We treat money as real because we need a way to keep score.
When people speak of the importance of confidence I recognize that they are speaking of the essential factitious nature of money.
Unfortunately the fiction is only available to governments with their own currency.
For all other entities the books must eventually balance.
Banks are insolvent when their cost of funds exceeds their income from loans.
Governments are insolvent when their costs persistently exceed their incomes.
It occurs to me to wonder how we can know? If the bank will accept the check the check is good.
Some number called government debt may be growing but who has the right to demand payment?
Greece may live through this adventure.
No comments:
Post a Comment