Cluster Family Office Blog

Let’s think about it. Let’s think about it again. Questions arise fascinating, isn't it? For example, quantifying this all-in-one fee It could be as simple as applying the average profit from the bank’s current customer accounts as a percentage of the amount contributed by the saver or investor. In other words, for every euro the customer deposits with the bank, the bank deducts its one-off fee annually, half-yearly, quarterly or however it sees fit. Obviously, loans and mortgages would have to generate the cost of the money itself separately, with whatever margin the financial institution wishes to add, as it would not be fair for a customer who generates an asset for the bank to pay the same as one who generates a liability (or perhaps it would). But from there on, it’s the same for everyone.

This is just a light-hearted exercise, and I hope it will prompt some comments from you all, which I’m sure will be very interesting and insightful. Some of you may think it’s unfair for a casual saver to pay the same proportion as a more active investor who will be using a whole range of financial products and tools. At first glance, it may seem that way, but Let's have a look at it One more thing: what happens to a saver who neither wants nor knows how to invest their money beyond seeing it reflected in their savings account? They are easy prey for fund managers who kindly cause to invest their money in financial products that no member of their family can understand. This harassment is constant, relentless and ruthless. The money unemployed Placing money in a simple savings account or a fixed-term deposit is considered negligence on the part of the bank employee on duty, bordering on gross misconduct. This misnamed ‘adviser’ needs sell financial products that improve their clients’ operating results if they do not want to lose their job. Furthermore, they must do so exceptionally well if they hope to progress within the organisation and move from a customer-facing role to a more senior position—in other words, to go from a rank-and-file employee to cigarette lighter. I have personally met a few honest and dedicated bank managers who try to to do as little collateral damage as possible whilst barely meeting their commercial obligations, but they all feel uncomfortable with the work they do and long to one day be able to offer independent advice without the commercial pressure they feel is being exerted on them by their superiors. Obviously Only a lucky few will succeed. The rest will continue to live by the rule that has been etched into their very being: Sell or die.

Some of you might say that this commercial pressure is common to most of the work we do, and that’s true. But as I see it, it is infinitely more serious to sell inappropriately a financial investment product which, for example, consists of a collection of DVDs that we don’t need. Ethically speaking, there is no comparison: the significance and danger of negligence when it comes to our heritage is vital not only for us but also for our children. You don’t mess about with food.

In a scenario where a bank manager generated exactly the same profit for their firm, regardless of the volume of assets or the type of investment their clients made, the advice would be provided in a manner infinitamentity more appropriate and tailored to the needs and intentions of investors and savers. Even their personal relationship with them would improve substantially if, instead of selling to them, I simply provided them with a service. A service that would be worth a fixed percentage of the total amount of money customers have deposited with the bank. The professional expertise of the fund managers and the banks themselves would do the rest, and moreover, the monitoring of these fees by a competent body would be far simpler and more effective.

This scenario would be far more hygienic and convenient than the current one. Many of you will think it’s unfeasible or utopian; perhaps it is. But at the end of the day, it’s how a family office any self-respecting to be, and therefore does not have its own financial products. Obviously, the bank should continue to develop its own products, but without shove them down their throats straight to the heart of the financially inexperienced customer – that is, the vast majority.

The current situation is unlikely to improve much with the MiFID, as reported Consumerist y Echevarri in his interesting articles. As he rightly says Echevarri: «…it ends up protecting financial institutions rather than customers.» More or less the same kind of exploitation we see on a daily basis will continue, since, unfortunately, bank profits depend largely on it.

Anyway, we just wanted to put this idea out there so that you can let us know what you think. It’s always good to give some thought to to question ourselves methods that do not have to be set in stone. Progress has always depended on this.»

Podemos encontrar en la web de Healdsburg Housing Bubble una herramienta más para ayudar a los inversores de Real Estate. Además de útil como herramienta, en esta nueva aplicación de Google Maps podemos ver qué ocurre con los inmuebles prime y los que no lo son, en un escenario de desplome del sector inmobiliario como el actual. Con el acercamiento del zoom adecuado vemos como puntos rojos los embargos (foreclosures) de cualquier zona del mapa.

Este es el link.

Si nos desplazamos con el mapa a través del buscador a ciudades como el centro urbano de Miami veremos como está fuertemente afectado por estas clausuras judiciales. Lo mismo o peor le ocurre a toda la costa central de la ciudad de Los Àngeles y hasta San Diego. Curioso ver también como la linea fronteriza de Tijuana en la Baja California, separa también claramente la diferencia de embargos entre dos economías y sociedades muy distintas.

Sin embargo (y nunca mejor dicho) la isla de Manhattan está relativamente limpia de puntitos rojos respecto a sus alrededores: Upper West Side, todo el perímetro de Central Park, Midtown East, West Village, Battery Park, Greenwich Village, el Downtown e incluso Chinatown. En cambio en el Upper East Side al este de la 3ª Avenida (a más de 4 o 5 manzanas del Central Park), y en general todo el Midtown, abundan más. Pero sobre todo veremos muchos más embargos fuera de Manhattan, en zonas como West New York, Jersey, Newark, etc…

Esta es la gran diferencia de comportamiento en la pérdida de valor entre una de tantas casitas playeras en la costa de Florida o California; o inmuebles únicos, primes, situados en ciertos barrios de una isla limitada, única e irrepetible como Manhattan, donde el turismo este verano abarrota sus calles como nunca. Y es que esta burbuja inmobiliaria, sea norteamericana, irlandesa o española, nos enseña que en ciclos alcistas, cuando todo está carísimo, las diferencias entre los inmuebles prime y los que no lo son se difuminan temerariamente. Cuando nos despertamos del sueño, el mercado (que no las tasaciones) nos escupe en la cara el valor actual real de nuestros inmuebles. Pero mientras los propietarios de inmuebles prime sufren caídas temporales de valores sólidos que se recuperarán en el futuro, otros inversores habrán pagado (o deberán durante vida y media) unos precios que su generación difícilmente volverá a ver, al menos hasta que la inflación los devore.

No es un chiste ni una rima ocurrente, sino un titular de la prensa. Según esta noticia de El Economista, se han más que triplicado las gestoras españolas que han anunciado este verano a la CNMV el aumento de sus comisiones. Algunos creen que esto es debido a la caída de la rentabilidad de la remuneración en IPFs y del dinero en general, que hace que otra vez éste fluya hacia los fondos de inversión colectiva (y al aumentar su demanda, los gestores aprovechan para aumentar precios). Pero la realidad es que en plena borrachera del plazo fijo con extratipos que evidenciaban la desesperación contable de la banca, y con hemorragias descomunales en casi todos los fondos, las comisiones de estas IICs no se rebajaron sustancialmente. Y lo mismo podemos decir si el motivo lo buscamos en la salida o entrada de dinero en bolsa.

Quizá uno de los motivos para esta subida veraniega sea la caída en los ingresos de las gestoras, que han sufrido desplomes en el último año en volumen de gestión, y también la práctica eliminación de los HWM y comisiones de éxito en sus diversas formas. Ante ese escenario de vacas flacas y caídas en sus ingresos vía comisiones, las gestoras de fondos han optado por la misma estrategia que el Estado español: Aumento de la imposición. El pan para hoy tan arraigado por estos lares. Aunque con tanta volatilidad, euforias efímeras y necesidad de ganar en los mercados especulativos lo que se ha perdido en la economía real laboral, probablemente las gestoras no pasen hambre tampoco el día de mañana.

Vivimos aún tiempos convulsos, también en bolsa a pesar del presente rally, y con una altísima volatilidad y nerviosismo. Y estas convulsiones permiten abusos en las comisiones. Me explico: Al contrario de lo que sucede en mercados tranquilos, donde los resultados moderados exigen unas comisiones que no lastren en exceso los rendimientos, la alta volatilidad en los mercados es el mejor camuflaje para unas comisiones caras. Si el cliente gana en un entorno de alta volatilidad bursátil, probablemente lo hará con abultadas cifras y no le importará pagar grandes y merecidas (?) comisiones; mientras que si ha sufrido pérdidas en un entorno de volatilidad alta, probablemente no le resultará tan grave perder 2 o 3 puntos más allá del 20 o 30% que le ha quitado el mercado. En uno y otro escenario, habrá un mercado volátil y loco al que culpar o responsabilizar.

Blame it on the Market!

Viene de ayer…

Pilar, Pilar… no has entendido la esencia de nuestro artículo. Ni de nuestro blog. La Felicidad es una de nuestras premisas en la gestión de un patrimonio. Por lo tanto una celebración, de esas como para hacerse daño, no sólo es aconsejable sino también imprescindible. Un homenaje a uno mismo por todo lo alto. Lo que queremos decir es que no se deben comprar artículos caros que supongan un porcentaje significativo de la fortuna antes de generar las rentas adecuadas, como por ejemplo una casa o un cochazo o un yate, etc… Pero una fiesta, celebración, viaje, mariscada, capricho, innombrables diversos, etc, etc… por supuesto que es adecuado. Si tu nueva fortuna no te sirve para hacerte feliz, ¿de qué c… te sirve entonces? Pero ojo, eso debe ser compatible con que la fortuna aumente y se transmita a los herederos que tú quieras, si ese es tu deseo.

Una fortuna con cierto volumen debe colmar tus deseos y felicidad, a la vez que crece adecuadamente. Si no es así, no estás haciendo lo correcto o te has equivocado y tu premio tiene un cero menos de lo que la euforia te hizo ver. Y no sólo debe colmar tus caprichos, sino como bien dices los de tu entorno (la autoescuela de tu sobrina). Recuerda que te van a salir parientes y amistades de debajo de las piedras, pero si eso te satisface y encaja con la capacidad de generación de rentas y crecimiento de tu fortuna, adelante. ¡Faltaría más!

Si tu coche tiene 15 años está para cambiarlo, desde luego. Si el nuevo coche es una insignificancia comparado con el premio de la lotería, puedes ir hoy mismo a comprarlo. Pero si el descapotable rojo vale un pico importante, quizá sea más prudente comprártelo pasado un trimestre o dos o tres. Al fin y al cabo llevas 15 años con el mismo trasto, y no vendrá de unos meses más a cambio de hacer lo correcto. Además, con un poquito de suerte el rojo carmín que te gusta habrá que pedirlo a fábrica, y en lo que tarden en la cadena de producción el crecimiento de tu fortuna te lo habrá pagado enterito. Obrar del otro modo es quemar el dinero de forma caprichosa, compulsiva, estúpida e irreversible.

Como te he dicho antes, conocer qué hay más allá de Chinchón no debe lastrar el potencial de crecimiento de una fortuna considerable, si lo que queremos es que ese premio nos cambie la vida entera (y la de nuestros herederos) y no sólo unos pocos años.

Cuidadín con los negocios de tu prima porque no sólo arriesgas lo que inviertes sino también asumes un riesgo de pérdidas futuras. Unas pérdidas que pueden superar fácilmente lo que te va a costar tu viaje a Canadá y tu auto-homenaje a lo grande. Un mal negocio puede ser un saco sin fondo que te deje sin fortuna sin ni siquiera haberla podido disfrutar o quemar. Además también se puede llevar por delante tu relación con tu prima, aunque eso sería lo de menos, porque te saldrán primas por todas partes como ya te he dicho antes. No digo que no se deba invertir una parte de un premio en un negocio, sino que hay que tenerle mucho respecto a los descosidos que puede hacer un negocio en tu fortuna. Al fin y al cabo, si las posibilidades de éxito de ese negocio son muy altas, ¿por qué no lo habéis intentado con dinero del banco? Y si no lo son, mejor que dediques tu premio de lotería a algo más prosaico.

No te debe preocupar que te vayas a aburrir porque tu entorno social trabaje y tú no, ni porque tengas más tiempo libre que tus amistades. De hecho una parte de tu entorno social será difícil de mantener, bien por agendas incompatibles y/o envidias insoportables. Pero tranquila, porque harás nuevos amigos/as que tendrán tanto tiempo libre y dinero para ocuparlo como tú, y además no les tendrás que invitar. Pero con ellos no vas a ahorrar más, ya que, aunque cada uno se pague lo suyo, vuestras actividades serán más caras. Tu ocupación, además de disfrutar de la vida (porque recuerda que serás más rica pero no necesariamente más longeva), puede, o incluso debería ser el aprendizaje en la gestión de tu propio patrimonio. Ese coaching es algo que realizamos con muchos de nuestros clientes para que cada vez sean menos dependientes y más capaces de tomar decisiones respecto a sus fortunas. Es decir, que sus capacidades se aproximen en lo posible a las que tendría si hubiera sido capaz de crear esa fortuna, en lugar de haberle sido dada (síndrome de Jurassic Park).

Lo de la vivienda tiene una directa relación con mejorar la calidad de vida. Y es algo que debe suceder. Pero en los tiempos que corren, en España, no deberías comprar ninguna vivienda sino alquilar la que más te guste. Con su jardincillo, biblioteca, ala este y oeste. Pero de alquiler. Si compras algún inmueble porque no puedes dormir sin ladrillos debajo de la almohada, que sean muy seleccionados respecto a país, ciudad y zona, y con una sólida rentabilidad vía explotación de alquileres y un sólido valor prime ante depreciaciones cíclicas. Repito, para vivir en España, lo que más te guste pero durante al menos unos años, que sea de alquiler.

Como verás, mi querida Pilar, los palos del sombrajo no tienen por qué caerse. Ni los anillos tampoco. Pero aún así, y después de saber que existe un modo de disfrutar y a la vez gestionar correctamente una fortuna, eres muy libre de decidir que tu patrimonio debe extinguirse con tu persona. O incluso mucho antes. Al fin y al cabo sería tuyo y sólo tuyo, hasta que comiences a compartirlo voluntaria o involuntariamente.

Muchas gracias Pilar por tu simpático e ilustrativo comentario. Espero que leernos te sirva para ser consciente de que engrosar la estadística de millonarios empobrecidos debe ser un acto totalmente voluntario (y temerario). Tienes toda la razón en que ser millonario no es un estado, porque si sólo es eso, será efímero. Pero la caída del que anduvo surfeando meses o incluso unos años sobre la ola de una herencia o un premio de lotería (fortuna súbita), es mucho más dura aunque la arena parezca mullida. Por el tremendo golpe debido a la velocidad que se había alcanzado, y también por la depresión del que sabe que en su puñetera vida jamás podrá volver a ponerse sobre ninguna tabla. A pesar del anterior video (excepción que confirma la regla), las fortunas súbitas son únicas y no existe margen de maniobra para enmendar los errores cometidos. Es lo que tienen.

Following on from the article we published at the end of July: «What you would have done with your lottery prize«, we’ve received a lovely comment from Pilar. We liked its content and its sincere, humorous tone. We’re publishing it in full and will add our own comments later:

«For some time now, four or five times a year, I’ve been spending a little money on treating myself to one of the most satisfying pleasures in my life. I buy a «Primitiva» lottery ticket and for a few days I find myself thinking, ‘What shall I buy? What shall I buy?’ Travelling, buying and renovating a lovely village house, helping out the people I love financially, a whole library… A couple of times, however, I’ve been on the verge of panicking when, whilst checking if I’ve got the winning numbers, I hear there’s a jackpot of over a billion (pesetas, of course). At that moment, I’ve actually felt a bit shaky (please, please, don’t let me win it all on my own) at the thought of what to do with so much money. I’ve almost gone so far as to think about how to get rid of it. A millionaire… well, yes, but a millionaire in stages.

So, the day I came across your website, I breathed a sigh of relief: if my fears do come true, here’s the solution. ‘Don’t worry, sweetheart,’ I told myself (I’m very kind to myself), ‘just leave the money in the bank for a week and get some advice – there are expert professionals here to guide you through these complexities.’.

But after reading this blog post, I’m not so sure anymore. I don’t think you’ll be much help. Here’s what it says: «how I want to live from that moment onwards» (direct quote)

First of all, I want to celebrate. What’s the point of an occasion like this if you can’t share it with the people you love? And I can’t see myself phoning my brother to say: «I’ve won the lottery, let’s go and stuff ourselves with prawns, but bring your card, as we’ll split the bill – it’s just that right now I’ve got it all tied up in a fixed-term deposit until next year, and as I’m still paying off the mortgage…»

I’d like to share this next. My third niece has signed up for driving lessons. Shall I splash out a bit and pay for them? And I’ve got a dozen nieces and nephews (their mums and dads are family too – hey, you! – and they might be hoping for a proper treat).

I want to keep my friendships going. A bit of extra cash would come in handy for that. Guys, I’ll treat you to dinner and a jazz concert! But it’s a bit of a hassle. Tagging along for free every time would spoil the good vibes. And besides, they won’t have as much free time as I do – my friends have jobs, after all. You’ve got to spend your spare cash sensibly so as not to throw things out of balance.

My car is already fifteen years old, and today it’s back at the garage again. If I didn’t live in the middle of the countryside, I might well buy a travel pass with the prize money. Do I have to wait until it’s earned enough interest to replace it? By the way, my partner’s car is from the same era, and when the road goes uphill, you have to pedal to get to the top.

Oh my, that trip to Canada you’ve been longing for… the time has come to discover what lies beyond Chinchón.

I want a job. I’ve already said that all the people I enjoy spending time with are working. And from now on, I’ll have too much free time to devote solely to myself and my partner. How about starting a business – «that thing» I’ve always wanted to do? And what’s more, your cousin has suggested you invest in a project she’s working on? Whatever you think is best, darling – of course I’d be happy to.

And finally, I want a new home. One that’s better quality and a bit bigger – yes, I’d like a couple more bedrooms. And a little garden. And a library. And two parking spaces. Or three, for that matter…

Hmm… I’m afraid that trying to reconcile the above with your advice and having the poles of my sunshade fall over are one and the same thing. Oh well. There’s no way round it. We’re destined to swell the ranks of the impoverished millionaires. And I’m not at all sure I’d want it any other way.

It strikes me that being a millionaire isn’t a status, like being from Valencia, but rather a profession, like being a plumber. To be a millionaire, you need skill and a calling; money is merely the tool. That’s why, if the money falls into the hands of, say, Dalamar, I imagine he’ll make a very flash millionaire and hardly «broke» at all; and if it falls into «our» hands, it’ll sweep into our lives like a wave; we’ll ride the cash right to the top, and then we’ll take a proper tumble. (The sand’s soft, isn’t it?)

»Thanks, lads. You gave it a go."

My dear Pilar, our comments tomorrow…

There are many highly respected and eminent voices predicting an imminent crash in the equity markets. And they have good reason to do so. But we must not forget that La Bolsa and La Razón They don’t always get on, even though they’re old friends. There are times when they don’t even look each other in the face; however, as time goes by they usually make up. But only temporarily, until the next outburst, gaffe, shock, blunder, childish prank, misdeed or witty remark of the volatile and chaotic stock market, which will once again undermine its relationship with Reason for an unforeseeable period of time.

Some they overlook the Reason and they’re only concerned with the Stock market, following it through its ups and downs wherever it goes, with a few managing to understand and interpret it well enough to benefit from it, at least for a short while. But many of us cannot understand one without the other in the medium and long term, despite their repeated disagreements.

It seems clear that, at present, Razón and Bolsa are going through one of their periods of squabbling and estrangement, but personally I like to try, from time to time, to look beyond the obvious, as we did in the banking meme. It’s not that I’m naturally suspicious, but it wouldn’t hurt to consider the possibility that, even though they appear to be at loggerheads, they might actually still be very good friends and, as the song goes, shake hands under the table:

Let us imagine that perhaps we are misinterpreting the sentiments of Reason, and that in reality the stock market is following criteria similar to those of its partner through thick and thin. Perhaps the behaviour of an exuberant stock market is more reasonable than it seems, now that the US financial system has overcome the imminent threat of collapse. The ground that had vanished from beneath our feet (and I am not referring to the stock market floor but to that of systemic risk) was not regained until early 2009. Let us remember that a global collapse of the system was a real possibility as recently as 10 months ago.

Back then, when – despite the scepticism of the majority – the banks’ zero value could be justified (in an impeccable and pioneering manner by Investorsconundrum), we also seek to go beyond the obvious logic. And we try, in the article The Broken Bank on 3 November 2008, we sought to find arguments to justify the banks retaining a certain value despite being bankrupt both in accounting and practical terms. In short, we tried to find reasons where there appeared to be none. And we found them. It turned out that the irrational reasons the factors we had sensed were necessary for the banking sector to be worth more than zero were confirmed. Proof of this was what we were able to write six months later in The Broken Bank II. And ever since we said in that article of 27 April: «»If we’re thinking about a high-risk speculative investment, perhaps now is the time to buy shares in major US banks", Bank of America’s shares have risen by 70% and those of Goldman Sachs by more than 40%.

Perhaps that hand under the tablecloth It is the elimination of systemic risk that is driving the current stock market frenzy. Given that the stability of the financial system has been guaranteed, with hyperinflation on the horizon – a scenario that is also reasonably plausible – with the share prices of financial institutions rising sharply from the depths of hell, with macroeconomic figures showing a slowdown in the rate of decline in the US, and with interest rates practically at zero, etc., perhaps their apparent indifference is not what it seems. And so we should not expect them to make up in the form of significant falls or new lows, but rather to continue their clandestine romance beneath the gaze of most analysts. Of course, if the rises take hold over time, more and more analysts will bend down to take a closer look under the tablecloth...

…But let’s not jump to conclusions, because what is clear is that Bolsa and Razón are not on speaking terms at the moment.

Our previous article in which fictional, almost cinematic alternatives to the use of money were put forward, has sparked interesting comments on the possibility (or impossibility) of replacing money as we know it. ManuelMad, now a regular contributor to this blog, has been kind enough to send us this article in which he debunks Andrea von Roth’s proposal:

«In these times of economic – and theoretical – crisis, many have jumped on the bandwagon of an electronic monetary system. In particular, theorists from the Marxist school, who, having realised that a system without prices leads to the impossibility of economic calculation, that is to say, to the impossibility of entrepreneurs or planning bureaucrats estimating future prices, have realised that the creation of public, electronic money is the solution to the ‘top-hatted bankers’. Once again, they demonstrate the flaws in their theory and, above all, their fatal arrogance. These social engineers, with master’s degrees from some university hardly worthy of the proletariat, intend to control people’s daily lives through methods they claim are scientific. All in the name of the common good. They fail to realise that their policies will be determined on the basis of their value judgements—that is to say, on their individual and personal interests. There is no such thing as this supposed collective good in any of their actions.

Following this introduction, I invite you to delve into the wonderful world of money. Money fulfils two fundamental functions in the economy: preserving value and serving as a medium of exchange; therefore, the object intended to serve this purpose will be the one that possesses the quality of being the most liquid asset in the economy. It is worth clarifying that money does not arise from any social contract, nor is it created by the state, as some seem to think; rather, it is society that determines which assets are the most liquid through subjective judgements in a process that knows no end. With regard to liquidity I’ve already spoken about this here for anyone who would like a broader overview of it.

The idea of legal tender, whether under the current monetary system or a fully electronic one, undermines the concept of money. This system forces the acceptance of money as a means of payment at its face value. This triggers Gresham’s Law, which states that bad money drives out good.

An electronic monetary system replicates the weaknesses of the current system and, worse still, encourages further fraudulent behaviour. Indeed, a public electronic system with legal tender status would displace sound currency and impose unsound currency, just as the current monetary system does. Economic agents would not be able to choose which asset is more liquid; instead, this would be imposed by decree. Furthermore, the fundamental problem is ignored: the current system, based on fractional reserve banking, is designed to increase the power of politicians and bankers, whilst the population suffers from inflation; and the process of credit expansion, unsupported by real savings, leads economic agents to make disastrous investment errors, thereby jeopardising the system’s solvency.

None of this would be possible were it not for a central bank acting as a lender of last resort and backed by the state through deposit guarantee schemes, which “utopically” underpin this fraudulent activity. As history has shown, all such measures ultimately fall short, leaving no alternative but to recapitalise through debt and higher taxes.

If such public institutions did not exist, the very nature of banking would lead to the principle of prudence. No one here is suggesting that banking fraud would be eradicated, but let us not forget that a banker is nothing more than a businessman who wishes to make money and thrive in the market for as long as possible. Under such a system, the only option is to serve their customers’ needs faithfully. No one prospers by bankrupting their creditors or failing to meet their obligations, as happens in the current system or would happen in a public electronic system.

We can surmise that under a private system, policies and liquidity ratios will be much more conservative and, most importantly, bankers will once again be held accountable for their debts and contractual obligations – something they are not at present and would not be under a public electronic system either.

In a private currency system, banks that expand the money supply beyond their available funds are running the risk of going bankrupt due to insolvency. The proposed electronic system means that the only incentive is to expand the money supply, thereby jeopardising the entire system with the risk of insolvency. Furthermore, it prevents individuals from leaving the system by withdrawing their deposits.

We must be clear that the state has not developed any technology or theory for issuing optimal money; what is optimal is determined by economic agents. The liquidity of an asset is not determined by the state, but by economic agents through their personal assessments and judgements. The state has merely systematically eroded our purchasing power through laws on legal tender, both as a means of raising revenue and as a way of enriching the political and banking elite.

As we have seen, the electronic system would lead to more abuses being committed than is currently the case, as it encourages the infinite expansion of the money supply, which would undermine all arguments regarding stability, distort prices, create massive bubbles, prevent individuals from escaping this trap, and institutionalise crime by stripping people of their money’s purchasing power.

»The solution, therefore, is not public money with legal tender status; the solution is the free market and private money subject to the forces of supply and demand among consumers.’

Thank you very much, ManuelMad; as always, a fascinating insight.

We have received another interesting comment that we would like to publish as an article, both because of its content and its unusual origin. It was sent to us signed by Andrea Paredes von Roth, whom we thank for her opinion, even though we do not share it. The comment reads as follows, verbatim:

The New Economic Paradigm:

Uno de los artículos que recuerdo con más cariño es el titulado Fasten your seatbelts, en el que comparábamos la situación de la economía mundial con la de un vuelo con problemas técnicos. Lo escribimos 3 días después del 11-S de 2007, después de vivir el aniversario potencialmente más peligroso después de los atentados del 2001. En un momento en que la economía mundial se colapsaba y el suelo se desvanecía bajo los pies del Sistema, sin saber a dónde iríamos a parar. Leedlo y después os comento dónde veo la situación actual:

Personalmente creo que en esta segunda mitad de 2009 y durante al menos todo el 2010 efectuaremos el aterrizaje forzoso, y es cuando vamos a ver y sufrir las consecuencias de la situación en la que estamos inmersos. Una vez hayamos conseguido parar, veremos cuánto daño nos hemos hecho y cuántos años tardaremos en reparar el aparato para poder volver a volar con seguridad. Ojalá el aterrizaje terminase como el del video, sólo con daños materiales.

La próxima semana trataremos un tema que últimamente se está comentando mucho…

En Junio de 2007 se intuíamos que algo gordo estaba a punto de cernirse sobre todos nosotros y así lo escribimos en un artículo. Sin embargo la banca seguía en el verano de hace dos años ofreciendo facilidades e incentivos para que la clase media se «empufase» más y más (como dijo Echevarri en un comentario al artículo en aquel momento). Al cabo de año y medio escribimos otro titulado «Do Not Disturbios«, cuyo link os pegamos al final para que podáis comparar el cambio de escenario sufrido. Os dejo con Crisis What Crisis? escrito el 23 de Junio de 2007:

El 4 de Febrero de 2009 escribimos el siguiente artículo: Do Not «Disturb» Y algunos lo tacharon de agorero.