Forms of “democracy” and the monetary system

There is a guest post on Zero Hedge about democracy and its contradictions and it is giving rise to some interesting thoughts.

I have already set forth in these pages my opinions and views on the nature of politics and have already stated that in the West it is evident that although the political process may have afforded a degree of control to the people at the outset, today the political process is thoroughly beholden to interest groups like unions and corporations. My opinion is that in a political context characterized by democratic principles, this is a guaranteed outcome.

But politics is not and cannot be discussed in isolation. Politics is not something that can exist in the absence of the need for power over people and things. Thus politics comes about to control those aspects of life that pertain to the acquisition and wielding of power.

In a primitive society, power could be the control of a territory or of the women of child bearing age. Control could come about simply by killing or keeping others away from one’s acquired territory or women.

In more developed societies, control comes about through the acquisition and control of that which is used to acquire territory and women.

Enter money.

The concept of money is right up there in terms of utility with the invention of the wheel and the discovery of fire. Money is an ingenious construct and it is the one thing that is most responsible for the acceleration in social and economic development. Money is flexible, infinitely divisible and supremely portable. Money allows human interaction to take place at several levels simultaneously. There is no reasonable substitute for money in a developed society. None.

As the ultimate medium of exchange, money frames all other human constructs. All bar none. All human constructs and action evolve within the confines of the monetary system. Ergo, money is the ultimate driver of human development. There is nothing beyond money.

I place economy among the first and most important virtues, and public debt as the greatest of dangers … We must make our choice between economy and liberty, or profusion and servitude. (Thomas Jefferson)”

Hailing from the old world where feudalism and the private interest of the elite were prevalent, Thomas Jefferson along with a very restricted band of other politicians understood  the unequivocal and awesome power of money. But the power of money Jefferson refers to is not in how much you can spend of it in order to buy favors. The power of money resides in the ability of the monetary authority to enslave the population by gradually devaluing the currency.

It is subtle but it is clever and it is lethal. To understand the power of money it helps to stop thinking of it as the bits of paper and coins you carry around in your pocket.

It matters not what is used as “money”.  Money is only a vehicle; it is a medium of exchange.  Throughout the ages things like salt, stones or shells have been used as money. In prison, cigarettes may function as money. What matters is not the form it takes. What matters is how it is handled.

In our presumed open societies based on democratic principles, our politicians have allowed a certain degree of popular participation in the political process. However, democracy must inherently lead to the concentration of power as each individual understands that their wish can become reality only if enough people vote for it. Hence individuals see an interest in banding together in groups to exercise power trough numbers. Corporations and unions are a typical example of the concentration of votes that comes about in a democratic environment. But corporations and unions work for their own self preservation and the perpetuation of their own power base which must necessarily work against the interests of society at large.

But the real threat to liberty is not what happens in the political arena.

The real threat to liberty is how the monetary system is managed.

Notice here that although society can play a partial role in the political process, it can most certainly not play a role in managing the monetary system. In the West today the monetary system is managed unilaterally and arbitrarily behind closed doors by an elite that has the appearance of independence from government.

By deliberately imposing debt based fiat money (DBFM) upon society, the monetary elite draws an invisible boundary around it. This boundary is subtle but it is lethal.

DBFM is predicated on the perpetual expansion of inflation. Ergo, DBFM is predicated on the perpetual expansion of debt. But inflation is a dynamic that conforms to the law of diminishing marginal utility so that ever greater quantities of debt are required in order to obtain the same result. As you keep doing that over several decades, the purchasing power of the currency gradually wanes.

And that’s how enslavement happens.

At the outset, DBFM doesn’t feel any different than any other kind of money. That’s because at the outset, the intrinsic value of the currency is at par with the intrinsic value that people exchange it for when buying goods and services. But as inflation gradually erodes the purchasing power of the currency, economic actors find they need ever more currency for the same good or service. This is the reason that at the outset of this iteration of DBFM families could get by on one salary. But as inflation progressively erodes the purchasing power of the currency, economic actors must not only deplete their savings but they must also make use of debt. Initially debt may only be used for a little extra luxury. But as the inflationary dynamic progresses, debt becomes necessary to make ends meet.

As society finds it progressively more difficult to make a living, interest groups gradually garner votes by promising social safety nets. Things like social security or social health care or subsidies for example. As inflation progresses, society becomes ever more dependent on social spending and on debt till at one point people find themselves dependent on the state and on the hook to the monetary authorities.

At that point, the trap has slammed shut.

That’s the “clunck!” you heard in 2007.

There is only one way to get out of this jam. The only way to re-acquire our freedom is to shun the banks. Withdraw any savings you may have from any of the major banks. This is not a painless decision. Withdrawing your savings and or closing your accounts with one bank may entail losing lines of credit that must be closed too. By impacting the capital ratios and income straems of banks, we, the little people, can bend the banks. The other trick that can bring the monetary authorities to heel very quickly is by collapsing the velocity of money. The way to do this is to stop spending on things that are not necessities. If you really want to push the boat out, you can also buy yourself one coin and one ingot of gold and silver each. If every single person in the West did that, the attention of the monetary authorities would be secured immediately.

Of course it can be argued that my proposed solution may be worse than the disease. Most of you would prefer to hold on to the status quo and see how the chips fall in the hope that hardship may not be necessary…

But look around… look at how things have progressed particularly in the past three years…. look at how precarious your pension already is and although you may not want to admit it, somewhere deep inside you know you won’t get the pension you were promised. Look at what happened to our political process. Look at your life – stuck in a job you may not like but unable to make a move because you have those payments to make every month. Look at the friends that have already fallen by the way side. Look at how despite being caught in scandal upon scandal, a small elite of politicians and bankers are still making out like bandits and none have been prosecuted. Look at what is happening to the price of food.Finally, look at the sheer amount of money bankers are paying themselves not two years after having been rescued by public funds… we are talking here of hundreds upon hundreds of Billions (nine zeros) that our politicians are still today shoveling towards the banks all the while paying lip service to the electorate as to how to curb bank bonuses…

How to curb bank bonuses??

If our governments had not given public money to the banks, bonuses would really not be an issue today.

Am I ranting?

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3 Responses to “Forms of “democracy” and the monetary system”

  1. pat00donnelly Says:

    Tim

    Not everyone!

  2. pat00donnelly Says:

    Democracy means that those thieves who offer the most to their supporters get to steal for the longest time.

    Eventually, the country is plundered!

    Just like Ireland.

  3. Tim C Says:

    No. You’re not ranting. Aren’t you just detailing the reality? And as you’ve said ad infinitum, the sad and dangerous conclusion of where this has to lead is some sort of major world conflict that will rain death and destruction on everyone.

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