Difference between revisions of "The financial system"
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(→Books & Documentaries: What Is Money? - by Frederic Bastiat) |
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*[[The Money Fix]] | *[[The Money Fix]] | ||
*[http://sacred-economics.com/read-online/ Sacred Economics] ''- by Charles Eisenstein'' | *[http://sacred-economics.com/read-online/ Sacred Economics] ''- by Charles Eisenstein'' | ||
+ | *[http://mises.org/daily/5213/What-Is-Money What Is Money?] ''- by Frederic Bastiat'' | ||
== See also == | == See also == |
Revision as of 00:31, 28 May 2012
Contents
- 1 Quotes
- 2 The Nature of Money & Credit
- 3 The Problem of Usury
- 4 Distribution of Wealth
- 5 Internal Memo from the Bank of England 1862 to the Banks of America
- 6 Bitcoin & P2P Currency
- 7 Energy as Money
- 8 Related Wikipedia articles
- 9 Related news items
- 10 Alternative Money Systems
- 11 Books & Documentaries
- 12 See also
- 13 Attachments
The term price system is used to describe any economic system whatsoever that effects its distribution of goods and services by means of goods and services having prices and employing any form of debt tokens, or money. Except for possible remote and primitive communities, all modern societies use price systems to allocate resources. However, price systems are not used for all resource allocation decisions today. A variety of non-market economics type proposals have been presented as alternatives to a price system such as energy accounting.
A price system may be either a fixed price system where prices are set by a government or it may be a free price system where prices are left to float freely as determined by unregulated supply and demand. Or it may be a combination of both with a mixed price system.
One of the necessities of the project is a P2P currency and transaction system which must be able to exchange currency with existing external systems. The project would use a currency model based on energy (see think global, act local). Many people involved in the project in the past have had deep concerns about introducing a currency system. But in fact it has always been there, and its a natural process for any organism to evaluate costs of their available courses of action in terms of various forms of energy.
The problems arise when we introduce corrupt concepts like usury (riba) and fractional-reserve banking, which is why there's so much religious fuss about that concept. And even concepts involving passive income start to cause trouble, such as when a centralised organisation profits from users transactions.
The problem is that only the Source can create something out of nothing, energy out of the void. Man cannot do this (And when He can we won't need Usury or debt any more anyway!), only God can, but usury gives money this Godly power. But because money does not really posses this power of creation it means that the cost of its growth is being balanced elsewhere; by a depletion in natural resource and an increase in the distance between rich and poor.
In the project, currency should simply be a medium of exchange which is an intermediary used in trade to avoid the inconveniences of a pure barter system. In a barter system, there must be a coincidence of wants before two people can trade - they must want exactly what the other has to offer, when and where it is offered, so that the exchange can occur. A medium of exchange permits the value of a good to be assessed and rendered in terms of the intermediary.
Such a medium of exchange is purely in the form of an informational store of value and is handled by a global virtual organisation called Accounts which is composed purely of its users resources and the fact that they share the same system.
There is no profit, only the cost of resources and their production and distribution. This means that there is also no passive income or interest, but the time taken for people to fill roles in production have an associated cost, working for additional purchasing power carries on in the usual way. Of course people can still arrange to work in these "legacy" ways if they like, but these concepts are not condoned by the network because they violate the spiritual principles by creating something out of nothing.
Quotes
![]() | If our Nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good also makes the bill good. The difference between the bond and the bill is that the bond lets money brokers [Bankers] collect twice the amount of the bond plus interest. Whereas the bill [currency] pays nobody but those who contribute directly in some useful way. The People are the basis for government credit. Why then cannot the people have the benefit of their own credit by receiving non-interest bearing currency, instead of Bankers receiving the benefit of the people's credit in interest bearing bonds? It is absurd to say that our country can issue $30 million in bonds and not $30 million in currency! Both are promises to pay: but one promise fattens the usurers and the other helps the people. |
— U.S. President Thomas Jefferson
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![]() | With adequate knowledge of the physical realities that dominate the economic affairs of peoples, the road is clear for unlimited progress and the attainment of universal peace and prosperity. The evils that in the past have paralyzed the very heart of nations lie patent and beyond concealment. So they pass beyond the power of further harm. Only that rarest kind of courage—intellectual fearlessness and honesty to face things as they are and not as they appear—is required to abolish poverty and economic degradation from our midst. |
— Wealth, Virtual Wealth and Debt, by Frederick Soddy
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![]() | A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men ... We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world — no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of small groups of dominant men. |
— Woodrow Wilson, 1916
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![]() | As a result of the war, corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until wealth is aggregated in the hands of a few and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of the war. |
— Abraham Lincoln
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![]() | Fiat money is the cause of inflation, and the amount which people lose in purchasing power is exactly the amount which was taken from them and transferred to their governments by this process. |
— G. Edward Griffin, The Creature from Jekyll Island
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![]() | A fiat monetary system allows power and influence to fall into the hands of those who control the creation of new money, and to those who get to use the money or credit early in its circulation. The insidious and eventual cost falls on unidentified victims who are usually oblivious to the cause of their plight. This system of legalized plunder (though not constitutional) allows one group to benefit at the expense of another. An actual transfer of wealth goes from the poor and the middle class to those in privileged financial positions. |
— Congressman Ron Paul, Paper Money and Tyranny
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![]() | It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning. |
— Henry Ford
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![]() | It is commonly supposed that a banker's profits consist in the difference between the interest he pays for the money he borrows and the interest he charges for the money he lends. The fact is that a banker's profits consist exclusively in the profits he can make by creating and issuing credit in excess of the liquid assets he holds in reserve - and in exchange for debts payable at a future time" |
— H. Hd. MacLeod, :The Theory and Practice of Banking
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![]() | If debt and money are the units of measure by which we account for and keep track of the production and distribution of physical wealth, then surely the units of measure and the reality being measured cannot be governed by different laws... If [physical] wealth cannot grow at compound interest, then debt should not either. |
— Frederick Soddy 1877-1956
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![]() | Mr. Chairman, we have in this Country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board and the Federal Reserve Banks, hereinafter called the Fed. The Fed has cheated the Government of these United States and the people of the United States out of enough money to pay the Nation's debt. The depredations and iniquities of the Fed has cost enough money to pay the National debt several times over... This evil institution has impoverished and ruined the people of these United States, has bankrupted itself, and has practically bankrupted our Government. It has done this through the defects of the law under which it operates, through the maladministration of that law by the Fed and through the corrupt practices of the moneyed vultures who control it. |
— Rep. Louis T. McFadden, US House of Representatives 1932 |
The Nature of Money & Credit
(from Wikipedia:Social Credit)
Major Douglas also criticized classical economics because it was based upon a barter economy, whereas the modern economy is a monetary one. To the classical economist, money is a medium of exchange. This may have once been the case when the majority of wealth was produced by individuals who subsequently exchanged it with each other. But in modern economies, division of labour splits production into multiple processes, and wealth is produced by people working in association with each other. For instance, an automobile worker does not produce any wealth (i.e., the automobile) by himself, but only in conjunction with other auto workers, the producers of roads, gasoline, insurance etc.
In this view, wealth is a pool upon which people can draw, and the efficiency gained by individuals cooperating in the productive process is known as the “unearned increment of association” – historic accumulations of which constitute what Douglas called the cultural heritage. The means of drawing upon this pool are the tickets distributed by the banking system.
Initially, money originated from the productive system, when cattle owners punched leather discs which represented a head of cattle. These discs could then be exchanged for corn, and the corn producers could then exchange the disc for a head of cattle at a later date. The word “pecuniary” comes from the Latin “pecus,” meaning "cattle". Today, the productive system and the distributive/monetary system are two separate entities. Douglas demonstrated that loans create deposits, and presented mathematical proof in his book Social Credit.
Douglas believed that money should not be regarded as a commodity but rather as a ticket, a means of distribution of production "There are two sides to this question of a ticket representing something that we can call, if we like, a value. There is the ticket itself – the money which forms the thing we call 'effective demand' – and there is something we call a price opposite to it." Money is effective demand, and the means of reclaiming that money are prices and taxes. As real capital replaces labour in the process of modernization, money should become increasingly an instrument of distribution.
Douglas also claimed the problem of production, or scarcity, had long been solved. The new problem was one of distribution. However; so long as orthodox economics makes scarcity a value, banks will continue to believe that they are creating value for the money they produce by making it scarce. Douglas criticized the banking system on two counts:
- for being a form of government which has been centralizing its power for centuries, and
- for claiming ownership to the money they create.
The former Douglas identified as being anti-social in policy. The latter he claimed was equivalent to claiming ownership of the nation. Money, Douglas claimed, was merely an abstract representation of the real credit of the community, which is the ability of the community to deliver goods and services, when, and where they are required.
The Problem of Usury
Profit and interest should be kept within the realm of personal agreements and not be part of the system itself otherwise it takes on the power of money creation and can gain control over its value.
In a serious consideration of the subject therefore it is necessary to particularise carefully. Jeffery Mark saw this clearly and in his Analysis of Usury (Dent. 1935) (p26) he distinguished a major and a minor variety, thus;
there are two forms of usury. the major form is that represented by bank loans and the discounting of bills, and the minor form by the creation of interest bearing savings, investments, or inheritances, which as government or municipal stock, industrial shares, bonds, debentures, mortgages, or capital claims on land, plant and property, make up the debt structure in every country. The common and essential feature in all these processes, here comprehended as the major and minor principles of usury, is the payment of money interest on money lent.
... we must always differentiate between lending by private persons and lending by banks or other credit making institutions. In the later case they create the means of payment out of nothing and then proceed to appropriate both capital and interest.
Here's an excerpt from an article by Trace Mayer on 24hgold.com: The usurer has lent his money to one who takes it of his own free will, and can then enjoy the use of it and relieve his own necessity with it, and what he repays in excess of the principal is determined by free contract between the parties. But a prince, by unnecessary change in the coinage, plainly takes the money of his subjects against their will, because he forbids the older money to pass current, though it is better, and anyone would prefer it to the bad; and then unnecessarily and without any possible advantage to his subjects, he will give them back worse money …. In so farthen as he receives more money than he gives, against and beyond the natural use of money, such gain is equivalent to usury; but is worse than usury because it is less voluntary and more against the will of his subjects, incapable of profiting them, and utterly unnecessary. And since the usurer’s interest is not so excessive, or so generally injurious to the many, as this impost, levied tyrannically and fraudulently, against the interest and against the will of the whole community, I doubt whether it should not rather be termed robbery with violence or fraudulent extortion.
Distribution of Wealth
Usury is often considered the root of the problem, but it is a logical necessity within the context of a system in which money is a scarce commodity. Money should not be something scarce, with very few people having an abundance while the majority is short of it. This is because it should play the role of the "ticket" by which resources are distributed throughout the system. A system which is properly designed to organise the global allocation of resources amongst all its parts would ensure that all of the members composing it be in an optimal state of well-being. To do otherwise would be equivalent to an organism preventing its blood from flowing to some parts of its own body.
Universal Basic Income
This ties in to the UBI ideas via the redeemable bond associated with each person. Technically, the UBI is not a hand-out, but rather a dividend on each persons share of the total wealth of the nation (in this case the "nation" being the network).
- Wikipedia:UBI
- UBI New Zealand
- Keith Rankin on UBI
- Resource for Rankin papers
- Philosophy conversation on UBI
Internal Memo from the Bank of England 1862 to the Banks of America
The sender may distribute material via email and Web site without profit to those who have expressed a prior interest in receiving it for research and educational purposes only. I believe that this constitutes a fair use of any copyrighted material as provided for in Title 17 U.S. Code, Section 107. If you desire to use copyrighted material from this source for purposes that go beyond the fair use statutes, you must obtain permission from the copyright owner.
In 1862 the creditors of America, the Bank of England, sent the following circular to every bank in New York and New England:
"Slavery is likely to be abolished by the war power. This, I and my European friends are in favour of, for slavery is but the owning of labour and carries with it the care of the labourer, while the European plan, led on by England, is for capital to control labour by controlling the wages. This can be done by controlling the money. The great debt that capitalists will see to it is made out of the war must be used as a means to control the volume of money. To accomplish this, the bonds must be used as a banking basis. We are now waiting for the Secretary of the Treasury to make the recommendations to Congress. It will not do to allow the greenback, as it is called, to circulate any length of time, as we cannot control that."
"When through a process of law the common people have lost their homes, they will be more tractable and more easily governed by the strong arm of the law, applied by the central power of wealth, under the control of leading financiers. People without homes will not quarrel with their leaders. This is well known among our principal men now engaged in forming an IMPERIALISM OF CAPITAL TO GOVERN THE WORLD. Thus by discreet action we can secure for ourselves what has been generally planned and successfully accomplished."
That was part of a leaflet called the "Bankers' Manifest" printed for private circulation among leading bankers only. It appeared in 1934.
While on the subject of banks and debts, it is evident considering their nature that the banks are more powerful than the Government of the United States, for if they were not, there would: be no such thing as a National Debt. National debts are unnecessary in a country with the real and potential wealth and resources as the United States; they are the greatest of national burdens and the evils the Government would be foremost in avoiding. But on the other hand they are the biggest source of riches and control in the hands of the American financial system. That we have a National Debt is not only evidence of the real rulers of the nation, but the extent of the debt is a true indication of the extent of this rule.
It is absurd that the Government should be forced to borrow that which it has, under the Constitution, the power to create!
Ever since the banks were given the right to issue money, panics, financial depressions, famines, and the inevitable increase of crime have been periodic occurrences. In America the average is about every twelve years. They shall continue until the government assumes its natural prerogative of issuing money, and confining the work of bankers to banking.
Excerpts from the book: Citadels of Chaos 1949.
Bitcoin & P2P Currency
Bitcoin is an open source peer-to-peer electronic cash system that's completely decentralised, with no central server, trusted authorities or middle men. The availability of bitcoins can't be manipulated by governments or financial institutions. Bitcoin already has a number of exchanges for converting to and from other currencies; BitcoinFX, New Liberty Standard, Bitcoin Exchange and Bitcoin Market.
In a p2p computer network there are no servers, the entire network is composed of users running instances of the application on their computers. Each running instances offers a small amount of processing and storage resource to the network so that it can deliver the services it was designed for such as redundant storage, anonymity or voice-over-IP applications.
In the case of a p2p currency system, some of the services the network is designed to offer are privacy, verification, authentication, currency creation and transfer of ownership. To ensure a reliable and tamper-proof system requires a lot of resource, and that amount is proportional to the amount of coins in the network. The network is able to pay the users for the resource they offer by making the coin-creation process part of the network protocol itself instead of being handled by a central trusted authority. This creates a natural and incorruptible link between the supply of currency in the network and the demand for it.
Even aside from the ability to exchange bitcoins for other currencies, it still makes a very useful tool for independent organisations and groups because it allows them to trade and settle accounts amongst themselves independently and privately. It effectively gives them a "bank" that has a trustworthy system of accounts that can't be tampered with and requires no corruptible central authority to operate.
Energy as Money
- Electricity as the universal basis for a new money system (Activist Post)
- kilowattcards.com - Kilowatt Cards are gift cards that pay for 10 kilowatt-hours of electricity (including taxes and fees) to benefit any consumer electricity account when redeemed.
Related Wikipedia articles
- Money
- Currency
- Currency competition
- Legal tender
- Unit of account
- Medium of exchange
- Ecological economics
- Environmental economics
- Energy accounting
- Price system
- Technocratic views of the price system
- Free banking
- Full-reserve banking
- Anonymous internet banking
- Ripple monetary system
Related news items
- The Truth About JP Morgan’s $2 Billion Loss
- Michael Tellinger files lawsuit against South African bank
- Vatican Calls for Central World Bank to Be Set Up
- Hedges - No way in US system to vote against banks
- Mega coriorations fly under the radar
- Ratigan blasts US political-banking ties
- George Monbiot: If the state can't save us, we need a licence to print our own money
Alternative Money Systems
- Open Transactions
- WebFunds - a system based on the Ricardian Contract
- Voucher Safe
- Bitcoin
- PostiveMoneyNZ
- PostiveMoneyUK
- American Monetary Institute
- The Cascadia Hours Exchange
- A web-based currency called Ripple is in development
- Ubuntu Contributionism
- Lawful Bank
- RipplePay
- Ithaca Hours
- The Open Money Projects
- SIMEC Interest-free community currency
- Mutual Credit - Drupal module
- SeedBomb! - seeding Vancouver's first community currency
- CommunityForge
Alternative money exchanges
Books & Documentaries
- Inside Job
- The Secret Of Oz - Bill Still
- Human Ecology
- Social Credit
- The Money Fix
- Sacred Economics - by Charles Eisenstein
- What Is Money? - by Frederic Bastiat
See also
- The Thrive Movement's economy sector
- Goldbugs vs Greenbackers (WebOfDebt) - An excellent explanation of the fallacies of the gold standard
- States to Financially Break Away from Federal Government
- Comparison of payment systems
- How to Create a Local Free Market Currency - (DownsizeDC) with several links to other good articles :
- A lot of detailed information - by William F Hummel
- Online transaction systems
- Anatomy of a future-proof local currency system
- fee.org - The Foundation for Economic Education
- P2P foundation's article on money
- WeBank - Report organised by Nesta and OpenBusiness.cc about P2P finance
- Post scarcity
- Cancerous Capital
- transaction.net
- The Natural Economic Order - The full text of the book by Silvio Gesell
- Dutch barter system challenges the banksters
- Understanding money supply - Mike Shedlock (Mish)
- What is Money and How Does One Measure It? - Mish
- P2P Energy Economy
- 50 Statistics About The U.S. Economy That Are Almost Too Crazy To Believe
- Myths about "what's economically important"
- In This Age of Plenty - Social Credit book by Louis Even
- Thirst for Justice - The Social Credit island metaphor, by Louis Even
- The end of the Statist Quo - by Casey Research
- How To Attack The Fiat Currency Fractional Reserve Banking Conspiracy
- Conspiracy of the Rich - by Robert Kiyosaki (Rich Dad, Poor Dad) - a book collaboratively created on a wiki
- Competing Currencies Can "End the Fed" Softly - Ron Paul on the House floor introducing his bill for legalizing competing currencies, the HR 4248 Free Competition in Currency Act of 2009
- Does Economic Growth Cause Inflation? - by Frank Shostak Published: March 23rd, 2011 - an indispensable expose on flawed monetary policy and an important reference for maintaining stability of alternative currencies
- Russia Today - Zeitgeist: Moving Beyond Money
- kleptocracy.us - visualising the US debt (and this one too)
- Must money be backed by gold?
- About the ESF
- MarketSkeptics - reporting about the real state of the economy
- Bernard Lietaer: Money diversity (TEDtalks) - Bernard Lietaer argues that the monoculture of money is what creates economic instability, leading to liquidity crises. He calls for a greater diversity of alternative currencies
- Creating Wealth - by Gwendolyn Hallsmith & Bernard Lietaer - Scientific proof that multi-tier currency systems are absolutely required