Roland Dürre
Thursday August 22nd, 2019

Money.

Virtual and digital.

Im Smoking – es geht zur Gala. 

Wearing my Smoking – on the way to the Gala.

Money has always fascinated me. Not only because you can buy everything with it, but also because it is something virtual with important functions and with immense strength and power.

Money is a virtual commodity. It needs belief and symbols If you want it to fulfil its purpose, you actually need an almost absurd belief in the value of money. Because nobody wants to spend anything he values without getting something real and secure in return.

Money will work as a currency if a huge collective unit accepts it as “valuable”. If you have no majority of people in a society who believe in it, then you can forget about it.

In terms of architecture and functionality, money has two functions.

First and foremost, money is a

I. means of payment

that simplifies the exchange of goods, perhaps even enables it. But it also has a second function that you want to strictly separate from the first. It is about money to be paid back in the future, generally also called “debts“, along with “providing“.

II. Financing the present and providing for the future

In this context, we now get the additional dimension of time. You can accumulate money in order to provide for your future. It is called saving.

You can also try to improve the present at the cost of a future. In other words, I can buy and get and use something today but pay for it (a lot) later or in instalments. For instance because I have no money today but assume to have money tomorrow. For whatever reasons.

This is how I can build a house with borrowed money. This is how you also generate income from capital or rights. All I have to do is find someone who believes me when I say that I will pay my debt back tomorrow, i.e. at a defined time in the future.

Both – saving and borrowing – precludes that the currency will remain stable as time goes by. But that is seldom happening. However, before we deal with the phenomenon inflation, let us talk about interest.

After all, this covering of time only became possible through interest. Now, if you owned more money than you needed (in other words, if you were rich), you could give the money you did not need to someone who needed it. This person (also called debtor) could buy what he needed and had to pay interest for being given money. And he could calculate how much more he had to pay for something he needs immediately.

If you talk interest, you immediately also need to talk inflation. If, for instance, the inflation is higher than the interest rate, then you can become rich by indebting yourself – totally without any work. And this is how “the devil will always shit on a huge pile of shit”. In other words: poor and rich automatically build opposing poles.

As I said earlier, money has always been a virtual commodity. It has often been represented by actual things (coins, paper notes). If you had these objects, you were able to take part in the property game.

Typically, the objects were special things, like coins or paper.

As civilization progressed, you could generate your own money. All you needed was the trust of your business partners. Laws and the debt tower improved your security. For instance, you could formulate debt contracts as bills of exchange and received goods against an unconditional pledge of payment for a certain time in the future.

Today, we have less and less objects that represent money. This is how money becomes an entry in a global book that describes who the money belongs to. The global book is realized and kept by a complex banking system. It is called technological advance that this book is now no longer written on paper but digitally administered.

With Blockchain technology, they now try to do this accounting in a digital, decentralized and global manner. In particular, they want to be independent from central service providers, mostly with camouflaged identities, which means the owners can register through their sw system and need not lay open their authenticity.

Mostly, however, these currencies are still linked to state systems. And the money is administered by private enterprises, the banks. That makes sense, because historically, it has been assumed that countries cannot become bankrupt. After all, everything belongs to them and they can always take the money from their citizens.

But in reality, it is the trust of the citizens in their country and its currency that carries the system. If this trust is no longer there, the currency can easily be dead. It happened several times in the past, and the consequences were always catastrophic.

So modern currencies like the dollar, the Euro or the Renminbi can easily die. Even if it sounds unimaginable to us, it can easily happen. Without the function of money, business life is not imaginable.

Mental experiment:
What would happen in such an event?

The answer seems simple.
New currencies would have to come. The necessary requirement is that the people trust in them. Such a trust can best be generated in groups that share mental concepts.

Nobody ever said these groups have to be state regulated. These communities should be huge. The biggest communities we find are those in the internet. Consequently, the idea that huge internet enterprises should carry these communities sounds logical.

This is why I see a facebook currency (for example) in a different light. And I believe it would be a good idea if we prepared for such a currency. Simply to have something on standby if the dollar, the Euro, or the Renminbi (or all of them) will collaps.

Let me be clear about this:
It might happen that, in our country, currencies that we have discriminated against and fought, like the LIBRA, will suddenly become saviours of the world-wide business life. If, for instance, the three currencies collaps, where are we supposed to take our money?

It might happen faster than we would like it to happen.

Here is another difference between Libra and similar currencies and Bitcoin:

When all is said and done, what facebook wants to do is organize a faith group currency. LIBRA will probably become a classical, purely digital antiquated currency. It has nothing to do with a crypto currency. Bitcoin is totally different – the distinctive criterion is that the owners are camouflaged behind their software and their registration and remain anonymous. However, it seems to me that anonymous property is not something we want in our society. And even with Bitcoin, you only get it in theory. If nobody else, then at least the miners prevent it.

nd here is a cynical question: I could easily imagine the catholic church as provider of an internet currency. There are still many people who trust in it – and there is a great argument in favour of such a provider – the enterprise has 2,000 years of success behind it.

RMD

Those were the days – we were still paying with Deutsche Mark. Coal is nice.

In former times, people lived frugally in order to save money for their old age. Even as a young child, you had your bank account. Today, it is not so easy to open your bank account.

However, this is not bad news, because in times of zero interest, it makes no sense to save money. You save and save and eventually nothing is left. Because the money you saved lost all its value. Because we have a high inflation rate and zero interest – both thanks to the EZB money politics.

Today, more and more people have to save money.

Not for their old age – but in order to make ends meet. And because, as the end of the month comes, nothing is left on the bank account. Because life has become expensive. Or, to be more precise: the rents have become really expensive, at least in some cities.

Food has become cheap – I think it has never been quite as cheap as now.

I know people who pay 1,200 € each month for their cold flat in Munich – and they often find this quite cheap. Regardless, it is more than half of what they earn after taxes. If you have a flat to live in, all you need is some clothes and food.

Most of us have far too many clothes.

We pile them on top of each other in our wardrobes. But visible signs of having worn them (after all, you want to look presentable) and the fashion (you want to be chic) make us buy more and more all the time. Regardless of the fact that there are many things we really no longer need. That is purest consumerism. And the wardrobes keep getting fuller and fuller.

Let us look at food.

In Germany, it is cheaper than in most other countries. I took a close look at the prices of basic food in discount shops:


Flour, milk and eggs

If you buy milk, you pay 1.05 € if you choose fresh full milk with 3.8 % fat, if you take the H-milk with 3.5% fat, it is even less: 0.70 €. That comes as a surprise to me. Compared to a litre of Diesel fuel (1.30 €) or petrol (1.45 €), it is really cheap, isn’t it? Especially since there is always also a tetra package that comes with it. And if you drive a car, one litre of fuel is quickly gone.

Looking at flour really gives me pause. At Aldi Süd, you get one kilogram of Mühlengold Weizenmehl for 0.39. Now I understand why some people heat their ovens with grain.

If I want to bake a cake, I will also need eggs. There are three different 10-egg-packages: from hens that were kept on the ground, they cost 1.19 €, from hens that were running free, they cost 1.59 €, and from ecological hens, they cost 2.69 €. If I want the eggs boiled or coloured, I get 10 of them for 1.89 €. That sounds really nice, doesn’t it?

I will also need oil.

Here is what I see: the pure vegetable oil made of rapeseed costs 0.99, the same is true for the pure sun flower oil. As you see, oil, too, is less expensive than petrol or Diesel fuel. I wonder if I can pour it into my car. Well, maybe not, because, as we all know, I no longer drive a car, let alone a Diesel engine car.

Coffee must not be missing from my list.

I find “Bio Caffè Crema, ganze Bohne“ for 9.49 € and, even better, “Tizio Caffe, ganze Bohne, sortiert“, an entire kilogram for 7.49 €. Since these prices do not only contain the added value tax, but also the roasting tax, this is really remarkable. According to Wikipedia, in Germany the coffee tax per kilogram for bean coffee is 2.19 Euro. For instant coffee, it is even 4,78 Euro per kilogram.

Those who love alcohol also need not worry.

The least expensive schnapps is the Doppelweizenkorn Kornmeister. You get a 0.7 for 5.29 and for three litres of Gold Beer KARLSKRONE (as a six-pack, 6x 0,5), you pay 1.79 €. A total of 7.08 € should easily settle you for a soccer evening at home in front of your TV set.

If you do not like beer, I recommend red wine.

The discounter offers a bottle of “Mazedonischer Rotwein“ for 1.49 €. So what more do you need?

If you need snacks to go with the liquor, this is also quite cheap. You get Chips SUN SNACKS, 200 g for 0.79 €. Two packages in your trolley and the entire TV evening with six half-litres of beer, one bottle of schnapps and two packages of chips is still only 8,68 €. If you drink some wine after the match, you have a total of not much more than 10.00 €.

As I see it, the absolute hit when it comes to cheap is: apple-sauce.
You get SWEET VALLEY, 710 g for 0.59 € in the Tetra pack. Who can produce this at such a price?

As you see: if you are prepared to eat cheap, you can really live quite well in Germany. To be sure, I have no idea how these prices are possible. I am afraid there must be some exploitation of labourers, producers or suppliers.


So why do I write about this?

Because I think the proportionality got lost.

Something is wrong and something is rotten in this state. In Munich, I pay a sort of rent for one room that would buy me huge mountains of food and t-shirts and leave me enough to drink myself to death.
What will happen if, as a consequence of the climate crisis and the destruction of the soil, we can no longer produce enough grain?

I mean the wheat that currently is so cheap that we only pay 0.39 Euros for an entire kilogram (neatly packed). If I paid the money that is paid for rent (1.200 €), I would actually get three tons of wheat for it. That is more than 700 kilograms each week, i.e. 100 kilograms each day. What will happen when wheat becomes rare?

What will happen if suddenly things turn around totally? Somehow or other, this seems threatening to me and I worry about a future crisis.
And I think of what I consume. What do I need for living except a place to stay and food?

Well – I want to travel.

A short time ago, when I was sitting in the regional train going home to Neubiberg from Winterhausen, two young ladies sat with us at the table. Naturally, they talked about a few other young ladies who had booked a week in Mallorca for 250 Euro. After all, you could get three days on Malle for 146 €: ”How can anybody be such a big spender?“ – was their opinion. Welcome to Ballermann.

Mobility is very important for people, that is also true for me.

It helps if you understand that you can also be quite mobile without a car. If you combine your bike with public transportation, you are doing even better. However, many people believe they absolutely need a car for their mobile freedom. Consequently, they have to spend whatever remains of the income after they have paid their rent on their cars. And then there is not much left except buying food at the discount shop.

But I now understand: if I have a flat, it is quite easy to live with very little money. I am not sure who gets to pay the price for it.
Most of us have more than enough clothes.

You can spend an extremely long time without buying anything new. I practice this – and it works. I am quite happy with it. No more suits, white shirts and ties. And in summer, always the old shorts. Along with all those many free t-shirts. Great.

I try to buy regional products, for instance at the weekly market or the good Supremo coffee. The prices differ fundamentally from those at the discount shop. For coffee, I pay 2.5 times what I would pay there. I am well off and I can afford to do this. I do it because I want to make sure that others, too, can survive and that ruthless exploitation is reduced. But I am probably not succeeding?

Here is a mental experiment:

What happens if I know someone who does not have enough money and I give him, for instance, 10,000 €? I fear he will immediately buy a car or perhaps fly to “paradise”. So his carbon dioxide footprint will immediately increase drastically. That is not what I want.

Perhaps the best solution would be for me to burn my money. I do not mean at the stock market, because that would again mean that someone else gets it. I mean it in the true sense of the word.

Except that this will also not do any good. Because a one-sided DZB will quickly create new money (we used to say “print”). Because they need to trigger the economy and stop the collapse of nations who suffer under the Euro.

RMD
(Translated by EG)

P.S.
I took the prices from the website Discounter-Preisvergleich of April, 24th. Barbara told me that several products (for instance one litre of fresh milk) are considerably less expensive than I wrote.