What has the Big Bang got to do with Economics……?

4 Apr

‘At first glance nothing but read on and all will become clear……’

 

In the early 20th century Edwin Hubble, the Cosmologist after whom the Hubble Telescope is named, made one of the most important discoveries in science when he plotted the rate of the recessional velocity of galaxies, demonstrating that the universe was, and still is, expanding.

 

It is from Hubble’s observation that the idea of a Big Bang was born. Put simply, if the universe is expanding today, if one winds back the clock, at some point in the past the universe must, logically, have been smaller; taken to its conclusion, at some point in the past the universe had a beginning. This is now an empirical, undisputed fact in Cosmology and Physics (Monotheistic religions may disagree but that is a whole new ball game), I diversify.

 

An awful lot has happened in the 14 billion years since the Big Bang to leave us with the universe we can see today but what has this got to do with economics……?

 

First of all let’s set out some facts about banks which may not be apparent given that they have names like ‘The Bank of England’, ‘The Federal Reserve’, ‘The World Bank’, ‘The International Monetary Fund’ and ‘The Central European Bank’.

 

All of the above give the impression that they are owned and run for the benefit of the people by their respective governments. They are not. They are all privately owned institutions, given permission by governments to literally print money. They are more like a cartel than a service allowing for the convenient exchange of goods and services without carrying bags of gold or diamonds, and, most importantly, when they ‘create’ money it is a debt with interest payable upon it……

 

Back to the Big Bang……

 

Let us now imagine the application of Hubble’s Law to global economics. The 14 billion years of the expansion of the universe is akin to the interest that is created along with every unit of currency created by a bank as it expands. If we wind back the economic clock to the point at which the very first bank note was issued, that solitary note was issued with interest. Ergo, to settle the debt owed on the first ever bank note printed required the creation of more. This is why the big economic superpowers have national debts which add up to hundreds of trillions of Dollars/Pounds/Euros.

 

Wind the clock forwards and we reach the current state of global economics where more and more money has been required to settle the ever expanding debt. The practical upshot of this model is a debt that increases exponentially at an ever increasing rate; just as the universe is expanding at an increasing rate. This debt can only go in one direction and I’m sure you have all worked out which direction it is going.

 

One could consider the simplicity of the early universe as the solitary note. All of the birth and deaths of stars that created the elements we see in today’s universe is the equivalent of the increasingly complicated business deals that mask the inflationary model. The bonding of atomic nuclei inside stars and transmutation of elements in supernovae could be seen as the borrowing, lending and taxing that make economics seem as complicated as the universe……

It is a model that can never be satified. It can only expand and to keep the expansion in check, money is conveyed from the poor to the rich……

And that is what the Big Bang has to do with the Global Economy……

 

It could not be explained with any more simplicity……

 

‘With special thanks go to Sonia Greaves, the Emeritus Professor of the Inspirational Ideas, without whom the seed of this idea would not have been planted……’

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