One percent of one hundred equals one - one hundred multiplied by one equals one hundred.
I
was thinking this when I bought an item in a shop and it cost me $9.99.
So, I considered asking for my change from a $10 dollar note. Of course
I never would have received it, One cent coins disappeared in 1990
along with their piggy bank chum, the 2 cent coin. Even though they they
were no longer minted, they were still legal tender but they were just
too expensive to produce and distribute compared to their worth.
Whatever happened to my original one cent - where did it go?
I
understand that I can't hold it in my hand as change but somehow it
should be mine. It was unjust. The shopkeeper assured me that it was not
his profit because many of the items in his shop carried a lower price
and the total stock sales averaged out. But I noticed that there were
never prices of $9.91 or $9.96. Every transaction is rounded off to the
nearest 5 cents. So 1,2,9 and 8 become 0, 3,4,6 and 7 become 5, so who's
got the change and where is my one?
It doesn't seem to exist as
real tender except when it appears on paper as a digit. Very clever
accounting. It's counted but not accounted for.
It was initially
considered that the original range of coins introduced in Australia in
1966, at the change to decimal currency, represented the least number of
coins required to make any given amount. They were the 1,2,5,10,20 and
50 cent coins. Take any of these out of circulation and out of your
pocket and and you must either carry more money or spend more money to
get change.
How has my cent disappeared?
The Cent ceased
to become significant with the introduction of plastic card money.
Bankcard was the first mass produced credit card in 1974 and at its peak
membership in 1984, the $1 coin was introduced. The $2 coin came in
1988 and then 'eftpos' in 1989. One and two cent coins stopped in 1990.
Bankcard ceased operation in 2006 even though it was created and
supported by the largest banks in the country.
What a strange
thing that is. My coin cent went missing when plastic money arrived! It
no longer counted in my pocket but still added on a receipt, and it had
piled up with all the missing others in endless accounting balance
sheets for the last thirty years.
But maybe there is a way to get my cent back.
But
I need to buy in bulk to increase the value of my dollar whereas the
seller makes more profit from selling things individually. If I buy 10
things at 99 cents for $9.90 I get 10 cents change from $10. The shop
sold 10 things. If I only buy one thing I lose one cent. They sell 10
things singularly and make ten cents profit over the sale price. There
is actually an automatic 1% profit margin in everything that is sold and
the only way I will get my one cent change is if I buy 3 things and get
5 cents change. But if I don't, the money disappears.
Who gets the money if I only buy one thing?
Obviously
I'm being encouraged to buy in bulk and buy with plastic but there is
also something else going on here. If all my cents and your cents are
not being repaid and being hoarded somewhere, isn't that theft or fraud
or deception? And if all these accumulated cents are being spent some
how or where, shouldn't I know about it?
Maybe I do, but I have
become so accustomed to the large frivolous money movements orchestrated
by banks, countries and economies that I barely notice the small
details. Of course there is only one big problem at the moment - it's
called a RECESSION and it's the one we had to have to return a semblance
of balance back to the economy.
The Great Depression of the
1930's has since been followed by a few minor recessions. But now, the
common thread is the inability of the banks to call in loans when the
borrower does not have time or money to pay. Worsening future prospects
cause the banks to begin refusing loans and start hoarding money and
then the downward spiral begins. As Irving Fisher said in 1933, about
the mechanics of boom to bust : "A fall in nominal interest rates and a
rise in deflation adjusted interest rates."
It is possible that
key decisions made by central banks to re-establish the Gold Standard
following its abandonment after the First World War was the primary
cause of the great depression *(see: Ahamed 2009). The financial crisis
that preceeded the great depression began with a stock market crash and
spread to the banking system. Whereas the current financial crisis began
in the credit markets and then spread to the banking system and the
stock market.
A few comparisons indicate some similarities between the severity of the 1933 and the 2007 depressions.
World
trade volumes fell by 30% over three years then, but now they have
already quickly dropped by 20%. An extended period of strong growth in
stock prices before both crises and the falls during the current
downturn are of a similar size to those in the first 12 to 18 months of
the Great Depression. Gross Domestic Product in OECD countries during
the first year of this current depression fell only slightly less than
in the first year of the GD *(see: Gruen and Clark 2009).
Highlighting
a few comparisons between in actual money value for the same periods
will help to illuminate the insanity of the current situation.
Australian Net Debt in 2009 = $647 Billion
USA Net Debt in 2009 = $11.4 Trillion
Australian Exports in 2009 = $123 Billion
USA Exports in 2008 = $1.84 Trillion
Australian Exports in 1933 = 98.7 Million Pounds Sterling
USA Exports in 1933 = $1.7 Billion
$25 in the USA in 1969 would buy the equivalent of $150 in 2010.
In
1969 Richard Nixon abolished the USA Gold Standard. This effectively
turned the USA economy into a FIAT economy, ie: no backing for money.
The
USA is the only country in the world that enjoys the luxury of paying
off its debts in the same currency that it alone can print. It has
enjoyed this privilege since 1971 because of its military and economic
dominance and because the rest of the world needed to do business in a
stable currency and the USA dollar fitted the bill. (*1).
In the
1980's, Reaganomics preached that greed was good and science was no
good. At the same time Australian Banks were deregulated.
Coincidentally, The $1 coin was also introduced to the currency at that
time and was soon followed by the introduction of EFTPOS plastic money
transactions.
The price of gold has been rising since 2000 but
gold production has not. In late 1998 the gold price was in the mid $200
and annual global production was just under 2500 tonnes per year. Since
then the gold price is now up 340% yet production in 2010 is set to be
just over 2400 tonnes. (*2).
Compare this chart of Gold versus major currencies over the last ten years:
www.bullionvault.com
Commodity
currencies, high-saving countries, managed floats, large debt-to-GDP
ratios.....none of it mattered, real money beat paper money over the
last ten years. (*3).
Has anyone yet noticed a pattern to
economic fluctuations in the periods since the Great Depression, the
1960's, the 1980's and 2010?
When Ronald Reagan moved into the
White House, total U.S. debt equaled 168% of GDP. The next 27 years
took the total to 370%; it was heralded as a triumph of the Anglo-Saxon
free enterprise system, but it left people with an additional $27
trillion of debt.
(*4).
There are two important factors at play here, INFLATION and DEREGULATION.
Bankers
and Accountants the world over know how to manipulate the figures to
their advantage. (they really don't deserve to have a capital letter
attached to their title, but they are so important people - they like to
think!)
How is it that entire countries are hitting the wall?
The
list of casualties continues to increase: Iceland, Dubai, United
Kingdom, Greece, Spain, Italy. How many more "P.I.G.S." will fall before
the entire world needs to re-structure and re-finance?
(Remember:
the USA net debt in 2009 was $11.4 Trillion dollars. The UK has just
announced cuts in public sector spending by $36 Billion dollars. Please
say those figures slowly to realize the true size of the amount of money
that is being lost. Also consider that the Europeans and the Americans
have differing definitions of Billion and Trillion!).
I keep
wondering where all this money is coming from and going to. I am amazed
that there are still some people who are actually making fortunes from
government mandated schemes such as superannuation, internet banking,
investments and the stock market. ( In Australia there is a $1.4
Trillion dollar 'super' honeypot just waiting to be milked).
With
plastic money (invisible money) so readily available for everyone to
spend over the last 20 years it has been easy to be conned into a false
sense of security regarding our actual individual worth. Most
individuals, economies and governments don't know how much money they
have or even where that money actually is.
The often respected financial accountants are the wizards of the 20th century!
Be very wary of the emperor's new clothes!
Watch out for delusion by stealth and the illusion of wealth.
Inflation,
inflation, inflation - the price of everything keeps going up,
automatically indexed in tandem with some unknown long since forgotten
benchmark.
A case in point. Please let me illustrate by
considering the real value of one of the oldest currencies in the world,
the Lire, and one of the newest currencies in the world, the Euro.
The
smallest coin in the Italian currency is 50 Lire. This is equivalent to
USA 2.58 cents. The smallest banknote is 1000 Lire which is equivalent
to 0.5 of the Euro (the Lire originally represented 1 pound weight of
silver, like the pound sterling).
1 Euro = 1.58 $ Australian dollar.
$100 Australian dollars = 127,297.88 Italian lire before 1999.
$100 Australian dollars = 0.08 XAU gold ounces.
Do you see what is really happening here?
Because
the government economies are slaves to inflation, they need to
continually adjust their exchange rates to stay in the race. Your money
is always not worth what you thought it was!
Plastic money, ie: any card transactions, is a very clever instrument for disguising the real value of what you just spent.
Clearing times for cheques and internet banking transactions are illusory.
The
wizards of finance have perpetuated a myth that financial transactions
are not instant. The reality is that they are instant, but just not for
you or me.
You better believe it - someone, somewhere, somehow,
has found a way to spend those cents, make a profit on them and return
the original amount to your account.
This should not be a legal way to do business - it is fraud and deception.
If
$1 AUD = 1272.9788 Lire before 1999, how much of this value actually
disappeared with the conversion to the Euro? And where did it go and who
has it? It has to be somewhere. Those anally obsessed accountants would
not let such a trifling amount slip through their fingers. Or would
they if they could? It's very likely they found the way to disguise the
loss by clever manipulation of one of the basic Keynesian principles of
generating economic growth for governments: "Hire people to dig holes
and fill them up."
We were conned! Governments have enforced
inflation and taxation by stealth so as to manipulate the false
economies presented by the bean counters. Stock markets, the Dow Jones
Index, time zone differences, daily fluctuations in exchange rates, the
abolition of the gold standard, easy credit plastic card money and the
obsession with turnovers instead of profit, and the policies of greed
have catapulted all of us into the greatest recession the world has ever
experienced.
Do not be deceived by the spin doctors. The economy
of the entire world is sick, and the medicine that our governments pump
into the ailing patient is still called HELP but it is really only
CREDIT.
The patient cannot be revived with bad medicine - it is
not dead - but in limbo, where it will stay until democracy realizes
that BIG BROTHER is manipulating us all.
Where is all the money that is being promised that will revive our economy coming from?
Yep,
now I know. All those cents that have been rounded up or down. All that
money that is counted but not accounted for. All that credit card
plastic money. All that money that doesn't really exist but we are
encouraged to spend - complacent as we revel in the luxury of greed.
Someone knows were all those missing cents are and they are hell bent on spending them.
I'm as mad as hell and I want MY cents back!
Do you want YOURS?
.....................................................................................
(References:
*1 - Daily Reckoning, 16.03.10
*2 - Daily Reckoning, 16.12.09
*3 - Daily Reckoning, 06.01.10
*4 - Daily Reckoning, 11.05.09).
And finally, I would like to suggest the address of a web-site that will help you keep track of your missing cents :
http://www.atn.com.au/info/banking.htm
