How to make R1.45 billion per day - guaranteed!

2015-11-30 11:56

This is it, your shot to make it big. Your shot to stick it to the filthy rich of this world. In the process, you will play your part in creating a prosperous South Africa, a veritable Switzerland in South Africa.

Allow me to introduce you to the largest, hugest, most successful get rich quick scheme in history, like ever.

How big?

R8 trillion big. That’s an 8 followed by 12 zeroes, like so: R8 000 000 000 000.

HUGE.

How quickly can it be made?

You’re not gonna believe this, but here it is:

  • R1 million every single minute
  • R60 million per hour
  • R1.45 billion per day
  • R44 billion per month
  • R533 billion per year
  • R8 trillion in 15 years

By who?

Well, by you. And me. And each and every one of our fellow South Africans.

How?

Well, when I say make money, I do not mean getting our hands on some of the existing money in circulation. I am talking about the real deal, actually making money, new money. Creating money.

You see, the only way in which we will ever get our South Africa to be the Switzerland of Africa is by creating the money we need. Ourselves. Fast.

The shocking truth? There is nothing stopping us from creating the money needed ourselves.

We need to create the money because money has become the cooperative oxygen of our world. No “points” in our gamified world of collaboration through money, then no collaboration toward shared goals. We need millions of homes, water infrastructure, roads, schools etc. etc. Without the coordination tool of money we cannot do it.

There are a number of other things we need to change and get right too, but without the money none of these will be possible. So let’s start with the money.

Why R8 trillion?

Because if we can maintain an annual GDP growth rate of 8% for 15 years up until 2030, we would have grown our GDP from the current R4 trillion to R12 trillion, an increase of R8 trillion. With such a GDP growth we would have our Swiss South Africa by 2030.

To achieve our Swiss South Africa we need vast amounts of infrastructure and be able to distribute nutritious food to all. Well, we have close on 8 million unemployed fellow South Africans desperate for work. We also have the raw materials and skills needed. So why don’t we?

Because we do not have enough of this imaginary stuff called money.

Huh? Why don’t we just create more money?

Because of the incredibly stupid way in which we currently create money in our society.

Let me explain. The way things are set up is that new money can only be created if a bank believes there is profit to be made. The upshot of this is the following very bad situation:

those that have the most money decide whether more money should be created or not

In other words, investors together with their banks, be they local or foreign. They only invest if, in descending order of priority:

  • they know they will definitely not lose any of their existing money
  • they believe that their existing money, and more importantly the money owed to them by those that do not have money, will not be devalued by inflation or a depreciating currency
  • they are confident that they will get the majority of the new money created, so that they remain at the top of the money pile and society

You see, rich people together with banks create money. See that large shopping centre that went up near you? The owners of a property development company explained to a bank that the suburb had expanded and that there were now enough people in the area for an additional shopping centre to make sense. A profit opportunity. The bank asked the property developers to put some of their existing money at risk, and then the bank created the additional money needed and recorded it as a debt owed by the developers. Note that the bank did not invest existing money from deposits. The bank created brand new money on the spot from nothing, backed up by an equivalent debt recorded against the property developers.

The property developers then took the newly created money, built the shopping centre, got tenants and started charging rent. As they collect rent they pay back the money created plus interest to the bank. The bank writes of the payments against the debt, effectively destroying the originally created money in the process, but the bank keeps the interest portion as its profit. Once all is paid the property developers own the shopping centre.

So asset creation, such as building new shopping centres, is enabled by the creation, spending and subsequent destruction of interest based money.

Should the shopping centre not be much needed, there would not be enough successful tenants to pay rent, leading to the developers not being able to pay back the money created plus interest back to the bank. The bank and its shareholders would then be liable for the debt recorded as the new money was created to build the shopping centre, and thus the bank and possibly its shareholders would have to pay back the recorded debt with their own cash.

So rich people and banks only build anything if they are very, very sure of making excellent profits in the process.

Is it true that none of us are at all interested in building any kind of infrastructure in our country unless we can show a fantastic profit? Do we really prefer to have millions in shacks, millions hungry, a sky high crime rate and a very unsafe country?

Of course not.

So whilst this traditional capitalist model of private risk taking associated to the creation of new money and assets in society works reasonably well in many, many cases, we must accept that it fails miserably in many other cases. If our current model of capitalism is so fantastic, why do we still have massive amounts of infrastructure not being built whilst simultaneously having 8 million unemployed?

Think of the social costs we are all paying because of this failure, simply because the rich and banks do not allow for the building of infrastructure we need since they cannot see a way in which they would make a tidy profit in the process. Crime, social unrest, malnutrition. Something is fundamentally broken.

That something is the way in which we create money.

There is another way. South Africa has excellent legislation in place that allows us to get together and create the money we need to create our African Switzerland, without the rich few requiring their extraction of excessive profits in the process.

Cooperative banks.

Every major city in South Africa must create a municipal co-operative bank to which all of its citizens belong. Then together we create the money needed to build our Swiss South Africa, with zero interest attached. The goal is not to make a tidy banking profit through interest. The goal is to build our Swiss South Africa, to eradicate unemployment and crime and have a safe and happy country.

Can we really do this? Can we really create money? Yes, absolutely.

Let’s use the City of Tshwane metro municipality as an example. The citizens of Tshwane decide that high quality social housing is needed in the City of Tshwane. The first phase would cost R500 million. To start, R100 million of existing money must be deposited into the co-operative bank. The R100 million can be sourced from Tshwane corporates via CSI funding, municipal tax money, citizen tax rebates etc. The other R400 million we just create. We type the numbers into our cooperative bank computer and shazam, we now have R500 million!

Of course, the R400 million also has a debt side. The debt side is the acid test of whether building the social housing was a reasonably good investment of our societal resources: time, muscle power etc. Thus the citizens of Tshwane would now have a joint debt of R400 million, to be paid back over a 30 year period or more as rent is collected from those living in the social housing. The R500 million would stimulate our local economy, thus enabling more money to be earned and in turn enabling the debt to be repaid via rent over time. This is how the world works.

The most critical aspect of this is that the debt is created with zero interest attached, which makes an enormous difference in our society’s ability to prove that the investment of time and resources was sensible, since we would not need to pony up the tidy profits to the banks and to a lesser extent property developers.

There are of course a number of other factors required in order to make this a success, the primary one being that we need to carefully control what happens to the new money as we spend it into our Tshwane economy by paying for the construction of social housing. We would want to make sure the money does not end up in the hands of a few, that there is full transparency to curb corruption, that we boost broad local employment, that the full construction value chain is kept as local as possible, that we do not create too high inflation nor have the majority of the money leave the Tshwane region, and especially for as little as possible of the money to leave South Africa.

All this is possible, but more on that in articles to follow. If you wish to get into the rest now, check out my free book Societal Renaissance.

By the way, this is exactly how Europe and the rest of the developed world built their core infrastructure from 1945 to 1980. They created their money at a societal level and made sure that the money could not leave their relevant countries but rather continued to support the creation of local value, enabling debts to be paid back and proving their societal business cases. After they built the majority of their core infrastructure they decided that they could safely abolish capital controls, i.e. not controlling how much money enters or leaves their countries. Via the IMF they forced the developing world to abandon capital controls too. This has proved absolutely disastrous since it completely disempowered developing countries from controlling their rate of internal collaboration toward local shared goals. The IMF has started to admit its enormous error.

So instead of waiting for profit driven investors and banks, we can just get on with creating the money needed to build a better South Africa for all, right now.

For now, understand this:

if we as the citizens of South Africa do not take charge of the creation, allocation and destruction of money, then we will NEVER, EVER have a safe and prosperous Swiss South Africa

So please join me in the call for municipal cooperative banks so we can make that R1.45 billion per day together – guaranteed!

For more information on how we can build our Swiss South Africa, check out my freely available book Societal Renaissance.

Follow me on twitter @LionelBisschoff

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