Schlagwort-Archive: Consumption

Today’s system-relevant addictions

Shortly after the crash of the Wall Street in New York (1929) Bertolt Brecht found the right words in the Three penny Opera: “What is robbing a bank compared to founding one?” Thus, he demonstrated visionary instinct. Because of the government debt, every Germans have a calculated debt with the financial system of more than 29,000 €; every US citizen even more than $ 57,000 – inclusive all babies and retirees. At the same time, some people call the classical financial institutes as system-relevant and support therefore the banks. As a result, their losses are continuously socialized and profits privatized. With it the moment is reached to take a look at today’s grown system-relevant addictions.

Just as a drug dealer makes the junkie slowly addicted to the drug, the banks have built up over a long time the following system. The result is the same as in a casino – the bank always wins.

  • Pay little interest and take lots of interest
    Already the easy-to-understand idea of charging interest rates for lending money required early on the regulation of the money business in order to prevent usury – sometimes better, sometimes worse. At the same time the banks took over the service of securely storing the money that one did not need, paid for it a certain interest rate and lent the money for a higher interest rate to borrowers, who needed money. The differences created the profits of the bank. The management of this exchange is systemically relevant – the neutral broker creates more occasions.
  • Encourage consumption on tick
    Loans served to finance kingdoms, states, and eventually businesses. With the emergence of the consumer society, there discovered also the consumer loans: for housebuilding, car purchasing, and holiday trips and meanwhile for all areas of consumption. By enabling such loans, the banks encouraged the economy that in turn created jobs. This offer of consumer loans has system relevancy- at least in a world of consumption.
  • Fees on everything (account, credit cards, balance, transactions)
    In addition to the interest rates, the banks eventually discovered the approach of getting paid for any service. An overseas transfer has always cost a lot (additionally to the rate of the currency exchange). In the meantime, the banks start charging all areas: for all kinds of money cards as well as account, transfer fees inclusively for personal transfers at a bank counter. Particularly clever is the idea to offer customers a membership card that provides some of the old services for free – of course with some pre-requisites beneficial for the bank. Since regular payments (like the rent, the telephone bill, and loans) are transacted via the own bank account, the bank strengthens as a middleman its system relevancy.
  • Reduce and possibly eliminate cash
    Since banks offer less and less “physical” services, it becomes important to close the back door of an account, the cash. For this purpose it will be abolished successively. Without cash, the values only exist in the banks’ data storages. Thus, after the abandonment of the gold standard, we reach the zenith of the virtualization of the financial values. Our wealth is now subject to fluctuating courses, which are constantly changing. So, if the cash itself has no more material value, you can also get rid of it. As soon as only the data storages of the banks represent our monetary possessions, the last person should be clear about the system relevancy of banks.
  • What is still to come?
    In the future, ALL money actions will be chargeable. The highest fees will be asked by those banks that can not change themselves as fast as the other players. The Internet enables new business models – from Linden Dollars, Bitcoins to microfinancing, crowdfunding or private loans. These transformations mean the end for classical financial institutes, which believe that they can finance themselves through excessive fees and do not adapt to the new circumstances. The last convulsions will demand a lot of the system. This means for the customers to find a way out of the systematically defined dependency from the banks – the account, the saving interests, the standing orders, the transfers, the money investments, etc. The insistence on the apparent system relevancy will shift the system – away from the classical financial institutions.

Bottom line: For millennia’s, the economy worked without system-relevant banks. Today, the banks are in a deadlock. The current efforts to find new income sources will exploit the meanwhile established dependencies, until the customers get broken. The credit system, the consumption, the services, the cash, and all that is called system-relevant, will be replaced by new providers with new business models, like microfinancing, crowdfunding or private loans. The basis of the economy, the money that is only based on faith, will be replaced by new means of payment – no matter how, main thing is getting out of the system-relevant addictions of today.

The fuel tank – the ideal metaphor for budget

Surprisingly, some everyday experiences do not reach the consciousness of certain people. Managers, who are responsible to administer the means, often live in a world of apparent abundance. They waste their energy into the extension of budgets instead of taking care for a more reasonable use. For those, the gasoline tank should be a helpful metaphor to better understand the budget.

Tank

A truck tank seizes approx. 900 liters. With an average consumption of 40 liters at 100, you can achieve a distance of 2000 km depending upon the landscape and cargo.

Managers have likewise a kind of tank – the budget. They must fulfill their tasks within the respective budget. In the absence of a reliable planning and an awkward distribution of the means, however, bottlenecks develop frequently. Then they try to substitute the limits with exaggerated expectations and requirements for the contractors, the employees and suppliers.

The analogy of the tank offers a good idea, why this does not work. The following aspects are likewise valid for the tank and the budget.

  • Size
    The size of the tank determines how much gasoline can be refueled. With a truck this can be easily about 1000 liters. This maximum filling determines the range. If more is used, then either a second tank has to be installed or refueled from time to time.
    The same is valid for the budget. Depending upon the task setting a manager receives a limited budget. It is used to pay employees, material, services etc. The annual budget should be large enough to realize the tasks. If it is not enough, the budget must be laid out bigger in advance, or in the current year additional budget must be requested and made available.
    In the two examples the size cannot be increased at will. This means that the availability of resources is never infinite.
  • Necessary consumption
    The consumption of a truck specifies how far it can drive. This varies strongly, dependent on the cargo, the traffic and the scenic conditions. Empirical values help to plan correctly.
    The consumption of the budget results from the project. Depending upon the structure of a project and/or the employment of external forces it costs more or less. The quality of planning is defined by the experience of the planners.
    The optimum use arises in both cases from an economical allocation in the really necessary places. Despite all thriftiness a minimum consumption is mandatory.
  • Economical investment
    The driver determines with his driving style the economical use of the fuel in the tank. Foot down to the ground and unnecessary braking’s burn more gasoline, than actually necessary.
    The managers and the employees together determine by their expenditures, how effectively the budget is used. Generous distribution and unnecessary double work increase the costs.
    By focusing on the essential the users have a large influence to use resources skillfully. In each case consumption cannot be reduced to zero by thriftiness.
  • Range
    The maximum range of a truck results from the size of the tank and consumption. The weight that has to be moved and the inclines of the landscape have an influence on this range.
    The budget is normally planned for one year. Although the monthly consumptions are fixed in advance, the budgets vary due to unexpected expenditures. They result from bad plans, unexpected additional costs and unrealizable savings.
    Due to the basic conditions the range cannot be increased without limit.

Even so resources are scarce in all areas, the handling of budgets is characterized by enormous boundlessness. The efforts concentrate more on the provision and procurement of budget, than on the correct assignment of the means.

Bottom line: The awareness of limited resources is the basis, in order to achieve a larger range with the smart application. The tank as conception could help one or the other to better understand the application of the own resources.