The Reality Of Our Predicament

Man has natural possession of his own skills and abilities.

Since we established that individuals cannot morally be treated as chattel, it is reasonable to expect that upon exchanging one’s skills and abilities for money:

1 – The exchange represents equal value

2 – An individual should have the right to retain full possession of the money he receives in exchange for his efforts

But in the modern state predicated upon presumed democratic principles that extend to individuals such luxuries as the definition of the individual (self determination) and the right to private property, money is the exclusive preserve of an authority that manages it as it sees fit.

Throughout the past half century in particular and regardless of the political persuasion of successive governments, modern Western states adopted a policy of constantly increasing deficits and increasing sovereign debt. This policy is directly responsible for the gradual erosion of the purchasing power of the currency thus resulting in an increase in the cost of living.

But… The fact that the monetary authority arbitrarily, deliberately and constantly erodes the purchasing power of money, effectively means that when we exchange our skills and abilities for money, the exchange does not satisfy the two basic expectations of the exchange.

Arithmetically speaking, since the skills and abilities of the individual are limited but monetary creation is infinite, effectively this means that inevitably, although gradually, individuals will be divested of all wealth.

But monetary debasement is only one aspect of our socio/economic construct.

By debasing the currency, the monetary authority guarantees that property will gradually flow towards itself. This is an arithmetical identity.

But modern money is an artificial construct. Each new unit of money must be borrowed into existence.

The borrowing is done first by the state.

The state must therefore pay interest on the sums it borrows.

As the state has adopted a policy of increasing deficits, borrowing must in turn increase accordingly to cover the short fall in funds.

As the borrowing increases, so does the debt service.

In order to cover the normal functions of the state AND to cover its debt service, the state must levy ever greater amounts of taxes from individuals.

By exchanging one’s skills and abilities for money therefore, the individual is subject to:

1 – An exchange that is not equal in value

2 – Exchanging something the individual owns outright for something he does not own and has no control over

3 – Further taxation over and above the debasement over which he has no control

The above is not opinion. The above is an arithmetical reality.

Below are some of the questions that should be asked if you don’t understand what I am trying to say above.

a) Why is there a monetary authority separate from government?

b) If the monetary authority can create money arbitrarily, why can’t government do it?

c) If money can be created arbitrarily, why does government impose taxation?

c) In countries predicated upon democratic principles, why must we use one type of money that is imposed by government?

d) In countries predicated upon democratic principles, why was there no vote nor debate as to what money to adopt?

In closing, this is what you should take away from the above.

These are arithmetical realities. Most importantly, these are arithmetical realities that compound over time. A compounding dynamic is something that starts out slow but then accelerates till it goes parabolic.

This arithmetical reality has preordained ramifications that manifest at the political level, the fiscal and the socio/economic levels in society. Look around! Regardless of the political persuasion of successive governments throughout the West, the result for all individuals in Germany, France, the UK, Greece or Portugal is always the constant loss of purchasing power and the concomitant increase in the cost of living. No exceptions.

When this dynamic goes parabolic, the world you have known prior to this situation going critical, is not a world you will recognise and war and/or any of the 7 plagues are not far off.

We are now in the parabolic phase.

5 Responses to “The Reality Of Our Predicament”

  1. Richard Says:

    Separation between Money and State.
    Read the writings of E.C.Riegel

    • Guido Says:

      Technically we do have separation. That is part of the problem in fact.

      The central bank is that entity that ostensibly offers the separation of money and state.

      Our predicament stems from exactly this set up.

      In a first instance, government imposes upon society the use of one particular unit of account to the exclusion of everything else under penalty of law. In a second instance, government bestows the privilege to own and manage that unit of account to the central bank which is an arbitrary and unelected entity.

      In this context, the fruit of productivity cannot be distributed amongst the many. Rather it is arithmetically concentrated in the hands of the entity that owns the unit of account that we must all use under penalty of law.

      • Richard Says:

        “In a first instance, government imposes upon society the use of one particular unit of account to the exclusion of everything else under penalty of law.”

        False. Individual buyers and sellers can agree among themselves to use any non-voidable mechanism they choose by which to exchange. Be it vodka, tobacco or slips of paper.
        Remember, we are still holding to your assumption that humans are not chattel. Which implies that we control all phases of commerce: Production, Distribution, Exchange.

        Those who create the wealth shall determine the MEANS by which they will exchange their wealth.

        Our predicament is primarily due to our ignorance of money.

        Maybe you can state for your readers the cardinal rules which are characteristic of proper money. You can start by explaining the fundamental process of how money is created.

        • guidoamm Says:

          Not false at all Richard. Our money is imposed by law. The reason it is imposed by law is because government must try to maintain control of the majority of transactions in order to extract what they consider is their rightful fee for giving you the opportunity to live and work.

          Buyers and sellers may have a certain degree of latitude when exchanging goods or services, but this freedom only extends to barter or cash transactions and then merely because government does not yet have the tools to control every single transaction.

          As a case in point, barter works for goods and services that do not have a title attached to them. Should you however try to barter a house, a car or a piece of land, you can be certain that government will extract their pound of flesh because government is the intermediary that validates the titles and the transaction on these items.

          In this regard, let me refer you to the case of Bernard von NotHaus whom minted .999 silver tokens and used them to purchase goods and services from third parties who, in turn, were fully aware that the tokens they were accepting were not Federal Reserve Dollars. These individuals willingly accepted to engage in commerce with VonNothaus. Yet, government prosecuted VonNothaus.

          Moreover, the reason our governments are currently discussing ways to impose a blanket ban on the use of cash is exactly because the fiscal impasse of our sovereigns requires that governments hunt down every last cent they can get their hands on. Abolishing the use of cash, could, in their minds, give them total control of every single transaction thereby enabling them to extract their pound of flesh to which they feel entitled.

          So, yes, money is absolutely imposed.

          Effectively, if government declared that people were free to make use of whatever unit of account they wished but that, when it comes to paying for government services they must use the currency of the state, this problem would not exist. Of course, in this hypothetical construct, sovereign currencies would not be artificially tied to one another either (floating exchange rate mechanism).

          In fact however, today the money of most sovereigns is arithmetically tied to the US$. Shunning Euros to make use of Yens for example, may only afford you a temporary exchange advantage. In the long run however, the result is the same.

          That is why our predicament is particularly pernicious.

          As far as “controlling” all phases of production, distribution and exchange, there too, you are wrong.

          By arbitrarily bestowing the privilege to manage the monetary system to a third party AND by imposing a particular unit of account upon society, production, distribution and exchange are compromised. As is evident today, the entities that have first access to newly minted currency and credit, have an asymmetrical purchasing power advantage. Over the long run, control of the monetary system results in the concentration of profit thus the transfer of title towards the owner of the currency.

          Effectively, as this policy is applied liberally over decades, the result is the monopolisation of business and industry that is brought about by a regulatory and fiscal environments that stifle Business Dynamism.

          So, it is the owner of the currency that determines the means by which anyone will exchange anything. Not those who create the wealth unless of course, those that create the wealth happen to be in the good graces of government and banks in which case, they can indeed have a wider degree of manoeuvre in their decisions…

  2. Roger Glyndwr Lewis Says:

    Hi Guido, good to see you back, I was reading some excellent stuff on the Bank of international settlements earlier. Government and Corporations are both two cheeks of the same arse to put it crudely. Banking Corporations and industrial ones are all interlinked, you will be familiar with the Swiss paper on the connections of wealth holding interests etc. was posted as a link in a positivemoney facebook comment . Hope you and yours are well all the best Roger

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