I am sure you heard; “governments are printing too much money”.
You might have also heard that paper money not backed by anything ends up as nothing.
Many years ago people traded by paying with gold coins. Then they traded with paper money backed by gold. This meant that you could go to the bank and exchange the paper bill of one dollar, or whatever, for one one gold coin of one dollar.
That used to be the system we had in the World years ago, when onme paper dollar was backed by a one dollar gold coin.
But politicians could not resist the temptation to make money beyond the amounts possible if all money had to be backed by gold.
One day, in President Nixon’s term, Americans and the World woke up and learned that from that moment on, one paper dollar could not be echanged for a one dollar gold coin. This meant one paper dollar could be exchanged for on paper dollar.
That started massive money printing by central banks. As the central banks are controlled by the politicians, they can not resist printing more mone in times of crisis, so that the people will have money to survive.
But things are even worse now. Until recently, only the central bank of a country was allowed to create money, now even private banks create money.
Mnay people still believe that when they go to the bank to borrow money, for example, to buy a house, that what the bank does is lend them the money savers deposited in the bank. It used to be like that, it no longer is. Now the bank is allowed to ned much more money than what depositors have in their savings accounts.
How does that happen?, because the central banks of countries allow private banks to create money out of nothing to lend it, neat, isn’t it.
More and more people are catching on that there is too much paper money, that is why inflation is growing.
You will not be surprised to hear that the people more aware of the problem are the Swiss. I have no doubt this is because Swiss voters have learned to be responsible. They have no choice because direct democracy forces them to make decisions and to live with the effects of their decisions.
You probably know Switzerland is the country with the most solid finances and the highest degree of political stability. Swiss politicians are not as free as the politicians of representative democracies to be financially irresponsible.
The first sign that the Swiss people are becoming concerned about excessive money creatio out of nothing, is that in 2018 the Swiss people voted on a referendum to decide if private banks would no longer be allowed to create money when they make loans.
The proponents wanted to prohibit private banks to lend more money than they had in deposits.
The initiative was defeated, but is shows the concern about excessive creation of paper money.
But these are signs that concern in growing about uncontrolled creation of money. It is not by coincidence that the Swiss people are the first, and the only ones so far, to start to worry about out of control money creation. No doubt it is because direct democracy has made them more responsible.
Actually, it was the massive creation of money in 2008-2009 to rescue US banks and other business in 2008-2009, and also banks and business in other countries, as well as whole countries, that led Satoshi Nakamoto to create Bitcoin.
Excessive, out of control, money printing by elected politicians should be brought under control. Only the people in a direct democracy has the power to do that. This is another important reason to bring direct democracy to all countries.
Victor Lopez
