BOOK Draft Continued

This is another failed attempt to write the book

Please forgive any inconvenience caused.

The way forward has proved to be the creation of a course in the subject.

The scripts for that are far superior

Please go to this link for that.


Continued from the PREVIOUS PAGE

People are naturally scared of complexity and meddling with a complicated system like an economy.


Once you understand what an economy is and how it is supposed to work it is easy to see why the design of the world’s economies is wrong.

By putting the simple things right -

  •       Those things that destroy lives, savings, homes, and businesses
  •       Those things that are there contrary to economic and management theory
  •    Those things that would make any complex system more complicated and more unstable,

…leads naturally to a better economy.

It also leads to more profitable and more durable businesses and institutions. They can reduce insurance and capital costs. They can expect the economy to behave in a more ordinary way. They can plan further ahead and they can borrow more at less cost.



The first thing that an engineer, a doctor, or a social worker does when confronted with a badly behaving complex system is to check whether everything is being done according to ‘the book’.

  •         Are basic principles being followed?
  •         Has the motorcar got round wheels that are centrally positioned?
  •         Is the person’s body being fed a balanced diet?
  •         Are the aircraft’s wing fitted the right way up?
  •         Is the ship properly designed to stay on the surface of the sea?

It does not take a genius to see if such things are wrong. 

Such wrong things will give rise to multiple problems. When one thing is wrong it creates a whole lot of knock-on effects and a huge amount of complexity. When several things are wrong as is the case with the economic framework, it creates a baffling amount of complexity. We can make it all relatively simple if we try.

But if you try to correct for everything that goes wrong as a result of such mistakes, you will be very busy and probably confused. And you cannot possibly make a perfect job of it without using an immense data base and huge amounts of resources that might be better deployed doing something else.


The Standard Model for the economy as traditionally taught at universities states that economies are unstable. There are very clever people who know a lot about mathematics and statistics. A great deal has been invested by them in learning how such skills can help with forecasting what an economy may do next. How to sort out what follows from what, and so forth.

Some economists are taught how to take advantage of these things by re-positioning their employers and themselves. That costs everyone else something and makes the rich and powerful richer and more powerful. Changing this will produce considerable opposition, make no mistake about that.

Other economists are taught how to try to rebalance the economy after it has gone astray. Or to try to intervene so as to prevent that from happening.

To do this they try to invent complicated methods and instruments. Their interventions confuse everyone else and they admit that they do not fully understand the problems themselves.

Many of them conclude that economics is not an exact science. That may be true, but it can do a whole lot better.

One could do exactly the same kind of thing to forecast how an aeroplane would behave in various weather conditions if the wings were fitted upside down (maybe fly upside down if you can get it to take off), or if the wings were on back to front.

The idea of making adjustments to the controls and intervening to stop the aeroplane from stalling or diving at an incredible speed is what is taught at university economics classes.

That is clearly not the way to manage an economy or any complex system.

Why do they do that?

Because they can. They are good at statistics and mathematics. That is what is taught. But you do not need that much maths to see if the wings are on the wrong way around and to put that right.

It is the same with economics as readers of this book will discover.


The following characters have been given random names
unrelated to any particular person

Uncle Charles had just bought his home when the central bank raised interest rates. House prices tumbled and his mortgage repayments jumped up out of reach. The effect on the economy was so terrible that he lost his job. If the monthly repayment cost had been calculated differently, this would not have happened.

Grandpa took a loan in Swiss Francs and his Indian brother took one in American Dollars.

They did this on the advice of a professional loan arranger who said that interest rates were much lower in those currencies. Then the Swiss Franc jumped up by 30% on the day (like it did in mid-January 2015). Grandpa’s costs jumped up by 30% and the total debt that he owed became 30% larger. The jump reduced in the following days but it was still expensive. He still had to repay the loan. He lost his pension paying it off. Businesses in Switzerland that depended on exports crashed.

If the value of the Swiss Franc had been allowed to adjust to the balance of trade and if the facility to manipulate that currency value did not exist, this would not have happened. In fact, currency wars would not be possible either. Businesses could make plans based upon prices that could be forecast more easily and more exactly. Jobs would be safer, world trade, one third of all business activity on the planet, would be easier and cheaper. Think of that – in effect, cost savings and simpler forward planning for one third of all businesses in the world.

His Indian brother was hit by the same problem. The Indian Rupee crashed. The professional mortgage arrangers did well. They got a good commission and walked away.

Great Aunty Isobel lived in the 1930s and had all her wealth tied up in shares. When the stock market crashed she lost everything because she had loans to pay off. She committed suicide.

Without the way that credit is allowed to grow almost without limit, this would not have happened. It could not have happened. This is the source of all of the major booms and busts if they are not caused by the currency instability. Maybe both together.

Sally, the daughter, had immigrated into France. She did the 'sensible' thing of taking a fixed interest rate mortgage. It was all she could afford but she thought it made her safe. Then the whole of Europe was in trouble and incomes started falling. She had to take a wage cut. The cost of the mortgage did not alter. 

Her Greek Sister was about to do the same when interest rates sky-rocketed, house prices crashed and people started leaving the country. She was lucky to have avoided that mortgage and she also left Greece for Germany like many others did. Single currency regions cannot adapt. They cannot devalue the currency. And when governments also borrow vast sums using fixed interest debt, they are extremely vulnerable to deflationary forces.

This same problem left the Greek Government with too few people to tax and their huge fixed interest rate debt became impossible to pay off or even to service. Greece has other problems like allowing people to retire at age 50 and not collecting taxes. This kind of problem does not have to be added to the rest.

Single currency regions, not just in Europe but everywhere, even quite small ones like the UK, tend to find that people leave the hard hit areas and move to the prosperous cities where houses cost far more and continue to rise as the population shifts. Not everyone can buy a home there. The rents are high and when they get that job which they could not get back home, they struggle to make a living. They become economic slaves.

What they leave behind is a poverty stricken area and the house they once owned and loved has little value. Infrastructure that cost billions to create back home falls into decay. It could have continued to function and been useful. No need to build more infrastructure elsewhere. No need to destroy families and old-friend relationships – no longer seeing the ones you know living around the corner. Now you are a stranger living in a foreign culture. The local population is not friendly – social strife can emerge. Loneliness can rise. A recent report claimes that mental stress knocks over 3% p.a. off Europe’s GDP.[1]

Why would a government join a financial community like Europe in which they are unable to adjust the costs of things  (the value of the currency) and as a result, lose their best people and see their tax revenues emigrate? A single currency can help businesses greatly. It simplifies everything. So a solution is needed.

To be continued...

[1] GDP means Gross Domestic Product and actually means the total income earned by a whole nation or in this case, Europe.

The book is something way ahead of its time, addresses all the major current issues bar the wealth gap (it gets some attention too) and it is very practical. It can and it must change the world for the better. ASAP

See the clicks for that at the end of this web page. 

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