Federal Reserve Notes (FRNs) Are IOUs – United States Government (USG) Borrows FRN Currency at Interest from Private Offshore Federal Reserve System – Counterfeit “U.S. Courts” Are Federal Reserve Courts Under Commercial/Admiralty Jurisdiction – Privately-Owned FRN “$” Carries a Hidden Lien That Contaminates All Its Transactions – Using the Toxic Currency Makes You a Peon – Income Tax Is a Tariff on Merchants Importing FRNs – We Work to “Pay Off” a Fraudulent, Imaginary Debt – The Creditors Who Own the Currencies Are the Real Criminals – Remedy: Debt-Free, Interest-Free State Scrip (Backed by People’s Labor and Property) – People: Take Back Your Governments! Demand Monetary Rights!
They Own It All (Including You!) by Means of Toxic Currency
by Ron MacDonald
Seldom in history does a book come along where readers comment that it should be in the home of every American family, and placed on the mantle right next to the family Bible. But that is what readers of this book are saying. With very simple grammar, They Own It All tackles a subject craftily hidden from the average man – the true nature of modern currency and its impact on his personal life and freedom.
Most everyone knows that something is desperately wrong in America, and the entire world for that matter. Imagine being the owner of a manor. One day you return and find that your servants have taken over the estate, and they place you in chains to be their chattel – forever! As the book unfolds, the reader finds that this is what has literally happened. We now have governments malignantly growing, freedoms destroyed, and our every movement tracked. We need permission from the entity we created (government) for most anything we do in life.
The authors prove that this amazing feat was done through what they call “toxic currency”. They show how Federal Reserve Notes are really the privately owned property of the private offshore corporation known as the Federal Reserve System. You do not own what is in your pocket because it belongs to “them”. Worse, the authors show how the currency carries a hidden lien that contaminates everything which is transacted for it. Hence, “THEY” own it all by hidden liens, which represent the creditors’ 100% interest in all transactions. Since you own nothing, you are devoid of all rights. How? Even to exert the most basic of rights, the right of contract, you must have your own unliened property to offer. If you are using the property of a third party, you are beholden to his terms and conditions (agency regulations) for its use. Worse, since it is a product in international commerce, it has compelled you into admiralty jurisdiction and lifted you off both the land and common law. It is from the common law that you once had unalienable rights. Today, those unalienable rights (given by the Creator) have been replaced with privileges and immunities given to you by the Creditor. You are a debtor (using debt notes). Debtors do not have any rights. You are legally chattel (property of the Creditor) in the eyes of the law through your voluntary use of and transactions with the toxic debt currency.
“Remedy: If this entire economy collapses today, and we are holding worthless Federal Reserve Notes – which they are anyway – our remedy, very quickly, is to start our printing presses in our State and put out scrip that we, ourselves, own, backed by our labor; and we can exchange them amongst ourselves, because we trust our own possessions and our own wealth.” – Ron MacDonald (Become Vocal Local! radio show 2009-12-02)
Book review by The Idaho Observer
They Own It All (Including You!) by Means of Toxic Currency
by Ronald MacDonald and Robert Rowen, M.D.
Seldom in history does a book come along where readers comment that it should be in the home of every American family, and placed on the mantle right next to the family Bible. But that is what readers of this book are saying. With very simple grammar, They Own It All tackles a subject craftily hidden from the average man – the true nature of modern currency and its impact on his personal life and freedom.
Most everyone knows that something is desperately wrong in America, and the entire world for that matter. Imagine being the owner of a manor. One day you return and find that your servants have taken over the estate, and they place you in chains to be their chattel – forever! As the book unfolds, the reader finds that this is what has literally happened. We now have governments malignantly growing, freedoms destroyed, and our every movement tracked. We need permission from the entity we created (government) for most anything we do in life.
The authors prove that this amazing feat was done through what they call “toxic currency”. They show how Federal Reserve Notes are really the privately-owned property of the private offshore corporation known as the Federal Reserve System. You do not own what is in your pocket because it belongs to “them”. Worse, the authors show how the currency carries a hidden lien that contaminates everything which is transacted for it. Hence, “THEY” own it all by hidden liens, which represent the creditors’ 100% interest in all transactions. Since you own nothing, you are devoid of all rights. How? Even to exert the most basic of rights, the right of contract, you must have your own unliened property with which to offer. If you are using the property of a third party, you are beholden to his terms and conditions (agency regulations) for its use. Worse, since it is a product in international commerce, it has compelled you into admiralty jurisdiction and lifted you off both the land and common law. It is from the common law that you once had unalienable rights. Today, those unalienable rights (given by the Creator) have been replaced with privileges and immunities given to you by the Creditor. You are a debtor (using debt notes). Debtors do not have any rights. You are legally chattel (property of the Creditor) in the eyes of the law through your voluntary use of, and transactions with, the toxic debt currency.
This book explains the difference between transactions with gold and silver coin within the common law, and negotiable instruments in international admiralty law. It is night and day. You have neither title, rights, nor interest with negotiable instruments (currency) but possession by “privileges” only. You will discover that what you think are your courts are really Admiralty courts of the Creditor. Your courts were silenced when your gold (wealth) was stolen by your government (servants) in 1933, with a bankruptcy of the government admitted in the Congressional record. Hence, the American government, which is insolvent, is acting at the behest of its hidden creditor, as would anyone in a perpetual Chapter 11.
This masterfully written and documented book will ultimately become an American classic. It should be in every home and library, to educate all of us on the real nature of “money” and how the international bankers can control every aspect of your life simply by controlling (owning) the currency. Knowledge will provide the means to remedy the situation both on a personal level and national level, and with education of our children, prevent it from ever happening again.
The authors’ treatise on transacting in gold/silver coin within the common law is priceless, as well as Appendix H. The latter is a document from a major taxing agency in California that returned lawful money (gold coin) of the United States submitted to the agency in payment of alleged taxes. The agency called the coin an “invalid financial document”. The authors cited a recent federal case that went all the way to the Supreme Court, in which the district court determined that lawful money (gold coin) is literally invisible to the government! So what are we doing continuing our transactions in “their” property?
Understanding the underlying problem provides the means for the remedy, including instant remedies. Reading this book will expose the invisible “Matrix”. And, when the invisible becomes visible, it will remain so for all time. They Own It All (Including You!) provides the means for Americans to take their country back and become the master of their servant government again. It may be the only book one needs to take to a “Tea Party”, as the book is the first since the imposition of the income tax to identify what “income” really is. (Hint: it deals with transaction in Federal Reserve Notes.) It is not just a must-read. It is an essential read, since it connects the remaining dots that even those schooled in the cause of freedom for years have likely missed.
THIS BOOK WILL PROVE TO YOU THAT ALL CURRENCY IN THE WORLD IS TOXIC, RESULTING IN THE FOLLOWING:
1. You are legally a debtor and chattel (property) owned by a hidden creditor.
2. There is a hidden lien on everything transacted for, by, or with a Federal Reserve Note.
3. Your entire alleged wealth is/has been liened – you don’t own anything! You merely have possession by privilege. This privilege may be yanked at any time if you don’t obey the real owner.
4. The Federal Reserve Note is a foreign product owned by a foreign corporation, and not by you or the U.S. government.
5. The States and the United States courts are bankruptcy courts representing the interests and property of the foreign creditor.
6. Without knowing it, you have been compelled into international commercial law, where you have none of your unalienable rights. Hence, you have been insulated from your birthright, the common Law from which your rights are immutable.
7. You are charged an income (excise) tax for transacting in the foreign commodity known as Federal Reserve Notes.
8. You have been divested of the rights to, value of, and profits from your labor, which has been stolen.
9. Lawful gold coin (pre-1933) money transactions are invisible to the states and national government(s).
10. The real cause of draconian governmental regulation and your loss of rights is the toxic currency.
11. The United States lost its sovereignty in 1933. It is in receivership to the hidden creditor. The bankrupt government is a puppet to the real master, as declared by Banker Rothschild on the cover.
12. The real cause of the current economic calamity is the toxic currency.
13. The hidden creditor (international bankers) owns everything, including you.
14. You have been living within an illusion, believing that you are free, but in reality you are owned!
With this knowledge comes the singular remedy!
Ron MacDonald is a Vietnam veteran who’s spent the last 25 years studying law. His key interests are Fundamental Principles and Inherent Rights from which all other law arises. He’s watched in dismay as unalienable Rights have been reduced to mere privileges. His overriding interest is for fellow citizens to be free from government tyranny. Robert Rowen, MD is a Phi Beta Kappa graduate of Johns Hopkins University and UCSF Medical School. He is devoted to educating readers of his Second Opinion Newsletter on the real causes and remedies of illness (hint, not deficiencies of drugs). In his 26 years in the field, he has watched in dismay while forces of toxic medicine have organized through government to destroy its superior competition, biological healing. His overriding interest is freedom from medical regulatory tyranny. Over 6 years’ friendship and countless hours’ discussions, these two interests mutually interacted to uncover the one common denominator related to loss of all our freedoms. (Amazon bio)
It’s your choice! :
God –> Sovereign People –> State Governments –> United States Government
Mammon –> Federal Reserve System –> United States Government –> 14th Amendment U.S. citizens–peons
On the show, some topics:
1. How did we go from the grantors of the trust to the chattel of the trust?
2. How do transactions in FRNs mark everything you do and think you own as property of the creditor (liens by mere maritime hypothecation)?
3. 14th amendment citizen is a statutory citizen of a corporation in maritime law.
4. Gold specie is not liened to the creditor; therefore, the government owned by the creditor cannot see it. We prove this in many ways.
5. While we don’t want to openly give income tax advice, we can point out that federal taxes are a use tax. For example, you work all your life, pay taxes, and have 5M left at the end of your life. There is then an inheritance tax on money already taxed. Why? That “money” (currency) is not really yours. It is property of the Fed, and you are charged a transfer fee. However, if you leave 10M in gold specie, there is no tax at all, nor is there a reporting requirement if you leave the country with that much – unlike FRNs.
There is so much to talk about. Your audience will be enraptured with the dots we have connected.
P.S. Ron agreed that our purpose is to stay on the straight and narrow, talking about things we can absolutely prove in writing immediately and without conjecture. The international banking conspiracy is real, but to jump into that, for many people, is a real leap of faith. The hidden lien on all Americans via FRNs, however, is real easy to prove. We will do that.
Robert Jay Rowen, MD
DR. ROBERT ROWEN, MD
WELCOME TO SECOND OPINION. Second Opinion helps you take charge of your health – and feel younger, and healthier, than ever before.
Editor-in-Chief Robert J. Rowen MD is a Phi Beta Kappa graduate of Johns Hopkins University and the University of California at San Francisco. He is board certified in emergency medicine and served on the Alaska State Medical Board. Dr. Rowen is known as “The Father of Medical Freedom” for pioneering the nation’s first statutory protection for alternative medicine in 1990.
Dr. Rowen goes beyond the same old tired health advice. He brings you big breakthroughs that really work, often years before they’re covered anywhere else. His advice doesn’t rely on second-hand information or health-food-industry hype. Everything you read about has been tested in the real world on real patients.
Please explore our website. While you’re here, be sure to sign up for Dr. Rowen’s free Health Alert newsletter and get his latest Special Report.
WHY YOU SHOULD BUY They Own It All (Including You!):
1) Are you one of the millions bewildered by the tumultuous economic meltdown? Are you affected by it? Have you wondered how the government has risen to a level of power over us (from licenses to regulations to taxes) that our forefathers waged the Revolutionary War over? This book connects the dots, many of which you may already know, to show that the singular cause is not toxic mortgages, but toxic currency.
2) This book shows the greatest deception ever perpetrated on the people of the world, and it happened right here in the USA. No, it was not Bernie Madoff. His $55 billion swindle was mere child’s play. His was only 1/1,000th that of this swindle we reveal herein. A swindle that has stolen from EVERYONE (including you) in America, without their knowledge. And it was done through toxic currency.
3) Do you like mysteries? Have you ever been interested in the discoveries of ancient treasures, or new discoveries of hidden wealth, or information that has been buried for eons? If so, we know you will enjoy reading They Own It All (Including You!) because it uncovers a hidden secret that affects everyone, and everything. It reveals and answers an ancient prophecy that 2000 years ago predicted what we are experiencing today.
4) We, the authors, unequivocally state that this book will shift the reality of everything you have believed regarding the government, money, property, and rights.
5) By reading They Own It All (Including You!), you will find out what the two scales in the above header mean. Once you understand the two divers scales above, you can consider that you have awoken to a secret, which has been strategized to steal from you not only your wealth, but your person. It will remove a veil from your eyes, and more than likely will make you angry, very angry! If you do not want to be angry by learning the truth, we caution you not to read the book, They Own It All (Including You!).
6) Are you concerned about the debt our government has foisted upon each and every man, woman, and child for the next thousand years, if not forever? We firmly believe and state that the knowledge in this book will offer the people of America a freedom unlike anything they have seen since the War Between the States. We CAN take our country back!
7) You have nothing to lose, and possibly a world of knowledge unlike any other in history to gain. Buy it, and if you don’t like it, GET YOUR MONEY BACK! How many times have you, in life, bought a book and were dissatisfied with the contents? Here’s the deal: if you are dissatisfied with the contents of They Own It All (Including You!), say so. Return the book to us, and we will refund the purchase price.
WHAT IS NEW PEOPLE ORDER?
It is a name only, and not a corporation, organization, or partnership. You cannot join the New People Order; you are within it by being within humanity. It is the natural status of human beings, which is to be above their servants, governments. Governments are created for the sole purpose to serve the people. Once the governments veer away from their original purpose to benefit the peoples who have created them, we then have governments in control of the destiny of each, and a New World Order in control.
HERE IS A TESTIMONY FROM A READER WHO HAS READ They Own It All (Including You!):
I have just read a most amazing book called They Own It All (Including You!). It puts together in one place, and with proof, almost all, if not everything your past guests have presented on your program. (New World Order, end game, income taxes, erosion of rights, etc.)
The book proves that we are all legally marked by a corrupt debt-based monetary system, and with that mark, we are compelled into a horrible system of government regulation, taxes, wars, theft of our rights and more, all controlled by the international bankers. I believe that the authors have nailed the subject of what the mark is. Even better, I have re-read Revelations Chapter 18 in the light of the book. It is now crystal-clear to me that the warnings about Babylon were warnings about the international merchants, known then as the money-changers. It was a commercial prophecy.
Nothing has changed in 2000 years. The book makes crystal-clear the current economic meltdown, why, what is behind it. And the best part is, they also have the remedy that could end the tyranny instantly. It’s all about the monetary system. These guys were given the gift of connecting all the dots that those of us studying the system have been unable to do, until now.
This book could change the world for the betterment of us all. I highly recommend the authors to you as guests. www.NewPeopleOrder.com
And remember: “IF IT IS TO BE, IT IS UP TO ME !!”
Solving the Problem of Land Rent and Land Speculation – Rent-Seekers Stealing Citizens’ Surpluses – Financiers as Economic Rentiers – Solution: A Regular Legal Tender Dividend to Each Household and an Excess Wealth Tax – Distributing Strong Demand Throughout the Country – Populist National Money System – Your Personal “New Money Fountain”
Henry George and Populist Reform of the American Economy
July 25, 2015
As you know, the monetary system and lending system are also big problems for nations seeking increasing standards of living for the common man. When every dollar in circulation (as currency or transferable bank deposit) is co-created with a debt obligation equal to that amount (principal = loan amount) plus compound interest, the mathematically inevitable defaults always end with wealth transferred to the creditors, bringing about a nation of a few oligarchs and many powerless paupers.
And the people controlling the perverse money and lending machinery end up owning the land and charging high rent.
Some thoughts on a solution to both problems together:
When businesses begin to concentrate in a geographical area, each new business brings new consumers, workers, and income to that location. With lots of labor and consumers nearby, the place become much better for buying, selling, and producing. Rents obviously increase, the closer a parcel of land is to that center of commerce. (The location may have been picked originally because of its proximity to water, roads, or other centers.)
Henry George points out that all speculators have to do is buy the land before the location is developed, then wait for new enterprise and population around it to increase demand for use of that land – so that rent can be raised and raised, and tenants will be found to pay it.
Henry George offers as his solution the “single tax”, as they say, to tax away the surplus and thus fund government to do good things. I am fuzzy on how that solves or does away with the problem.
The solution I favor for both problems is for the government to authorize a legal tender dividend to households – to each citizen human being – that instantly becomes new money (a new deposit in the bank) that people can either spend into circulation or save, as they choose. All new money would be created and distributed in this way, at minimal cost. Very simple: one amount goes to each citizen on a regular basis. This will accomplish one great thing: it will distribute strong demand (purchasing power) throughout the country, concentrated where the population is biggest. But every place where people live will have new money appear for someone to earn.
People will have money to buy more from people around them. They will have money to pool and make available to small entrepreneurs they know. Start-ups will increase because there is more hope of steady demand for the product or service. The new demand will call for the production of a larger “total economic pie” for the people to consume.
Big cities with big populations will be places where demand is very strong, but high rent (following as per Henry George’s thesis) will also obtain. The money, however, now follows the people. People can move to lower-rent areas, knowing that all people everywhere have money to spend.
I am opposed to a Federal land tax. I believe the Federal Government should be funded from direct taxation only, and from fees for services (e.g. use of national utilities and national parks). Government should never deficit finance. The Federal Government should repudiate its debt and accept the worst possible credit rating as a way of burning its bridges behind it. It can settle up with foreign governments by giving them all American-citizen-owned assets in other countries. Foreign investment and foreign reserve currency status should be eliminated. Trade must be balanced, and both favorable and unfavorable trade policies must be abandoned.
A city can fund itself with property taxes. A state of the United States can fund itself as their citizens and elected representatives provide.
I favor an excess wealth tax, but not an income tax. Only bankers benefit from income taxes, because income taxes prevent the profitable entrepreneur or worker from self-financing his own expansion from profits. Only the bankers who lend to businesses would want a crazy tax like that. How absurd to tax the incentive to human productivity in providing goods and services to households and businesses.
How to replace the present money and finance system with the populist national money system where banks can’t create or destroy money, but are simply intermediaries between people with saved money and entrepreneurs with promising ventures to finance or families who want to buy homes? When each citizen becomes a fount from which new money entering the economy flows, then there will be people wanting people to move and bring their personal “new money fountain” with them. Every city and town will compete to invite people to come there because they bring new money with them. This demand for households will accompany the new demand for labor, giving people the wonderful advantage of living in a society where there is a seller’s market for labor. A worker can quit a bad employer, with the assurance that plenty of other employers are looking for workers to meet the never failing demand created by the national new money dividend.
Not only will new enterprises begin, but there will be a new economics of community building, based on attracting people as new money fountains to locations that are underdeveloped but promising.
I mentioned an excess wealth tax. That tax addresses people who own a lot of IOUs and corporation stock, but also people who own a lot of high-rent land. The excess wealth tax is the best of all taxes because, unlike the income tax, it does not penalize productivity. (Then why did we get the income tax in the first place? We got it because the owners of corporations wanted a means of financing World War I – and also a means of taking away money from people earning money, so that the profit-making little man could not roll his profits back into his little company and thereby become a threat to the market share held by the corporations that are owned by bankers.) An excess wealth tax removes wealth that is already amassed and that can only be replaced with more production of goods and services.
Of course, those who are rich get together to prevent such a thing from happening: they form a conspiracy to subvert representative government, so that excess wealth will not be taxed. The conspiracy of rent and interest collectors is to make sure that the crooked system is not altered – and that the general population is dumbed down and misinformed, so that they cannot make an effective challenge to the nation plundering system preferred by the bankers and their allies.
Dick Eastman <email@example.com>
(Left/Above: the erudite Dick Eastman)
Recently, Social Crediters have been campaigning against the notion that Usury is the core of our monetary problems. To them, it’s the “Gap” – the difference between output of the productive sector and purchasing power of the consumer base.
However, the Gap is mostly caused by Usury, and it’s becoming more and more difficult to understand why the Social Crediters are not willing to admit this.
(Here’s my analysis of Social Credit, for those new to the issue.)
Dick Eastman convincingly took him to task on the issue of Usury being the Gap. Dick mostly communicates via his email list; email me if you want to get on Dick’s list to receive his top-notch work.
Next, Dick wrote me a friendly letter (see below this article), looking to bridge our differences.
The Gap is the difference between what workers produce and the wages they receive. Because wages are lower than the value of production, there is a constant lack of purchasing power for the workers to consume their own production.
Major Douglas was the one to point out this phenomenon. He proposed having Government print debt-free money and allowing the people to spend the new money into circulation. If you print only as much money as is necessary to buy up ‘excess’ production, no ‘inflation’ (rising prices) will ensue, Douglas claimed.
I’m not really convinced that this will be ‘inflation’-free. I don’t think Dick Eastman is either; but he doesn’t care much, and correctly notes that inflation is really the very least of our problems, as inflation stimulates economic growth and reduces the value of debts – things only bankers and the ultra-rich hate.
Be that as it may, the bottom line is that Social Credit compensates, to some extent, for Usury; this is why I personally sympathize with the scheme.
Dick Eastman, who wants to use an upgraded form of Social Credit to end Rothschild tyranny, has been making the case for years that Douglas’ ‘Gap’ is basically the interest on loans of money. As Eastman correctly notes, the Bankers don’t spend the money back into circulation – but hoard it, to cause deflation.
I’m adding that they lend the interest back into circulation, as the extra interest drain of the collected interest lent back into circulation will only worsen the deflationary pressures, both in the medium and long term. In this way, the Bankers let compound interest work to crunch us with ever worsening money scarcity (while printing ever more money! neat trick, huh?).
The Gap is calculated by Social Crediters to be around 50% of production. Obviously, it’s no coincidence that about 40% of the prices we pay for goods and services are Usury passed on by the producers – as calculated in Helmut Creutz’ The Money Syndrome.
It seems to me that this more or less speaks for itself; in the to and fro between the Social Crediters and Dick Eastman, I could not find any real rebuttal of this by the SC-ers. Dick is simply right. It’s not an ‘accounting issue’ (as the SC-ers put it), it’s the interest drain.
Downside of Social Credit
Clearly, this being the case, we need to solve Usury first; what remains of the ‘Gap’ after we do, can be solved with some extra liquidity, if need be.
Social Credit’s main problem is that, while it compensates to some extent what people lose to Usury, people will still be paying Usury, even with freshly printed notes.
Why do the Usurers need to continue to suck up trillions per year? That’s the whole issue, is it not? We have a couple of trillionaires at the top of the food chain who have stolen the rightful inheritance of Earth’s people – through compound interest.
It’s all unearned income. All that those guys do during the day to ‘make’ this money is bribe (and threaten) politicians, newspapers, and ‘economists’.
Compensating people for the interest drain is not enough. The interest drain itself must be stopped.
Responding to Dick Eastman
As Dick notes, we do agree on a great many issues. We share a hobby too: preparing ‘Austrian School economists’ for luncheon. The Austrians’ criminal defense of deflation is something both Dick and I feel especially strongly about.
Furthermore, while I do have a proposal of my own, I’m not at all hung up on it.
The goals of monetary reform, as I see them, are to:
1) end Usury and its associated scarcity of money;
2) end artificial inflations and deflations (the boom–bust cycle);
3) democratize credit allocation, so neither bankers nor technocrats can direct the economy.
These are the parameters along which I have analyzed the different monetary reform proposals out there, including Dick Eastman’s (the latter in email correspondence, not on Real Currencies).
I support, with reservations, anything that moves in the right direction; and unreservedly, all proposals that achieve the three main goals of monetary reform, as I see them.
Dick wants to replace the current usurious credit-based money supply with Populist Social Credit, and allow for full-reserve banking, assuming that competition among banks will lead to low interest rates and decent behavior by these institutions.
In the diagrams in his letter, we can see how his proposal would lead to constant circulation of all the money, including that used for interest payments. So the interest drain, or gap, will be solved.
But in doing so, Dick, like the wider Social Credit community, overlooks that Usury is paid by those who don’t have money to those who do, i.e. the poor will borrow from the middle class, who in turn will borrow from the rich. At least some of the wealth transfer through Usury will continue. It will still be the rich depositing money to lend in these banks.
Furthermore, while Eastman hopes to reach out to our Muslim brethren in the faith, he ignores why Islam rejects Usury: because it is unearned income. In Islam, every transaction must lead to both participants adding to the greater whole. The Usurer just takes. He adds nothing, risks nothing, and loses nothing. [In fact, Eastman proposes that lenders/banks share half the risk of business failure with entrepreneurs. So there is a potential monetary loss alongside the potential monetary gain; thus, a strong incentive for bankers to assess business ventures carefully, and for individual investors to assess bankers carefully. –AD]
In an interest-free environment, there is no ‘risk’: all risk is mutually insured, just as the credit is mutual. ‘Debtors’ (people promising to pay) pay a one-off service charge to cover the risks for the community. Since most lending will come with collateral, risk is minimal anyway.
This is, in fact, already the case today. There is no real ‘risk’ in the financial industry. For instance: house payments (mortgages) go underwater because of the deflation that the banks willfully cause; since banks hold houses as collateral, they have no ‘skin in the game’ (no risk of loss).
Last, I’m not as optimistic as Dick is about the disciplining effects of the market on bankers. Bankers will be bankers, experience shows. Eastman puts them in a cage, but a wild animal can find ways to escape – especially if its incentive, Usury, remains in place. They will be colluding again in no time. Such is the power of the love of money and its weaponization: interest on loans of money.
He puts my position as: “Your answer is simple enough. Kill the vampire, and have government make loans at zero interest. Certainly that remedy would fix the problem. Usury is killed. You are happy. Martin Luther is happy. Mohammed (pbuh) is happy. God is happy. Right?”
Then Eastman points out the problem of Government being in control of credit creation and allocation.
And that is indeed a major problem, if Government is the one to dole out the credit.
That is not my position, however, because it would not achieve goal number three: democratic credit allocation.
I’m looking for interest-free credit facilities that work according to a clear-cut charter: semi-private, semi-public, not-for-profit institutions. And they should allocate the credit based on rights. The understanding must be that people simply have a right to credit, as it is their promise to pay which is monetized. The Money Supply and the Credit of the Nation are part of the Commons; all commoners have rights to access their fair share of the available credit, based on rules that balance the needs and rights of both individuals and the community (other individuals).
Borrowers must show creditworthiness, include collateral, and have a reasonable plan (e.g. a normal business, a mortgage). The credit facility must provide no more credit than stable prices allow.
In this way, credit allocation can be made predictable, to a large extent: no technocrats looking for control, but professionals simply facilitating people’s natural rights.
90% of society’s demand for credit can be covered in this way. What remains are risky ventures. These need financing too, but this can be reasonably done on an investment basis, where those providing the capital also share in the risk. Brokerages can provide the infrastructure for this.
What’s more (and this is the key point): what Eastman proposes – full-reserve banking – can be done, just as well, interest-free! People can save with ‘banks’ (for lack of a better word) interest-free, and their money can be used for lending, as long as the ‘bank’ guarantees the deposit, which can be done well by having borrowers pay a one-off charge to cover uncollateralized defaults. This is known as JAK banking.
And let us not forget that Usury is the main cause of defaults to begin with. Clearly, the creditworthiness of people vastly increases if they don’t have to pay interest on their loans.
Solving Usury will solve at least 80% of the gap. It’s really hard to see how the Social Crediters can get around this.
However, Usury is worse than just the gap. It’s a wealth transfer from those who don’t have money – and thus, must borrow – to those who already have more of it than they can spend.
It is unearned income.
The whole idea that money should breed money is unreasonable.
The time value of money is a hoax, cooked up by 16th century Jesuit monks in Salamanca, who laid the groundwork for what later became Libertarianism. This was the end of Usury prohibition in Europe. It paved the way for centuries of Usury, and is leading directly to the destruction of the West, and to World Government.
There is no need for Government or Banks to control lending; it can all be done in democratic, decentralized, and not-for-profit fashion.
Let us end all rents and unearned income. The economy should be based on production, not parasitism.
Having said this, I admire Dick’s work, and I’m grateful for this opportunity to make the case against Usury once more, and to fire up everyone to take up arms against the Money Power menace.
Let us not rest until that Demon is defeated once and for all!
Social Credit With Demurrage
More on Mutual Credit
Rationalizing Usury: The Time Value Hoax
The Difference Between Debt-Free Money and Interest-Free Credit
The Goal of Monetary Reform
Forget About Full-Reserve Banking
Dick Eastman’s letter:
Very good to receive this email from you.
We have been sharing thoughts and friendship for a long time. We agree on almost everything – including the deflation that results from the practices and systems of usury. Our common goals might be better attained if we could agree on the same remedy. I think we can.
As I understand it, you are saying that usury is wrong – in the sense of breaching a morality that best serves people. The last I looked, it appeared to me that you advocate the elimination of interest on loans under all circumstances, and that you would have a government agency make all loans interest-free. Yes, that would eliminate usury. The structure of the financial system would be so changed that the gap in purchasing power due to the draining of interest to financiers/ capitalists/ bankers would be gone. End of problem. End of story.
In my opinion, and not without some thought, your charging a fee to allow others to spend your money today, instead of your spending it – provided they promise and do give you that same amount of money later on – is a freedom that, in a well-designed market economy/ money system/ lending system, could be a positive benefit to borrower, lender, and society as a whole.
My idea has been to find out exactly where interest under the present system is killing us, and to do something about that. Why is the usury system killing us?
I think I have isolated what is good and what is bad about usury under the present system – and what would be all good without bad under a different system.
The system of today’s usury I call the Bank-of-England/Rothschild system, named after both the bank that initiated the system and the family name of those who have most effectively used the system to the detriment of all nations and peoples except their own.
I have identified elements of the Bank-of-England/Rothschild system that cause the most trouble. Sometimes the gold standard. Always the private issue of the nation’s money. Also the tendency to want deflation – to make the money they monopolize be worth more per unit, so they can increase their real wealth by simply hoarding money and not spending. This deflation is the cause of the leakage of purchasing power from the real economy, causing hardship and loss in the “lower loop” (most households; businesses; local government that provides public services). The Bank-of-England/Rothschild system has always opposed national treasury money – the greenbacks backed only by the word and authority of a good government. Such a national treasury money system would cut down Rothschild power from that just short of gods, to something more on a scale of their standing among common humanity.
In the past, I have used this diagram, which has hinted at the problem.
But now, I have two diagrams that, I think, together capture the essence of the problem.
Flow of lending:
The diagram above shows the inevitability, under a system where all money is borrowed at interest, of a tendency to deflation, default, and depression for the many (lower course), and unearned windfall gain for those operating the Bank-of-England/Rothschild system (upper course).
The effect of one loan on quantity of money in circulation:
This diagram does not show the circular flow of buying, earning, and taxpaying among the household, government, and business sectors. The flow here does not involve injections of new money, or leaks of money from the economy; every loan by a bank, however, does. We show one loan and its effect above; all loans have the same effect.
New money comes in only a few ways; all involve borrowing at interest. These ways are: 1) commercial bank loans at interest, secured by collateral or primacy lenders’ claims in any bankruptcy; and 2) bond financing, where money comes when a corporation or government writes an IOU (promising to pay some amount in the future), which is then sold for a lower price in the current bond market. The new money is not really new; it comes from the interest earnings that are being hoarded by those who have been holding on to money simply to create deflation and to gain from deflation.
As with commercial bank lending, bond financing also involves interest drain. The creditor class gives up the (deflation) gain from hoarding, for the bigger (interest) gain from buying an IOU (bond). The bond maker gets the money and spends it on war, or new Walmart outlet buildings, or high-fructose processing plants – which, for a time, increases money in circulation (monetary inflation). But, as with bank lending and interest collecting, the IOU stipulates a face value that must be paid, at a future date, that is bigger than the bond price that the bond sold for; on many bonds, there is also a coupon amount that must be paid at regular intervals.
The surge in money circulating from the purchase of a new bond with money that was being hoarded, is soon followed by the payment of coupon amounts and bond face value back to the hoarders: more deflation, unless the corporation or government chooses to roll over the debt by writing new IOUs to get money to pay the obligation on the old IOU. This is the true heart of darkness. Both bond financing and bank loan financing have the same effect: an increase in money supply, followed by a decline – as principal and interest are paid, and as coupon and face value are paid – that takes the money circulation lower than before the financing was undertaken.
There is one more mechanism for making new money: the bonds themselves can be sold, by those holding them, to the central bank, in exchange for funds – referred to by the concealing euphemism “Quantitative Easing” (QE). This, of course, gives money only to the hoarding class – the people who only part with their money deposits when interest rates are very high, or when bankrupt assets and privatized public utilities come up for distress sales in extreme buyer’s markets.
The above explains everything. Why depressions happen. Why bust follows boom. How the debt increases to trillions upon trillions of dollars owed. Why possession of the world is being transferred to the credit monopoly that provides the credit money (the all-borrowed money supply).
I know, Anthony, this has been your understanding of the matter too. This is the great evil exposed. The vampire has two fangs: the all-borrowed money supply; and deflation intensified by hoarding, where only higher interest rates, or a coveted Greek island, or Chrysler Motors going up for auction in a distress sale, can induce the hoarders to spend.
This is the system we both do not like. This is the system that grips our countries – Holland and the US – and everyone else’s country as well.
Your answer is simple enough. Kill the vampire, and have government make loans at zero interest. Certainly that remedy would fix the problem. Usury is killed. You are happy. Martin Luther is happy. Mohammed (pbuh) is happy. God is happy. Right?
But then comes the old crotchety American who says that the government passing out money interest-free is socialism – even communism – where Congress, our federal legislature, is the biggest whorehouse in the world. I am sure the Tweede Kamer of the Netherlands operates in the same way. Selling votes. Giving contracts to those who contribute to the elections, or who control the political parties that decide who will be the ministers running the government.
But once your country’s politicians, or my country’s politicians, have the power to create money and then lend it out at their own discretion, you will have created a monster of state power that is just as terrible and corrupt as Bank-of-England/Rothschild power. The state will be a god. People will wait in line for loans, like people wait in line for an operation or a CAT scan under socialized medicine. And only those who contribute to the party and to the politician will get moved to a shorter line. To heck with that scheme. Can’t a European see the problem there?
I can’t join with you if you insist upon replacing usury with a government that creates money and then passes it out in loans to those the government chooses to lend to – those the state deems to be “deserving”. A government can’t just lend to everyone all that the borrowers want at zero interest, or else everyone would borrow and borrow with promises to repay later, until they die; just try to recoup after they are dead. So there must be some kind of rationing, some constraint on who gets loans. You would leave that process up to the government, politicians, political parties, those who pay the bosses of the political parties – in fact, the same people who already own Congress and the Tweede Kamer under the Bank-of-England/Rothschild system that our two countries have now.
So I ask you: Can we agree to be rid of the Bank-of-England/Rothschild system – but not replace it with the all-powerful National Money Power that you have been so naively proposing?
Now, you are not the only one I would like to come to full agreement with. There are also the Moslems (peace be upon them all in this world and the next). They too are against usury. Like you, they reject my proposals, which they most likely consider haram.
Well, I have extended an olive branch to you and to them, but have not gotten a response. I propose a system where businesspeople who want, for example, to make a new kind of device, can get a lot of money from a lot of people – on condition that those people get their money back after the device is built and selling, plus some more money for their willingness to lend.
But would that necessarily be usury?
No. I am thinking of a replacement for usury, that is not usury, but which does allow little people to pool their money to support an entrepreneur with a good idea, in the hope of a gain for themselves later on. What I propose to accomplish this with will not be usury, but will be an actual silent partnership, where the vampire “lender” is transformed into a small silent partner – sharing in risk, having the rights of a small partner rather than a creditor.
Here is how it would work:
The economy has plenty of money in it, coming from the state and being introduced exclusively through the new money dividend – debt-free money to each person in each household on a regular, unfailing basis.
There will be people with great inventions or ideas for products that people would enjoy, if only someone would make them; but these inventors have no money to realize their idea and put it on the market. They need money – an “advance” – so they can pay employees and materials suppliers and tool suppliers, until the product is selling and can pay for itself.
Instead of going to a bank for a loan like they do now, and instead of writing up an IOU and selling it as they do now (bond financing), we would instead have, not a bank, but a populist institution we could call a “pank”. I slightly change the name because I want to underscore the idea that the “pank” is something completely different, for the following reasons.
Here is how Anthony Migchels would start a “pank”. He calls up his internet friends and says, “I know a sharp young fellow named Daan, whose wife Isa is a great dress designer, really different and cool. And Daan has invented a new treatment for fabric that makes it really fantastic to touch, and that drapes in a really attractive way, so that every woman will want to own such a dress. We need to hire five hundred seamstresses and buy 500 sewing machines, plus the material, plus the building, plus the chemicals for the treatment, and so forth. I want to open a “pank” to provide Daan and Isa with the advance they need. Will you subscribe (this replaces becoming a depositor in a bank)?
And what if I, Anthony Migchels the “panker”, am wrong, and Daan’s idea is no good, or the government will not let him use his chemicals, or the style of dress Isa designs just doesn’t sell? Well then, in that case, we as silent partners must share the loss with Daan and Isa. If you put up ƒ300 (gulden – post-euro) and the business fails, you are only entitled to claim half of what you subscribed. That is what makes this no longer usury. A banker would lay claim to the full debt obligation, and would have priority before Daan and Isa could get one tiny penning from liquidation. But under the new Dutch “panking system”, no such loan contract would be legal. “Pankers” and the subscribers the “panker” attracts will not be insured by the government. “Panker” and subscriber would be exposed to all the risk Daan and Isa are exposed to.
Then why would anyone ever become a subscriber to Anthony Migchels’ pank? Because everyone knows that, since the early 21st century, Migchels has been renowned as one of the most honest men in Holland, a man with good sense and an eye for a good deal, a man with a good heart who would not ask people to subscribe to his pank to fund a venture unless he was sure it would succeed. In other words, when you subscribe your money to a panking venture, you are putting your trust in the integrity of the panker to pick the right entrepreneur with the right idea in the right market at the right time, given all the factors that might affect the success or failure of such fashion design innovation.
So, is panking usury? You might look at the fact that the panker takes money from people with an understanding that he will return that much and more later on, if the venture of Daan and Isa succeeds. That looks like banking, and therefore like usury. But then again, notice that the panker and the subscribers are taking the same risk as Daan and Isa. Notice that in the event that the business fails and cannot pay the pank what was hoped, Anthony and Daan and Isa and the subscribers divide the loss among themselves. That is partnership, not usury. Under usury, the lenders must get completely paid before employees, or other creditors, get a penning.
Furthermore, it is not a percentage of the loan that is owed to the pank and the subscribers, but a return of the advance plus a share of the profits. And the venture’s successful outcome would involve the hard work, intelligence, and shrewdness of Anthony Migchels the panker (remember, a panker is one who creates the lending institution that replaces the usurious bank of today).
Now, in Islamic banking, riba (usury) is haram (sinful and prohibited), with no exceptions; however, partnerships are halal (acceptable and permitted). The pank, with Anthony Migchels as panker in this case (anyone can be a panker if they have the name and reputation that earns the confidence of subscribers to take the risk), calls the shots for who gets the money – for whom to partner with (in this case, partnering with Daan and Isa).
There is no riba or usury involved in repaying the amount of the advance (called “paying the principal” in the Bank-of-England/Rothschild system); so the big question is whether the extra money that Anthony and the subscribers get back is riba (or, in Christian eyes, usury), or whether it is shared profit or some other thing.
For example, the arrangement could be a joint venture (Musharakah, rather than a borrower–lender arrangement); or it could be set up as a work-and-earn-to-own arrangement, where the pank funds the business and its early operations, paying Daan and Isa fully for their contributions of entrepreneurship, management, know-how, and labor – enough for them to live on while the ownership of the business is sold to Daan and Isa in installments, using a pre-specified formula. The pank would take profit left over after paying Daan and Isa what is owed them, until the business – Daan en Isa Mooie Jurken – becomes completely owned by Daan and Isa.
The deal is this: The pank says, we will pay for starting the business you want and fund its early operations, paying Daan and Isa a fee for all of their contributions – including Isa’s original designs, and the worth of the chemical formula as purchased by the pank from Daan. The pank will take profits over that sum; half of the profits go to the pankers (Anthony and his subscribers – the subscribers replace the savers who put their money in time deposit accounts in the old Bank-of-England/Rothschild system). The point is that the pooling of money – so that good business ideas can be undertaken – can be done without usury, riba, or “charging interest”.
Whether theologians against usury, and Moslems against riba, give American populist social credit a “pass” on avoiding sin, the fact remains that the creation of a permanent money supply provided for free to every citizen; and the ending of money creation by banks; and the requirement that banks only lend money that savers entrust them to lend, will end the tendency and incentive for the financial system to deflate the quantity of money in circulation. That in itself will end deflationary depression, end the mounting indebtedness to lenders, end the waves of defaults and bankruptcies, end the transfer of real asset wealth from the borrowing class to the lending class. It will make businesses more profitable. It will allow businesses expanding and innovating from their own profits, to replace their borrowing from banks because money is not available to innovate without going to the usurers.
So, Anthony, can we agree that the Bank-of-England/Rothschild system leads to national ruin all the time – that it is an instrument of class warfare and piracy, of rich exploiting the helpless poor? And can we also agree that, with competitive “panking”, anyone can become a “panker” if he has a good reputation to attract subscribers (buyer beware! subscriber, be prudent, because we allow panks to fail)? If the panker cannot pick good enterprises to invest in, cannot properly evaluate factors that may affect supply and demand, and thus cannot select the right entrepreneur with the right venture – whether giving a retailer money to stock his shelves, or betting on a new invention – then no one will want to subscribe to his pank again. If he fails, he fails.
This would be highly competitive panking. A pank is only as good as the ventures it is investing in. The pank would allow little people to invest in something big – to receive gains that, today, only the rich can do.
Today, under the Bank-of-England/Rothschild system, there is no competitive banking. Interest rates are fixed. Everything is fixed. The game is rigged in favor of the lender and against the borrower. That will end.
But remember this: Companies that satisfy customers will never suffer a bad day because of macroeconomic deflation. There will be no deflation – no lapse in consumer purchasing power. Firms will be as successful as the businessman dreamed when he started his business – if he is a good businessman and entrepreneur. That means we will be back in a land of opportunity.
There will be no more macroeconomics. No monetary policy. No tending to the national economy. There will be no national interest rate, no international money markets. I have not gotten into the other phase of American Populist Social Credit: the elimination of corporations, and a return to having all businesses as either single proprietorships (single owner) or partnerships – with full liability for owners.
There is no democracy unless the people – all of the people equally – are the ones who spend all new money into circulation. The Rothschilds and Rockefellers, owning Goldman Sachs and JPMorgan Chase, should not be creating money and lending it to people at interest to give the economy its money supply. Nor should politicians have that power to create money and spend it into circulation, because that power would lead to corruption and a totalitarian state at least as bad as what we have now.
Let the people have all new money, and let them be free to pool their money and jointly undertake big things, if they want to – with a populist banking system (or “panking system”). The populist banks will not be able to create money; they will just be places where good opportunity spotters will find the best entrepreneurs to provide money to. “Advances”, or “investment money”, or “partnership funds”, can replace the term “loans”.
Let us have a system that Moslems and Christians against riba and usury can participate in, with a clear conscience that no sin is being committed against God and the ways of righteousness as found in the Holy Books.
But most of all, let us do away with the evil lies and theft of the Bank-of-England/Rothschild system, that plunders the people who create the wealth from the world that God has provided us all to enjoy.
Not banks, not government, but people (households) hold sovereign sway over money and purchasing power. The consumer, not corporations or Congress, will be the first spender of all new money.
Populist Social Credit or North American Basic Income Guarantee – Dick Eastman reply to M. Oliver Heydorn
February 17, 2015
Introducing… the greenbit
The Money Power has been stronger than the people. Populist Social Credit can change that very quickly, in the simplest and safest way. We just need the new system, a better way; there is no need for revenge. We just take the money monopoly out of the wrong hands, and adopt the policy that all money is provided by government through a household dividend of no-cost autonomous (debt-free) money, as a public utility.
You have heard of the greenback. I submit that the best greenback money for the twenty-first century is the “electronic greenback” or “greenbit” dollar – provided you do not confuse it with the the scam “bitcoin” or the phony “Green Party” which promotes an anti-industrial revolution in the name of saving the world from “climate change” and backed by scientific fraud. The greenbit is an electronic greenback, and nothing else – “thin-air” money, created permanent deposits – authorized by Congress in exercising its Constitutional power to regulate the value of money through a very simple and short Social Credit Act. Such an act would end all money creation by banks (the money multiplier effect via fractional reserve lending). Banks will only lend exactly the funds submitted. The greenbit dollar is a new concept; I wish to specify that each electronic-entry greenbit dollar can have its own “serial number”, so that the history of spending of each greenbit dollar as it transfers from account to account in market transactions can be traced. But all the consumers know is that they get greenbit dollars every month or quarter, as a national dividend. “Greenbit” money is a name derived from “greenback” – autonomous, ex nihilo (“thin-air”) national legal tender, in the form of a permanent “deposit” amount.
The Populist Social Credit dividend is NOT a guaranteed income; it is not a negative income tax; it is not a substitute for any existing welfare or social security benefit. It has nothing to do with those things. Rather, it is the government’s way to best provide the economy with the infrastructure of permanent money needed to generate market activity for the good of all. The dividend is given to people, with no strings attached. They can spend it on consumer goods; they can give it to poor relatives or charities; they can loan it to a bank for interest, so that the bank can lend it to entrepreneurs and home buyers for a slightly higher interest rate – in a loanable funds market that is very competitive, with many small, state-chartered banks and no big regional or national banks.
You get the idea.
It’s time to teach the public.
Have car. Will travel. I expound on the populist social credit idea for free, for any group of five or more in Yakima, Seattle, Portland, or Spokane. The talk can be recorded and used freely by anyone. I will give a talk and answer all questions, and hear all comments. I will also debate the superiority of populist social credit over alternative proposals, against any monetary reformer, economist, politician, student, libertarian, progressive, or conservative in those cities, if invited to do so.
North American Basic Income Guarantee is a monster disguised as populist reform. The Douglas Social Crediters may be fooled, but I am not. –Dick Eastman
North American Basic Income Guarantee and Anglo-Canadian Douglas Social Credit join forces – to rob American economic sovereignty?
Does the “North American Basic Income Guarantee” idea favor the US giving up its monetary sovereignty in exchange for a small check every so often? There will be a conference discussing both Douglas Social Credit (A + B, compensated price rebate, and all that) and the NABIG proposal, at the Fourteenth Annual North American Basic Income Guarantee Congress, from Thursday, February 26 – Sunday, March 1, 2015 in New York City. Both of these schools of reform – Douglas Social Credit and Basic Income Guarantee – have gotten a big boost from the recent (January 26, 2015) Federal Court of Appeal ruling that the Bank of Canada must fulfill its charter by providing national treasury money. I am not linked to any of these people in any way, except for occasional arguments with D.S.C. folks over whether accountancy problems with depreciation allowance, or the burden of interest drain, causes the shortage of purchasing power behind economic depressions; that, and whether a retailer rebate system is needed on top of the Douglas social credit dividend.
My advice: Be careful, Douglas Social Crediters. The NABIG crowd’s proposals are offering you something like a social credit dividend, but look what they are trying to take from us: national economic sovereignty. [Another caveat to Social Crediters: many of the NABIG/USBIG bigwigs are confirmed socialists, and obviously do not seek to break the Rothschild system money monopoly. –Abel Danger]
They have the money, the conferences, the media recognition. NABIG is a globalist Trojan horse to end national money sovereignty in exchange for a small monthly check from an international private bank. [“Federal Reserve Notes” are already a de facto international currency. The USA needs more national monetary sovereignty, not less. –Abel Danger]
M. Oliver Heydorn has appeared on HenryMakow.com – known for its promotion of the ideas of Anthony Migchels – and on the website AbelDanger.net, which has been advocating Social Credit of one kind or another for some time. I know little of M. Oliver Heydorn and his views; you have some YouTube videos and the article below. My initial reservation about this fellow is his looking for a “North American Basic Income Guarantee”, rather than American Social Credit and Canadian Social Credit forever separate and happy. That indicates to me that Heydorn wants to do away with American national monetary sovereignty. It is not Populist Social Credit (PSC) that is being invited to chat at the NYC conference; it is Douglas Social Credit (DSC) and North American Basic Income Guarantee (NABIG) that are going to get intimate in Manhattan and Brooklyn – working that compensated price rebate and problems with “accountancy” in with the elimination of national money with a North American basic income – with the “amero” as the intended new currency?
[Dick Eastman update (March 30, 2015): Mr. Heydorn did not, as I first thought, endorse Guaranteed Basic Income – in fact, he pointed out differences between the two and clearly put himself on the side of the Douglas social credit dividend position. My criticisms directed against basic income guarantee, and my warnings to social crediters not to join ranks with the basic income guarantee, were misdirected if I aimed them at Mr. Heydorn. His statements pointing out the differences are, on the whole, correct, and he took the right side, as far as I can see. I offer him my retraction for any statements that incorrectly suggested that he endorsed the Guaranteed Basic Income model. As far as I know, Heydorn is a most competent exponent of the Douglas social credit idea, and his own way of presenting it is a good one.]
The NABIG crowd seem to have big money for conferences, and have invited the poor social crediters to get their support. All you have to do is say: 1) that the “B” gap causing depressions involves accounting methods not taking depreciation allowance into account; 2) that deflation is not the problem; 3) that interest is not the problem; and 4) that the social credit dividend should just be for filling a scientifically measurable gap between purchasing power and the total cost of producing and distributing goods. The DSC will eat out of your hand if you just grant them those favorite stupidities of theirs.
At any rate, here are the conference particulars:
The Fourteenth Annual North American Basic Income Guarantee Congress
Basic Income and Economic Citizenship
February 26 – March 1, 2015
Sheraton New York Times Square Hotel
811 Seventh Avenue at 53rd Street, New York, NY
Dr. M. OLIVER HEYDORN, A SPEAKER AT THE NABIG CONGRESS
NABIG SESSION 4: To Have and Have Not in the Twenty-First Century Economy
Michael Lewis, “Beyond the Deserving/Undeserving Dichotomy: Genetics, Poverty, and Social Welfare Policy”
Oliver Heydorn, “A National Dividend vs. A Basic Income – Similarities and Differences”
Karl Widerquist, “Institutional Aspects of the Piketty Observation and the Case for BIG”
Moderator: Troy Henderson
Dr. Heydorn and North American Basic Income Guarantee have no endorsement from me.
Here is Dr. Heydorn – with my comments.
THE DEFICIENCY OF CONSUMER PURCHASING POWER
by M. Oliver Heydorn, Ph.D.
published October 2014
Oliver Heydorn: The founder of Social Credit, C.H. Douglas, cited five main causes for this deficiency of consumer purchasing power in his booklet “The New and the Old Economics”. They were: profits, savings, the re-investment of savings, deflationary policies on the part of banks, and the difference in circuit velocity between cost creation and price liquidation. This last cause, which is the main cause, is also known as the A+B theorem. Basically, the idea is that modern industrial production involves overhead costs, and these overhead costs (because of the way in which real capital – machines and equipment – is financed and its costs accounted for) build up costs without distributing an equivalent volume of income (in the form of salaries, wages, and dividends).
Dick Eastman: The American people are deficient in purchasing power and aggregate demand because the nation’s entire money supply is borrowed. It is borrowed with business loans, with mortgage loans, with government borrowing. The money supply gives amount A in loans to the borrowing households, businesses, and government who spend it into circulation; but with the loan comes the obligation to pay back principal equal to the loan, plus compound interest which often exceeds the amount of the loan. But the only money to pay back that principal and interest is the money floated by the loans. Therefore, there have to be unsold products, because the firm has to pay interest on the business loan, and what is paid as interest cannot be paid as wages or profits.
Douglas was wrong. He spotted the shortage of purchasing power, as had many economists and bankers before him – all of the economists who have explained depressions as caused by under-consumption, by over-saving, by deflation created by too much debt burden. Douglas gave us the idea and the name for the social credit dividend, but he confused everyone with the bogus explanation for the lack of purchasing power.
Heydorn: Apart from any question of theory, the claim that there is a gap between consumer prices and consumer incomes is one that can be (easily) verified by consulting the economic statistics of any developed country.
Eastman: There is no gap to measure, because the production took place in one economy with one money supply, and the subsequent purchases of finished products happen in a different economy in which there are fewer dollars in American consumers’ hands.
Douglas says the money gets held up in the business sector, because firms lock it away as depreciation allowance, rather than distributing the money to people who will go out and buy products. This is dead wrong. The business sector does distribute all of its income to wages, rent, profit, factor buying, taxes and, last but not least, payments of principal and interest on debt.
Yes, money does leave circulation to a place where it does not return. It goes offshore to bank accounts in the Cayman Islands, it sits idle as “excess cash reserves” in the biggest banks, and it is held by those who are said to “earn” that interest simply as cash balances – as money held as a speculative asset in their portfolio, in a speculative bet on deflation that will make the cash worth more. When the well-interconnected bankers hold large cash balances, they conspire as a class – as an “interest group” (interest in the sociological sense, not the economic sense) – to effect deflation. They do this by cutting their lending. The lenders (new bond buyers and bank-loan deposit-creators) can deflate the economy by agreeing to cut lending, by forcing a lowering of loans through lowering the Federal Reserve discount rate, and by calling loans.
All of that contracts the money supply – cuts the flow of money into people’s hands, thereby cutting consumption, cutting business sales and tax revenues, thereby decreasing wages and employment levels. But all of that originates in the financial sector and among the lending class – not in the household, business, or government sectors. Douglas, and Heydorn, have you barking up the wrong tree.
Heydorn: Take a look, for example, at these statistics from the Canadian and American economies in 2008.
In 2008, the GDP in the US was a little over $14 trillion, while total incomes that were earned (wages, dividends, and salaries) were a little over $8 trillion. This means that there was a gap of $5.9 trillion. In Canada in 2008, the GDP was $1.2 trillion, while total incomes were $770 billion. Thus, there was a gap of $436 billion. So we see that in these two countries, there was a disparity between consumer prices and consumer incomes, and it was significant – it was not small. Now, just a word of caution: I don’t believe that these statistics tell the whole story; I think the situation is more complex. So don’t take these figures as revealing the exact nature and size of the gap, because that would be somewhat misleading. The important thing is that, whatever its various causes, a significant gap exists.
Eastman: This is all wrong, and deliberately confused. First of all, the Gross Domestic Product (GDP) measures, within national boundaries, production that was either sold at given prices, or else was counted as unsold inventory at the end of the tax year (net change of inventory) – unsold goods priced at cost of production. The National Income is the wages, profits, rents, financing (interest plus principal), and taxes, that have been paid out during the period in which production took place.
GDP is always more than National Income; and the difference, or gap, between the two amounts is the capital Consumption Allowance. But the capital consumption allowance is not money payment to a factor of production or to a holding account reserved to buy new machines when they wear out. Rather, the Consumption Allowance is the estimated value of capital goods (machines, factories) used up or worn out in production, plus the value of accidental damage to capital goods. No money is set aside at all.
The difference between Gross Domestic Product and National Income is not in money. The difference between them is in recognition that, in order to make the product, capital stock was used up and worn out to a degree that must be observed in the accounting books. It is a way of noting that because of a year of production, all machines that wear out will be worth less at the end of the year of production than they were worth at the beginning of that year. The depreciation is marked in the books as a cost of production, but no actual money is set aside by the firm as a consequence. The wear of the machines shows up in price, to cover the cost as a depreciation allowance, but no money is tied up.
Yes, the firm will call the depreciation a cost, and they will attempt to cover that cost in their pricing: the entrepreneurial decision to produce always takes the fact of machines wearing out into consideration. But this does not affect inflation or deflation as interest drain does.
Here is why the purchasing power gap does not result from depreciation allowance:
A firm buys a machine. The machine will wear out at an unknown changeable rate, but the managers of the firm will decide to depreciate it evenly, say 1/10th of its value over ten years.
The fact of the machine wearing out, and the decision to depreciate it on the books over ten years, will affect pricing. The depreciation is a cost of operating; it will be figured into all production decisions and taken into account in all pricing decisions. There will be more cost and less profit because machines wear out, and because the balance sheet shows depreciation over the year.
But the fact is that, eventually, the worn-out machine will be replaced by a new machine.
No company has a shoebox under the CEO’s desk where thousand-dollar bills of “depreciation allowance” disbursements are stored idle until it is time to buy a replacement for a completely worn-out machine. No money is put aside at all. The strategic decision to buy a new machine is made at the time it is needed; meanwhile, all funds are distributed fully to maximize profit.
Machines wear out, but that does not stop the flow of any funds from distribution. The depreciation is just recorded so that the business owner(s) will not make the mistake of thinking that everything left over after wages, rent, utilities, factor costs, interest, and taxes are paid, will be profit – because he is “poorer in machines” than he was at the beginning of the year.
Douglas did not get it. Heydorn does not get it. The insufficiency of purchasing power in the hands of the public to buy the goods produced comes from interest payments to the lenders (to the financial sector and international sector) – money that is not returned, because the lenders find it more profitable to hoard it and allow deflation in the real economy to increase the value of their money stash.
Douglas and Heydorn are saying that purchasing power falling short causes depressions by an amount determined by the value of machines that has fallen due to wear and tear, or by the cost accounting allowance for such “depreciation”. They are wrong.
Heydorn: So, there is an imbalance that lies at the root of the modern economy, and this imbalance must be consistently overcome or compensated to some substantial degree because, if it isn’t, the economy would enter into a downward recessionary spiral and would eventually collapse. If additional purchasing power is not drawn on from some source to equate the prices of existing consumer goods with available incomes, businesses will scale down production, more people will be unemployed, and this will decrease available incomes even further, thus intensifying the original problem. Additional effective purchasing power that is not derived from existing production must be provided from some source. There are essentially two ways of providing the additional purchasing power. There are the conventional methods, the palliative measures that are employed by economies the world over. And then, there are the Social Credit methods.
Eastman: He hasn’t told you where the shortage of purchasing power is coming from; he just confused you with the difference between GDP and National Income, which has nothing to do with the disbursal of money to buy goods. Everyone expects to pay prices that will compensate the producer for the wearing out of his machinery in production. That is no cause of deflationary spirals!
Now he is talking about the need for “additional purchasing power” – to do what? To “equate the prices of existing consumer goods with available incomes”.
Yes, people need more money given to them directly so they can buy more – and so businesses can actually stay in business, and keep up their demand for labor in the labor market, and pay all their creditors, and even get ahead.
But what is this noise about “equating” prices of goods with incomes? What bean counter is going to measure those two numbers, and what economist is going to state what infusion of new money is going to “equate” the two measures? He certainly can’t take GDP and National Income – those figures come after the year is over. Nor is there any way of estimating them.
So, after wrongly identifying depreciation as the source of the problem of deflationary depressions, and offering the “gap” between GDP and National Income as, more or less, the indicator of how much new purchasing power needs to be added, he tells us new purchasing power can come from the old “conventional methods” or from the new “Social Credit methods”.
Now what do you suppose he means by “Social Credit methods”?
Heydorn: The conventional methods rely mostly on the creation of new money in the form of debt to fill the gap. Incomes derived from new production, especially capital production and production for export, and incomes or purchasing power derived from additional government expenditure, and purchasing power derived from consumer loans (credit cards, lines of credit, car loans, mortgages, etc.) help to offset the consumer prices that are currently on the market, but only at the cost of increasing public, corporate, and consumer debt.
Eastman: The methods of increasing consumption expenditure are two. The first is the monetary policy route of increasing home refinancing and second mortgages, either by bank policy or by reducing the discount rate that allows banks to lend closer to their legal lending limits. The second is the “fiscal policy” route of either lowering taxes, which is never done, or of government increasing expenditures and transfers, usually paid for by more government borrowing. Commercial credit – when businesses extend credit to customers – doesn’t count, because those businesses tighten their belts even as their consumers can loosen theirs; commercial credit does not increase money supply for the whole economy. Businesses don’t create money when they extend credit to customers buying on the installment plan.
Heydorn is right that the “conventional” ways of addressing insufficient public buying power all lead to increased debt.
Heydorn: The problem with relying on debt-money to fill the gap is that it does not liquidate the outstanding consumer costs; it merely transfers the obligation to pay them to a future point in time. But that future point in time will also have its own gap costs to meet. Since consumer incomes in the future will be eroded by the additional debt servicing charges, they will be even less adequate to meet the recurring gap. The increased lack of liquidity translates into an even greater need to borrow, in order to meet the needs of the moment. So what ends up happening is this: debts are paid off at a slower rate than new debts are contracted. This leads to an ever-increasing mountain of debt which is, in the aggregate, unpayable.
Eastman: Since when is the goal to “liquidate outstanding consumer costs”? What is an “outstanding consumer cost”? The problem with “debt-money” – which Heydorn does not define! – is that people not only have to pay for the good; they also have to, separately, pay for the money with which to transact the purchase. The problem is that the money supply is all borrowed. It’s borrowed by the consumer. It’s borrowed by the producer. It’s borrowed by the government. We can earn dollars rather than borrow them, but the dollars we earn exist only because someone is in debt to pay back to a lender that dollar plus interest. That is the problem. The solution is a permanent money supply that does not have to go back to thin-air or drag from us interest that the usurer will hold as a speculative investment, betting on deflation.
Of course, there is truth in the claim that borrowing money to increase spending (or as Keynesians might put it, to increase aggregate demand) does result in a greater burden tomorrow.
Keynes imagined that government spending financed by deficits in the “bust” portion of a “boom and bust” business trade cycle, would be recouped by the increased tax revenues brought in during the boom. Keynes even recommended increasing taxes in a boom, to be sure to get the money to pay the debt incurred in stimulus and “pump priming” to fill the “recessionary gap” during the downturn. We can all agree that it has never worked out that way.
Heydorn: Under the current system, the richer a country becomes, the more indebted it must be; it is penalized, with a millstone of debt, for making use of its real credit. The United States, constituting as it does the richest country in the world in real terms, is also the most indebted. The total debt outstanding in the United States (public, corporate, and personal) is somewhere in the neighbourhood of $61.6 trillion, or roughly $193,000 per citizen, and is steadily increasing.
Eastman: I’m not going to waste time answering the notion that a country is richer when it is deeper in debt. I’d rather explain what is really going on.
When there is no dot-com industry in existence, and the financial/speculator elites want get the dot-com market created and then own it, they start with the creating. To create the dot-coms, they begin lending money in the field. They instruct their mass media assets to hype the coming revolution. They start giving grants for research. They fund entrepreneurs who will buy the brains to get the boom going, with plenty of loans flooding in. Easy money is the rule. Dot-com companies abound. All are happy. The future looks glorious to all of them.
And then, after all of the brains have done their work, after all of the entrepreneurs have busted their butts to be the Ford or Edison of dot-com, the bankers have completed their act of wealth creation. Now they take possession of it, by deliberately contracting the amount of money in circulation. The lending stops. Loans are called. Firms are forced to sell or to merge to stay afloat. I forgot to mention that as the boom goes on, the interest rates are raised – not really because it is harder for the banks to find the money to lend, but because they want their ongoing cut of the profits: they do not want borrowing entrepreneurs to make a ton of money and then self-finance their own expansion. The higher and higher interest rates prevent this entrepreneurial self-financing from happening.
Now, back to what I was saying: having financed the development of the firms, software, trademarks, etc., the lenders then proceed to ruin the people who built it all, by cutting the money in circulation, so that the borrowers – who borrowed at high interest rates to strike fast and hard in the boom – are now faced with customers lacking the money to buy as before. Firms sell off and hostile takeovers hit them, because the debt situation makes it impossible for firms to defend themselves. And soon the bankers own what they lent money to the entrepreneurs to build.
And what has happened to the Money Power rich? They lent the money, collected the interest, and then when the borrowers could no longer pay the interest, simply had their corporations buy up the defaulting and bankrupted companies – all as planned from the first.
Heydorn says, “Under the current system, the richer a country becomes, the more indebted it must be.” That is wrong. It’s not about a country becoming richer or less rich. It’s about the transfer of wealth from the producers of wealth (entrepreneurs, engineers, managers, skilled working people) to the monopolists of money and credit, who produce nothing – but, by virtue of controlling the flow of tokens in the token-mediated market economy, who can manipulate people through easy money followed by tight money, through interest rate alterations, etc., until the financiers own everything.
Heydorn: The U.S. National Debt alone is around $17.7 trillion, or 55,000 USD per citizen, and is likewise increasing (this figure represented a federal debt-to-GDP ratio of 105%). The money supply, on the other hand, is only about $11.4 trillion (M2). Indeed, if all of the money in circulation were used to pay off as many of these debts as possible at any one point in time, the U.S. would have no money supply whatsoever, yet massive quantities of debt would still remain.
Eastman: It is meaningless to compare the debt to the money supply. The money supply is a thing of the moment; the debt accumulates over time. In the UK, there are consul bonds that never stop paying coupon interest. The important thing to look at is flows of money: the flow of money into the real economy of households, businesses, and public goods; and the money that flows out of it. The problem is that if every dollar that flows in comes with a contingent obligation to pay the same amount back out again, and with compound interest required to be paid out too, then there must be default, bankruptcy, and a great transfer of collateral to the creditors. Debt matters; and the mountain of it represents a gigantic drain of purchasing power, especially when the debt collector would rather take your mortgaged house and turn it into his absentee landlord rental property, and take your business and add its assets to his family-trust-owned corporation, and add your government’s privatized utilities to the trust’s portfolio as well.
Stop trying to match up numbers of this gap. The problem is:
1) that all money in the economy is borrowed, with an obligation to pay back a) all the borrowed money supply, plus b) interest on the money borrowed;
2) that the lenders do not return the interest they take, and put it back into the economy;
3) that all “remedies” being considered are only those remedies devised by the lending class.
Government money is spent to fund a new asset that the lending class can own – high-speed rail or new pipelines, for example – as if the lenders don’t have money as spare change for building those things!
Three of my diagrams show their racket:
The nation does not need this system, in which the masters create the money and decide who gets to spend it into circulation, in return for a cut called interest.
Heydorn: The fundamental problem with the present financial and economic orders is the chronic lack of consumer buying power. The macroeconomic gap between prices and incomes, which is primarily caused by how capital goods (machines and equipment) are financed, and how their costs are then accounted for under existing conventions, is THE issue which needs to be addressed.
Eastman: No, the lack of buying power is not the fundamental problem. There is always a lack of buying power from almost everyone’s perspective – except the saint or ascetic who seeks to annihilate his desires, but even they do not like to see those around them starving and sick. The problem is a borrowed money supply, rather than a publicly provided one. The problem is a privately controlled money supply that is manipulated by the owners of the money supply to maximize their takeover of the wealth of the entire planet. We do not have to fill in the gap between GDP and National Income with an amount equal to the depreciation allowance for machines and equipment, as Douglas suggested and as M. Oliver Heydorn suggests above.
Instead of filling the gap, like putting in a false tooth, we need to overturn the way all new money is introduced into the economy. We need to separate banks from money creation. The national bank – like the Bank of Canada was designed to do, as upheld recently by Canada’s Federal Court of Appeal – is to create national legal tender money. The question then becomes, how should new money be introduced into the economy? By the Canadian Parliament or the US Congress voting for big government projects that give fat contracts to the corporations owned by the family trusts of the big banking families? Or by the big bank lending to whom it chooses to favor with big fat loans?
The populist says neither of those two alternatives is the right and safe way to proceed. Both of those roads lead to corruption and the enslavement of the common man. Let’s have none of that. All new money of a nation should originate in the hands of each citizen of the nation, to spend as he sees fit, or to save, or to give away. Only in that way is there true democracy in both economic and political power. The power to create new money and spend it into circulation is too great to give to any one group of banks or to government; it must be distributed evenly to everyone. Money is a public service, a common utility – the infrastructure of society’s arrangements for conducting a market economy. It is necessary infrastructure. It is not a commodity. It is a medium through which transactions are conducted. No one should have control of the tokens that control everyone’s behavior.
In money creation and the distribution of new money, we must all be equal.
Heydorn: In the main, the present system deals with the gap by filling it with additional debt-money from the private banking system in the form of public, corporate, and consumer debts.
From a Social Credit perspective, saving the taxpayer large sums of money and/or preserving the country from an increase in public indebtedness via the issuance of interest-free money from the Bank of Canada is certainly a good thing. However, such a reform of the system does not address the fundamental problem with the present financial and economic orders: the chronic lack of consumer buying power.
A Social Credit system would fill the gap with ‘debt-free’ money and distribute it to consumers, directly through a National Dividend, and indirectly through a National Discount on retail prices. It is critical that the individual, the common consumer, be the prime beneficiary of any monetary reform, and that he be accorded full control of credit policy within the context of a properly functioning financial system.
Eastman: I say forget gaps. Forget measuring them. Forget conceptualizing them. We know the problem is an economy where all the money is borrowed. Heydorn wants to add debt-free money to fill the gap that shows itself in all debt-money economies. I say get rid of all debt money. The money in the economy should be permanent. Banks should have nothing to do with money creation. Neither Douglas nor Heydorn wants to go there, but there is where America must be to beat debt slavery once and for all. All money should be created by government and distributed exclusively through the Social Credit Dividend to the household sector.
The function of banks is as a medium between savers and borrowers: the savers turn their money over to the bank, so the bank can lend it. The bank gets interest from the businessman or homebuyer; it pays interest – a smaller amount of interest – to the savers, for relinquishing control of their money to the bank for a while, so the bank can lend it.
Banks will be small, competitive, and state-chartered. There will be no need for a central bank. And as for “interest rates” in America, there will be none. Every bank will be allowed to offer what it wants for the use of savers’ savings, and lend at the rates it chooses in its competition with many other banks looking to serve the same entrepreneur customer. Very quickly, the Ivy League do-nothings will drop out of the banking business, because it will no longer be a racket for the care and fattening of an organized crime oligarchy. Bankers will be hard-working, sharp men who, like the entrepreneur, have exceptional knowledge of the community, the markets, and human character. They will be well placed to take the risks in finding men likely to carry through on the ventures they are looking to have financed.
Also, banks should share risks with borrowers, so that if the borrower fails and the anticipated returns are never realized, the banker will only be able to claim half of the principal. The bank must assume half the risk in the loan contract. The banker is responsible for granting the loan, just as the borrower is responsible for applying for it. The risk must be shared. That will ensure that banking will be a much different game, with a much different kind of man playing it, than we have today. I am talking about the American Populist Republic we can have if we want it.
And finally, there is no need for any National Discount on retail prices, that Douglas advocated and that Heydorn is pushing too. All that is needed is that consumers spend all new money into circulation. The Social Credit Dividend is enough to accomplish that. We do not need government giving rebates, or setting “just prices”, or compensating retailers for lowering prices to some level dictated by the government. That is as sure a road to destruction as socialism or the gold standard.
I have just found another Heydorn article – this one at Henry Makow’s website – in which he sings a much different tune. Here he is pointing to interest, rather than depreciation allowance, as one of the causes of a shortage of purchasing power.
Social Credit: A Simple Explanation
There is never enough money to buy what we produce. Social Credit addresses a fundamental flaw in our economic system: the gap between a plethora of products and the lack of money in purchasers’ hands.
by Oliver Heydorn Ph.D. (henrymakow.com)
Heydorn: Social Credit refers to the ideas of the brilliant Anglo-Scottish engineer, Major Clifford Hugh Douglas (1879-1952). Douglas identified what is wrong with the industrial economy and also explained how to fix it. The core problem is that there is never enough money to buy what we produce. In essence, people don’t earn enough to afford the plethora of available consumer goods and services. This gap is caused by many factors. The charging of interest on loans is only one of them. Savings and the re-investment of savings are two others.
Eastman: The “discovery” of the shortage of purchasing power making for “bad times” is very old – older than the formal study of economics. Under-consumption theories of depressions precede Western civilization. Douglas didn’t really discover any gap; in his explanation for the gap he found, he blamed it on “accountancy” in how we figure depreciation (capital consumption allowance). Heydorn, like my well-meaning friend Anthony Migchels, now rightly mentions interest being involved; but he says that “charging interest on loans” is one of the causes of the gap. That is not exactly right.
The real problem is that: 1) our money supply is all borrowed, with interest charges due; 2) banks have the ability to create and destroy money supply – instead of just borrowing, from savers, money that already exists, and lending it to businessmen, as they should; 3) bankers lend money that the banking system creates, and charge interest; but when they collect the interest earnings, they don’t go out and spend them on consumer goods, or lend them. Instead, they withhold them from circulation one way or another – “neither spent nor lent” – causing a deflationary depression, from which they profit. (Lenders can profit in a deflation at the expense of debtors, just as borrowers can profit in an inflation at the expense of creditors.)
Heydorn: The economy must compensate for this recurring gap between prices and incomes. Since most of the money supply is created out of nothing by the banks, the present financial system fills the gap by relying on governments, firms, and consumers to borrow additional money into existence so that the level of consumer buying power can be increased. As a society, we are always mortgaging our future earnings in order to get enough purchasing power so that we can pay present prices in full. Whenever we fail to borrow enough money, the economy stalls, and the government may even start a war to reboot it. To the extent that we succeed in bridging the gap, we contribute to the building up of a mountain of debt that can never be paid off.
Eastman: Dr. Heydorn has departed from Douglas here, and is coming over to populist territory – although I would not say that the banks are “relying on governments, firms, and consumers” to fill the gap. Banks do not want the deflationary gap filled; they profit from the deflation. Remember, banks are in the business of lending money, and the interest rate (the real interest rate) is the price of their product. A rise in the real interest rate, due to deflation, is to the creditors’ advantage. Right now, the nominal interest rates are not historically high – some rates (the federal funds rate, the discount rate) are near zero – but that is because there is deflation. With deflation, the real interest rate is much higher than the nominal interest rate. Real rates are very high now, because dollars to pay back loans will be even dearer to come by through honest work tomorrow than they are today.
Dr. Heydorn has put it very well when he says we are always mortgaging our future earnings to get more purchasing power to address present effects of deflation. Of course, it is not really “we” who are doing that – it’s the oligarchs who are squeezing us, and who pay politicians to use such harmful remedies. The problem is that we do not have the money infrastructure that government should provide, in fulfillment of its true and constitutional function.
Heydorn: Filling the gap with debt-money is also inflationary, wasteful, and puts the whole society on a production–consumption treadmill. It is the prime cause behind social tensions, environmental damage, and international conflict. All of this dysfunction is tolerated because the banks profit from it. Compensating for the gap transfers wealth and power from the common consumers to the owners of the financial system.
Eastman: Providing new money in a deflation does not raise prices – except maybe in the shortest run, before producers can hire more people and buy more supplies to increase output. Having money from the present system is not the main problem. The main problem is when they call back all that money because it was borrowed, and call out interest money besides. There is nothing wrong with a production–consumption treadmill; that is how human beings provide for themselves in any society. Dr. Heydorn is right that the present system is here because the biggest banks profit from it.
The only gap that matters is the gap created by a nation having to pay interest to obtain a money supply that they could have had their government print up and distribute for free. And of course that is worsened by having them charge interest on that borrowed money supply.
Inflation is not a problem – not when everyone is so far in debt because of a fraudulent system rigged to force deflation on debtors.
The bankers are not compensating for the gap; they are deflating the currency to increase the value (command over goods and labor) of each dollar they are owed. They love the gap. They designed the gap. They owe their fortunes to the gap.
Heydorn: Douglas proposed that instead of filling the gap with debt-money, the gap could and should be filled with debt-free money. This money would be created by an organ of the state, a National Credit Office, and distributed to consumers. Some of it would be issued indirectly in the form of a National Discount on all retail prices, while another portion would be issued directly in the form of a National Dividend.
Eastman: National Dividend is good. National Discount rebate scheme is bad.
Heydorn: Since the productive capacity of the modern, industrial economy is enormous, an honest representation of our productive power would allow us to enjoy an abundance of beneficial goods and services, alongside increasing leisure. Our economies could become socially equitable, environmentally sustainable, and internationally concordant.
Eastman: Dr. Heydorn overlooks the fact that under the system of deflationary depression, American industry and other productive capacity has been eviscerated. The interest taken from the people has been spent in China (the dollar is an international reserve currency, remember), on industrialization over there; that foreign industry provides us with almost all of our products now, with very little made here, domestically. The effect has been devastating.
So the productive capacity here is not enormous; but if we are ever to get productive capacity back, it will only be done with money put in the hands of Americans, so they can buy from one another, and so there is ample money for new business start-ups and ample domestic demand to make them prosper. That is what the populist republic looks at when it is providing money to each person; it does not bother about measuring a gap and filling it. Forget about all that. Provide money sufficient to move all production and enterprise that can be moved. Inflation? Not a big worry when there is less lending going on because more firms can finance their operations from their own earnings.
I should add this: the Austrian School “mal-investment” theory of depressions is wrong. Inflation does not cause economic depressions. Interest drain explains why booms collapse – not mal-investment from distorted market signals and so on.
Heydorn: Unlike some other monetary reform proposals, Social Credit does not advocate the nationalization of the banks. It is completely opposed to any scheme that would see us jump from the frying pan of a self-serving private system, into the fire of a complete state monopoly over money and its issuance. The latter would be a fine basis for the introduction of a totalitarian society. Social Crediters, by contrast, stand for the decentralization of economic and political power in favour of the individual. Social Credit’s proposal for an honest monetary system is not socialist but rather anti-socialist. It is completely compatible with a free enterprise economy (incorporating free markets, private property, individual initiative, and the profit motive).
Eastman: Well said. On this we agree.
Here is more Dr. Heydorn:
The Case to “Reinstate” the Bank of Canada
Posted on February 2, 2015 by M. Oliver Heydorn
There is a very interesting legal case that is playing out in Canada at the moment. William Krehm, Anne Emmett, and COMER (the Committee on Monetary and Economic Reform: http://www.comer.org/) filed a lawsuit on December 12th, 2011 in Federal Court, to try to force a restoration of the Bank of Canada to its mandated purposes. In essence, they want the Bank of Canada to provide interest-free loans to the federal, provincial, and municipal governments, as provided for in the Bank of Canada Act.
This money would be used to finance public expenditures whenever there is a budgetary deficit. Apparently, the federal government used to borrow interest-free (to at least some extent) from the Bank of Canada up until 1974. At present, governments borrow all of the necessary money (apart from any bonds they may sell to the public) from private banks at the going rate of interest. Canadians are economically burdened with the resultant debt-servicing charges because the Bank of Canada does not make use of its prerogatives in the interests of the Canadian public. The case is being prosecuted by Rocco Galati, who is widely considered to be Canada’s top constitutional lawyer.
The nature of the lawsuit has been explained on the Press for Truth website in the following terms:
TWO CANADIANS AND A CANADIAN ECONOMIC THINK TANK CONFRONT THE GLOBAL FINANCIAL POWERS IN THE CANADIAN FEDERAL COURT. THE CANADIANS PLEAD FOR DECLARATIONS THAT WOULD RESTORE THE USE OF THE BANK OF CANADA FOR THE BENEFIT OF CANADIANS AND REMOVE IT FROM THE CONTROL OF INTERNATIONAL PRIVATE ENTITIES WHOSE INTERESTS AND DIRECTIVES ARE PLACED ABOVE THE INTEREST OF CANADIANS AND THE PRIMACY OF THE CONSTITUTION OF CANADA.
Canadian constitutional lawyer Rocco Galati, on behalf of Canadians William Krehm, Ann Emmett, and COMER (Committee for Monetary and Economic Reform) on December 12th, 2011 filed an action in Federal Court, to restore the use of the Bank of Canada to its original purpose, by exercising its public statutory duty and responsibility. That purpose includes making interest-free loans to municipal/provincial/federal governments for “human capital” expenditures (education, health, other social services) and/or infrastructure expenditures.The action also constitutionally challenges the government’s fallacious accounting methods in its tabling of the budget by not calculating nor revealing the true and total revenues of the nation before transferring back “tax credits” to corporations and other taxpayers. The Plaintiffs state that, since 1974, there has been a gradual but sure slide into the reality that the Bank of Canada and Canada’s monetary and financial policy are dictated by private foreign banks and financial interests, contrary to the Bank of Canada Act.
The Plaintiffs state that the Bank for International Settlements (BIS), the Financial Stability Forum (FSF), and the International Monetary Fund (IMF) were all created with the cognizant intent of keeping poorer nations in their place, which has now expanded to all nations, in that these financial institutions largely succeed in overriding governments and constitutional orders in countries such as Canada, over which they exert financial control. The Plaintiffs state that the meetings of the BIS and Financial Stability Board (FSB, successor of FSF), their minutes, their discussions and deliberations are secret and not available nor accountable to Parliament, the executive, nor the Canadian public, notwithstanding that the Bank of Canada policies directly emanate from these meetings. These organizations are essentially private, foreign entities controlling Canada’s banking system and socio-economic policies.
The Plaintiffs state that the defendants (officials) are unwittingly and/or wittingly, in varying degrees, knowledge, and intent, engaged in a conspiracy, along with the BIS, FSB, and IMF, to render impotent the Bank of Canada Act as well as Canadian sovereignty over financial, monetary, and socio-economic policy, and bypass the sovereign rule of Canada through its Parliament by means of banking and financial systems.
On the 26th of January, 2015, the latest appeal on behalf of the Crown to have the case dismissed was rejected by three judges in Federal Court in Toronto. The Federal government now has 60 days to appeal the decision to the Supreme Court. Cf. http://pressfortruth.ca/top-stories/update-bank-canada-vs-comer/. Interestingly enough, both the case itself and the various developments that have occurred are not being covered at all by the mainstream media. While Mr. Galati’s other cases have regularly received wall-to-wall coverage across the country, this particular case, which he believes is probably his most important case to date, has so far been ignored. When questioned about this, Mr. Galati said that he has a firm basis for believing that the Canadian government has requested or ordered that the mainstream media not cover the case (he could not divulge his sources), and that, in his opinion, the government does control the media to a certain extent and on certain limited issues. He also added that he does not believe that we in Canada are living in a democracy. In fact, as far back as 1999, he has been on record as claiming that we have entered a “quiet dictatorship”.
As far as its merits are concerned, Mr. Galati said that the case is on solid legal and constitutional grounds, and his clients should win. Whether they will win or not is another question. As Mr. Galati has acknowledged: “Not all meritorious cases in our judicial system win.”
From a Social Credit perspective, saving the taxpayer large sums of money and/or preserving the country from an increase in public indebtedness via the issuance of interest-free money from the Bank of Canada is certainly a good thing. However, such a reform of the system does not address the fundamental problem with the present financial and economic orders: the chronic lack of consumer buying power. The macroeconomic gap between prices and incomes, which is primarily caused by how real capital (machines and equipment) are financed and how their costs are then accounted for under existing conventions, is THE issue which needs to be addressed. In the main, the present system deals with the gap by filling it with additional debt-money from the private banking system in the form of public, corporate, and consumer debts. In lieu of these palliatives, a Social Credit system would fill the gap with “debt-free” money and distribute it to consumers, directly through a National Dividend, and indirectly through a National Discount on retail prices. It is critical that the individual, the common consumer, be the prime beneficiary of any monetary reform, and that he be accorded full control of credit policy within the context of a properly functioning financial system.
In connection with this particular lawsuit, and as a further clarification of the point just made, I should also mention that granting the government the right to fill the gap according to its policy objectives (i.e., employing people to work on public production), or, more broadly, granting it or the state the sole right to control the whole money supply, is thoroughly incompatible with Social Credit’s underlying social and political philosophy. Institutions exist to serve the interests of individuals, not the other way around: that is, individual consumers must control financial policy, not the government, the state, or the private banks. There is no point in “restoring the right to create and issue money to the state” if the state is then going to control the purposes for which producer and consumer credit are to be issued. This is the great trap of which certain monetary reformers, who are rightly concerned about the hegemony of private banking, are blissfully unaware. If, God forbid, such reformers get their way, and the state were to obtain total monopoly control over the money supply, I think they will find to their horror that the same people who levy a great deal of control over the private and partially decentralized monetary system will be in complete control of the state system.
Monopoly is the name of the game; let us not be “useful idiots”.
Those individuals who believe that the main problem with the current financial system and economic regime consists in the mere fact that the private banks create the bulk of the money supply ex nihilo and then charge interest on the loans that they issue, would do well to carefully read the following blog posts which explain the differences between this view and the unique Social Credit approach to monetary reform:
 Douglas often criticized the practice of relying on borrowings from private banks, at the going market rate of interest, in order to finance government operations. Cf., for example, C.H. Douglas, Social Credit, rev. ed. (Gordon Press, New York: 1973), 136-139:
The National Debt rose between August 1914 and December 1919 from about six hundred and sixty millions sterling, to about seven thousand seven hundred millions sterling. And this rise represents, on the whole, the expenditure over that period which it was deemed impracticable to recover in current taxation. That is to say, if we take the average taxation for supply purposes over that period 1914-1918, as being about three hundred millions per annum, the amount paid by the public as consumer for the goods and services supplied to it for war purposes, was about thirteen hundred and fifty millions, and the financial cost of those goods and services was about eight thousand three hundred and fifty millions, a ratio of cost to price of about roughly 1 : 6.2. In other words, goods were sold to the public at one-sixth of their apparent financial cost, and no one lost any money over it at the time. How was this done?
A considerable amount of this money (some of which may be in excess of the figures just mentioned) was created through what are known as the Ways and Means Accounts, and the working of this is described in the first report of the Committee on Currency and Foreign Exchanges, 1918, page two. Paraphrased, the process may be shortly explained as follows.
If ten million pounds credit is advanced at the Bank of England to the credit of Public (i.e. State) Deposits (which simply involves the writing up of the Public Deposits account by this amount), this amount is paid out by the Spending Departments to contractors in payment for their services, and when the cheques are cleared, passes to the credit of the contractors’ bankers (Joint-Stock Banks) account with the Bank of England. The Joint-Stock Banks are accustomed to regard their credits with the Bank of England as cash at call and, therefore, ten million pounds is credited to the depositors of the Joint-Stock Banks, and ten million pounds to the Joint-Stock Banks’ cash account.
As a result of this, the Joint-Stock Banks, working on a ratio of one to four between so-called cash and short-date liabilities, are able to allow their customers (working on Government contracts) overdrafts to the extent of forty millions, a portion of which their customers may devote to taking up Treasury Bills or War Loans. The banks themselves may take up about eight millions of Treasury Bills or War Loan, out of their additional ‘deposit’ balances, or they may lend about eight millions to the Bank of England to lend to the Government. Eventually, the result is the same, namely that the Government owes forty millions to the banks, through the Bank of England.
Now the first point to notice is that the result of this complicated process is exactly the same as if the Government itself had provided forty millions, in Currency Notes, with the important exception that the public pays 4 or 5 per cent per annum on the forty millions, instead of merely paying the cost of printing the Currency Notes. The effect on prices, while the forty millions is outstanding, is the same, and the contractors pay 6 or 7 per cent for their overdrafts instead of getting the use of the money, free. But if the forty millions is redeemed through taxation, or a Capital Levy, the public pays not only the 5 per cent per annum, together with the contractor’s 6 or 7 per cent, plus a profit on both of them, but it pays the whole of the forty millions out of money which has been received in respect of wages, salaries, and dividends. So far as I am aware, no one has ever suggested that Currency Notes should be retired by taxation. It is true that when this forty millions has been repaid, both the original debt and the repayment cancel each other, and only the interest charges go to the Profit and Loss Account of the Bank. But since, as we have seen, the repayment of bank loans means the immobilisation of an equivalent amount of price-values, this only means that a fresh loan with fresh interest charges has to be created. A consideration of these facts will make it easy to understand the implacable opposition of bankers and financiers to Government paper money and their insistence on the importance of what they term redemption. The payment in current taxation of only one-sixth of the price of war stores, etc., meant, therefore, that a credit grant of the other five-sixths of the price was made to the Public. The repayment of this credit is only justifiable on the assumption that banks own Public Credit.
Published on Feb 1, 2015 by arnisluks13 (YouTube)
Eastman: Here is Heydorn talking with two social crediters, both very good men, Wallace Klinck and his youngest sibling, Robert Klinck:
I am against the North American Basic Income Guarantee.
Here are the basic features of what I am hoping my countrymen will consider and adopt instead.
Populist Social Credit is a collection of borrowed ideas combined, I think, in a very good way, to give a nation a money system highly conducive to human well-being and happiness.
January 28, 2015
(Left: The founder of the Social Credit movement, Major Clifford Hugh Douglas 1879-1952)
Social Credit addresses a fundamental flaw in our economic system: the gap between a plethora of products and the lack of money in purchasers’ hands.
by Oliver Heydorn Ph.D.
Social Credit refers to the ideas of the brilliant Anglo-Scottish engineer, Major Clifford Hugh Douglas (1879-1952).
The core problem is that there is never enough money to buy what we produce. In essence, people don’t earn enough to afford the plethora of available consumer goods and services.
This gap is caused by many factors. Profits, including profits derived from interest on loans, is only one of them. Savings and the re-investment of savings are two others. The most important cause, however, has to do with how real capital (i.e., machines and equipment) builds up costs at a faster rate than it distributes incomes to workers.
The economy must compensate for this recurring gap between prices and incomes. Since most of the money supply is created out of nothing by the banks, the present financial system fills the gap by relying on governments, firms, and consumers to borrow additional money into existence so that the level of consumer buying power can be increased.
As a society, we are always mortgaging our future earnings in order to get enough purchasing power so that we can pay present prices in full. Whenever we fail to borrow enough money, the economy stalls and the government may even start a war to reboot it. To the extent that we succeed in bridging the gap, we contribute to the building-up of a mountain of debt that can never be paid off.
Filling the gap with debt-money is also inflationary, wasteful, and puts the whole society on a production–consumption treadmill. It is the prime cause behind social tensions, environmental damage, and international conflict.
All of this dysfunction is tolerated because the banks profit from it. Compensating for the gap transfers wealth and power from the common consumers to the owners of the financial system.
FILLING THE GAP DEBT-FREE
Douglas proposed that instead of filling the gap with debt-money, the gap could and should be filled with debt-free money.
This money would be created by an organ of the state, a National Credit Office, and distributed to consumers. Some of it would be issued indirectly in the form of a National Discount on all retail prices, while another portion would be issued directly in the form of a National Dividend. 
Since the productive capacity of the modern, industrial economy is enormous, an honest representation of our productive power would allow us to enjoy an abundance of beneficial goods and services alongside increasing leisure. Our economies could become socially equitable, environmentally sustainable, and internationally concordant.
Unlike some other monetary reform proposals, Social Credit does not advocate the nationalization of the banks. It is completely opposed to any scheme that would see us jump from the frying pan of a self-serving private system into the fire of a complete state monopoly over money and its issuance. The latter would be a fine basis for the introduction of a totalitarian society.
Social Crediters, by contrast, stand for the decentralization of economic and political power in favour of the individual. Social Credit’s proposal for an honest monetary system is not socialist but rather anti-socialist. It is completely compatible with a free enterprise economy (incorporating free markets, private property, individual initiative, and the profit motive); cf. http://www.socred.org/blogs/view/why-social-credit-is-not-socialism.
Getting an understanding of Social Credit is well worth the effort, as it may just manage to save civilization.
Oliver Heydorn (firstname.lastname@example.org) is the founder and director of The Clifford Hugh Douglas Institute for the Study and Promotion of Social Credit: www.socred.org
He is also the author of two recent books on the subject (available via Amazon): Social Credit Economics, and The Economics of Social Credit and Catholic Social Teaching
 Technological progress means machines are doing more and more of the work. Thanks to the dividend, those individuals whose labour is no longer needed by the economy would nevertheless retain an income and enjoy access to goods and services.
You can find this article permanently at http://henrymakow.com/2015/01/social-credit-a-simple-explanation.html
Stephen C said (January 30, 2015):
Fascinating subject. This is the first time I have heard of this, so I really can’t make any comments, but just wondering how Social Credit would handle large infrastructure projects such as roads, rail, and dams? How would it deal with speculation?
I would welcome change and the elimination of poverty worldwide. It is my hope that Social Credit or something similar and fair will replace the moribund economic system we have today.
David said (January 29, 2015):
Any economic system would be preferable to the fascistic fractional reserve central banking cartel we have been cursed with for the last century. All the money in circulation today represents a loan at interest from a private bank that is paid back by impoverishing the American people at the expense of the 1%, who are only out the cost of the ink and paper to print the currency on. And once the people have been strip-mined of everything of real value to pay back this phony “national debt”, that’s when another world war gets cranked up. We are there now.
Ben F said (January 29, 2015):
Excellent article. It identifies the real problems, recommends the correct solutions, and hits all of the proper targets that need to be de-throned, de-toothed, and made to fall into their proper and smaller place in the economy.
Systems were made for Man, not Man for Systems.
Wallace K said (January 29, 2015):
Oliver Heydorn has made an excellent presentation of the Social Credit case in a nutshell. The central issue is who owns the credit which the banks create against the community’s real wealth. Banks perform a vital function in creating and issuing new credit as loans allowing producers to activate the real, physical, and psychological, credit or productive capacity of a nation.
The problem is not that they create financial credit, as some amateur “monetary reformers” are so wont to claim. The evil of modern banking is that the banks claim the ownership of the credit which they create in monetizing the community’s wealth, and thereby appropriate the communal capital to control the accumulated Cultural Heritage of mankind. Because of the conventions of modern cost accounting, this results in a growing deficiency of consumer income relative to costs and prices. The banks are creating new buying power all the time, but as a debt owing to themselves. There is no reason why we cannot create the required additional purchasing power without leaving a trail of debt as a growing mortgage on future incomes.
According to the conventions of modern accountancy, industry must recover its costs via the consumer. New “money” created as debt by the banks as at present, or by Social Credit “debt-free”, will in either case be recovered in prices and cancelled as effective purchasing power when business repays its production loan from the bank or places such funds in reserve. The real cost of production, i.e., the required human energy and materials, has been fully provided or paid when a product has been completed.
There should be no need for any overall consumer financial debt whatsoever. The new Social Credit “consumption” credits would provide a growing unconditional income to all citizens and continuously falling “compensated” retail prices. Social Credit may present some intellectual challenges, but the main historical objection and impediment has been the irrational and indefensible Puritanical pseudo-morality that insists, essentially, that all incomes must be “earned”, although human “labour” input to production processes is rapidly being replaced by non-human factors, i.e., “solar” energy, automation, and artificial intelligence.
Nishit said (January 29, 2015):
The article has good logic but a major flaw in my opinion. The flaw is that it proposes a solution called social credit or debt-free money. Everyone proposes a solution that in turn is another system that must be controlled and regulated. In my opinion the solution is not another monetary system but understanding to break free from the system. This can only be done by individual effort, not by group think. When a person is conscious and is not a slave to the money banking system or any other system, then the person can easily adapt to whatever system that is in place, do his duty of work, and feed his family. I think the flaw of most good-hearted people is that they propose a system, instead of simply understanding of how the system, matrix works.
As Bruce Lee says, “Man, the living creature, the creating individual, is always more important than any established style or system,” and “To me, a system (martial arts/ money system) that clings to one small aspect of combat is actually in bondage.”
Dean said (January 28, 2015):
What does Social Credit look like for the man in the street? If you consider that the Canadian GDP (i.e. the realized price of everything sold that year) is about $1.2 Trillion and the US GDP is about $14T and then consider that the statistics organizations of both countries report total incomes (i.e. effective demand money with which to meet the price) of $770 Billion and $8T respectively, that is a gap in purchasing power of 43%. How does this relate to us all as individuals? It is an annual per-capita shortage of purchasing power amounting to about $17,000. This means that every adult over 18 could be given a guaranteed income of $2000/month and retail goods merchants could give consumers a 20% sales credit at the cash register; all this while causing neither inflation nor deflation. How do you pay for this? You make it up out of thin air – just like bankers do! In the US Constitution, Article 1, Section 8 specifically provides for it. The not-so-subtle difference between how our economy works now and how it would work under Social Credit? There would be no interest debt tied to this new money, and thus no need for repayment of either principal or interest. This would effectively dismantle the welfare state and radically lower taxes, and this would put even more money in the pockets of consumers. It would also loosen the hold that big money holds over our political system with their lobbying and campaign contribution “bribes” that corrupts and undermines our political democracy.
For those who presume that this debt-free issue of money would result in inflation, consider this. Producers need to borrow their capital costs, so the loaned money is effectively the creation of money. As production is sold, the first place producers apply this revenue is to settle the loans as they impact profitability; but the loaned money is destroyed the instant the bank receives it.
Consequently, the economy becomes short-circuited by exactly this amount – principal and interest. The debt-free issue of money in the form of guaranteed-income dividends and sales-credit compensated price fills the gap caused by this short circuit. The bottom line is that this is a FUNDAMENTAL FLAW in our cost accounting systems that must be recognized and fixed. Social Credit is the easiest fix. There have been others proposed, though. Consider Nobel Laureate Professor Frederick Soddy and his National Economy proposals that also recognize this gap and offer a less equitable and effective remedy. Bill Still, who ran as Libertarian Party Presidential candidate in the last US election, is an advocate of Soddy’s method.
If this – i.e. prosperity and less government control over our lives – is something you the reader would like to see happen in your lifetime, maybe it is not only in your best interests to learn more about Social Credit, but it is your duty to yourself and your family.
JG said (January 28, 2015):
Loans can only thrive in a fiat-financed economy for so long before the rubber meets the road – and that day of reckoning is coming soon for the world economy.
The American economy is run more by debt now than anytime in its history.
1) Inflated home mortgages that will never be paid back
2) College loans to the tune of 100,000 dollars that will never be paid back
3) An UNAFFORDABLE HEALTH CARE PLAN that most people don’t have the money to buy
4) And then more loans from the banks to the investment firms, based on “derivatives” from an inflated asset held as collateral, that won’t be paid back either
This is all the result of an economy functioning on debt.
When debts can no longer be paid back, the economy will collapse because debt will eventually make the real money that does exist scarce, thereby producing deflation. It’s already happening right now.
Robert K said (January 28, 2015):
The real basis of personal freedom is economic autonomy. The Age of Robotics contains the potential to bring this condition to every person, and our (currently perverted) money system is ideally suited to be adapted to this end. What is commonly called “democracy” – i.e., Political Democracy, the right to cast a vote in elections – is a sham, so long as Economic Democracy – the power to command economic policy as consumers – is attenuated. In the context of the most astounding productive capacity in history, such phenomena as economic insecurity and government austerity policies are anomalies that must shock and repel any thinking individual.
Launch Local Currencies – The Time Is Now – We Want Interest-Free Money! – Babylon=Usury – Usury Destroys All Aspects of Culture and Human Relationships – Eradicate Rent-Seeking – The Money Power Sit on Their Asses
Source: Real Currencies
Introducing the Talent
by Anthony Migchels
April 30, 2013
(Left/Above: the logo of the Gelre, the first unit based on the Talent. Soon we will launch a national unit for the Netherlands)
Alternative currencies are a crucial component in addressing our monetary problems. However, the monetary architectures that are currently available are wholly insufficient to provide serious relief for Main Street. The Talent is the first independent currency model that provides all functions that modern currencies need to truly compete within the Dollar/Euro paradigm. Not only that: it is now available for immediate implementation at ultra low cost.
Interest slavery and the ongoing gutting of the West through the credit crunch continue to erode living standards everywhere. Small and Medium business is suffocating for lack of credit and demand in the economy, while Big Business is reporting record profits and claiming larger and larger shares of the market.
High class units, operated professionally by people who know what they are doing, have every opportunity to provide small and medium business with both the liquidity they need to operate and new customers. Alternative currencies are not only a great customer loyalty program, as people can spend the units only with the businesses who accept them, they also have the potential to seriously alleviate the liquidity problems of the business’s customers.
In hard times, alternative currencies tend to boom. During the Great Depression literally hundreds of them were operated in the United States. In Spain and Greece, hit hard by the Euro Crisis, have seen dozens of units spring up. Argentina has been surviving because of them since its 1998/2002 collapse.
Most famous is the Swiss WIR, which has been turning over billions since its inception in 1934. It’s famed for its stabilizing effect during recessions, when capital scarcity makes it more worth while for business to deal with its limitations.
Limitations of Alternative Currencies
However, the Alternative Currency market remains handicapped by major problems. Amateurism and lacking monetary architects of the units being the main ones. The currencies that manage to thrive are typically run by energetic people. The WIR shows how far even very primitive currencies can go if run by a professional organization.
This shows both in the superficial analysis of both the real nitty gritty of the monetary problems that we face and the political context. The field is dominated by idealists. Over the last few years a marked improvement in terms of political awareness is definitely palpable: say five years ago most in the alternative currency business were oblivious to that bankers behind it all, for instance. Nowadays this is no longer the case, everybody is used to ‘conspiracy’. But this creates a new problem: the disconnect between the awareness on the web and the stone age conversation that is still the norm in the mainstream.
At the moment the discussion about the monetary architectures that are available is mounting and that is indeed very important, but still much remains to be desired.
Entrepreneurial ambition is really key to make it all work, but this must be combined with level headed appreciation of the monetary and this combination has shown to be very elusive indeed.
The Key Challenge for Modern Currencies
There are two major architectures that hold sway: Euro/Dollar backed units and Mutual Credit based units. Most units work with the basic agreement that 1 Unit = 1 Euro/Dollar, meaning they use the Euro or Dollar as unit of account.
The Euro/Dollar backed units, for instance the American Berkshares, the German Chiemgauer or the British Brixton Pound, are created by selling units: A Berkshare is sold for $1. The Dollar is held by the issuing organization, the Berkshare is spent into circulation at a local business. The local business can spend the unit with a colleague or pay an employee. If at some point a business acquires more Berkshares than it can spend in the network, they can reclaim a Dollar for every unit with the issuing organization.
The great boon of this system is that it allows convertibility of the unit. However, the great downside is that there can never be more Berkshares in circulation than the issuer has Dollars at hand. This means that there can be no interest-free credit. Money scarcity remains a real issue, as the money supply is dependent on scarce Dollar.
Mutual Credit based systems create money as credit: participants, businesses in particular, can just get a credit line in the unit and start spending. The minute they do, new money comes into circulation. When a debtor repays, money is taken out of circulation.
The great upside of this system is that there is no money scarcity: people will typically experience an abundance of money and a shortage of places where they could spend the units. The exact opposite of the Dollar/Euro situation, where most have less money than they would need to invest. There is interest-free credit.
But this comes with a price: there is no Dollar/Euro in the bank to back the unit or to convert. And this is a real problem, because there will always be businesses, usually the more succesful ones, providing popular goods or services, who obtain too many of the units, more than they can usefully spend in the network and they will have to limit there intake, creating serious bottlenecks in trade.
The Talent answers these challenges by providing the first fully convertible Mutual Credit based unit in the world. By providing an online exchange where people can buy and sell the unit. See here for a full breakdown of the system.
The Talent is a complete set of software and best practices, that is now available to everyone who wants to start his own currency. It can be implemented at very low cost and provides the start up with everything he needs to operate a truly comprehensive currency backed with high class methodology, incorporating the lessons learned with 80 years of experience with these units worldwide.
Implementation of the Talent comes with full consultancy for the starting initiative by the system’s developer, the writer of these lines.
The Talent’s proposition is particularly ideal for entrepreneurial people who know what is at stake, who see the clear business opportunity that creating high class, professionally run units provide for both participants and the initiator himself.
By implementing the Talent, the entrepreneur can focus on building the network and the organization necessary to run it, resting assured he’s offering his participants the best complementary currency currently available anywhere.
The Talent is the first unit in the world that provides everything we expect from money:
– It is sufficiently available (‘abundant money’)
– It provides interest-free credit
– It is convertible to Euro/Dollar
– Allows payment on-line and by mobile phone
– Connects both businesses and consumers and potentially (local Government)
– Implementation comes with full consultancy.
All in all the Talent is the first architecture that truly allows head on competition with Dollar or Euro in the marketplace.
The Time Is NOW
Years of research and development have been invested in the Talent. It answers all the major issues facing those in the field today. The first unit based on the Talent is the Gelre, which is in pilot phase and for which we are currently raising funds for wider marketing. Soon a national variant for the Netherlands will be launched.
Implementation is seriously considered in the United States, Britain and Ireland.
Funding remains a huge issue. It’s sad: not so much money is required, but while there are Trillions available for saving banks, it’s very hard to get even a few thousand to save us from the banks.
However, we will soon launch a major crowd funding initiative, where you will have a hands on chance to make a difference in the struggle against the Banks and their Usury and deflation and for normal people looking for a reasonable deal!
Babylon = Usury! We Want Interest-Free Money!
by Anthony Migchels
April 30, 2013
Usury is the original sin in the economic sphere and the root cause of all our economic problems. It causes unfathomable suffering. It is so pervasive, so normalized, it seems unavoidable.
The truth is we have everything we need to create an interest-free money supply and eradicate usury and associated rent-seeking completely from our economic and social lives. A Usury-Free economy ends poverty and brings abundance to the many. It will save our souls in the process.
The love of money is the root of many evils. Usury is the weaponization of the love of money. It feeds the avarice of the usurer. It forces ever more debtors into ever more immoral behavior. It replaces love with commerce. It corrupts commerce, which becomes ever more exploitative to pay off ever higher interest charges. It is the foundation of rent-seeking. It rips apart the fabric of society. It makes a mockery of any kind of social contract.
It causes hunger. Bankruptcies. Intense stress in families. Weighs especially heavily on the poor and leads to all sorts of excesses at the top. Billions of people live in abject poverty all over the world because of it. Entire communities, nations are gutted to pay the interest to the opulent. Nobody counts those dying prematurely from its effects. They are billions.
The many pay to the few. The poor pay to the middle class, who pay to the rich, who pay to the opulent. Poor countries pay ten times more interest on their foreign debts than they receive development aid.
Even when not in debt, forty percent of our income is lost to interest passed on in prices by producers. The many pay anywhere between five and ten trillion per year to the wealthy. All other rents ultimately are based on cost for capital and would hardly exist without usury.
It is the ultimate centralizer of power and it is global. It has been growing for centuries at compound interest rate speed, and now it is such an incredible cancer it is ready to swallow the remains of the host it has been feeding on.
The European nations put up $4.5 Trillion in handouts, easy credit and guarantees to ‘save’ their banks and the euro. The Fed provided an unimaginable $16 trillion dollars in easy credit to its banking buddies. Much of it was never repaid. This is ‘necessary’ because without banks we would not have money. So the West put up $20 trillion to have some bits and bytes and paper and coins circulate to exchange goods and services.
Surely the end of our civilization is near, when we allow such rapacious plunder to be sold with such a stupendous lie. While we simultaneously say there is no money to save the poor from starvation and the Earth from pollution.
The whole thing is totally senseless
We think: “without interest there will be no credit! I would not lend if I didn’t get anything back.”
But the Money Power doesn’t lend anything!
Money is just bookkeeping and credit is an automatic result of double entry bookkeeping, which by its very nature knows debit and credit.
The problem is not the creation of money! Quite the opposite: it’s marvelous that we never need to have a shortage of money.
The problem is when the bookkeeper starts raping the debitor with interest for no other reason than the associated minus. And takes all this interest himself. Just for the service of bookkeeping!
We pay $300k in interest in thirty years for our $200k mortgage which was created by entering some numbers in a computer bookkeeping application!
Gold solves nothing
We don’t want to pay $300k interest in coin! We want bookkeeping at cost-price! Interest-free!
Even in ancient times Gold and Silver were circulated by private parties. This is touted as a wonderful free market operation. But who circulated the specie? Those owning the mines, of course!
They circulated the metal by lending it out at interest and manipulated the volume from day one.
Today nobody knows how much Gold there is. All the Gold mines are owned and controlled by the Money Power. Those owning the mines are the Money Power, that’s how it all started. Vast amounts of Gold are in their vaults, ready to be unleashed onto the market through usurious lending, aiming to create asset bubbles, only to stop lending a little later to create a deflationary crash when people pay off their loans.
It is exactly the same way they create the boom-bust cycle with paper based money.
Just look at what they are doing to Gold today. They have been doing this forever.
The Golden Calf is the archetypal symbol of avarice, the Money Power is unthinkable without it.
We want Interest-Free Money!
Babylon is Usury
Jesus admonished us to lend freely, expecting nothing in return. The Vedas abhor usury. Moses forbade it. Half of the Q’uran is Allah threatening severe punishment for those taking Usury.
Money is bookkeeping. We don’t need interest for savers. The bank doesn’t need savers. Debit and Credit are the two sides of the coin in bookkeeping. They are automatic.
Yes, the volume must be managed, but that is unavoidable. No monetary system can exist without managing volume. The problem is not management, it is allowing vultures to do it.
The reason we have a boom-bust cycle is because we allowed private parties, banks, to manage the volume in their own interest. They set up Central Banks to create the illusion of ‘officialdom’.
Saying ‘the market must do it’ is saying the Plutocracy has been doing a good job over the last 5000 years.
We want interest-free mortgages, no income tax, no poverty. We want abundance, good will, a cultural rebirth, fairness and the end of Plutocracy.
Budget of an Interest Slave
The Problem is not Debt, it’s Interest (with Video)
Meet the Real Deal: Michael Hoffman on ‘Usury in Christendom’
The Fight against Usury by Juri Lina
Why we need Monetary Innovation by Margrit Kennedy
Bomb Countries With Banknotes to Boost Demand – Money Must Go Straight to Households, Not to Banks – Helicopter Money Emerging Into Public Debate – Permanent National Debt-Free Money – End Interest Drain to the Financial Sector – Take the Privilege of Money Creation Away From Banks – Fund All Government Goods and Services by Direct Taxation and Fees
We should cash-bomb the people – not the banks
Source: The Guardian
Juncker’s new fund will do little to head off Europe’s lost decade, as Friedman and Keynes would agree
Abandon helicopters. Use bombers. Bomb Germany, France, Italy, Greece, the entire eurozone. Bomb them with banknotes, cash, anything to boost demand. The money must go straight to households, not to banks. Banks have had their day and miserably failed to spend. From now on, they get nothing.
Five years after the financial crash, it is nearly unbelievable that the eurozone’s lords and masters now confront renewed recession. They seem inert before deflation, subflation, lowflation, or whatever lets them avoid the word “scandal”. An ever more dominant Germany is unmoved. Its finance minister, Wolfgang Schauble, is set on “black zero” or a balanced German budget.
The European Central Bank (ECB) murmurs about “quantitative easing”, but is up against Germany’s furious protests. Ten per cent of the eurozone’s workforce, and one in five of its young, is unemployed. Greece has lost a quarter of its national product. The waste of resources is staggering.
At the heart of this tragedy stands the absurd figure of the new EU president, Jean-Claude Juncker, impresario of Luxembourg’s outrageous tax-evasion oasis. Yesterday he proposed a €21bn European fund which, he claimed implausibly, would entice private backers to invest “up to” 15 times the sum. Who will invest when there is no demand? The pope rightly called the EU “elderly and haggard”, mistrusted, insensitive, and bureaucratic. I doubt if Juncker turned a hair.
The eurozone is heading towards what even the pro-EU Economist calls “Europe’s lost decade”.
Ever since the credit crunch, the continent has been suffering what Keynes called a classic liquidity trap. There is too little money around, and thus a chronic shortage of demand. People have too little to spend, which means shops close, supplies dry up, and no one invests.
Britain and the US supposedly met this challenge by “printing money”, by quantitative easing (QE). This was a confidence trick. It claimed to release money “into the economy” to stimulate borrowing and thus spending. It merely channelled billions into bank vaults and boosted reserves. What did spill into the economy went to stock market inflation and obscene bonuses. In Britain, it also leaked into the mad world of sub-prime housing subsidies. Otherwise, demand has remained dangerously sluggish.
What saved Britain was George Osborne not practising what he preached. He borrowed and spent like a crazed Labour chancellor. Borrowing has risen, not fallen, and this year is 10% up on last year. Public spending is still higher than in 2010, welfare payments are up, mega-projects are booming; only hated local government is down. To Osborne, austerity is for the small guy – and a gullible media.
The eurozone has no such luck. Germany continues to defy the two great minds of 20th-century economics, Keynes and Friedman. [??] They clashed on much, but agreed on the need to “loosen” money supply to avert recession. Keynes buried it in the ground and had the poor dig it up. Friedman more generously dropped it from helicopters.
Such methods have long been ridiculed as vulgar by conventional economists and politicians. To them, economics is a branch of ethics. Monetary policy should punish the poor for its extravagance in booms, not “reward” the undeserving. Any money going should be channelled through the welfare state or the great and good banks.
Yet versions of helicopter money (HM) are now emerging into public debate. The essence of HM is not to boost government spending – and thus challenge “budgetary austerity” – but to print money off-budget to avert deflation. It is like giving blood to a shattered body: without it, all other remedies are a waste of time.
Such “neo-monetarism” is aired by the Financial Times‘s Martin Wolf in his new and exhaustive study of the credit crunch, The Shifts and the Shocks. He suggests “permanent helicopter money”, with government deficits simply covered by printing presses unless and until inflation returns. It has been discussed sympathetically by Tim Congdon, by the Americans Mark Blyth and Eric Lonergan in the magazine Foreign Affairs, and by the former City regulator, Lord Turner.
All challenge the conventional wisdom of bank-led reflation.
John Muellbauer, professor of economics at Oxford, champions “QE for the people”. He points out that, as existing policies to revive Europe’s growth have faltered, “proposals for distributing money directly to citizens have been quietly gaining traction among critics of orthodox central banks”.
The commentator Anatole Kaletsky points out that if the £375bn of QE had gone to private bank accounts rather than to buying bonds from banks, it would have meant £24,000 per British family. This would have transformed the demand economy.
To have government simply depositing cash in cashpoints or handing out spending vouchers at post offices might seem eccentric. But this has been done in Japan, China, Vietnam, and Taiwan, where cash and vouchers have yielded swift spending surges. HM has been adopted by aid organisations including Give Directly in Africa, sometimes tied to school attendance. Brazil and Mexico have likewise “dropped” cash on poor communities. All these schemes were declared resounding successes. The West’s brief flirtation with HM through car scrappage schemes is credited with having saved the US car industry.
Why are policies considered suitable for developing societies not relevant to Europe? The answer, I believe, is not intellectual or political, but rather a matter of class. Just to print money and hand it out leaves people vulnerable to “moral hazard”. People should not get cash they have not deserved. If demand is to be stimulated with cash, it should be through someone responsible, like a banker. If the banker in effect “steals” the money, too bad.
I imagine that even if Friedman and Keynes banged together on the door of the EU or the ECB, those inside would send them packing. These institutions are in a line of descent from those who sealed Europe’s fate with the 1919 Treaty of Versailles, the Great Depression, and the 2008 credit crunch. They seem happy to visit on Europe a “lost decade”.
Meanwhile, the bombers are on standby. The printing presses can roll and Europe can be saved. But who will throw the switch?
Dick Eastman (email@example.com) responds:
Simon Jenkins is proposing what amounts to a money dividend to each household, because only in this way will aggregate consumer demand be raised. This would immediately raise the standard of living and domestic business revenue, which would raise hiring and wage levels. People would be valued more, partly because each citizen represents, say, 300 euros per month or per quarter in new purchasing power. The demand for consumer goods would change the labor market from a buyers’ market to a sellers’ market. Buying power, hiring power, and debt-paying power would increase.
Mr. Jenkins, however, undermines his own reform when he is vague on what kind of money should be used to “bomb Europe”. He says to use banknotes, cash, anything to boost demand. Is he really indifferent between using: 1) deficit-financed dividend transfers, where each euro of new circulation put in the hands of households comes into existence with a debt to government of that amount plus compound interest, which ultimately has to be paid by those households; or 2) the populist option of having government create the new money ex nihilo – a permanent, debt-free money?
Under a debt-based money system, when people receive a flow of loan money – including a deficit-financed consumer dividend – it requires that someone pay out of circulation an even greater amount of principal plus interest, so that economic reflation must be followed by monetary deflation through interest drain to the financial sector. Why not have money as a public utility, as a wealth pump, in the spirit of Arthur Kitson, Gottfried Feder, Frederick Soddy, and others strictly against having a nation’s money be entirely borrowed funds with principal and interest owed? In fact, the state should create all of this money, and banks should have the privilege of money creation taken away. Simon Jenkins leaves the door open for this when he says “the printing presses can roll and Europe can be saved”. The term “printing presses” can mean the creation of “fiat deposits” – letting a government-run consumer dividend office have the power to create money by keystroke – a power which never should have been entrusted to the Bank of England or any other bank in the first place.
Why not go the whole way and do the following (American Populist Social Credit model; other countries are welcome to adopt a similar strategy):
1. repudiate debt incurred under a fraudulent system where the amount of money in circulation is kept insufficient to repay loans
2. institute permanent national money created by fiat (from “thin air”)
3. originate all new money exclusively in each citizen’s primary bank account, through a regular, free and clear, household-sector dividend
4. separate banking from money creation, thus ending the fractional reserve banking system; require that money creation and distribution to households be a federal function, and that chartering and regulating banks be a responsibility of the states; eliminate the central bank, all national banks, and all open market operations by any bank
5. require that banks (savings and loan associations regulated by the states) lend only funds entrusted to them by money owners for that purpose
6. require that the risk of all bank-financed transactions be shared between borrower and lender, so that banks can only recoup half of the principal in the event of business loss resulting in default
7. end all deficit finance by government; require that all government goods and services be funded by direct taxation and fees, with all government financial accounts published for citizens to examine
by Anthony Migchels on November 15, 2014
Source: Real Currencies
(The Trillions that they rake in in Usury every year allow the Bankers to hire endless numbers of fools in pretty suits to explain that it’s all for the greater good; they have their media parade these people before an ever more desensitized public. This particular specimen, Fine Gael Senator Martin Conway, while trying to sell water meters to the Irish, managed to say on television ‘water does not just fall out of the sky, you know’.)
The Enclosure of the Commons is an ongoing process, in which the peoples of the World are disowned from their natural heritage – paying for their own land, their own water, and soon their own sunlight and air. It’s an integral part of our complete enslavement.
Usury has, throughout the ages, driven this disownment of the commoner.
Complete liberation of the Commons is a key goal in the struggle for real economic freedom. Commoners have a right of access to their fair share of the Commons at cost price.
The Commons are ‘the cultural and natural resources accessible to all members of a society, including natural materials such as air, water, and a habitable earth’.
The difference between the Commons and Capital is that Capital goods were created by men, whereas the Commons were created by God.
Capital should be owned by its creator or by those who have purchased it. The Commons are part of our common heritage; every human being has, by natural law, rights to his fair share in them.
Capital goods that were created in the common interest, with public means, must also be considered part of the Commons – for instance, a public railway system.
The commoner is anybody with rights to the Commons.
The historical context
Throughout history, there has been an ongoing battle between the rich and the many for control of the Commons. It’s a key part of our economic history.
Currently, we are in the endgame of this process: the people have been basically completely disowned already, and after the coming collapse, the ultra-wealthy and the State will consolidate what up till now remained in the hands of the middle class.
The same process brought the 1000-year-old Roman Empire down: when it collapsed, all land and most other assets had been centralized in the hands of a very few through Usury; this unsustainable situation was ultimately the reason why it was brought down.
In Medieval Europe, the Landed Aristocracy and the Vatican owned the Land; the commoner lost about 10 to 20% of his production in rents and taxes to his ‘Lords’. Unskilled Labor worked about 15 weeks a year to feed a family. A Craftsman could afford to work even less.
There is no reason to idealize the situation. Life was brutal in many ways, and the distinction between the Aristocracy and the common man was enormous. Serfdom is hardly what we are looking for. The spiritual tyranny of the Vatican came with many outrages.
Still, there can be no doubt at all that the standard of living in Britain in the late Medieval era was much higher than, for instance, during the 19th century. While Britain ruled the waves, the British common man faced an abject fate in the sweatshops, should he manage to escape the press gangs.
Only after the war did things really improve for the commoner. But over the last 40 years, real wages have been declining constantly, meaning all economic ‘growth’ is being gobbled up by the 0,001%.
So what’s going on? How is it possible that in the ‘rich West’, the commoner must now work 40 hours per week, up to 50 weeks a year, for sustenance? That 150 years ago, normal people were far worse off than their ancestors in the Middle Ages?
Well, Usury happened, and Usury started buying up the Commons, gaining rents while raising them too. People are more and more forced to pay more and more for what was always theirs.
Usurpation of the Commons
It’s an ongoing process, continuing very much today, globally. Water is the main front at the moment. An excellent example is Ireland: the IMF (Usury) forced the Irish Government to install water meters at private homes – part of the ‘structural adjustments’ ‘necessary’ for making available the next tranche of loans (which are needed to service the old loans). This prepares for the next step: privatizing the water utility.
This step has already been taken in Detroit, another place ‘needing’ bailouts after it was suckered by the bankers’ derivatives hoax. The obvious result: rising prices, people being cut off from what is of course basically their own property.
Meanwhile, they’re creating artificial scarcity by destroying competition and alternative sources. Fracking is undoubtedly a huge part of that.
And it’s not just water. Even sunlight is now under attack. In Spain, draconian fines are threatened to those who dare use solar panels. The Solar Police is allowed to enter Spanish private quarters without a warrant if they suspect somebody may leeching off of the sun, which is just another finite resource that ‘doesn’t just fall out of the sky, you know’.
‘Next they’ll tax us for breathing’ is an old running gag. But it’s not a joke, and there is every reason to believe that, at some point, either the State or a Corporation will claim ‘air is not a human right’ and is a ‘finite resource’.
How the Money Power busted the Landed ‘Aristocracy’
In Medieval Europe, say starting around the 13th century, urbanization started, and the first Kings managed to forge the basics of Nation States. Usury was already on board: lending to the Kings, not even at interest, but in return for concessions; taking over sources of income from the State.
Providing the Landed Aristocracy with mortgages (the Aristocrats would then default) slowly but surely started centralizing Land in the hands of richer and richer Plutocrats. The Protocols extensively describe this process. They boast how they managed to make the Kings believe that borrowing was in their interest; after 20 years at 5%, the amount of the principal was already paid in interest, without even denting the debt itself – while the Kings could have taken the same sum in taxation from their people directly.
The Protocols also report on slowly but surely pushing out the Landed Aristocracy, both through Usury and marriage. They point at the French Revolution as the coup de grâce for the Aristocracy as a political force. But Aristocrats remained an obstacle to Usurers’ schemes, because Aristocrats’ land holdings allowed them and their people to at least live freely from their own lands, affording them real sovereignty. This issue was finally settled in the 19th and 20th centuries by taxing land holdings.
While 1789 settled matters in the West, the Protocols predated 1917, which destroyed the old arrangements in the East. Even in America the basic conflict is visible, with the Landed Plutocrats framing the Constitution, while the Bankers established control in the early 19th century through Alexander Hamilton.
Another infamous example is post-1066 Britain, when William the Conqueror allowed the Jews into England. With them came Usury and the shetar, their contracts, subverting classical English common law. Within decades, Jews were the richest people in the country.
Jews were, like most Gentiles, forbidden to own land; but ways were found to make it possible for debtors to collateralize land holdings, and the issue quickly became a major plague. The Magna Carta was the first reaction against the Jews’ financial practices, and in 1290 they were kicked out of the country, until that despicable (ask the Irish) Calvinist stooge of Jewish Amsterdam Finance, Oliver Cromwell, let them back in.
Usury leads to escalating rents
Usury not only allows for enclosure of the Commons; it also allows for higher rents. For instance: to buy some land, most people will need a mortgage. A mortgage costs 150% of the principal in Usury over 30 years. Landlords pass these costs on to tenants. Even when the mortgage has been paid off, and there is no cost of capital to pass on anymore, there is the wholly artificial idea of ‘opportunity cost’: the money invested in Land could have been profitably invested elsewhere, and the ‘loss’ of this ‘opportunity’ must be ‘compensated’.
Nowadays, about 75% of rents for housing are Usury or ‘opportunity cost’ passed on by the landlord.
The idea that people need to pay for the land they live on from the moment they were born is strictly for humans only. No other species has a brain powerful enough to spin reality into such absurdity.
Nobody can call himself free if he’s a slave to landlordism, just as he cannot be free as long as he’s chained by Usury and scarce money.
Classical Economists, like Adam Smith, David Ricardo, and the people before them, considered Land, Labor, and Capital to be the factors of production.
‘Modern Economics’, beginning with Karl Marx, managed to obscure this.
We need to establish again the difference between man-made goods and our natural heritage, so that we can have a clear view of our rights and duties.
Land reform and the wider liberation of the Commons is a key target in the struggle against the Plutocracy.
As we have seen, it is Usury that has managed to usurp the Commons, overtaking the Landed Aristocracy that preceded it as the main power: so monetary reform is obviously the main goal.
But Land reform is definitely its younger brother and part of the same fight.
Unfortunately, current land reform proposals, most notably Georgism, are lacking, mainly because of their mistaken trust in the State and taxation.
In a forthcoming article, we’ll discuss how we can equitably reform land, without empowering the State and/or its opulent owners.
Source: Real Currencies
Supporting People and the Commonwealth and resisting the Money Power by defeating Usury.
August 27, 2014
by Anthony Migchels
Last week I did an extensive interview with Plane (Paul) from the Plane Truth. The Plane Truth has had a number of highly worthwhile guests on, including recently David Livingstone.
It was a bit of a wild ride, because we had plenty of time, 100 minutes, enabling us to cover a great deal of the issues under discussion here at Real Currencies and in the Alternative Media in general:
– The bankers
– The Capitalist Monopoly
– The Jewish Question
– Austrianism and Libertarianism
– Alternative Currencies
– Putin and Russia
– National Monetary Reform
– And much more.
Anthony Migchels – Usury and the Rise of the Bankster Dictatorship ~ The Plane
The great cognitive dissonance of the Alternative Media: everybody is talking about the Bankers, nobody is talking about economics and monetary reform.
Anthony Migchels – An Interview with Morris, Part 1
Anthony Migchels – An Interview with Morris, Part 2
The Difference between Debt-Free Money and Interest-Free Credit (Anthony Migchels)