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Regulated or deregulated — central bank fiat money created via debt instruments is inevitably self-destructive. We are in a situation where essentially all glo

Regulated or deregulated — central bank fiat money created via debt instruments is inevitably self-destructive. We are in a situation where essentially all global personal tax revenue goes directly or indirectly to pay commercial and central banks for the money supply to exist. Destroy that — or be destroyed by it. Everything else is just rearranging deck chairs on the Titanic.

mistrial9 7y ago
fantastic polemic -- utterly false dichotomy. We are in an age of massive systems, and systems-thinking is called for..
- pjkundert 7y ago
  The limiting function for money creation is the amount of wealth available to absorb it (both stock and flow). Presently, that is secondary; the limiting function is the ability of civilization to maintain the interest payments to those private institutions mandated to create the money supply. One of these concepts is necessary; the other is not. Creation of dynamic money supplies based on the one limiting function is possible, and there are emerging mechanisms becoming available to support such money at scale — and make it available to the other ~4 billion people entirely unserved by the present system. Care to comment on why this conversation is a “polemic”, and such a future is unimaginable?
- notacoward 7y ago
  And what does "systems thinking" oh-so-conveniently mean this time?
  - maneesh 7y ago
    One thing that might be worth considering is where the best leverage point in the system is. See http://donellameadows.org/archives/leverage-points-places-to-intervene-in-a-system/ http://donellameadows.org/archives/leverage-points-places-to...
RealityVoid 7y ago
All money is essentially debt. It might be a failure of imagination from my part, but I can't see what you would replace it with except a system just like eit but not quite it.
- rjf72 7y ago
  He's referring to something in specific that many people do not consider. Most of our money is not printed, but created by fractional reserve systems through debt. Banks in general are only required to hold 10% of their deposits on hand. The rest can be lent/invested. If there's a run on the bank they rely on a central bank to give them money to cover it. Most people know this stuff, but consider this: - Bob deposits $100 of 'real' money at a bank. - Joe takes out a loan of $90 and uses it to buy something from Jane. - Jane deposits $90 at the bank. - Mike takes out a loan of $81 ... And this process recurses on downward with a smaller and smaller share each time. But the mathematical result of this is that $100 of "real" deposits ends up creating $1000 of debt. And that's before interest which, for long term loans, can be multiplicative. So $100 of "real" money may end up creating thousands of dollars of debt. We've created a system where banks end up, quite rapidly, being owed literally more money than exists. Great time to be a banker for sure. This is why the Fed and other financial entities are so obsessed with inflation. Inflation makes everything more expensive in the present, but it also reduces the cost of loans from the past. Imagine I take out a loan for $1000 and somehow the next day we see 100% inflation. Well now my loan can be paid back with only $500 of 'value' as measured from the time I took out the loan. If inflation is higher than the interest rate on my loan, I actually earn money by not repaying it. By contrast, deflation makes older loans more expensive. And of course there is also the investment outlook. Inflation is a penalty on wealth. If there's 2% inflation per year, my billion dollar piggy bank becomes worth ~$20 million less each year. So I'm incentivized to invest actively. By contrast with deflation I can sit on my money and become relatively richer by the day. But this also puts us on a roller coaster. Old debt is only paid off with new debt which will only be paid off with new debt which ... And the money definitely does trickle downward, but at the same time it gushes upward. And the ride keeps going faster, and growing bigger. Not hard to imagine a different system as ours is grossly counter intuitive. Of course different doesn't mean better so, as a recurring theme in human history, we're only like to change once things go boom.
millstone 7y ago
If an investor (say, a pension fund) holds treasuries, then this has the effect of redistributing money from taxpayers (via interest payments) to pensioners (via treasury yields). Where does the destruction come in?

mistrial9 7y ago

fantastic polemic -- utterly false dichotomy. We are in an age of massive systems, and systems-thinking is called for..

pjkundert 7y ago
The limiting function for money creation is the amount of wealth available to absorb it (both stock and flow). Presently, that is secondary; the limiting function is the ability of civilization to maintain the interest payments to those private institutions mandated to create the money supply. One of these concepts is necessary; the other is not. Creation of dynamic money supplies based on the one limiting function is possible, and there are emerging mechanisms becoming available to support such money at scale — and make it available to the other ~4 billion people entirely unserved by the present system. Care to comment on why this conversation is a “polemic”, and such a future is unimaginable?
notacoward 7y ago
And what does "systems thinking" oh-so-conveniently mean this time?
- maneesh 7y ago
  One thing that might be worth considering is where the best leverage point in the system is. See http://donellameadows.org/archives/leverage-points-places-to-intervene-in-a-system/ http://donellameadows.org/archives/leverage-points-places-to...

RealityVoid 7y ago

All money is essentially debt. It might be a failure of imagination from my part, but I can't see what you would replace it with except a system just like eit but not quite it.

rjf72 7y ago
He's referring to something in specific that many people do not consider. Most of our money is not printed, but created by fractional reserve systems through debt. Banks in general are only required to hold 10% of their deposits on hand. The rest can be lent/invested. If there's a run on the bank they rely on a central bank to give them money to cover it. Most people know this stuff, but consider this: - Bob deposits $100 of 'real' money at a bank. - Joe takes out a loan of $90 and uses it to buy something from Jane. - Jane deposits $90 at the bank. - Mike takes out a loan of $81 ... And this process recurses on downward with a smaller and smaller share each time. But the mathematical result of this is that $100 of "real" deposits ends up creating $1000 of debt. And that's before interest which, for long term loans, can be multiplicative. So $100 of "real" money may end up creating thousands of dollars of debt. We've created a system where banks end up, quite rapidly, being owed literally more money than exists. Great time to be a banker for sure. This is why the Fed and other financial entities are so obsessed with inflation. Inflation makes everything more expensive in the present, but it also reduces the cost of loans from the past. Imagine I take out a loan for $1000 and somehow the next day we see 100% inflation. Well now my loan can be paid back with only $500 of 'value' as measured from the time I took out the loan. If inflation is higher than the interest rate on my loan, I actually earn money by not repaying it. By contrast, deflation makes older loans more expensive. And of course there is also the investment outlook. Inflation is a penalty on wealth. If there's 2% inflation per year, my billion dollar piggy bank becomes worth ~$20 million less each year. So I'm incentivized to invest actively. By contrast with deflation I can sit on my money and become relatively richer by the day. But this also puts us on a roller coaster. Old debt is only paid off with new debt which will only be paid off with new debt which ... And the money definitely does trickle downward, but at the same time it gushes upward. And the ride keeps going faster, and growing bigger. Not hard to imagine a different system as ours is grossly counter intuitive. Of course different doesn't mean better so, as a recurring theme in human history, we're only like to change once things go boom.

millstone 7y ago

If an investor (say, a pension fund) holds treasuries, then this has the effect of redistributing money from taxpayers (via interest payments) to pensioners (via treasury yields). Where does the destruction come in?