Planck Foundation



As the dust of the Credit Crisis falls down and the air start to clear, vision/sight get better. The balance sheet damage caused by the Credit Crisis to the financials will become clear. Cooking the books is a time limited art of accounting. Everything will be done to keep the contract hubs (collection places of financial damage) in the air, the in terms of real valuating completely unreal 'Ambac and Fannie Mae show' must go on, stopping it would be fatal. In reality the damage 'has hit the structure'. Greenspan has the US government advised to initiate a financial 'A Team'. As the damage will come to the surface financials will fall in numbers like apples from a tree in a storm. First due the Credit Crisis balance issues and second due payment defaults caused economic turbulence/decline due to the combination of the Energy Crisis and the Credit Crisis. Governments will one way or the other pay the bill of each and every burned asset. The US government (in her effort of preventing damage explosions) even pays on this moment the cash for paying dividend to the stockholders of Fannie Mae (dividend payments while a wave of looses come to the surface and the balance sheets are a fruitcake: just to prevent a stock price collapse). By all these (huge) governmental inventions, currencies will get less value (inflation we call that) and in case of a bankruptcy of the USA (and the attached fall of the dollar) many other currencies with loads of virtual dollar backing will go down either. Solving the consequences of the Credit Crisis will burden the USA and the dollar more than possible/reasonable. And this happens in a time of an Energy Crisis and an upcoming (agriculture downsizing) Water Crisis. It's not the USA who decides to initiate and manage by themselves a Chapter 11 model, but (as the US needs foreign capital every day like oxygen) it are the lenders who will stop lending at a certain time. Than the Open Market Committee will be the only buyer of US treasuries with phony digital/printed money, causing mega inflation in a time of already stagflation. The purchases of the Open Market Committee is the reason why the fall of the US and the fall of the dollar will be at the same time. When the dollar collapse (taking governmental and GSE issues bonds with them), many other currencies that has invested in those (like the Euro) will go down to. Out of this chaos a new financial system must be born. Led by the BIS (Bank of International Settlements). The US will do anything to get in the driver seat of this new solution and/or profit maximal of it, offering premiums to the old dollar asset owners (fruitcaking the new currency on its birthday already: nothing will ever change), but the world will no longer the power/moral of the US concerning maintaining financial stability, while at the end of each period other nations has to pay the bill of the US expenses. The new financial markets will be fragmented, with values closer to the realities. Not transparent securitized values will have no attraction at all anymore. The dual system (central bank ran by bankers and government ran by treasuries) will be abandoned. Two captains on the same ship leads to problems and it's always the fault of the other. Joined responsibility is no accountability at all. Than central banks will not buy treasuries anymore (and thereby governments will not pay a large part of tax income to the central bankers as interest). Cities will create their own currencies. Or the kWh will be the value, a value that only can be eroded by more energy availability. Energy as central role in money creation. 100% exact to measure, transportable, digital transferable. There will be public database registers with kWh debts, preventing more debts than affordable. Money creation will be done by the fact that a third party will be accountable for the debt. The fractional banking system will be abandoned. An other possible (not energy attached) model could be that city governments will (limited by own legislation) create money (take care of the money supply) by their investments and spending (no taxes and if they do right, less inflation). Governments (national, regional, local) that have no currency/financial backup plan in case of the collapse of the US and the dollar will experience the smash against the wall when it's needed. Just like no energy policy will give the same effect: a big smash against the energy wall. Financial solutions will cover, currency (easy value traffic), finance (credit), savings (people's trust in it will be very low) and governmental income/tax (unneeded expensive projects and wasting money on local scale will not be possible). Governments will reconsider their tasks and act more wisely/smarter. Government for money will be the slogan (achieving large effects by smart less input by choosing right policies). Government will be about: how to get the best society (with no compromising quality standards) by organize internal local society. Governmental budgets (as in: taxation) will be severe lower. Financing will be done completely by the Raiffeisen model: only good investments will get the actual needed backing of people with actual financial values, so that people with actual liquidity surplus can facilitate the capital with low risk.

Author: Gijs Graafland

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