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Money As Debt
On a day when Lagarde happily trots out statement after statement that the IMF has another bucketful of promises to solve the world's excess debt problems with its own debtors providing more of the wealth-creating debt in ever-increasing circles of ridiculous indebtedness, we may have found the perfect antidote. Perhaps, given the weakness in European sovereign markets this week, bond market investors have already watched the following presentation. Explaining in simple terms and for the broadest audience Paul Grignon's 'Money As Debt' explores the baffling, fraudulent and destructive arithmetic of the money system that holds us hostage to a forever-growing debt - and how we might evolve it into a new era. Get your popcorn ready.
Where does Money Come From?
By Paul Grignon, the creator of “Money as Debt”, the animated cartoon seen online by millions worldwide and available on DVD from moneyasdebt.net. This is a condensation of an article that may be downloaded from http://paulgrignon.netfirms.com/MoneyasDebt/Money_or_Credit.pdf
The simple answer to the title question is DEBT. Whether paper cash or numbers on a computer screen, all money (except coins) is “evidence of debt”.
What is "cash” and where does it come from? Cash can be the familiar paper stuff, or it can be credit at the national central bank which banks use to settle accounts between banks. “Credit cash” at the central bank is always convertible to “paper cash” upon demand.
So, where does cash come from? Is it just printed by the government as we are shown on TV?
NO. Cash is created out of thin air by the central bank of the country (which is often privately owned). The central bank can just have it printed for the cost of printing, by the government or privately. The central bank then uses this cash it creates out of thin air to buy interest-bearing public debt in the form of government bonds.
Government debt is perpetual and thus interest paid on it is perpetual. Therefore a good definition of cash might be: evidence of public debt on which taxpayers will be paying interest forever.
So what is credit? Everything else that isn’t cash.
Take for example your bank account. Your bank account tells you how much cash the bank OWES you if you demand it. It isn’t cash itself. All those numbers in bank accounts are just “promises to pay cash”, nothing more than IOUs created by banks. However, we typically think of these bank IOUs, or “checkbook money” as “money”.
Little wonder. This checkbook money, especially in electronic form, is much more convenient and secure than paper money. Therefore we can transact all of our business with these promises to pay cash instead of cash itself.
So… are there more promises to pay cash than there is cash to fulfill them? You bet. That is because banks usually make what they call “LOANS” by promising, rather than providing, cash.
With a base of “cash” usually much less than 8% of the total they will “loan”, banks create their so-called "loans" as “promises”. How? It is astonishingly simple.
You, the so-called borrower, sign a document that promises to pay the bank X amount of money over time plus interest on the outstanding balance. Your promise is backed by the collateral you agree to forfeit and the effort you will expend to earn the money. Your promise to the bank is an ASSET to the bank. To balance its books, the bank creates a matching LIABILITY. The bank promises the borrower X amount of “cash” on demand.
The “loan money” that the bank puts in the borrower’s account is not “cash”. It is an IOU. It need never be cash unless the borrower demands cash. And, because we accept these IOUs as money itself, and do almost all of our business trading these convenient and secure IOUs instead of inconvenient and risky cash, banks can safely issue many more IOU’s than there is cash to back them up.
Perhaps the simplest and most "magical" feature of this system is "net" transactions. Only the net differences of transactions between banks need to be paid in cash. In theory, if all the banks are getting as much bank credit coming in as is being withdrawn, all the IOUs balance each other out at the end of the day leaving a net difference of zero. No cash required at all, from anyone! In practice, banks are competing.
Winners can demand losers pay in cash. But that amount is still only a small proportion of the whole amount of credit issued. The exception to all this is coins. They don't begin as debt. The government Mint stamps them and the government sells them at face value to the banks, no returns. But coins are an insignificantly small part of today's money supply.
The significant thing about coins is that most people’s understanding of money has not yet developed much beyond the idea of coins, simple POSITIVE tokens of value.
They fail to see how we have been ensnared by a money system based on NEGATIVE shackles of debt. The current system pretends to be “money” but is, in truth, a financial black hole sucking us all in to seemingly inescapable control by our so-called “creditors. The truth we need to see is that WE are the real creditors, because it is WE who produce the real value in the world, not the banks.
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Yes indeedy, Govt is garbage at everything it does.. why would any sane person propose it (mis)manages the money system?
the solution to the monopoly on money systems we have, enforced by that monopoly institution called Govt, is a free market in money... it's called competition
Free market competition is the solution to monoplised money
there is much to commend in this video...the only part where i have reservation is the solution that government create money. while this is a vast improvement over the current system, it makes people wards of the state and denies the right of individual contract - to say nothing of the rights of the people to order their own commerce....
surprised we made it this long without a gas price update
17 cents/gallon average US price based on real money (pre-1965 US coins) http://www.coinflation.com/silver_coin_values.html
No need to re-invent the wheel. Search Mathematically Perfected Economy (MPE)
What is MPE?
Nothing more than this IS mathematically perfected economy.
Mathematically perfected economy is a currency not subject to interest, comprising a debt financing all permissible enterprise, paid by each and every debtor exactly as they consume of the associated production.
There is no inflation or deflation 2, as the currency in circulation is always equal to the current value of existent production across however much of the economy is supported by a circulation.
Neither the value of money or assets are altered by changing proportions of circulation to indebted assets or services. The value of the money is always consistent in quantity — both in earnability and spendability — with the remaining value of the indebted assets which exist, for which it was issued, and which constitute its immutable value.
The remaining circulation is always sufficient to pay off debt. Further production therefore is not impeded by a deficient circulation, deplenished by paying more than what circulation was introduced 4 to finance the production.
Debt is not multiplied beyond the circulation or remaining value of indebted assets. To pay debt obligations exceeding the remaining value of indebted assets sets off a perpetual cycle of re-borrowing and multiplication of debt. Merely to maintain a circulation, we must borrow again so much as we have paid beyond the original circulation which was equal only to the unmultiplied debt.
Neither production or consumption are impeded by imposition of extrinsic cost. In every transaction, production is traded for equal production 3.
So long as we make such a circulation available to production, no impediment, limitation, or inequity whatever are imposed upon production or commerce. Production and commerce are fully expedited only by a completely liquid and effectual currency.
Mathematically perfected economy is no more than a singular prescription, dissolving unjust intervention.
riiiiiiiight !
tell me who determines how much money is in circulation?
"The value of the money is always consistent in quantity "
You mean the value of money is always the same. Aah 'Nirvana'
Nature, the universe, everything man owns and manages changes (in value) over time. Nothing stays the same, or it would be a dead thingy
Money always changes in value, your idea collapses on a basic priniciple of the universe, change is the universal construct
The answer to the problem of monoply money we have today is a free market in money. Competition is the one and only mechanism to usher in beneficial change
Shit I forgot. I´m discussing things with Austrians. Keep the sentences short, rooted in myth and faith, and as thus wholly indefensible or indescribable. “We need small government, let free markets be free, don’t you love liberty and freedom, we need to take our country back!” Stuff like that is what Paulians respond to. I bother with all of these ‘details’ about ‘how things actually work’ and it sets off their ‘liberal educated elite’ sensors – causing the thinking portion of the brain to shut down.
Wow, don't you need to box, label and pigeon-hole a person to debate an issue?
If the aim is to make it easier to shoot him down can i advise all your shots missed.
I'm not an Austrian (they're as clueless as all other economists)
I'm not a Ron Paulian (he's as clueless as other politicians)
I don't believe in "small Govt" i believe in zero Govt
I don't believe in "taking the country back"... nations do not exist (a pure political fabrication, a fantasy with zero value but to piss on the boundaries so the scum can tag, tax/thieve and control those within)
and the 5th label you're wrong on is i don't believe in "myth and faith"... i'm rooted in practical human experience, historical facts about what works and what doesn't
about the only thing you got right is my complete respect for free markets... because they work, no other system does because no other economic system (ie. Govt regulated or public-private sham) has the competition mechanism at its core which provides both enterprise and consumer with the destribution of power (freedom to choose)
Competing for what?
"The value of the money is always consistent in quantity "
Not fixed as u assume, but in such a way that the circulation is always redeemable in the very scope and volume of products it was from the beginning, intended to represent.
Most people can’t give you a good definition of money — a definition which holds; and a definition which serves them.
Yet if we ask the questions which develop a fully accountable answer, we readily arrive at a fact that the only definition of money which can inflict no offense whatever, is a currency which comprises immutable tokens of value.
In fact likewise, most people do intuit that money IS a relatively immutable token of value — not understanding how the exceptions are eng-endered, or how the exceptions offend them. In other words, they recognize that immutability is a vital object; they likewise recognize that immutability of a promissory note is even vital to its facts of contractual obligation; but they do not recognize that one and one only monetary prescription makes good on this indispensable object of immutable tokenization of value.
Both to tokenize value and to immutably tokenize value nonetheless are only TO REPRESENT not only however many different products, but necessarily, to likewise represent the volumes of such products, or we fail to keep the ostensible 1:1 relationship between circulatory volume and remaining value of all products, which is necessary to immutable value.
The only way to immutably tokenize value therefore is if the units of value of the circulation are immutably linked to the remaining value of ALL represented property (not just to one or several of MANY products);
and thus likewise, the remaining volume of units of circulation must at all times equal the volume of remaining value of the ALL the products which the circulation is intended to represent, or we fail to keep these principles. In fact then, the only way to maintain these equal volumes is to pay the value of the represented property out of circulation as the value of the property is perceived to be consumed, or to depreciate.
The only way you can do this of course, is if we pay monetary obligations comprised only of principal, at the rate of depreciation or consumption of all represented properties.
Volume of circulation must likewise equal remaining volume of all represented property. Franklin observed in his “Modest Inquiry into the Nature and Necessity of a Paper Currency,” that the colonists prospered substantially more when they supplemented their circulation of precious metal with paper currency (certain implementations of which were debatably subject to interest). He postulated that some prospective extent of such supplementation might be excessive; and that it might have negative consequences. But nonetheless he noted (evidently then because they never reached such a limit) that the additional circulation of paper currency sustained substantially greater prosperity.
Why?
They must therefore have suffered previously from an effectively deflated circulation. But simple questions thus resolve Franklin’s curiosity:
If the circulation is to represent (tokenize) value, then if the circulation were ever to exceed the volume of the remaining value of all property, then someone would have received circulation for nothing. Such an excessive, “inflated” circulation however would be impossible, if in fact all promissory notes (of principal only) are legitimately collateralized.
Likewise however, if the effective volume of circulation is ever less than the volume of represented property, then it is impossible to trade all property all at once; and someone will not have received and persisted in just reward for their production.
So, an “effective,” just circulation must at all times equal the remaining value of ALL production (“products”).
A further malady exists in the present disposition of currencies subject to interest. That is, ever more of a circulation is perpetually dedicated to sustaining ever greater sums of artificial debt, leaving ever less of the same circulation to represent/tokenize the value of property. Thus interest makes abiding by our necessary principles of immutable tokenization impossible.
1. The only circulation which sustains all these necessary objects therefore is a volume of circulation which is at all times equal to the remaining value of all property.
2. The only way to maintain such a circulation is to pay principal out of circulation at the rate of consumption or depreciation of related property.
3. Thus as a circulation comprised of promissory notes only represents FINANCED property (subject to promissory obligations), the only way to sustain a circulation which necessarily represents the remaining value of all property is to further accommodate immediate conversion of equity into currency.
These in fact then are the principles of mathematically perfected economy™; and this is a vital path of the logic of overall solution.
But our question asks if money is a product? Essentially, this is to ask if it MUST be a product in order to serve these vital purposes of a just currency, which of course must eradicate all potential for systemic
offense.
We can see however, even on an abstract level, that the concept of tokenization can only go awry if the need for tokenization must account for all products, and the concept of tokenization requires A product or a few products to do so. Yet even according to the concept of tokenization itself, the token is distinct from the product itself — unless to be an immutable token of value, “money” must actually exist in the physical form or instances of some such “product.”
In other words, if just/”honest” money IS a product; how then and why would argue this restrictive concept of A product or products? How can either case serve the objects of volume equaling the volume of ALL products, if money “must” be A product or products; and if the volume of THE product or products must yet equate to the volume of ALL products?
In fact, given the aforesaid observations, we readily recognize that nothing but ALL products CAN so represent all products; and the only reason folks like the Austrian “economists” are trying to insist on A product (or products) for their obfuscated claim to tokenization, is they refuse to acknowledge the very principles they pretend their ONE or few products somehow uphold — and yet are proven not to uphold.
As Franklin likewise observes, never did their precious metal monetary standards result in actual consistent values of money; and the reasons are evident in these principles: There is no perpetual 1:1:1 relationship between remaining circulation: remaining value of represented property: and obligation, because the Austrians refuse to recognize that the only mathematic course to this perpetual relationship is to pay off promissory notes comprising obligations of principal only, at the rate of consumption or depreciation of the related property — with the payments thus retiring the circulation as the value of the property itself is consumed. In fact, only promissory notes of principal, paid at this obligatory schedule of payment CAN accomplish these purposes; and do so even without regulation.
Thus we readily understand the problems of gold, which itself in fact perpetually violates our necessarily perpetual 1:1:1 relationship; and which further violates these principles when it coexists with interest, which perpetually disposes ever more of the circulation to servicing a perpetually multiplying sum of artificial debt — leaving ever less of the same circulation to sustain commerce.
Thus the answer to the original question is that money CANNOT BE A product, if it is to be an immutable token of value, because
A product, in which the resultant circulation would ostensibly be redeemable, ITSELF cannot represent All products! Thus it cannot provide a perpetual1:1 relationship between volume of circulation and redeemability which purportedly eliminates subversion of value.
Effectively, the Austrians (and others) claim virtues of gold which do not exist, while the principles they exalt instead would endorse only mathematically perfected economy™, because the only currency which CAN accomplish thispurpose of making the circulation effectively not A product, but in factat all times ACTUALLY REDEEMABLE in ALL products, is mathematically perfected economy™ — which alone therefore, immutably tokenizes all products represented by the circulation, and in such a way that the circulation is always redeemable in the very scope and volume of products it was from the beginning, intended to represent.
that's a very interesting point.
"Competing for what?"
Competing monies in the marketplace.. competing to provide a means of exchange ..many different monies so end-users (biz and consumers) have a choice (power)
"Most people can’t give you a good definition of money.."
the Oxford English dictionary, Wiki and none of my fav economic gurus can give me a clear efinition of capitalism either.. i can define it in 2 words
"..we readily arrive at a fact that the only definition of money which can inflict no offense whatever.."
the idea that you can get progress on any issue by compromise or not offending anyone is nonsense.. let's offend people, if we're right let them stew while they catch up
".. a currency which comprises immutable tokens of value."
token is a good word. I'd define money as any medium (ok token) of exchanging value that the market so decides. I threw in the word "market" because that's as it should be, the freedom of the market to decide (on anything whatsoever) rather than the rotten monopoly system we have currently and the many false prophets who also propose an alternate one (monopoly) system as a 'solution'
I'll cut the rest of your post down to one point, you are proposing one system to replace one old rotten system. Your one system will fail because it is a monopoly.
I noticed you didn't reply to my one question: who will allocate the volume of money in your one (monopoly) monetary system?
At the core of your one system is a monopoly administration. You obviously have no idea how the free market works, through the competition mechanism, and why it'll beat the crap out of any other system devised.
Destroy the competition mechanism and you vandalise all good/progress. You also destroy the end-users power to decide what best suits them, another block on progress and the best value system in the market.
"Effectively, the Austrians (and others) claim virtues of gold which do not exist.."
I agree the Austrians are as misguided to try to fix the monetary system with one answer (Gold backed money) as you are for the same reason, there is no one answer in a free market, there is (should) always choice for the end-users to decide
The virtues of Gold do exist though. It has been used as money throughout thousands of years. The problem has always been the elite (Royalty or Govt) monopolising money and destroying (debasing) it because all monopolies by nature have no checks and balances like a free market so they run out of control and drown everyone in their debt (which is where we are now, again)
I'm all for Gold based or backed money, and Silver. But I'm also for anything the market wants to use and develope as money, be it Beanz, bitcoins, Airmiles, Nectar points, notches on wood or cows (as the Zulus use). Money can and should be anything the free market decides
Nobody in history has out-thought the free market, nobody ever will.. let there be a free market in money, the only solution to money there is
who will allocate the volume of money in your one (monopoly) monetary system?
We (the people) will.
Do you have another solution for inflation, deflation, systematic manipulation of money and property, and terminal failure because interest mulplies debts into oblivion
Money is just a means of measurement, an accounting tool to keep track of our promissory obligations to each other. Anything else is a lie...
So "We The People" will vote for this (monopoly) committee. That falls down on 5 points;
1. the people aren't too smart (it's not their job so why would they choose the best candidates)
2. the 'candidates' will assuredly be hired puppets for bankers (see our voting system)
3. your organisation is a monopoly, it would be infiltrated by the bankers (see Govt)
4. committees (and democratic voting) are no ways of deciding anything.. both are inept, inefficient and completely antiquated organisational systems compared to the free market
4. 5. it's a monopoly on money system, and all monopolies produce garbage
"Money is just a means of measurement, an accounting tool to keep track of our promissory obligations to each other. Anything else is a lie..."
Money is not just an accountants ruler, money become a commodity, an 'animal' in its own right rubbing up against all the other assets on the farm (economy).
Money fluctuates in value like every other asset class, it is not static. First rule of the Universe, change is the only constant.
The best way to manage change is a free market with commercial organisations because only the competition mechanism allows change/progress at its fastest and freest rate whereas your system would bottleneck the talent with a voting system, bottleneck progress as your organisation is a monopoly and they do not have to change
"Do you have another solution for inflation, deflation.."
Why do i want a 'solution' to inflation/deflation of prices? The best solution to high/inflated prices is high/inflated prices. All prices fluctuate, including the value of money, let the market work it out
"..systematic manipulation of money and property.."
you have designed a monopoly on money system, 100% guaranteed your candidates and organisation will be infiltrated and corrupted in a matter of years by the usual banker cartels just like the 'democratic' voting system
"..and terminal failure because interest mulplies debts into oblivion"
What's the Chapter after Oblivion? There's always a next Chapter, it's called 'Green Shoots' usually
a free market in money does not have oblivion, because it is a diverse and adaptive (like the internet, like global trade, like nature), so when part takes a hit the other competitors soldier on
the weakest, most unstable, most slow to adapt to change, most rotten system is a monopoly
you cannot beat the free (competitive) market model. Period
Through our Common Monetary Infrastructure.
C = RV = RO
C = Circulation
RV = Remaning Value
RO = Remaning Obligation
C - CRP + NRP
Circulation - Consumption Related Property + New Related Property
If we think about it, we ought to realise that money only performs one really practical and fundamental function for us, which is to provide “liquidity”. That is to say, it allows us to represent divisions of the value attributed
to things. This function of dividing value is the singular and most important reason for inventing money, it is fundamental because without it, we would be unable to trade a piece of our house for food. Also, without this
divisibility function, we would not be able to establish a standard means for measuring economic transactions nor keep records of debts and positive accounts. Hence, the fundamental rationale for money is to provide a
measure of value so that we can represent value and its divisions.
It turns out that there are only two requirements that need to be met in order to achieve this functionality:
1) Denominate a common unit of reference of constant value.
2) Maintain stable records of the inputs and outputs of the value dividing process.
1) Denominate a common unit of reference of constant value.
Why do you want a "common unit"?
We already have 350 currencies on the globe. Then we have a host of other items used as money too, from Zulu cows and beads to the precious metals to Airmiles, Nectar points etc etc etc
Do you want one fruit at your local shop or only one style of clothes to wear??
You are fixated with the "One True Answer" which you want to mount on a pedestal and admire like a religion. That's not how the world/nature works, it finds many different answers to many different questions (of what money is and what money is for)
What we need in the money market is competition, not this corrupt monopoly that's fulfilling its assured end-game of all monopolies, turning to trash
2) Maintain stable records of the inputs and outputs of the value dividing process.
Why do you want a centralised accounting system?
The biggest trade on the globe is global trade, it is totally disparate and diverse. There is no central command for global trade, it works because each individual business works with other individuals by the million.. none of it reports or accounts to a centralised system (thank fuck for that or they'd soon ruin it just as the Fed and ECB have ruined their monopoly money systems)
Legal is to lawful as currency is to money.
www.tradewithdave.com
"The current system pretends to be “money” but is, in truth, a financial black hole sucking us all in to seemingly inescapable control by our so-called “creditors. The truth we need to see is that WE are the real creditors, because it is WE who produce the real value in the world, not the banks."
Well said.
The money system is in fact a weasels (bankers) extortion racket. The unproductive gaming the productive (for personal greed and power of course)
Interview the Rothchilds or Rockerfellas, they'll reveal 'The Game' they're playing
Money as debt is perfect with the exception that it does not address that FRN's are not redeemable.
That means the system is based on flat out theft not lending.
I think a better way to explain it to most people is that Money is a Product.
Money cannot be a product
Most people can’t give you a good definition of money — a definition which holds; and a definition which serves them.
Yet if we ask the questions which develop a fully accountable answer, we readily arrive at a fact that the only definition of money which can inflict no offense whatever, is a currency which comprises immutable tokens of value.
In fact likewise, most people do intuit that money IS a relatively immutable token of value — not understanding how the exceptions are eng-endered, or how the exceptions offend them. In other words, they recognize that immutability is a vital object; they likewise recognize that immutability of a promissory note is even vital to its facts of contractual obligation; but they do not recognize that one and one only monetary prescription makes good on this indispensable object of immutable tokenization of value.
Both to tokenize value and to immutably tokenize value nonetheless are only TO REPRESENT not only however many different products, but necessarily, to likewise represent the volumes of such products, or we fail to keep the ostensible 1:1 relationship between circulatory volume and remaining value of all products, which is necessary to immutable value.
The only way to immutably tokenize value therefore is if the units of value of the circulation are immutably linked to the remaining value of ALL represented property (not just to one or several of MANY products);
and thus likewise, the remaining volume of units of circulation must at all times equal the volume of remaining value of the ALL the products which the circulation is intended to represent, or we fail to keep these principles. In fact then, the only way to maintain these equal volumes is to pay the value of the represented property out of circulation as the value of the property is perceived to be consumed, or to depreciate.
The only way you can do this of course, is if we pay monetary obligations comprised only of principal, at the rate of depreciation or consumption of all represented properties.
Volume of circulation must likewise equal remaining volume of all represented property. Franklin observed in his “Modest Inquiry into the Nature and Necessity of a Paper Currency,” that the colonists prospered substantially more when they supplemented their circulation of precious metal with paper currency (certain implementations of which were debatably subject to interest). He postulated that some prospective extent of such supplementation might be excessive; and that it might have negative consequences. But nonetheless he noted (evidently then because they never reached such a limit) that the additional circulation of paper currency sustained substantially greater prosperity.
Why?
They must therefore have suffered previously from an effectively deflated circulation. But simple questions thus resolve Franklin’s curiosity:
If the circulation is to represent (tokenize) value, then if the circulation were ever to exceed the volume of the remaining value of all property, then someone would have received circulation for nothing. Such an excessive, “inflated” circulation however would be impossible, if in fact all promissory notes (of principal only) are legitimately collateralized.
Likewise however, if the effective volume of circulation is ever less than the volume of represented property, then it is impossible to trade all property all at once; and someone will not have received and persisted in just reward for their production.
So, an “effective,” just circulation must at all times equal the remaining value of ALL production (“products”).
A further malady exists in the present disposition of currencies subject to interest. That is, ever more of a circulation is perpetually dedicated to sustaining ever greater sums of artificial debt, leaving ever less of the same circulation to represent/tokenize the value of property. Thus interest makes abiding by our necessary principles of immutable tokenization impossible.
1. The only circulation which sustains all these necessary objects therefore is a volume of circulation which is at all times equal to the remaining value of all property.
2. The only way to maintain such a circulation is to pay principal out of circulation at the rate of consumption or depreciation of related property.
3. Thus as a circulation comprised of promissory notes only represents FINANCED property (subject to promissory obligations), the only way to sustain a circulation which necessarily represents the remaining value of all property is to further accommodate immediate conversion of equity into currency.
These in fact then are the principles of mathematically perfected economy™; and this is a vital path of the logic of overall solution.
But our question asks if money is a product? Essentially, this is to ask if it MUST be a product in order to serve these vital purposes of a just currency, which of course must eradicate all potential for systemic
offense.
We can see however, even on an abstract level, that the concept of tokenization can only go awry if the need for tokenization must account for all products, and the concept of tokenization requires A product or a few products to do so. Yet even according to the concept of tokenization itself, the token is distinct from the product itself — unless to be an immutable token of value, “money” must actually exist in the physical form or instances of some such “product.”
In other words, if just/”honest” money IS a product; how then and why would argue this restrictive concept of A product or products? How can either case serve the objects of volume equaling the volume of ALL products, if money “must” be A product or products; and if the volume of THE product or products must yet equate to the volume of ALL products?
In fact, given the aforesaid observations, we readily recognize that nothing but ALL products CAN so represent all products; and the only reason folks like the Austrian “economists” are trying to insist on A product (or products) for their obfuscated claim to tokenization, is they refuse to acknowledge the very principles they pretend their ONE or few products somehow uphold — and yet are proven not to uphold.
As Franklin likewise observes, never did their precious metal monetary standards result in actual consistent values of money; and the reasons are evident in these principles: There is no perpetual 1:1:1 relationship between remaining circulation: remaining value of represented property: and obligation, because the Austrians refuse to recognize that the only mathematic course to this perpetual relationship is to pay off promissory notes comprising obligations of principal only, at the rate of consumption or depreciation of the related property — with the payments thus retiring the circulation as the value of the property itself is consumed. In fact, only promissory notes of principal, paid at this obligatory schedule of payment CAN accomplish these purposes; and do so even without regulation.
Thus we readily understand the problems of gold, which itself in fact perpetually violates our necessarily perpetual 1:1:1 relationship; and which further violates these principles when it coexists with interest, which perpetually disposes ever more of the circulation to servicing a perpetually multiplying sum of artificial debt — leaving ever less of the same circulation to sustain commerce.
Thus the answer to the original question is that money CANNOT BE A product, if it is to be an immutable token of value, because
A product, in which the resultant circulation would ostensibly be redeemable, ITSELF cannot represent All products! Thus it cannot provide a perpetual1:1 relationship between volume of circulation and redeemability which purportedly eliminates subversion of value.
Effectively, the Austrians (and others) claim virtues of gold which do not exist, while the principles they exalt instead would endorse only mathematically perfected economy™, because the only currency which CAN accomplish thispurpose of making the circulation effectively not A product, but in factat all times ACTUALLY REDEEMABLE in ALL products, is mathematically perfected economy™ — which alone therefore, immutably tokenizes all products represented by the circulation, and in such a way that the circulation is always redeemable in the very scope and volume of products it was from the beginning, intended to represent.
Well, it seems the argentinean gvt is not so stupid after all.
Central Bank (that belongs to the State) is, by law (reform bill passed on march 27):
"Art. 1°: The Central Bank il an autarchic entity of the State under the dispositions of the present Organic Rule and other concordant legal rules.
The State guarantees all obbligations assumed by the Bank. Except other dispositions established by law, there wil be no obbligation for the Bank to accomplish any rule whatever its nature, established or to be dictated by the Public Administration that can involve limitations to the Bank capacity or faculty given to the Central Bank by the present Organic bill.
Art. 3°: The purpose of the Central Bank is to promote, according to its faculties and in the context of the political goals of the national gvt., monetary stability, finantial stability, employment and economic development with social equity".
(Forgive my translation)
[On the game show, "Wheel of Fish", Phyllis Weaver has just spun the wheel and landed on a red snapper] Kuni: Ahhh, a red snapper. Mmmmm, very tasty. Okay, Weaver, listen carefully. You can hold on to your red snapper... [Hiro-San emerges, carrying a table with a box] Kuni: ...or you can go for what's in the box that Hiro-San is bringing down the aisle right now! What's it gonna be? [Phyllis Weaver has difficulty in choosing as the audience point to the box] Phyllis Weaver: I'll take the box. The box! [applause] Kuni: You took the box? Let's see what's in the box! [Hiro-san opens the box; the audience gasps. There is a silence] Kuni: Nothing! Absolutely nothing! STUPID! You're so STU-PIIIIIIIIIIID!
This movie is good for education, and generally great throughout - though I do have one problem with it.
The issue I have with this movie is during the conclusions: The movie concludes that there is an arithmetic problem with the charging of interest, it further goes on the suggest only three possible outcomes, one of which is the presenters preferred solution (money is created by the state and spent and taxed to retain balance).
The charging of interest is not just an arithmetic problem, it is also a justice problem. Charging interest is getting something for nothing, and whosoever charges interest on money and continuously re-lends will concentrate their own wealth while producing exactly nothing. This is an exception of justice, and therefore cannot be legal under any system of just laws.
To advise that lending could be done by the state, with all citizens as beneficiaries - firstly assumes a state (is inevitable), and also assumes a moral state. A state with monopoly power to loan and create money? Surely we have seen the results of states with such ominous powers, war, poverty and social injustice.
The presenter failed to offer an alternative solution that myself and many others see as the only true and acceptable solution.
Firstly, money is created privately by anyone and everyone, and acceptance of any payment (or form of money) is always voluntary. In this way money that is widely accepted must meet the demands of the market - meaning it satisfies the properties of money, and is trusted.
Secondly - that society agrees and understands that lending money for interest is not just, neither is it just to rent real estate - both of these activities inevitably lead to concentrations of wealth and social injustice. This occurs because real estate and real money are effectively eternal - they are not impaired by the passage of time - human beings on the other hand are temporal creatures. There are forms of money and some land which may be impaired by time - these exceptions should not make the rule.
Real estate does not require any human labor to produce, it simply exists - in a similar way that water or air exists - I am of the opinion that it cannot be defined as property - because it is not a product of human labor. In my view the body, the mind and those things created by human labor are property - nothing else is. It should be noted that buildings are capital goods, and I have no issue with renting them - and they qualify as property by my previous definition.
It is not only the concentration of wealth, and getting something for nothing that are the issues, but also claiming ownership of systems in which they are only participants. The idea then that any temporal being can claim ownership of something that is eternal is presumptuous - as is the charging of rent on something that every human being has an equal interest in.
An analogy that spring to mind is this. If I play poker, the cards I am dealt are mine - but this does not mean I can simply get up and take the cards away from the table with me, or keep them for the next deal - it is only the face value of the cards which I can rightly claim, and only within the context of that particular hand/round - the cards belong to the participants of the game and are governed by the rules of that game and I am bound to relinquish them in due time.
Real estate may be privately controlled (morally speaking), but the use of it should be governed by an acceptable social contract - one which protects the future users, the current neighbors and the fluid systems (air, water and biosphere) with which it interacts.
Money's purpose is to facilitate trade and to preserve value. If it cannot be lent at interest, either directly or indirectly such as a bank deposit - then people will have little reason to hoard it and it will freely flow, fulfilling its purpose.
People may ask - if you cannot lend money, how will large capital projects be completed, how will people make large purchases? The answer is simple, a great many capital projects are completed by equity purchase - and that is a fair and just system. Capital goods may be rented as they depreciate, and they require human labor to create them - so renting them out is not something for nothing.
It's not "an economy." It's a malignant, inherently destructive terminal process, intended from its very inception to dispossess us unjustifiably, or the justification would mark every Federal Reserve "Bank" like the Lincoln Memorial.
Interest has a critical fault. So long as it exists, there's no neutralizing or stabilizing of its consequences; its inherent processes are perpetual, and irreversible.
As Mr. Kondratiev observed, "interest" inherently meets its end.
Search for Mathematically Perfected Economy
When Money is Debt; Wealth is Poverty
http://www.extraenvironmentalist.com/blog/dispatches/236
For the simplified version... The math is hidden in plain view.
1. Society A gets $20 from Bankster B
2. After 1 year, at 5% interest, Society A owes Bankster B $21
There are only two legal ways to pay that debt back without being bankrupted and collateral seized... and both REQUIRE the Bankster to ALLOW them to occur.
1. You sell your labor, in a timely manner, to Bankster B and earn all the interest back so you can use it to pay back the loan in full. That's called serfdom.
2. You sell your assets, in a timely manner, to Bankster B and earn all the interest back so you can use it to pay back the loan in full. That's called asset stripping.
This is a basic flow chart of the process...
Debt Dollar Tyranny
http://kvisit.com/SgoDLAQ
Our debt based system puts the lenders in charge. Not because of they work hard or make the best widget, but because they rigged the system and the American people are gullible to think the government wouldn't allow a private cartel of mega banks to stab them in the back.
II have news for folks, the Fed is NOT independent of the mega banks (Morgan, Sachs, etc...). The Fed REPRESENTS the mega banks... whose CEOs sit on the Board of Directors of the Federal Reserve and HIRE front people like Greenspan and Bernanke.
The Fed does what is in the interest of the OWNERS of the mega banks. PERIOD. END OF STORY.
This is Econ 101, legal corporate structure and mathematics, NOT conspiracy theory, conspiracy FACT.
the 'flation debate centers around who takes the losses when the system collapses. That's all. BOTH are defaults, BOTH lead to revolution of some sort.
It seems obvious to me that the following scenario is the BIG WIN for the OWNERS of the mega banking cartel:
1. Inflate to indebt society and leverage to the hilt on the insider knowledge of the inflate operations.
2. Once the game ends (2007/2008), LOOT society for all you can get. Sure, this requires some currency devaluation, but its all debt and payable with interest in the end - so they will get it all back and then some. Doubling or tripling one's cash position and wearing down society is worth is a 10 to 15% temporary reduction in purchasing power of those dollars.
3. Once it becomes apparent that the SOCIETAL LOOTING OPERATION IS A DONE GAME, restrict credit and then blow the economy to holy h*ll. Of course, they will make sure the Strait of Hormuz is blown up (or similar) to trigger the collapse so they can dazzle the ingnorati with correlation as causation nonsense.
4. Roll up much of society's assets under their mega corporate fronts, bankrupt their competititon and consolidate the vast majority of the nation's wealth within their mega corporate structure.
5. Hyperinflate to "balance their books."
6. Establish themselves as the "saviors" over a bankrupted populace and a nation in receivership.
So, the end is hyperinflation, but the economics of the decision to hyperinflate demands that they bust society and "get real" with their assets before they do it.
They've protected their mega corporations and TBTF - so they will survive anything, but their compeitition won't. They are setting up a police state and eliminating the populations rights and civil liberties (folks, NOBODY hates your rights as much as the TYRANTS that take them from you - and a suit, honey BS shouldn't be all that is required to trick the majority of Americans).
Inflate -> Loot -> Deflationary Bust -> Competition Elimination, Asset Strip Society, Impoverish Society -> Hyperinflate to "Balance Books" -> DOMINATE Society with POLICE / SURVEILLANCE STATE.
These people are not idiots. They are not stupid. They don't fail to "get it."
They are cold, hard, demonic, Machiavellian, scientific criminal tyrants with lispy voices, pot bellies and nice suits.
More specific and better equiped to articulate the issues and solution is Mathematically Perfected Economy, Mike Montagne
DO THE MATH. CHALLENGE THE MATH. CALCULATE INHERENT MULTIPLICATION OF DEBT TO SYSTEMIC COLLAPSE YOURSELF.
CLICK BELOW LINK to download our free Excel Maximum Possible Lifespan Mockups as a conventional ZIP file (76 Kb). ALSO OPENS IN APPLE Numbers.
http://www.perfecteconomy.com/ftp/zipped-pfmpe-multiplication-of-debt-ex...