Wednesday, May 7, 2014

Is money a fiction?

Only if you believe representation is a falsehood. In which case the gold standard is also a fiction. And so are traffic lights.

Money is a kind of regulator; it regulates, somewhat analogously like bran is advertised as keeping you regular. Or, if you will, it is better referred to (analogously) as the bloodstream of an economy.

But this regulator we call money itself must be regulated. It is, after all, a sterile instrument. Money is to be regulated by controlling the quantity. That does not mean some kind of net over the money in circulation, but controlling the amount that is both issued into circulation and extinguished from circulation.

Anyways, did you ever know someone who was personally mired in debt and their debt just took care of itself?

Didn't think so. That would be to live in a fiction.


I was wondering about corporal punishment by the state. Is that torture?

For instance, some place might have a law that serves five or so whips from a bamboo cane for someone caught defacing public property. I was sincerely wondering what the Church teaches on this.

Is spanking your kids torture? What?

"Don't you dare quote Aquinas to me young man!"

UPDATE: I think Kevin O'Brien more or less adequately answers the question "Is corporal punishment torture? Is spanking your kids torture? What?" right here. I already knew why torture is wrong, which is what Kevin writes about. But I'm wondering what the Church teaches about corporal punishment, vis-a-vis.

Does is it or does it not explicitly say that physically hurting someone can be a justice that is justifiably meted out to serve as a correction for an injustice committed? If it is just, then that means there must be an executioner of the punishment (someone wielding a bamboo cane). What if, by being the executioner, a person is put into the occasion of sin because of the chance of falling into taking pleasure in inflicting the punishment?


Enbrethiliel said...


Actually, I'm fleetingly acquainted with someone who decided to default on a big student loan. If I correctly understand the US financial system (which, of course, must be different from the Canadian financial system), this means that she still has to pay back the principal--which is taken out of her wages and her tax returns--but no longer has to pay interest. And I wondered why this wasn't the deal offered to students in the first place. Just pay back the principal, adjusted for inflation if necessary--but no interest.

We get the answer in the telling connection she was able to make after defaulting. For she continued to be hounded by the creditor so that she would put the loan back in deferral! It didn't matter to them that they were already getting money from her: it was the interest that they wanted. And it occurred to her that the "money" she had been "lent" for uni hadn't actually existed, though there was a sense in which it was "created" by her borrowing it.

The sad catch is that anyone who dutifully struggles to pay back a student loan with interest is participating in the wanton creation of "new" money that brings down the value of real money that is actually in circulation . . . while those who make the irresponsible decision to default on a loan they promised to pay are helping to regulate the quantity of money.

And caning is totally an appropriate penalty for the crime of conspiracy to create a financial crisis. (What?)

Paul Stilwell said...

Your comment receives a Gold Star!

Unfortunately I don't have a neat little graphic to tag it with.

"And it occurred to her that the "money" she had been "lent" for uni hadn't actually existed, though there was a sense in which it was "created" by her borrowing it."

Yes, the promise to pay back the money (plus interest) is precisely what brings the money into existence. Our (and the government's) "promise to pay" has replaced wealth evidence. Wealth evidence (such as a bridge being built because a government printed 4 billion dollars, which did not exist before, precisely for the purpose of having a bridge built, without interest to anyone) is what acts as a buffer (though not by any means the primary or sole buffer) between the issuance of money and the potential of inflation. It also works conversely to prevent scarcity of exchange.

Now we have a government who borrows the 4 billion dollars, which did not exist before, to have a bridge built, and in order to pay that back and the compounding interest...ta da! Bridge tolls for the commuters!($3.oo each way). Plus more taxes. It will take likely over three decades for that bridge to get "paid off". Why, why this craziness, this horrible yoke?

People say, "Ah! But debt acts as a buffer so that we don't go crazy with money inflation!"

Huh? LOL!

And, as you mention, that interest paid, gives to banks the "reserve" to create even more loans than they did before.

It is really nothing other than having to pay for one's productions/labours/studies/business like they were something that one rented. They are tethered and dragged down, being milked for its every good, so that their good does not actually achieve what they were meant to achieve.

But did you know its actually debated whether we have inflation or deflation?

Strangely, I actually believe we have both. Because if all that money in circulation, the bulk of it, is simply money waiting to be paid back, and the money does not exist to pay back the compounding interest (for if the bulk of the money is borrowed, then where does the money come from to pay the compounding interest? That too must be borrowed - at interest), then we have the weird predicament in which prices rise and yet people have less and less money. In other words, today it is not simply a matter of inflation, for the inflation also means deflation - deflation the point of robbing people's actual productions before those productions can achieve what they are supposed to achieve.

The more that debt-money is inflated the more it sucks up.

Belfry Bat said...

The resolution to the paradox is: Stilwell's thesis that it should be the Government that Prints Money ably points to what the True Government is, in our debtflationary economies.

Paul Stilwell said...

Absolutely Bat!

I particularly like, "ably points to what the True Government is".