Financial Crisis, the way forward.indd

Financial Crisis - the Way Forward

Above: The symmetric web of the spider, hanging quietly in space

like one of Descartes’ vortexes within a mist of dark matter, is in sharp

contrast to the rapidly unravelling “cat’s cradle” of the current ﬁnancial

system.

Contents:

1. Financial Crisis , October 2008. p. 3

Aims.

2. The Way Forward p. 17

problems; taxation; home ownership; education; work; healthcare; the

welfare state; pensions; gambling; defence.

3. Progress or lack of it. p. 29

Mankind’s quest for the answers to the riddles of the universe, the key

to life.

4. The monetary System. p. 47

The value of labour; money; housing as the gold substitute; the theory

of economics.

5. A World Oriented Solution p.62

1. Financial Crisis, October 2008

In the early 1980’s we had periods of high inﬂation, encouraged by the Labour Government, that seemed to do no-one any great harm, and certainly stimulated the economy. Later in the same decade, Margaret Thatcher and Nigel Lawson (Prime Minister and Chancellor of the Exchequer respectively)decided for no very obvious reason that inﬂation was a very bad thing. They imposed higher and higher interest rates, reaching as high as 16%, and put many businesses and individuals deliberately into bankruptcy. Since then, the control of inﬂation has been a “sacred cow”, whichever government has been in power. Instead of allowing some modest inﬂation to drive the economy, the policy has been that money lending shall fuel greater and greater growth. The

pursuit of a constantly increasing economy has been the central aim, despite keeping inﬂation to a ﬁgure as near to zero as possible. Banks and ﬁnancial institutions fuelled the growth so desired, by lending more and more money. Manufacturing during the last twenty or more years has been much more efﬁcient overseas than in the UK. Countries such as China, Brazil and Vietnam have had low labour costs and low currency exchange rates. The western countries,especially Europe and USA have taken advantage of global markets, and their own manufacturing capabilities have dwindled. Unfortunately, much more was being bought than in any sort of truth could be paid for. Almost no one in the western world now has any money in the bank. Now we discover that banks and ﬁnancial institutions are leveraged to a degree that as private individuals we could never be allowed, and could never have imagined. A few years ago, Donald Trump, “owner” of numerous casinos in Las Vegas was in the news. Touted as one of the richest men in the USA,

he was found to have borrowings that (marginally) outstripped his assets. The banks however would have lost money if they had made him bankrupt, and so instead the banks simply lent him even more money and made him “richer” still. In late 2008 we now ﬁnd that the ﬁnancial institutions themselves are leveraged to multiples that would have made Donald Trump’s eyes water. Leman Bros. has become insolvent, and

it is revealed that the leverage entailed in their business is in excess of 30x. That is to say that their assets were only £3 in every £100; the whole of their business was a massive paper bubble, hidden from all by the complexities of their methods of trading.

Since the collapse of Lehman last month, other major institutions have been falling fast. The Icelandic Banks are insolvent, putting the entire country into that same insolvency. Our own major banks are clearly insolvent also, and have gone to the government to be bailed

out. The government having committed us initially with the bail out of “Northern Rock”, have set an unfortunate precedent. Their example was followed in the USA by the failures of banks and credit companies such as “Fanny May” and “Freddie Mac”. The US government under the now reputationless George Bush (junior) attempted to push through a government bail out of $700 billion; a sum that sent ordinary people reeling. Their senators were pushed initially by public opinion to reject that idea, and the stock markets around the world started to fall. Since then, the British labour government under Gordon Brown, has said that they will take over the ailing banks by borrowing £350 billion, and taking a stake in those institutions, under new rules, expecting that when(somehow) recovers, the taxpayer will be rewarded by a proﬁt. At the same time, it has rapidly become evident that this banking crisis

is much more widespread than at ﬁrst admitted. Many commentators have referred to “strong” banks as well as to troubled ones. There has been however a long established practice, where banks and foreign investors have traded CDO’s (collateral debt obligations) These have been freely bought and sold between institutions as being high grade stock. They are guarantees from one bank to another that if one is in trouble, the other is sharing responsibility. It is now clear that these guarantees, for billions and billions, are entirely worthless. Moreover, it means that all banks are linked into each other’s debts. At the same time the trading of these CDO’s has been entirely unregulated, and are not public. Invisible and strung throughout the system like a tangled web, they have made the domino effect inevitable and possibly all embracing.

Governments are universally proclaiming that they will provide the necessary funds to bail the system out. Not one government has stated where this money is to come from, except that it will be borrowed, and that future taxpayers will repay it. Our government has already given us more national debt than we had after the war, after we had actually repaid that debt. Unfortunately, if money is to be borrowed, it will have to come from somewhere. However, the banks have run out of money, so where is that money to be found? If any foreign banks have any real capital assets they will notbe willing to risk them on bailing out our excesses. It is likely though, that in the presence of such a widespread collapse, that they themselves will be affected. There is an international monetary fund, but that is not independent of the banking system, and cannot cope with a systemic failure. It is inevitable that ultimately collapse will take place. Once the dollar has become almost worthless, oil will trade in other currencies. Since the euro and the pound are also likely to be largely worthless

for international trade, there are two possibilities. Either international trade effectively ceases, or other currencies will be used to ﬁll the void. Perhaps the Chinese yen might be used. The Russian rouble could become important. China has currently an extensive manufacturing industry, supplying much of the world with manufactured goods, and it has coal for power. Russia has coal, gas and oil. South America has oil to export, as of course has the middle east. The current main world oil consumers, North America and Europe, will suffer a slump such as never before seen. This means that they will have to cut imports of all sorts of commodities and manufactures. It is likely that these changes will take place exceedingly rapidly. The US and UK stock markets have fallen 40% in a month. On 15th October, [2008] the stock markets fell 8% and 7% in one day. On 24th October, the market fell 5%. All western business is being very rapidly decapitalised. This process is not likely to be short term or remediable, since most of the investments made in recent years have been of

foreign capital. Now that the middle east and China see that our stock is worthless, they are withdrawing their capital. Not only will that withdrawal be long term, but at the same time it ensures that those same countries, who have the assets, will not wish to reinvest them in propping up a western banking system that is not merely in trouble but which has actually withered on the vine. No amount of watering or propping up will save it. What is now needed is acomplete revision of the entire world economic system, and of the political systems that drive it. It is certain that such widespread change cannot take place except after enormous revision of the spread and distribution of wealth or real assets. It is surely the case that the USA is doomed to split up into separate states, and that it will not be able to wage war around the planet. There may be enough ability for it to feed and house its own people, but with some 3 million in its prisons, [and 10 million unemployed in 2011] the culture of greed and with the false values that were manifest in the gold rush to the Klondike [Canada, 1897, and Alaska], the USA is likely to succumb in due course to civil war. Some states have assets, others will be hard pressed to feed and house themselves. Those states with oil are not going to give it away for nothing to those without. Internal problems in the USA [if unsupported by artificial “bail-outs”] should at least take their armies out of commission elsewhere. Even the Mexicans may think twice about illegal entry.

During the 2008 Olympic games in Beijing, Russia was embattled in South Ossettia, Georgia. Vladimir Putin ﬂew from China to the scene as thousands were killed. Meantime, in England, fuel prices were constantly rising, and as a sop to the electorate, Gordon Brown stated that 1 billion pounds would be spent this winter to pay a fuel subsidy of £150 to all parents with children on child beneﬁt. The payout was to gain votes and not to be conﬁned to the poor. Only two months later the oil price was dropping dramatically.

In 1948 an international agreement was made that aircraft fuel was to be exempt from taxation. This agreement has never been broken, and as a result air travel has become ubiquitous. It is now cheaper to ﬂy to a foreign country some thousands of miles away than to travel by rail a hundred miles or so to the capital. We can be sure that the cost of providing the aircraft has been covered by highly leveraged bank loans. Fresh ﬂowers and perishable food are ﬂown daily to Europe from Africa. Such enterprises are likely to succumb to the current economic revision. Imposing fuel tax on aircraft fuel has been avoided as too unpopular, but many unpopular effects of such proﬂigacy are likely in any event. A complete revision of world economic and political policy has long been needed. Whilst the politicians had the means to undertake change, they did not have the will. What incenses many at present is that at the “drop of a hat” the government can announce untold billions of pounds (or dollars) to invade Iraq and to bail out a bank, yet has never sought to address worldwide poverty or healthcare. Even health care in this country itself [UK] is now largely delivered to score political points rather than to provide the care that the individual needs. Taxpayers inevitably ask why it is possible to spend billions on war but not to fund an operation or a medication that is needed? Healthcare rationing really only came in to being with the Conservative Government in the 1980’s. Before that intervention, hospitals applied for the funds that they needed, and general practitioners’ drug and staff budgets were left to individual doctors to determine, and for decisions to be based upon the need of the individual patient. Now, a politician determines prescribing. Hospitals were the ﬁrst to have budgets imposed, and when the same process started to be applied to general practice, certain medicines were “blacklisted” and made unavailable for prescription by the doctor. The patient must then go and buy them “over the counter” at the pharmacy. The government ruled that certain cheap medicines, such as antacids for indigestion, and cough mixtures, may not be prescribed. Although this may have led a very few patients away from the surgery, in reality it had the absolute opposite effect to that intended. The GP was unable to prescribe a cheap cough mixture for a cold or cough or viral illness, and the patient either had to be argued with, leading to a long term permanent change in the doctor-patient relationship, or else prescribed something much more expensive and dangerous – an antibiotic. In the case of indigestion, the outcome was much more extensive and far more expensive. Since a simple cheap and largely harmless antacid could not be prescribed, much more powerful and expensive drugs were offered instead. Now patients are all on proton pump inhibitors and similar, costing 20-30x as much, with little or no advantage to most patients. This foolish policy, counterproductive such as it is, has never been reversed. In recent years, hospital treatments have inevitably become more

complex; more investigations are done, and yet hospital beds continually reduced in number, along with nursing staff levels, as a supposed way of limiting costs. This is because costs are assessed in terms of bed occupancy. What patient wants to stay un-necessarily in hospital? What doctor or nurse wishes to keep them in that bed for no reason? Now we have reached a state where the hospital is only paid for the ﬁrst two days of bed occupancy. Thus it can be necessary to intervene with multiple investigations and treatment that is in many cases unnecessary, in every attempt to get the patient out of hospital. This causes anxiety, additional risk and actual cost. The old method of “watchful waiting” to see what might progress before intervention, and to allow God and nature to heal the patient, has been torn from the pages of the medical textbook. If the public was allowed to decide what their money is to be spent upon, it would surely be to provide sufﬁcient beds for urgent cases such that there would be no shortage (as there now is each and every day) and to allow doctors to freely prescribe whatever drugs were actually necessary for the patient. The reason for new drugs being excessively expensive, is in fact perversely,

the patent law restricting the time that a drug company is able to patent a drug. If companies were able to retain patents longer (much longer) then they could recoup the cost over a much more sensible period. At the same time, drugs could be much better tested over a longer period, resulting in much more control and much enhanced safety. Many new drugs have to be withdrawn because of serious side effects, having ﬁrst been hailed as “wonder drugs”. During their short sales life the company has inevitably extracted the maximum proﬁt from the sale of that ﬂawed drug. If a new medicine is truly of value then it will be so

for many years to come. It is entirely wrong and counter productive that the patent laws have been revised in this way. If after a much longer period of testing, the new medicine was proven of genuine value, then agreements should be internationally made regarding its sale and distribution. The way that politicians conduct these matters at present is not for the public good.

The whole political system is currently ﬂawed, not merely the banking system, or the running of the healthcare system, the legal system, education and much more. A much simpler model for society is needed, revised from the ground up. Clearly a huge opportunity will shortly exist. Financial meltdown, accompanied by geopolitical shifts, will one day produce massive change. At present though, there is nothing in place as a model that might allow the world to integrate and function as a cohesive unit, beneﬁcial to all, in relative peace and harmony. What could be proposed as the new model? To see beyond the current strife and stress is difﬁcult but essential. It should be clear to all that modern life in the UK is far from equitable, full of stress, excesses of all kinds, and gross inequality. It has long been clear that drastic change was needed, clear that economic collapse would happen sooner or later. When this would happen or in what way it would progress was not apparent. In order to consider what might replace the current world order, rather than descend into anarchy, we need to apply ourselves from ﬁrst principles.

What are the most important ideals to be supported in human life for the 21st century?

We can look at various societies such as exist and determine the best features. We can look outside of our current society. Imagine that we come to planet earth in 200 years time, having seen the demise of 20th century culture, what would we then like to see in its place? We have a blank slate. If we used a blank slate, then we would do as God did: introduce mankind, allow him total freedom, and let him (her) determine his own fate. If we take a blank slate, we really just go back to being early mankind and make the same mistakes again. We have, however, no such blank slate. We are fully-grown, we have all the technology and knowledge that we ever asked for. We are not a new born infant, innocent and blameless, but subject to all the stresses that society forces upon us. Now for the very ﬁrst time, mankind has the opportunity to rewrite the model for future civilisation. To do this we need the beneﬁt of past experience and the sum of human knowledge. At the same time we must apply wisdom greater than that of Solomon. Solomon knew what was good, but fell to be a victim of greed and power, forgetting his good intentions. We need to do better; to use all the beneﬁts of our knowledge, but to remove all previous constraints, and attempt to design the perfect society. Only if we seek true perfection can we hope to achieve anything approaching it.

We must look forward to the time when we have achieved a new ideal and decide what is to be contained within that ideal. It must be applicable to the whole world. Once we have deﬁned the ideal, we can look at the ways and means and timescale to achieve it.

Any attempt in the past to achieve a utopian society has failed, because the group involved was isolated, and only looked out for themselves. They either sought to rule the world, or to distance themselves from the rest of the world. Now the situation is different. Now we must look for a solution to create a peaceful global society that is sustainable and all encompassing. What is needed for peaceful and meaningful co-existence?

What aspects of modern society are destructive and harmful? There exists now the means to feed, clothe, house and educate all those who wish it, throughout the world. Most societies in the world do not however have access to those means. Various societies have imposed themselves on others, destroyed their cultures, and stolen their assets.

War and conquest has been the main diversion for mankind for at least three millennia. If we can foresee a future ideal world, it will not be at war. War has been waged constantly, and continues as much now as ever. The reasons for that war are greed and power. All politicians are likely to abuse power for power’s sake, or for short-term gain, seeing themselves as all-important. Very few if any politicians have avoided abuses of power for their own ends. Without an absolute cessation of conﬂict, human misery will continue indeﬁnitely.

Many of the apparently poorest societies, living apparently primitive lifestyles, hidden and remote from westernised society, are contented, free from the stresses of modern high powered living. Western society in contrast has forgotten the basics of stress free life, and peaceful coexistence, unable to reconcile itself to basic family life. In western society the gulf between rich and poor has become greater and greater. At the same time no single group in society is happy, content or stress free. Instant gratiﬁcation, and consumerism dominate. In sport, the determination to win is paramount. Only the best is good enough.

Pressures to win distort the event and remove all simple pleasure. The same attitudes prevail throughout life. Money, alcohol and excess are everywhere. In Politics, laws are made and changed for their own sake. If a valid set of reasonable values and laws were in place, then change would in general be unnecessary, and it would be only rarely that any parliament was to be called upon to change the rules. As it is, the complexities of legislation are removing any basic pleasure of life. Rules are needed for safety, but should be clear and straightforward. If correct they will not need frequent revision. The fact of frequent revision is that the basics of life have long been forgotten. The current crisis shows that many years of Parliamentary law have only created an unsustainable system.

So what are the basics that we need to address?

All babies and children are born innocent. If they are misled or misinformed, led astray or abused, then it is the fault of those born before them. We need a future generation to be born into a different world; one that is free of corruption and abuse, where all are appropriately educated, competition is light hearted, and strife is unnecessary. It is important that all babies born into the new world are treated equally in terms of resources, but at the same time all are not equal in ability. Society must have an equitable way of providing different lifestyles. There are adequate resources in the world if equitably distributed. At the same time the current pressure of increasing population needs to be removed. Now that we have effective means of contraception, the population size must be reduced and maintained at a level that allows a simpliﬁed, easier lifestyle. Better education, and the enablement of work for women in western society, has already reduced the birth rate in western society to around 1.8. This level will ensure a signiﬁcant population reduction, although all sectors of society are not equally involved in this process, and the numbers of split families and single parents is excessive. Education seems key to these changes, but currently there are wide differences in the education and lifestyles of different sectors of society.

Many areas of the world see societies very different to ours. Those societies should not be interfered with, invaded or molested. There are no universal rules that should be imposed on all others. If there is to be a new model, then it must be adopted by will and not by force. Greed and gross inequality must be abolished. There must be true religious freedom. A single world currency is necessary, managed and set up to be truly international and not being at the same time the currency of an individual state who would thus benefit disproportionately (as with the US dollar). At the same time, individual currencies must always continue to exist and run alongside, so that adjustments to relative value can be made. Such adjustments must be made and fixed by an International Monetary Regulation Body (which could be called OMRO for short). This would prevent collapses of individual economies. Currency speculation at present influences world economics in an adverse manner. This is maintained as a playground for the rich. Regulation by international agreement may be exceedingly difficult, but was in effect practiced before, and speculation on the scale at present practiced must be removed if world economics are ever to be regularised. At present, a unit of work is rewarded to one person in great afﬂuence at a rate of thousands of pounds an hour, and to another in dire poverty at a rate insufﬁcient to buy enough food and drink for the day. Money and commodities have been traded in advance even of production; distorting values. The basics for human existence are now entered into a huge money gambling machine. Instead, values need to be stabilised, ﬁxed, and substantially universal. Money markets, stock markets and commodity trading should be reformed and strictly controlled. It is universally agreed that the world has diminishing resources, and that whether or not human activity is partially or wholly responsible for climate change, it is human overactivity and abuse of planetary resources that is leading to our own demise. Population control is the ﬁrst building block to a solution of this problem. If population levels were reduced to one tenth those at present, then resources would be adequate without the need to abuse them. If we had only to produce

one tenth of the amount of food and power that we do now, then there would be ample available. It would need equitable distribution, but there would be an adequate resource. [clearly a lower reduction or stabilisation would also be effective] Modern technology could be applied in a sensible manner to prevent the need to drain fossil fuels. True sustainability of food and energy would be possible. New trading methods will be needed within the reduced population base. It would no longer be necessary to populate unsuitable areas. Population would best be placed where it can be safely accommodated, avoiding natural disasters whenever possible. Nature can be allowed to ﬂourish unmolested in many areas that have more recently been disadvantaged by mankind. Small primitive societies can be left alone, free from the ravages of western diseases and outside interference. The need for more and more oil, minerals and suchlike, for more roads, vehicles, and consequent destruction, wil be abolished.

Aim:

1. Therefore, is to reduce the global population to 1/10th current levels within 100 years. This does not require darconian measures, but will follow naturally if contraception is fully and freely available in all communities, and if the population is appropriately educated and socially responsible.

2. Stable family living to provide healthy children, fed and clothed, without ﬁnancial pressures, able to socialise, educated, but able to work and play without duress, and with equitable access to health care.

3. Law and order to be equitably provided such that an uncomplicated society can interact quietly and freely without the distortions of excess work and of drugs and alcohol.

4. The arts and sport to be universal in society, land use and distribution fair and without demands that cause destruction of the environment.

5. True freedom of speech and movement, except in areas restricted to nature.

6. A global monetary and governing system, nuclear weapons banned for all countries, and all armed forces to be restricted to one globally maintained force for international emergencies, jointly funded and controlled.

7. Global population agreements, global trading and wage agreements. Maximum and minimum wages structures agreed world wide, with no bonuses and no super rich elite. No special treatment for politicians. No power for individual politicians beyond their local or regional government body. Full accountability for all serving politicians and public servants. Important laws to be international and not overcomplex. Taxation to be at agreed levels across all countries. If there is international money and taxation there will be little or no reason for smuggling and illicit trade. If all tax and money is controlled and regulated internationally then unfair competition will be eliminated. Tax havens are abolished. Greed and inequality is what promotes poverty. Maximum earnings levels, combined with prevention of corporate greed are required. At present companies move work from country to country to obtain the cheapest labour. If any country wanting to participate has to be party to the global rules, then it can either agree the rules and participate, or remain outside of the system and not gain the beneﬁts. One country cannot disadvantage another if it has no means of force and no ﬁnancial advantage. Population growth at present forces discontent and the attitude “we are all right so nuke the others” may be an extreme one, but horrifyingly close to that which has recently prevailed, fuelled by the excesses of the current disparate system. True equity must be the aim. Equity is not the same as equality. There is little point in there being a massive population housed in the sahara desert. Previously the human race had to reproduce continuously just to survive. Disease was endemic, epidemic and uncontrollable. Food and goods could be traded even in ancient times. A completely new monetary system to ﬁt a global economy, along with much reduced and controlled population, can lead to a good and pleasant lifestyle for all.

All assets are ultimately global. Oil that runs out is ultimately no use to anyone. Grain left to rot has no value. Manufactures with no buyers have no value. Sustainability is paramount. Destruction of natural resources is not of value to anyone in the future. Tribes in the wilderness are mostly well aware that civilisation is wreaking destruction upon the planet. When habitats for wildlife are preserved then those of humans are enhanced. Human population reduction is the ﬁrst and most essential step towards this. A new global unit of currency would at the same time present an opportunity to cease monetary ﬂuctuations and gambling in currency around the world. International wage agreements should include sensible maxima as well as minima. Population reduction will substantially reduce demands on commodities. Labour can be rewarded at sensible levels. Heads of companies and large institutions should be paid little more than the average. The poor often work much harder and longer in two or more jobs at present. Family life with a full time mother should be strongly encouraged. The work ethic must be reintroduced where necessary, and the welfare state and government intervention at all levels dismantled.

One simple taxation system, VAT, income tax and no other taxation of any sort should be in place. Public services should be substantially reduced. Commodities and goods should be traded as made and supplied, no advance or paper trading should be permitted. Debt and lending should be abolished. If the population is reduced to a tenth of its current level, then there is no need for new housing or building, instead the infrastructure can be improved; there will be no need for millions of new cars. There will be no need for new roads. Maintenance will be negligible also. Schools and hospitals can cope, since demand is then low. Healthcare can be extended worldwide, and disease more easily controlled with less movement. Trading in shares is abolished and executives only paid as anyone else. Companies manufacture goods as needed, as opposed to for self-gratiﬁcation and ever increasing proﬁt. With only one universal armed force, there is no need for a perpetual arms race, and no requirement for “star wars” satellite systems. Mercenary forces and illegal armed forces can be eliminated, since there is universal agreement. Competition is largely eliminated if there is a universal currency, and removal of excess personal gain. Greed and massive personal gain is the single factor that has precipitated the current crisis. A more egalitarian society worldwide needs to be the aim. Immediate moves towards universal population control and a single world currency are the necessary outcome of the current crisis. If these

changes can be put in place, then all of the pain will be worthwhile. The long-term aim needs to be for sustainable permanent housing, food and watersupplies world wide, with universal access to health care and education. Stable family life with a stable and much reduced population will reduce crime.

Abolition of national armed forces can follow the massive debt crisis. Population reduction will reduce labour forces, making labour truly valuable. Taxation of reduced populations will need to be much more wisely gathered and spent. One single tax of VAT would remove tax evasion and much bureaucracy at a stroke. Unnecessary services can be disposed of in a simpler society. Expansion and perpetual growth is unnecessary and undesirable. Reduction [stabilisation] of the population is the key.

2. The Way Forward.

What should be done now to avoid the economic ruin of the UK? The Government needs not merely to take effective long-term corrective action, but to pave the way for a new type of society. The people of this country expect and realise that now is the time for the profound change, which is needed to correct long standing problems that have developed since the Second World War.

Problems

Successive governments have created a society that now has essentially lost its way, and has acquired many wrong values. A simpler and substantially egalitarian society is the essential aim. A system and society that is sustainable, along with the environment in which we live. Many changes have occurred during the last seventy years that have proved to be for the worse. A new look at how society functions as a whole should address the needs of the whole community. At present we have a super rich elite, an underclass, [see also “The tragedy of our Youth”] and a struggling middle class. All are affected by the current ﬁnancial meltdown in different ways. The welfare state created by the labour government in 1948 has not achieved its intended aims, and has distorted the outlook of those born after its inception. It has altered many of the values of society. It needs radical revision. The capitalist wealth creating, home owning dream of the 1980’s has proved unrealistic and unworkable. Most families have had to put both parents into full time work to be able to own their home. They are putting all their efforts into that one aim, are neglecting family life due to pressures of work, and in recession will lose the very home that they have slaved for. The ﬁnancial bubble of recent years has encouraged obscene salaries and bonuses for the super rich, and at the same time increasingly left the average worker out in the cold. Homelessness, drug taking, binge drinking and alcoholism have increased alongside the creation of lottery millionaires who have in the main had their lives ruined by wealth that they cannot deal with usefully. The welfare state pn the UK has created generations of unemployed, and of those who expect all to be provided as of right. There is a new blame culture and of lawsuits against any unfortunate accident or incident. Contentment and acceptance has been replaced with an immediate desire to obtain not only redress, but to seek reward and gain, and to attack and punish others. Family life has taken a back seat to a culture of greed. What once was an absolute luxury, is now necessity. Many parents no longer have the time to spend with their families, since they are both fully employed elsewhere. At the same time, they are pressured to provide all instantly, not merely that which is required for life, but everything that is constantly advertised on television and in glossy magazines. In 1948 such advertising and constant consumerism was never dreamed of.

Before the First World War, 10% of the population owned their own home, 90% were in rented homes. It was the change to the idea of universal home ownership that has provoked and stimulated the rampant consumerism of recent times. With ever increasing house price inﬂation, every homeowner was urged to “spend, spend, spend”. The house price bubble would cover all debt. At the same time the economy was driven by domestic and high street spending, on goods largely manufactured abroad. An underclass has developed, a group of those who were always underprivileged, neglected by their families, abused from birth. Consequently they were steered to a life of crime and drugs. Violence, drug trafﬁcking, human trafﬁcking, sex slavery, gun and knife crime, have become endemic, yet largely unseen by much of the population, who it does not directly affect on a day-to-day basis. If the defects in family life and parenting are addressed, stable family life would lead to a strong decline in the abuse of drugs and alcohol. At the same time, if the economics of the drug producing nations are improved, with suitable conditions attached, those nations will cease to be pressured into drug production. Taxation is far too complex in this country. Most people try their best to avoid what tax they can. At the same time the government spending more and more; now wishes to borrow more and more. Government control of our lives increases daily, with Draconian measures to curtail our freedoms in the name of protection from terrorism and control of crime and immigration. If it were not for the welfare state, then we would have little to fear from immigration. Only this very week there is an inquest into how it came about that our police and security forces could shoot to kill an innocent man in a London tube station. This is even worse than hanging for petty theft, a penalty long abolished. At least there would then have been some sort of court case prior to the execution. This was the unthinkable execution by the state in the absence of trial. When the welfare state was created, it was envisaged that the ]individual would buy the beneﬁts with the contributions paid from their work in the form of the national insurance stamp. Only if the contributions were made, were the beneﬁts to be obtained. This idea has long been overlooked, and the NI stamp [National Insurance] is just another form of taxation. Taxation that is over complex has the effect of “cloaking” itself. Not only is the means of extracting it largely hidden, but the purpose and use of it is kept entirely secret. At the same time, the extraction of it involves an enormous and unnecessary bureaucratic machine. The car licence (unique to GB), TVlicence, rates, fuel duty, and national insurance, are now just part of overall taxation, requiring much effort to collect it, and no long are applied for the purposes that were originally intended (better roads, the BBC, etc).

Taxation

It should not be thought that a simpler method of taxation is not equally effective, since it is readily apparent that other countries maintain good standards of living, and better cultures without these additional taxation methods. In Croatia, for instance, there is no council tax, no TV licence, no national insurance. There is a good healthcare system, adequate roads, no door to door rubbish collection, no bags of rubbish littering the streets, excellent state education, a much more egalitarian and family oriented society, and no armed force parading the world, invading other states. We now need to take the most sensible solutions from elsewhere, and rationalise the services and aspirations of society in this country. There should be only income tax and VAT, and no other form of taxation whatsoever. All other taxes should be completely abolished. Overall tax should be reduced. [Regulation applied to companies could direct profits into reinvestment and investment elsewhere, reducing profit to individuals and companies alike, promoting new development, or face heavy taxation of the company itself.] All this means substantial change, and reconsideration of what is actually necessary expense. Also prioritisation rather than automatically funding everything desired. The welfare state needs to be substantially revised, and now is the time and opportunity.

Home ownership

It is clear that the great experiment of universal home ownership has failed. This “dream” has only ended in tears. Now we must look towards the rebuilding of our town centres and the full utilisation of existing housing, rather than the production of more and more housing estates. Most town centres are empty. Most shops and town centre buildings carry neglected and empty accommodation. Restoring these should be an absolute priority. The now stagnant building industry [worldwide – eg thousands, even millions of buildings left empty and derelict in the U.S.] must be used to refurbish these buildings as energy efﬁcient, affordable housing. Our towns must be given adequate green space, and the car must take a back seat. If many more people actually live in the town centres, they can walk to work, they can shop locally instead of at out of town malls. The countryside will be protected from sprawl, and the town centres will be regenerated. Public transport needs to take over from private cars in town centres. Secure car parking can be provided at the periphery for those who must use it, so that public transport can take over in the centre of town. Cars within the whole of the central town or city area must be entirely banned. The experiment of keeping cars out of central London, an acclaimed success, must be taken to a whole new level. Shopping for the essentials of life must be made available in the town centre for the new population. The acquisition of luxury goods at the same time is likely to take a back seat from the change in the economic environment. Removing unnecessary roads and Victorian cemeteries must be undertaken to create new public parks and open space.Where possible, underground metro links from centres to railheads and car compounds should be built. New modern railways should be built that are truly affordable to use so that the car is sidelined in the realignment of public and private transport and ﬁnance. Bus routes should link remoter country towns and villages to the rail network. Universal car ownership must be phased out.

A Fresh View on Public Works

When conducting all these works it is important to realise that as long as materials and labour are sourced within the country, and not sourced from abroad, then there is no net loss to the nation. This pricipal needs to be agreed worldwide as a necessary clause to promote and enable pulic works worldwide. This will benefit all and does not need to have an adverse effect in other ways on world trade, but is essential worldwide if unemployment is to fall and economies are to be kick started. It is a fallacy to think that public spending is always a drain on the economy; that is only true if there is a negative effect on International Trade. Again, these works must be substantially done by those persons already unemployed ( say for more than four months), and not by immigrant labour.

Education

There is currently an intention to increase the school leaving age to 17, and to place the majority of adolescents into university education. At the same time it is clear that many still leave school without the ability to read, write, spell, or calculate. There is no concept of household accounting taught at school, and parenting skills are signiﬁcantly lacking at all levels of society. Binge drinking in the young increases all the time, and discipline in schools and at home is absent if not entirely prohibited. If drinking and smoking in the young are to be eliminated, then discipline must be reinstated. The school leaving age must be that appropriate to the individual. The examination system must return to being just that – an examination of ability. Most children are judged on coursework that is not even entirely their own work. Jobs need to be created for those who need to leave school with more basic abilities. Perhaps theycould simply be tested in basic reading, writing, arithmetic, and life skills; allowed to leave when appropriate, rather than at a ﬁxed age. Some might qualify younger, and others will have to stay on until they reach an acceptable standard, or are judged to have reached the limit of their ability.

Work

If the young are to leave school when individually appropriate, then it is clear that there must be sufﬁcient jobs available for them, and their elders to ﬁll. The day of state provision such that large sectors of society no longer works must come to an end. A new dawn of self-provision must commence, with work for all and an end to the beneﬁt culture. At the same time there must be elimination of the super rich, and the culture of greed and avarice. Bonuses and huge salaries must either be banned or taxed out of existence. If those people move abroad, then let them. We need a new more egalitarian society here. We need to produce enough food in this country to feed ourselves, and to cease to airlift food from abroad. The same principle applies to other countries. It is the export of cheap American grain to feed all parts of the world that has permitted the growth of that superpower, led to world trade imbalances, excessive reliance upon others internationally, and the inability of many nations to be self supporting. Any nation must be self supporting in the longer and medium term, otherwise we have war, famine, and financial meltdown. All nations should be able to support themselves. International aid merely perpetuates large problems. Regions that can only sustain small populations, should become or remain substantially depopulated.

A tax should be placed on aircraft fuel. Now is the time to do this. We all know that the current policy of cheap air travel is unsustainable and morally reprehensible. Our own internal tourist industry would be revitalised at a stroke. That itself will provide much needed work. Increased food production can extend to large numbers of new allotment schemes. Everyone everywhere should be encouraged to grow his or her own fresh fruit and vegetables. This is not only healthy, but gets everyone outdoors and into a healthier lifestyle, away from the couch and the television. A culture of substantially increased sports time at school, with extended school hours, will make the young ﬁtter, more active, and more ready to work. Two hours of active sports for every child, four days a week, summer and winter, should be the statutory minimum for all. Increased work on the land requires utilisation of smaller wasted areas, not ripping up more and larger areas, but cultivating smaller enclosed spaces, accessible to the population, with easy access. A ﬁtter young population will be enabled to better use this facility. Rather than spending billions extra propping up failing banks and increasing taxation, an effort to reduce and simplify taxation, to investmoney in new factories, rebuilding of railways and inner city housing, will create a new beginning. Propping up the existing ailing system will only delay decline, rather than stimulate new growth or restore the essential values of society. Essential manufactury should be restored to this country. Government

borrowing will be better addressed to this need than to buying up impoverished stocks and shares. If it is thought that bank shares can one day be sold on again at a proﬁt to the taxpayer, then that assumes that the economy has made a recovery. [It was anticipated to resell the bank stock at a profit, but now it has collapsed again, this making further bailouts much less feasible.] The economy can only recover if it is revitalised. Revitalisation will not be achieved by propping up dead timber. There are many areas of this country that have suffered from the decline of old industry, where men are out of work many years following that decline, and where little or no attempt has been made to introduce new industry, and where housing stock is run down and empty. These areas should be speciﬁcally earmarked for massive regeneration, with very substantial tax breaks and grants to generate new industry. New council houses should be created from old and empty housing. The sale of council housing must cease absolutely. If the Thatcher experiment has any real value, it must be that we learn from it, and start completely afresh.

Health Care

The priorities of health care have become distorted. It was ﬁrst thought that if universal free health care was to be provided, then the population would become more healthy, and that the costs of providing care would decline due to the improvement of that health. Clearly that vision was more than distorted; it was a mirage. We now know that the possibilities of healthcare are limitless, and that the current methods of funding new drug innovations are prohibitively expensive. A new look should be taken so that a sustainable model can be advanced for continuing healthcare in a new society. A new culture of exercise and sport in schools will provide a better start to life. The idea of perpetual life should be abandoned, as it is clear that although life can be extended indeﬁnitely, the quality of life in extreme old age cannot. It is better to create a healthy lifestyle during the working lifetime, than to look forward to preservation in an uncomfortable old age. Despite the dreams of post war society for the abolition of disease, disease is actually more resilient than we are, and much that we had hoped to conquer, is resurgent. We now have many resistant organisms, and ever increasing numbers in the world of cases of such as tuberculosis and immunodeﬁciency virus. Such disease as malaria may never be fully eradicated. Human population control will be a better answer. Instead of millions more humans decimating the planet, and spreading disease, we need a substantial reduction of the human imprint. Resources can be better targeted. At present, the allocation of health care is inequitably allocated around the globe. Even the small number of trained health care workers that are in the developing countries, are vacuumed up into the more afﬂuent nations. The afﬂuent nations must train a surplus of staff and export health care to the developing nations. Additionally, we must not deplete the non human resources of those countries. At home, we must re-evaluate health care priorities. Health care has become a purely political issue, and “targets” set that are neither realistic nor valuable. The basics of health care and the real needs of the population have been forgotten. The medical and nursing professions, struggling to provide best care for the individual, have been coerced into neglecting the individual so as to provide statistics for government. Such ideas as special clinics for cataract surgery, and increased throughput for hip replacements are laudable, but the provision of beds and nurses has been substantially neglected, indeed deliberately pillaged. We need more people in work, and should pay more nurses, not place them on the “dole” to be a pure drain upon society. As long as the government does not borrow money from abroad, there is no requirement to limit healthcare. Bed numbers should be doubled, at the least. Presently, there are no beds free during most of the winter, and patients have to be admitted onto corridors. “Black lists” of drugs should be entirely abolished, and doctors allowed to prescribe cheap drugs that they are unable to at present because the public is expected to buy them “over the counter”. At the same time, doctors will only prescribe expensive drugs if there is a perceived beneﬁt, and the costs of new drugs could be hugely reduced if the drug companies were allowed to spread their costs over many years with a revision of the patent laws. At the same time, mandatory long term testing would eliminate the prescription of many new drugs that are hailed as “wonder drugs” in the press, only to be found to have unexpected severe side effects later, and withdrawn again with just as much press attention, protracted law suits and massive compensation that the companies must recoup with ever increasing costs for the new drugs. It must be realised that this vicious, unnecessary cycle and spiralling costs have been brought about entirely by the imposition of the restrictive patent laws for new drugs. These laws must be abolished, replaced with new laws concerning testing and compensation. It should be that if anyone wishes to take a new drug, that it must ﬁrst have been the subject of rigorous long term testing, but also, must be taken at the patient’s own risk. The culture of compensation for every event must be broken at all levels. After all, there are plenty of medications available with known risks and side effects. Patients must be made to read through all of the possible beneﬁts for effective treatments, and all the pitfalls and disadvantages. The subsequent effects are then personal choice and responsibility. Political interference in health care must be removed absolutely. Elections may not consider or promote health care issues, other than overall funding. The decisions on how to spend the allocation of heath care taxation must be made independent of government. Constant changes in the methods of administering the health care system must cease. Previous radical and frequent changes to funding mechanisms and administrative networks have only resulted in the loss of good staff, and the failure to ever cope with the change or catch up with proposals. Likewise curriculum in schools should not be determined by government. Blame culture must be tackled. Lawyers must be prohibited by law from advertising, and “no win no fee” cases must be prohibited by law. Legal fees are currently exorbitant, and as part of the abolition of bonuses, and the culture of greed, the fees and hourly rates of lawyers must be regulated.

The welfare State

This has been an absolute disaster. Social change after the world wars had removed the class divide of the aristocracy. Now instead we have an underclass and the super rich. This is no better substitute. The ﬁnancial divide in Britain is greater than ever before. The rich no longer consider it a duty to care for the working class, but more to wallow in their own riches. Once the rich provided jobs and homes for the poor. Now it is all down to the state and the welfare system. Taxation is supposed to provide for all, but no one wants to pay. The dream of a new society in post war Britain has not been realised. Jobs must replace beneﬁt. Jobs must be created, and those unwilling to take a job offered, for which they are physically suited, must go back to being paid little or nothing. Women must be encouraged to look after their children rather than to have to work as well as the husband, at the expense of childcare. We have a nation of neglected children and broken families. Incentives must be placed to encourage stable marriages, with networks to help families survive, the wife at home and the man in work. Children must be trained in the skills of parenting, since the current generation of young parents cannot cope and do not have those skills. Cheap rented housing will reduce the stresses in employment. Energy efﬁcient homes, and huge reductions in private car use, will enable families to refocus on basic family life. Provision of sport and exercise for all children will encourage parents to be healthier. The age of legality to purchase alcohol and cigarettes should be steadily raised. Continuing to raise taxation on alcohol and cigarettes is counter productive, and has removed much money from the budgets of poorer families without reducing consumption. This policy should be reversed. “Alcopops” and similar beverages should be entirely banned from sale. The sale of alcohol at discos and nightclubs needs control, and the sale of alcohol and cigarettes restricted to age of 21 and over, and altogether banned

from sporting events of all kinds. Prohibition of smoking in public places has been much less contentious than many would have imagined. Similar moves with alcohol are now necessary. It is widely appreciated that alcohol consumption in this country is out of control. Quotas of production could be placed on large companies, and imports of alcohol considerably limited. The production of food in allotments and smallholdings will reduce household budgets, and increase health and improve lifestyles. There should be incentives in place for these activities. Mandatory pension schemes to replace state pensions are needed, but investments having suffered, these may seem excessively risky. The alternative is to substantially boost the state pension scheme, with the money paid in,being actually invested into the new industries, not simply taken from future taxation. If money is invested by the state for pensions, then it will not be subject to the whims of the individual investor, and the effect will be to stabilise the stock market. Stock markets should be internationally revised, and all investments must be liable to minimum periods of deposit and notice given for withdrawal. Indeed stock market investments could be made permanent investments, and only dividend payments permitted. Any stock sold, must be exchanged for another stock. Withdrawal of the capital is prohibited. Speculative markets, of futures and commodities except for actual export or consumption, should be internationally prohibited. Moves should be made to prevent currency ﬂuctuation, and to introduce a global currency. Countries worldwide would beneﬁt from a stable currency. This must stand alone but run alongside national currencies, all regulated and not subject to speculation. Gambling in general should be restricted, casino licences and other gaming licences withdrawn. It is a fallacy of the government to believe that the country beneﬁts from the revenue and the jobs created, when the result is nothing but misery. The lottery should be abolished. A modest amount of inflation would immediately replace lost revenue and allow for adjustments. The good causes supported should always have been ﬁnanced in other ways anyway (some from taxation some by charity). Defence and offence should not be confused. It was us, the British, who commenced the bombing of civilians in the Second World War. It was our bombing of Berlin that led later to the retaliatory bombing of London. This led in turn to our vindictive and vengeful bombings of cities such as Dresden and Cologne at a time when victory was already secure. It was thus that the bombing of Nagasaki and Hiroshima was made possible; the unthinkable took place. Recently we condoned as a nation, like it or not, the invasion of a state that

posed no armed threat, allowing our politicians to act outside of democracy. (The threat was to financial systems, which were to be attacked through a change in the oil revenue exchange system – which will soon fail anyway.) The time has surely come when we must ﬁnally abandon pretensions of empire and the immoralities of the former British Empire. We should contribute to a global peacekeeping force and no more. No individual country should have a nuclear arsenal and huge armed forces whereas others are prohibited. Prohibit all or ultimately perish. The worldwide provision of armaments and power by force needs to be rethought and democratically agreed. This is not a true democracy if a few can still decide the fate of millions on a whim. All politicians, especially those in power, should be responsible for their actions. At present there is no complaints system whatsoever concerning public servants in the health service administration, for example. Those working under governance are subject to minute scrutiny and to unreasonable sanctions for matters of opinion. Committees and Politicians (from the Prime Minister downwards) should never be immune, and should always have to answer for the consequences of their actions. Government, laws and regulations need to be made much simpler and absolute clarity imposed rather than to be open to the interpretation of individuals. Governments and politicians have attempted to reform such as the health professions and education, with little or no beneﬁt. Now it is time for the public to demand reform of the legal system and of politics.

3. Progress, or lack of it.

So why is it that we have ended up in such a mess? What is this world in which we live? Unfortunately, for the last four hundred or more years, we have become more and more entranced with the new science and with technology and “progress”. We have collectively lost our way. The Italians invented banking in the sixteenth century. Paper money and now digital technology have replaced barter, gold and precious metals as currency. At the same time new ideas have arisen as to the meaning of life. We have been unwittingly seduced by the idols of the ancients. We are obsessed with ourselves and our own short self-indulgent lives, yet we live in an incredible universe of unfathomable proportions and beauty. There are about 100 billion stars in our own galaxy (the Milky Way). The Milky Way was probably formed by an amalgamation of several smaller galaxies. Those galaxies did not come together as an amorphous mass under the inﬂuence of an attractive force, but instead have formed a spiral structure that is essentially ﬂat with a bulge in it. This central bulge contains an estimated 200 million suns. The Milky Way is some 100,000 light years across. Our solar system lies on the edge of the spiral, about 2/3 of the way from the centre of the galaxy. The whole Milky Way spiral is rotating, and thought to take about 300 million years to make one single rotation. In the centre of the galaxy there is considerable turbulence, and many stars orbit erratically. One cluster of stars has been observed to move at a speed of 3 million miles

an hour. The sun will one day swell as a “red giant”. Slowly burning its hydrogen, it will become 10,000 times brighter, and become larger in diameter than he current orbit of the earth. Long before that a rise in temperature of only 60 degrees will be enough to evaporate all the water on Earth. Such conditionsbillions of years in the future, long before the sun becomes a red dwarf, will cause the extermination of life on Earth. It is truly inappropriate that anyone should worry now concerning an event so far in the future. Every person now on Earth, will be in the spirit within a mere 120 years. Let us remind ourselves how the scientists evolved their theories over the centuries. No individual has come up with acomplete theory of physics and of life. Ideas have inevitably evolved and been worked upon by physicists and philosophers over many centuries. Cosmology is one of the ol;dest sciences, yet we have few correct answers. Perhaps now a little more “light” can be shed upon the origin and fate of the Universe. The purpose of the individual human existence is as uncertain to most of us now, as it was to early man.

Tides

The tides of the sea, circle the Earth not once a day, as they would surely do if attracted by a gravitational force from the Moon and Sun, but twice a day. That tides ﬂow twice daily can only be explained by an alternative hypothesis. The reason that there are two tides is that there is a pressure wave in the ether(dark matter) caused by the displacement of the Moon whilst the Earth rotates with the invisible dark matter around it. The pressure is equally high at two points around the Moons orbit. There is a pressure wave in front of the Moon, and a pressure wave behind the Moon. The pressure wave causes the low tides. The high tides arise not by attraction, but by the ﬂow back of the water from the low state. If there were forces directly attracting the water toward the Moon, there would only be one tide, and that tide facing the Moon. It is the Earth that rotates once a day, whilst the Moon only circles the Earth once a (lunar) month. There could never be a second tide on the other side of the Earth from the Moon. Instead, the Moon displaces dark matter, and there is a pressure wave both ahead of the Moon and behind the Moon. There are two tides during each revolution of the Earth. It is the Earth’s rotation that drives the tides against the pressure in the dark matter. If you don’t credit this theory, you just have to observe when the tide occurs. You will ﬁnd that each high tide occurs around six hours before the moon is at it’s highest, and six hours after that time. The ocean ﬂows are affected by the shape of the land masses, and currents run between seas of various sizes and shapes, but the fact that the moon presses down on the sea forcing it away from itself cannot be doubted. In order to achieve this effect there has to be an effectively “solid” or connected dark matter between the moon and the earth, that puts pressure on the ocean, moving it ahead of the moon’s position as the earth rotates. The moon itself only rotates around the earth once a month, and the earth is rotating every 24 hours on its axis, set within the “sea” of the dark matter.

The sea and the Atmosphere

Satellite mapping has shown that Oceans are depressed in the central parts. This shows that something is pressing on the water from above. The pressure in the ocean increases toward the bottom. If the Sun and Moon were attracting the water, an ocean’s surface would be higher in the centre, not lower. If the sun attracts water, the pressure at the bottom of the sea should paradoxically be less. The molecules in the shallower parts of the ocean, as well as the Sun and planets would be attracting the deep water upwards and away from the bottom. With the huge force required to balance the Earth in orbit around the Sun, water would not exist on the surface of the planet. It would be sucked off (especially as it constantly evaporates) together with the atmosphere, and ﬂy off to the Sun. Newton was fundamentally wrong in his ideas of attraction at a distance. He was not wrong about the need for a stable currency, and the need for radical action. Einstein was in error concerning time and space, but his ideas regarding life and peace on earthare indeed praiseworthy. Now we have a theory that is all encompassing, we should never cease to wonder at our human state, remaining humble whilst enjoying our molecular world, and caring for all around us. In this world we will never know all the answers. Human memory is held in the subatomic level. That we shall take our human experience with us into an inﬁnite future should make us critically examine every thought and deed, respect all other beings, preserve our planet, and fear God’s wrath, should we fail. We certainly need to re-examine our actions and our motives in the current ﬁnancial crisis. When we look outside of our immediate selves, we can ﬁnd wider meaning, and hope to avoid our selﬁshness.

4. The Monetary System

We have seen how an examination of the physics of the universe, abandoning all preconceptions, can lead us to new conclusions. If the monetary system is similarly examined, perhaps we can likewise reach new conclusions. Money exists solely as a substitute for barter. Barter is the exchange of one item for another. Primarily it may have been the exchange of a sheep for a goat, or of a spear for a stone tool. The system allowed supply and demand to come into effect, so perhaps four goats may have been worth one cow, for example. At that early time, the system was entirely ﬂexible (individual barter), subject to immediate need and supply. Thus if food was elsewhere in short supply, no doubt an individual or tribe could, if they had plenty themselves, trade their surplus and obtain as much of another’s goods as they wished. Fixed exchange rates were implausible. Supply and demand surely reigned supreme. Even today supply and demand remains the prime factor determining the price of goods and services.

The value of labour

Following the Black Death, the supply of labour was short, and like it or not, the lords of the land had to pay much increased prices for it. Today, the same factors apply, but in recent years there has been a perverse effect. The welfare state has paradoxically reduced the value of labour by allowing low wages. Because a man (or woman) can obtain money for no work (on the beneﬁt system), an employer can offer a low wage. This is because the perceived value of work is low, and because the worker can choose not to work. This is not the effect that has been anticipated, and provides my ﬁrst example of how a complete re-examination of the economic system can lead to unexpected results. Many other factors are of course involved in the labour market, but themain effect of the beneﬁt system is to permanently retain a huge pool of unskilled labour. Labourers in sufﬁcient numbers are available to undertake the ever decreasing manual jobs available, yet many jobs remain unﬁlled. To correct this, it is necessary to replace the beneﬁt system. Beneﬁt or state pay should be linked to actual work. Clearly that work should be ultimately of value to the community and can be linked to an improvement in society far beyond removing the factors of boredom and lack of self-esteem with consequent damage to the fabric of family life and society as a whole. Unless pay is linked only to work and decoupled from the idea of pay for idleness, there will never be an improvement in the social structure and personal esteem. At present the beneﬁt culture encourages the import of foreign labour, feeds an underclass, breeds discontent, and keeps the labour pool unrealistically cheap and unskilled. Above all, it discourages parental responsibility and a cohesive family unit.

Money

Historically, money was introduced some 2,700 years or so ago. The introduction of money allowed goods to be bought later, at times separate to the sale of ones own produce. Note that money always must be initially earned from the sale of goods, and no doubt soon after, from labour such as service in the army. Money was not initially lent for proﬁt, but this idea no doubt was quickly upon the scene. Money could be stored and used to purchase necessities or luxuries at times of need or desire. True necessities are those related directly to the maintenance of life, that is food, drink, fuel and accommodation. Luxuries are strictly speaking, items unnecessary to sustain life. More and more items strictly classed as luxury, have become regarded as necessities by an increasingly afﬂuent society since the industrial revolution. Mechanical machinery powered by water steam and combustion engines, have allowed easy duplication of complex items. In consequence, those items have decreased in cost and value steadily as they became more plentiful. As a sequel they have been regarded more as necessitous than luxurious.

The introduction of money was possible because of the discovery of metals, and in particular, of the rare metals, silver and gold. Because these metals are not freely available they could be used as coinage. Clearly they had to be valued by weight. Mints were established to produce the coinage, and mark it asofﬁcial currency. Many tricks were used to debase the currency, reducing its weight, and eventually milled edges were introduced in the late 17th century to prevent removal of small amounts of metal from the edges of the coins. By the time of Aristotle, coins had been introduced, and were marked to show their validity and value. Coins were perhaps ﬁrst widely distributed by the Romans, who established mints at various sites around their empire in order to pay theirsoldiers. The introduction of paper money was made ﬁrst by the Chinese, and later this was used by the Italians in the establishment of a banking system. Previously, money, in the form of metal, coins or ingots, could simply be buried in a secret place, and hopefully found again, and no doubt usually was, except that the owner sometimes died without revealing the hiding place. Paper money is not amenable to storing under the ground, and could be destroyed if its owner’s house caught ﬁre. With the introduction of paper money, a bank was necessary to keep it safe.

The modern banking system is based upon the principle that the bank stores the money of the populace, keeping it safe, releasing just enough of it to permit daily transactions, and allowing the banks to lend most of it out to others for interest payments. In order to permit economic growth, the supply of money has to be regulated and allowed to grow at a rate proportional to increased trade and work. During the industrialised age, a change was needed from the acquisition of gold, silver and jewels, to a growth in money that reﬂected the changes in national and world trade. Central banks were established that would feed new money into the system to permit growth and increasing trade. The Bank of England was thus established in 1694, at ﬁrst as a private

bank, soon becoming an instrument of the state. The bank of France was established by Napoleon in 1800. Money is now held by the public, by businesses and corporations, by Commercial, “High Street” banks, similar ﬁnancial institutions, and by the central (government) banks. Only the central banks such as the Bank of England, and the Federal Reserve, can regulate the money supply, adding money to the system. If a dual system of currency were introduced, the central banks could be internationally regulated, with the national currency pegged to the global standard currency. Every time the Federal Reseve wanted to introduce or print more money, they would be free to do so, but would have to report this to the International (Global) Currency Regulator, and would find that their currency had then been adjusted in value (devalued) against the standard. The commercial banks are required to hold reserve deposits to cover the ﬂow of money that is needed on a day-to-day basis. The problem that has arisen at this time in the banking systems is that the banks have over time introduced more and more tricks or methods of providing extra funds, and no longer hold the assets in their vaults that they need to keep the system going. The International Monetary Fund was established to provide extra insurances of reserves against catastrophic losses or runs on the banking system, but in reality the system has become so over played, that the international monetary system reserve cannot cope. In 2011 it is clear that whilst Greece or Ireland can be “propped up” (surely a foolish stop-gap only), that others such as Italy cannot, as there are not sufficient funds in the sytem, which is surely doomed in its current form. The origin of these problems is in the cessation of the use of gold as a mechanism of international trade. When banks ﬁrst issued paper notes, those notes “promised to pay the bearer, the sum” as stated upon the note. This meant that the bank must keep gold in its vaults, and whenever the bearer of the note desired, he could and would demand payment in gold. This was not just impracticality. Gold was shipped around the world from country to country, and the price was the intrinsic value plus the rate of shipping. Gold was bought and sold at different rates depending upon the success of an economy. Money held as paper could be transacted into gold and back as the price ﬂuctuated. These transactions in due course translated into the buying and selling of government stocks or bills. The government maintained the reserve. At various times gold was more valuable than silver, sometimes the opposite. After various calamitous wars, the gold standard was abandoned. It was also resumed at times, but has now been dropped altogether. As a result, the control of money has become increasingly loose. Currencies, that is the paper money of different countries, have themselves been traded and widely ﬂuctuate according to all kinds of perceived risks and causes. Largely the dollar has been the international currency of last resort, and has in general been the most stable. This has mainly been because oil, the substance traded internationally in the greatest amount, has been universally traded in dollars. If and when oil is substantially traded in another currency, then the stability of the dollar will disappear. (Threated by the collapse of the dollar by Saddam, about to trade oil in Euro's, the US went so far as to blow up their own towers and then invade Iraq). When the world ceases to become oil dependant, then there will be no dependance on the dollar, and its value will fall. (It will do so before that...) Currently the pound in particular, is perceived to be at risk and has rapidly lost its value against the dollar. If the gold exchange mechanism were still in place, then such rapid devaluations would not occur. The present system of international currency speculation and daily fluctuation may save having to establish an international regulator, but helps no one.

Housing as the gold substitute

Because there is no gold standard to link currencies, and nothing to determine the value of currencies, something else was needed to replace it to provide an asset value to underpin the currency. Since the Second World War, western society has increased substantially in population size, and at the same time strongly encouraged its citizens to become owner-occupiers. This has caused the price of houses to gradually and very substantially increase. On the back of that steady increase across generations, the money supply has been steadily increased and a masive production of new consumables has taken place. The increasing money supply has been used to fuel economies. More money available means that the holder is anxious to spend it as soon as possible, and increasingly cheap manufactures appear as a result, apparently increasing work, proﬁts, and revenues to the government. Gross national product steadily increases, and the economy appears to grow as a result of increasing money supply. Whilst gold was necessarily linked to the ﬁnancial system, this process either needed the steady revision of the price of gold, or else the constant provision of more gold from the mines. The banks have felt able to lend more and more to individuals without corresponding reserves, because they have “secured” their loans against property (housing and buildings) instead of reserves of gold. Unfortunately, whilst securing their debts against real estate, it was assumed that the value of that estate could never go down, and that it would always go up. At the same time ﬁnancial institutions have become more and more adventurous in the way that they lend amongst themselves. They invented more and more ways to make the money go further. They lend out money that they haven’t got, against time and the promise of repayment. Stocks and shares are likewise traded on a promise. A bank will lend money it hasn’t got during the morning, against the promise that it will be paid in the afternoon. The bank uses money paid in by depositors for days at a time before the depositor is given any access. Promises are made of high returns on deposits, but when the money is to be returned then heavy penalties are applied so that the promised payment is rarely actually made. The money is multiplied within the system in a waythat the controllers of the central bank cannot control and never envisaged. The actual assets required to back up the money supply became more and more at risk. The housing crisis was predictable, but the results of it far more wide- reaching than anyone is currently predicting. On 28th October 2008 the Bank of England announced that as much as 1.8 trillion would likely be needed to support the worldwide banking network. More than 1 million homes werepredicted to be in negative equity within a short period. Gordon Brown the UK Prime Minister stated that the oil rich states in the middle east needed to inject the money required in the world banking system. There is however, no reason at all why those states should do that. It is increasingly clear that the money required in the system is not actually available, and that the various Governments are stalling for time. There is to be a world ﬁnance summit in Washington next month, but when it occurs that will only be a round of talks. So many countries are involved, with astronomic amounts of money missing, that no simple solution will be possible. The economy of Hungary is now in very serious trouble, and enormous sums are missing from the banking system of Iceland. Those countries have no means on their own of regaining stability. Consequent upon recession, the price of oil is dropping rapidly due to diminishing demand with even the closure of thousands of manufacturing businesses in China, causing mass unemployment there, and a reverse migration to the countryside, although for the moment the Chinese banking system is said to be secure. This is unlikely to prevail indeﬁnitely, but they have much less leverage in their system, and their foreign investments are perhaps more secure than the housing market. The prices of houses in the meantime, will slide ever more rapidly if and as the banks, desperate for even the smallest returns and needing any liquidity that they can get, take ever more draconian steps, repossessing homes only slightly in arrears, and in many cases not themselves able to obtain a buyer. In the USA there are already many streets in many towns and cities where six or seven properties have been repossessed, are not sold on and have been left unoccupied. The result is that those homes have already been vandalised and aremostly unsaleable, and unusable. The waste of good housing stock by this process is unnecessary, and the process is not contributing to a recovery. In addition, the persons that previously occupied the property, have to be rehoused. Instead of repossession, the banks must be obliged either to rent those homes out to the previous owner at a price that they can afford, or else the previous owner must be allowed to stay in occupancy (and pay a rent) until such time as another tenant or buyer is secured and can move in. Leaving houses unoccupied in this way encourages vandalism, creates new slums, is one step towards the breakdown of society. It is an absolute waste of a resource that actually belongs to the community that created it with hard labour, not to a bank that has ﬂoated more and more electronic money without proper controls. It appears that the banks have created a new system without control, where the paper money does not exist in the system, but by a system of increasing electronic delays, and promissory techniques, money has been traded continuously within the system, building it up and up in its apparent amount, without the paper ever catching up or appearing in the vault at the end of the day. In the 1970’s the banks would lend in the morning, and see the money actually in their vaults to correspond to it, in the afternoon. Now money is traded electronically against the promise of its arrival. It never actually arrives, and the amounts apparently within the system were gradually inﬂated more and more. Now we have banks and ﬁnancial institutions trading at 30 times the amount of money that they actually hold. The whole has been “secured” by interbank promissory or guarantee bonds which not one bank can actually honour. Although the only real security that the banks held – property- has devalued and tipped the scales, this bubble was bound to burst, and the bursting is not the fault of the home owner, who should now be protected by law, rather than penalised. Wholesale eviction of owners will not put the money back into the system. There is no-one there to buy those homes, and no money to fund the purchase. Instead of giving money to the banks, in this instance, governments must buy the houses for resale later, for immediate tenancy, and as future societal housing or council housing. Society will have to return to a majority living as tenants. Home ownership for the masses is dead. It will take years for a full readjustment, and the destruction of perfectly good housing stock must be prevented, and the population must not be thrown on the streets. Banks have created an enormous artiﬁcial bubble of electronic money, unsupported by gold, paper or property. 30% leverage cannot be supported by any system. It was inevitable that this crash would occur, and it will be much greater in its effects than anything previously experienced. When paper money that did not promise a gold or silver equivalent was ﬁrst superceded by plain paper backed by the state or sovereign, then that paper was sometimes overissued. The result was that prices rose drastically until the paper became worthless, and had to be replaced by coin, silver or gold. At that time the amount of money in circulation could still be covered in that way. It could be now, if the values are sufﬁciently adjusted. For convenience of the state in funding the war, Britain dropped gold as astandard for paper during the Napoleonic wars (1797-1816). During the American States civil war, the paper dollar was no longer linked to gold. Resumption of the gold standard for the note took place in 1879. In both cases the price of gold became greatly elevated as a result. The same will occur today if we return to the gold standard. If the banking system is to be reformed to one that can remain stable, then lessons must be learned from the past, and drastic changes must be made, not just the pumping in of money from elsewhere to temporarily stave off the collapse of what is a failed experiment.

Gold provided a single world currency that was simply related to each country’s paper at a slightly different rate. If money was moved around the world, then gold was also. The only difference in the rate of each currency was that the price of shipping the gold was added if money was exchanged between currencies. If money was increased in one country then the prices in that country will rise, relative to that in other countries. Since it then becomes effective to purchase in another currency, exports will decline and imports become more expensive. Demand will increase upon the foreign currency. As soon as the foreign currency become more valuable, gold is shipped out to pay for it. This then has the effect of reducing the money supply in the ﬁrst country, since it can only be issued against gold. This causes a diminution of prices, and corrects the import-export balance. The effect is to have a single world currency. In fact as long as gold is used, gold is that currency. This could actually be done without the transport of gold if a single currency can be maintained. If not, it is imperative to return to the gold standard. History tells us that there was a change from a gold standard to a silver standard when large amounts of gold were discovered in the US and in Australia in the 1840’s. Silver assumed the standard in various parts of the world during the late 19th century, remaining as such only in China and the far east at the end of that century. It was the outbreak of the First World War that we must blame for the loss of the gold standard.Most countries were unable to retain it in the face of the conﬂict, and at the end of that war, most countries had inconvertible paper money. After the First World War, Britain re-established the gold standard, although there were some ﬂuctuations, and the correct balance of exchange was difﬁcult to establish between the pound and the franc for example. Churchill in 1925 as Chancellor of the British Exchequer, reinstated the pre-war gold standard, but although most other countries also re- established it, the great depression in the US intervened. As a result of the depression, the US federal reserve ceased to allow ﬂows of gold. Britain broke from the gold standard in 1931, and the US in 1933. Now the world is substantially linked to the dollar, but this is only because oil is traded in dollars. If the oil price were not artiﬁcially held up, and if it were purchased in other currencies, gold, or a truly universal currency, then a complete realignment could be achieved. The US is artiﬁcially inﬂated in its economy, because all countries wishing to purchase oil, must ﬁrst obtain the dollars required from the US. In order to trade oil, other countries must ﬁrst produce goods or services to send to America for dollars, then the US simply prints dollars,sucks in merchandise from around the world, and the oil rich states acquire billions of dollars. In turn, the oil rich states sell their oil in dollars, and must in turn use those dollars to buy assets. Dollars in themselves are useless to the oil states, but this mechanism has pumped up the economy of the US far beyond the capabilities of its own resources and manufacture. This is solely due to the abandonment of the gold standard. If the gold standard is resumed, there will certainly be a huge increase in the price of gold, but gold as a single standard, becomes in effect a single currency. It may be that a single currency could be introduced at the same time. It should be immediately obvious to one and all in the United Kingdom, that although the Euro has ﬂuctuated in value, it has been more stable than the pound. Britain should have converted to the Euro a long while ago. If we had done so, then everyone would be blaming the euro and Europe for the crisis. At least we can now all see that it is the world banking system itself with the unregulated gambling and greed of bankers with their computers, divorced from paper and any gold standard or equivalent, which has caused the problem.

Economic Theory

Theories of economics were developed, and governments have employed and consulted professional economists. Unfortunately monetary theory, likephysics and theories of space, matter and time, were only just that. Theories. Theories and mathematical equations in the physics of matter and the universe, were found not to ﬁt the actual facts. Unfortunately, theories of economics have also been found wanting. Quantity theory was developed to attempt to relate various economic factors such that predictions could be made. Many different types of ﬁnancial deposits in banks are made, and the subject so complex that monetary theories were developed that even from the start, ignored many of the major transactions that took place on a regular basis. The problem is that many types of bank and lending institution exist, holding deposits and making loans. Loans are of different amounts and at different interest rates. Some institutions have more of the deposit held in reserve than others, and in the 1970’s for example it was common to have perhaps 20% of the deposit held in reserve and 80% lent out. Institutions have now found ways of lending sums greater than thirty times that of the whole initial deposit, ultimately not merely lending the whole of the deposit, but lending the same deposit, in full, to thirty or more different institutions all at the same time. The operations of these systems are so complex that they cannot be described by any ﬁnancial model. There was at one time a legal reserve ratio, but banks have been largely deregulated, and throwing all caution to the wind, have found ways around any remaining regulations. The quantity theory of money is that there is a nominal amount of money and a real amount of money. The quantity is that written on the notes or on the computer screen The real amount relates that nominal amount to the value of it, which is the amount of goods, property oil etc. that it will purchase. We can immediately see that with a gold standard or with stability in trading markets, this process could initially produce some meaning. Now however, the value of all commodities can ﬂuctuate by the hour or day in massive amounts, and even the value of real estate, used to replace gold as the ultimate reserve, has lost its known value. In quantity theory, the holders of the money determine how it is spent, the value of that money as a consequence being related to the price paid, say for oil or real estate. Problems immediately arise in the modern world, since stability has been lost. Computerised ﬁnancial exchanges can cope with thousands of transactions almost simultaneously, and commodities and stocks are bought and sold on a merry go round in which the transactions become more and more divorced from the actual money, so thata chain of transactions is in existence where no-one has actually exchanged anything, and the values are largely divorced from the exchange of actual currency. In the old system, money had some self-stabilising properties. If for instance a community had a total income per year of 10,000 units, there might be 1,000 units of money, and on average each member of the community holds perhaps 10% of his annual income. In this model, each single unit of currency is paid out ten times a year. If inﬂation occurs, and the money supply increased, then there might for the sake of argument, be double the amount of currency previously in circulation, that is 2,000 units. Now each person regards himself as better off and attempts to spend the extra money. Each person will attempt to get the best price, and each person will try to pay the least possible, but the money in circulation, though double that originally, remains stable at that level. Total spending goes up, and total income also. Both have doubled, but total money circulating remains equal to 5.2 weeks income. The gold standard applied to the currency, meant that if originally 10 units of currency bought 1 ounce of gold, then now 20 units of currency bought 1 ounce of gold. If another country traded with this one, and had retained its previous money supply, then ten units of that country’s currency would still buy one ounce ofgold, and one of their currency units would be equal to two of ours. If there were any additional difference in those values between the currencies, then gold could be bought advantageously with one or other currency, but gold would be shipped to cover the currency ﬂow. Abandonment of the gold standard has lost this essential ﬁxed relationship. Although it may be impractical to re-introduce the gold standard, this should be done until a world currency is introduced. In times past, we were not so dependant upon oil, and such large one-sided ﬂows of currency were not in existence. In quantity economics, equations were introduced. The transactions equation is MV=PT. In this equation the money in existence (M), is multiplied by V. The velocity of transactions (V) is the total number of transactions. The right side of the equation shows an average price (P), multiplied by T, an aggregate quantity of goods (including capital). The problem with this equation, that might have once held good, is that now we must factor in leverage, and thus the equation becomes MVxL=PT (where L is the leverage, and for the sake of example, we will use a leverage of 30 times). Thus the number of goods and services has multiplied thirty times, but the actual money in existence remains as it was. Remove half of the money from the system by the collapse of the over-leveraged ﬁnancial institution. Now we see that 30x the total money in existence is needed to correct the balance. At the same time, the value of property and stock is immediately 30x that which it should be, and falls like a stone. Although the Bank of England has suggested that 1.8 trillion is required, it is apparent that this may still be woefully inadequate, if the average company and ﬁnancial institution is similarly leveraged.1.8 trillion is the approximate amount of money said to be in use world-wide. It may actually be that an average factor of leverage world-wide is perhaps ten. This may be over conservative, but on the basis of this basic equation, an injection of as much as 20 trillion will easily be required. Such money does not exist anywhere in the current system. Thus the value of every commodity in the world must be devalued many times below that at which it presently stands. We will have enormous and permanent world-wide deﬂation. In the meantime, the money supply is inadequate to meet the needs of commerce. To go back to the earlier example, in the previous paragraph, the money in circulation is immediately cut to a tenth of what it had been. Prices and values must in consequence of these facts and ﬁgures, adjust, but the pain experienced by all in the meantime is immense, since there is insufﬁcient money in the system to pay for jobs and industry. This is such a drastic cut that it will have severe effects on the lives of almost everyone, worldwide. Discontent, crime and even total breakdown of law and order, could ensue. National income can be included in the equation MV=Py. In this equation, y is the total of national income (the total of all goods, services and additions to capital). P is the price index, V is the average number of times that the money stock is used for making income transactions work of any kind, be it payment for goods services or any kind of labour. This equation or modiﬁcations of it have no doubt been of value in the past. Now that capital is found to have suddenly decreased by perhaps a factor of 10, we can see that if other factors remain equal, then income will fall to a tenth, or otherwise, if income is to be maintained, 10 times as much money must be found to put into the system. The equation is no doubt too simple, but the basis of it shows how unstable the current system has become. All this is due to the lack of a currency standard, and to the allowance of ridiculous levels of leverage in the ﬁnancial institutions.It is immediately clear that for the average citizen to be penalised by removal of his income and home because of the fact of deregulation by government is nothing short of iniquitous. In past centuries, people might be suddenly awarded great riches by the sovereign, or stripped of all their goods and chattels by mere whim. Now we have a similar situation, but applied to the entire population. Do not think for one minute that this will not affect everyone. It was long recognised that the above and other similar equations were not rigid in their application, and that changes in money supply, inﬂuenced by interest rates, might take many months to take full effect. Monetary policy was introduced to control and inﬂuence the money supply, and thus work and productivity. Monetary policy was applied to regulate the economy by the supply of money via the increase or decrease of interest rates. The reduction of interest rates to zero or near zero, and the addition of money from central banks such as the Bank of England and the Federal Reserve, would normally be relied upon, and indeed proved to work in Japan (for a while). Now however, the problem is that we have a sudden global collapse of capital due to insidious leverage applied over several decades. The difference between the capital and the money supply is simply too great to be balanced by any normal mechanism.

After the depression of the 1920’s John Maynard Keynes proposed some modiﬁcations to the economic theories. Keynes idea was that prices and output were not directly linked to the money supply. Real income or production is, he said, linked to investment by institutions, and by governments, not to wages paid. Keynes thus modiﬁed the equation to include two parts of the money supply, M 1 and M 2 . M 1 is money used in transactions, and M 2 is the money used in speculation. M2 money was said to be independent of income, and largely dependant upon interest rates. Thus he postulated that interest rates work upon the general economy by means of promoting or discouraging investment. The Thatcher government applied massive increases in interest rates as a blunt instrument in the 1980’s as a method of controlling inﬂation. If monetary or quantity theory and policy had been used, other means would have reduced the money supply. The central banks could have imposed conditions of increased reserves. Unfortunately the imposition of Keynsian theory in such a drastic fashion had the effect of completely destroying incomes and investment, causing a considerable and uncontrollable slump. The Keynesian equation introduced the idea of interest rates as a method of inﬂuencing money to be placed into bonds or investments as opposed to being used to transact goods, or to be merely held as cash. If interest rates were high then money would be invested rather than kept as cash or goods. So much for theory. It only works in speciﬁc circumstances. In reality a balanced economy is required, and this can be destabilised by any excesses in the system. In the 1980’s the excess “control” applied was interest rates. The equation failed to hold true. In the 2000’s the instability is due to invisible mega-funding or leverage, which totally destroys the balance of the existing economic equation, which had never taken that factor into account. Ofﬁcially, since Keynes, there has been a resurgence in monetarist policy, that is to say that there has been a greater reliance upon monetary policy and the money supply than upon Keynesian ideas of economies being adjusted by change in the interest rates. In the event different governments have tried different approaches, always too optimistic, and always lagging behind events, since changes take months and years to go through any cycle.

5. Action

Massive hidden forces in the void of space are nothing new. Descartes described them, whereas Newton could not see the light. Newton was however engaged as master of the mint in April 1696. He saved the currency by reorganising the mint and efﬁciently replacing the entire currency with new milled coins. He was absolutely ruthless and had no compunction in sending many forgers to the gallows. Collapse of the currency is nothing new. The Roman Empire collapsed as a result of the failure of the state to organise its ﬁnances. They failed to supply and regulate the necessary coinage, leading to the collapse of an empire. Not long after Newton’s ﬁnest hour at the mint, the speculations on worthless South Sea Stock, led to a change in Government, and Sir Robert Walpole was elected to sort out the mess in 1721. Worldwide failures on such a scale as now have never previously arisen. Empires have fallen from similar events in the past. The current economic crisis as has been shown in the previous chapter, is much more extensive than anyone has so far admitted. Economic collapse can certainly be expected to bring about changes of government and policies across the globe. What is now needed is a cohesive global policy. Changes that take place need to have long-term beneﬁts and to result in a sustainable global economy. Politics have always been short term in the past.Short term ﬁxes will not be sufﬁcient now. We need to be as ruthless as Newton in eradicating the rotten apples of the current system. New global laws are needed and are needed fast. Resources are global and need global management. Trade is now permanently global - it will remain so for ever. A new ﬁxed global currency system, governed and regulated by governments across the world, needs to be put in place. Globally regulated, sustained low interest rates are required, linked to the new currency. Individual nations can run modest amounts of inflation that with allow regulation and adjustments. The black holes in the system need to be entirely eradicated. The new international ﬁnancial authority needs to be utterly ruthless in redeﬁning the system. As an essential co-ordinated measure, all speculative trading needs to cease. Stock and money markets across the globe should be suspended for some months, only resumed after radically amended rules are in place. During this period the entire global ﬁnancial system needs to be revised. There is no advantage to the public conferred by Governments attempting to bail out individual banks. An entirely new system needs to replace the old. Each Nation needs to have one or two banks 100% nationalised, linked to the global Authority. Pumping funds into all and every bank and institution is futile. Insufﬁcient funds are available for that to happen. Even all the free ﬁnances of the Middle East will be insufﬁcient. All those institutions beyond their means either restructure themselves and survive, or are allowed to fail as any other unsuccessful business would do. No less would be expected of any private individual. Only by starting afresh with a small number of newly structured properly run institutions, can there be a sustained recovery and stable future. We have already had leaked email showing that bankers intend to ﬂout the new rules. This is why only total nationalisation and strict new rules will sufﬁce. Either the gold standard must be reintroduced, or an equivalent new international global currency (to which others have a fully ﬁxed link) must be used to keep all nations at an agreed parity. The individual citizen must be protected from eviction from their home. If their house is to be repossessed, they must be permitted by law to rent it permanently from whoever purchases it. At least 50% of all repossessed homes must be purchased by government as new council housing stock. Rents must be set at truly affordable levels. These protective measures need to be introduced immediately. Loss of housing stock to vandalism and neglect is of no value to the community. A gambling culture has arisen worldwide, including many lotteries. It has pervaded business and all of society. This culture needs to be dismantled. The new banks may not abuse money deposited in banks or transferred by investors. Money placed in a bank by a customer must always and immediately be available to that customer. Wages across the globe must be agreed and regulated. Bonuses and shares issued as extra wages must be prohibited. All money traded by banks must be backed up on each and every occasion by an agreed amount of deposit. Inter-bank guarantees must be prohibited. Stock exchanges must only be allowed to sell and re-sell stocks and commodities in real time. Transactions in advance must cease. Only when the stock has been held for a designated period of months, can it be resold, and such money as is paid must be fully transacted at the time of purchase. Such purely speculative trading in shares as “short selling” must cease. This will largely stop mergers and acquisitions, forcing companies and institutions to stand or fail on their own merits. Investors must be much more cautious. The global economy will in any event slow down to a crawl, whatever measures are taken. It is therefore essential to ensure that the new measures are sustainable, not short term. The use of global resources, including health care, healthcare workers and medicines, timber, oil, coal, gas, minerals and so on need to be regulated and agreed across the globe. Unregulated market forces are destroying the planet. If a new currency is created, the opportunity exists to regulate stable and sustainable use of global resources. Preconditions and regulation must be hard wired into the new ﬁnance. All countries signing up to the new currency agreements should form a new healthcare agreement, armament agreement, and a commitment to reduce global population by substantial numbers. Those failing to agree should be left out of the arrangement. They will not survive politically or economic if they do not. No country, even the US, can stay out of these arrangements and survive. No country should be allowed to dominate all others. Arrangements must truly be democratic. All countries need global trade, and all are tied into the current disaster. This is a great opportunity for the human race to reform its activities for the long term good of all.

Completed 31.10.2008 , amended 1.9.11

Mark Rumble

Space is as full of dark matter as the leverage in the ﬁnancial system The cosmic pressure upon the earth is towards the centre, ever inwards, as the stress of ﬁnancial ruin presses down upon the global economy

In the global economy, MvxL=PV. No longer does E =MC 2 Keynsian and monetary policy unchecked have led to unmitigated disaster Newton reformed the mint, but made a mess of gravitational theory

This treatise describes the ﬂaws in current theories, and looks forward to global solutions that can improve society for the future.

Rapid changes and decisions are needed by governments if they are not to collapse with the bubble. Truly global decisions and long term planning are necessary to avoid disaster.