Someone, somewhere is blowing half the money you paid for your house on a well earned weekend break with all his mates in a surprise tropical location, well, it was a nice house. It is incredible to think that you worked for over twenty five years to pay your mortgage and twelve and a half years of it didn’t even cover the annual bonus of a single banker. All of that time and effort. For what? Do you feel grateful? Do you?
For something so powerful money is really rather useless. It can’t do anything, you can’t wear it, live in it or eat it. In the past you could wave a wad of notes around for a bit of validation but conspicuous cash is so last century. Modern money is becoming secretive, invisible, mysterious, no one really knows where it comes from or where it goes, they think they do until they’re asked to explain it. There is a sense that old money was easier to understand but it wasn’t, money isn’t changing at all but the use of it is.
Banks are currently in the process of moving money from the old physical realm, which is expensive, to the new virtual realm which is incredibly cheap. They are embracing digital commerce with evangelical fervour, employing all sorts of techniques to make it attractive, credit and debit cards, contactless, online shopping and banking. But such convenience comes at a cost, loss of freedom, the right to anonymity, the right to keep your money under the mattress. It is the banks’ intention to eventually overthrow cash completely, to control all money, to know where it is, who has it, how it is being spent. Every digital transaction will be logged, will be traceable, will carry a small fee, governments will be alerted to any suspicious or illegal activity, everyone will be held accountable. All unregulated employment would cease, the gardener, the decorator, the backyard mechanic, the standup comedian, all would have to declare every penny they earnt, tips would be taxed, pocket money would be wages, beggars would need card readers.
None of this actually changes money though. Contrary to popular belief money is not made of ones and zeros, even if they are on a ten pound note. Paper money is not money and never was, it is just the tangible representation of the idea of money. It is, if you like, the smell of money. Money is a table without any legs held up by the knees of the diners. Money is hard to define because it doesn’t really exist, it is notional, a concept, a figment of the imagination. Pure money takes up no space, costs nothing to run or transport and requires no physical infrastructure, based on its nominality there is no reason why money can’t be free. In fact it once was, before the banks got hold of it, but now even earning money costs money, it is designed that way, to tempt you beyond your means, to make you want more of everything, to put it on credit, to get a loan.
When you borrow money it always seems like a bad idea but the truth is all the money you will ever have is borrowed. Wages, gifts, inheritance, the money in your pocket, all borrowed. The only difference is when we borrow money from a bank we have to pay more money for it over as long a period as they can possibly contrive despite the extra only being compensation for the time the bank goes without the original sum. The idea is to keep you paying just the interest and not the principle, a successful loan’s increasing size should never be greater than your ability to just about maintain it. Money has never been good value for money.
Being poor is expensive as you will never have enough money to make money work for you. Money only makes money when there is a lot of it, big money is just lots and lots of small money. Which is why it still takes four days for a cheque to clear and why really wealthy people don’t work for a living. They live off the time of others, they buy it, collect it, luxuriate in it. This might sound clever but it’s more likely luck, it’s not called a fortune for nothing.
Those indentured to the wealthy are supposed to be thankful but what they actually are is indebted. The more indebted you are the harder money is to come by making it ever more difficult to escape poverty. Banks don’t like the poor so if you are in desperate need of money the bank is not going to give you any, they like to give money to people who already have money, which is bit like doctors only treating those who are well, if you are actually ill please die outside.
The price of borrowing fluctuates all the time and despite money being almost limitless it’s cost is curiously subject to the laws of supply and demand, this applies disproportionately to the less well off. If your needs are great and your credit rating or ability to repay are not you are likely to be forced into the arms of a shark, not that sharks have arms, though they might be armed. Under these circumstances where money is allegedly in short supply the shark can and will demand whatever he likes for it. Not that this premium in any way improves what you get.
Regardless of whether you borrow money from a private bank, with a £500k opening investment minimum or from Slippery Fred with a length of iron bar and a bull-mastiff cross, the quality of the actual product is identical. It’s as if Aston Martin and KIA sell exactly the same cars except that you have to pay more for the KIA. Of course if you fail to meet your repayment obligations then the dark side of money’s personality becomes apparent. Violence is the hidden potential of all money, the promise of what will happen to you if you don’t pay it back. Basically the private bank will assume you are good for it and will send you a very polite letter whereas Slippery Fred will assume you aren’t and will send the boys round.
Money is not recorded in the pages of Slippery Fred’s ledger, debt is, debt is not money, it is a promissory note, a promise to pay the debt with something of value. In Slippery Fred’s case, cash or maybe your mum’s flat screen TV or possibly your fingers. Which makes you a better bet than any central bank. Their promissory note is money and they can’t hope to keep their promise to pay the bearer as there is far, far more money in circulation than there is gold in reserve. This is because most money isn’t printed it’s imagined.
Only about 3% of money in the economy is represented by cash, the rest is created by the banks out of thin air. If you want a loan from the bank they don’t lend you a big bag of dosh they literally summon the money from nothing, bring it into being and pass it to you directly as debt. Nothing changes hands because nothing actually happened, the bank just said yes, went behind the curtain, rattled a few pots and pans together and hey presto! Instant money. This turns the economy into an over inflated smiley face balloon, its smile growing wider with greedy madness as the banks keep blowing more air into it. If it starts to leak a little the banks just blow harder, stretching things to breaking point, making everything further apart and even more expensive, until inevitably it bursts with a big bang, revealing nothing but debt and wiping the smile off the face of the economy for good. Or at least until the government gives the banks a new balloon to play with.
Being illusory doesn’t stop money from being the single most powerful notion in existence, more powerful even than Jesus or Father Christmas, who both flourish because of it. Money is of mythical importance because it is mythical, we will do anything, risk everything, to get it and keep hold of it. We give up our whole lives in the ceaseless pursuit of it, not because of what it can do for us but because of what it can never do. The promise of money is an absolute lie, it has no charity or generosity, it is cold and hard. For the most deserving it is fantasy, for the least deserving it is reality. There are those who like to think they can function without it, idealists who answer to a higher calling, yet everything they want to do is limited by a lack of it, they are like vegans at the end of the world, wondering whether to eat the grass or the rat.
Having no money can be a choice but more often than not it isn’t, money is a wall that we build with our minds, that stands between those that have it and those that don’t, a wall that keeps getting higher, hiding the wealth of the wealthy from the poor and the poverty of the poor from the wealthy. Money is not the root of all evil, not that there is any such a thing as evil. Evil is just an excuse for bad men and they can be very bad where money is concerned. It is the reason for everything awful, war, politics, racism, sexism, religion. Money doesn’t test our faith, money is our faith, Mammon is the one true God.
Greed ruins us all, it is not and never has been good but it doesn’t change the fundamental nature of money. All money is the same regardless of how or where it was obtained, it is fungible, there will now be a pause while we all pretend to know what that means. There is no such thing as blood money or drug money or dirty money, all money is equally dirty or clean depending on your perspective. Laundering money is simply about plausible deniability, about making it presentable to banks and governments so that they can spend it with impunity, all money is laundered but when banks and governments do it they call it business.
Money begets money. Stocks and shares, subprime loans, swaps, short selling, long selling, hedging, merging, leveraging, exotic derivatives, who really understands any of this? No one, apart from those who are meant to of course, it’s all about access, about coherent confusion, dangling the glittering bait, being in the privileged position to exploit the avarice and gullibility of others, their relentless desire to spin the wheel, to turn the card, to roll the dice. If the stock market was less of a casino there would be no brokerage firms or investment banks, their losses would be the same as everybody else’s. Assuming the game isn’t rigged they win because gamblers rarely quit when they’re ahead and it’s far less painful to lose when you’re playing with someone else’s money.
What does publicly traded even mean to the general public? Only about 10% of UK stocks are owned by members of the UK public and there most definitely won’t be be anything general about them. The Footsie 100 is little more than a scoreboard for the super-rich, a way of rubbing our noses in their unattainable super-wealth and super-fun, ‘LOOK AT US’ it shrieks, ‘UP HERE, SO FAR ABOVE YOU, SO MUCH BETTER OFF, SPENDING ALL YOUR HARD EARNED MONEY ON OUR SUPER-SHIT.’ As a gauge of the nation’s financial health it is almost useless, yet we are all supposed to pay attention to it as if it were the actual writing on the wall. If there’s another crash and you don’t own stocks you’ll barely notice, apart from all the distant screaming, unless of course the government decides to bail out random banking types with your money which is only fair because I’m sure they wouldn’t hesitate to do the same for you if your business failed.
Bankrupt is an ancient term that literally means broken bench, as in a smashed or overturned money changer’s table, it implies that a bank’s losses should be carried by the bank. Not anymore. Money may be a figment but the liability attached to it is very real and banks are in the business of passing liability on, they’re always looking for someone else to foot the bill. Austerity wasn’t caused by the crash, it was caused by paying for it, by the government giving real non-existent money to the banks to quietly replace all their fake non-existent money then gifting the debt to the British public. Thanks banks.
Despite the bank’s best efforts you can’t actually make money out of nothing, all money has to originate somewhere and that somewhere is your labour, so in effect the money they lend us is money we earnt. We raise the child, educate the child, then it goes to work for a bank and we pay its wages. Everything starts with our labour, commodities are worthless unless attributed a labour value, how much time is it worth? Time is money and money is time yet neither exist as anything other than shackles of the mind. They are both deliberately hard to come by with a deficit of either being described in pretty much the same way, losing time, finding the time, running out of time, haven’t the time, where did all the time go?
Once the monetary value of time is established a commodity price can be set, a price that favours everyone other than the last person buying it, which is probably you. This brings us to another curious part of money’s function, to convince us all that it’s totally natural for things to increase in price. Of course if we have bought one of the things in question then it is also money’s function to hide the fact that whatever the thing is it’s not worth what we paid for it. Money gives you the illusion of possession when more often than not you own nothing. It is tempting to think of the money you have as yours but it isn’t, it is waiting to fulfill its purpose, burning a hole in your pocket, it wants you to spend it, probably on something temporarily diverting, ultimately useless and more expensive than it was this time last week.
It is important not confuse price rises with inflation, the government likes it when we do though as inflation is little more than a measure of their fiscal incompetence and improbity. Why the price of everything rises is mostly a mystery but it can be summed up as some people want to make more and some people want to pay more, it is basically the trickle down of greed meeting consummation compulsion. To achieve this things must seem to be better than they were, rarer than they were, more desirable than they were, why else would you buy another mobile phone when they are little more than incrementally engineered disappointment. This disposability is why the rate of a price increase is almost always inversely proportional to the rate of depreciation and customer satisfaction. This process is often referred to as fashion, which is really just an excuse to throw something perfectly fine away and buy a new one.
The idea that the things we want must increase in value and therefore become less attainable yet more desirable is so entrenched that we often believe it to be a good thing. Sometimes this leads us to believe that something is a good investment when it is not. Art for example is never worth any more than the artist originally got paid for it, from that point forward there is nothing but speculation, desire and human irrationality. Art may increase in value but that doesn’t make it a sensible investment, a Van Gogh is about five quids worth of wood, canvas and paint and eighty million dollars worth of stupidity in much the same way that an 1869 Chateau Lafite is a bottle of old grape juice that probably tastes worse than a £4.69 Merlot from Aldi.
It’s just as well then that the man or woman in the street doesn’t have to worry about such pointless frippery. He or she has to work for their money, their labour may be all they have so when they invest in something you can be sure it won’t be frivolous. It is sad then to think that a good part of that effort will be spent indirectly on wealthy people’s leisure, that the biggest purchase of their life is not an investment at all but rather a way to lose a spectacular amount of money in a socially acceptable way.
Buying a house has never been about owning a house it is about owning a very special kind of debt, one so unfair and punitive that only governments in general and banks specifically could possibly get away with it. With a mortgage we project the value of the house into the future. Depending on the type of mortgage we basically agree to pay twice what the house is worth because we expect that by the time the debt is cleared the house will be worth more than twice what we paid for it. It won’t, mainly because we will choose to live in it and maintain it and improve it, these costs plus the interest on the debt will never be recovered. At best they will be pushed forward, sunk deep into a bigger better house, our only ambition to pay off the mortgage before we die.
Banks get away with this because we don’t live in houses, we live in homes and if that home is where your heart is then you will never stop paying. It’s why the first rule of police detectives and property developers is don’t get emotionally involved. The banks take full advantage of our attachment, tailor our expectations to it. It’s no coincidence that the increase in the value of your house over the life of your mortgage just about covers the cost of it, that is how the economy is devised and a large part of the banking system is built around it.
Interesting word mortgage, French via Latin, very old, of uncertain origin but of very certain meaning. Depending on who you ask. Directly translated it means death pledge, which is bit honest for a modern day banking product, bit like calling a gym You’ll Only Come Once. It was thought that the crash would seriously impede the death pledge what with them being the cause and all but nope, banks are practically giving them away, because without them there are no banks. Mind you, you will need to be a thirty to forty year old non-smoker with no health issues, credit cards, cars or children who doesn’t eat avocado toast, have holidays or a race horse or subscribe to Spotify. Oh, and you will need a twenty five per cent deposit.
Full disclosure, it’s not actually called a death pledge, I made that up, it’s a dead pledge as in the paid debt being dead not the debtor, but it’s unlikely that the increasing number of families struggling to make repayments feel that way, to them I bet death pledge sounds about right. Houses can no longer afford to just be homes, they are living expenses, university funds, pensions. With death often failing to live up to its end of the bargain we are all living and working longer and as retirement slowly creeps up on us and our home is finally ours we barely have time to notice before we remortgage it and start undoing years of diligence just to buy essential things to supplement our withering heights.
You could always downsize of course, convince yourself that it’s an adventure, sell up and move away from the home you spent your entire adult life paying for and into something bijou in Bexhill. Who cares that it automatically disqualifies you from entering the national cat swinging competition at least you can afford to heat and eat and you can always take comfort from the fact that someone, somewhere is blowing half the money you paid for your house on a well earned weekend break with all his mates in a surprise tropical location, well, it was a nice house.