MONEY REFORM THINK TANK: JOIN IN THE DEBATE!
“You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.” --Buckminster Fuller
Most legislation is formed in advance by “think tanks” funded by special interests, but nobody funds experts to think about how to reform the money system itself. Now, however, we have the Internet, where we can banter ideas about in “virtual” think tanks without funding. Getting anyone to pay attention, of course, is another matter; but before we even get to that stage, we need to agree on a plan. I’ve gotten a great deal of feedback on this subject by email, so am opening it up to blog comments. What should our money system look like and how should it work? Give your feedback here. Comments on the book “Web of Debt” and articles are also welcome!
Note: This page has gotten a bit long and unwieldy. Please keep entries short and to the point!
September 12, 2007 at 3:42 am
To Ms. Brown—I’ve not yet read your book, but I’ve read all the excerpts, plus your blog articles regardng economics.
Since you mentioned the island of Guernsey, (spelling?) I thought you might be interested in the article below. It explains that many non-centralized currencies are now appearing in Europe.
Perhaps you’ve already seen it.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/01/18/cneuro18.xml
September 12, 2007 at 2:38 pm
Thanks Richard, that’s interesting! I’ll add that to my next revision. Ellen
September 13, 2007 at 11:29 am
CCs, or Community Currencies are all very well, and good but in order to tackle what really matters (ie. the major social, economic, and political issues) we need something far more powerful. I refer here to my evolving project of Transfinancial Economics. It is time to think BIG, and not small all the time (ie. New Economics, et al) otherwise the survival of the human race could be “at risk” with ideas that have little, or no real impact in the world (except after a period of many many decades perhaps when the planet as we know it might not even exist!!).
September 19, 2007 at 12:59 pm
Richard Cook is a leader with respect to credit as a public utility. Of course there are the monetary reformers such as Michael Hudson, and others too, working with the Kucinich people and but of course, Ron Paul (he has changed his mind about the gold standard btw).
The best of the best about these subjects is F. William Engdahl, as he is an economist teaching in Germany and his research has delved into all the many systems and the entanglement of it all.
September 19, 2007 at 5:26 pm
Hi Roberta, I totally agree and support all your picks. I wasn’t aware Ron Paul had changed his mind about the gold standard. That’s good news! What does he propose then — could you cite a reference? Thanks! Ellen
September 22, 2007 at 8:34 pm
At a quick glance, it appears there are some good intentions and good awareness of an serious issue that faces the USA and the rest of the world.
I see evidence of government created money as the solutions to the great debt that America carries. I caution you that you cannot pour new wine (government fiat) into old wineskins (centralized banking). It takes care of the interest problem, but the root of the problem is still intact. The centralized structure and temptation associated with that structure wouldn’t change, simply the players who have their hands on the monetary levers.
Whether a currency has interest or not (what some call “debt-free”), the interest aspect of a currency is SECONDARY to how the real money is created and brought into circulation as per MARKET LAW. MARKET LAW , a subset of all NATURAL LAW trumps man’s law. You will see.
Government’s ability to create dollars can be highly inflationary and we all know that politicans love to spend. Lobbyinging and patronage are rampant.
When an financial entity, whether it be government or banks, create a “fictional value” called currency with book entries, the potential for abuse is the same. Overcreation of the currency, inflation, is the hidden tax on the people. Applying interest is another layer of pain, but overcreation, in of itelf, will rob people of their wealth and savings.
Gold (and silver to some degree) are the defenders of honest money with supply dicipline that is governed by the market. Gold cannot be printed or created in a computer. The “genesis” of money is all important. Is it an asset or a debt ? Some whould argue that a created credit loaned into circulation by the elected government would constitute itself as a form of asset money. Never ! Not according to THE LAW , the big law as governed by natural markets.
Markets are natural folks. As a matter of fact, we have learned our early lessons about markets in nature. More zebras = more lions. This has nothing to do waith man’s law or man’s manipulation of that law. It seems to create balance very well, if left to itself.
The money markets would do well to look at this organic aspect of money and abide by its laws too.
The law of weights and measures was derived from organic law. This is why gold and silver have over 5000 years of trusted history.
Debt currency, (at interest or at zero interest) is a measure within the law, but is a measure without a weight, like a maiden looking for a husband.
As for gold, all HISTORICAL gold standards, including Bretton Woods have been hampered, not by gold, but by the poor logistics associated with gold. It was difficult to transport and more importantly, almost impossible to split into small denominations. A fixed peg to gold was inefficient and quite unfair in veiw of the peg to USD’s only. A peg did not reflect real time market fluctuations of supply and demand either. Something had to come about to create the “perfect marriage”, but that marriage was something that only God knew about and God wasn’t telling.
Enter the age of information. Gold can now be held as weight in one personal “reserve ” as a store of value and measured (”slice a piece off”
in any major currency of the user’s choosing. Gold becomes the standard, but real time fiat currency measurments become the measuring tool. Gold can be shipped from A to B, almost anywhere, while using gold weight as the standard.
Another problem for historical gold logistics was “more money meant more gold”. That was true in the practical sense, but hat was also true in the theoretical sense 35-40 years ago, was that gold’s market value, if allowed to float as per market law and the law of supply and demand, could meet all market needs, everywhere. The practice had to be patient , however, because the manifestation of the law required the ability to recreate structure to suit and evergrowing change away from hierarchy and toward “holography”, something akin to organic markets, as natural as a mustard plant.
As long as the price of gold was allowed to rise, to suit market demand for money, then within the age of information , gold could be split and distributed in very tiny amounts, but unlike the Bretton woods era, this could be done in real time.
Bravo real time ! I propose a toast with the new wine of digital gold , in the new wineskin of the e-comm container.
Note : Gold needs no legal tender status. It is a true market currency and needs no crutch.
September 22, 2007 at 11:46 pm
long term capital management went under in 1998 under clinton….
September 23, 2007 at 3:42 am
Ms. Brown,
I enjoy your articles as they are well researched and well written. And I’m definitely in agreement about the absurdities that are the Federal Reserve and fractional reserve banking. In fact, I’m looking forward to reading your book (which I’ve ordered).
I do detect in your articles something I would like to clarify if I may and that is that you seem to advocate the power to create fiat money be taken away from the banks and be placed in the hands of the government (you refer to the government as the people which could be another discussion). I would hope you agree with me and the many you quote (Rothbard, Paul etc.) that the root of the problem is not who creates the fiat money, but that it is created at all. Many would agree that entrusting the politicians with our finances is as egregious as entrusting the banks. Both scenarios would lead to perpetual inflation.
I deeply apologize if I’ve misinterpreted what you have said in your articles I’ve read thus far but some portion of your articles strikes me as similar to what Paul Grignon has put forth in the latter part of his video “Money as Debt.” He and I have had several email exchanges regarding the gold standard and its importance in any overhaul of our deeply flawed monetary system but he just responds with the shortsighted collectivist mantra that the government would solve all our monetary problems (he is Canadian). He stopped corresponding when I engaged him further on his beliefs.
Thank you for your time and effort in responding and please keep up the excellent work in getting the word out regarding the evils of our current monetary situation.
P.S. I live in SoCal as well. If you have any speaking engagements I would most welcome being a supportive part of your audience.
Warmest regards,
Mark MacVay
September 23, 2007 at 6:06 pm
I’ve received so many comments on returning to gold as the national medium of exchange that the most efficient way to address them may be to post my chapter on that subject. It is at –
http://www.webofdebt.com/excerpts/chapter-37.php
On the LTCM bailout occurring on Clinton’s watch — thanks; I got that wrong but have now fixed it. It was the bailout of the banking system after the collapse of the savings and loans that cost George Bush Sr. at the polls. (Here’s my excuse: I didn’t start doing my own investing until I got divorced in 2000. Anything that happened in the market before that I only know from reading!) Best, Ellen
September 23, 2007 at 7:12 pm
If anyone is interested in a serious discussion about the utter impossibility of gold backed money please email me.
Before doing so, please research the total amount of gold that has been mined. Who owns the gold. (don’t forget to count the gold jewelry owned by the people of India). If you are going to buy the gold from the people who already own it , what will you use to pay for it?
I look forward to hearing from you.
Jim
September 23, 2007 at 9:08 pm
I believe that all of the world’s central banks have signed formal agreements to participate in this world-wide fiat monetary system. This gives them all the opportunity to print money at will and without limits.
The privately-controlled banks in each country are licensed and authorized by the central banks to loan out unlimited amounts of money to the public at very favorable interest rates (to the banks). The loan amounts are not restricted, and the interest rates are determined by the central banks. The interest charged on the outstanding principal generates enormous amounts of wealth for the thousands of privately controlled banks that exist in every country, worldwide.
The loans are underwritten by the governments with taxpayer funds, therefore the private banks have essentially no risk involved (when was the last time you heard about a bank that went belly-up?). It is an enormous international scam that is perpetrated on the public.
Oversight in each country is essentially non-existent, even though such bogus organizations like the SEC and the CFTC exist to provide oversight, they are a part of the privately-held banking system
The one area I see little written about is the fact that all the entries in the bank’s books are digitally entered. The country’s central banks can have their staff go to the computers and key in unlimited additional amounts of funds into the private bank’s accounts. This is accomplished without any oversight as there is no official auditing of either the chartered private bank’s accounts or the central banks, or the auditing is carefully monitored by the government hacks who are themselves employed by the central banking system. No problems occur which cannot be rectified behind the scenes. No negative public information is ever revealed. It is a closed system.
Once the private banking systems were freed-up from the restrictive gold and silver backed monetary system, they no longer were required to lend out funds in amounts relative to the amount of gold and/or silver they had on hand. In other words, once they no longer had to keep on hand gold and silver in amounts that were equivalent to the amount of paper money that they lent out, they were free to loan out monies to individuals and businesses in unlimited amounts. And there was now a zero risk factor for the banks since legislation was passed which insured that any loans that went belly-up would be underwritten by public funds.
The banksters have scammed the public for decades with the quiet approval of our elected public officials. They are, in fact, unindicted co-conspirators in this on-going crime against humanity.
The terrible debt loads for most Americans, and those in similar financial circumstances in other countries, have effectively been enslaved by the worldwide private banking system that is based on the issuance of unlimited amounts of fiat money.
The men who operate this system are without conscience.
September 23, 2007 at 9:48 pm
Mr. Hunt writes: Once the private banking systems were freed-up from the restrictive gold and silver backed monetary system, they no longer were required to lend out funds in amounts relative to the amount of gold and/or silver they had on hand. In other words, once they no longer had to keep on hand gold and silver in amounts that were equivalent to the amount of paper money that they lent out, they were free to loan out monies to individuals and businesses in unlimited amounts.
He says that our “money” needs to be backed by gold and silver. Again I ask “from where will he get the gold and silver?” Who will he buy it from? What “money” will he use to buy this gold and silver?
September 25, 2007 at 6:20 pm
When people are concerned about the money issue based on the debt paradigm that’s been created, their first consideration should always be the nature of the currency (nothing to do with interest) in regards to HOW it is created.
If you go away with one small “nugget” of wisdom, go with the simple understanding that the only way for the
“debt:circulating currency” ratio to fall is for assets (unencumbered) to be entered into circulation.
September 25, 2007 at 6:28 pm
Jim Johnston , you wrote :
“If anyone is interested in a serious discussion about the utter impossibility of gold backed money please email me.”
How do I get your email ?
I have two questions for you for the sake of public aspect of this blog.
1) Do you believe that money should be managed by a supply driven hierarchy or by the market ?
2) Do you believe that a gold system is restrictive because of the demands placed on the physical amounts of gold “required” to expand the money supply for the sake of real growth ?
September 25, 2007 at 6:32 pm
Walter , you wrote :
“The men who operate this system are without conscience.”
Did you know that we’re all following the same “script” ?
There’s “good guys” and “bad guys” written into the “script”.
This is not a judgement of any kind, simply an observation.
September 25, 2007 at 6:47 pm
Mark Macvay, you wrote :
“I deeply apologize if I’ve misinterpreted what you have said in your articles I’ve read thus far but some portion of your articles strikes me as similar to what Paul Grignon has put forth in the latter part of his video “Money as Debt.” He and I have had several email exchanges regarding the gold standard and its importance in any overhaul of our deeply flawed monetary system but he just responds with the shortsighted collectivist mantra that the government would solve all our monetary problems (he is Canadian). He stopped corresponding when I engaged him further on his beliefs.”
Mark, I, too, once believed that government was the way of creating an interest free currency (interest free to them) for the sake of managing an economy. I failed to realize the truth , which is not necessarily about government or banks, but about a deeper issue of the age , which is an age predicated on a hierarchical structure. We have been supply driven since “the apple was shoved in our faces”. There has no other way to structure. I suspect that our computers were busted.
We take this for granted, but we shouldn’t. As supply chains formed in top-down fashion
(economics is the first secular model), all other models followed suit, including politics, religion and education, thus all of our institutions are hierarchical in structure. We think of this as “normal” , which it has been until now because with the aid of the information age, we were “stuck” with it …… but the good news is that we’re all forgiven, in a sense.
Foregivesness could be replaced with judgement now that we have the tools to change and morph structure, however.
As a supporter of gold, I found that gold was never the problem with a good gold based system, but it was the logistics of gold that was the problem , based on moving it from A to B and the ability to “split the gold” into small denominations. Might you concur ?
You cannot pour new wine into old wineskins, as a friend of mine once said.
September 25, 2007 at 6:51 pm
I see no waay to edit.
My last post has a sentance that should read :
We think of this as “normal” , which it has been until now because without the aid of the information age, we were “stuck” with it …… but the good news is that we’re all forgiven, in a sense.
September 25, 2007 at 9:59 pm
Ooops.
I just posted my email for E-Manual and too late noticed that mail address will not be published.
September 25, 2007 at 10:20 pm
Jim …..
I suspected as much, so please ask Ellen to forward it. I already tipped her off that I would suggest this very thing.
Thanks
E-Manual
September 25, 2007 at 10:22 pm
Jim …..
Can we get these basic issues public for the moment and then we can “paint” as we see the “frame” evolving ?
1) Do you believe that money should be managed by a supply driven hierarchy or by the market ?
2) Do you believe that a gold system is restrictive because of the demands placed on the physical amounts of gold “required” to expand the money supply for the sake of real growth
September 26, 2007 at 3:07 am
Rich to poor redistribution is in order. All debt in the world is forgiven. Everyone keeps what they currently have in their possession. The rich will then reconsider their greedy ways. The sun will come up in a better world tomorrow. Problem solved. Or do we just not want to solve it. Lets vote on it. 50% plus one wins.
September 26, 2007 at 11:17 am
You can’t forgive all the debts in the world. Public and private debt in the U.S. comes to something like $50 trillion. For every borrower there is a lender, and most of the lenders aren’t banks. They’re pension funds, savers who put their money into bonds of various sorts, etc. You’d be depriving them of their life savings or their pensions. What you CAN do is to pay off the federal debt with government-issued money; in fact, that’s the only way a $9 trillion public debt can be dealt with. Ed Griffin (representing the Goldbug camp) and Stephen Zarlenga (representing the Greenbacker camp) agree on this point. See my article “The Quick Fix,” http://www.webofdebt.com/articles, and my Response to the Mogambo Guru (blog page). Best, Ellen
September 26, 2007 at 3:00 pm
“Rich to poor redistribution is in order. All debt in the world is forgiven. Everyone keeps what they currently have in their possession. The rich will then reconsider their greedy ways. The sun will come up in a better world tomorrow. Problem solved. Or do we just not want to solve it. Lets vote on it. 50% plus one wins”.
This is asking for a proclamation, based on the power of hierarchy.
You cannot pour new wine into old wineskins.
September 26, 2007 at 3:22 pm
Ellen , You stated :
“You can’t forgive all the debts in the world. Public and private debt in the U.S. comes to something like $50 trillion. For every borrower there is a lender, and most of the lenders aren’t banks. They’re pension funds, savers who put their money into bonds of various sorts, etc. You’d be depriving them of their life savings or their pensions. What you CAN do is to pay off the federal debt with government-issued money; in fact, that’s the only way a $9 trillion public debt can be dealt with. Ed Griffin (representing the Goldbug camp) and Stephen Zarlenga (representing the Greenbacker camp) agree on this point. See my article “The Quick Fix,” http://www.webofdebt.com/articles.”
What can also be done, is people can take personal responsibility for protecting themselves, while also helping to support the development of a grass roots market money system , predicated on gold and/or silver. Market money that obeys market law needs no “legal tender” proclamation. The market governs THE LAW. This is not an argument for gold or silver, but an argument that the way to deal with debt is to have liquid assets (unecumbered) flowing in the economy as forms of money. In short, balance the books. Digitization makes this simple and user friendly. No fractional reserve smoke and mirrors is required if a digitized account will account for account holdings as weight. Weight can be measured in dollars or other currencies for the sake of distribution.
There is never a lack of fiat currency. There is simply too much debt, by contrast. Hierarchical fiat , regardless of whether it is government fiat or bank fiat is still fiat. Let the market control the real money, money that subscribes to THE LAW. Hierarchical fiat is subject to the abuse of repeated inflationary boom & bust cycles and the fate of the “karmic wheel”. Why tempt fate ? Why repeat history ?
It appears to me that the nature of currency, whether it be by fiat or by the market, has plenty of recognition in this blog. Where is the appreciation for centralized structure versus de-centalized structure as per markket law ?
You cannot pour new wine into old wineskins.
Have you been assimilated by “the BORG ” ???
Fiat has been a neccesary evil in the development of our journey, a “stopping ground” of sorts, on our way to the age of information and the “great wedding”. You are invited.
It gets even better …….
Stay tuned.
September 26, 2007 at 3:23 pm
Hi Ellen (and everyone else),
In addition to Griffin and Zarlenga you might read “Secrets of The Federal Reserve’ by Eustace Mullins. The complete book can be read at one of the Google hits.
Enjoy,
Jim
September 27, 2007 at 3:03 am
I’m off for a 3 week adventure, to two money reform conferences and to see my daughter in Switzerland; but feel free to carry on without me! Ellen
September 27, 2007 at 7:21 am
Looks like pension funds are a bad gamble. 50 trillion, 100 trillion what’s the difference. Like all gamblers, you know the risks. The lenders ARE banks, not pension funds and they have more knowledge, influence and power than the average borrower. “A lender nor a borrower be.” With more knowledge, influence and power, would the bigger sinner please step forward. Forgive all debt. problem solved.
September 27, 2007 at 12:13 pm
The problem wouldn’t be solved at all, Drew, as Ellen already stated. To keep this simple, if I was to lend you $1000.00 USD’s , based on my labor’s pay, would that be lumped into this forgivenss of debt that you’re suggesting ?
There is a difference between credit creation from nothing, based on debt (a promise to pay) and the lending of currency that is already in circulation , currency that has been “legitimzed” through labor or productivity.
Be careful not to throw the baby out with the bath water.
Our attempts to create a new model , at least on the conceptual level, has to do with the “genesis” of the currency in its creation. I realize that when we pass currency from one hand to the other, it may simply be an exercize in “finding a bigger fool”, but we may have to accept that we’re an age of fools, all of us.
It’s only the root that is rotten, not the stalk.
September 28, 2007 at 6:22 am
If it can’t be solved at all I guess most of you will be seeing one another in hell. Take a portable air conditioner purchased at Wall-Mart on your VISA card manufactured at starvation labor rates by some soul in a third world nation that is sure to end up in Heaven for his efforts. Hope you are cool with this. The truth hurts doesn’t it.
September 28, 2007 at 1:23 pm
Drew …
Natural law rules and the fact that someone can produce a widget in the far east at a more competive rate than I can excites me to no end. It frees me up for a bigger job and that job is based on developing new ways and new systems to help that person in the far east. How can I help her/him , while also helping myself ? Simple. Marketing and financial services.
They have to get their product to market in increasingly efficient ways and as such, need support.
Think of North America as being the finance and marketing department for a global company that has its production department in the east. The sales people and financial people in the company get paid just like the assembly line people do. Yes ?
We still have work to do, but when our task is done, individuals like you and me will earn money when products are bought anywhere and everywhere in the world. This includes a redistribution of wealth from a Chinese person buying a product that is actually made in China ! I currenctly earn income from the American consumer’s purchasing of American product, yet I’m in Canada. Apply the same logic toward China. This is only possible because of networks. Networks will support financial & marketing services and our huge advantage in N.A. is that we are “wired up” at the household level, much better than any other area of the world. Financial and marketing services are being decentralized down to the individual. That spells more opportunity than ever before.
Even if one does not directly participate in nettworking, networking will provide the means of support for other labor by bring money from all over into the N.A. markets.
We’re following “the script.” Hell is but a short transitional period.
September 30, 2007 at 6:33 am
Of coarse it excites you E-Manual. Blind greed will do that. The fact is that if you didn’t enslave someone from the far east into making widgets for you, you would not have to try to BS anyone into thinking that you cared about them. He would be far better off without you. The people that you speak of have no product to market only labor to be exploited. With phases like, “while also helping myself,” “individuals like you and me will earn money,” “I currently earn income,” scattered liberally through your blog the “script” is quite clear. Make as much as you can, as fast as you can regardless of who gets hurt in the process. Pawn off the poverty, pollution and the long sweaty hours of labor on someone a long ways away, take the wealth and resources, oh! and always claim you care. You think its brilliant. Hope everyone with this mindset is having a very good time. Your not fooling everyone you know and Hell is probably a lot worse than your thinking.
October 1, 2007 at 3:27 am
People in the far east are doing better than they ever have in the past. There are more jobs and better jobs. They want to work and they want more access to markets. If the west can help them get their production to market, then it’s a win-win. That’s how a market operates.
There’s no need to enslave anyone.
October 2, 2007 at 6:07 am
E-Manual to say that people in the far east are doing better than they ever have in the past, would require a lifetime of research and I am positive you would have to disregard a lot of history to prove that. They do want the best for their families, (that for the most part in positive human nature), and in the pursuit of this all to often are swindled out of their labor, resources, cattle, goats and gardens. All for a few dollars that as everyone knows will never buy what it use to. A human beings will to live and provide is being taken advantage of. There is no access to markets, help getting “their” (a NIKE runner?), product to market or win-win. Just win-lose. A market operates like a game of Monopoly. Every thing in and the strongest fastest cheater wins all, while everyone else is poor and fighting. And by the way I know what you meant to say. There’s no need to let them know they are enslaved. In a true business sense if they never figure it out that would be too soon.
October 2, 2007 at 6:34 pm
Drew , you mentioned that “a market is like a game of monopoly”. Are you aware that you are defining a structure ? This is the whole point of my own observation because I can clearly see that the “old” hierarchical structure is giving way to a morphing toward a more “holographic” structure which works to wean out the apex (greed factor) of the old paradigm. The hierarchical structure is and has been a necessary part of our history and our evolution from past to present and an ever present part of “the script” since the “apple was shoved in our faces.” This supply driven paradigm is giving way to a “rounder world” as people integrate themselves, as individuals, into supply chains. Supply chains have historically been controlled by corporate entities, at least within recent history since the closng of the agricultural age. This change is also a part of “the script” and could never come about until the aid of the information age.
The bigger question I see is , “Now that we have the tools, will we use them?”
New wine requires a new wineskin. That wineskin is simply waiting to be sewn together.
October 6, 2007 at 5:44 pm
Hierarchy as compared with good democratic social organization is of course always the problem. It is rooted in time and getting worse fast. The rich take care of the rich and they control the media and are heavily ingrained into our political system now as well. They work very hard and successfully I might add, into explaining how really bad things are good for you. (Using your sons and daughters lives to root out weapons of mass destruction that don’t exist for example). I do agree that the old hierarchical structure is morphing into one that is easier to see through. That may in fact help us see the agenda and be our saving grace. You however must have a tainted definition of the word ‘greed’, because it is destroying western culture as it grows at an ever increasing rate. Even in the face of decisions such as, should we leave sovereign nations alone or do we need to occupy and kill them if necessary to acquire their resources to prop up our run away greed infested, resource depleted economies we leave all too often with blood on our hands. We have even ran out of one of our most precious resources, “The ability to think rationally.” We are unfortunately moving into a more evil paradigm, not irreversible perhaps with some soul searching but obviously not looking good. To get to a “rounder world” will take more intelligent, clear thinking, “good” minds than got us into this present mess. The only thing round about the world right now seems to be it’s shape. Our thinking process seemed to have flat lined at about the time the commador 64 was introduced. We have the tools (infinite communication hardware) yes, will we use them for good? Probably not. (Forward bases with satellite imagery and laser guided GPS coordinated missiles come to mind.) You too seem to be a bit confused on these points. “Historically,” and “recent” do not have the same meaning. Look them up. As well supply chains are owned by the people of this earth and always will be. The information age has allowed corporate entities to misguidedly or intentionally compromise this fact which would bring the closing of the agricultural age and human life on this earth. This will not happen so change the way you think or be part of the “bad fight.” There is no use spending a lifetime looking for a wineskin that will never exist in which to store wine that does not belong to you.
October 7, 2007 at 4:12 am
The rounder world will come about when people integrate into supply chains in such a way that their participation saturates capacity. Corporate entities and the elite control society because they control supply chains. When that changes, so too will structure.
Look at your loose definition of greed. It’s not an absolute definition. It’s a relative definition and again, this is my point. Based on relativity, greed is a function of structure.
All you should do in this moment is ask, “what have I done to wean out the greed factor’ ? How have I contributed to shifting toward a rounder world, where the greed factors within the aggregates have become balanced.
We are here to balance the power between supply and demand, within a world that has always been supply driven throughout modern history. Thiis was never possible until recently. The hierarchy has been a necessary evil. It is not anymore.
October 8, 2007 at 8:29 pm
Hello from far away - from Finland,
1. I am not sure if anyone has mentioned J R R Tolkien with regard to monetary reform. Richard C. Cook has an article about it :
http://www.theperfectsystem.net/reform/monetary_reformers_interpretation.htm
“Here’s how I see today’s crisis reflected in “The Lord of the Rings”:
The evil disembodied all-seeing eye of Sauron: Whatever devils sit atop and rule the international financial system which is profiting from so much economic and financial chaos.
Mordor, the realm of Sauron: The international banking and financial system in all its aspects and the world of war, oppression, and economic ruin it has created over the last century, when hundreds of millions have been slain through useless wars and upheavals over power, ideology, money, and control of resources. ”
…(..)…
“In my opinion, it is the conflict between economic democracy on the one hand and the domination of worldwide usury finance enforced by political power on the other that most reflects the struggle for human freedom today and that will determine the survival of any human civilization that is worth having. ”
2. Furthermore Stephen Goodson has also written a piece about Tolkien.
http://www.barnesreview.org/Tolkien/tolkien.html
“It was in the field of monetary reform that Tolkien displayed his most passionate concern. His indignation about the evil of usury—the creation of money out of nothing and then lending it out at interest—is reflected repeatedly:”
“There should only be one source of money; one fountainhead from which flows the nation’s blood to vitalize commerce and industry, ensure economic equity and justice and safeguard the welfare of the people. . . . In other words, it has always been and still is our contention that the prerogative of creating and issuing the money of the nation should be restored to the state. (August 3/10, 1956, page 48)”
“Above everything else Tolkien may be judged as an ardent supporter of monetary reform. He understood that money is not a form of wealth but a medium for the exchange of goods and services, He sought social justice through the adoption of an honest money system, which would distribute the benefits of the technological age to all mankind, and provide a secure basis for a future of progress and prosperity.”
Please comment.
October 10, 2007 at 3:58 am
Lars ….
You said : In other words, it has always been and still is our contention that the prerogative of creating and issuing the money of the nation should be restored to the state. (August 3/10, 1956, page 48)”
Should it be restored to the state ? Is the problem the individuals who head up the running of the banking beast or is the issue deeper and slightly more esoteric ?
Could it be the beast, rather than those who inhabit its belly ?
There is nothing wrong with private banking. There is a problem with private banking that creates credit from nothing, however.
There is nothing wrong with social credit creation in the name of managing debt and its interest. There is a problem with over-creation, however.
It’s not how the above differ that matters. It’s what they have in common. Hierarchical structure. Simple……. so simple it’s often missed because our whole paradigm of existance has been based on a supply driven society where those who supply (the haves) have had an advatage on those who do not (have nots). This top-down structure was forged in economics and thus the die was cast for all models that followed.
We’ve been supply driven since the apple was shoved in our faces.
Both private fiat and/or government fiat are centralized (hierarchical) and supply driven.
Interest free credit is still money from nothing in the creation of figures from thin air. It may solve the interest dillema, but the temptation for inflation is huge. Inflation is the hidden tax on the people. Centralization of debt currency is necessary because in its simplest form, the fiat system is a set of books. There is no real wealth creation that is sovereign and debt free within the money, in of itself. Only assets can fall into the category of money that can be sovereign and debt free. Only assets can be worked into circulation, debt free and with the organic dicipline of market law left intact by way of the “sweat of the brow” and the law of weights and measures.
Historical asset money (gold and silver) only had logistical problems. They were not about the theory of gold, but about the practice of moving gold and/or splitting gold into small denominations. These issues are now academic with the advent of digital currency and the ability to move 1/1000000 of an ounce of gold from A to B , in an instant where the money is stored as weight , while the “bride” of currency acts as the measuring stick in terms of how much weight is “sliced off” the personal reserve in order to transport from A - B. We have asset backed (100%) currrency in circulation to manage debt and liquidity.
I suspect the market will move demands toward the monetization of commodity ETF’s for this very reason. E-Gold serves as a good model. Point of sale will be able to accept your commodity in the forseeable future.
Why did the great monetary minds of the past not see this ? Simple. Their computers were busted, perhaps ?
You cannot pour new wine into old wineskins ……… an even better story than Lord of the Rings.
October 10, 2007 at 10:13 pm
Seems you are a goldbug, right E-manual ? Have you not seen how the gold price fluctuates. Also gold has been hoarded by certain questionable individuals with questionable motives.
Germany had no gold 1933-1939 but managed still to get things going big time. Neither had Franklin any ..at least not much of it in the years of the Colonial Scrip glory.
I am 100% sure that government/state/socially issued credit is the only way to go. Banks can then store the created money. Banks can trade it - but only with 100% reserves. The power of the banks has to be radically cut. They are not benevolent to society.
October 11, 2007 at 8:40 pm
I’m a huge believer in asset currency, Lars. At least asset backed.
As for social credit versus bank credit, you may be changing the wine , but the wineskin remains the same. There is no appreciable difference in the structure. You simply changed the players. Inflation is still the huge temptation , by which the people can be robbed of their savings and hard work. I used to be a proponent of social credit because I had a blind spot to inflation. I focused far too much on the interest aspect of the debt and not enough on the “genesis” of the money.
The model has worked in the past (guernsey Islands), but has not been tested over a long period of time in a large market. Where it succeeded, it succeeded because of good people at the helm, but good people in a bad system is still a bad system. As such, I say let it be and let the private system that is based on gold compete. That has already occured on the basis of the e-gold model. I have an account and I can tell you the system is absolutely terrific. It has a 1:1 backing and the system is based on stored weight. I have a store of value.
Here’s the new feature, however. There is no peg. Gold still floats to reflect economic realities. The gold can be “pieced off” digitally for the sake of speed and the ability to transport very small denominations in a multitude of currencies, so digital gold is actually a new marriage of currency and bullion. It’s globally seamless.
Germany “filled the shoes” of inflation with war, Lars. Have you not noticed that war and fiat currency have a co-dependent relationship ? Tsk, Tsk, Tsk. Working for Boy George, by chance ? ;-”
Just kidding is all.
Ever consider this ? A modern day war cannot be fought without deficit financing.
Deficit financing is a product of “money from nothing”, whether it be issued by government or by private banks.
Gold can be decntralize in its creation. It can also enter circulation debt free, providing asset in circulation, assets that support ongoing liquidity with less need for new currency and inflation risks. Interest is fine as long as there are enough assets in circulation to support P & I.
People who do real work deserve real reward.
Can you imagine the “handouts” for the sake of political favoritism ? What a nightmare social credit would be ! Vote for me, votre for me ! Been there.
I’ll stick to the law of weights and measures.
October 13, 2007 at 1:54 am
Abolish all lending and borrowing, and the world will be a better place. Limit the amount of assets any one person is allowed to pile up. Five years pay for the average person inside any particular sovereign nation, for instance. (pick which one you would like to live within) Institute the 100 mile diet for all products. Problem solved. We are going to have to do it sooner or later anyway to preserve life on this earth. When you have cancer you want to slow it down or stop it, not speed it up.
October 13, 2007 at 3:39 am
The lending of an asset differs greatly from the creation of a debt number. In the first case, an asset has already been created as per organic law. The supplyb exists in the system. In the latter, it has yet to be created. In the case of the latter, a liquidity crisis and a breakdown of trust can be created, as we have recently seen with the sub-prime and structured product breakdown. This is long from over. It was not predicated on lending of assets. It was predicated on credit from nothing ……….. from debt. A promise.
Prudent lending can be very helpful.
I thought this forum was about practical solutions and not simply an idealist “wish list” ?
We are just beginning to understand the “fall of man” and our journey back to providence. It must be worked out in order to “balance the books” and “square up with the house”.
October 13, 2007 at 7:05 am
This is unfortunately not an idealist “wish list” but what has to be done. The “stitch in time saves nine ship” sailed long ago. These types of hard decisions must be made now intensionally or later by default. I’m afraid that the practical/pretend solutions will prevail however and we will go into default mode at a later date. It is only human nature to error. Build on the side of a mountain, on the coast, hell build below sea level, what could possibly happen, right. Riiiiiight! Lending for most of the things humans do is neither prudent or helpful.
October 14, 2007 at 11:41 am
These types of hard decisions must be made now intensionally or later by default.
I agree, but who’s decision are you referring to ? This is where the paradigm of thought has to shift. I can expand , but I’d prefer to wait for your own answer.
October 16, 2007 at 7:19 am
In America today 1% of the people are presently pocketing 24% of the total income. The bottom 50% of the people are only pocketing 12% of the total income. In a perfect world that needs no social programs or intensional social thought process because it just happens any 1% of the people in general should make roughly 1% of the total income. I would agree that the bottom 50% of people are only four-fold low as compared with the top 1% of people at 24-fold high. Coupled with the fact that a lot probably have two jobs or more, or are working 80 plus hours a week and are no doubt more intelligent but less evil than the top 1%, this is a testament to their honesty, integrity and sound work ethic and up bringing. Good for them they are the group more on track and should be proud. On the other hand the top group has some serious decisions to make. These decisions probably will not come intensionally. They may come by revolt which is not in the nature of the lower income group unless really pushed, but more likely by default. The meek shall inherit the earth.
October 16, 2007 at 3:22 pm
Drew ….
You’re starting think around the issue of structure. That’s good. Stay there because it by changing structure that the distribution of power will change. My last post asked you to define “who’s decision” it would be to institute change. Your last post did a vague, but accurate portrayal of current circumstances without actually answering my question.
Q: How do you blame a set of scales for being out of balance ? Which side do you blame ?
A: You don’t. The evil is not in one side or the other. It rests within the relationship.
Again, we are here to balance the power equation between supply & demand.
This is a structural issue. We have an apex of power and a” reed factor” built into that apex because of the nature of the structure.
Q: If structure was made to be less hierarchacal, what happnes to the imbalance in power ? What happens to the “greed factor”. My reference to greed is on the relative basis, as you have pointed out. (eg: They have more than us)
The question now evolves to “How do we shift the shape of the structure?” In order to answer that, we must look at the very genesis of social structure. It’s much less about intention than one might think. Regardless of intention, the FACT is that a top-down paradigm was unavoidable in the sense of creating some aspect of social order and lines of communication and delegation. It’s within this that the manifestaion of supply-chains formed. Supply chains formed within the economic model, which is the first secular model of society for the simple reason that we had to eat. They formed in top-down fashion. There were no computers. All other institutions followed suit in regards to the hierarchy that was formed in the economic model.
Q: Now that we have computers, can we change the classical paradigm to create a rounder world ?
Remember that in the context of structure within this conversation and using your example, above, GREED IS A RELATIVE CONCEPT ! It’s relative to the structure.
We can wean out the greed factor via an evolution and a morphing toward “consumer capitalism” in a world that has been dominated by “corporate capitalism” , which is really to say that we move toward balance.
Good news: Capitalism is incomplete, much more so than it is flawed. We must all integrate and by doing so, “reshape the world”.
October 20, 2007 at 12:28 pm
Hi, I’m back from my 3 week adventure — 2 money reform conferences, some meetings, and a social getaway, all good! On how the system gets changed, I think it happens when the old system collapses or is threatening to. Here’s a possible scenario: the Chinese and other central banks are currently dumping U.S. Treasuries. The Chinese and the Japanese are about to beat the Western banking system at its own game, having routinely bought our Treasuries with their own local currencies, which they have then simply printed and swapped for dollars, using the dollars to buy our bonds. Monetary reform will happen when it’s the ONLY way we can avoid a check mate: our government will have to start printing its OWN money and buying back its own bonds, then refrain from going into debt in the future.
October 20, 2007 at 9:26 pm
Hi Ellen …. welcome back. I agree. The FED will buy bonds with the result being inflation.
Many see this as the lesser of two evils, politically, but I also see another issue based on “inflation being the way to go”. They may even buy stocks.
Any organic market transition (not government or central banking ,necessarily) toward the digital circulation of commodities would be aided best in an inflationary environment. The right questions about inflation will lead to the right answers. This wouldn’t happen in a deflationary situation. It brings on a different conversation, altogether.
Have you cared to wonder why the fiat paradigm has been so vital in all of this ?
October 20, 2007 at 9:51 pm
I agree; the Fed IS buying back federal bonds right now, covertly. And they’ll keep doing it until exposed. They HAVE to continually inflate the money supply, just to produce enough “money” to cover the interest in a system that creates enough to cover the principal but not the interest owed on their loans. A dollar invested at 5 % interest compounded annually becomes $5 in 33 years. That means that if the lenders were allowed to lend 20% of the money supply at 5% interest, in 33 years they would have all the money. It also means that if the money supply consisted solely of gold, and no new gold were added to the money supply, in 30 years the lenders would own all the gold. The money supply has to have a “fiat” base so that it can keep expanding, so that the lenders can keep getting their interest without killing the golden goose.
October 21, 2007 at 6:05 am
Ellen …..
Hope you haven’t overlooked that gold can be :
a) entered into circulation, debt free (impossible for a debt currency by its very nature)
b) decentralized to the market (create a new model)
The new model that will arise will be out of necessity and will embrace commodities held in commodity based ETF’s ……. but only based on market demands. It’s all there just waiting for us. The “great wedding” between e-comm and ETF’s as reserves is there for the asking. Liquidity with no debt.
What gold needs is a higher price before the consciousness will surface.
Have you considered why the fiat paradigm was so vital ?
October 22, 2007 at 8:07 pm
I just started to read your book, Elen, and I am very impressed by it, but I would like to make two points here in this comment.
The first point is that you said in the book that a law was eventually passed which returns to the government about 95% of the interest which it must pay to the federal reserve. On your blog, you have said this: “Just the interest on the U.S. government’s burgeoning $9 trillion debt will soon be more than the taxpayers can afford to pay.” It seems to me that you must be talking about government debt not owed to the Federal Reserve if most of the interest is returned back to the government. This raises the question of how much of the government debt is owed to the Federal Reserve, and how much is owed to other lenders. Perhaps you could clarify this matter.
The second point that I wanted to mention two you is a historical inaccuracy in your book about the “Glorious Revolution”. In your book, you use the phrase “Oliver Cromwell’s Glorious Revolution”, but according to the histories I have read, Oliver Cromwell had nothing to do with the Glorious Revolution. The Glorious Revolution came in 1688, many years after Oliver Cromwell’s death.
October 22, 2007 at 8:52 pm
Thanks. The Federal Reserve currently holds $800 billion of the $9 trillion federal debt, or less than 10%. The rest is owed about half to various government agencies including Social Security, and about half to private parties (half foreign, half domestic). You’re right about the Glorious Revolution; sorry. I’ll fix it in my next revision — though I’m torn between whether to do a revision or a sequel. So much to write on this subject! Best, Ellen
October 23, 2007 at 3:41 pm
As yet I have not your book on the monetary system. However, I would like to suggest something for a future edition of it. It might be a good idea to examine those “economists” who claim to believe that fractional reserve banking is just a concept as opposed to a reality. Some of them appear at the Gang 8 yahoo discussion group (notably Bezemer, and Gardiner). It appears infact that they have a different interpretation on fractional reserve bank….Maybe worth investigating? Apparently, L. Randall Wray is a key proponent of all this, and easily traceable on the internet with the term “fractional reserve banking”. You might write an article on this……
You may remember me when we met in London.
R.Searle
October 24, 2007 at 10:54 am
Hi Robert, yes I remember you! Thanks for writing. I looked at Wray’s argument but it was complicated and looked like sophistry to me. I could dissect it but am a bit busy right now. Thanks though for pointing it out! Cheers, Ellen
October 27, 2007 at 2:15 am
Somebody asked why I’m heavily invested in gold and gold stocks if I don’t think it’s the ideal medium of exchange. Here’s my response:
The world’s central banks are inflating the money supply everywhere at double digit rates, and that money has to go somewhere. Real estate is no longer a good investment, and government bonds don’t pay much in the way of interest. Investors sense we are heading toward a recession, so they are leery of ordinary stocks; but commodities of all sorts are booming, because the rest of the world is catching up to us in development and has an insatiable appetite for them. Gold is the go-to investment when the dollar collapses, which it’s doing right now. People are rushing to gold because they just don’t know where else to put their money. The gold price has been suppressed for years, but the manipulators are running out of ammunition to short it. The stock market is a secondary market; we’re just betting we can buy a stock for less than we can sell it. I think that’s true for gold and other commodities right now, so I’m in them. My other option would be to short some things (Countrywide Financial, etc.), but I just don’t like options. I think shorting has an immoral element, and I’ve written a chapter on that. Then too, Countrywide could get bailed out. Shorting is a dangerous game because we don’t really have free markets. You never know what apparently-failing stock or currency might get manipulated up when it should be plummeting.
October 27, 2007 at 9:57 pm
Ellen ….
I’m well invested too. I know others as well. StreetTracks (GLD) is quite popular with many because of its ease, especially in this trading market.
Question : Why would people invest in StreetTracks when it’s simply a one dimensional investment where the gold is not allocated to the individual’s ability to call the gold. It’s simply a bet on gold, cash in, cash out.
E-gold is based on the purchase of actuall gold that you own and deposit (web-based transaction) and is thus callable. Not only that, the gold can be sent to any other member, so it’s not just an investment concept in the gold, but a currency concept based on instant liquidity. Any ideas for me ? Do you think it’s just the “visibility of GLD that makes it popular ?
October 29, 2007 at 5:12 am
I agree, it sounds like a better investment. It would be a better investment unless there are hidden fees, commissions, etc. When I bought gold coins in the past, I learned that gold would have to go up a LOT before I would break even, because the coin dealers charge huge commissions to buy them back. That was when gold was actually going down, so I got discouraged and switched to gold stocks because they were more liquid.
October 29, 2007 at 1:02 pm
Gold coins/bullion are TRADITIONALLY purchased and owned with no intention of going back into cash. For people who understand gold, coins/bullion are bought as insurance against financial crisis/collapse. Gold is wealth preservation. If one has the intention of cashing out, then there are simpler methods such as the “bet on gold price movement” that GLD offers.
My own bullion is either going to be used as currency or is going into my estate. Any other purpose for gold can be of a different variety.
My earlier point was based on “why buy a gold ETF when you can buy actual gold” and have a store of value that you actually own, while also going beyond the limitation of “gold as an investment” by way of having gold as an investment/currency, both callable and transferrable on a direct basis. The ETF is neither callable nor is it transferrable as a currency of ease. In short , E-Gold gives the owner the security of the metal and the convenience of the most liquid currency in the world.
Fiat cannot compete whether it be controlled by the bank hierarchy or the government hierarchy. You see, it’s not just the nature of the currency or even the ownership, but the structure that is at issue. Bullion subscribes to the organic structure of a true marketplace, which is not hierarchical. Hierarchy is artificial. The “new age” allows us to leave that paradigm behind us ……. unless we’ve developed a sense of codependency with it. Codependency is actually the hallmark of the whole passing age.
A fiat debt currency MUST be hierarchacal by its very nature. It must have an apex of centralization , a focal point, because it is based on a simple accounting system that is based on a “set of books” and as such, each dollar in the system has no sovereignty.
The dollars have been “asslimiated by the BORG” in a structural sense.
Gold is sovereign. Gold is debt free. Gold subscribes to organic law and the law of weights and measures that are naturally inherent in an economy.
The logistical problems with gold’s history are a separate & distinct issue and gold has suffered those issues for millenia, now to be overcome with the ease of the information age where each person can have their own bank.
Welcome to an age of interdependency, Ellen. We’re simply following “the script”.
October 31, 2007 at 12:44 am
Ellen…..
Based on your interest and participation with some gold securities, you should find this rather interesting. In this article, the writer makes comparison between StreetTracks (GLD) and an “imaginary instrument”, something that in actual fact, is not so imaginary when one knows where to look.
This one can be a little dry and gets down into some “deep tissue”
http://www.goldensextant.com/GLD.html
November 4, 2007 at 6:45 pm
There is overkill on trying to correct ( tinker) a flawed monetary system when the first base to reach is understanding what ‘currency’ or money is by definition otherwise it becomes an endless shoot up at all sorts of imagined targets and no way possible to check ( quality control) to access if one is actually getting anywhere.
A national money system is to serve the whole of society so the ‘market’ is too abstract and doesnt appreciate the human life. The market is only one of the things that reflect what we do. This is no basis to found something so fundamental to all of lifes needs. Also trading currency for commodities such as gold or art or land etc is trade in relation to security or trade because one has more currency than they need. This debate isnt about trading away currency, the majority of people arent in that bracket they have so much they got to find somewhere to store it. Much of this derives from trying to aviod inflations effects. If we create a new currency where inflation isnt a structural feature then we dont need to find ways to avoid or use inflation to get more surplus money we dont need.
We need to be more practical and less self centred. The new form of currency is for every transaction every one makes to get what they need in life.
No currency if it is going to serve the whole of society and not just the smarties cannot be based on a commodity whether its gold or peanut butter because commodities are manipulated and thus people and their value of contribution to the whole will be manipulated/cheated just as now.
It has been said that the debt of the US at the end of world war two was equal to all the known gold in the world.
Until people agree on what currency is and for this debate will be endless and split into several threads that wont tie in together. In the process there will be conflicts over philosophy of life that is behind the mindsets which will not be obvious rather than the practical issues of a new and sound currency system.
November 5, 2007 at 6:16 pm
Quote-
E-Manual Says:
October 11th, 2007 at 8:40 pm
I’m a huge believer in asset currency, Lars. At least asset backed.
As for social credit versus bank credit, you may be changing the wine , but the wineskin remains the same. There is no appreciable difference in the structure. You simply changed the players. Inflation is still the huge temptation , by which the people can be robbed of their savings and hard work. I used to be a proponent of social credit because I had a blind spot to inflation. I focused far too much on the interest aspect of the debt and not enough on the “genesis” of the money.
The model has worked in the past (guernsey Islands), but has not been tested over a long period of time in a large market. Where it succeeded, it succeeded because of good people at the helm, but good people in a bad system is still a bad system. As such, I say let it be and let the private system that is based on gold compete. That has already occured on the basis of the e-gold model. I have an account and I can tell you the system is absolutely terrific. It has a 1:1 backing and the system is based on stored weight. I have a store of value.
…………………….
E-M, I am familiar with social credit, what you have said convinces me you never were a ‘proponent’ of social credit because it doesnt focus on interest at all and it isnt the same
wineskin, its the reverse from top down, it’s bottem up.
It is you who is the same wineskin.
You want everyone to have to obtain everything through a middle-man asset factor in order to get what they want.
Currently we have to get purchasing power for what we want by ‘buying’ bank assets ( debt) and your change is to buy gold changing the asset, in order to have purchasing power.
Since gold cant be handled in itself it will have to handled through representations just as debt assets are. And who is going to pay for the use of the gold/debt assetes? The customer, comsuming public by interest. We have already had a gold asset backed debt system. The ‘rules’ we currently are robbed by were developed under the goldsmiths. You are merely going to cause the banks to go back to a venee of integrity.
Your returns on gold is good for you because its isnt wanted by everyone. The moment it become the alleged basis of money again ( in 1914 in London it was exposed as a lie) the price will go through the roof (even better for you) and filter down through every commodity under the sun. But dont surprised if it become illegal for private citizens to hold gold as it will be so short of supply to sustain the world economies you are likely to have your taken off you before it goes through the roof.
November 5, 2007 at 9:22 pm
Peter…. Are you raising the ghost of FDR here ? Confiscation is a nice rumor in the fiat currency camp, but it doesn’t scare me a bit. As far as I’m concerned the established order needs to integrate gold into a market driven system that has transparency and uses a digital form of currency for the sake of movement and the ability to “split gold” into small measurments/denominations.
Failures of past gold systems were not about gold, but about the logistics of gold.
Gold in of itself is simple and pure.
If you look at e-gold as a model, you will see the ease, the simplicity, the store of value combined with liquidity and the seamless convenience on a global basis. There is no price peg as in gold systems of the past. It’s real time gold, as weight, but measured by way of current national currencies. It reflects real market fundamentals. It needs no legal tender status and can co-exist with any fiat currency because market law trumps the laws of man.
The loading of gold into the system is user based. E-gold does not sell gold. It must be deposited from the outside by the account holder. E-gold is simply a gold conduit like the wire service of the 20th century.
The creation of the finished gold is more of a decentralized and organic market concept that any form of fiat, whether the fiat be government or bank issued. I consider fiat to be a structural problem , based on the need for centralization and consolidation of power based on who and how the currency is issued in its genesis.
November 7, 2007 at 12:10 am
I wonder if you have heard of Walter Burien, and his take on CFRs, how the government controls about 70% of the stock market through their investments of their retirement accounts. How would this affect monetary policy, as it seems an inflationary policy will only benefit those who control the markets. Could this be?
November 7, 2007 at 2:08 am
Yes, I wrote on Burien’s theory in “Web of Debt.” That’s a good point that inflating the money supply is good for the government’s investments! Social security, for one, could certainly use some pumping up.
November 8, 2007 at 2:22 am
Something occurred to me recently. Back in the late ’70s, I remember hearing that the Treasury wanted to start minting dollar coins again. First, they made the silly Susan B. Anthony coin that could hardly be distinguished from a quarter, especially by blind people. They said they wanted this to be the new dollar and the smallest paper bill to be the 2-dollar bill with Thomas Jefferson’s likeness, which they screwed up with incompetent engraving on the back. They also wanted to stop minting pennies, which are worthless and only useful for merchants, who like to charge 99 cents for something rather than a dollar and thus trick idiots into thinking they’re saving money. Then, bye-bye Sue and Tom. Later, they came out with the Sacagawea dollar coin, which was a far superior design to Sue’s, without the reeded or milled edge that made Sue’s dollar indistinguishable from a quarter for the blind and with an easily distinguishable gold color for the sighted. Then, bye-bye Sacagawea, and no 2-dollar bill in sight. This one, I couldn’t figure out, because it seemed they got it right this time. After reading your book, it all makes sense! While 1-dollar bills are the smallest denomination paper bill and not worth much, they are still the most common bill, and there must be billions in circulation. The Fed gets the interest on those! They don’t want to lose that! That’s what I love about your book. Once I started reading it, things that didn’t make sense now make sense.
November 8, 2007 at 2:31 am
Thanks Joe. That’s what I loved about writing it, and what kept me obsessed with the whole subject for 5 years doing research. I’m still obsessed with it. Now I’m writing an article on what’s really going on in Iran, and next I’m going to look at China. It all falls into place!
November 12, 2007 at 3:38 am
Hi Ellen et al, A latecomeer to the discussion here, but I have had a read over the entries, and it’s all very interesting. Also like to get a copy of the book once I get a paypal account set up. But for now, I just wanted to say that I have been quite a bit of thinking the last few years on the whole money supply issue, as it seems very fundamental to me in terms of trying to push our society in a better direction., which involves primarily removing the predators from their control of our governments. I’m Canadian and primarily concerned with Canadian things - not ignoring the rest of the world, of course, but one must get one’s own house in order before presuming to advise others, I think - but the problems are pretty widespread and the solutions will need to be going along the same lines. I think the problem with using a gold standard is that there is only a limited supply, and thus, as has been noted, ‘he who controls the gold controls the world haha!’ - and that doesn’t seem like a good idea to me, not to mention, as has been noted, that it is pretty finite in supply but our societies and economies are expanding, and also that it just sets up the scenario for ‘goldstrikes’, and becoming wealthy through luck rather than work (yes, I know, prospecting is work, but the rewards can be far in excess of any value actually added to the society, and wealth should be based on work and contributions to society, not luck). And the problem mentioned with fiat money, about unnecessary inflation, is real enough - but the solution, to me, is that the issuing of the money is not controlled by ‘representatives’ in secret meetings and corrupt discussions behind closed doors designed to benefit the few at the expense of the many, but by a true democracy, in which ‘we the people’ make all decisions of importance - and since it is very much against OUR interests to undertake policies which inflate our money supply, it won’t be done. I won’t rag on on a list like this, but the ideas are explored in more detail in a book I have recently finished, ‘They’re Building a Box and You’re In It’ - at http://www.rudemacedon.ca/dlp/box/box-intro.html - the money supply is dealt with in the first chapter, and there are a couple of more money related things in the first couple of appendices.
November 12, 2007 at 9:34 am
E. Manual you arent addressing the web of debt.
You arent addressing the totally inadiquate supply of gold for a system to be based on it.
The current system is largely digital already and the bulk of the money supply doesnt relate directly to the real economy we are almost all conscious of.
The ‘reserve’ of gold will have to expand exponentially parallel to debt and if the volumn of gold cant then its value will have to and that inflation in the cost/value of gold will tranfer through the economy effectively reducing the purchasing power of the money as now. Prices will continue to acrrue at a faster rate than the rate of disposable incomes to cancel them as now. This effectively means the splitting down of the value of small digital gold ‘coins’. Same as reducing the real coins real value by minting them half size but retaining the same face value, a fraudulent way of doubling the money supply. The resulting ever increasing borrowing (debt) to make ends meet as now will continue and you wont have stopped what we have now but actually added to it.
This is why you couldnt have a peg value which would cause a depression. If you track the value of the US dollar over time that is what is already happening effectively. Gold is nothing but a misleading dress-up that will add to the cost of money and centralised bureacracy to try and monitor it.
That is what you will have to do for every micro-gold digit changing hands many times in twenty four hours. Try doing that uncentralised and de-consolidated and still be transparent. It will be like trying to record within a single integrated system every cash transaction and the change given that takes place. The ‘time’ factor which is the mystery in economics and finance is where the slight of hand and the cunning inventive imaginations have the edge if one doesnt start thinking outside the square.
Ultimately all debt will have to be repaid via gold and that means the banks will end up owning most of the gold and controlling its market. The rate at which the gold supply/fluid ownership stops with the banks is the rate of interest.
You are merely re-arranging the deck chairs on the Titanic. We need to get off the ship and build one that fits the specifications we the people design not the ‘experts’ design. You have to realise that its the credit of the people that bankers are leveraging not their own credit.
The problem of the gold system in the past wasnt the logistics it was the same as now, creating debt against time/drawing on the future before it arrives, which then has to draw on its future in turn, endlessly increasing debt.
Its irrelevant whether the collateral is any sellable assets of the borrower, just gold or toilet papar nothing will change because you arent addressing the problem as I see it.
November 12, 2007 at 4:38 pm
It seems as I have observed before that no one is really interested in any solutions to a problem that ultimately will cause great hardships to the masses in the very near future. E-Manuel’s last response to me. Q. How do you blame a set of scales for being out of balance? Which side do you blame? A. You don’t . Excuse me, you don’t. You have a unhealthy compassion for the perpetrators here. Well let me explain some simple science to you. Gravity may be old but it is not outdated. On this scale of modern day capitalism that you have mentioned we know which side to take from to level it. A modern day Robinhood could figure that out without a computer. Computers only empower the “greed factor” taking us to the brink at break neck speeds. And this fairy tale stuff about balance. You just can’t balance good with evil. Some just rewards are starting to be handed out now in the housing industry and that is encouraging. When people that had very little, “relatively speaking,” walk away from a $650,000 mortgage and start over again it is a small victory. Maybe their buddy’s family can get it or a nicer, bigger and newer one at auction for $250,000 and they can split the new mortgage on the side. One small step for man, one giant step for mankind. A balancing of the scale you might say. Fighting fire with fire. And if you are still banging that capitalist drum, quietly you would agree with such an idea anyway. Capitalism is not only “perfect,” and “complete,” E-Manuel it is intensional. Reshaping the world will be accomplished more by eliminating it than sitting back trying to figure out how to play both sides of the fence. Now there is “the good book” worth writing. Or just read the one your Grandma gave you when you were little.
November 12, 2007 at 6:01 pm
Peter…..
If you don’t know how the e-gold model works, then this conversation becomes difficult.
Within a proper gold based system, where gold based digital currency acts as the “measuring stick” for the gold weight that you transfer on a transaction, there can never be too little gold. I suspect that your perception of increased demand is synonomous with an increasing need for more gold. NOT SO. As long as the market increases the trade value, consistant with supply-demand law (organic) and the increaed price reflects real market fundamnetals, all that is needed is a way to reflect the amount of digital gold you transfer on any transaction that is denominated in ANY currency. The calculations are in real time.
Eg: Gold is trading at the instant of the transaction at $800.00/ounce
I’m in Canada. I buy an 800.00 widgett from you. The system “slices off” one ounce and sends it to you. You now have one ounce by weight.
If gold goes to $900.00 based on the market , then I’d send less than an ounce for an $800.00 payment.
As the demand for currency goes up, so does the supply of fiat. We are not interfering with that system. We are co-existing. The gold supply can remain static or lag. Its trade value simply increases. If a cup of coffee, repesenting the economy , is $1.75 and the economy has real growth of 100% over the next 15 years, then the “here and now” vs the “there and then: looks like this :
Now :1 cup coffee = $1.75 = 1 grain of gold
Assuming no growth in gold supply.
Then : 2 cups coffee = $3.50 = 1 grain of gold.
Coffee is still $1.00. Gold has doubled in monetary trade value based on no supply growth. There is no price inflation in the relationship between dollars and coffee (the economy)
Note: This is why if gold , “the useless relic”, had no commercial/industrial value, whatsover, it would be an even BETER form of money than under current circumstances. It’s about supply applications in terms of traade value stability.
Most so called “gold bugs” even miss this point becausee they do not clearly sparate gold’s role as a commodity and its role as a form of money.
E-gold is a dynamic real time digital gold system that does not use a fixed peg, while still maintaining the owner’s store of value , which is accounted for as WEIGHT. The reserve does not have to expand nor does the world’s supply to illustrate the point. The price has to refect the non-expansion, consistant with market law. This is a marriage of weights & measures. This was never possible before the real time abilities of the information age, however.
The assumption that “more currency = more gold” is a throwback to an older standard BEFORE the information age. Gold had logictical problems in distribution and the “splitting of gold” into small denominations. That issue has been overcome. The pegging and repegging is now a real time issue and is set by the market, NOT GOVERNMENT or CENTRAL BANKS. In short, it’s barter and gold is the standard that is “tied to the ground” of real economy.
It’s liquid, while being non-inflationary. It allows for an asset form of currency to enter circulation where the debt levels do not have to rise. The present fiat system does not lack currency in respect to supply needs. There is simply too much debt associated with that supply. Gold can come out of the ground debt free, based on the labour and “sweat of the brow”, which is to to say that by the time it has been cast, the debt has already been paid in advance. This gold is sovereign and debt free. It simply greases the wheels without assocaited debt.
Your prevous post is based on a fixed gold peg. I thought I already indicated that the real time issue is the major difference. Perhaps I should have created more emphasis there.
November 12, 2007 at 6:32 pm
Drew ….
There are perpetuators of a problem and the resulting imbalance on both sides of the scales. The problem still comes back to an imbalance. One side throwing stones at the other is a “karmic wheel” approach where we might want to figure a way off the karmic wheel. I suspect that there may be an issue that many, if not most, have not considered, based on the issue of structure. Structure is so pervasive and overwhelming, it gets overlooked …… or underlooked. When we reside so deeply inside the “belly of the beast”, we tend not to see what that beast looks like. Since the “apple was shoved in our faces”, that structural beast has been a top-down supply driven paradigm.
Now think about this for a second. Could the world have developed in any practical way without being “baptised by fire” and going though the hierachical paradigm ? Wasn’t that top-down supply driven model the “fall of man” ? If so, are we not following “the script” right to the letter ? If we are about to leave the “age of grace”, what is it that awaits us that is so different ? On the basis that the top-down, supply driven paradigm was a “necessary evil”, then you may be able to help some people see that the age of grace was encapsulated in forgiveness for a very good reason, reasons that most have yet to grasp.
Our predicament can be seen as a matter of intention, but a clouded opinion of that nature closes its mind to the FACT that there is the issue of capability vs incapability to consider.
Ecomomics is the first secular model of structure. It evolved first. It had to for the simple reason that we had to eat. All other secular models folowed suit. Supply chains formed in a top-down fashion. It became the “cast” for everyting that followed in terms of foming a hierarchical imbalance of power with most of that power residing in the apex. Thus we see this in all of our institutions. This is a structural issue. We’re changing that but we only became capable of changing that in any practical sense by way of the information age where we can move from linear concepts of distribution to non-linear methods where we can move wealth in more creative ways, ways that are more direct to include the individual. That individual must be integrated in the supply chain, however. That individual must recognize the opportunity and act on it.
We are in the process of balancing the power of supply with the power of demand by way of integrating the individual into positions of greater power and influence within the economic model and specifically within supply chains. It’s notworthy to recognize that supply chains have been dominated by corporations for most of the industrial age.
As we move from hierarchy to -non-hierarchy, in creating a “rounder world”, the real ethical question is does the individual believe that corporations should have more rights and opportunity than the individual ? There is where we find a great deal of imbalance.
Now for an irony. It’s the supply side, the “haves”, the corporations who have been integrated into the supply chains for so may years. Individuals (consumers) are just catching up. It’s only through the integration and the “reshaping” that balance can start to take place. Again… the evil is in the imbalance, not in one side or the other.
You cannot pour the new wine of good intention AND practice into an old wineskin of hierarchy.
Pay it forward my friend.
November 12, 2007 at 9:00 pm
I would like to be put in contact with Jim Johnston. Also my book Down on the farm show the money problem can be sovled working at both the state and federal level
November 12, 2007 at 11:29 pm
The United States Constitution gave the Congress the power and mandate to coin the nation money and to provide for post roads for the America people to use. People can have commerce without money but they can’t have commerce without transportation. Only, when Congress combines the two and issues the money then spends it into circulation to rebuild and upgrade America’s transportation system in lieu of taxes, based on what the people in the cities and counties of America feel that they need, will we solve most of America’s problems. Once we get debt and interest free money into circulation we could raise the reserve rate until the banks could no longer create and loan money at interest. Once we had enough money (not credit) in circulation to run the real economy not the false financial economy then we could to begin to prosecute the fraud that has bee perpetrated on the America people by the financial system.
November 13, 2007 at 12:33 am
To Jim Johnston: I don’t seem to have your email address, but here’s Byron’s website if you want to connect –
http://wealthmoney.org
To Byron: I totally agree! I agree with many other comments in this informative discussion as well, but I find that if I respond to them all I don’t get my other work done, which is to write topical articles and try to get them out there. Thanks for writing though!
November 13, 2007 at 3:34 am
GREAT BOOK! You hit the money situation right on the head.
In Minnesota we are promoting legislation that would require state-chartered banks (there is a dual banking system in America and state banks operate under state rules) to pay for all transportation (roads, bridges, rail and maintainance) by creating new checkbook money on an approved project by project basis. This would bring debt and tax free money into circulation while lowering gas and axle taxes. This is the greatest idea ever….and should actually be done at the national level but it’s too hard to lobby there so let’s take ‘em on state by state. You all keep in touch with me…please. Leslie Davis
November 13, 2007 at 4:02 am
Byron ….
Have you ever noticed that the spirit of the Constitution was written from the bottom-up ?
They started with the rights and fredoms of the individual. Back in the day, bottom-up concepts were idealistic theories simply because implimentation was only possible from the top-down. Jefferson’s P.C. had a little too much wear and tear to be of any use, I suppose. All kidding aside, the actual manifestation of bottom-up projects and implimentations had to wait for the age of information.
Now that we’re here, why do you want to empower government or banks with the power and responsibility of money creation and control when the market can do it without being subject to repeating the oppression of a top-down structure. Have we not had enough ?
For the record, by the way, I should tell you something. I was born on the 4th of July.
I know about what I speak of. I know the “script”. It’s time for a whole new act.
Perhaps you should read my post at 6:01 and let me know if you think there is anything that is unconsitutional about the spirit of it. Your thoughts would be appreciated.
November 13, 2007 at 4:51 am
Leslie — that’s great! And Minnesota could probably pull it off, since you had that terrible bridge disaster in the summer. I wrote an article on that–
WAKING UP ON A MINNESOTA BRIDGE:
HOW TO SOLVE THE INFRASTRUCTURE
CRISIS WITHOUT SELLING OFF OUR NATIONAL ASSETS
August 4, 2007
http://www.webofdebt.com/articles/infrastructure-crisis.php
If you were not able to get debt-free issues of money past the legislature, you could try for interest-free loans. Interest is estimated to make up half the cost of everything we buy. If state banks issued loans interest-free, the cost of state projects could be cut in half. The loans could then be paid back from the proceeds of the projects — bus and rail fees, tolls for bridges and roads, rents from low-cost housing, fees for energy from sustainable energy projects. My latest article on that is this –
SUSTAINABLE ENERGY DEVELOPMENT:
HOW COSTS CAN BE CUT IN HALF
November 5th, 2007
http://www.webofdebt.com/articles/energy-costs.php
You’ve inspired me to write another one on your project. Do you have more details?
November 13, 2007 at 8:11 am
The value of a cup of coffee is approx. 3 cents which is about one seventh of what is required for a coffee grower to keep his children from starving to death. Coffee is the second highest world trade item next to oil which is also stolen from its rightful owners with blood from American trailer parks. It is really hard to tweak this stuff but knowing the facts is helpful.
November 13, 2007 at 12:54 pm
Drew … me thinks you missed the point or you are deliberately trying to exercise a silly debate which I have no time for. Coffee is simply a proxy for the economy. I could have used any “widget” to represent economy in the example.
November 13, 2007 at 1:07 pm
>>> If state banks issued loans interest-free, the cost of state projects could be cut in half. The loans could then be paid back from the proceeds of the projects — bus and rail fees, tolls for bridges and roads, rents from low-cost housing, fees for energy from sustainable energy projects.<<<
Why are you looking for the state to support the control at all ?
Why would anyone want to repeat history ? It is our role to “follow the script” and “break through” to a new paradigm that empowers the grass roots, not the established order of hierarchy.
Interest is not the problem. Debt based currency created from thin air is the problem. Interest simply compounds the problem after creation, but it is the “genesis” of the currency that is the root of the issue.
Any debt currency (a promise), regardless of interest, will subject the users to inflation, the hidden tax. There must be an organic component to the money creation, one that is controled by natural economic laws and one who’s creation can be decentralized.
It’s not a matter of doing things right. It’s a matter of doing the right things, Ellen. Sometimes, that starts with the right questions.
Does a money that is debt free, completely liquid and a good store of value satisfy the need ? What else is needed ???
Build a new model and make the old one obsolete.
November 13, 2007 at 1:10 pm
to E-manual I read your post at 6:01 and now I understand why you don’t use your real name. The idea is to solve the problems in a workable way not to worship gold. If you did just a little study on the supply of gold and the number of people in the world. you would not waste the space on the site.
November 13, 2007 at 1:13 pm
>>> to E-manual I read your post at 6:01 and now I understand why you don’t use your real name. The idea is to solve the problems in a workable way not to worship gold. If you did just a little study on the supply of gold and the number of people in the world. you would not waste the space on the site.<<<
Byron …
Perhaps I missed something. What does the supply of gold vs the number of people in the world have to do with the post at 6:01 ? This is anything but a rhetorical question, believe me. Nobody said anything about gold worship. That’s simply a projection.
Do you have an economic argument where the rubber meets the road ? Perhaps I can learn something from this.
November 13, 2007 at 2:44 pm
E-Manual: gold won’t work either as a single global currency or a single U.S. currency. It won’t work for the same reason it didn’t work in 1776 and 1933 — there isn’t enough gold to go around. I’ll repeat my example: a dollar lent at 10 percent interest compounded annually becomes 10 dollars in under 25 years. That means that if the money supply were 100 percent gold, and if bankers lent out 1