FAQ

Here are some frequently asked questions (or variations of them) and my answers.  Feel free to add more!

Q:

I understand how the current system might require extra money to be created in order to payback a loan. Day 1, I borrow 100; Day 30, I repay 110. But does it have to be like that? Most loans are repaid in installments, so Day 1, I borrow 100. Day 10, I repay 40. Bank spends or invests 30 back into the economy. So money outstanding in the economy is the 100 I originally spent minus the 40 I earned back and gave to the bank plus the 30 that the bank reinjected into the economy (through other-than-lending) equals 90. And what I owe to the bank is 110-40=70. So if money is turning over in the economy, it seems like there is no necessity to create new money in order for me to satisfy my obligation. Do I have that wrong?

A:

That is how they get away with it; it’s a huge shell game, so it’s hard to tell what’s really going on. But take the simplest case: we have a 100% gold currency, no inflation or deflation. Lenders lend out 20% of it at 5% interest. Two dollars lent at 5% compounded annually become $10 in 33 years. That means in 33 years, the lenders own all the gold. The only way to avoid this is for the money supply to expand, creating inflation.

_____________________________________

Q:

Isn’t the best solution to return to the gold standard? That would prevent inflation or deflation. The money supply would remain fixed and stable.

A:

Same as answer #1 – in 33 years, the lenders would own all the gold. The only way you could have a 100% gold currency that continued to circulate and perform the normal functions of “money” would be by eliminating interest from the system.

____________________________________

Q:

Why does the stock market keep going up? Is it simply pricing inflation in? Population growth and expansion of markets to other economies? If the price of a share today is the present value of all future expected dividends (which I think is the definition but I could be wrong), then do the expectations for dividends really rise all that much?

A:

The stock market keeps going up despite a falling dollar, a subprime mortgage crisis, a credit crisis, and economic conditions that many people have already characterized as a recession because central banks around the world are inflating the money supply at double-digit rates. The money has to go somewhere. Real estate is no longer a good investment, and interest rates on government bonds are too low to be very appealing. Dividends have very little to do with the price of a stock. Look at Amazon’s stock, for example: it doesn’t list earnings, and it’s trading at a price/earnings ratio of 130, a huge multiple (10 or so is considered good). Yet it keeps going up. The stock market is a giant casino, where investors are just betting they can sell the stock for more than they paid for it.

________________________________________

Q:

I note your delicacy in not specifying WHO exactly these money-lenders are. Why are you so afraid to say the word “Jews”?

A:

Your assertion is too broad. J.P. Morgan was an Episcopalian, and John D. Rockefeller was a Baptist. The Jews were allowed to practice usury when no one else was, and that’s why they dominated the field; but that’s not really the point of my writing. It’s that the SYSTEM is bad. We should not be allowing private money creation. If you allow people to pretend they have money and lend it at interest, you’re going to wind up with a spiral of debt and inflation, until it can’t spiral any higher, when it will have to collapse. If you forbade the whole Jewish race from being bankers and still let bankers create money out of nothing and lend it at interest, you’d still have the problem. Pirates will rush in where there is bounty to be had.