Cole Webber

7621 — I continue to feel very optimistic about the present situation.

I am having to remind myself. I think the people saying we are headed for total economic collapse are very small minded. What is more likely is a deferment or moratorium, not out of being nice but also out of self interest. Suppose a bank repossesses a house or apartment building — right now, who precisely are they going to sell to? By almost any calculation it is self interestedly better for them to delay the interest than to suffer the larger drop of value of selling it at a loss in a panicking market, during which period they would be trying to sell they would also be collecting no interest. The banks do not want you to declare bankruptcy; they don’t want to repossess an asset which is now worth less than what they paid for it. When they do, they lose money, especially in a market with no buyers. This is a crisis uniquely affecting the whole world. Even in booming industries like Lysol they are booming so much that they can’t keep up with what they ought to produce. There is no buyer and so there is no reason to foreclose, to demand, to screw over en mass. The bank is part of the market as well, and must try to accommodate it — not the other way around. Banks are not a monolithic impossible force but a business as well, a flow of organization and resources, albeit one with special abilities. In line with the government, they can absolutely inject money into the system to keep it going. The government can and does make money – invent it. They print more everyday; of course inflation negates part of this, but not the whole total, hence the growth in real value of goods per capita over time. Printing money is not the only way either. Simply change the rules by which trade can be conducted and you can exponentially grow money; more than by which you could ever grow by print. For instance, by reducing the reserve requirement and guaranteeing the deposits. The only way that an injection will not work is if people remain terrifyingly irrationally panicked. Money is an agreement which has value because we say it does. If we believe we can get this cash now, and that it is ‘real’ and that we do not hoard it but spend it, we can do it. But who knows. Banks are made up of people too and people are obviously not terribly smart all the time, and perhaps especially now. Perhaps my greatest sadness about the world is the belief of the majority of people in money as it existed before 1844 and before even the industrial revolution. People think of money as a fixed and finite resource. It is not. It is an approximate accounting for value. People say money doesn’t grow on trees; how ridiculous! It’s paper isn’t it? It literally does. And we can add further and further total advantage all the time. We have the capacity to do much more than we even allow ourselves to do now. Accordingly, over the past two centuries governments have had to take subtle and covert actions to more than double the available capital possible for accounting purposes from the same starting number, not even maliciously, but simply to make it stick by avoiding a panic. For instance through the introduction of joint stocks, which effectively doubled the amount of money in the world overnight. This did not blow the system, but in fact made possible the industrial revolution: it worked. Because value and potential were there. If we are heading for a recession, it is not because we have to be but because we chose to be, by choosing fear rather than courage and imagination. We have weeks, now possibly months at home to experiment, the ever growing problems of the world in the forefront. Have ideas to fix them! Make real value and not just money, for the money will surely follow tenfold. As FDR wisely put we have nothing to fear but fear itself.

— cole