Thursday, April 28, 2011


I was banned a second time from the "ticker forum" primarily for my articulation of the fundamental flaw in a "money as debt" economic model for the world. As many of you know, dissent is not allowed and if you are not a complacent drone bee in Denningers hive, you are not allowed an opinion regardless of its proof or underlying truth.

Be that as it may, some of you on "sucker forum" have asked me some questions regarding how we could have an honest money system that is not dependent upon a perpetual expansion of credit and the inevitable collapse that lending at interest is mathematically guaranteed to produce. I'll take a moment to give you what is a solution with the caveat that it will never ever happen until Americans are rioting in the streets and cities are burning to the ground.

First, understand that the entire model of global economics is a ponzi scheme. It is dependent upon perpetual GDP "growth" which by definition is perpetual expansion of global money supply since GDP is measured in units of money. Secondly, understand that all money is created by debt. All money is lent into existence with interest. To have perpetual GDP growth requires perpetual credit expansion and perpetual credit expansion requires perpetual interest on that debt money. Since all money is called into existence via debt, all interest money has to be called into existence by the same mechanism...more debt. It is a compounding function where the more debt money there is the more interest money has to be created by yet more debt compounding in a never ending debt accumulating spiral until it is all unsustainable.

With this understanding, the only solution is a non debt based monetary system. Lending at interest (usury) has to be outlawed and money created by government not banks and added to the economy only to serve the needs of commerce and the growth of population. This was the principle behind having a "gold standard" Under a gold standard, it was thought that a limited resource like gold restrained the creation of money, and basically it did. Government could not create more money than there was gold at a fixed price to back it. This had the desired effect of restraining inflation as the money supply could not expand faster than the resource backing it. This was all undone at the behest of banks under the Nixon regime for the sole purpose of allowing banks...the print money and lend it into the economy to fund the Vietnam war which was immensely profitable for banks who historically have always thrived on war. With uninhibited means, banks went insane with greed and began their campaign to make debt slaves out of every human on earth. They have largely succeeded and this is why we are where we are today, at peak debt with a crashing currency and guaranteed economic doom on the doorstep.

This is not to say that return to a "gold standard" is the answer. It is not. There are too many people, too little gold and the world too dynamic and complicated place. What is needed, what would work, what should be done, is the creation of a universal currency backed by a large and diverse basket of real world goods and services that reflect all the elements of a global economy. Under such a scenario, a unit of "money" would be equivalent, for example, to a measure of oil, corn, wheat, cotton, gold, iron ore, a unit of labor, etc etc. Every unit of money would have a real world intrinsic value that would never change and never get deflated in its purchasing power. One unit of money would procure you the same amount of these real world commodities today, tomorrow and indefinitely. Zero inflation. No deflation, no inflation...stable constant prices.

This money would be issued into the economy by government not banks. It could be spent into the economy with infrastructure projects, national institutions of learning and science, research etc. Private lending would be non usury and require that an equity stake be taken verses interest. If for example you lent your saved money to a company to expand, you would receive an equity stake not a debt stake. If the company succeeded and sold more of its product you would get your return for your risk. The difference comes from how the venture made its would do so by capturing more of its competetors business which taps existing money supply and doesn't feed the debt interest machine. It would reward productivity and efficiency not blunt "growth" and would not be credit driven.

This is how it has worked in the past when we lived with "colonial script" It would work now and it would be beneficial for all mankind. It will never ever happen. It removes banks from the system and relegates them to utilities that held your savings and processed financial transactions. Since banks run the world now and have as their only mission statement the debt enslavement of humanity, it will never happen short of a revolution in thinking and a revolution on the streets

I am on solid ground here and happy to address any further questions you may have on this fundamental issue


  1. You actually bothered to create an entire blog just to slam Denninger?


    I honestly think you need to find something more productive to do with your time.

  2. You were banned because you are an insufferable egomaniac that is full of crap.

  3. What happened to this place?

    Why no posts in 4 months?