Save: v. to prevent with an event(s) and/or action(s) possible (injury and/or death) and/or (damage and/or destruction) and/or (embarrassment and/or usage) and/or error
The analogy of personal savings and fat in an animal’s body is very appropriate. When an animal is sick, suffers and injury, or is starving from lack of food then it can burn the body fat it has stored to survive until the body heals itself or finds more food.
Humans have emergencies. It may be a chronic health issue or loss of a job or need of money in retirement and with savings to rely upon you can weather the storm. Going into debt is another possibility for emergency situations but if the economy is in a depression or if your credit cards are maxed out then the possibility of getting financial help may be out of the question. OK, personal bankruptcy is the option in the modern world but the hardship it can cause can sometimes bring you to the verge of suicide.
Businesses are in the same situation. If they have savings or a financial reserve then they can weather an economic downturn when banks are not lending any money that easily. If their reserves are inadequate then severe financial downsizing or even bankruptcy threatens.
Banks and central banks also need savings or financial capital reserves because going into debt or working in the red for too long spells financial disaster. Sure, counterfeit money can be printed to bail out banks during a financial crisis but the national debt grows along with it and ultimately the debt has to be repaid unless there is debt forgiveness or restructuring or refinancing.
Banks wildly speculating with derivatives and other non tangible assets in the trillions of dollars have incredible potential future debt or obligations which no amount of money printing can save in a severe liquidity crisis.
International banks are increasingly becoming profligate wild speculators making riskier and riskier loans not backed by capital reserves. It is just a question of time before the governments of the world will start putting the brakes on this incredible bank Ponzi scheme with a new more rational financial system for the world and new financial rules for the banking world.
It may take a worldwide depression to shock the nations of the world into financial reality but the day of reckoning is coming sooner or later. The nations of the world which will come out of depression on a sounder financial footing will be the ones with rich natural resources and a large GDP and GNP.
Ruling justly with money is potentially possible but when the financial system loses touch with reality and tangible assets it is doomed to implode eventually. Gradual financial change is preferable to shocking sudden change but I doubt that humans on a spending addiction will be able to make the necessary changes in small increments with more just financial laws.
Inflation and ridiculous interest on savings accounts is not encouraging wise saving for individual family units and ultimately the government is a reflection of the budgeting ability of its citizens. Encourage private profligacy and national profligacy is the result. No inflation or a decent return on savings which keeps pace with inflation is one of the fundamental solutions necessary in a just banking system.
Budgeting is not taught in elementary school and that is one of the biggest failures of the educational system of any nation!!!!!!
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