literally at the push of a button. As the volume of money
increases while the material resources on this planet are limited, products and services
tend to become ever more expensive. The more money exists in the system, the lower
becomes the value of the money in the savings account. This phenomenon is called
inflation,
5 and it requires us to work against it. As a consequence, economic growth is
needed, but it makes the world economy less and less sustainable. It drives our planet
closer and closer to an „abyss”, where the current financial system will ultimately
fail.
There are at least three factors, which make things worse. First, the dollar is
currently a „petrodollar”.
6 It is not backed by gold, but by oil. Hence, when new
money is created, new oil has to be extracted and consumed, which will eventually
turn into CO 2 and potentially add to climate change. Hence, the current monetary
system makes a major contribution to the so-called “climate emergency” that we are
now faced with.
Second, the dollar is the world’s lead currency,
7 so that all the other countries
have to buy dollars in order to buy certain kinds of goods (such as oil). Therefore, all
countries that bought dollars contributed to the so-called “climate emergency,” even
if they did not raise CO 2 levels themselves.
Moreover, the lead currency system put the USA in a privileged position. They
could import much more than they exported, and automatically enjoyed a higher
standard of living. They could also spend more money on arms. In fact, for a long
time the US military spending of the USA was as high as the military spending of all
other countries on this planet together
8 (according to other sources, that applies to
the USA and China together
9 ). This circumstance made the USA the “world police”
and global superpower. The power was needed to keep and expand the privileged
position, and it resulted in many wars.
Third, some central banks are private in part.
10 This means that, when a country
makes debts at the central bank, a few private individuals will make incredible
amounts of money. Money creation works to their benefit, while tax payers will
have to pay many years for the billions lent, maybe many generations.
4 See https://en.wikipedia.org/wiki/Fiat_money.
5 See https://en.wikipedia.org/wiki/Inflation.
6 Petrodollars and the System that Created It, The Balance (April 8, 2020) https://www.thebalance.
com/what-is-a-petrodollar-3306358.
7 See https://en.wikipedia.org/wiki/Reserve_currency, https://de.wikipedia.org/wiki/Leitwährung.
8 U.S. Defense Spending Compared to Other Countries (May 13, 2020) https://www.pgpf.org/chartarchive/0053_defense-comparison.
9 See https://en.wikipedia.org/wiki/Military_budget_of_the_United_States.
10 Who Owns the Worlds’ Central Banks?, Zerohedge (October 22, 2019) https://www.zer
ohedge.com/markets/who-owns-worlds-central-banks; Wem gehören die Notenbanken wirklich?
GodmodeTrader (August 24, 2016) https://www.godmode-trader.de/artikel/wem-gehoeren-die-not
enbanken-wirklich,4843326.
13 Democratic Capitalism
Such developments did not come as a surprise. As interest rates for debts have
been higher than interest rates for savings, debts increased more quickly over time.
To compensate for this, new money had to be created, which—in the fiat currency
system
4 of today—happens literally at the push of a button. As the volume of money
increases while the material resources on this planet are limited, products and services
tend to become ever more expensive. The more money exists in the system, the lower
becomes the value of the money in the savings account. This phenomenon is called
inflation,
5 and it requires us to work against it. As a consequence, economic growth is
needed, but it makes the world economy less and less sustainable. It drives our planet
closer and closer to an „abyss”, where the current financial system will ultimately
fail.
There are at least three factors, which make things worse. First, the dollar is
currently a „petrodollar”.
6 It is not backed by gold, but by oil. Hence, when new
money is created, new oil has to be extracted and consumed, which will eventually
turn into CO 2 and potentially add to climate change. Hence, the current monetary
system makes a major contribution to the so-called “climate emergency” that we are
now faced with.
Second, the dollar is the world’s lead currency,
7 so that all the other countries
have to buy dollars in order to buy certain kinds of goods (such as oil). Therefore, all
countries that bought dollars contributed to the so-called “climate emergency,” even
if they did not raise CO 2 levels themselves.
Moreover, the lead currency system put the USA in a privileged position. They
could import much more than they exported, and automatically enjoyed a higher
standard of living. They could also spend more money on arms. In fact, for a long
time the US military spending of the USA was as high as the military spending of all
other countries on this planet together
8 (according to other sources, that applies to
the USA and China together
9 ). This circumstance made the USA the “world police”
and global superpower. The power was needed to keep and expand the privileged
position, and it resulted in many wars.
Third, some central banks are private in part.
10 This means that, when a country
makes debts at the central bank, a few private individuals will make incredible
amounts of money. Money creation works to their benefit, while tax payers will
have to pay many years for the billions lent, maybe many generations.
4 See https://en.wikipedia.org/wiki/Fiat_money.
5 See https://en.wikipedia.org/wiki/Inflation.
6 Petrodollars and the System that Created It, The Balance (April 8, 2020) https://www.thebalance.
com/what-is-a-petrodollar-3306358.
7 See https://en.wikipedia.org/wiki/Reserve_currency, https://de.wikipedia.org/wiki/Leitwährung.
8 U.S. Defense Spending Compared to Other Countries (May 13, 2020) https://www.pgpf.org/chartarchive/0053_defense-comparison.
9 See https://en.wikipedia.org/wiki/Military_budget_of_the_United_States.
10 Who Owns the Worlds’ Central Banks?, Zerohedge (October 22, 2019) https://www.zer
ohedge.com/markets/who-owns-worlds-central-banks; Wem gehören die Notenbanken wirklich?
GodmodeTrader (August 24, 2016) https://www.godmode-trader.de/artikel/wem-gehoeren-die-not
enbanken-wirklich,4843326.