Tuesday, December 4, 2012

The Great Fleecing of the Ages

If money is being overprinted today, and overprinting is what's causing price inflation, then why are there not people arriving at stores with their wheelbarrows of worthless trash money to buy just a single loaf of bread? Why are there not people wallpapering their walls with their worthless trash cash if money is being overprinted and that overprinting is what's causing price inflation? If money is being overprinted today, then why aren't people's chequing accounts filled with thousands upon thousands of worthless electronic digits?

Answer: it is not being overprinted. The cause of price inflation is absolutely because of the interest on the debt. Interest rates go up, then so do prices, because people have to make a profit from what they sell. Businesses depend on loans. All money is a loan. The banks own 100% of the money all of the time.

Don't think so? In the beginning they do and in the long run they do - which is basically the definition of something that's on loan. The money that comes into existence as a loan did not exist before the loan was made. If all the money comes into existence as an interest-bearing loan, then - to repeat Byron Dale's simple and ingenious question - where does the money come from to pay the interest on the loan? That too has to be borrowed - at interest.

Which of course, leads to Dale's perceptive analogy:

"You cannot borrow yourself out of debt - no more than you can drink yourself sober."

The cheque that you get from work, the payment that you get for your services, is money that was, at some point in time, by some other person (whether in industry or government), at some other place, borrowed into existence as an interest-bearing loan. That's right: that fiat money in your wallet and purse came into being in the exact same way that credits on a credit card do. There is no fundamental difference between them.

Ah, but surely once a loan is paid back, that money then gets circulated back into the system in various ways and thus there comes to be money in the system that is not loaned?

You want to know the kicker? When a loan is paid back to the bank, they extinguish that money from the system. Before the loan was made, the money did not exist; the borrower's promise to pay is what brings the money into existence as a loan. When it is paid back, the banks extinguish that money from the system. Of course the interest from it they keep as their own and perhaps some of that goes back into the system, but the proportions of that to what is loaned, and loans refused, and what is called back, would not be near enough to make any difference whatsoever.

So yeah, no, there is no overprinting problem today, here in the west. The problem is completely different.

And when you hear people talking about the problem having to do with too much credit (and the "credit-addicted welfare slaves") as well as that damn fiat money, before going off into a tangent about how we need to become less dependent on government Anarcho-Capitalists, you can be assured they don't quite get it - indeed, that they miss the mark entirely. Because that fiat money is nothing but what the credit is. They are the same. The problem with the fiat money is not that it is fiat. The problem with it is that it is borrowed. The problem with government spending is not the spending, but that they borrow in order to spend (and of course, kicking the payment for the debts plus compounding interest to the next generations, not to mention flushing the nation's sovereignty down the toilet). Borrowing is not something exclusive to "credit-addicted welfare slaves"; it is the very foundation of our entire monetary system.

As has been said, if you are in debt, you may get out of debt as an individual; and no fault to you for getting out of debt, but the nature of the beast that has been spawned on us is such that an individual getting out of debt means someone else must go further into debt. Must. The system, being that all the money (or 95% of it) is loaned at interest, is naturally rigged - like a vast pyramid scheme in which all that happens is that debt gets shifted around - means that a number of people have to go bankrupt in order for some to get out of debt (with hopefully some assets to their name instead of merely arriving back at zero). Participation in the system scheme does not depend on whether you personally are in debt or not: in all of our transactions we are shifting around debt. And while individuals may get out of debt, the nation cannot - at least while this system scheme is being perpetuated. In order for that system scheme to keep going on, a nation must go deeper and deeper into debt.

The only way for a nation to get out of this scheme is for the nation's government to start printing its own debt-free money and spend it into existence.

"The power to create, issue and circulate the medium of exchange, which should be recognized as the supreme prerogative power of government, now forms the stock-in-trade of the business of our super-banking system, which functions as the servant of usury in the realm of high finance." --Gerry McGeer, The Conquest of Poverty - or Money, Humanity and Christianity

St. Matthew, pray for us.

No comments: