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A 14-Year-Old Girl Explains How We Can Stop The Addiction To Economic Growth

Tyler Durden's picture


Via ClubOrlov blog,

[This week's guest post is by Scott Erickson, who is an award-winning humor writer and the author of a satirical novel titled The Diary of Amy, the 14-Year-Old Girl Who Saved the Earth. I liked it. It is entirely disarming and strikes a good balance between humor and seriousness. There are enough jeremiads and diatribes and rants on this topic out there. Luckily, this isn't one of them because Scott's scathing social critique and mordant wit are delivered via a charming narrative device: a smart, earnest, precocious 14-year-old girl.]


Hi! I’m Amy Johnson-Martinez, the 14-year-old girl who’s saving the earth from environmental destruction. A lot of people don’t understand how the destruction of the earth is connected to our addiction to economic growth. Actually, a lot of people don’t even realize that we’re addicted!

Personally speaking, I think it’s kind of weird that economists don’t tell us about this. So I guess it takes a 14-year-old girl to tell you about it!

Economists always say, “The economy has to keep growing or else it will collapse.” But it can’t grow forever, because the earth is running out of resources. Actually, it’s already starting to happen. That’s a big reason why the economy is getting worse.

Our economy is giving us a totally stupid choice: Save the economy or save the earth. It won’t let us save both! I personally think that’s pretty crazy!

On my journey to save the earth from environmental destruction, I figured out pretty quickly that the main problem is the economy. Pretty much every time there’s an idea that would make things less destructive and more sustainable, the argument against it is always: “It will be bad for economic growth.”

That’s when I found out the economy has to grow or else it collapses. But when I asked why, nobody knew the answer. So I had to figure it out myself.

I looked at a bunch of economic books, but none of them said anything about why we’re addicted to economic growth. I couldn’t even find out how the economy could grow. That’s another basic question: How can money grow?

Isn’t that an interesting question?

This led to another question, “How is money introduced into the economy?”

The answer wasn't easy to find. At first I thought the answer was that the government prints it, but that was back when I was young and naive. It turns out that the government prints only a tiny percentage of the money in circulation, and the rest is just promises, based on future growth (which is kind of weird if you think about it.)

Then I found out about “quantitative easing,” which sounds intellectually sophisticated. But it’s not the “real” answer, because quantitative easing only creates more promises. And the only way to live up to these promises is by overall growth of the economy. So we’re back to where we started: How does the economy grow?

Since I couldn’t find any answers in books about contemporary economics, I tried looking at books about the history of economics. I focused a lot on John Maynard Keynes, who was from England and invented the basic economic ideas we still use.

I found something interesting that he wrote in 1933. It’s the first thing I found that talks about economic growth. Basically, he thinks it’s important to have the economy grow, but when everybody is doing OK then growth should stop:

Suppose that a hundred years hence we are eight times better off than today. The economic problem may be solved.

The economic problem, the struggle for subsistence, always has been the primary, most pressing problem of the human race. Thus for the first time since his creation man will be faced with his real, his permanent problem – how to use his freedom from pressing economic cares, how to live wisely and agreeably and well.

When the accumulation of wealth is no longer of high social importance, there will be great changes in the code of morals. The love of money will be recognized for what it is, a somewhat disgusting morbidity, one of those semi-criminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease.

I see us free, therefore, to return to some of the most sure and certain principles of religion and traditional virtue – that avarice is a vice, that the exaction of usury is a misdemeanor, and the love of money is detestable.

But the prediction that economic growth would end poverty hasn’t happened. In fact, even with all the economic growth that’s happened since then, poverty is getting worse. Obviously, the idea that economic growth will end poverty isn’t right.

I had to look up what the word “avarice” means, and basically it means “greed.” I also had to look up what “usury” means. It means to charge interest on loaning money. It’s a religious word and at one time all religions were against it as unethical.

Even though the quote was interesting, it didn’t answer the question about how money can grow. So I had to go back even farther. The ideas of John Maynard Keynes were influenced by another guy – John Law.

What a weird person! According to one book, in addition to being a banker and an economist he was “a gambler, swindler, rake and adventurer forced to flee the British Isles after killing an opponent in a duel.” This kind of person helped invent our economic system?

I found something in a book about John Law that seemed important: “Law made clear the distinction between a passive treasury, where money just accumulated, and an active bank, where money was created.”

Banks create money? That was news to me! I thought they just kept money and loaned some of it out.

The answer has to do with the “fractional reserve system” which started in the 1700s. It used to be that money was sort of a “receipt” for gold. The receipt was called a “banknote,” which was printed by the bank. But then some bankers figured out they could print more “receipts” than the gold they had, therefore they only had a “fraction” of the gold compared to the “receipts” (actual money).

That explains how it came to be that banks could create money, but it didn’t explain how money could “grow” – since banks were only allowed to print a certain percentage extra.

Then, some bankers figured out a way to become even more wealthy with this “extra money” they could print themselves. What they did is to give out the money in the form of a loan. Since they charged interest on the loan, they would get back more than they gave out. This next part is where the addiction starts.

Let’s say you get a loan for $100, but because of the interest you pay back $110. Here’s an interesting question: Where did that extra $10 come from?

It didn’t come from you, since you can’t create money. Only banks can – by making loans. So the extra money could only come from one place: More loans! If you trace money to where money comes from, it almost always comes from a loan.

People can get personal loans, but what’s more important for the economy is business loans – loans to start or expand a business. Of course all the loans have interest, which means paying back more money. But we’ve already figured out that money is “created” by banks issuing loans. So to pay off past loans, somewhere else in the economy there has to be new loans which create more money. But then THOSE loans have to be paid off with money, which means MORE loans.

It always comes back to the banks making more loans to pay off the existing loans. This has been going on for hundreds of years, which is how the economy “grows.”

Economic growth needs more money, but more money needs more economic growth, which needs more money. And it doesn’t stop. It can’t stop.

That’s not only how the economy grows, but why it HAS to grow. We can never get to a point where growth is “enough.”

This is why we’re addicted to economic growth. We’re not creating money; we’re creating debt!

Like with any addiction, we keep doing it even when it’s not working any more. This is why even when it’s obvious that economic growth isn’t solving unemployment or ending poverty or doing any of the other stuff it says it can do, we keep trying it anyway. It’s why even though we have more money than ever before in history, we still need more.

The funny thing is that the solution is super-easy. All we have to do is stop the banks from creating money as debt.

You know what’s really interesting? I discovered that our greatest president Abraham Lincoln figured this out and tried to stop it. Lincoln tried to fix the problem by having the government print a kind of money called “greenbacks”—$450 million of interest-free money. But the banks did NOT like this because they wanted to create all the money themselves! So they bought up all the “greenbacks” and forced the government to buy them back in exchange for gold.

Lincoln had the right idea, but he didn’t go far enough. We have to eliminate interest on ALL money. The answer is actually super-easy.

To end the addiction to economic growth and save the earth, this is what we need to do: End the creation of money as interest-bearing loans. Put an end to fractional reserve banking and make it so banks can’t create money. Then give the U.S. Treasury the exclusive right to issue U.S. currency free of debt.

Of course, the big banks won’t like this, because they make money from keeping us addicted. But as I learned in school, we live in a democracy which means companies aren’t the boss of us; we’re the boss of them. Yay for democracy!

Let’s stop the addiction before the economy collapses and destroys the earth, which is very beautiful. In fact, it’s my favorite planet!


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Tue, 11/05/2013 - 18:51 | 4124572 WelfareFTW
WelfareFTW's picture


Tue, 11/05/2013 - 18:55 | 4124582 HelluvaEngineer
HelluvaEngineer's picture

Burn the witch!

Tue, 11/05/2013 - 18:58 | 4124598 gdogus erectus
gdogus erectus's picture

Lincoln was a good guy?
We are responsible for the resource depletion?
Work on your education a bit more. Zero Hedge is free. (as long as you don't mind being educated in a men's locker room.)

Tue, 11/05/2013 - 19:21 | 4124662 HelluvaEngineer
HelluvaEngineer's picture

Yeah, I didn't actually read it.  Now that you mention that part and I revisited it, I have no friggin idea how you could pick Lincoln over Andrew Jackson.  Choice #2 would be Kennedy, since he died for that shit.

Tue, 11/05/2013 - 19:29 | 4124706 icanhasbailout
icanhasbailout's picture

"But as I learned in school, we live in a democracy"



Tue, 11/05/2013 - 19:39 | 4124747 McMolotov
McMolotov's picture

+1 for "facepaw."

Tue, 11/05/2013 - 20:11 | 4124870 Buckaroo Banzai
Buckaroo Banzai's picture

Lincoln was an awful President, but you have to give him credit for the Greenback.

"But the banks did NOT like this because they wanted to create all the money themselves! So they bought up all the “greenbacks” and forced the government to buy them back in exchange for gold." And they also had Lincoln shot.

And another thing. It isn't just compounding debt that is creating cancerous economic growth; the takeover of our global economy by publicly traded corporations contributes to the problem as well. Publicly traded corporations MUST grow in order to increase their stock price in a financial environment that scorns dividends. Consider a company like Starbucks. In Italy, there are thousands and thousands of family-owned corner bars that sell espresso and cappucino. Each one of these little family-owned bars make a nice living for their owners. Contrast that to Starbucks, which must grow exponentially in order to benefit a literal handful of corporate executives. It doesn't even benefit shareholders in the long run, because one day the growth will stop, and the stock price will collapse, leaving shareholders holding the bag.

Tue, 11/05/2013 - 20:51 | 4125018 James_Cole
James_Cole's picture

It's not about saving the Earth, the Earth will be ok.

Tue, 11/05/2013 - 23:50 | 4125596 Thomas
Thomas's picture

I suspect a little ghost writing went on in this article.

Wed, 11/06/2013 - 00:05 | 4125647 AlaricBalth
AlaricBalth's picture

It's a novel.
Amy doesn't exist.

Wed, 11/06/2013 - 04:53 | 4126011 zhandax
zhandax's picture

Let's hope so, else that kid is on tv in some mall tomorrow morning with an assault shotgun rifle glock.

Tue, 11/05/2013 - 20:58 | 4125052 Help Is Not Coming
Help Is Not Coming's picture

I agree with you with regards to corporations. The real problem is that corporations are effectively immortal. Shareholder's come and go but the corporation lives on. Jonathan Swift had insight into immortal beings when in Gulliver's Travels he described the Struldbrug  which was a person that looked like everyone else except for the red dot above the left eye. But more importantly...

Struldbrugs were forbidden to own property:

As soon as they have completed the term of eighty years, they are looked on as dead in law; their heirs immediately succeed to their estates; only a small pittance is reserved for their support; and the poor ones are maintained at the public charge. After that period, they are held incapable of any employment of trust or profit; they cannot purchase lands, or take leases; neither are they allowed to be witnesses in any cause, either civil or criminal, not even for the decision of meers (metes) and bounds.


Otherwise, as avarice is the necessary consequence of old age, those immortals would in time become proprietors of the whole nation, and engross the civil power, which, for want of abilities to manage, must end in the ruin of the public.


Tue, 11/05/2013 - 23:59 | 4125627 acetinker
acetinker's picture

I claim the official title of asshole in this realm, but this is attributed to a 14yo girl.  You expect her to "know" what you know?  I'm normally good with anything you say, Mc.  If I'm missing something, clue me in.

Wed, 11/06/2013 - 05:03 | 4126017 zhandax
zhandax's picture

Skip, you want to rethink 'claiming the official title of asshole in this realm' in fight club?

Wed, 11/06/2013 - 11:20 | 4126860 acetinker
acetinker's picture

So I've been told, but I'm sure someone, somewhere thinks you're an asshole, too;)

Sun, 11/10/2013 - 22:13 | 4141837 acetinker
acetinker's picture

OK zhandax, it's been a few days.  I'M STILL THE ASSHOLE.  You got a counter-claim?  If not, fuck off, Skip!

Tue, 11/05/2013 - 20:11 | 4124869 peter4805
peter4805's picture

But only if the duck floats...


Tue, 11/05/2013 - 21:32 | 4125167 VulpisVulpis
VulpisVulpis's picture

There isn't a 14 year old in the US who could write anything like this. Satire ineffective.

Wed, 11/06/2013 - 08:33 | 4126220 The Mist
The Mist's picture

Not only satire, the entire conclusion fails.

Yes let's have the govt print free money, no way they will print too much and spread inflation among the citizens... Surely a new fiat currency is the answer right?

How about you make money redeemable for gold again and any private bank can issue notes, which are redeemable for gold that's in their safe.

Tue, 11/05/2013 - 19:05 | 4124626 Freddie
Freddie's picture

Any American woman, man or child with a hypenated name is an AH unless they are part of the British upper class.   Most of these people are idiot Americans trying to sound like upper class WASPs. 

Tue, 11/05/2013 - 19:31 | 4124701 akak
akak's picture

What is an "AH"?

And not that I disagree with you that the hyphenated name thing is pretentious and idiotic, but why is it OK for upper-class Brits to hyphenate names but not Americans?

Wed, 11/06/2013 - 05:14 | 4126023 zhandax
zhandax's picture

The same reason for us to shoot at them until they went away.  We (precarious term these days) don't want royalty here.

Wed, 11/06/2013 - 05:45 | 4126046 A Nanny Moose
A Nanny Moose's picture

The Hedge, "in the beginning."

The Hedge is the AH and the ZH...the beginning and the end. It is all things.

Fri, 11/08/2013 - 09:28 | 4134663 BigJim
BigJim's picture

Freddie, can't you read?

[This week's guest post is by Scott Erickson...


Tue, 11/05/2013 - 19:25 | 4124683 RSloane
RSloane's picture

Hey. Don't dis the little girl. She made more sense than Krugman ever did.

Tue, 11/05/2013 - 19:26 | 4124684 RSloane
RSloane's picture

I feel so strongly about it I said it twice!

Tue, 11/05/2013 - 19:50 | 4124789 Zero Point
Zero Point's picture

I liked your comment so much, I greened it both times!

Tue, 11/05/2013 - 20:13 | 4124881 David449420
David449420's picture

Imagine a world where EVERY Banker in the World, from the least to the Truly Corrupt were "Corzined (Vaporized)" tonight.  We would wake up to a different world tomorrow.  Just a Pipe Dream, though.

Tue, 11/05/2013 - 20:24 | 4124917 David449420
David449420's picture

Why stop there. Lets throw in EVERY Politician at the same time.  It would take them Decades before they could even start to Fuck us up again.

Tue, 11/05/2013 - 21:13 | 4125107 Zero Point
Zero Point's picture

Every "news" reporter can go on that list.

Tue, 11/05/2013 - 18:53 | 4124576 Gamma735
Gamma735's picture

Is this 14 year old home schooled?

Tue, 11/05/2013 - 19:23 | 4124585 Running On Bing...
Running On Bingo Fuel's picture

I wonder if Trav777 is babydaddy? Does she have peak oil or nuke opinions?


Tue, 11/05/2013 - 19:44 | 4124773 Wen_Dat
Wen_Dat's picture

fuckin knew it

Tue, 11/05/2013 - 18:53 | 4124577 SilverIsKing
SilverIsKing's picture

Bottom of page: "Zero Hedge is intended for Mature Audiences"



Tue, 11/05/2013 - 18:53 | 4124578 falak pema
falak pema's picture

back to barter and bitcoin

Tue, 11/05/2013 - 18:55 | 4124586 akak
akak's picture


Lincoln had the right idea, but he didn’t go far enough. We have to eliminate interest on ALL money. The answer is actually super-easy.

To end the addiction to economic growth and save the earth, this is what we need to do: End the creation of money as interest-bearing loans. Put an end to fractional reserve banking and make it so banks can’t create money. Then give the U.S. Treasury the exclusive right to issue U.S. currency free of debt.

I smell here the powerful stench of Ellen Brown the Money Clown and Bill Still the Fiat Shill.

Tue, 11/05/2013 - 19:06 | 4124625 SpykerSpeed
SpykerSpeed's picture


Love these nicknames, I shall employ them myself in the future.

Tue, 11/05/2013 - 19:23 | 4124679 akak
akak's picture

Those two duplicitous, disingenuous, lying bastards really piss me off, as they pretend to be 'reformers' of the current corrupt and unsustainable monetary regime while being nothing but pro-statist wolves in sheeps' clothing who fundamentally uphold the governmental monopoly on the issuance of money while constantly propagating misinformation and outright lies on sound money and the beneficial role of gold (and silver) in monetary history, as well as being opponents of monetary freedom and free market money itself.

Beware these two agents of monetary lies and subversion.

Tue, 11/05/2013 - 19:26 | 4124693 RSloane
RSloane's picture

+1 Akak. You said it just right.

Tue, 11/05/2013 - 20:07 | 4124854 1100-TACTICAL-12
1100-TACTICAL-12's picture

Competeing currencies, I'll give you thee Texans for one New Mexican & a hit off your bong>

Tue, 11/05/2013 - 20:38 | 4124965 Againstthelie
Againstthelie's picture

Many ZH readers seem to be glad about interest slavery as long as it is based on Gold not on fiat money.

You also don't seem to know that the money we have is created 90% by private banks. So it's not government money it's privately created money that creates compound interest.

If interests on a credit must be paid back in gold or credit based fiat money changes NOTHING.

You must understand the principle of the problem: paying back more than what is available at creation.


The money masters increased their power during a gold standard and they will welcome it again, if the current Kondratieff cycle will end. Nothing will change until the criminal principle of compound interest is forbidden like it was forbidden by death penalty in the golden middle aged centuries.

Tue, 11/05/2013 - 23:13 | 4125497 Raymond K Hessel
Raymond K Hessel's picture

90%? You do that math in your head?

Interest is not evil.  Everyone needs a boogey man for all their pain.


Booga wooga wooga wooga!!!  Pitch forks!  We're not going to take it anymore, 8 hour work day, blahhhrrrr!!!!

Wed, 11/06/2013 - 05:24 | 4126029 zhandax
zhandax's picture

I guess 'I'm persecuted' is the boogey man for all your pain'?  Prove interest is not evil.

Wed, 11/06/2013 - 06:56 | 4126096 Againstthelie
Againstthelie's picture

Interest is not evil. 

A system that forces paying back more than is available and this gap growing exponentially is not evil?


Oh, isn't there one single people with a dediceted word for an incredible outragous lie? And randomly this people has a "religion" which prays that compound interest will give this people the world and only then then JWH will come?

Wed, 11/06/2013 - 00:27 | 4125711 Martian Moon
Martian Moon's picture

I donate to Still.  Not because I share his statist views but because he is genuinely trying to reform the system from within.  And doing a great job in educating the uninitiated.  For being real, I give the man an A+.

Now if you have some info showing him as the recipient of some wolf in sheep's clothing foundation money ... please share.

Tue, 11/05/2013 - 19:19 | 4124663 spdrdr
spdrdr's picture

Yes, Still's crazy concept seems to be cropping up everywhere.

"Let's just print money directly from the Treasury, and everything will be sweet as!"

Lunatics.  The lot of them.


Tue, 11/05/2013 - 19:49 | 4124794 Induced Coma
Induced Coma's picture

I live for the day when everything will be sweet ass...




Wed, 11/06/2013 - 05:26 | 4126032 zhandax
zhandax's picture

As in 40 Virginians?

Wed, 11/06/2013 - 00:47 | 4125164 Radical Marijuana
Radical Marijuana's picture

Well, akak, I LIKE the THEORIES of "Ellen Brown the Money Clown and Bill Still the Fiat Shill."

However, those theories are pretty well irrelevant to the real world, since money is measurement backed my murder. There is no real money system without some murder system to back it up. Ellen Brown and Bill Still propose preposterous boot strap pick-up political miracles, based on being able to awaken enough people to the ways that they are abject victims of the runaway systems of privatized fiat money. While there is no doubt that is so, there are no real solutions which could operate outside of the historical situation that the international banksters are who they are because they were quite willing and able to bribe, intimidate, and assassinate their way through. The current monetary system is really based upon dishonesty backed by violence. Any theories which propose monetary reforms which ignore that money is backed by murder are actually non-starters.

Our real problems are almost infinitely worse than any "monetary reforms" that I am aware of being proposed by anyone. My view is that people who recommend going back to gold and silver based money are even more full of bullshit than those who propose that the government will regulate the fiat money supply better, in the public interest, rather than allow that fiat money supply system to be almost totally privatized. The FACT that we have created a global system of electronic fiat money frauds, backed by atomic bombs, is trillions of times worse than anything that ever existed before in human history.

In my view, we are going to get "monetary revolution" in the worst possible ways, after the current systems push themselves through more genocidal wars, along with democidal martial law. Whatever the good THEORIES might be about possible monetary reform, what is actually going to happen is more runaway social insanity, as the established systems of legalized lies, backed by legalized violence, endeavour to keep themselves going and going, ... and try to transform themselves to become even more globalized systems of force backed frauds.

Human realities are always organized systems of lies, operating organized robberies, with the monetary systems being the symbolic expression of those basic facts. The sublime paradoxes that are manifesting more and more every day are that progress in science and technology ends up being mostly employed to become better at being dishonest, and backing that up with violence. Thus, the existence of global electronic frauds, backed by atomic bombs.  Governments are organized crime, controlled by the best organized gang of criminals. Thus, the government of the USA is the single greatest gang of organized criminals and terrorists in the world, which is actually directed to do what it does by the international bankers.

Whatever nice sounding lists of theoretical solutions to those problems, they are all actually irrelevant to what is really going to happen, which is the exponential growth of the systems of backing up frauds with force, which will destroy themselves to a degree that are trillions of times worse than we can currently comprehend. Since human civilizations ended up being controlled by the people who were the best at being dishonest, and backing their lies up with violence, every decision we have made about what to do has become dominated by systems of legalized lies, backed by legalized violence. Therefore, we have an economic system which is based on maximizing the short-term benefits, regardless of the longer term costs. It was always privatizing the profits, while socializing the losses. Those trends have been accumulating and accumulating, until we finally will reach some real point where the longer term costs, and socialized losses, will overwhelm all of the short-term benefits and privatized profits.

Any genuine changes will have to go through those inevitable processes. There may eventually emerge some kind of monetary revolution. There are no possible monetary reforms which are practically possible to happen until after things get so bad that there are driven to be some sort of monetary revolutions. Such monetary revolutions will be based upon some new regime of death controls, to back up some new regime of debt controls. It is extremely dubious that that will be better than what exists now, since we are on a runaway path towards overshooting, and collapsing into chaos first. The deeper problems are that, since money is measurement backed by murder, how could we ever operate any better murder system, after the development of weapons of mass destruction which are trillions of times more powerful than ever before in human history, since that has no apparently sane and possible answer at the present time?

Any saner money system would require a saner murder system to back it up. That is a pretty tall order, asking for a prodigious series of political miracles. Instead, what one can more reasonably expect is that the runaway debt slavery systems, reaching the point of numbers which become debt insanities, will cause the outbreaks of death insanities as their consequences. AFTER that, one can not predict what the world would look like then! However, the deeper theories continue to be that the central concept of any possible political economy, within any possible human ecology, MUST still be the death control system.

Neolithic Civilization has evolved through the history of warfare, to create murder systems operated through the maximum possible deceits, in which the well established social stories were all bullshit religions which were working within those overall systems, by agreeing to deny that they should exist. Upon that basis was built the monetary system, based on the maximum possible frauds, which were similarly opposed by bullshit ideologies which were working within those overall systems, by agreeing to deny that they should exist. It is almost impossible to estimate the degree to which our current human civilization is insane, since it is all based on doing everything it does through the maximum possible deceits and frauds about what it is doing.

Meanwhile, real progress in science and technology has enabled the scientific methods to discover different truths about the laws of nature, which have enabled some human beings to become trillions of times more powerful and capable than ever before in human history. However, those abilities have primarily been applied to become many orders of magnitude better at being even more dishonest and violent. In that context, sane "monetary reforms" are not possible, while real "monetary revolution" will be possible only after the established systems become so insane that they madly destroy themselves ... after which there are no longer any possible predictions regarding what that world then will look like.

Anyway, akak, if you happen to read this, I wonder what kind of bullshit pie-in-the-sky monetary reforms you personally recommend?  Or ... do you recognize that money is measurement backed by murder, and that any monetary revolution must necessarily be based upon surviving through to some new kind of murder system, operating death controls, which can adapt and assimilate themselves within a world where advances in science and technology have made some human beings become quadrillions of times more powerful and capable than ever before ???

Tue, 11/05/2013 - 18:57 | 4124587 walküre
walküre's picture

What's happening at Google?

Tue, 11/05/2013 - 18:57 | 4124592 NoDebt
NoDebt's picture

Was I that stupid when I was 14?  Yeah, probably.

Tue, 11/05/2013 - 18:58 | 4124594 onewayticket2
onewayticket2's picture

what better way to punish productivity than global warming and the need for cap n trade and silliness like this....and get the kids to sell it is just the cherry on top.

wherever did you get such marvelous methodology??



the Hitler Youth

Tue, 11/05/2013 - 21:32 | 4125168 Mark_BC
Mark_BC's picture

What is "productivity"? Can you define it for me? In order to produce something you have to first take raw materials and energy. When you run out of energy you cannot "produce" anything and your economic "productivity" will go to zero. Since we are fully addicted to fossil fuels without any replacement on the horizon, and since we're at Peak Oil now, and soon to be at peak gas and coal, then it stands to reason that our econmies and societies are doomed because of denial attitudes like yours pervading the masses. Not only will they not grow, but they will contract framatically.

Tue, 11/05/2013 - 23:16 | 4125504 Raymond K Hessel
Raymond K Hessel's picture

Peak oil??  You must have some dip stick.  


I mean, your dip stick must go all the way down in the oil can under the earth which, of course, is how you know we're at peak oil.  


Awesome.  Congrats. Your parents must be proud.

Wed, 11/06/2013 - 01:36 | 4125837 Mark_BC
Mark_BC's picture

Apparenlty you haven't been paying attention, or rather paying attention to the MSM. Global oil production rates have not increased in 8 years despite prices basically tripling. All of the world's reserves of oil amount to about 40 years of consumption and new oil discovery rates are way below consumption rates. We are almost certainly at peak, and if by chance they manage to squeeze higher production rates out it will only be a small, short lived blip.

My parents are proud, I am a mechanical engineer designing pipelines, mines, ports, factories and power plants.

Tue, 11/05/2013 - 19:00 | 4124601 Zgangsta
Zgangsta's picture

This does nothing to solve the root of all of these problems, which is runaway overpopulation.

Tue, 11/05/2013 - 19:15 | 4124653 willwork4food
willwork4food's picture

No it's not. It's runaway avarice by the top 5% of individuals and corporations-which includes the military industrial complex.

Tue, 11/05/2013 - 23:25 | 4125526 Raymond K Hessel
Raymond K Hessel's picture

Right. Not the people who bought more house than they could afford.  Not people who would rather complain about dragging their kids from soccer to basketball to karate, instead of pushing them to learn math, programming, and science.  


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Tue, 11/05/2013 - 19:59 | 4124830 Zero Point
Zero Point's picture

Funny thing. I know correlation isn't causation, but strangely population seems to correlate with the absence of electrical power and internet use.

It would seem that if "free" energy could somehow be invented (perhaps a hundred years ago by Tesla or maybe Schauberger) then population would cease to increase?

Perhaps then anyone who was pushing the "population bomb" agenda 21 hogwash would be seen as the shill they are.

Tue, 11/05/2013 - 19:00 | 4124605 hairball48
hairball48's picture

Must be a boring day for news

Tue, 11/05/2013 - 19:19 | 4124667 NOTaREALmerican
NOTaREALmerican's picture

Re:  Must be a boring day for news

Everywhere, actually.    The bitching sites I visit can't seem to find enough for people like me to bitch about, for a few days now.

Peak bitching?

Tue, 11/05/2013 - 19:35 | 4124723 Smiley
Smiley's picture

"Peak bitching?"


Lets hope not, when angry people quit bitching they are far more likely to get violent.

Tue, 11/05/2013 - 19:04 | 4124612 lolmao500
lolmao500's picture

To end the addiction to economic growth and save the earth, this is what we need to do: End the creation of money as interest-bearing loans.

LOL that's what the FED is doing with their QE... no interest free money for their buddies... and that is working SO WELL!

Tue, 11/05/2013 - 21:34 | 4125176 Mark_BC
Mark_BC's picture

Their buddies turn around and "invest" that money to earn ... interest! in some form.

Tue, 11/05/2013 - 19:03 | 4124615 eddiebe
eddiebe's picture

Well, we know what happened to Lincoln. And sure, yeah, we're a democracy.

Tue, 11/05/2013 - 19:03 | 4124616 A Lunatic
A Lunatic's picture

Dear stupid little girl, our official form of government is not a Democracy. Now you know the second reason we got where we is.......

Tue, 11/05/2013 - 23:26 | 4125532 Raymond K Hessel
Raymond K Hessel's picture

It started out as a constitutional republic that was turned into a parliamentary democracy.

Tue, 11/05/2013 - 19:03 | 4124617 Al Huxley
Al Huxley's picture

Yay for democracy!

Tue, 11/05/2013 - 19:20 | 4124666 HelluvaEngineer
HelluvaEngineer's picture

I know. I mean - isn't it super awesome and stuff?

Tue, 11/05/2013 - 19:04 | 4124621 Icewater Enema
Icewater Enema's picture

There is so much wrong with this, it isn't even worth commenting on it all (other than to say this). meh.

Tue, 11/05/2013 - 19:20 | 4124673 Peterus
Peterus's picture

I find it worthy of a comment.

Entire story "by a 14 year old impersonator" is an excercise in lefty logic. The premise is clear and it's going to be reached!

Money is bad, scarcity is artificial, resources are running out, banks bad but the governments that actually enable banks their profilgacy by taking in their loses are kinda part of a solution... And on top of this the idiocy with ever growing debt (did lefties ever heard of defaulting on loans, or actual sucessful enterprises that DO produce more wealth than is put into them and can pay back more without any debt expansion) and complete misunderstanding of the money commodity.

Tue, 11/05/2013 - 19:39 | 4124746 NOTaREALmerican
NOTaREALmerican's picture

Re: did lefties ever heard of defaulting on loans

And see, that's why we have 14 year olds suggesting "political solutions", because it seems nobody can shake their dislike for the "other" political side.

So, everybody is stuck in this perpetual circle of blaming the "other" political side for the majority in the problems, but - meanwhile - the people who actually don't have any political side just keep looting.

Tue, 11/05/2013 - 20:15 | 4124890 Mark_BC
Mark_BC's picture

Why would we need credit loans if interest was banned? The people would again own things rather than being debt slaves to the elite owners. You wouldn't buy somethign until you saved up enough money to buy it, but because the peopel would own things rather than the elites, it wouldn't take a whole lifetime to save up for it as it does now.

Tue, 11/05/2013 - 19:40 | 4124754 Againstthelie
Againstthelie's picture

And compound interest is good, Shlomo, correct?

Tue, 11/05/2013 - 19:52 | 4124803 NOTaREALmerican
NOTaREALmerican's picture

Re:  And compound interest is good

The miracle of compound interest.   It compounds a savers interest so that, after enough time, you can retire comfortably and live a happy peace life.

Tue, 11/05/2013 - 23:28 | 4125537 Raymond K Hessel
Raymond K Hessel's picture

You nailed it.  

Take out compound interest, you take out the savers.  Ultimate goal of this social justice fascit trojan horse shitty article.

Tue, 11/05/2013 - 19:07 | 4124634 AldoHux_IV
AldoHux_IV's picture

There are enough jeremiads and diatribes and rants on this topic out there. Luckily, this isn't one of them..

Show me one without it being a commercial for gold/silver/bitcoin/ideology or some paid subscription and I'll say you're right otherwise I'll just give "her" credit for truly being revolutionary & starting a conversation.

Tue, 11/05/2013 - 19:11 | 4124641 Dre4dwolf
Dre4dwolf's picture

Wow at all the "big guys" picking on a 14 yr old girl.

I think shes got a pretty good grasp on things.

Tue, 11/05/2013 - 19:20 | 4124672 HelluvaEngineer
HelluvaEngineer's picture

Well this is Zero Hedge.  I mean...I'd do her.  Wait, what are we talking about again? (j/k)

Wed, 11/06/2013 - 09:05 | 4126275 highly illogical
highly illogical's picture

The girl doesn't exist.  Read the intro, she is a "narrative device" from the mind of a disturbed adult male.

Tue, 11/05/2013 - 19:12 | 4124646 stant
stant's picture

when i was 14 i read alot. and learned what world wars were for

Tue, 11/05/2013 - 19:13 | 4124648 robobbob
robobbob's picture

the author completely misses the difference between actual physical growth and paper financial growth.

the creation of tangibles increases the value of an economy. paper creation increases the size of the economy but destroys its value.

producers raise the standard of living. beyond a certain limit, financial engineers become parasites who kill the host.

push come to shove, producers would find alternatives or even build rocketships to beat earths resource depletion. such solutions would be disastrous to those whos wealth comes from controlling artificial scarcity.

Tue, 11/05/2013 - 19:24 | 4124681 NOTaREALmerican
NOTaREALmerican's picture

Re:  beyond a certain limit


Ahh,  and that's where the sociopath really shines.   Creating bullshit about what that "certain limit" is.

Why, I remember when I was a younger libertarian and how Alan Greenspan used to speak of the wonders of "free enterprise" and "self-regulating banks" and the "evil of entitlements".    The libertarians and the Conservatives used to think Alan was truely a great American.

Tue, 11/05/2013 - 19:49 | 4124654 Manipuflation
Manipuflation's picture

I have been considering lately what to do since, well, a long time.  I need to get the fuck out of here.  Russia is really starting to sound better.


Edit:  That link seems to work but not from ZH so here is another one to explain ranked choice voting.

Tue, 11/05/2013 - 19:17 | 4124657 viator
viator's picture

A budding Erlichian with a brain full of mush. Worships in the new green church. Who was it who said "give me the child and I'll give you the woman"?

Tue, 11/05/2013 - 19:57 | 4124821 Milestones
Milestones's picture

The sex  was different but the young lad had those line laid to him: "Give me the boy and I will give you the man."  Spoken by Lee Marvin from "Paint your Wagon" with the minister' son as the referred to "man".            Milestones    

Tue, 11/05/2013 - 23:31 | 4125545 Raymond K Hessel
Raymond K Hessel's picture

Chester the Molester?

Tue, 11/05/2013 - 19:17 | 4124658 NOTaREALmerican
NOTaREALmerican's picture

Well, the root of the problem is that "growth" is viewed by everybody (all the ISM's) as "good" so there's got to be growth.

Tue, 11/05/2013 - 19:17 | 4124661 Minister of Bre...
Minister of Bread and Circuses's picture

not sure i buy that this is really written by a 14-year old, just that it is written to sound like one.

Tue, 11/05/2013 - 19:31 | 4124670 Againstthelie
Againstthelie's picture

Interest slavery through money as debt.

The way money is created by banks should be explained in more depth:

If the bank makes a loan what happens in detail? It makes a balance sheet extension. The bank demands a security. This security is written on the liability side of the balance sheet. Then the bankster types, with extreme effort and extremely costly laborious labour, the numbers into the computer (in earlier times it was written on the paper) and sends this money to the customer's account. The money is created. No saver's money is used! This is one of the big lies for the sheeple, that the banks would use the savings of their customers to make loans. BS!

This credit money is created at zero costs out of nothing and is secured by the REAL security of the credit taker.

But it gets even more perverse:

In a market economy prices of goods and services are determined because of their costs. The costs for a bank to create credit? Zero. Or almost zero.

The cost to produce a credit of 1000 or 1000000? Is exactly the same! Zero. Nevertheless this legalized criminal business has managed it to avoid all rules of the free market: Although the 1000000 loan costs the same as teh 1000 loan, they demand 1000 times more interest on it than from the small credit.

Isn't it incredible, that the banks, that have been praying all over the world capitalism and the principles of free market economy, have a business model that completely avoids the principle of economies of scale and product prices as result of production costs? And not one in a million recognizes it, that the biggest promoters of Capitalism, the banks, have a business model that has NOTHING to do with a free market economy but instead run a political regime with political actors playing a politics simulation that gives the productive people the hard free market while the banks run their legalized money as debt ponzi scheme. Every Politician talking about the need for economic growth and not talking about money as debt, is their puppet and a supporter of this biggest organized crime in history.

A brilliant scam and it's not surprising at all, that after several hundreds of years of this criminal "business", the money creators and money lenders own the world while their political actors in the Plutocracies talk about the necessity of economic growth to keep the sheeple distracted from the reason why exponential growth in this regime is needed.

Tue, 11/05/2013 - 23:08 | 4125473 essence
essence's picture

True. I feel your pain.

Now the question is ... do you prescribe that behavior, or do you render it superfluous by introducing competing systems.  

Ones response to this exposes their mindset.
Are you one seeking to impose your beliefs on others (ultimately by force/murder ...hey, let's call it for what it really is).

OR you agreed to permit others to introduce and pursue their solutions in conjuction to you having the same freedom.

Bit of a disclaimer here.... I'm not referring to murder and extortion being used.
Once those tatics are involved then its war and all limitations are chucked aside.

Force and guile rule and only you can determine your 'rules of engagement', if any even exist at that point. I've never had a loved one destroyed by evil and couldnt begin to say what I would be capable of after that.


Tue, 11/05/2013 - 23:32 | 4125548 Raymond K Hessel
Raymond K Hessel's picture

Orrr...stop buying things you don't need with money you don't have.

Tue, 11/05/2013 - 19:22 | 4124675 mla
mla's picture

That was horrible. I'm anti- Fed and anti-fiat, but that whole argument was stupid. You can contuinually have productivity growth without any implication of somehow destroying the planet.

Tue, 11/05/2013 - 19:29 | 4124704 NOTaREALmerican
NOTaREALmerican's picture

Re:  You can contuinually have productivity growth without any implication of somehow destroying the planet.

One would think that eventually,  like compound interest, we'd be so darn productive there'd just be nothing to do anymore. 

It's not really growth in productIVITY that's the issue, it's the growth in crap.

Disclaimer:  I think humans need more crap, and until all the crap in the universe is stored in U-store-it places, true human happiness will never be acheived, but that still doesn't mean it's not a problem.

Tue, 11/05/2013 - 20:25 | 4124923 Againstthelie
Againstthelie's picture

It's not really growth in productIVITY that's the issue, it's the growth in crap.

Correct. The productivity growth would lead to much shorter working times. But if all essential needs can be easily satisfied thanks to technological progress nevertheless with such a criminal monetary system compound interest grows further.

So instead to work only half the time compared to the 1970s thanks to double productivity and enjoying a simple and slow life, all human energy in this regime is invested to make people believe they need more and more of the crap. And since it's not good for economic growth that things are durable, planned obsolescence has replaced the old engineering principle that things should work forever. So we do not only need more and more crap not to fall into depressions, all the crap we are running after has less and less durability and we need to work harder and longer to afford it.

Thanks to compound interest.

Many ZH readers seem to be glad about the interest slavery as long as it is based on Gold not on fiat money.

Tue, 11/05/2013 - 19:38 | 4124738 Againstthelie
Againstthelie's picture

It's not horrible it's simple mathematics.

What changes being anti-fiat and keeping compound interest? Nothing! The culprit is compound interest. It doesn't matter if this compound interest must be payed in gold or in credit based money.

The fact that more must be paid back than what is available at creation of the credit is the core of this crime. Fiat money is only a certain manifestation of the crime.

Tue, 11/05/2013 - 19:22 | 4124676 bigrooster
bigrooster's picture

Great story.  The poor kid will probably not see 15.  She is on the terrorist watch list for sure.

Tue, 11/05/2013 - 19:25 | 4124680 booboo
booboo's picture

I don't know, the EPA started under Nixon has been hell on small business, big business loves their regulations, lawyers have a huge nipple streched over the Super Fund, politicians won't go near them, the Supreme Court kicks their ass occationally but they keep breaking the balls of the little guy anyways "sue us serf" and the EPA continues to pull the wool over the eyes of the libs who think they are saving the planet so yea, they are pretty much fulfilling the role of government quite well, an army of thousands beating the shit out of a dirt farmer.

Tue, 11/05/2013 - 20:19 | 4124712 Flakmeister
Flakmeister's picture

So are you plugged into the medical marijauna scene in Colorado? 

Cos you be smokin' dat good shit, mon....


Still recovering from Jamaica.....

Tue, 11/05/2013 - 19:29 | 4124700 davidgdg
davidgdg's picture

Clueless smart Alec teenager bores grow ups to death

Tue, 11/05/2013 - 19:31 | 4124708 essence
essence's picture

Poor kid

She has the right idea but the transition & short-to-medium term implications could be disruptive enough such that she could never afford to have kids herself, have her own car, home, etc.   ESPECIALLY if the Government directly controlled the printing press (man, talk about cronyism-city).

Better yet is to scuttle the Central Bank and get government COMPLETELY out of banking and having/giving a monopoly on money creation.  Sure, they can specify a preferred tender for taxes & government business, perhaps even their own fiat dollar if it survives, but let's have no legal tender laws. Let there be a multiple of currencies and banking models. No doubt clearing exchanges and rating agencies will quickly spring up. Folks can look to rating agencies for advice about the resulting banking/Money system. Bogus banks and rating agencies will fail, honest and efficient ones will live.

With true competition and government lassez faire then fractional reserved banks would compete with full reserve banks, No interest banks (if they're viable), PMs (physical or business models such as GoldMoney), Bitcoin, you know FREE ENTERPRISE. We've hardly ever known it because Government sticks its nose into everything and perverts it.

Let the marketplace and not a criminal cabal and corrupt politicians decide what thrives or not.

 Oh, and let's do the same for the Medical industry too!


Tue, 11/05/2013 - 19:50 | 4124790 NOTaREALmerican
NOTaREALmerican's picture

Nice rant.  I loved it.  When I die and remodel my heaven I'm going to hire you as economic architect.  

But, here on earth we've got this one really very bad behavioral problem with humans, which is:   many of them are scheming sneeky asshole bastards and the really really smart-n-savvy ones create bullshit for the dumbasses about "FREE ENTERPRISE", while they screw the dumbasses anyway they can.   This causes the dumbasses to get pissed and then another really really smart-n-savvy one comes along and creates bullshit for the dumbasses about "SOCIALISM" and then we get into these battles about which bullshit is better, and the story-line gets lost, and other sociopaths are picking peoples pockets while others are trying to remember the story, and pretty soon the dumbssses on the Red and Blue Team are throwing chairs at each other and (well) that's where we are right now.

So,  how do we get from Libertarian utopia with semi-psychotic dumbasses humans?

Tue, 11/05/2013 - 21:48 | 4125002 essence
essence's picture

If you evaluate the past, one sees that it's money power bribing politicians, or in response to some perceived inequity or issue, forces are brought to bear on politicians by the masses for action, yet the end results are hijacked by the money power.

Looking at Banking as an example. Not just anyone can start a bank, oh no, you need a state or federal charter (actually, much more these days). And to get such charter a bank would have to compromise itself by paying above market rate for dubious government bonds. Thus from its inception a new bank has already climbed into bed with corrupt government (that was yesteryear, today fractional reserve banking is so fully entrenched that no real alternatives to the system could ever hope to start up and threaten the status quo).

Get government completely out of the loop and free enterprise has a chance.

Still, I'll admit, we need to get money out of politics. Specifically, we need to keep rich assholes from buying off politicians. That's an ancillary issue that is of utmost importance. The ricos will always seek to buy a politician as an expedient to getting their way. That avenue should be shut off ASAP or else we're attempting to dig a hole in the sand.

Big picture though:
head off the enemy at the pass .... and that is any under lying laws that give money power an advantage from the get go.

Look, these people are friggin truly smart & savvy after having the best of education and advisers. Plus, (at the very top) hundreds of years experience and contacts to draw upon from their family involved in banking and buying off governments.


P.S.  if that's too nebulous for you ... then just focus on reinstituting Glass-Steagall, auditing the Fed and the Exchange Stabilization Fund. Get external money out of elections. Even that might be enough to get the ball rolling. Keep in mind there's a heck of alot more of us than them. Numbers can provide great leverage.


Tue, 11/05/2013 - 19:31 | 4124710 Flakmeister
Flakmeister's picture

Wow,  what a lame collection of comments...

Tue, 11/05/2013 - 19:34 | 4124715 NOTaREALmerican
NOTaREALmerican's picture

Re:  what a lame collection of comments...

Oh yeah!    Oh YEAH?    Well,  maybe you just haven't seen how lame they can get!

Tue, 11/05/2013 - 19:36 | 4124727 zerotohero
zerotohero's picture

zzzzzzzzzzzz - wake me when this kid shuts up

Tue, 11/05/2013 - 19:36 | 4124733 Zigs
Zigs's picture

Unfortunately, most voters only think at the level of a ten year old.

Tue, 11/05/2013 - 19:41 | 4124752 Smiley
Smiley's picture

People that regurgitate this warm fuzzy platitude bullshit make me fantasize about violence with claw hammers.

Tue, 11/05/2013 - 19:50 | 4124796 Againstthelie
Againstthelie's picture

Platitude bullshit, to talk about the core of the crime? Shlomo, I can tell you what real BULLSHIT is: a system that demands to pay back more than what is available. If this compound interest must be paid back in Gold or in credit based fiat money changes nothing.


Tue, 11/05/2013 - 20:13 | 4124879 Mark_BC
Mark_BC's picture

"People that regurgitate this warm fuzzy platitude bullshit make me fantasize about violence with claw hammers."

That's the scary part, that even most ZH'ers don't get it. She is simply stating the way it is and even the Austrians try to stick their heads in the sand and hope it goes away so they don't have to face some Inconvenient Truths, just like the Keynsians do. Everything she says is right.

Until franctional reserve lending and interest bearing loans are constitutionally banned from existence, we will not survive as a society. Of course, a few people will be around through the upcoming collapse, but modern civilization and the majority of the world's people won't. Unfortunately, however, I think it's too late to avoid that outcome.

Tue, 11/05/2013 - 22:41 | 4125413 Amagnonx
Amagnonx's picture

Interest is moral and there is nothing wrong with it economically either - it is the combination of fractional reserve banking and interest that is the problem.


If you labor and save money, then you could buy some animals - and they would reproduce and your stock would increase.  You would earn interest due to the natural productive power of the earth, if you put your money into the stock market and the business was successful - you would increase your wealth.


If you deposit (real) money into a bank account, and that money is once more lent out to a new business that is successful - the loan represents equity in the business, and a claim of profit on that equity.  It is perfectly reasonable and moral - and if you put your money into a bank, the bank defrays your investment risk by backing a wide variety of businesses.


Even if the bank elnds to people for the purpose of consumption - for a home or car for example, then the person who takes a loan decides to pay a premium due to their time preference - they want it now.  So the bank effectively holds equity, and charges for leasing the equity to the user.  Perfectly moral and reasonable.


When the bank makes a double entry, when it creates new money while retaining your account balance as an on demand balance - when it counterfeits peoples products of labor and lends that out - that is where the problem arises.  When all so called money is created out of debt, and is owed back to the central banks, pluys interest and can do more than exitinguish the principal on that debt - then we have a maelstrom of ever increasing debt that cannot be paid.


As you say - it is stunning to me that even here on ZH people still do not understand where our econmic problems come from.

Wed, 11/06/2013 - 02:03 | 4125876 Mark_BC
Mark_BC's picture

There is nothing moral about making money simply by having money and sitting on it -- that is parasitic. If you invest your money into a venture and make a return, that is different. That is you taking a risk and (possibly) putting some of your own sweat into it to turn a profit. That is not immoral, in principle (of course, the details of how it all gets executed could be cause for concern). You have your own blood sweat and tears in it and it's not about just parking your money and walking away and expecting to earn interest off it, beause you could also lose money on your investment as well.

You may not believe this, but for every investment that provides a real return, there is another investment out there that lost. That is because we are very near the point where the world economy can no longer grow due to resource, technological, and ecological contrants. It is now a zero-sum game. That is why everyone who invests their money in supposedly risk-free bonds and gets 2.5% return is actually losing money due to financial repression because inflation is higher. Their loss is the elite bankers' gain.

Wed, 11/06/2013 - 09:03 | 4126266 Amagnonx
Amagnonx's picture

"There is nothing moral about making money simply by having money and sitting on it -- that is parasitic."

You are conflating the problems of the current fraudulent monetary system and interest - interest is earned money, it is a return based on your savings being deployed into equity and earning a return by being an equity holder in a business.  


In a 'proper' bank, using 'real' money (100% reserves and gold for example), then your savings are deployed by the bank into various kinds of loans, in some cases consumer loans - where the end users pays a premium based on time preference - or in investment loans, where you earn interest based on taking part of the profits for the loan which represents an equity position.  The bank then assumes most of the risk, and employs your capital more effectively than you could - and rightly charges you an arbitrage on your savings.  The bank loses on some loans, and makes money on others - and pays you part of its profits.  All perfectly fine.


Interest is NOT the problem - the problem is that govts are sending their people into debt, odious debt.  Then instead of earning the money, the govt steals the money from the people using threats of violence, pay tax or get locked up.  Then those who hold sovereign debt are simply the profiteers of a system of slavery.  The interest is not the problem, it is the use of force to extract wealth from the population in exchange for nothing of value - because the govts do not use the money they borrow for the public good - but rather for war, espionage, and buying votes.


The other problem is that banks are not lending out your money, they create new money and lend that at interest.  Expanding the money supply, causing the value of the money to fall.  This is fraud - and they have basically zero risk because the money was invented.


Interest itself IS moral - but in our modern system it SEEMS immoral, due to fractional reserve banking (a fraud) banks earn interest on money that does not come from savings, but rather is conjured out of thin air.  Additionally - the money that is recieved by issuing govt bonds is not invested, but rather it is wasted - the govt borrows the money against the wishes of informed people, but mostly facilitated by the general ignorance of people - and then uses FORCE to get repayment.  Rather than the money having been spent to increase the earning power of the people by infrastructure investement, or improved education - the money is wasted, and yet the people have to repay this debt from which they derived no benefit.

Wed, 11/06/2013 - 12:02 | 4127041 Mark_BC
Mark_BC's picture

Those are some good thoughts and I don't necessarily disagree with most of them, but the inevitable conclusion is that a monetary system that includes interest on loans means that there must be some other investment out there that will offset those gains, because it is in fact now a zero sum game.

Tue, 11/05/2013 - 19:49 | 4124786 Lordflin
Lordflin's picture

All systems, natural or man made, must grow or die. The explanation is not difficult. Work is inefficient. As a consequence waste is produced. As waste is toxic to the system that produces it, it must be removed which requires more work. More waste is produced, and so on. Only a perfect system can continue in perpetuity without growth. Sadly, it is an imperfect universe...

Sorry this was such a mystery to you...

Tue, 11/05/2013 - 20:09 | 4124845 Againstthelie
Againstthelie's picture

I don't know in which world you live, but in my world nothing grows forever. Things grow up but then they do not grow further.

The force to growth in our economic regime comes from the fact, that more must be payed back than what was borrowed. That's the force that creates the need for growth.

And our economic growth has NOTHING to do with a natural development anymore. People do not need three TV and every year a new smartphone. Most of today's economic activity is based on ARTIFICIALLY created DEMAND. How much energy is invested to make people dissatisfied with their current car? With their current house? Their furniture? Their partner?

More and more people recognize how sick everything has become and get out of the treadmill: throw the TV out of their home, leave the loud cities, decelerate their live, stay with their children instead of wasting their life behind a supermarket cash desk or in a office.

Compound interest grows exponentially and must be satisfied. This is nothing natural, this is completely artificial and intentional.

If this compound interest is payed back in gold or in fiat money changes nothing.

But it destroys the nations, the people, the live, creates all kinds of mental illness, depressions, social failure, drug misuse, and in the long run will ultimately turn the planet into a desert because everything must be turned into profit to satisfy the unsatiable exponentially growing compound interest.

Tue, 11/05/2013 - 22:42 | 4125415 Lordflin
Lordflin's picture

You are quite correct, nothing grows forever... all systems ultimately die... At least that is the way it works in the world that I live in....

Tue, 11/05/2013 - 20:13 | 4124863 Mark_BC
Mark_BC's picture

To the contrary, biological growth must stop or it dies. There isn't any biological system in the world that can continue growing indefinitely. If it does, it's invariably called cancer. For some reason, we have deluded ourselves into believing that our own growth isn't cancerous to the planet, despite us appropriating for our own uses 25% of every single piece of vegetation that grows on it.

Tue, 11/05/2013 - 22:55 | 4125452 Lordflin
Lordflin's picture

This is incorrect... Complex systems continue to grow internally with the replacement of cells... Single cell organisms grow and divide.... Think of growth as a race with death... Death always wins in the end...

Wed, 11/06/2013 - 01:32 | 4125829 Mark_BC
Mark_BC's picture

Every cell that divides replaces an existing one that died. Single cell organisms can only grow and divide while their environment supports it. On average, growth exactly equals death. Either thier pond ries up and they all die or they go dormant and get swept away to another pond in the wind, or they simply run out of resources in their pond and die. There are NO biological systems that can continue to grow indefinitely.

Tue, 11/05/2013 - 19:51 | 4124795 gatorengineer
gatorengineer's picture

She has been indoctrinated into the hive....  There is no saving her....

Tue, 11/05/2013 - 19:52 | 4124798 Reaper
Reaper's picture

Imagine at 14, you can plan to save the world and know enough to do it. That's the problem with Obama and Bernanke, they lost insight by aging and were corrupted by their personal economic growth. She appears ready to accept the mantle as our next master Central Planner. Will she plan by example and avoid all the excesses of our present master Central Planners? Or, will she like all master planners become corrupted by her power?

Tue, 11/05/2013 - 19:54 | 4124809 NOTaREALmerican
NOTaREALmerican's picture

Re:  Or, will she like all master planners become corrupted by her power?

I think she'll find that the wine served by the top 10% is better than the box wine the bottom 90% is drinking.   Her "decisions" will follow from that.

Tue, 11/05/2013 - 20:47 | 4125001 Reaper
Reaper's picture

Many decades ago, I was at a UN function, where cases of a very special aged wine were served. At the head table, the most honored diplomats and the UN's elite staff were seated. Many of the those offered their praise of how superior the wine selected was. As the wine was being praised, a glass was poured for me and I said, "vinegar." The head steward came over, confirmed it and all the bottles were collected and removed. The UN's elite were a joke.

Tue, 11/05/2013 - 23:22 | 4125523 DOGGONE
DOGGONE's picture

VERY memorable, thanks. Have you any ideas for getting folks' heads out into the light?

Tue, 11/05/2013 - 23:49 | 4125592 Reaper
Reaper's picture

Yes. Pavlovian training. Repeat often enough until their "brain" associates what you say automatically with what they observe or hear. Be aware: dogs learn quickly compared to horses, which need very longer training times. Fools, like horses, take longer to train.

Tue, 11/05/2013 - 19:59 | 4124831 ebear
ebear's picture

Where's the hijab?  How can we take you seriously if you're not wearing your hijab?

Tue, 11/05/2013 - 20:07 | 4124853 Mark_BC
Mark_BC's picture

Actually, receiving interest on money was illegal for a lot of Christian history too.

Tue, 11/05/2013 - 20:12 | 4124867 Emergency Ward
Emergency Ward's picture

It's the up-front fees that are the killer.

Tue, 11/05/2013 - 23:41 | 4125569 Raymond K Hessel
Raymond K Hessel's picture

Awesome. We're now taking the Dark Ages as a a gilded age?!  



Wed, 11/06/2013 - 01:54 | 4125858 Mark_BC
Mark_BC's picture

How was inflation back then?

Tue, 11/05/2013 - 20:03 | 4124847 AUD
AUD's picture

Why is a Scott trying to pretend he is an underage girl?

Tue, 11/05/2013 - 20:35 | 4124947 Atomizer
Atomizer's picture

Victoria Grant | this Canadian explains the same, she is no longer 12 years old.

Tue, 11/05/2013 - 20:38 | 4124964 monkeydart
monkeydart's picture

"Let’s say you get a loan for $100, but because of the interest you pay back $110. Here’s an interesting question: Where did that extra $10 come from?"

Good brainteaser. In case anyone doesn't know, The answer is there is no extra $10. 

Take a two person economy. There is only 100$ of printed fiat. Joe lends 100$ to Bill at 10%. Bill pays back $50 at the end of year 1. He now owes 60$ and only has $50. But he also is a farmer and he has $30 worth of crops. He sells these crops to Joe for $30. Bill now has 80$ and owes $60 and Joe has $20 and debt assets of $60. Bill decides to pay off the rest of the loan before more interest is accrued leaving him with $20 and Joe with $80. There is still $100 but there was also product created. 

The reason we have so much debt is because idiots who cant balance a budget are running the show. 

Tue, 11/05/2013 - 20:52 | 4125014 Againstthelie
Againstthelie's picture

There is still $100 but there was also product created.

LOL! You miss the important point: not 100, but 110 must be repaid! These $10 do not exist and can only be paid in our criminal system of compound interest, if someone takes a credit and goes into debt. Therefore interest and compound interest is the real core of the problem.

The reason we have so much debt is because idiots who cant balance a budget are running the show.

Also wrong. The reason we have so much debt is the fact that all money in this regime comes only into existance as loan and every loan must be payed back with more money than what was created. The perfect treadmill for slaves! And you sheeple believe that a balanced budget would make a difference? Incredible.




Tue, 11/05/2013 - 22:53 | 4125447 monkeydart
monkeydart's picture

No I understand that 110 must be repaid. I don't understand why so many people think that compound interest is a bad thing. If we were to live in a society that used gold and silver as a primary means of exchange, would you lend me one ounce of gold if I promised to pay it back with one ounce of gold in 10 years? I highly doubt it. You would more likely say sure but I also want ten ounces of silver or some of your crops. 

The money is created as a loan yes, but whether it is a loan or they simply print more money without a loan, the point is your dollars become worth less. If they just print dollars with no loans, then the sheeple still have to keep running on their treadmills as the money they saved loses its value. It doesn't matter how the new money comes into existence (allowing the Fed to print without any backing is an idea that would have minimal long term effects), destruction of value is guaranteed either way.

Debt is not a bad thing unless it is used improperly, which is exactly what is happening now. 

I'm not trying to argue that there isn't problems in the system right now. I'm just trying to say that compound interest isn't a bad thing. If anyone wants to argue with that point I would be happy to borrow all of your excess cash at 0%. This girl's idea of letting the Fed print without creating debt is like a de-evolution from the gold standard to the debt standard to the no standard. 

Tue, 11/05/2013 - 20:51 | 4125019 Randoom Thought
Randoom Thought's picture

Amy is not a moron. She discovered that the entire problem is caused by banks creating money as debt. Even as a 14 year, she realized that growth and/or inflation are required to keep the Ponzi debt system going. 100 dollars of debt money plus 3 dollar of annual interest on that debt means that the money supply must be increased every year ... which is what they econonomists call "growth".

It is true that the growth paradigm is a false paradigm ... but the banks need to fake it so that their entire business model does not collapse right on top of their heards. Their business model is that they get to skim a percentage of the gross summ of all activity on the earth every year. While that seems idiotic and unfair, it is true. The only way they can do it is if more is created every year to make up for what they banks have stolen ... err taken.

Tue, 11/05/2013 - 20:55 | 4125020 PhatChow
PhatChow's picture

There is nothing wrong with Fiat, in fact it is the only thing backed by people's labor. Lots of people won't accept gold as payment for goods and services. So you are best to choose an instrument that lots of people will universally accept.


There is also nothing wrong with fractional reserve as long as the reserve amount isn't changed. It would be like fiat Bitcoin where you know how many maximum coins there are. Why? Because only a maximum amount of fiat currency is created by the multiplier effect.


There is nothing wrong with the Fed as long as it doesn't intervene to create additional credit.


There is nothing wrong with infinite economic growth. This can be achieved through a service based economy that protects the environment.


There is nothing wrong with compound interest provided that you don't take on stupid amounts of debt.



If a king lends $100 to a young woman with a sum of $110 to be repaid. The person would have to provide goods and services amounting to $110. This can happen over time through selling small flowers that are picked for free in the fields. It doesn't have to be repaid $110 in a large chunk. Theoretically if the person cannot pay their debts through the provision of goods, then the next debt repayment strategy is through services, the easiest method is that they can rent out their body to repay the debt. By this method the person who loaned out $100 expecting $110 in return can be satisfied. Nothing is free, just don't take the loan in the first place. This is why people under 18 usually cannot take out loans. If you argue that people are too young, raise the age when you become an adult, because these same people are voting... If you don't like selling your body, don't take on debt.


Simplified: Borrow $100 from King, Sell Body For $110 to King, Repay King in FULL, Buy Other Stuff From King.


For academic purposes, selling your body may include labour and other services provided other than prostitution.


If there was no interest rate, bankers could type extra infinite amounts of money into their bank accounts through borrowing. But once they start spending it would cause hyperinflation, if they don't spend it, then it's just fictional money that makes them happy.

Tue, 11/05/2013 - 20:58 | 4125053 Againstthelie
Againstthelie's picture

Where do all these interest slavery supporters suddenly come from?

The $110 in your example must be paid back, no matter what is produced in the economy but only $100 have been created. So $10 are missing but must be paid back. And they can only be paid back if someone takes a credit and therefore becomes indebted. Slavery is cool!

Tue, 11/05/2013 - 21:26 | 4125082 PhatChow
PhatChow's picture

You pay back the extra $10 over time. There is no requirement to repay the $110 in one large chunk.

Well in a simplified scenario the king takes on that extra credit. That's how it ends.

If you were unable to find someone to take on that debt other than the King, then you shouldn't have borrowed it in the first place. The king will eventually want something else that is created such as a new piece of technology, in return the $10 credit is paid off by selling it for $10.

Otherwise where is the incentive for the King is even lend money?

There is no extra money created, it's all just fictional.


You don't have to be a slave, you just have to be able to bargain properly. If you were really a genius that could make the next Google, then you wouldn't have to let go of all your technology. That way both parties benefit. There is no interest servitude unless you are an idiot that cannot repay it.


That would be one's last option. That's because they were dumb in the first place.


In an extreme case, your technology is so fabulous that the king is now in debt to you! He will service that debt by inviting you to stay in his palace.


I'm using the King as an example because it's a very OLD fashioned view. In modern times, it's everyone who has a bank deposit, and that is most of us. That interest must be repaid even if it's 0.05%. You must understand the context and why I have simplified the theory.

God Forbid, even those who sold you that piece of gold! They are holding the cash. Someone is holding it, someone whose labour has gone to dig it up and refine it. Why else would people accept fiat for GOLD? Everyone is in on it, that's because they aren't the losers. Why be a loser?

Be financially prudent and you won't be that loser in debt.

Tue, 11/05/2013 - 21:02 | 4125066 birdsonthebat
birdsonthebat's picture

You can only hold your babies securely with nuclear arms. Learn to stop worrying and love the financial bomb.

Tue, 11/05/2013 - 22:17 | 4125320 Amagnonx
Amagnonx's picture

You are a total fool, and understand nothing.  Now Ive had my gratutious ad hominim, Ill dispose with your worthless arguments.


Human labor is of variable value, it is distributed and in no ways can be directly reclaimed at a fixed value - so your idea that somehow fiat is 'backed' by human labor is a worthless idea - because it is not convertible directly for equivalent value in any reliable way.  Savings are a store of the PRODUCTS of labor, in the case of real money they are converted into a durable form that can at a later date be re-exchanged for similar value.  Instead of a wheat farmer saving part of his crop as wheat, he would convert it into gold - which takes much less space, does not risk rats eating it, mold, fire and its resale value does not deteriorate over time.  Fiat is subject to fire, rats, mold and under a fractional reserve system is subject to diminishing value.


Fractional reserve banking creates new money, which diminishes the value of the existing stock of money - it is counterfeiting - and the most egregious kind - because it is counterfeiting of the products of human labor.  It is saying to those who sweat and sacrifice, those who save - your efforts are worthless, they are worth the time it takes for a banker to punch in some numbers to his computer.  This undermines the efforts of everyone who labors, it destroys the value of their work, it demoralizes, it destroys the virtue of saving to offer your children a better future.  It rewards those who through fraud steal from those who by effort, by sweat, commit their labor to the betterment of the future of their families.


That there is nothing wrong with the Fed (given it doesn't create additional credit?) is patently absurd - it is the Fed who begins the counterfeiting of money, the basis of the entire chain of theft.  It forces people to be enslaved to a system of credit that robs them every second of every day - not through interest, but through counterfeit - but more than that, it allows the bankers to control the governments - to allow those governments to spend the money of the people without constraint, to burden this generation and those of the future with odious debts - not for the building of great works, for the infrastructure whereon a great nation may build its wealth - but on destruction of war, on consumption, on frivolous waste which sane men might avert themselves from, were they not mesmerized by handsome sociopaths, by propagandized media - by public schooling, by removal of any semblance of responsibility.


That there is nothing wrong with infinite economic growth?  Well, I might somewhat agree - certainly upon a basis of unlimited energy, and near perfect recycling - neither of which critical aspects I see available in our current circumstance.  So now, where then do we truly trend in efforts of infinite growth?  Into degradation, into destruction of non renewable sources - of things that arise from the land, the earth itself - overwhelmed in its ability to regenerate.  With wisdom, with caution, and with due reverence for our own home and its subtle balance - then we might aspire to infinite growth - but now, while charging ahead with scant regard even for our own generation of mankind, and none at all for the future - then a penchant of expansion is to take a deep draught of hemlock, to open a vein a little and declare that we are not dead quite yet - and that we feel sure a physician will appear at an opportune moment and recall us from our certain destination.


Lastly - yes, there is nothing wrong with compound interest - interest on savings, and an incentive to dishoard those savings into a bank, which might defray the risk of investment while arbitraging is not part of our trouble at all.  However, when combined with fractional reserve banking, it is the very heart of evil.


Fiat created from principal debt does not extinguish debt in the way real money does, both the debt and fiat are cancelled out of existence - and the interest remains, ever expanding - mathematically ensured systemic failure.

Wed, 11/06/2013 - 02:51 | 4125925 PhatChow
PhatChow's picture

There is a limit to the amount of the money fractional reserve system creates... Look at the mathematical formula involving the reserve ratio. (Amount Deposited)/RR. That's one component. We can have fractional reserve ratios without a Fed as long as we can predict with reasonable certainty the ability of people to repay debt. There are millions of Americans that repay their loans with ease each year.

When you are given the reserve ratio, everyone would be aware of the maximum money at any time. These numbers are broadcasted out to the general public so they can be analysed along with other unrelated aspects controlled by the Fed such as a cash rate or QE announcements. It's up to individuals to protect their money in these circumstances, but if that number were to stay constant. It's not the lack of information, it's the lack of will to do things and poor decisions to take on debt that traps people. I bet everyone here knew that the Fed was doing QE.

The Fed is important. Some entity has to start creating an object that retains it's value. What would have happened if Gold had no intrinsic value other than it looking nice. What if no one had the tools to create jewellery, then it's the same fiat rubbish. It's just a yellow rock. That could mean that people value "paper money" which could be used as toilet paper rather than a "yellow rock" that can be turned into jewellery which you just look at. That's why the Fed is important, there needs to be an originating object that people store value in, that is easily traded, divisible and more.

You give up all these when you take on the volatility of the gold. That's the most ignorant part, because precious metals are not really money if it's value is constantly fluctuating. Why don't you put all your money in copper and watch it slide as people move away from using copper in telecommunications (fibre), plumbing (pex plastic piping) and other problems? The only reason why it retains some value is due to it's mandated use, but as people move away from copper. It's going to become worthless. A similar problem arises with Gold as it has lost many uses in computing. We no longer put 3 to 10 grams of gold into CPUs, you can buy these to melt down if you are a fanatic. Gold is no longer being used in fillings, they now use cheap plastic. Inert substances are now replacing gold for medical implants... So, why speculate?

At least the value of FIAT money can be predicted through news and traded on forex markets and doesn't have the same volatility as gold. You can still trade a similar amount of rubles for dollars, but if you were in gold, the value has changed dramatically. Goldbugs basically using a piece of metal to speculate. What else do you define money as? Is it just the labour and goods? If it was, then why isn't fiat paper money which is backed by labour and goods sufficient? It's backed by everyone that uses it.


Take a look at bitcoin, it's just digits on the web. It's not backed by anything other than labour (now and into the future), but nevertheless zerohedgers are probably invested in it heavily. Someone needs to setup that system first and then stop tinkering with it. A problem with gold is that you can keep creating more and more of it. That's why bitcoin is probably a better example than gold when it comes to best choice "fiat".


In the modern context each piece is actually not evil at all. The issues together along with ignorance from borrowers has caused the issue. In fact without the borrowers falling apart, then there would be no issue.


Interest can be cancelled. Furthermore, all of the interest can be repaid. You have to rely on the person who loaned you the money to want something else from you. If they don't have that something then you just default. They cannot get anything from you, unless you willingly do it, but then again you won't ever get a loan again. So you are better paying off the debt. (So how would that work? Well, you can find any one of the billions of people on earth that are willing to pay off your debt if you do something else for them. They will take on the debt, but eventually someone along the line of debt holders will create that next Google and finally repay that original lender and all the interest payments that go along the way.)


Without an item that retains value such as fiat, there would still be debt servitude since people are willing. People still barter with their bodies and make verbal contracts that put themselves into debt. Take a look at some of the third world countries. It's not a problem with the monetary system, it's a problem with opportunity.



Tue, 11/05/2013 - 21:22 | 4125139 TNTARG
TNTARG's picture

It's too late to save the World. They've fucked it up already.

Fukushima is here, there and everywhere. And worsening. No fiat nor gold can't stop radiation.

Tue, 11/05/2013 - 21:31 | 4125163 PhatChow
PhatChow's picture

True, but if they reset, it will be the same thing again.

Except this time people will be given a chance not to rackup any crazy debts.


Otherwise, nothing will have a price. Gold will also be worthless. There will be no consensus. That's why there is a market. Including a market for debt.


There is no utopia. That's why it's "On a long enough timeline the survival rate for everyone drops to zero", and that includes the gold hoarders, and those planning for doomsday and armageddon. You can't plan for it, you all die in the end. That's the ironic part of the phrase.

Tue, 11/05/2013 - 21:33 | 4125172 DOGGONE
DOGGONE's picture

Hi Whomever!
Making this content apparent to the people
would greatly aid your efforts! Please do it!
It is not weird that economists don't do so -- they, or their employers, are bought by the financial sector, which is 1/12 of GDP.

Tue, 11/05/2013 - 21:36 | 4125184 SpongeBobWhoopAss
SpongeBobWhoopAss's picture

 Save the Earth? This child needs an introduction to the Doomslayer. The late, great Julian Simon.



Tue, 11/05/2013 - 23:11 | 4125489 TNTARG
TNTARG's picture

Give that as a reading for the mothers of thousand of children getting thyroid cancer in Japan, the US and sorroundings. To the mothers in Iraq who are being told not to have any more children. Give that to Fatima Ahmed who was born in Fallujah with deformities that include two heads tanks to depleted uranium ammo.


Pity sardines, starfishes and many other Ocean's creatures can't read. Starfishes may stop eating each other and melting.

Wed, 11/06/2013 - 02:17 | 4125892 Mark_BC
Mark_BC's picture

Wow, just wow. That Julian Simon article is just so wrong in every way I don't even know where to begin. It would basically take me as many words as he wrote to go through all the problems because basically everything he says is either patently false or a gross distortion of the facts or processes. I guess I shouldn't expect anything more from a business professor....

Tue, 11/05/2013 - 22:03 | 4125261 luckylogger
luckylogger's picture

What a long winded little thing. Bets mommy and daddy wrote it and are upperclass people with suv's, great big wood houses and bitching about oil extraction and logging.

Reality of it is , we have more known resources than we did in 1965 and for all the peak oil, climate changing fanatics- just go live in a tepee and walk to ocean city next time you want to go to the beach.............................

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