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

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  • Tue, Jun 08, 2010 - 01:51am

    Peak Prosperity Admin

    Peak Prosperity Admin

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


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.


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).


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.