Wednesday, September 24, 2008

Financial Crisis: Danger and Opportunity

The Bush Bail out is Alice in Wonderland stuff. It seems in the Paulson/Bernanke plan is to pay out more (?twice as much) for the toxic debts than their face value. Mind boggling. And it is coming offered no conditions, in stark contrast with the terms of World Bank bail outs (certainly, they are toxic terms, but the point is they do impose conditions, not give free handouts).

If the Senate blocks the Paulson/Bernanke plan, however, it is likely that the banksters' house of cards will crumble. The failure of the banks will spread to the "real" economy, and globalisation means that this collapse will be world-wide.
A Second Great Depression. Crisis.

The danger is that politicians, at a loss for anything else to do, will go to war, for resources, and to relieve their feelings of frustration.

The opportunity is that we get a Green Recovery, through the Green New Deal, which depends on two things;

1 Re-localisation of the economy, as we have always advocated: LETS, Time Banks, Local currencies (See Magrit Kennedy )

2 Creation of a new currency, based not on gold, not on deregulated private greed (as in money 1971-2009) but on Green Values.

Money is a store of value. It is a symbol, not a thing-in-itself. Once bank notes represented gold. In our lifetimes, it has come to represent market value in an deregulated money market. Money was worth whatever it was worth, it was a plaything of the greed merchants. This absurd, self-referential system is in the process of collapsing in on itself, imploding onto a vacuum of astronomical debt. Nature abhors a vacuum.

In the event of its collapsing comprehensively, as seems likely, we will need to create a new currency which is based on real values: that is, the resources implicit within our environment and society. How to quantify these resources? An Index can be constructed, based on something like the the NEF's ISEW, as developed into the Happy Planet Index
- energy values like wind, tide, wave and sun, with human values such as health, inventiveness and willingness to increase the order in our system.

In this system, money is linked to the ultimate physical reality, Gaia. If we do things which increase the health of Gaia, our money will appreciate in value, and if we do the opposite, our money will depreciate.

So. That's the aim. Now for the difficult bit: getting there.

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