Monetary reform
 

Dear friends,

I decided to open this forum for two reasons.
First reason is that tough there seems to be displeasure to situation of our worldwide economy still alternatives are not talked about except going
back to gold standard which is bad idea.
Its bad because who ever owns most of the gold dictates the rules of economy, not small citizens who happend have some gold coins in their pocket.

However there are several other good alternatives which we
get acquainted.

Second reason is to share some information about how our economy runs so that we can start think what we can do.

Many just remain to wait when the economy is going to crash and dont bother to think what after that.
If we dont take this responsibility to develop monetary system that honors
us people and nature somebody else will do it and it not might be our best intrest.

I feel that these are important matters to us since we are in a situation were nations, companies and people don’t have enough money in order to function properly.

Instead of money we have debt, which have come a household term in everyday news.
In fact it is difficult to find anyone who does not have debt.

Why?

The answer is simple, our economy is based on ever increasing debt.
If debt is not growing economy cannot work.
Have you ever wondered why our politicians speak about need of constant economic growth ?

So let us look closer what we mean about when we say that our economy is based on debt and what is the problem in it.

First thing to understand is that from money we have today 98% of it is not physical money but digital money created by privet banks.
Rest 1% or 2% of money is notes and coins that nation mint is creating.

How does a bank create money?

Let us say that you want to buy a house which costs 100 000dollars. So you go to bank to ask a loan which is your promise to pay back to bank in several coming years.

Now the bank goes to it computer and create that money out of thin air, it only has to have certain percent of its own capital in order to do that.
Capital is usually peoples deposit money but not necessary so.

Often the percent of banks own capital vary anything from 0% to 8% depending on laws and local agreements.

So, to give you 100 000 dollars loan that means that bank has to have 8000 dollar its own capital if percent is 8%.

Now the money that just came to existing didn’t exist before and became real only because you took a loan or debt that you own to the bank.

When you pay off your debt it means that so much money is away from total amount of money that circuit in economy.

If all the debt would be paid off there couldn’t be anymore money except coins and notes.

Besides this a bank include to your loan its marginal and interest.
Interest = what price bank loan money to you
Bank marginal = if a bank would loan money to other bank it would get more interest from them than from you, so a sum of money that fills that cap is called bank marginal or sometimes profit.

This is just one way how banks finance their business and we come back that later.
Important to us here are the concepts of debt money and interest.

Notice that interest money is not created so it has to come from some were else.

That means that if amount of debt created money wouldn’t increase somebody have to fail to pay back his loan because there is not enough money for all.

We are experiencing this when economy is going down.

So, thus far we can see a build in problem in our present day monetary system which demands constant economic growth. Same time amount of money people have in their use is getting smaller because ever increasing costs of national and privet debt.

Just see:
http://www.usdebtclock.org

More next time….

Love and economic democracy…
Kunda:wub2:

Re: Monetary reform
 

hey...

i feel the current crisis in economics has its root in human psychology.

money is 3 things: a unit of account, a store of value and a means of exchange.

Exchange and accounting are relatively concrete. Value however, is not. Given the institutionalization of greed and the way it is now deeply embedded in systems of governance (referring specifically to lobbying of private interests to public officials) i am uncertain to the ability of "reform" to do the trick.

Given the psychological roots of value, i.e. gold is only valuable because we deem it so, in order to change the global economy would require a restructuring of collective consciousness. Simply put, is it possible to extract the speculative greed that has propelled us to this point without altering the global perception of value?

I am under the impression that it is not. Nonetheless, I am hopeful that a shift in the global economic paradigm will transpire over the next decade vis-a-vis what people commonly call "chaos".

It is my belief that we are currently on the leading edge of a point in time that forms a normal curve (bell curve) of destructive/transformative forces that rapidly break down outmoded institutions that no longer serve the expanding consciousness of the Human Family.

Our relationship to "value" is in the process of transformation and will not be grounded into reality until after the financial crisis of 2008 has

(a) finished reverberating throughout all economies globally

and (b) initiated a period of tension that finds its culmination in talk of global war.

I am not suggesting that there will in fact be a WWIII but rather that economic tensions will probably culminate in a geopolitical senario that at least reflects a great underlying tension of the times as the collective consciousness of the Human Family is forced to embrace a more enlightened worldview that is based upon group not individual consciousness.

Until such a time is reached, there wont be a physical manifestation of any new economic systems. I just feel that being on the leading edge of a great dispensation of destructive force we are collectively not ready to embrace any new paradigms as any new global economy will reflect a psychological shift in value.

A parallel to this can be seen in the levels of awareness between the WWII generation and those born in the late 1940s forward (baby boomers). This awareness is reflected in terms of individual creativity and materialism. Im not saying that the post-WWII generation is not materialistic, im simply suggesting that they are not so rabidly materialistic as those generations of humanity that we see in the late 19th and early 20th century.

So in short...

The conceptualization of value is key. The key to changing it is in the collective psychology of Humanity. This psychological shift will be a shift away from selfish individuality toward more group conscious means of expression by the majority of humanity. So the building tension is for the liberation of consciousness from self-limiting institutions - artifacts of a bygone age. Until this transpires, we wont see a manifestation of a new paradigm.

sorry for being long-winded :original:

Re: Monetary reform
 

Thanks both of you for posting on this!!

Bravo! :thumb_yello:

Re: Monetary reform
 

Dear tribe of light,:wub2:

I just wanna shortly answer to your letter,

The fault is in monetary system, not in the people! :trumpet:

Like when the children play a game and dont like the rules of it, they just
chance them. Whoever was creator of the rules first time doesnt matter for them because they can chance them any given moment.:thumb_yello:

Key is that they understand the rules and their effect to them.

Modern people does not understand rules of economy but just experience
its effect in society and in their life.:thumbdown:

These matters are not teached in anywere except small minoraty of people
who basically agree to take part of the fraud since they get some economic
benefit.

I firmly belive that if people can be educated in this matter they see the reality of the monetary system and its faults and can thus start to figure
out better one, like children in their play.:roll1:

You can safely say that i am an optimist in this matter.:tongue2:

Until next time....

Love and optimism !
Kunda:wub2:

Re: Monetary reform
 

Dear friends,

So far we found that money comes to existence from thin air when somebody takes a loan.

If you think that salary you get from your work and then use to pay bills is created by your labour in the existence you are wrong. It is actually money which is taken from over all money stock that rotates in economy. Somebody created that money to rotation by taking a loan.

Biggest causes which create money in the system are mortgage institution, financing corporations and loans to the nations. ( poetry..):smoke:

Money for your living (food, energy, salary…) is not created but it is taken from over all money that circuit in a system.

This raises the question who owns the money?

If all money is just a loan what happens to it when repaid ?

When you repay your loan back to bank it is still exist as bank asset.
Loan is quit one in a way because it is taken away from overall money circulation.
But that repaid money is still real money its just kind of deposit for banks own usage.

It became bank own money !:nono:

This is important point. Bank can use that asset when ever they want and what ever they want.!:thumbdown:

It has nothing to do with human rights and sustainable economy or democracy.:tears:

So eventually all the money end up as an property of the bank, it is just loaned us for a while !

With that we buy houses, apartments, land and so on…but what happens if you don’t have money to sustain your “stuff”? You still think that its going to be your “stuff” for long?:shocked:

This is way banks sucks away nations wealth little by little by being able to buy everything there is to buy.:mfr_omg:

What happens meanwhile is that loans are taken faster than paid of which makes an illusion that banks don’t “own whole planet.”
However during recession they draw those assets and cheaply buy anything there is to buy.

A summary:

Money is created as debt and it ends to a property of the bank and is thus without any social control.:thumbdown::thumbdown::thumbdown:
Debt money also insist eternal economic growth which is a problem it self.
From that and more next time…

Love&Peace :tongue2:
Kunda

Re: Monetary reform
 

Hi all,:trumpet:

He is well spent time with economist Dr Richard Wolff who is exellent
speaker. Especially for those of who live in USA there is some good stuff...

http://www.youtube.com/watch?v=TZU3w...layer_embedded

Love
K:wub2:

Re: Monetary reform
 

I was watching one of Ron Paul's videos online last night and a journalist was asking him if he supported the gold standard as THE solution to our current monetary mess. His response was that he thought there should be competition in currencies. I like this idea, because it gives the market the chance to determine what is best instead of just relying on some expert to come up with a solution. The problem we have right now is that all of the paper has no inherent value. If each paper currency were required to be backed by something real (i.e. land/real estate, gold, silver, diamonds, etc) we would not be in this mess. Any fiat currency is just a time bomb waiting to explode because the printers of the money aren't mandated to show any restraint in printing it.

I think the only way we will see any type of monetary reform is if the current system collapses. Nobody wants to admit that their 401K, stocks, house, car, etc which were bought with fiat money might not be worth as much as they paid or that their social security, pension or medicare might not be available when they need it.

Once the system does collapse, we have an opportunity. The only way we won't have reform is if those of us who do understand what is happening fail to explain it clearly to those who don't. Fiat money is something that every high school student should learn in a basic economics class just as we all learned about how slavery was abolished after the civil war. The only difference between slaves paying tribute to their master and the common people paying tribute (interest) to their masters in the form of interest is that we somehow are under the illusion that we are free.

Re: Monetary reform
 

Dear sjkted,

I like many things Ron Paul promote, however I see problems in his monetary ideas and let me explain why.

Idea of backing the money by gold or anything else has to do with the idea of controlling amount of money that circulate in economy and thus keep the economy steady without too much inflation.

Its an idea that doesn’t work because inflation IS NOT caused by “too much money chasing too few goods” In fact the real world support just opposite. We have all the places full of “stuff” but no one to buy them.

Amount of money in our world has grown about 15-20% every year still there is not much inflation because of that.

What comes to popular quantity theory is incorrect also. It says that prices go up because it “absorb excess” money in economy in order to inflation keep steady and moderate.
Fault in this idea is that prizes can go high or down unlimited way without consideration of debt or money available.

Money based in gold is also FIAT money or money by law.

Any society need a medium of exchange in order to function.
Big question is who controls it ? Who creates it? Who owns it?

We could base our money in gold but problem is that its piled up in the hands of few. The quatity is issue and therefore gold as base have never worked
execpt promote the intrest of few.

Ron Paul speaks that “market should determinate” what currency we use.

Have you though what that means? What is a market ?

Does it mean example that you go to town market place where a man shouts “potatoes, potatoes”! costs only ten shoelaces!
And you say to him “Sir, I only have hairs in my head as currency today”!
“Sorry” says man……

Obviously he means something else than common people.
How about these guys who are charge now? Bankers, investors, big industry ? THE CAPITAL !
At least they are the ones that so far has been charge in “market”.
You really want that they continue in different disguise? Don’t think so.

So, real problem is WHO create money and controls its flow in economy ? How much money circulate in system ?
These are DUTIES of sovereign government not privet citizens, bankers,
investors, big industry...
Government can create its own money which eliminate the real problem THE DEBT MONEY that is real cause of inflation and ups and downs in economy.

I agree that we may need a crash in economy system in order to place it.
Reality of many “things” has been lost in humanity and our monetary and banking system is big one. I still hope that we could learn more easy way that school of hard knocks………..

Peace and love
kf:wub2: