I am writing this in September 2011.

Every now and then I forget that I have given up on the collective madness of our civilisation and how it permits small groups to do outrageous things to everybody else without anybody really caring, noticing or questioning what they are up to. This forgetfulness set in again when I heard that some young trader had beaten the fail-proof system of one of the world’s largest and most sophisticated banks, UBS, by losing them £1.2 billion. This the media quickly explains away as largely bad luck because he was caught mid-trade by the Swiss authorities deciding to adjust the value of their currency, plus a little bit of record falsifying.

We hear these explanations, read the newspaper lines … and move on to the next item presented by our eternally busy minds.

But STOP. What was the guy really doing?

This guy was a trader in a huge market for ETFs – Exchange-Traded Funds. They are a relatively new product that bankers have created and society has allowed them to get a way with it. An ETF is a basket of indexes, a bit like running a pool of bets in simultaneous games, races and other gambling events and placing a value on their collective outcome. Imagine! Clearly, because there are so many variables involved, it is not possible to give an exact, current valuation of such a Fund, as the components in the basket are all performing differently, often wildly differently than anticipated.

An investor buys shares in an ETF. You can imagine that the only way this can work is by some powerful computer programmes monitoring the performance of the constituents of the basket, projecting these forward and basing a current price on how the indices in the pot are expected to perform. Typically ETFs will specialize by creating baskets that contain defined indices like the Spider (SPDR) that tracks the S&P 500 index; or Currency; or Bonds; or the Auto Industry; etc. But all they are doing is betting with money, either we, society, or they, as money printing institutions, provide. Money creating money without anything of value being added in between does not reflect the laws of nature.

If you look at money as energy, as potential, or even as seed-stock, you can immediately see that you need to place it or plant it somewhere to get something of value back. Only by adding something new can it be said that value is being created. Much of today’s banking by-passes creating something new, instead simply focuses on making more and more sterile money. Only when such speculation goes wrong, are heads hung in mock-shame, and in embarrassment at being caught out – and a new financial instrument is created to make yet more money and leave Joe public even more in the dark.

Are we as a society stupid, or mad, or so brain dead, that we are not willing to start asking aloud what role we want banks to play and then enact legislation that will force them to serve the greater good, rather than a narrow, very small greedy minority. Because we did not challenge the banks in the preceding phase of this corruptive process (when the only value that banks had was that against which they had secured their lending), they have in a sense now thrown all pretence to the wind and are openly doing what does not make sense, other than to hasten the decline of this system. Understand, when I say “banks”, I mean the system that encourages how banks behave, are managed, are supervised, are expected to perform, etc. Bankers too are simply doing what they think best, most profitable, etc., in accordance with the requirements of a system we are allowing to prevail.