519-646-2222Money ran out a long time ago
Yes, that is true, there is no longer enough money in circulation, in the entire world, to account for the money that banks have loaned. If you added up the value of the actual currency in every single country in the world it would come up thousands of trillions of dollars short of the money that is changing hands today.
The issue is that money was originally based on property value, usually the nominally agreed upon value of a precious metal, such as gold, quantities of which could through laws be restricted. At one time, in China, money was made from bricks of tea because tea was highly valued.
In the last several decades our perception of money has changed tremendously we have become virtually cashless. Banks have moved from paper and coin transactions to electronic exchanges of credits and debits in accordance with agreed accounting principals.
Money is changing again, this time moving deeper into the virtual world and further away from tangibles. Virtual currency such as Bitcoin is slowly moving towards the mainstream. Actual hard currency is becoming scarcer with each passing day, and digital credits, usually transferred through smart phones, are steadily replacing credit cards.
So, what does that mean for the future of banking and the lending industry? Well, we can’t answer that question but we can be certain that major changes are coming in the way that we not only make financial transactions but also in the way that we perceive property, property values and how we transact property.
Changes will likely be coming faster than we might anticipate, stay tuned.