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[PFMPE] ECONOMIC COLLAPSE: What is Money, or Currency?
by mike montagne - PEOPLE For Perfect Economy
Email: mike.montagne (nospam) perfecteconomy.com
02 Mar 2002
Why the nature of currency is vital.
March 1, 2002
[PFMPE] ECONOMIC COLLAPSE: What is Money, or Currency?
Why the nature of currency is vital.
"Money" is not just a medium of exchange, unless it is only a medium of exchange; and so an exact and complete definition of money or currency is vital, because the very form of money may multiply debt in proportion to the circulation, to the ever greater cost and disadvantage of the subjects of the ostensible "economic" system, and to the ever greater profit and advantage of the few who impose that system upon them.
We cannot understand the ramifications of a monetary system unless we truly understand what is often called "money." In modern history, governments across the entire world have been corrupted purposely, to impose a currency which irreversibly multiplies debt in proportion to commerce.
As a result, vast accumulations of wealth have entrenched shaded plutocracies at ever greater cost to unassenting publics. For the irreversible disposition of every such system itself, we have suffered repeated, longer-term cycles of multiplication of debt and debt service, unto termination of commerce under insoluble debt. From the ashes of eventual, inherent bankruptcy across entire systems, after bankruptcy wipes away debt, the plutocracy, already empowered by unjust collection of the wealth, ensures their systems of debt multiplication are begun anew, to suffer no different consequence.
The original purposes of currency were simple, but complete insofar as serving the purposes of involved parties. The original forms of currency arose spontaneously in accord with the desired structure of trade. In such an original form, the money, if any, was a token of value. No party which contributed nothing to the trade, profitted from it.
Ultimately, governments would come to regulate monetary circulations. In very many cases, because the power to issue currencies is the opportunity to take tremendous unearned profit from entire nations, the advantages of a circulation which could be honored by — and which could fully serve — a broad trade system, were subverted and abused.
The colonies of the United States of America were unique among the nations and nations-to-be of the world, as they modeled their currency to replicate solely, trade between consenting parties, that no party extrinsic to the trade profitted unjustly from it.
The virtues of the near perfect American Colonial system therefore comprised the greatest possible threat to systems of multiplying indebtedness, because the very complete freedom to prosper without impediment, inherent solely to the perfected attributes exemplified by the American Colonial system, vibrantly demonstrated the iniquities of unjust profit rendered by the multiplication of debt inherent to, and irreversible within, central banking systems.
The money of the American Colonies thus became the principal cause of the American Revolution.
On behalf of the Bank of England, British Parliament ordered the colonists to give up their interest-free currency. No such system as the colonists had devised could be allowed to demonstrate the impoverishing costs imposed by the plutocrats, of a currency subject to multiplied, unearned profit. By dictate of the plutocracy of England, in America, as everywhere else in the world, debt would be perpetually and irreversibly multiplied upon the unassenting subjects of the system, to their ever greater detriment.
The colonists would pay some thirty-percent annual interest for the imposed currency. Benjamin Franklin reported, "Within a year, the poor houses were filled. The hungry and homeless walked the streets everywhere." He later explained, "We would have gladly borne the little tax on tea and other matters, if it had not been that they took from us our money, which created great unemployment and dissatisfaction."
How did the concept of money first originate, and what is the vital difference between such a money as the colonists devised, and the more convoluted instrument issued in its stead by the Bank of England — prototype of the central banking systems of the present world?
One day, a producer of a given product was approached by another. The latter said, "I have not yet produced the thing(s) which I will in turn present to you, which I can produce if you first produce the thing(s) I ask of you."
The first saw the prospective benefit of this commitment, should the second be so good as to perform the resultant obligation. Trust was involved; and the "money" that was thus created was comprised of the incumbent trust.
Money was created when the debtor was willing to attest to their obligation. The obligation was so much as penned to paper, which in turn represented the value, and very immutable units of, that which they promised to deliver. The paper, new money itself, held by the creditor party of the trade, was evidence of the debt. The value of the money held by the creditor was a promise to pay — a note.
A note of course is only so good as the integrity and capacity of the debtor to fulfill their obligation. No note, regardless of who issues it, is any better.
How do we emulate free, unimpeded trade by management of a circulation; and what properties must a commerce system provide, that it not impose injustice on its subjects?
If the value of our original note were diminished over time, the creditor might receive less than the intended obligation of the debtor, or vice versa. In order not to subvert the purposes of trade commitments or corrupt the value or cost of accumulated savings or assets, the value of currency must be consistent across time.
How is money to be introduced to the circulation?
The answer to this question rests on the further questions, must money represent debt; and when should money come into existence?
When new prosperity is rendered, and if money is to represent debt, and if the circulation is to represent the value of all things related to it, the singular place and time money can be and must be introduced to circulation, is when new wealth is created. If a circulation is to represent the value of things in part by constant proportion to those things, and if it is undesirable that a circulation impede trade, then the volume of circulation must be equal to the value of the volume of things for which it was created, and which might be traded, all at once, by it. Nothing less than such a circulation provides for full, immediate trade.
The need for further circulation thus coincides with the production of new wealth. This therefore is when new circulation must be introduced; and the quantity to be introduced must be equal to the new wealth.
Distribution of the circulation is readily solved. Where new circulation is required, it is distributed to the producer of the wealth, and the consumer of the wealth assumes a debt equal to the original value of the wealth.
Rate of payment is also readily solved. Only by paying against just such debts at the rate of consumption, is money in circulation kept equal to the current value of debt-related wealth; and then, and then only, are we paying only for what we consume, with an equal measure of our own production.
Only in such a system is the circulation always adequate to pay all debt; is there no inflation or deflation; is there no manipulation of value or cost by scarcity of circulation; is there no impediment to prosperity for scarcity of circulation; and is there no multiplication of debt in proportion to commerce, as inherent to interest.
Here and here alone, have we replicated entirely the conditions and interaction of our original two, unimpeded traders.
By agreeing together to issue and regulate such a currency by such a prescription, the integrity of the currency is further assured by society together (government) holding debtors accountable to fulfill the obligations represented by the "money." This was the apparent conviction of the American Colonists, who fought a revolution to defend their currency.
A government of free people and representing free people, such as the original United States Government, was not established to profit from the people.
The history of the American "Economy" led indirectly to a far different end than the founders fought for. In a century of strife, descendants of the original central bankers the American public had cast off, ultimately were successful in imposing just such a privately owned "banking" system as necessary to issue a currency with the additional attribute and ramifications of "interest."
Under the so-called "Federal Reserve" System — a conglomerate of international banks — a currency would be issued such as engendered the hunger and homelessness Franklin explained compelled the American Revolution.
What is the distinct nature of the central banker's interest-bearing debt currency; and what are the consequences of it?
The currency and interaction of modern central banks is analogous to a third party imposing upon our original two-party trade.
This third party, by nature extrinsic to the trade, produces nothing, and intrinsically contributes nothing to commerce. The extrinsic party writes the obligation to pay for the debtor party, and makes the obligation to pay no better than the debtor party's original promise, but adds to the cost of the transaction, whatever "interest" they coerce from the debtor by virtue of the need for such a token of exchange, as necessary to convey the diverse and dissimilar products of modern commerce.
The entire body of vying commerce then is reduced to a pool of debtors committed to deliver debt-and-interest obligations which, from the very beginning, exceed the entire such circulation.
The central banker has provided the original traders nothing they aren't fully capable of providing themselves, and something they certainly are fully capable of providing, in concert with further traders, to all commerce together. But by displacing such an equitable system with a paper or coin currency, the essential promises of which no banker fulfills, the system is subject to profit by interest, and the additional ramifications of interest — whatever those ramifications be.
What are the ramifications of "interest?"
In order to maintain the circulation vital to repaying their debts, and vital to sustaining the further, greater commerce necessary to repaying the obligations of those debts, which include interest, the subjects of the system are compelled to re-borrow what they pay against principal and interest as subsequent debts, increased so much as periodic interest.
So long as the system exists — so long as interest exists — debt is multiplied in proportion to a circulation, or the commerce which can be sustained by it. Ever more of the circulation must be devoted to servicing debt, altogether, at the ever greater profit of the central bankers, who provide no contribution to prosperity, for the mere, ostensible service of qualifying our credit-worthiness, and counting what we pay them in multiples of our own production.
As the sum of debt is multiplied, greater sums of interest are paid and re-borrowed; and thus debt increases by ever greater increments of periodic interest.
Ultimately, one thing — debt service — increasing in proportion to another — the capacity of commerce to support and survive debt — exceeds the latter.
While a society might issue and regulate its circulation without limitation and for the mere costs of qualifying creditworthiness (without impeding credit-worthiness) and accounting for (far less) payment of debt... from the very beginning a central banking system establishes total debts (principal plus interest) which cannot be paid by the circulation, and which, in order to maintain the vital circulation, inherently and irreversibly multiply debt to our ever greater detriment, and ultimate imposition of system-wide insoluble debt.
So, we see, modern "capitalism" is not true, free enterprise; and the nature of money is critical to the vitality and freedom of enterprise.
mike montagne — PEOPLE For Mathematically Perfected Economy
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