The Truth About Money
According to some economists and self professed world market gurus, in our current market economy system, money is debt. In other words, if nobody borrowed money from banks and all debts were paid, money would not exist. This is because the only things with any true value are the items you use for collateral on a loan, since nobody has gold anymore, not even the central banks. Today, money is created by banks when you sign a loan agreement – except the bank only magically creates the principle of the loan, not the interest. You have to come up with the interest from the money circulating elsewhere in the system, but all that money was created the same way. In the end, it's just one big game of musical chairs.
If you have the time (about 40 minutes), the following 5 videos will blow your mind about how money is basically created out of thin air. You'll never think about money in the same way again.
Video: Part 1 of Where Does Money Come From
Video: Part 2 of Where Does Money Come From
Video: Part 3 of Where Does Money Come From
Video: Part 4 of Where Does Money Come From
Video: Part 5 of Where Does Money Come From
A System Dependent on Exponential Growth
“Anyone who believes exponential growth can go on forever in a
finite world is either a madman or an economist.” - Kenneth Boulding,
economist
In our current system, all resources must be used at an
ever-increasing rate to accommodate the ever-increasing need for
money to pay the ever-increasing interest on every dollar printed at
an ever-increasing rate. They may say our economy is growing at a
“steady rate” of 3%, but what they fail to explain is that 3% is on
top of last year's 3%. Supply and demand is actually increasing
exponentially. If you were to represent it on a graph, the line
would have a sharp curve upward, instead of a steady straight line.
A system like this cannot go on forever, and so the videos urge us
to ask ourselves and our governments four simple questions.
Four Questions for The Government
Video: How Money is Created and
Destroyed
Question 1 – Why do governments choose to borrow money from private
banks at interest when government could create all the interest-free
money it needs itself?
Although The
United States Mint is the only official government body capable of creating
interest-free money, we can still create interest-free money. At
this point, the Mint only produces coins – the Federal Reserve, a
private corporation, charges interest for every dollar printed.
These were the only details missing from the videos.
Question 2 – Why create money as debt to begin with? Why not create
money that circulates permanently and doesn't have to be perpetually
re-borrowed in order to exist?
We used to have a system not based in debt before President Woodrow
Wilson signed into effect the
Federal Reserve Act.
He realized, all too late, this was a bad idea. “I am a most unhappy
man. I have unwittingly ruined my country. A great industrial nation
is controlled by its system of credit. Our system of credit is
concentrated. The growth of the nation, therefore, and all our
activities are in the hands of a few men...”
Question 3 – How can a money system dependent on perpetually
accelerating growth be used to build a sustainable economy?
The answer is simple – it can't.
Question 4 – What specifically needs to be changed?
Only a major overhaul of the entire money creation system would be
able to effectively bring about change because it is the fundamental
backbone of the current system which is the problem. At this point
there are not enough material valuables in the world – such as gold
or silver – to provide for our current currency needs. One bright
idea is to use certificates of time, which just needs an accurate
and fair system of accounting to become a valid solution. However,
banks would need to become a non-profit organization in order to
create a sustainable system in which it is worthwhile for someone to
provide loans and currency safekeeping.