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What's Wrong With Our Monetary System (And How To Fix It)

Tyler Durden's picture




 

Submitted by Adrian Kuzminski via Club Orlov blog,

Something's profoundly wrong with our global financial system. Pope Francis is only the latest to raise the alarm:

“Human beings and nature must not be at the service of money. Let us say no to an economy of exclusion and inequality, where money rules, rather than service. That economy kills. That economy excludes. That economy destroys Mother Earth.”

What the Pope calls “an economy of exclusion and inequality, where money rules” is widely evident. What is not so clear is how we got into this situation, and what to do about it.

Most people take our monetary system for granted, and are shocked to learn that the government doesn't issue our money. Almost all of it is created by loans made “out of thin air” as bookkeeping entries by private banks. For this sleight-of-hand, they charge interest, making a tidy profit for doing essentially nothing. The currency printed by the government – coins and bills – is a negligible amount by comparison.

The idea of giving private banks a monopoly over money creation goes back to seventeenth century England. The British government, in a Faustian bargain, agreed to allow a group of private bankers to assume the national debt as collateral for the issuance of loans, confident that the state would be able to service the debt on the backs of taxpayers.

And so it has been ever since. Alexander Hamilton much admired this scheme, which he called “the English system,” and he and his successors were finally able to establish it in the United States, and subsequently most of the world.

But money is too important to be left to the bankers. There is no good reason to give any private group a lucrative monopoly over the creation of money; money creation should be the public service most people mistakenly believe it to be. Further, privatized money creation allows a few large banks and financial institutions not only to profit by simply making bookkeeping entries, but to direct overall investment in the economy to their corporate cronies, not the public at large.

Ordinary people can get the financing they need only on burdensome if not ruinous terms, leaving them as debt peons weighed down by mortgages, student loans, auto loans, credit card balances, etc. The interest payments extracted from these loans feed the private investment machine of Wall Street finance, represented by the ultimate creditor class: the notorious “one percenters.”

There are two main critics of our privatized financial system: goldbugs and public banking advocates. The goldbugs would return us to a gold standard, making gold our currency. The problem is that it would become almost impossible to borrow money since the amount of gold which could be put into circulation is relatively miniscule and inelastic. They is no way easily to expand the supply of gold in the world

Credit—the ability to borrow money—is vital to any economy. If we cannot borrow against the future for capital investment—roads and infrastructure, housing, businesses, hospitals, education, etc.—then we cannot fund essential services. To that end, we need an elastic money supply.

Public banking advocates—like Stephen Zarlenga and Ellen Brown--appreciate the need for credit. Their aim is to transfer the monopoly on the creation of credit from private to public hands. Unfortunately, there is no guarantee that this form of "progressive" state finance would be any better than private finance.

If we had a truly democratic government actually accountable to the public, such a system might work. But in fact governments in the United States and most developed countries are oligarchies controlled by special interests. A centralized public bank—without a political revolution--would likely favor government contractors and continue to squeeze borrowers for interest payments, now supposedly directed to “the public good.”

This is curiously reminiscent of the system in the old Soviet Union and today's China, where a political nomenklatura ends up calling the shots and enriching itself. Our current system of centralized private finance, as well as the "progressive" proposal of centralized public finance, are no more than twin versions of top-down financial control by an elite.

Fortunately, there is another model available. There is a long tradition in America, beginning with colonial resistance to “the English system,” and continuing with anti-federalists, Jeffersonians, Jacksonians, and post-Civil war populists. This tradition opposed any kind of centralized banking in favor of some kind of decentralized issuance of money.

The idea they developed is to prohibit any kind of central bank—public or private—and instead have money issued exclusively locally on the basis of good collateral to individuals and businesses. It's a grassroots, ground-up approach. Priority is given to local citizens and businesses, who can get interest-free loans from local public credit banks to finance what they need to do.

Such a system would have to be publicly regulated to ensure fair and uniform standards of lending at the local level. It would, in that sense, be a public banking system. The absence of a centralized issuing authority, however, would prevent any concentration of financial power, public or private.

Any top-down system of financial control - private or public - presupposes some kind of control by elites, that is, some kind of central planning, whether in corporate board rooms or in the offices of government agencies, or some combination of both. The historical record suggests that such top-down decision-making is inevitably self-serving, distorted, and socially counter-productive.

Indeed, whether public or private, it is the love of money empowered by centralized finance which creates the “economy of exclusion and inequality” which Pope Francis decries.

The decentralized system of populist finance would operate with no central planning. Instead, countless local decisions about lending and credit-worthiness would function as a genuine “hidden hand” of finance, one which would be self-regulating. Here the love of money would find no way to leverage its power. Instead it would be dispersed among the general population, as it should be, without burdensome interest charges, to the benefit of all.

 

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Tue, 07/14/2015 - 17:36 | 6312723 Panic Mode
Panic Mode's picture

Sadly, collapse is the only way to fix it. The ones in power will do whatever in takes to stay in power. 

Tue, 07/14/2015 - 17:49 | 6312789 Headbanger
Headbanger's picture

Or a massive comet impact.

Tue, 07/14/2015 - 17:55 | 6312817 greenskeeper carl
greenskeeper carl's picture

this article only needs to be a few sentences long- our money is debt based, and therefore it is impossible to ever pay of our 'debt'. It requires and ever greater ammount of debt to function. Our entire monetary system rests in the hands of a small handful of individuals who are completely unaccountable and can create money out of thin air on a whim.

 

there is no fixing this. It must collapse and be replaced by a form of honest(gold/silver based) money. It cannot be reformed, or fixed. The good news is that it will collpase under its own wieght in the not too distant future. It will result in a lot of pain for a lot of people, but there is no other way to do it

Tue, 07/14/2015 - 18:44 | 6312933 Kaiser Sousa
Kaiser Sousa's picture

"There are two main critics of our privatized financial system: goldbugs and public banking advocates. The goldbugs would return us to a gold standard, making gold our currency. The problem is that it would become almost impossible to borrow money since the amount of gold which could be put into circulation is relatively miniscule and inelastic. They is no way easily to expand the supply of gold in the world..."

and he starts with stating that there is "something profoundly wrong with our monetary system...."??????

thats the reason asshole cause Money can never be debt and Gold is REAL MONEY....

annother quack who knows nothing of Gold and Silver's 5000 year history...fuck off.

ps: as was before Gold will just be the Money backing the Currency, there by constraining the urge by corrupted government to DEFICT spend and debauch the currency.....and miss me with that "gold bug" bullshit too....

and finally, u best beelieve the MoneyChangers know GOLD IS MONEY cause if u doub this fact just do a search under Gold on this site

http://history.state.gov/

to see how document after document shows they have waged war against Gold on behave of the MoneyChangers since the creation of the fucking Fed....

Tue, 07/14/2015 - 18:49 | 6313060 Stuck on Zero
Stuck on Zero's picture

Agree "... since the amount of gold which could be put into circulation is relatively miniscule and inelastic ..." is as dumb a statement as you can make in economics.  Gold backed currency managed to fuel the greatest ecomonic booms in world history.  Gold is just the standard by which spending power is measured.

Tue, 07/14/2015 - 18:53 | 6313077 Kaiser Sousa
Kaiser Sousa's picture

bet...

this is the problem there r far too many people who speak on things they r not by virtue of knowledge qualified to do so.

 

"The difficulty for men who with absolute certainty grasp axioms which constitute the foundation of specific disciplines is when they encounter other men who speak on matters of which they possess no genuine understanding….”

- Kaiser Sousa

 

Tue, 07/14/2015 - 21:17 | 6313599 TheCryptoShow.com
TheCryptoShow.com's picture

Competition from private money is needed, such as bitcoin!

Tue, 07/14/2015 - 22:23 | 6313810 mvsjcl
mvsjcl's picture

Not one mention of the name Rothschild. Odd that.

Wed, 07/15/2015 - 04:31 | 6314261 striped-pad
striped-pad's picture

our money is debt based, and therefore it is impossible to ever pay of our 'debt'. It requires and ever greater ammount of debt to function.

I used to think that, but I discovered it's not true by studying the balance sheets. First of all, note that money (in the form of bank deposits) is a debt from the banks to the account holder. If you have $100 in a bank account, it means that the bank owes $100 worth of its assets to you. Don't believe me? Look at the annual reports of any bank e.g. Bank of America:

http://investor.bankofamerica.com/phoenix.zhtml?c=71595&p=irol-reportsan...

Open the 2013 Annual Report PDF, and go to page 25, where you will see $1,119,271 million of deposits in their liabilities.

The bank mostly deals in financial assets (promises), so you probably don't want it to give you some of its holdings of Treasuries in exchange for your $100. Instead you want to buy something tangible, so you exchange the money for goods and services with someone who needs the money to pay their debt to the bank (their loan). Or you can exchange with someone who doesn't have a debt to the bank, but wants to buy something from someone who does have a debt to the bank.

Eventually the loop is closed (the borrower has obtained the money to repay their loan), and the loan and money are simultaneously destroyed, since they are equal and opposite debts and cancel each other out.

There is no need for ever-greater debt. As long as the interest is used by the bank's employees, suppliers and owners to buy something (rather than them sitting on it for ever), the borrowers can obtain the money to pay the interest. This is not peculiar to banks - anyone can hoard money.

Described with diagrams here:

http://www.bluehydra.co.uk/ACE/Post03-MoneyLifecycle.html

Balance sheets at each stage of a loan (excluding interest payments) are here:

http://www.bluehydra.co.uk/ACE/Post04-BalanceSheets-Loans.html

Wed, 07/15/2015 - 04:47 | 6314279 striped-pad
striped-pad's picture

Our entire monetary system rests in the hands of a small handful of individuals who are completely unaccountable and can create money out of thin air on a whim.

Remembering that the money which banks create is their liability, every loan which they make where the borrower defaults is a drop in the bank's net worth (assets minus liabilities). If a bank lends $10,000 to Andrew Ninja, who buys a car from Bella Twocars and then crashes it, the bank still owes $10,000 of its assets to Bella, but it isn't going to get anything back from Andrew. The bank's owners take the loss. (Shareholder equity is reduced by $10,000).

So banks can create as much money as they want, but the defaults fall on the owners. At first.

The problem comes when the defaults exceed the net worth of the bank. The shareholders lose their entire shareholding in the bank, but someone else loses too. This could be bondholders, depositors, other creditors, or taxpayers (if the government decides to "bail out" the bank i.e. socialise the loss). This is why the FDIC's prompt corrective action requirement is so important. As soon as banks get close to becoming insolvent, they should be seized and sold off before anyone other than shareholders starts taking losses.

Tue, 07/14/2015 - 21:18 | 6313605 Model T
Model T's picture

Whatever. 

Tue, 07/14/2015 - 17:51 | 6312797 Boris Alatovkrap
Boris Alatovkrap's picture

Tree of liberty is occassional to water by blood of power that is be.

-- George Jefferson

Tue, 07/14/2015 - 19:59 | 6313358 Arnold
Arnold's picture

"Be all that you can be."

 

 

--Your Uncle Sam

Wed, 07/15/2015 - 10:23 | 6315113 bracemaker
bracemaker's picture

that is the funniest shit i have ever read on here.

Tue, 07/14/2015 - 17:52 | 6312801 kaiserhoff
kaiserhoff's picture

It seems to me that what he is suggesting here, is essentially the Chinese system, which is subject to endless corruption and favoritism.  Without a clear, legal profit motive, what else is there but "good intentions?"

Tue, 07/14/2015 - 18:45 | 6313019 Radical Marijuana
Radical Marijuana's picture

Yes, Panic, the problem with any and all complementary currencies is that none of them can compete with the currency backed up by the government demanding that form of "money" be used to pay taxes. On a deeper level, various kinds of complementary currencies amount to smaller parasites riding on top of bigger parasites. The deeper issues are that money is measurement backed by murder. The various idealized alternatives only work WITHIN the bigger systems, where those forms of money pay for the murders to back them up.

The article above was what I describe as the work of a reactionary revolutionary, or one of the Black Sheeple, attempting to lead the Zombie Sheeple backwards. Tragically, there are no good grounds to believe that could become sufficiently successful. The approaches towards voluntary currencies tends to side-step the issues of organized crime, and the paradoxes of the enforcement of the rule of law, and so on an so forth ...

Most people who promote nice sounding alternatives to the established systems of triumphant organized crime destroying themselves due to their own excessive successfulness at enforcing frauds, tend to deliberately ignore how and why those are the dominating systems. What is wrong with our monetary system is that it is based on the runaway triumphs of the applications of the methods of organized crime to the political processes. Realistic resolutions to those problems would take better organized crime, NOT continuing to deliberately ignore how and why civilization is controlled by organized crime.

Since the money system is actually integrated with the murder systems, because those combined money/murder systems exist due to the degree that the debt controls are backed by the death controls, any genuine "democratization" of the money systems would have to be matched by genuine "democratization" of the murder systems. BUT, of course, articles like the one above are able to pretty well deliberately ignore all of that ...

Since the dominate systems are now globalized electronic frauds, backed by the threat of force from atomic bombs, those systems are way more out-of-control and criminally insane that can be fully comprehended. Rather, as you suggested, Panic, we are headed towards series of severe social storms and psychotic breakdowns. There are no "reforms" that will be allowed to be implemented, but rather, eventually, only some kinds of crazy collapses into chaos, perhaps opening up niches for some of the survivors to rebuild new systems on the remaining ruins ???

Ideally speaking, in my view, we should go through series of intellectual scientific revolutions, in order to reconcile progress in physical sciences by surpassing that with progress in political science. However, there is nothing remotely like that presented in the article above, which is mostly based on nostalgic nonsense, and the related impossible ideals. Since what EXISTS is globalized electronic frauds, backed by atomic bombs, those PROBLEMS are many orders of magnitude bigger than anything which previously existed in human history.

The basic approaches that we should use to develop better monetary systems ought to be based upon an energy standard. However, more thoroughly understanding human beings and civilizations as general energy systems must go through a series of profound paradigm shifts, the most abstract of which is to recognize that the concept of entropy had its meaning reversed when an arbitrary minus sign was inserted into the entropy equations of thermodynamics and information theory.

From a sublime point of view, it is amusing how some people who are reactionary revolutionaries propose "better" monetary systems which have nothing in common with the scientific theories of power and information, and therefore, make no effort whatsoever to revolutionize those theories. However, since what EXISTS is globalized electronic frauds, backed by atomic bombs, any realistic resolutions should be based upon deeper understanding of the progress in physical science that made that possible. However, of course, that is politically impossible, at the present time, since politics continues to be almost totally dominated by various old-fashioned religions and ideologies, which adamantly refuse to change their metaphysics to reconcile those with demonstrated progress in physical science.

What is wrong with our monetary systems is the excessive successfulness based upon enforcing fraud. However, there are no genuine solutions which could be based on simply stopping there being frauds which are enforced. Various complementary currencies tend to look at the national currencies being the banksters' frauds, being enforced by governments, and WISH that they could do something different, outside of that system. However, they can ONLY operate within those systems, within the "rule of law" which pays for the police and armed forces to back up the ways that the governments enforce the banksters' frauds.

Moreover, the reactionary revolutionaries bogus "solutions" tend to deliberately ignore how the murder systems, or the overall death control systems, would operate through realizations of alternative monetary systems. Essentially, the existing problems are due to the long history of successful warfare based upon backing up deceits with destruction, becoming successful finance based upon enforcing frauds. The excessive successfulness of those systems are driving them towards them causing their own self-destruction, through crazy collapses into chaos, since no matter how much frauds are enforced, those are still false, and therefore, the more successfully those frauds are enforced, actually the most psychotic society overall becomes, and hence, the only apparently practically possible resolutions to those problems caused by integrated systems of legalized lies, backed by legalized violence, is for them to drive through their own psychotic breakdowns.

HOWEVER, in that overall context, the deeper issues continue to be the death control systems, which back up the debt control systems. The existing systems are based upon the actual death controls being done through the maximum possible deceits, in order to back up debt controls based on the maximum possible frauds. Of course, we may well WISH for something better than those. However, it does not work to merely WISH that there were no death control systems, nor does it work to WISH that human beings would not be consciously aware of how those death control systems actually worked.

Meanwhile, those WISHES are exactly what the reactionary revolutionaries tend to promote as their preferred "solutions" to the currently existing monetary systems being fraudulent. That is what the article above is doing. It WISHES that there was no murder system that backed up the money system, and it WISHES that people would not be consciously aware of how those combined money/murder systems were actually working, because those WISHES are presented using the magic language of "democratization" or "decentralization," etc. ...

While I agree with those idealized goals, the article above has its mechanisms backwards. The article above does not make the slightest effort to come to terms with globalized electronic frauds backed by atomic bombs being the REAL problem we are actually faced with. Therefore, such an article does not endeavour to develop better understanding, indeed, revolutionary paradigm shifts, in political science, which would be able to be better reconciled with the progress in physical science that made electronic frauds and atomic bombs, etc., enabled to actually EXIST.

A better monetary system should be a more scientific monetary system. However, that would take continuing to carry through deeper and deeper levels of intellectual scientific revolutions, which then would apply to political science, and especially to the combined money/murder systems. Meanwhile, articles like the one are typical of the material published on Zero Hedge, by presenting relatively superficial analysis of the problems, followed by similarly superficial "solutions." Of course, given that the mass media do not even present such superficially correct analysis at all, the overall conclusions are more strongly reinforced that: "Sadly, collapse is the only way to fix it."

Tue, 07/14/2015 - 22:25 | 6313814 detached.amusement
detached.amusement's picture

this is only so, because of finite amounts of energy and too many flows to distribute it to - made exponentially worse by those flows having massive siphons at the trunk level - in some form or another operating the death controls.  until the energy flows are altered significnantly, or the coefficient of friction changes - e.g. an exponential increase in power source and efficiency - we're basically fucked.

Tue, 07/14/2015 - 21:17 | 6313600 Model T
Model T's picture

It's completely obvious how we got innto this situation; and what to do about it; but nobody is going to do it; so the article is a waste of time.

Tue, 07/14/2015 - 17:50 | 6312727 Captain Debtcrash
Captain Debtcrash's picture

The last thing we need is to have money creation in the hands of the government.  The government can regulate it, as in the weight and measure of it, but should have nothing to do with its creation.  Of course gold could be used as a monetary system with plenty of borrowing, only you borrow from the producer not the bank. The producer of your home, infrastructure of anything else would supply the credit, and who better to set the terms.  It may result in slower growth, but it would be healthier and not waste so many of our precious resources via misallocation, malinvestment and bubbles. 

Here's a good first step toward a sound monetary system.

Tue, 07/14/2015 - 17:36 | 6312728 Two Theives and...
Two Theives and a Liar's picture

Pretty sure Mr. Pope is in with the Globalist crowd:

http://www.zengardner.com/leaked-ass-popes-known-globalist-stooge/

How else would he "suddenly" become Pope?

Tue, 07/14/2015 - 17:48 | 6312777 lordylord
lordylord's picture

For some reason he shills hard for global warming too.  He should disperse all the Vatican's assets if he was at all serious about what he preaches.  I'd be more inclined to listen to the words of a pope wearing rags.

Tue, 07/14/2015 - 18:35 | 6312976 JR
JR's picture

Is the pope Marxist? Francisconomics regards capitalism as “the dung of the Devil.”

Writes Pat Buchanan:

On arrival in La Paz, Pope Francis was presented by Bolivian President Evo Morales with a wooden crucifix carved in the form of a hammer and sickle, the symbol of Lenin, Stalin, Mao and Fidel.

Had Pope John Paul II been handed that crucifix, he might have cracked it over Evo’s head. For John Paul II had seen up close what communism did — to his country, his church and his people in 45 years of Bolshevik rule. ...

Today we have a pope for whom free-market capitalism is the “unacceptable ideological commitment.”

As The New York Times reports, Pope Francis does “not just criticize the excesses of capitalism. He compares them to the ‘dung of the devil.’ He does not simply argue that ‘greed for money’ is a bad thing. He calls it a ‘subtle dictatorship that condemns and enslaves.'” …

Asks Buchanan:

The pope used the phrase “dung of the devil.” Is that not a good description of Karl Marx’s “Communist Manifesto” and “Das Kapital”? And is not satanic the precise word to describe the scores of millions of dead that 70 years of Marxist-socialist ideology produced? 

https://www.lewrockwell.com/2015/07/patrick-j-buchanan/is-capitalism-the-devils-dung/

Tue, 07/14/2015 - 17:37 | 6312737 realmoney2015
realmoney2015's picture

I agree with Jefferson and Jackson that central banks are our biggest threat. I also agree with Ron Paul that the solution is competing currencies. If you want to accept tulips or sea shells for payment, that is your choice. I for one would go for gold and silver.

Tue, 07/14/2015 - 18:21 | 6312902 kridkrid
kridkrid's picture

Especially today, with the access we have to data, in real time, there is no reason why we can't support a fairly endless number of currencies. There might be a few prevailing mediums of exchange that would be generally accepted by vendors, but what could be exchanged in the background could be endless. Sure there would be bubbles and failures, but nothing that can take down an economy.

Tue, 07/14/2015 - 17:38 | 6312738 Czar of Defenes...
Czar of Defenestration's picture

.

.

Adrian displays a SPECIAL KIND OF STUPID.

Especially when he cites the Pope, who admits he knows little of (though "pontificates" plenty on) economics.

OOPS.

Tue, 07/14/2015 - 18:06 | 6312851 leftcoastfool
leftcoastfool's picture

"he knows little of (though "pontificates" plenty on) economics."

I thought you were talking about Krugman for a minute, then I saw the bit about him admitting how little he knows...

Tue, 07/14/2015 - 17:39 | 6312739 A Lunatic
A Lunatic's picture

Unfuck everything......

Tue, 07/14/2015 - 17:48 | 6312780 disabledvet
disabledvet's picture

Yeah!

HEY GOVERNMENT GUY!
GET TO WORK!

Tue, 07/14/2015 - 17:49 | 6312785 Headbanger
Headbanger's picture

Too late

Tue, 07/14/2015 - 17:54 | 6312810 disabledvet
disabledvet's picture

So Puerto Rico really is fucked!

Tue, 07/14/2015 - 17:39 | 6312740 pods
pods's picture

Sounds good. Now we just have to have the moneychangers give back the power they have conjured up out of thin air.

pods

Tue, 07/14/2015 - 17:39 | 6312741 Gumbum
Gumbum's picture

This is the root of most of our problems. We can debate debt and the need for endless growth till we turn grey. Nothing will get fixed before the issuance of exponentially growing credit is stopped.

Tue, 07/14/2015 - 17:41 | 6312748 DetectiveStern
DetectiveStern's picture

We need a money system run by guys like this.

https://www.youtube.com/watch?v=hxVSVn0dzcg

Tue, 07/14/2015 - 17:41 | 6312750 matagorda
matagorda's picture

Yeah, Andrew Jackson took on Nicholas Biddle and the Bank of the U.S. and kicked their butts.  If only...

Tue, 07/14/2015 - 17:42 | 6312755 AgeOfJefferson
AgeOfJefferson's picture

Everything that is wrong with our monetary system and central banking is listed in the following document and, more importantly, what we can do collectively  to stop these banksters. Timefor action folks!

'Restoring the Lost Republic' (of the United States of America).

https://mega.nz/#F!J5EEXCDK!_LD4hgaBI3aUqqJc2Ng14A (PDF)

Once on the MEGA website, double-click on the PDF filename to download it directly.

Spread the word. Take some action.

 

Tue, 07/14/2015 - 17:43 | 6312759 Wary Hanger
Wary Hanger's picture

"What is not so clear is how we got into this situation"

Say What?

Tue, 07/14/2015 - 17:51 | 6312799 disabledvet
disabledvet's picture

That'll be thirteen point five BILLION dollars for an "Aircraft Carrier."

Hope it can fly to Moscow!

Tue, 07/14/2015 - 17:47 | 6312775 Saucy-Jack
Saucy-Jack's picture

Freegold solves the problem.

Just read FOFOA....

Just separate the medium of exchange function from the store of value function and let all currencies float against physical gold...at about $50,000 or so to start. Kill the US$ as the world reserve currency and voila!

Tue, 07/14/2015 - 17:51 | 6312800 lordbyroniv
lordbyroniv's picture

or.........

 

BITCOINZ !!!!!!!!1111111111111111ONE

Tue, 07/14/2015 - 17:51 | 6312787 carbonmutant
carbonmutant's picture

I believe we are experiencing a financial singularity.... and like the technical one, the gradient is so steep we can't see the other side.

Tue, 07/14/2015 - 17:50 | 6312793 lordbyroniv
lordbyroniv's picture

Sorry,..but every time Pope Francis opens his mouth all I can say is,...

 

who is HE to judge!??!?!

 

 

Tue, 07/14/2015 - 17:51 | 6312794 Billy Sol Estes
Billy Sol Estes's picture

Fuck the pope

Tue, 07/14/2015 - 18:38 | 6312991 Implied Violins
Implied Violins's picture

...but not the child he rode in on.

Tue, 07/14/2015 - 17:51 | 6312796 Dixie Flatline
Dixie Flatline's picture

Oh, I thought this was about how Obama said he was going to do a hard pivot on the economy.  Never mind...

Tue, 07/14/2015 - 17:53 | 6312803 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

The problem is that it would become almost impossible to borrow money since the amount of gold which could be put into circulation is relatively miniscule and inelastic. They is no way easily to expand the supply of gold in the world

There is no reason that a convertible currency cannot be revalued in terms of gold to allow an expansion -- it just has to be finite.

To that end, we need an elastic money supply.

Elastic, yes!  Infinite, no!

Tue, 07/14/2015 - 17:54 | 6312811 Bluntly Put
Bluntly Put's picture

There are two main critics of our privatized financial system: goldbugs and public banking advocates. The goldbugs would return us to a gold standard, making gold our currency. The problem is that it would become almost impossible to borrow money since the amount of gold which could be put into circulation is relatively miniscule and inelastic. They is no way easily to expand the supply of gold in the world

That statement is myopic. In fact many libertarians profess that the market should decide what it wants to use as "money". We are open to the idea that several competing forms of valuation could act as money or money substitutes.

However many of us believe that over time this has been tried repeatedly and precious metals always end up rising to the top due to their physical characteristics and rarity. For any particular form of money to be valuable it must also be scarce. Saying there is isn't enough gold to make the system work is denying the fact that smaller and smaller claims on gold, fractionalizing gold, cannot be accomplished. I think it can, bitcoin is still being used as held up as an alternative currency and it would be possible to fractionalize gold using some digital equivalent that could be redeemed in gold specie.

Perhaps a gram is the smallest amount of gold that could be physically redeemed.  But the point isn't having unlimted money available the point is allowing prices to adjust to the amount of money available.

Author is myopic.

Tue, 07/14/2015 - 18:00 | 6312830 Totentänzerlied
Totentänzerlied's picture

Finite "production" (strip-mining the planet) capacity meeting exponential consumption capacity is the problem. Everything else is either a symptom, or, more likely, a distraction.

Exponential growth, meet finite nonrenewable resources and thermodynamics.

Tue, 07/14/2015 - 18:13 | 6312833 Charlie Coyote
Charlie Coyote's picture

Most of us already know the problem with the financial system: what we call "money" is actually debt.  It's very simple to create debt, but very difficult to create value.  Those who control the creation process control the value of the debt by creating more or creating less - at no cost - to cause inflation or deflation.

Tue, 07/14/2015 - 18:01 | 6312837 newworldorder
newworldorder's picture

The money system is under control of 20 to 30 supra International Banks, able to threaten each and every Government of the World with catastropjy through population control anarchy.

Those banks are made possible and are controlled by the FED, IMF, World Bank, National Bank of China and the BIS. The majority of humans on this planet are to stupid, uneducated and uninformed to understand it. Many who do simply do not give a damn as long as the money spiggot flows their way.

Tue, 07/14/2015 - 18:02 | 6312842 gcjohns1971
gcjohns1971's picture

Excuse me.

But if bankers can't be trusted to create currency, backed by force...why would the government be more trustworthy? 

That politicians are dishonest is a truism...but you want to trust them, not only with all your wealth, but all EVERYONE's wealth??????

 

Excuse me, but that is garbage.

How about we choose what we want to use ourselves?

Lets consider the historical metals, for instance.

Why do you need a government to run a mint, in the first place?  Wasn't this done for the express purpose of offering the government an opportunity to steal though modification of the coin?

Honestly, why would anyone want to sanction such a thing.?  What desireable purpose is served?

If gold were to be money...why does the art work matter...unless it is simply the buyer's preference?   If it is the buyer and seller's preference, then what is the purpose of the gov't inserting itself in the deal, much less un-elected bankers who facilitate nothing except mandates that would not exist in the first place but for govt intervention??????

Tue, 07/14/2015 - 19:10 | 6313168 Hail Spode
Hail Spode's picture

True. Money is too important to be left in the hands of government. History shows us that government always tries to default on its implied contract to keep the money that it issues sound. The author is getting warmer, but the real answer is in here http://www.amazon.com/dp/B00B0GACAQ

 

Tue, 07/14/2015 - 20:20 | 6313431 numapepi
numapepi's picture

Modification of a coin is called seigniorage. It is done today through inflation. While the natural state in a capitalist system is deflation, government creates inflation, and the differance is the modern version of seigniorage. Or in other words... taxation by conniving.

Tue, 07/14/2015 - 18:14 | 6312874 enloe creek
enloe creek's picture

Caught on camera: Top Planned Parenthood doctor talks of selling fetal organs on black market http://rt.com/usa/273688-planned-parenthood-organ-harvesting/

Tue, 07/14/2015 - 18:16 | 6312881 22winmag
22winmag's picture

I stopped reading after "Pope Francis".

 

Who gave that asshole a podium to stand on and a microphone to speak into?

Tue, 07/14/2015 - 18:41 | 6313010 ILLILLILLI
ILLILLILLI's picture

Why, I believe it was the Catholics...

/snark

Tue, 07/14/2015 - 18:20 | 6312892 Charlie Coyote
Charlie Coyote's picture

What we need is a value based system of exchange.  Barter, for example, is value based - you exchange something of value for something else of value.  Our financial system is debt based - you agree to accept debt in exchange for something of value, which is the problem:  there is no equal exchange of value in any transaction. Where does the value go?

Tue, 07/14/2015 - 21:11 | 6313584 Stormtrooper
Stormtrooper's picture

Right! Gold is a commodity used as a commonly accepted method of barter relative to other commodities that are more difficult to value. In otherwords, it is true money.

Tue, 07/14/2015 - 18:23 | 6312905 Atticus Finch
Atticus Finch's picture

All news is a sympton of several basic processes and these basic processes have been repeated over and over for the last 70 years.

As far as what is wrong with the monetary system and how to fix it. I recommend reading Michael Hudson's. Trade, Development and Foreign Debt should you be interested in a true investigation of the problem. Unfortunately, the book is not a sound bite and many paragraphs have to be read more than once and then, given extensive thought. That said, he nails the problem and identifies successful historical approaches that would solve today's problems. But hey, who's listening?

Also Ellen Brown's, The Public Bank Solution identifies a clear path for resolving the current crisis. Why is the crisis not resolved? Because it benefits the creditors immensely and politician are too ignorant of finance to know what to do. And of course, they are bought off.

Oligarchs are not willing to implement solutions that benefit ordinary people. I mean useles eaters.

Tue, 07/14/2015 - 18:24 | 6312907 honestann
honestann's picture

No need for centralization of ANYTHING.  Let people exchange whatever they wish.  Let people save whatever they wish.

What will happen... naturally... is that most people will end up saving and exchanging gold, silver and/or platinum (or some other precious metal) for goods and goodies.  Why?  Because they are convenient.

As for "not enough money for borrowing", in almost all cases (today)... DEBT IS DISEASE.  And so, the more difficult to borrow the better.

Tue, 07/14/2015 - 22:11 | 6313276 Radical Marijuana
Radical Marijuana's picture

"No need for centralization of ANYTHING."

The history of warfare was mostly about the centralization of the power to murder. The "need" for that was demonstrated on battlefields. Human beings and civilizations necessarily operate according to the principles and methods of organized crime, with the history of warfare being organized crime on larger and larger scales, which then morphed into the history of successful finance based on enforcing frauds. WISHING that there was no organized crime is a childish fantasy. It is not even practical to try to avoid the best organized gangs of criminals, because they are world-wide, and automatically getting worse, faster ...

My previous comment above pointed out that the basics are that human beings operate as entropic pumps of energy flows, which are deliberately misunderstood in the most absurdly backward ways possible, because the best organized criminals get away with presenting themselves as not being criminals, and have been doing so for a long, long time! Therefore, the language that we use to communicate through tends to be extremely biased, as well as that the philosophy of science that most people presume is correct is also profoundly wrong.

The title of this article raises IMPORTANT TOPICS:

"What's Wrong With Our Monetary System (And How To Fix It)"

There are two main critics of our privatized financial system: goldbugs and public banking advocates.

However, most that article, and most of the comments upon it were the same old-fashioned kinds of bullshit, which, ironically, is still mostly the biggest bullies' bullshit, since that so totally dominates our civilization, including even the controlled opposition groups, that still think using that kind of bullshit. I REPEAT: Money is measurement backed by murder. Gold and silver backed money is the measurement of gold and silver backed by murder. Therefore, nothing is really gained by backing up money with commodities. (As well, the principle of the conservation of matter is only a special case of the principle of the conservation of energy.)

Public banking presents the practically impossible Catch 22, double bind paradoxes, that the funding of the political processes already dominate the public, and that is how and why the established systems became such that governments enforce the frauds of privately controlled banks, being able to issue the public "money" supply out of nothing, except backed by legal tender laws, and the demand to have to use that form of "money" to pay taxes. Ideally, public banking is a good solution, expect for it being politically impossible to implement, given the already established vicious spirals between the funding of politics and the monetary system. In theory, I support the public banking model, more than the commodity backed model, for monetary reform. However, in practice neither is possible. The tragic trajectory we are actually on appears to have no ways for the public to stop being incompetent political idiots enough for them to take back control of the public "money" system having already been almost totally privatized.

Our problems are WAY WORSE, because there are no ways to stop organized crime from existing, and therefore, no ways to stop governments from being the biggest forms of organized crime, controlled by the best organized gangs of criminals, which are currently the international bankers. Our real problems are EVEN WORSE due to those who promote "solutions" refusing to face the facts regarding what the problems really are, and why those are the really existing problems.

The reasons how and why there are central banks are that centrally organized crimes worked, as demonstrated throughout the history of warfare, operating the murder systems that backed up the monetary systems. By and large, the main reasons for why there are no practical political solutions to the REAL problems are that there is almost nothing but a core of organized crime, surrounded by controlled opposition, which "opposition" does NOT provide better organized crimes, but rather promotes the impossible ideals that there should not be any forms of organized crime.

In the case of honestann, there is the view that one should do one's best to avoid the organized crime gangs that dominate civilization, along with the view that those are out of control, and can not be ameliorated nor mitigated. That may well be the case, as I already agreed above with Panic, that we are most probably headed towards crazy collapses into economic chaos, due to the paradoxical final failures due to too much success at enforcing frauds, which excessive success still never stops those frauds from being false.

However, it is a superficial view to assert that there is "no need for centralization of ANYTHING." Clearly, the actual history of warfare, and organized crime in the form of the international bankers, has demonstrated the benefits from centralization, at least for them, which was enough to provide the positive reinforcements for that, so far ... The essential problem is that human beings and civilizations necessarily operate as systems of organized lies, operating robberies, which later suffer from their own excessive strengths becoming their worst weaknesses, namely, too much success at controlling civilization through being able to enforce frauds drives that civilization to become too psychotically out of touch with its own, more relatively objective, realities, due to the paradoxical excessive social successfulness based on enforcing frauds, which situation has been getting worse, faster, at an exponential rate!

Although I do NOT expect that human beings are going to adapt to survive having achieved prodigious progress in physical science, it continues to be that the only theoretically possible solutions to those problems would require profound paradigm shifts in political science. In particular, recognizing that money is measurement backed by murder. Of course, those who benefit from that being the case do so the most by lying about that the best, to the degree where almost all of the opposition to that being the case tend to also be indulging in the same basic lies.

There IS organized crime, and that HAS centralized itself as much as possible. Therefore, globalized electronic frauds, backed by atomic bombs, are what EXISTS, and (theoretically speaking) those are the problems that need to be resolved, NOT by going backwards to any old-fashioned religions and/or ideologies, nor by endeavouring to escape from the increasingly globalized grasp of the best organized gangs of criminals, which are not being better resisted, because most people refuse to face the facts that money is measurement backed by murder.

Thu, 07/16/2015 - 19:13 | 6315835 honestann
honestann's picture

I thought we had a peace treaty.  I don't reply to your messages, and you don't reply to mine.  I think we've repeated demonstrated that works better.  Thank you.

PS:  Just to pick one of your many misguided responses to my message.  I have never adovating wishing.  Not ever.  In fact, you know perfectly well that I advocate immediate extermination of every predator.  Period.  Which is what prevents centralization in the first place.  Even after humans refuse to respond to predatory actions for a while, and as a consequence centralization occurs, I still advocate extermination of ALL of them.  However, as a practical matter, once centralization gets to a certain point, the risk of any extermination technique is vastly greater than the hassle of vanishing to somewhere beyond the domain roamed and effectively controlled by the predators and centralization.  And indeed, human producers waited much, much, much too long, and today are unwilling to organize to exterminate human predators (which they could do).  Which only leaves escape, evasion and living an independent and largely self-sufficient life.  Or submission, which some of us are unwilling to accept.

I really wish you'd stop replying to my messages as I stopped replying to yours.  This is not to evade topics, but to evade the useless waste of time of answering endless BLATANTLY FALSE accusations like the one I answered above.  To be sure, I suspect the reason you accuse me of so many things falsely is because your accusation DOES apply to the majority of people.  But it is not fair to critique my messages as if I am a typical misguided, clueless moron.  I'm not.

PS:  Your responses also contain endless false statements that are not accusations pointed at me.  You have become a parrot of your own propaganda, and are clearly incapable of objective analysis of your own soundbites, which you memorized and parrot endlessly.

Thu, 07/16/2015 - 21:43 | 6321830 Radical Marijuana
Radical Marijuana's picture

Never a "truce," just an begrudging acceptance of the continuing PROOF that human beings must muddle through their own MADNESS.

Those who have gone through the historical selection processes of warfare, and other forms of organized crime, developed to become the human beings that best filled the niches of the top carnivores, or the men that preyed on me. You "solutions" are doubly impossible:

"advocate immediate extermination of every predator.  Period."

Of course, I regard you, honestann, as having become "a parrot of your own propaganda," due to your LOVE of the false fundamental dichotomies between human beings who act like predators versus producers.

I continue to point out that there is only one energy, and therefore, only one political system, which most matches the principles and methods of organized crime. However, your approach, honestann, is to refuse to apply the most generalized principles of energy systems and cybernetics to human beings, in order to appreciate those through unitary mechanisms. (Much less revolutionize the understanding of those theories to overcome the degree to which the current formed historically compromised with the biggest bullies' bullshit world views.) You make no effort whatsoever to even theoretically resolve HOW to "exterminate predators," AFTER the development of weapons of mass destruction.

I responded to your absurd statement against "centralization" with an explanation of WHY that centralization is what actually exists. You are the one who then comes back with silly, superficial notions of how to "exterminate predators," when, ACTUALLY the  history of warfare was different groups of human predators attempting to exterminate each other, which selected for those who were the best organized gangs of killers to prevail, and they did that by developing more "centralized" control of their murder systems.

Your stupid false fundamental dichotomies, and related impossible ideals, do NOT deal with either the short-term issues that the existing predators are who they are because they developed in the past to become the best at exterminating other groups of predators, and therefore, it would be damn difficult to actually kill them, NOR do you deal with the longer term issues of how can human beings operate death control systems after the development of weapons of mass destruction.

Your comments, honestann, are merely a slightly better articulated version of the other similarly superficial comments that are frequently posted on Zero Hedge about "killing the banksters." Rather, I like to promote at least the theory of sufficient intellectual revolutions to enable political science to surpass the paradigm shifts already achieved in physical science. That basically takes more UNITARY MECHANISMS, rather than the same old-fashioned false fundamental dichotomies. The BASICS are that ALL human beings live as predators. There are NO producers. Therefore, you are promoting totally backward mechanisms, because we see things through DUALITIES, and then go to the wrong pole of those dualities in order to promote a spurious unity.

You are totally failing, and are adamantly opposed to changing the basic ways that you perceive political problems. That is totally common. That is primarily why the human species is more probably going to end up committing collective suicide, rather than adapt to the development of globalized electronic fiat frauds, backed by the threat of atomic bombs. What I am promoting is that the same basic ways of thinking that enabled progress in physical science is what we should do in political science. That means not more reliance upon the old-fashioned dualities, such as predator versus producer, but rather using unitary mechanisms, which, when properly done, goes to the pole which actually exists, rather than it shadow, namely that all human beings are entropic pumps of energy flows, which are essentially predatory, not productive.

Such a view would enable better balancing of the rates of predation. Your backwards views would continue to not work, but actually make the opposite happen in the real world. Your old-fashioned morality is no different than most other controlled opposition views, in that you still basically use the same DUALITIES to perceive the political problems, when actually there is only ONE ENERGY flowing through all. Therefore, there is no basic difference between human predators and human producers. (Since there are NO genuine human producers, or different kinds of predators.) Those are the UNITARY MECHANISMS that theoretically are necessary to develop human artificial selection systems to become better internalizations of natural selection pressures, so that human beings could develop better death control systems.

"Kill the banksters," or extermination the human predators, is absurdly backward and impossible every different way that one looks at those real problems, from the short, to the medium to the longer terms. Better balancing of the rates of predation is possible ...

Thu, 07/16/2015 - 22:59 | 6322161 honestann
honestann's picture

You are radically disingenuous and completely insane.  Of course, you are most radically disingenuous with yourself, so you are the one hurt most by that.

Your idea of "science" is to wave your mouth, and simply assert that "producers" don't exist.

Your idea of "fundamentals" is to wave your mouth, and simply assert that "one energy flows through all", and therefore whatever demented religion you concoct must apply to all.

In other words, you take the same old conventional authoritarian approach that has caused ever-increasing death and destruction for the past 10,000 years or so.

Your solution, which is "to become an even better predator that the most egregious predators currently existing" is a formula for the extermination of the entire species.  And so, whether you are willing to acknowledge this or not, you advocate self-conscious purposeful, extinction of human beings.  So bit it.  That's your choice.

BTW, you have NO FREAKING IDEA what "science" is or should be.  Like so many human predators in the past 100~300 years, you simply attempt to co-opt any sense of legitimacy and prestige you can from the term "science".  Unfortunately, a great many scientists are paid to promote this.

I happen to believe that everything in the universe is in fact configurations of a single fundamental field.  Thus, I do believe there is indeed something even more fundamental than "energy" of which everything is a configuration.  However, this does not imply (as you imply) that different configurations are the same.  Very simple examples like water or salt should illustrate this.  Free hydrogen, free oxygen, free sodium and free chlorine behave quite differently than free water.  Also free neutron, protons and electrons behave quite differently than water or salt.  And all this is utterly consistent with the fundamental field having a single nature.

And so, a great many dualities and multiplicities have an UTTERLY REAL basis in the nature of reality.  Your attempt to "go religious" and pretend "god is all" in the form of "one energy is all" is a completely transparent attempt to justify universal predatory behavior by everyone in every situation... on principle.  You are as bad or worse than the most viscous religious predators who have ever existed.

You also have no idea how to operate your brain.  I don't know whether this is intentional self-deception in order to justify what "feels right" to you, or just plain old being clueless.  However, I do understand consciousness very, very thoroughly.  In fact, more precisely and thoroughly than all but one or two other human beings on the planet (who I work with).  So I recognize what you're doing.  And I won't fall for the standard trap of disputing minutia that depend on accepting fundamentally false and insane premises.

The reason I cast a great many conversations as "predator and producer" or "predator, parasite and producer" is because... wait for it... that is in fact the fundamental dynamic at the root of most human interactions.  It took a long time, and a lot of thought to make this identification.  I didn't just randomly grab these terms out of thin air, or adopt someone else terms.  I had to distill human behavior to the essentials, the fundamentals, and thereby make fundamental distinctions and recognitions that explain a great deal of modern (and ancient) life.

The fact is, human producers and human production are completely real.  You simply assert a lie when you claim otherwise.  If you attempt to dispute this with absurd definitions and statements, you do so simply to attempt to vanquish the issue because where it leads is contrary to your religion.  Well, tough turkey.  You can define "producer" to something impossible in your own head in order to evade understanding what you do not wish to understand, but you only destroy your own consciousness, your ability to comprehend reality, and thereby your ability to recognize or behave in successful ways.

Incidentally, in this response you continue to apply the same old invalid techniques as your earlier message, and your endless stream of reordered copies of your one and only fictional manifesto.

Tue, 07/14/2015 - 18:43 | 6313018 Grumbleduke
Grumbleduke's picture

primarily written for a german/northern european (yanks call them "socialist") audience, but maybe there are some ideas to be found for the thinkers, not barkers?

http://www.wissensmanufaktur.net/media/pdf/plan-b-english.pdf

 

Tue, 07/14/2015 - 18:43 | 6313020 kchrisc
kchrisc's picture

"What's Wrong With Our Monetary System (And How To Fix It)"

Bankster grift, Zionist plunder.

Guillotines.

Liberty is a demand. Tyranny is submission..

Tue, 07/14/2015 - 18:44 | 6313026 Esculent 69
Esculent 69's picture

What's wrong with our monetary system? It's criminally fraudulent!

How do we fix it? Let that motherfucker burn!! Burn motherfucker! BURN

Tue, 07/14/2015 - 21:50 | 6313696 bunnyswanson
bunnyswanson's picture

Dead politicians and investigative journalists are the result of these people.  "These People" should be banned from working in the financial sector.  Elite band of snipers to hunt down These Peoples' snipers is also another good idea because only a fool would stand up to save you when he knows he will die in the process.  If you cannot protect your heroes, expect to be led by wolves.  Can no one figure out how to kill a person without being caught but them?  The Donald has now been issued a position in the cross hairs and it could very well be that THESE PEOPLE arranged for Guzman to escape to clear off yet another politician who is TRYING TO SAVE YOU. 

I understand there is no way to organize other than covertly but if you find a soft place, a weak link in the chain of every one of THESE PEOPLE, they will slink back under their rocks.  Death would be preferable to living in a world they have in mind.  In fact, I'd suggesting shutting the whole Fing place down but Iceland if that is our only choice.  Sending our descendents into slave status after raisign them as the Rich Kid on the Block is going to be more than just work-until-you-drop.  The hatred being fertilized by TV advertisements and reality TV shows against Americans (the fairies, fatsos, flunkies and god fearing people) are going to be tortured by the new owners who clearly have a vision that does not include worshiping or play time.

Tue, 07/14/2015 - 18:46 | 6313038 semperfi
semperfi's picture

goddamn this is easy:

 

wrong:  fiat

fix:  gold

Tue, 07/14/2015 - 18:48 | 6313053 NuYawkFrankie
NuYawkFrankie's picture

re What's Wrong With Our Money System?

 

Hmmm....  good question.

 I guess that apart from the Federal Reserve System being a Satanic Scam Hatched In Infamy, everything appears to be hunky dory.

Tue, 07/14/2015 - 18:57 | 6313101 Tallest Skil
Tallest Skil's picture

There are two things wrong with our monetary system.

1. Fiat currency

2. Usury

End these and not only will we never have another depression, we'll flourish.

Tue, 07/14/2015 - 19:29 | 6313254 cpnscarlet
cpnscarlet's picture

It's hard to say usury is an issue given wha the FED has done to interest rates. Heck, I can get a 30 yr mortgage at a better rate than my Dad could get in the 50s.

Better to say: "2. Financial Repression - destroying the income from bonds"

Tue, 07/14/2015 - 18:58 | 6313105 mastersnark
mastersnark's picture

The answer might as well be "colonize Pluto" for as much chance exists the Fed, or any central bank, will ever close.

Tue, 07/14/2015 - 19:12 | 6313178 The Darwin Mode
The Darwin Mode's picture

Why does the author of this article start us off with the official platform of Catholicism, Inc? How does a public relations release from the Vatican legitimize any moral stance on anything, let alone one on the perils of a globalized wealth extraction scheme? The irony is intentional, right?

Tue, 07/14/2015 - 19:26 | 6313238 cpnscarlet
cpnscarlet's picture

I will repeat myself from yesterday -

Win or lose, the ONLY way you can fight the central banks and their minions is to buy PHYSICAL (I repeat - PHYSICAL) gold and silver. This may or may NOT be a game winner vis a vis investing (who knows the future?), but it is the only fight you can put up against TPTB, except for a shooting revolution.

This may sound like a repeat of "Buy and ounce, crash JPM", but if you have a better plan, let us know.

Gold and Silver and Gold and Silver and Gold and Silver and Gold and Silver and....

everything else is debt.

Tue, 07/14/2015 - 19:27 | 6313247 gigalax
gigalax's picture

"Credit—the ability to borrow money—is vital to any economy. If we cannot borrow against the future for capital investment—roads and infrastructure, housing, businesses, hospitals, education, etc.—then we cannot fund essential services. To that end, we need an elastic money supply."

 

This is false. I have realized that the Catholic teachings on usury are correct from an economic perspective. Lending money and charging interest is inherently wrong because you are selling something that has no real value. The future doesn't really exist until it becomes the present. Money is just a medium of exchange that is more convenient than bartering. The gold standard keeps things honest and forces the price of goods to reflect their real instrinsic value. You can't get something for nothing, which is why elastic money supplies always end in disaster. The Great Depression happened because bankers tries to turn the gold standard into a fiat standard.

Tue, 07/14/2015 - 19:34 | 6313279 cpnscarlet
cpnscarlet's picture

Wrong.

Interest on a loan is the price the debtor pays for the risk assumed by the lender. Here, the FED has forced financial repression on us by falsely pricing risk. It's the like the FED being able to say, "We know the future, and it won't be too bad." Of course, they are simply leveraging future risk so that when some crisis finally occurs, the effect on finances will be much greater.

"Catholic teachings on usury"? Best to stick to Biblical teachings. I think the current Pope is making Catholicism even less appealing then it has been in the past 50 years.

Tue, 07/14/2015 - 22:45 | 6313875 gigalax
gigalax's picture

No. Paying interest on a loan is paying money for money, which makes no sense. People forget the important fact the money is just a more convenient way of handling exchange than bartering is.

 

This is a good post on the subject.

 

http://charliebroadway.blogspot.com/2015/02/the-bait-and-switch.html

Tue, 07/14/2015 - 19:41 | 6313295 VWAndy
VWAndy's picture

Something that can be easily and correctly measured would be nice. 100 proof is as easy as it gets to prove.

Tue, 07/14/2015 - 20:16 | 6313421 numapepi
numapepi's picture

Some say JFK was assasinated BECAUSE he wanted to put us on a silver standard. Silver being far more elastic than gold. Once he was buried, our bills changed into "Federal Reserve Notes."

 

Take from it what you will...

Tue, 07/14/2015 - 20:22 | 6313443 TheEndIsNear
TheEndIsNear's picture

"They is no way easily to expand the supply of gold in the world"   

That is precisely why gold or gold backed money prevents govenment overspending and ultimately hyperinflation or default.

This article is bullshit.

 

Tue, 07/14/2015 - 20:28 | 6313463 Gab Timov
Gab Timov's picture

She's gonna blow!

Tue, 07/14/2015 - 20:29 | 6313468 Mo Bius
Mo Bius's picture

Kill the jew's  money machine - the Feral Reserve - and its treasonous owners. Remand to Congress its constitutional responsibility of printing inflation free money.

Read Henry George.

Tue, 07/14/2015 - 21:36 | 6313650 JailBanksters
JailBanksters's picture

What's wrong with the Monetary System?

Ooo Ooo Me Me Me

It's not actually Money, it's an Imaginary bunch of numbers sitting inside a computer that represents how much money you would have if it was real. And it's value is determined by Bankers based on how much they can buy with it.

Tue, 07/14/2015 - 21:44 | 6313679 Texar1991
Texar1991's picture

"They is no way....."

Tue, 07/14/2015 - 21:59 | 6313727 BolshevikPartyP...
BolshevikPartyPlanningCommitee's picture

Hitler kicked out the jewish bankers and fixed the financial system, and this pissed off international jewry.

http://www.radicalpress.com/?p=1389

Wed, 07/15/2015 - 03:40 | 6314225 Ghordius
Ghordius's picture

"There are two main critics of our privatized financial system: goldbugs and public banking advocates. The goldbugs would return us to a gold standard, making gold our currency. The problem is that it would become almost impossible to borrow money since the amount of gold which could be put into circulation is relatively miniscule and inelastic. They is no way easily to expand the supply of gold in the world "

lol, the gall of this claim, that there is not enough gold in the world. it all depends on it's price

and this "public lending" scheme is so damn... childish. the author is asking by that to transfer the privilege that banks have to all. sounds easy, eh? and what would exactly change, by that? simple: even less oversight on banking

so instead of having banks, we'd all have fantasy accounting available for our books... if already rich. while if poor... well, too bad. you could as well ask for daily helicopter money drops, but only over the rich, of course. yes, the same as now, just... moar

Wed, 07/15/2015 - 07:57 | 6314527 sam site
sam site's picture

 

You claim of the gold bugs, “the amount of gold which could be put into circulation is relatively miniscule and inelastic. There is no way easily to expand the supply of gold in the world” 


If you start with a large enough fixed gold supply saved by local investors, then an expansion of “inelastic” gold would be unnecessary to fund loans. 

In a decentralized, local model, request for funds would be made through the internet and interested individuals would step up to risk their savings in loans earning adequate interest compensating for risk.  Banks would finally become unnecessary.

In fact government at all levels would also become unnecessary as all affairs could be managed by private contracts among paying individuals at a local level.  Guns, the internet, shame, and private contracts will be the new “government” for the survivors.  This rational anarchy without chaos will be the new future model emerging out of necessity because of the new over-populated, hyper-competitive world America will find itself in.

This new austerity, that will make all excessive costs prohibitive to the survivors of the upcoming global deflation, caused by the collapse in confidence in paper fiat currencies, will also usher in, by necessity new minimalist, local decentralized cost structures. 

The part of this vision I like the most is that it is going to occur without argument, discussion or the need to convince anyone of anything.  This minimalist world will naturally occur by default because cost-elimination pressures will be so severe that the smartest, leanest, low cost and most adaptable will only survive this great culling. 

Overpopulation will act as a cleansing sword that sweeps over the land and smites the weak, bloated, unhealthy and dependent parasites that won’t be able to adapt to this new minimalist, lean, low-cost world.      

 

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