Debt II

Let’s be clear.

The problem is not Debt Based Fiat Money (DBFM) proper. As a system, DBFM is certainly less desirable than a value based system or a pure Fiat Monetary system free of debt.

No, the problem is not the system. Rather, the problem are the sponsors of the system.

DBFM is arithmetically limited in scope. Left undisturbed, DBFM would naturally reset regularly and by itself. In turn, this would allow a resetting of the economy purging the wasteful and the uneconomical before things get dramatically out of kilter. It is precisely this arithmetical limit that makes DBFM so desirable to the sponsors of the system.

The inherent tendency to reset provides the sponsors of the system with an excuse to intervene. In a DBFM system, under the guise of social justice, intervention takes the form of subsidies or bailouts. In this regard, electoral politics is symbiotic and reinforces the perceived “need” for intervention. Either way, the ultimate beneficiaries of intervention are the sponsors of the system. Hence the reason that in time, DBFM leads to the concentration of ownership of the productive capital of society in the financial sector along with the profits.

In an environment where the privilege to create the currency is arbitrarily bestowed upon a third party and where society is obligated to make use of this currency, the dynamic outlined above is arithmetically inevitable. The more expensive and pervasive the intervention the more assets are appropriated by the financial sector.

It is in this context that entities like the UN, the World Bank, the IMF, unions or any number of NGOs inscribe themselves. Pervasive and aggressive expenditure on the part of governments for the military, for subsidies or for social programs are absolute gold for the sponsors of DBFM. The best part is that some of this expenditure is justified as social justice or social responsibility when in fact it is purely a transfer of wealth … to the banks.

Now, don’t get me wrong. Government does have a role in upholding the rights of the less fortunate and the otherwise marginalized. But from there to justifying the dynamic of DBFM as morally right, is a stretch. It is a stretch exactly because the creation of funds ex-nihilo dictated by DBFM creates such violent social dislocations in the first place that neither the UN nor any entities that receive the funds can compensate the mayhem. Quite the contrary. An entity like the UN invariably reinforces corruption and waste thus it reinforces social marginalization and destitution.

It all goes back to the monetary system and the way it is managed.

It’s the monetary system stoopid! Government of the banks, by the banks and for the banks.

This is the reason saving the banks is presented as such a vital mission by our sovereigns.

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2 Responses to “Debt II”

  1. Patrick Donnelly Says:

    The “banks” need more analysis?
    They launder money and facilitate tax evasion. That is a subsidiary purpose and enables them to obtain the power they clearly have.

    The leakages from the system are merely apparent as the laundry enables many to use the wealth that has made its way to them from socially damaging activities including the credit booms themselves.

    The books of all banks need now to be examined while in public ownership?

    • guidoamm Says:

      “The books of all banks need now to be examined while in public ownership?”

      Hmmm! But that is not going to happen though, is it.

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