You will own nothing

(and you won't be happy)

Money, old and new

Since the "freezing" of Assets, both of whole states, their representatives and their oligarchy as well as simple workers is becoming a rising phenomenon, and at least one state is now retaliating by insisting on the act of converting foreign currency into their own legal tender before considering the transaction closed, I have found that it is almost impossible to describe what is going on.

So here's my attempt to do so now:

Any monetary asset is always in threat of at least two or three interconnected actions: theft (by an adversary) and inflation through counterfeiting and degradation (by the owner - not the holder).

However, physical money (cash) and digital or credit-based money are two very different things.

In fact, they are opposites.

And that is why one is being exchanged for the other.

Cash (or any other form of physical asset) is in the ownership of the holder:

I have it in my pocket, my safe or hiding place, as the main threat to it is from theft; for whoever holds it, owns it. That said, it is also hard to “seize” - for that very reason.

However, as it is in my ownership, what is there to stop me from counterfeiting it? Nothing. I *can* copy bank notes any time I like - the problem comes in distributing the counterfeits.

Credit, however, being virtual, cannot be stolen - at least not from the holder by a third party.

And it cannot be counterfeited by the holder, either, simply because the holder of the credit is not the owner of the bank account (I am literally inventing words here; they may be wrong).

But it can be inflated and deflated any time by the party giving the credit, i. e. the bank itself.

A simple example:

Transaction I: In cash.

I take a hundred bucks (in whatever currency) in cash and buy a pair of shoes from you.

Money and goods both change hands.

You are now in possession of my hundred bucks.

So why not make it a thousand?

Just put it on the Scanner and make ten copies of it.

An there you have it - if you can find someone illiterate enough to take the counterfeit money.

This is so hard to do to be almost impossible - except for the state or central bank, which has the printing machine and the raw material. But even then that takes time and effort.

This money is physical and therefore cannot be "frozen" or easily inflated; it can, however be physically seized (lawfully or unlawfully) and destroyed.

But even that takes physical effort, too.

Transaction II: With credit card

I take my credit card and buy the same pair of shoes from you:

The goods change hands; but the money does not.

Instead, credit (a digital, virtual number or state of magnetism; or, in the old days, a set of digits on a slip of paper and a ledger; here: "100 bucks”) is erased from my account and allocated to yours.

However, you are now *not* in possession of those hundred bucks - the bank still is; as it was up to now.

And you cannot change the "100" to "1000" by adding a zero.

Why not? Simply because you are not in possession of the bank account - the bank is (it's literally in the name).

You are just the holder of a credit sum to that amount.

Yes, you may order the bank to do this and that, but you have no physical access; and the bank need not comply to your will.

It is not possible for you to manipulate the bank account - barring hacks - but extremely easy for the banks (in their entirety) to do so:

They can restrict your payments down to zero, freeze the account, delete it, or add a couple of zeros, inflating the sum ten - to thousandfold with absolute ease (yes, there are some checks on this, but these can be circumvented via ordre du mufti - and are being so just now).

This "money" is virtual; it can not only be destroyed (as cash could be), but seized, "frozen", or inflated with ease - and was, in former days, just as able to be so, even with simple pen and paper; the main point being that you, the "owner" of this virtual money, have absolutely no access to it - but the bank does.

In other words:

If I pay you with a credit card or something similar, you do not really receive any money - nor do I lose any; it stays in the possession of the bank. We just pretend to.

So, no matter how often a commodity is sold, if the bank is big enough, the virtual money never changes hands (if such a thing were at all possible); the bank managing the account has it and keeps it - all the time; i. e. “for keeps”.

In comparison, just imagine, in the first example, that the buyer does not hand the physical money physically over to the seller, but instead to a third party, a "bank" that may “keep it safe"; but can, on the other hand, divert it, embezzle it or deny your access to it at any time.

So, if I buy something from you with a credit card, we are both trusting an institution, which we have no control over, to manage our affairs.

So what's with this Rubel - for - Oil thing?

In the beginning of this year - never mind the reasons - billions of bucks held by Russian state and private entities in western Bank accounts were "frozen"; this was possible simply because, as described above, the Russians had no access to these banks or their accounts in them.

They had sold their oil and gas to foreigners, and these had given the sellers credit in their own banks - again, simply because it was THEIR money generated in THEIR banks, and so they could do so.

In fact, it could not have happened any other way - as the buyers would have had no access to the banks of the sellers (or the accounts within) to generate money there (i. e. credit).

But when the sellers wanted to use this foreign credit for their own payments, the buyers of their commodities simply said "nope!" and withheld the allocated credit for themselves, by denying access to it - either to release on further date, depending on compliance, or to seize, divert and use for their own aims and purchases.

They could simply do so because it was their own credit allocations or IOUs lying around in their own banks.

The only assets the sellers had left was physical gold, which they had bought for their own (ore maybe foreign, it dos not matter) currency, and which was physically accessible in locations accessible (and therefore militarily guarded) by them alone.

The solution

And so - never minding the rest - the sellers told all future buyers:

To buy from us, you will, from now on, have to open an account with a bank that is on OUR territory, and which only WE have access to; and, at any given time, could seize, "freeze", or inflate - and not you (or anyone else).

And WE will give YOU credit there. In our own currency.

So there.

Everything else is just frills and fancies; quite important frills and fancies, but frills and fancies nonetheless.

Conclusion

If all cash goes virtual, and you do not control the bank, then:

You will own nothing, and you will be happy; and you will be utterly, and completely, dependent on our mercy and good will, for you to remain so.

Because WE will still own your bank account.

Utter misery is your other choice.

While still owning nothing.