Thursday, May 27, 2010

I'm starting to get worried

Not about the coalition - not yet anyway.

No what worries me is that the wheels may be about to come of the the European experiment and the worlds faith in quantum money.

What do I mean about quantum money ? Well I'm playing on the Heisenberg uncertainty principle as we can't really be sure where a lot of money really is.

I place £100 in the bank, the bank lends say £80 out to some one who spends it and deposits it again - allowing the bank to lend out £64 to someone who spends it with someone who deposits the money etc etc ...

Does my £100 exist ? Well the bank lent it out a few times, and yes as long as I don't look for it by asking for it back I can think of it as existing but I can't have it back as the banks lent it out a few times over.

We get round this by having a lot of people borrowing and lending at the same time - so I can withdraw £100 from the local cash machine- as long as most other people in the same situation don't.

This has all worked well enough for some time. But the problem is that people are about to do a lot of observing where the cash really is if sovereign defaults start - and they might very well soon - and it will then have problems being in many places at the same time.

( On an aside if you were the chancellor of a country about to default do you default before you receive a large rescue package from your neighbours or afterwards ? Its a no brainer really ).

I'm not an economist, just an engineer. But I don't like the look of things right now.

Further ( Stiff drink suggested before reading - in fact buy a crate load just in case the cash stops working )
Is Europe heading for a meltdown - Edmund Conway.


Wyrdtimes said...

I think the idea of "quantum money" is brillian MiaS - that should catch on.

Sgt Pepperspray said...

Well it looks like we are well and truly shafted then. I like the idea of getting a crate load in before the cash runs out though. I think I will do the same.

Rachel Joyce said...

Not a good time for savers - unless you have tangible assets, methinks.

Moonraker said...

No need to be downhearted. Governments will print money and there will be sky high inflation. A chance to pay off your mortgage with devalued money - like your parents did.