I have developed what I think is a
unique perspective on our financial system and am soliciting feedback from
credentialed economists. If it would make a difference, I would be willing to
make a donation to a charity of your choice in exchange for a substantive
response, if only a short one. My concern is with my children’s future, and
social justice.
unique perspective on our financial system and am soliciting feedback from
credentialed economists. If it would make a difference, I would be willing to
make a donation to a charity of your choice in exchange for a substantive
response, if only a short one. My concern is with my children’s future, and
social justice.
The logic of my idea is quite
simple: anyone who creates money creates nothing of intrinsic value, but
is still able to make a claim on our actual, material wealth, and even though
we are long accustomed to it, it is quite appropriate to call this legal theft.
simple: anyone who creates money creates nothing of intrinsic value, but
is still able to make a claim on our actual, material wealth, and even though
we are long accustomed to it, it is quite appropriate to call this legal theft.
If I am negotiating with a barista
for a cup of coffee, and they are willing to sell it to me for $1, but someone
comes along that has $2 that was created from scratch–and this is more or less
literally what has happened in the housing markets of many nations–and are
willing to pay that much, then I either go without the coffee, or fork over a
higher proportion of my income to compensate for the now-higher price. Had that
money not been created, then my coffee would still be $1, and my housing
affordable.
for a cup of coffee, and they are willing to sell it to me for $1, but someone
comes along that has $2 that was created from scratch–and this is more or less
literally what has happened in the housing markets of many nations–and are
willing to pay that much, then I either go without the coffee, or fork over a
higher proportion of my income to compensate for the now-higher price. Had that
money not been created, then my coffee would still be $1, and my housing
affordable.
I will readily grant that assenting
to this claim requires viewing old institutions with new eyes.
to this claim requires viewing old institutions with new eyes.
I would contrast this with what I
would call true Capitalism, in which the only way to make money is to provide a
good or service people want and are able to afford. As we all know, per capita
productivity has been increasing for some time, but wages have not. This
requires an answer, which I think relates to the system as a whole.
would call true Capitalism, in which the only way to make money is to provide a
good or service people want and are able to afford. As we all know, per capita
productivity has been increasing for some time, but wages have not. This
requires an answer, which I think relates to the system as a whole.
In making loans banks create money
which had not existed. This places more money into circulation, with a
resulting decline in the overall value of existing money. We call this
inflation, and expect some amount of it every year, since deflation is feared.
which had not existed. This places more money into circulation, with a
resulting decline in the overall value of existing money. We call this
inflation, and expect some amount of it every year, since deflation is feared.
Deflation is feared because in
conditions of widespread debt the amount of money to be repaid–the labor hours
required to satisfy it–rises steadily, resulting in higher rates of default,
and thus higher rates of banking insolvency, which propagated enough, generate
economic troubles.
conditions of widespread debt the amount of money to be repaid–the labor hours
required to satisfy it–rises steadily, resulting in higher rates of default,
and thus higher rates of banking insolvency, which propagated enough, generate
economic troubles.
However, if there were no public or
private debt, then a steady increase in the value of money would be a good
thing. A true Capitalism would be self
financing. People would save their money, as in the old days, and pay cash for
everything. Bank financing–which is to say allowing banks to “loan”
money that didn’t exist until that moment–is faster, but it is also a cancer
that in the long term is like slaking thirst with salt water.
private debt, then a steady increase in the value of money would be a good
thing. A true Capitalism would be self
financing. People would save their money, as in the old days, and pay cash for
everything. Bank financing–which is to say allowing banks to “loan”
money that didn’t exist until that moment–is faster, but it is also a cancer
that in the long term is like slaking thirst with salt water.
We see many people asking why wages
have been stagnant or even declining for the past 15 years or so. My view is
that the purchasing power of money has been transferred via monetary inflation
from workers and corporations to bankers and governments. The sheer quantity of
money in existence, at least in America, has increased HUGELY since 1981 or so
(M2 at least five-fold), as has the wealth controlled by the worlds largest
financial institutions. The two are obviously related.
have been stagnant or even declining for the past 15 years or so. My view is
that the purchasing power of money has been transferred via monetary inflation
from workers and corporations to bankers and governments. The sheer quantity of
money in existence, at least in America, has increased HUGELY since 1981 or so
(M2 at least five-fold), as has the wealth controlled by the worlds largest
financial institutions. The two are obviously related.
I propose that in the coming
economic collapse–it appears overwhelmingly likely both that US debt will soon
be downgraded, and that this will have vast rippling effects throughout the
global economy–a plan be proposed somewhat similar to the Chicago Plan of the
1930’s, with some significant differences.
economic collapse–it appears overwhelmingly likely both that US debt will soon
be downgraded, and that this will have vast rippling effects throughout the
global economy–a plan be proposed somewhat similar to the Chicago Plan of the
1930’s, with some significant differences.
Now, I do not know the specifics of
the Bank of England–and particularly the full nature of its relationship with
the European Central Bank– but in theory the following plan, developed for the
United States, might apply there.
the Bank of England–and particularly the full nature of its relationship with
the European Central Bank– but in theory the following plan, developed for the
United States, might apply there.
The key point is to grasp both that
money is not real, and that those who create it have become fabulously wealthy
without creating anything of intrinsic economic benefit, which adds a moral
element to this argument. They are the true elite.
money is not real, and that those who create it have become fabulously wealthy
without creating anything of intrinsic economic benefit, which adds a moral
element to this argument. They are the true elite.
Specifically, I propose that the
Fed (or in your case the Bank of England) be brought in-house and made an
accountable and controllable instrument of government. I propose that it then
use its power to create money to pay off ALL debts in the United States, public
and private. All mortgages, all cars, all credit cards, the national debt,
County debt, municipal debt. Everything. This will transfer wealth from the
banks to the people.
Fed (or in your case the Bank of England) be brought in-house and made an
accountable and controllable instrument of government. I propose that it then
use its power to create money to pay off ALL debts in the United States, public
and private. All mortgages, all cars, all credit cards, the national debt,
County debt, municipal debt. Everything. This will transfer wealth from the
banks to the people.
In the short term this will of
course be hugely inflationary, but I think things would settle down within a
month or two; and at that, far quicker and with much, much less suffering than
would be the case with a prolonged Depression.
course be hugely inflationary, but I think things would settle down within a
month or two; and at that, far quicker and with much, much less suffering than
would be the case with a prolonged Depression.
Then we end the Fed (or Bank of
England), require all banks to be 100% reserve (they would make money by
loaning the investor’s principle, by offering check cashing and account
services for a fee, and by warehousing money and other valuables), and never
alter the quantity of money in circulation again.
England), require all banks to be 100% reserve (they would make money by
loaning the investor’s principle, by offering check cashing and account
services for a fee, and by warehousing money and other valuables), and never
alter the quantity of money in circulation again.
This should then, with productivity
increases, gradually cause an increase in the purchasing power of the dollar.
This, in turn, will enable self financing of new business, and completely
eradicate business cycles.
increases, gradually cause an increase in the purchasing power of the dollar.
This, in turn, will enable self financing of new business, and completely
eradicate business cycles.
My view is that in a just, properly
ordered financial system people should be able to make a good living on 20
hours of work a week. Health care, retirement,
unemployment: all will quickly cease to be problems.
ordered financial system people should be able to make a good living on 20
hours of work a week. Health care, retirement,
unemployment: all will quickly cease to be problems.
I have a longer treatment of this
topic posted on the internet, but I think the factors involved are quite
simple. Self evidently, this is a radical plan, but in my view we are facing
desperate straits at some point in the next 15 years or so, if not sooner.
topic posted on the internet, but I think the factors involved are quite
simple. Self evidently, this is a radical plan, but in my view we are facing
desperate straits at some point in the next 15 years or so, if not sooner.
Please let me know what you think.
If you don’t have time to respond, I would be happy to hear from a graduate
student, or anyone who might be able to render a knowledgeable opinion. Thanks
for your time!!!
If you don’t have time to respond, I would be happy to hear from a graduate
student, or anyone who might be able to render a knowledgeable opinion. Thanks
for your time!!!
Me
P.S. As you might imagine, nobody
replies to these. I doubt most even open them. The reason I continue is that
this is an enormously important topic. If you have any feedback as to how I
might more productively solicit feedback or discussion, please let me know.
There is no ulterior motive other than a general amelioration of the human
condition, and the advancement of true fairness. This confuses nearly everyone.
replies to these. I doubt most even open them. The reason I continue is that
this is an enormously important topic. If you have any feedback as to how I
might more productively solicit feedback or discussion, please let me know.
There is no ulterior motive other than a general amelioration of the human
condition, and the advancement of true fairness. This confuses nearly everyone.
P.P.S It remains unclear to me how
Marxism is relatively unobjectionable in many circles, despite its history,
when the predatory nature of money creation is completely ignored. How can any
critique of “Capitalism” fail to take into account the primary
reality of the conjuring into reality of “Capital” ex nihilo by
empowered elites? It is not and long has not been a question first and foremost
of accumulation, but rather creation and first access to that creation.
Marxism is relatively unobjectionable in many circles, despite its history,
when the predatory nature of money creation is completely ignored. How can any
critique of “Capitalism” fail to take into account the primary
reality of the conjuring into reality of “Capital” ex nihilo by
empowered elites? It is not and long has not been a question first and foremost
of accumulation, but rather creation and first access to that creation.
The emergence of the middle class
falsified Marxist notions of class warfare, as did generally rising levels of
abundance and well being. What remains to explain is huge differentials in
wealth, and my perspective–this heuristic–does that easily.
falsified Marxist notions of class warfare, as did generally rising levels of
abundance and well being. What remains to explain is huge differentials in
wealth, and my perspective–this heuristic–does that easily.
My ideas, in my view, are both
simple and obvious, even though I seem to be the only one advancing them. My
hope, of course, is for company in my quest.
simple and obvious, even though I seem to be the only one advancing them. My
hope, of course, is for company in my quest.