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Our “Catch-22” Monetary System…There is No Way Out

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  • Tue, Jun 08, 2010 - 01:51am

    #81
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    Re: Our “Catch-22” Monetary System…There is No Way Out

darbikrash,

Thank you for putting to words an example that illustrates why some of us are averse to claims of “mathematical certainty”.  I have felt all along that all Mary shows is that the system must grow, which at least theoretically can happen in a fiat currency world.

I have always felt it makes more sense to attack the current monetary system on the grounds of morality and justice by showing that the people that gain from the system are not necessarily the ones adding value.

[quote=darbikrash]

To wit, it seems than the main objection is that the money changers are starting with nothing and selling us debt they don’t truly own, as they have a tails I win head you lose proposition. Fair enough. Is that not also true for the entrepreneurs as well? What skin do they have in the game if the recourse for failure is just default. Aren’t they just using capital to sell back resources they never owned on the first place with money they didn’t have same as the money changers? In this example, how different is BP than the central bank (or Goldman Sachs), isn’t BP just selling us back resources they do not own  using someone’s else’s capital (and trashing our planet to boot).

[/quote]

That insight into entrepreneurs is one that I will have to think about more deeply.  In general I have thought about bankruptcy as a way to punish creditors that took too much risk by making loans to shaky borrowers.  It seems the system is gamed in even more ways than I initially thought.  This makes me even less certain that there is a real answer to the question of what is the correct monetary system.  In the end, they are all based on faith, which can disappear in short order.

Great stuff.

  • Tue, Jun 08, 2010 - 03:15am

    #82
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    Re: Our “Catch-22” Monetary System…There is No Way Out

At month two, our hat guy goes BK. He makes the second payment, but soon realize the hats were all bad, so we now have $24,773.04 of cash left in the economy, but because of his default, we now have a total debt of $18,020.77. Note we now have more cash in the economy then debt.

That’s simply not a true statement.  To make a long story short banks take money from their income account and use it to pay off (destroy money) the remaining princple balance of a loan.

I’m sorry, but it is impossible to borrow ourselves out of debt.

  • Tue, Jun 08, 2010 - 03:17am

    #83
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    Re: Our “Catch-22” Monetary System…There is No Way Out

Do you “acknowledge that it is possible that two people can look at the same set of facts and come up with different ideas on how to fix it”?

Goes211,

How can any of that be possible when it seems that you’re unable to even deal with the facts of how our monetary system really functions?  How can we ever even talk about solutions when you won’t even talk about what the real problem is?

  • Tue, Jun 08, 2010 - 03:19am

    #84
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    Re: Our “Catch-22” Monetary System…There is No Way Out

His scheme is also designed to capture all the money on the island.

His scheme is to capture (steal) all of the property on the island, and the best way to do this without anyone understanding how is to create the medium of exchange as interest bearing loans.

  • Tue, Jun 08, 2010 - 03:24am

    #85
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    Re: Our “Catch-22” Monetary System…There is No Way Out

The species of currency doesn’t matter and more or less regulations won’t change the mathematical certainty of the terminal flaw.  Free markets will not happen when the private banks hold a monopoly to create money.  “Whoever controls the volume of money in any country is absolute master of all industry and commerce.”  – James A. Garfield

It should say this Larry, “Free markets will not happen when the private banks hold a monopoly to create money as interest bearing loans”.

It really doesn’t matter who creates the money, be it government (who really should be doing it) banks (who shouldn’t be allowed to do it) or the people themselves (it impossible for an individual to create a medium of exchange, and if a group gets together as we can see today, they only create it as interest bearing loans).

What we need to focus on is having the money created under the proper set of priciples.  Money that is created as a final payment, that benifits everyone in society, instead of money that is created as a debt, and only benifits the creators of the money.

  • Tue, Jun 08, 2010 - 03:26am

    #86
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    Re: Our “Catch-22” Monetary System…There is No Way Out

I really don’t think I my answers to your three questions would be significantly different than yours and you may know more about the actual mechanics of this than I do.

Then why won’t you just answer the questions?

  • Tue, Jun 08, 2010 - 03:44am

    #87
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    Re: Our “Catch-22” Monetary System…There is No Way Out

darbi, no, the objection to debt-based money is not because banks don’t own what they lend.  it’s not comparable to people and institutions doing real work/labor/value creation.  the difference between private bankers that profit from putting everyone else in debt vs. entrepeneurs and BP couldn’t be bigger.  the issue is fraud (violation of contract law for a party to have no performance), usury (violation of morality and the philosophy of freedom), and doing nothing but enjoying the monopoly power to suck value from the people creating it. 

regarding #5, I think you’re right that workers believe they “own their wages free and clear.”  but that would only be true with sovereign money.  millions of workers will soon learn it’s not true…they were lied to…severe deflation will be a painful wakeup call that banks and senior capital holders own the money.  

 

  • Tue, Jun 08, 2010 - 04:54am

    #88
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    Re: Our “Catch-22” Monetary System…There is No Way Out

Larry and Strabes,

Check this out. 

http://www.austindailyherald.com/news/2010/jun/07/gubernatorial-candidates-money-plan-key-his-campai/

Gregory Soderberg (co-author of Modern Money Secrets) is running for leutenient Gov of Minnesota under Leslie Davis.

The Davis Money Plan is an exact copy of the what was formally known as the MTA.  If the people keep hearing this stuff more and more they might just be able to understand there really can be life after debt!  Maybe this whole catch 22 thing can change someday.

 

It’s strange to see such a positive write up about debt free money in the media. 

  • Tue, Jun 08, 2010 - 06:12am

    #89
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    Re: Our “Catch-22” Monetary System…There is No Way Out

The Harvest

The federal debt ceiling is $13 Trillion yet the unfunded liabilities that politicians have saddled Americans stands at over $59 Trillion.  85% of which goes to Social Security payments, Medicare and Federal retirement programs.   State and local government retirement plans account for much of the rest (from USA Today)       The spending is guided by  vote-getting politics, and those closest to the politicians (like government employees) stands to reap a bountiful harvest  indeed.       

Because if the  real goal is to stop the debt spiral,  bank fraud and political abuse:    This will pave the way:  (1)  Remove legal tender laws  (2) Lift the punitive tax on gold     (3)  Ban bank bail outs.   (4)  Return the peoples money that FDR stole.

And Thomas you do not have the whole story on our money system because you thought all money is created via fractional reserve banking.  It’s not that your information is inaccurate,   it is incomplete.  

I asked you to research monetizing the debt so you’ll realize that you have left out the mothership of this money creation  system:  The Federal Reserve.     I even suggested you confer with Chris Martenson because he wrote an article about it.   

  • Tue, Jun 08, 2010 - 07:01am

    #90
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    Re: Our “Catch-22” Monetary System…There is No Way Out

And Thomas you do not have the whole story on our money system because you thought all money is created via fractional reserve banking.  It’s not that your information is inaccurate,   it is incomplete.

Then please show us where money is created that isn’t created by banks?

Show us where there is money that isn’t created as a liability to someone and disprove what larry has called the Catch 22.

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