| Subject: | Re: [socialcredit] The Still Unsolved Problem of the Economy | | Date: | Thursday, February 19, 2009 02:07:12 (+0100) | | From: | Per Almgren <almgren_per @.....com>
|
I agree with most of the following but there is a logical fault in th
paragraph about inflation, se below
Per Almgren
Arian F. Nevin skrev:
> (NaturalNews) This is not the first time a recession or a depression
> has occurred. It is an event that happens again and again, a recurring
> problem, which has yet to be solved. It is unlikely Congress will be
> able to solve this problem on its own. Senator Byron Dorgan recently
> admitted that Congress does not understand what is wrong economically
> nor how to fix the problem, "[N]one of us have been here before. And
> nobody in the country really understands what is the right medicine to
> fix what is wrong with this economy." Actually, the workings of the
> economy are not so mysterious that none can hope to understand.
>
> Congress and the Federal Reserve have undertaken a flurry of actions,
> but they have yet to do anything effective to make the economic
> situation better. They continue to put together various so-called
> stimulus packages which will not solve the problem. Their use of the
> crude medical analogy of "stimulus" demonstrates their ignorance. The
> economy is not suffering from a lack of stimulus. It does not need the
> economic equivalent of a sudden jolt of electricity or an injection of
> steroids to continue. This is like using drugs to mask symptoms, while
> ignoring the root cause. What the economic system needs is fundamental
> reform. There is no magic pill solution.
>
> In the 1920`s, before the great depression, Nobel Prize winning
> scientist Fredrick Soddy said about economic crises, "if we do not
> understand how the existing system works and wherein it fails, we are
> likely to make it worse rather than better." So let us start with one
> aspect of how the existing system works, where it fails, and what
> needs to change to solve our economic problem: the money system.
>
> Almost all money is created by banks rather than by the government.
> Bankers admit that banks create money. As the Chairman of the
> Associated Banks of New Zealand, H.W. Whyte, said in his evidence
> before the New Zealand Monetary Commission, "The banks do create
> money. They have been doing it for a long time, but they didn`t quite
> realize it, and they did not admit it. Very few did. You will find it
> in all sorts of documents, financial textbooks, etc. But in the
> intervening years, and we all must be perfectly frank about these
> things, there has been a development of thought, until today I doubt
> very much whether you would get many prominent bankers to attempt to
> deny that banks create credit."
>
> Commercial banks create money simply through making entries in the
> bank`s database. Most money exists solely as entries in such
> databases. The central bank, The Federal Reserve, in addition to the
> above method, can also create money through the additional mechanism
> of printing money, which it loans to the government and to commercial
> banks. Thus money exists both as paper and coins and as electronic
> entries in computers.
>
> It is impossible to maintain the framework of the current money system
> and at the same time solve our economic problems. A new money system
> is integral to any solution. Here is why: As it stands now, money
> exists primarily for the purpose of creating interest yielding debts
> to banks. The primary purpose of the current money system, which is
> integral to our economy, is to provide interest income to banks. Money
> should be issued solely by the government to facilitate the optimal
> functioning of our economy. At present, money is issued by banks to
> maximize their profits.
>
> A closely related issue is inflation. Inflation is the gradual theft
> over time of the value of everyone`s money through the creation of new
> money. Banks create new money to loan; this dilutes the value of all
> presently existing money. It is impossible to eliminate inflation so
> long as money is created for the purpose of creating debts.
It is, during a period, possible to avoid inflation even if the total
amount of money is increasing.
If the amount of sold goods and services increases at the same rate,
there will be no inflation. But this will only be possible as long as it
is possible to get an increasing amounts of raw material from the nature
and this is not possible in the long run since we are living on a planet
that doesn't expand. In many cases we have alreade passed the limits
where nature can restore the same amount that we uses.
If the lenders accept to lend us new money and not use any amount of the
interest paid for purchase of goods and services, there will be no need
for increasing the production, since the interest would never need to be
paid, it will just be automatically be added to a never amortizised
debt. This is however not happening in real life.
There is also possible, during a limited time, to avoid the inflation by
decreasing the amounts of wages and salaries paid, but that will make
the money economy shrink rather rapidly and cease to exist.
In short, interest upon money will force a combination of rising
unemployment, rising use of natural resources and growing debts. It is
possible, for a while, to avoid two of this three things, but not all three.
> Because of
> interest payments, more money must be repaid to banks than was
> initially loaned by banks. Where does this additional money come from?
> The only way this additional money comes into existence is when banks
> loan ever more and more money over time, thereby creating the
> additional money needed to pay the interest. This practice constantly
> increases the total quantity of money in existence. Another way of
> stating this is people, corporations, and the government must
> necessarily go ever deeper and deeper into debt for banks to create
> and loan new money. All so that interest payments can be made. The
> inch and the meter never change, shorter one day and longer the next,
> neither should the value of money. The value of money should remain
> constant over time so the people are not robbed.
>
> We are constantly inundated with propaganda decrying how irresponsible
> Americans are to be so in debt. This is to blame the victim. Every
> major government in the world is massively in debt. The National Debt
> of America is much greater in amount than the debt of the entire
> third-world combined. Almost everyone is in debt. College students,
> home owners, corporations, along with the government are all in debt.
> Why is there universal indebtedness? People simply accept this
> situation as a fact of life. The cause is not questioned. But, the
> cause is simple. The money system requires it to be so.
>
> Because money is created by banks for the purpose of lending it at
> interest, rather than created by the government for the common good,
> everyone must be in debt in order for money to exist at all. Whenever
> a loan from a bank is paid back, the bank destroys an amount of money
> equivalent to the amount of the original loan and keeps the interest
> payments. The electronic money banks create is all temporary money,
> though there is always a certain amount of it in existence. Their
> money creation is like a yo-yo. Money goes out with loans, and money
> comes back when the loans are repaid. The simplest example is a credit
> card. The moment a person makes a $100 purchase with a credit card, a
> bank creates $100 of electronic money that did not exist before. When
> that same person pays back the $100 several days later, the bank
> destroys $100 of electronic money. The money created by the bank only
> exists until the debt is repaid. Of course, because there are so many
> entities in debt, there is a certain amount of money permanently in
> existence. But banks are constantly creating and destroying money. It
> is a normal everyday affair. Most people do not realize it is ongoing.
>
> Money only comes into existence when people borrow from banks. Money
> is destroyed by banks when people pay back loans. If nobody owed money
> to banks, then we would not have any money. Therefore, though it is
> possible for individuals to eliminate their debt, it is completely
> impossible for the whole of the nation to ever get out of debt as long
> as the money system remains as it is.
>
> Who owes the debt to banks can be shifted around. Half the populace
> can owe money to banks, while the other half owes nothing, but it is
> impossible for everyone to get out of debt. Individuals can get out of
> debt, but everyone cannot be out of debt at the same time. Eliminating
> all bank loans, by paying off all debt, would eliminate almost all
> money. Some have to be in debt to banks in order for the money banks
> create to exist. Of course there is no reason that the creation of
> money need be tied to loans by banks. In an honest money system, the
> government would simply create money for the common good and spend it
> rather than lend it. The fact that banks create money today is solely
> the result of a historical accident and not the result of a conscious
> choice.
>
> The government and Federal Reserve have announced a one-trillion
> dollar plan to "boost lending." Another way of stating the aim of this
> plan is: The government is trying to "boost indebtedness." Every money
> loan by a bank also creates debt. The government`s solution to our
> economic problem is for everyone, including the government, to go even
> deeper into debt. While in the short-term this may help, because
> people will have more money from loans, in the long-term our problem
> is only growing, because we are sinking deeper and deeper into debt.
> We need to get out of debt, not go deeper into debt.
>
> We are liable to make the situation worse if we don`t understand how
> the existing system works and how it fails. The economic system works
> basically the same the world over. Everywhere banks function as debt
> and money factories. The system fails in that we have a private money
> monopoly and not a national money system. The government is only
> making our situation worse by creating more debt for all of us through
> its "stimulus packages." All of this "stimulus" and bailout money
> comes from increasing the National Debt and the amount of additional
> debt will soon total well over a trillion dollars. One trillion is a
> thousand billions. What we really need is to get out of debt. The only
> way to do this is to start with an honest money system.
>
> Soddy also said, "There is nothing left now for us but to get ever
> deeper and deeper into debt to the banking system in order to provide
> the increasing amounts of money the nation requires for its expansion
> and growth. An honest money system is the only alternative." An honest
> money system is one wherein the government, not banks, create money,
> and the value of money remains constant over time. What money is worth
> today is what it will be worth tomorrow. Any government program to fix
> the economy that does not include the elimination of money creation by
> banks with the creation of money by the government instead, cannot
> possibly work in the long-term. How can going deeper and deeper into
> debt solve the economic crisis? An honest money system is part and
> parcel to an effective economic solution. This is not the first time a
> recession has occurred nor will it be the last until the sovereignty
> of the people is taken back from banks.
>
> If you always do what you`ve always done, you`ll always get what
> you`ve always gotten. What we have the world over now is debt. Through
> our passive consent, we all contribute to this monstrous monetary
> injustice. We have nothing to lose except debt. We have everything to
> gain from an honest money system.
>
> References
>
> http://edition.cnn.com/2009/POLITIC...
> Frederick Soddy, Wealth, Virtual Wealth, and Debt: The Solution of the
> Economic Paradox. Frederick Soddy. 1926.
> National Economy: The Way to Abundance. Arian Forrest Nevin. 2008.
> A Matter of Life or Debt. Eric De Mare. 1983.
>
>
> About the author
> Arian Forrest Nevin, J.D. is the author of National Economy: The Way
> to Abundance. National Economy presents an immediate solution the
> worldwide economic crisis. National Economy is the study of how a
> nation, rather than an individual, can be made wealthy. It explains
> how all manufacturing that has moved to other countries and all jobs
> that have been outsourced can be returned to America, how real wages
> can be dramatically increased, and how, at the same time, the people
> can have more leisure.
> His website is http://www.nationaleconomy.net
> ---------------------------------------------------------------------
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