There is a better way to finance our futures.

Current Madness re: financing of countries.

Bondholders = faceless "beings" who loan money to our governments to keep the show on the road; daily, weekly, monthly, annually. Our governments never realistically plan to pay off the principal borrowed, but only to service the loans yearly with interest repayments. The bond holders get fairly attractive returns on their investments plus huge individual re-numeration, and who can be a better debtor than a sovereign nation! Or so the theory goes.

One slight glance behind this little arrangement highlights how dysfunctional it truly is. I would like to point that out here and also to offer one viable alternative to this system.

Since no country at the moment seems to have money to loan, except perhaps China, then one has to ask who are the bondholders and where do they get their cash? After all to hear political, economic and journalistic commentators talk on the possibility of debt default to bond holders, would make one think they were human eating lizards who could zap us all into oblivion with their advanced cosmic ray guns! No, the boring truth is that these bond holders are simply human beings like the rest of us. No ET lizards anywhere. However in truth who they work for, and represent, is often the pension funds and insurance companies of the world. A few bondholders in percentage terms are individual wealth holders, but mainly they comprise funding from these two industries.

So, we have the crazy situation where money collected from the people of the world through investments in pension funds and the buying of insurance policies of all kinds is pooled together and then used as finance to lend to completely incompetent governments and administrators in countless countries. Remember the money collected from the people is supposed to guarantee them personal security in their future, i.e. either through a guaranteed pension fund, or through the guarantee of an insurance claim being covered.

Investors believe that at some point they will be able to cash in their pension fund or their insurance policy and the cash will be there to meet their demands. This has worked to date for a few reasons. Primarily the biggest reason was that that we had a rapidly expanding population, hence it was perfectly acceptable for governments to defer debt principal payments and to be able to meet annual bond interest payments - (as they believed this debt will always deflate into the future, i.e. ever increasing population levels will make this debt a smaller and smaller burden. This allowed a malaise/incompetence to set in with the efficiency of handling finance raised in the bond markets. Countless articles could be written about how inefficiently government money is handled). However we are facing a population peak within decades. This should be the most alarming fact facing humanity at the moment as our whole economic system is built on the premise of more consumption, more people to pay taxes, more building, more cheap labour, more markets to sell to etc... So governments cannot assume that our current debt will always deflate, i.e. we will soon reach a point where more and more people are not available to pay off and devalue the borrowings of today.

Secondly, people up to very recently did not have hugely long retirement periods as the average age of death for both men and women was only about 10 years past retirement. That too is changing rapidly. In recent years people are living 20/30 years past retirement age. This will mean more and more money needs to be yielded back from pension funds to finance longer retirements, rather than being tied up in government debt repayment structures, with no access to the principal.

We cannot keep financing our lives the way we do today. We need to realise the bond holder is not some untouchable, all powerful demi-God. They handle our/your money. We need to stop investing in the market economy as the only way to ensure our future security. These guys will not be able to hold governments to ransom, raise interest rates and basically rule the world if they don't have your money to empower them. They are using your belief in a secure future to allow them rule the world.

How do we stop them, gain personal future security and by extension force governments to become more efficient?

INVEST in your local community. If we used the money we would have spent on investing in pension funds (public or private) and if we didn't have to buy insurance on everything, it would give us a lot more financial resources to secure our future. We could use that cash today to build the infrastructure (social and physical ) in our local community to give us more security. We could finance shared buildings, finance local food production, permaculture solutions and help build a barter economy where we can trade goods and services into retirement. These empowering additions to our locality (as just a few of many) would build our future security.

As for insurance, we could move to local insurance models. As an example instead of buying home insurance from a faceless corporation we could insure our homes collectively. It would be pretty easy to list the percentage of claims on house insurance policies and the common claim types. Then pool your money together with perhaps 100 neighbouring families. Hire a handy man/several people and pay them through a combination of local barter economy/cash remittances to work on fixing/auditing houses to correct common defects that could turn into future possible insurance claims. Now, instead of investing thousands and thousands over the years into house insurance that you may never need, you are now hiring someone locally to maintain your home and also to work on your house if you have an "insurance" claim. Part of the money you pay into this local scheme annually meets the local workers' salaries and part is used to pay for any bigger insurance claims that are fixed by locals.

Now power is taken from insurance companies/pension funds/bond holders who trade and hold governments to ransom with your money. Also governments will now have to evolve, streamline and become super efficient with reduced pools of money available for future borrowing.

In time, we should get to a situation where government borrowings are drastically reduced naturally as local solutions kick in. The more we finance/fund/fix our own lives, the less we need governments to do so for us.

I am not advocating the abolishment of something like a bond market. I am though advocating more individual empowerment over where your money is going and also empowerment over your future security. Everyone wins!