Posts by Maria Thomas48

Gregory Williams7 said:One must finally realize that money itself isn't the true measure of value. Rather, it is the labor required to earn that money that matters. The system doesn't suffer from a lack of additional working hours; it suffers because there isn't enough labor to justify the capital needed to pay for it. There is more than enough liquidity in existence.

The "money shortages" we observe within certain entities do not exist because the system lacks funds. Instead, the system lacks the actual labor that would generate the revenue necessary to settle outstanding debts.

If you find yourself lacking "paper" currency, why not negotiate a deal to repay your debt through hours of service, materials, or other tangible goods? There is no need to print more paper.

Broadly speaking, we've just been pumping up the system with credit since 1994. But there’s a catch—those loans eventually have to be paid back with interest. You either pay them down using the cash that was already circulating or you use a surplus from foreign trade. Since we don't have that surplus, and there isn't really any other way around it, the logical conclusion is that there should actually be less money in circulation as those debts get settled. But that didn't happen. Instead, credit just kept expanding until very recently. So, if you look at it generally, there might still be some money left floating around—unless it all got swallowed up by imports—but most of it has probably just been converted into liquid profits for various corporations and individuals. It's basically sitting there as cash reserves. Still, when you factor in our debts from all that credit expansion, they outweigh the savings. So, if you do the math and look at the total sum, the money just isn't there.

Gregory Williams7 said:One must finally realize that money itself isn't the true measure of value. Rather, it is the labor required to earn that money that matters. The system doesn't suffer from a lack of additional working hours; it suffers because there isn't enough labor to justify the capital needed to pay for it. There is more than enough liquidity in existence.

The "money shortages" we observe within certain entities do not exist because the system lacks funds. Instead, the system lacks the actual labor that would generate the revenue necessary to settle outstanding debts.

If you find yourself lacking "paper" currency, why not negotiate a deal to repay your debt through hours of service, materials, or other tangible goods? There is no need to print more paper.

You’ve got this all wrong. It’s just basic human nature for businesses and individuals to save money and chase profits, which naturally pulls cash out of circulation when they aren't reinvesting it. But thinking that a fixed, stagnant amount of money is the solution? That’s just not how things work. That approach turns the whole economy into a game of poker. And in poker, everyone doesn't win; there’s only one winner who takes the entire pot. It’s really just a matter of time before that happens.

I totally get why you're worried about your savings. You can always just hold onto your money in Euros if that makes you feel better. Personally, I don't have any debt, so I don't really have a skin in the game when it comes to pushing for non-credit money. It's not about me. It's about what's best for everyone else.

First off, you've got the wrong focus if you think introducing non-credit money is definitely what drives inflation. Why aren't you making an argument for getting rid of credit entirely? It’s those same credits during periods of credit expansion that cause absolute chaos. When the government pumps out massive amounts of credit, they naively see this huge spike in GDP and all this incoming tax revenue and customs duties. Our brilliant economists take note of the growth. Everything gets spent immediately. You end up with higher wages, too. Well, of course you do. Then the unions step in and demand that the surplus be funneled straight into paychecks. And that just keeps going for years. You don't say a word about any of that back then. So, it's pretty obvious we're all just living on credit for something that hasn't even happened yet. In reality, what we should actually be seeing is a massive influx of non-credit money.It’s just that he’s the only one you can actually use to cover interest payments on loans. And you aren't even complaining about it. But those interest rates? They're basically made up. Real money is never actually issued just to pay off interest.

So, what's your take on that?

It’s like that old example with kids playing games. You can't just hand children 100 poker chips at a casino table and then turn around demanding they give you 150 back. Kids don't actually produce those chips. Someone else has to manufacture them in the first place so the kids have something to receive or earn before they can ever hand them over to you.

So, basically, the system is short on cash for interest payments—if we’re just looking at the banks—specifically regarding retained bank profits, once you subtract operating costs.

And there's one more major thing here. I don't get how you can't see that labor can't be converted into actual wealth if there isn't a source of money. The example of two people stuck on a deserted island proves this point.

Take yourself, for instance. You say you've saved some money. How did that happen? It's simple. You found a source of money and traded part of your labor for it. When you look in your wallet, you see savings that represent your past work. But the rest of the system sees a monetary loss (not talking about the value of the service you provided, just the cash itself). If a million workers all try to act the same way, the system experiences a million monetary losses. If those workers accumulate their earnings over the years, that monetary loss accumulates within the system too. Economists explain this as a slowdown in the circulation of money. It’s natural and expected. Everyone wants to have savings after decades of working. Your demand that non-credit money shouldn't be introduced actually conflicts with what you want, which is to increase your savings and materialize your past labor into cash.

The second thing is wanting that savings to hold its value. I agree with you there. Matthew Patel12 explained that it's possible. He's been swimming in these waters for decades, after all. I would argue that in a self-sufficient, isolated system, that would probably work. The problem is this transition period and the depletion of conventional energy sources. That's why I advocate for energy and food independence. With that, you can easily balance trade deficits and stay independent of foreign currency. Automatically, the issue of exchange rate stability—the thing that bothers you—becomes easier to manage by limiting imports. This is only necessary because of speculative trading and a lack of trust in our currency. Not to mention, a disciplined non-credit issuance of the Dollar could potentially be more stable than other currencies (like the Swiss Franc).

Now, I'm not advocating for printing money like Germany did before WWII just to pay off debts. In hyperinflation, you can't even talk about "non-credit money"; you're talking about unbacked money. There's a distinction there. Matthew Patel12 explained nicely how much is needed, and in his last message, he mentioned as much as 12% of the budget. That's doable since the budget is 50% of the GDP. So that would be 6% of the GDP. And from what I've heard, interest is over 6% of the GDP. Which practically means we're in a bind, because at this stage, it's too late to introduce non-credit money without reducing debt. And we know we can't pay off the debt in foreign currency because we don't have enough of it. All that's left is an export-oriented approach, which I believe in a little.

Let's say. If banks practiced real banking—lending only what they actually have—there definitely wouldn't be inflation (which is caused by a massive money supply from credit), and soon (within a few years, not decades) we'd see money shortage problems. Economists would use their brains, realize they're short on cash, and decide to issue it non-creditically rather than through credit like they do now.

I agree that politicians shouldn't have the absolute right to issue non-credit money. Issuance should go through the budget and be decided by the Federal Reserve based on precise calculations (Matthew Patel12 has some ideas he says might work). Also, there should be a limit on taking out loans where the interest exceeds 50% of the future annual non-credit money (a moratorium). Just so some idiot doesn't get the bright idea to borrow more than can ever be paid back.

So now I'm asking you. Even if we start with non-credit money. What about the sixteen years when it didn't exist? That's also a question for Mr. Matthew Patel12. What is the transitional solution for fixing the broken curve? That would definitely hit the value of the Dollar. It would certainly be better to reduce external debt instead (the government could take over private loans and pay them off at a discount, while the borrower pays normally—all just to ensure no undeserved wealth is created).

Regards.

It’s honestly pretty wild how people defend the credit-based constitution like it’s one of the Ten Commandments or something. They guard it so fiercely. And the crazy part? Nobody even questions it anymore. It’s just treated like some kind of religious dogma that you aren't allowed to doubt.

There are a few things we actually agree on:

We need more money. Why? It doesn't really matter. What are the solutions?

So, credit just keeps growing and growing? It feels like that. Everything seems to be piling up.
The issuance of non-credit money.

We have inflation. Why? Honestly, it doesn't really matter right now. What matters are the solutions.

Is credit just getting bigger and bigger? It seems that way. Everything keeps climbing.
Maybe there's a way to actually bring inflation down using non-credit money. It's a thought. Just an idea floating around.

What exactly does Solution A actually give us? It just hands us debts. We're talking about real, tangible debt built entirely on the foundation of imaginary credit value. And let’s be clear—that credit isn't even someone's actual savings; it's just a tiny fraction of it. You simply cannot pay off real-world debt using imaginary credit when there's an even larger mountain of real debt sitting right behind it. Fractional reserve banking is a scam.

If you handed your kids 100 tokens to play with and then told them you’d be back in a week demanding 150 tokens, they’d call you out instantly. They’d tell you that you’ve lost your mind. Kids see right through that. It's obvious because you're asking for more than what was originally put on the table. Yet, somehow, this logic passes with adults all the time. Banks operate exactly like this. If you follow the math, the only logical conclusion is that money is growing somewhere, just sitting there waiting to be collected at will. But if it isn't actually growing—because, well, that's not how the laws of physics or economics work—then we are dealing with mystery banking. Or, to be blunt, a total scam.

So, we’re left with Solution B. The whole mystery banking thing just disappears and we finally face reality. But reality requires some ground rules for how money is actually issued, because let's be honest, a colored piece of paper isn't inherently valuable. You can't just print non-credit money in whatever massive quantities you feel like. You have to limit it to an amount that allows for sustainable growth without totally nuking the value of the currency through inflation.

The whole setup with central banks relying solely on credit to pump out money is just a scam. It’s all built on nothing. Every single one of these money shows is actually just a show about creating new debt. You take a credit amount, subtract the installments, and what you're left with is just debt. That debt isn't actually issued as real money, and there’s just no proof it even exists.

It’s happening in the economy too. You take small savings on raw materials, add some extra labor, and try to squeeze out a bigger revenue stream. But that gap between what you bring in and what you actually spend? It isn't ever issued as real cash. There is just no proof it will actually exist. It means every single manufacturer operating on a profit by selling goods is essentially issuing a tiny bit of debt into the system. If they blow all that profit immediately, it cancels itself out. But if they start hoarding it, it creates this subtle shortage of actual money in circulation.

So, here’s the thing. We have banks and big corporations constantly pumping debt into the system. But there isn't really a counterbalance to offset that massive buildup of debt because non-credit money just doesn't enter the loop. Sure, governments try to cancel out that accumulated debt by taking out loans to cover their budget deficits, but it's a trap. Once they finally tighten their belts and stop being so wasteful, the whole economy—and eventually the entire banking system—just collapses. A country can't just keep borrowing forever. They could technically issue actual, non-credit money. But why don't they? Because everyone is terrified of uncontrolled money printing and the threat of hyperinflation. It’s funny, though. Nobody seems nearly as scared of the debt levels spiraling out of control. Politicians shouldn't be allowed to decide how much money is printed based on some arbitrary decree; it should be based on solid arguments. But people aren't actually working on those arguments. Not really. In fact, nothing is being done. There's still this persistent idea that the only way out is through "sound fiscal policy" and austerity. That’s just wishful thinking. It has nothing to do with how this system actually functions. I could easily prove that if you play strictly by the current rules, there is zero chance of a country ever paying off its debt, even if they maintain a perfectly balanced trade surplus.

So, really, the best move is just to focus on proving that fractional reserve banking is a scam. If we can actually prove that this whole system is a fraud, then we know for sure that the current path is a dead end. It means there has to be some other way forward, something else entirely, to actually find a solution.

We all know why this whole system is broken. The government doesn't actually have control over the money supply anymore. Instead, they use this credit surrogate that serves one purpose only: creating a cycle of debt slavery. It’s designed specifically to benefit nothing but the big bankers at the top. The government having total control over printing cash doesn't exactly guarantee prosperity. Honestly, looking back at history, they print way too much money far too often. It’s enough to give you a headache.

Isn't it about time we finally found the real key to non-credit issuance, instead of just endlessly defending this whole system of legalized robbery and credit-based looting?

Best regards,

sites.google.com/site/financijskisustav/home

Robert Vaughn10 said:And how exactly does China plan to sustain that kind of growth? It isn't nearly as simple as it looks.
Once you inflate GDP through loans, debt, and handouts—call it whatever you want—that growth becomes unsustainable. It can't go up forever. Eventually, you hit stagnation or a full-blown decline. And then what? The only economies with actual long-term prospects are those that reward hard work, net savings, and investment fueled by those savings. Up until now, the Chinese have had plenty of that. But relying on "gifts" is dangerous; it sends the message that profit isn't earned through labor. Besides, who decides who gets a gift and who doesn't? When you combine handouts with increased consumption—which is exactly what China is doing by boosting imports—you undermine the value of labor and income. A nation on that path is headed for an abyss; inflation or deflation are just the inevitable results. If you want to import goods, you need to be able to pay for them with real earnings.
Relying on gifts while simultaneously ramping up imports is a guaranteed recipe for failure in the long run. The winning formula remains labor, net savings, and investment. And the absolute prerequisite for all of that is the rule of law. That said, I agree with Maria Thomas48 that this current system is unsustainable. The sheer scale of credit expansion and greed is massive...

We always end up asking why one person succeeds while another fails. If you look at 100 companies, maybe one is a massive success, while most are just average or way below par.

From a statistical standpoint, there is always a chance that a country shows up at exactly the right moment. They can capitalize on Western stupidity—that constant obsession with profit margins—and high living standards to maintain huge export numbers for decades. My expectation is that China will actually become less competitive as they continue to develop. Though, I don't have the specific data on the actual money flows.

The only thing I've heard is that the Chinese get grants to move operations abroad specifically to drive the export of Chinese goods. I also heard that the government pays for the shipping costs from China to the final destination for certain goods. If that's true, then it’s perfectly logical that Chinese products are cheap.

High-tech manufacturing moved to China (and India) simply because of greed and the hunt for higher margins. But I am certain that this credit-heavy system played a role too—the kind of system that was killing economies back home by driving up production costs through higher interest rates on new money. I also read some things suggesting that mystery banking players are also pouring profits into China and India by building up plantations, which creates competition for domestic goods through cheap imports. That just kills the local economy further. The investment goes overseas with the specific goal of starting production that eventually wipes out domestic manufacturing. The moves are quite clever. And obviously, it won't go on forever because trying to grow an economy for a billion people already has heavy consequences on the price of raw materials and ore. That ends up hitting Western industry's competitiveness again.

Everyone knows what globalization really means. For the little guy, it's nothing, but for corporations, it's a fantastic way to squeeze more profit and find loopholes to lower worker wages (look at the European Union and labor migration). In the end, this won't bring anything good to either China or Europe. You can't have high standards or high consumption if wages are low. Now, apparently, China is the top market for luxury goods. Since a good portion of those luxury items are actually produced in China, it will likely start shrinking the Chinese trade surplus because the foreign owners will be pulling the profits out. How much that actually impacts things is a real question.

Regards

Gregory Williams7 said:Look, for every single argument you try to construct to support your money-printing theory, I could find a thousand counterpoints to dismantle it at any given moment. This isn't because I claim to be an economist or some kind of expert. It is simply because your theory is riddled with holes. If we were to build a computer model to simulate your printing scheme in practice, you would see the disastrous results for yourself.

Just remember this one vital point. Money is merely paper with a bit of ink on it. No matter how much of it you print, it remains nothing more than paper. You won't suddenly have more televisions, or more iPhones, or more crops just because you printed extra cash. Therefore, you can conclude that you have contributed absolutely nothing to the economy, other than wasting vast amounts of paper and ink.

Mathematical equations are famous because of that whole "triple deficit equality" identity you see in economic science. I’ve actually gone ahead and reduced those equations for the external trade balance—basically setting the exchange balance to zero. The fact that economists never bother to comment on what these results actually mean within a real-world, purely credit-based system is just a way to cover up a massive scam. Fractional reserve banking is a scam. Your own opinion, despite being a trained economist, serves as proof of that. It's simple: they just didn't teach this in school, so you don't really have a clue. Honestly, it would be better if you just admitted you weren't taught this instead of making these baseless arguments.

I’ve laid out the math with examples that just can't be argued with. People can try to tweak the numbers all they want, but at the end of the day, the result always lines up perfectly with the equations.

99% of economists just can't wrap their heads around this truth, and they refuse to accept it because:

That would mean he’s basically admitting his knowledge is incomplete. Like, he’s actually conceding that he isn't an expert.
I just can't wrap my head around it. It’s honestly hard to accept that such a simple proof—something an economic layman could pull together—is sitting right there, completely unassailable.
They’re finally starting to realize that the entire economic policy of this country is a total house of cards. It just doesn't hold up under any scrutiny. It clearly isn't going to work. And the kicker? The people behind all of this were supposedly the top economists in the business. Truly unbelievable.
Conspiracy theories aren't really just theories anymore. It's actually becoming proven practice.
It’s becoming pretty obvious that economic programs are intentionally keeping people uneducated. It’s honestly hard to wrap my head around because everyone treats their professors like they’re some kind of untouchable saints.
It’s just proof that modern economics isn't actually a science. It doesn't rely on any scientifically proven methods. I mean, the derivative I worked out—showing exactly why the system needs extra money injected to prevent a long-term economic collapse—is irrefutable. It should be the bedrock of a nation's economy. But because the logic leads to anti-capitalist conclusions, they probably don't teach it in capitalist countries. Still, it’s pretty stupid that there wasn't any real scientific study on this during the socialist era, either. Stojan Nenandović is a perfect example of how you couldn't even write scientific papers about this stuff back then, like that piece "Non-Credit Money as a Gift." And I even heard about someone else whose thesis was rejected just because the topic was "fractional reserve banking is a scam."

And honestly, if you can dig up a thousand arguments against it, I still don't get why you can't just spot the error in the triple deficit equality that all those derived formulas are built on.

You don't even need to go looking for a mistake, because there isn't one. The flaw lies entirely within the education system itself. I mean, think about it—why won't a single economics department or university ever want to address this topic head-on? It’s pretty obvious. They would just embarrass themselves if they actually tried to give an answer. And why does every single economist go silent the moment they first encounter this issue? Because they can't debunk the evidence. They simply refuse to admit that a layman might actually be right. It is pure scientific madness.

The economy is falling apart. More and more companies are just folding left and right, yet you keep insisting that everything is under control and that this is somehow how things are supposed to work. It’s frustrating. You refuse to admit that the math simply doesn't add up. If you look at the equations, it's clear: the economy is bound to shrink because we're eventually going to run out of actual cash in circulation. We'll be left with nothing but a mountain of debt.

Look, I’ll give you a plain, common-sense example because clearly something isn't adding up here. Let’s say you take out a million-dollar loan to cover a debt that actually totals a million and three hundred thousand dollars. That means you have to scrape together an extra three hundred thousand dollars from somewhere. If every single person in this country did that, we’d be looking at a total national debt of 1.2 trillion dollars. Even if only half the population did it, we’re still staring down 600 billion in debt. So, what's your plan for finding that 600 billion? Are you going to pull it from the other half of the population? Where is that money supposed to come from? And what happens if we run this cycle a few more times? There isn't some magical place where money just grows like weeds so you can just go out and collect it. Exporting isn't a magic fix either, because any functional nation needs to operate within a balanced trade system. Your grasp on economics is falling apart because you aren't offering any actual solutions. What you learned isn't the whole story. The part they left out is the part that explains how fractional reserve banking is a scam.

The exact same thing happens when you try to build up cash profits through saving and accumulating gains. The math proves it’s possible, but it also proves that not everyone can save—or even just break even—regardless of how hard they work. Because the total amount of money is a fixed sum, while some people accumulate wealth, others end up accumulating deficits until they eventually go bankrupt. It’s incredibly obvious in a game of poker, yet in economics, this is masked by credit. Credit hides the initial lack of liquid cash for savings, and then makes things much worse later by generating debts that simply cannot be repaid.

And the public is still just clueless about what is actually happening. They don't understand the Federal Reserve's mandates or what it actually means when there is no primary issuance of non-credit money into the government budget. They don't get that every single loan is a generator of debt. They don't realize that credits cause inflation, and then inflation feeds on more credit, creating a cycle of irreversible debt. They fail to see that no successful company in the domestic market could exist if there weren't companies losing money. And the government doesn't care about solving the crisis; they only care about staying in power. Instead of doing anything to fix the situation, the administration would rather just focus on petitions for the next election. Now we have this new "Robin Hood" gimmick being pushed—a tax on banks. As if banks are printing money. They aren't. They are printing debt. A tax on issued debt won't pull us out of this. Even if it were a 100% effective measure, it wouldn't change a thing.

Based on the data and information I have regarding movements in other, much more advanced nations, I can predict with 100% certainty that our government's moves will result in nothing that changes the fundamental direction of our situation. At most, they might trim some unnecessary costs or take out loans just to pay off existing ones. Any global price increases are only going to make the situation worse.

How do I see this so clearly when other economists don't? Because I know that loans can only be repaid with real money, not by taking out more loans. I know that the state cannot just extract as much money from its citizens as it wants; it all depends on the balance of trade. And ours is negative. That means there is no money available to repay the debt. So when officials claim that our lenders trust us, the real truth is that the lenders just believe they won't be the last ones left holding the bag, and they'll collect their payment from the next lender in line. Long live ignorance.

Regarding the printing of money—or rather, the issuance of non-credit money into the budget—I've touched on this before. Right now, the issuance of non-credit money is limited to what the Fed provides against collateral. This is obviously far too little and stays well below the rate of inflation. There is also the issue of maintaining the exchange rate, given the high probability that the Fed could run out of foreign reserves. That's a topic unto itself. However, if we focus solely on protecting the exchange rate and end up destroying the entire economy in the process, I don't think that's the path we want to take. The problem is that there isn't much economic literature on non-credit money. Therefore, it's hard to find a good practical example. There are plenty of bad examples where money was issued without backing. I always compare it to medicine. For instance, honey is healthy, but eating 1kg of honey a day will definitely kill you after a while. Water is necessary, but drinking 20 liters a day will also kill you eventually. It's the same with money issuance. New money should be money used for savings and cash profits, and it must be tied to actual labor. That is only a small fraction of total commerce. Any distribution of money that isn't backed by labor devalues both the currency and the hard work of others. The basic rule for a healthy population is: there is no money without work. Everyone who is healthy but receiving social assistance must be socially engaged (charity work, cleaning up neighborhoods, helping elderly households, etc.). Companies contracted by the state shouldn't be making extra profits on those specific jobs because that devalues the money. Because of this, any firm working for the government should be under extra operational oversight. Public tenders are easily manipulated by rigging requirements or having bidders create fake offers to artificially drive up prices. All of this looks less like capitalism, but it is the only way toward prosperity. Issued money can only hold value this way, preventing devaluation. It is difficult to maintain all of this under conditions of imported inflation since we lack energy independence. People are already starting to say we need an energy independence plan. Food independence is also vital. But why even talk about this when people refuse to see the obvious? An exclusively credit-based system leads straight to ruin. It's like casting pearls before swine. Everything will become clear once it is finally realized that a system without non-credit money leads nowhere but to misery and collapse.

Hey there

The link was broken before. It's fixed now.

sites.google.com/site/financijskisustav/home

It’s pretty naive to think that living in a cave would somehow get rid of bartering.

The math behind our financial system doesn't need any fixing. It just proves one thing: you can't actually generate profit for an entire community at once.

Honestly, looking at GDP growth is kind of pointless when you realize money doesn't speed up circulation—it actually slows things down because someone is always busy hoarding profit. This basically means GDP growth is driven by credit, and since credit (well, all credit) can't truly be paid back—because there isn't enough fresh cash entering the system without being tied to even more debt—we're stuck. So, if you ignore inflation, saying the economy is "recovering" just because GDP is going up is silly. In plain English, the economy is just adding more stones to its neck, dragging itself closer to bankruptcy.

Now they're warning us about energy prices spiking this fall, and where is the extra cash supposed to come from to cover those costs? Credit is the only option left. And credit just means more debt. And again, that debt can't really be settled.

Things are going to get worse, and then even worse, while politicians just keep recycling the same old lines. Economists will spend their time explaining why we failed, but nobody wants to admit that a system built on credit acting as new money can never actually create prosperity. We essentially codified that reality into law through the Federal Reserve Act.

Cheers
sites.google.com/site/finacijskisustav/home

Gregory Williams7 said:Honestly, I find it hard to believe you two are still debating this...
If this is such a grievance for you, my only suggestion is to stop using money altogether. Just quit using it and live your life that way.

Personally, I am perfectly fine with the interest rates offered on my savings accounts. I appreciate seeing my capital grow over time without having to put in any extra manual labor. It works for me, and I have no intention of changing it.
Where that money originates doesn't interest me. I certainly don't need explanations from conspiracy theorists. I simply recognize that this system has functioned this way for an incredibly long time and will continue to do so for the rest of my life. I intend to take advantage of it.

The fact that someone took out a loan they cannot repay and is now complaining that the system is impractical—when it actually functions perfectly every single day—is solely their own problem. It is time to get serious.

Once you look at the math, these conspiracy theorists stop being theorists and become researchers and investigators. The government's annual need for new money is about 2 to 5% of the total money supply. Because of that, most people can't see where the issue lies. If you're only missing a tiny amount of money, it means the cumulative effect won't hit until years later, and it will depend on the foreign balance of payments and irrational credit expansion and investing in various "Obrovacs."

After determining that we are lacking money, and realizing that any monetary profit implies a monetary loss for others, I logically assumed that bankruptcies would hit businesses across all sectors, rather than just picking one specific industry. My reasoning has been confirmed day after day over the last 6 months through various examples. And I predict it will continue this way. The potential of these companies or how much business they could theoretically do doesn't matter at all. Due to the lack of liquidity, the economy reaches a standstill. Over time, there is even less money in circulation because we still have firms (and banks) generating monetary profit (and therefore causing monetary loss elsewhere) and a negative trade balance (which is another monetary loss).

Bank failures will follow. Perhaps Gregory Williams7 should be careful not to keep all his eggs in one basket. My only hope is that these banking collapses will finally open people's eyes.

Here is the latest news from the journals: only 3% of Americans have a salary sufficient to cover all their needs. We ask ourselves why? It's a forty-billion-dollar question. This is the struggle we've been handed. We have a nation, but we don't have control over the money. So, it is only a matter of time before everything is sold off cheaply just to pay off debts that should never have existed in the first place. Long live ignorance.

Anyone who thinks they can debunk these formulas and find a way out of a crisis using something other than credit-based money is welcome to send me proof (Maria Thomas48@provider.com). Let them assume that trade with foreign nations will stay balanced (as if every country can just exit a crisis on its own). So far, that has proven to be an impossible mission. Which basically means economists are taking us for fools when they claim we'll pull ourselves out of this crisis. It can only get worse, worse, and even worse.

Regards
sites.google.com/site/finacijskisustav/home

neonhound10 said:What you’re saying at the end there really boils down to basic human psychology...

You could spend all day trying to convince someone that smoking is wrecking their health, even showing them graphic photos of what happens to people who don't quit, and yet they still won't lift a finger to stop. It’s the same pattern with everything else, honestly; that's just how these massive systems operate, by leaning right into human inertia...

It's just the way it is...

Fair enough. But look at it this way. If you tell a farmer out in rural Kansas that there's a fox raiding his coop and stealing three chickens every single day, should he wait until he's down to his last three birds before he does something about it? Or should he act sooner?

neonhound10 said:The system is just what it is. It was designed by some clever mind, but to me, it feels like seeing those same old pyramids just wearing different masks. I saw through the whole thing a long time ago... it’s always the same story, where the people at the very top of the food chain get to enjoy everything while everyone else watches.

I’d argue that this entire setup only really makes sense as long as there are enough resources spread across the globe to go around. We shouldn't kid ourselves thinking that countries like Germany or France wouldn't pull the trigger on a war if they suddenly ran out of the essential stuff they need to function. The USA has been doing exactly that for decades now, all while hiding behind the guise of fighting terrorism or responding to some kind of perceived threat...

And that guy sitting up there in the sky? He wants your money too.I think I've heard that before in some educational documentaries.

It isn’t really about those few people who manage to see through the fog of scams. That part is fine. The real issue is that 99% of the population just doesn't get it. They don't realize there is no bigger scam than the very system used to supply the money we use for everything. If people actually had a little common sense, they would see what I was getting at in my earlier posts. The evidence shows the government has basically legalized the fraud. It’s being covered up by academic circles—you know, the economics departments at places like Harvard or Stanford. Honestly, they should be organizing immediately to bring the truth to light. Anyone intentionally hiding this should be thrown in prison for life.

It’s honestly hard to wrap my head around how someone could have such a massive deficit in intelligence when it comes to something this critical. It just doesn't make sense.

Proving a fraud is easy when you lay out the facts in black and white, but people just refuse to believe it. On the flip side, you can't scientifically disprove the opposite. Over the last six months, my website has seen thousands of visitors, and yet not one person has actually tried to use mathematics to prove that my formulas are wrong. I’ve even reached out to several PhD economists on their end, but they didn't offer any actual rebuttal to my evidence. It doesn't matter, though. These professional economists simply don't want to admit that my derivation is correct and that the current system is designed to trap everyone in debt slavery.

Economic academic circles are just covering things up. They actively block anyone from actually verifying the truth. I was talking to this guy recently who had his thesis rejected—it was on how fractional reserve banking is basically a scam—and they wouldn't even give him a reason. It’s wild if you think about it. He was fully prepared to stand in front of an exam committee and defend his thesis with hard evidence, but they just refused to let that kind of research be officially recognized.

I also heard that one of the Vice Presidents at the World Bank used to work on introducing non-credit money. Apparently, he ended up leaving the organization because of it, and now he doesn't want to talk about the whole subject anymore.

Even though this topic seems totally random at first, it eventually dug up a mountain of facts and some pretty unbelievable evidence. Most people reading this just sit back expecting everything to sort itself out automatically. They assume our economists will just swoop in and pull us out of this crisis. It’s funny, really. These are the exact same people who won't even bother responding to letters that lay out proof of actual scientific treason against the nation—against the people. Yeah, right. At this point, you can't even use terms like "intellectual" or "patriot" anymore. They don't mean anything.

Honestly, I’ve reached a point where commenting on how little people understand about money printing and where profit actually comes from just feels exhausting. In my own life, when I talk to people directly, I rarely see any genuine interest. Nobody seems to care that every single loan pumped into the system just adds more debt to the pile. Nobody worries that we are basically fueling inflation by feeding it nothing but credit. There is zero concern regarding how national debt gets paid back or if anyone is actually looking at the math to find realistic ways to fund those repayments. It’s just not anyone's problem. Nobody cares when the Secretary of the Treasury takes out a $2 billion loan only to face over a billion dollars in interest later. Nobody cares that illiquidity is skyrocketing and more businesses are heading straight for bankruptcy. And nobody cares when you use actual mathematics to prove exactly why this is all happening. It’s like nobody gives a damn. Everyone just assumes their own paycheck is safe. If the neighbor is starving or losing everything they own, people just shrug it off. Even the President doesn't seem to care. As long as the paychecks arrive on time—which is already handled, apparently. The government doesn't care either. They just want to coast through a few terms in Congress and secure a nice pension. That is just the reality we live in. Everyone looks out for themselves and thinks they’re doing the smartest thing possible.

We just aren't doing enough work for the common good on the big stuff. To me, controlling how much money is pumped into the system is easily the most vital thing a nation can do. It basically dictates the entire future of the country in almost every single case. With all those math PhDs out there, I’m convinced we could find a solution pretty easily if people actually tried.

I figured I'd write a slightly longer post to get this discussion going again. I know most people don't care about this, but as long as the issue exists, we have to keep talking about it. Maybe one day things will finally click and everything will just fall into place.

Best,

sites.google.com/site/financijskisustav/home

neonhound10 said:I’ve been following your posts, and even as someone who isn't an expert, I find myself agreeing with quite a bit of what you're saying...

The part I can't quite wrap my head around, though, is what you actually suggest we do to fix this?
What do you think would be the absolute worst-case scenario here?
And why do you feel like people won't just "mutate" into something entirely different?

I did a little digging on my own regarding the Argentine Syndrome...

http://www.mojnovac.net/forumi/showthread.php?t=197

It seems like certain things just move in cycles. Honestly, we're all just slaves to the 21st century and there's really no way around it... People are just way too dependent on money these days, which explains why everyone panics so much during a crisis or when one is looming.

Of course, the first thing people fear is seeing their current standard of living drop—which, in the US right now, feels totally disconnected from reality due to the fallout from recent conflicts...

I know I can be a bit stubborn about these things, but as long as we have such a massive percentage of retirees who haven't even finished a full career, plus hundreds of thousands of disabled veterans and those serving our country, I'd say there is plenty of room for budget cuts here...

But I truly believe that we need to start by looking at ourselves first...

The path to a solution is pretty straightforward.

If it's obvious that exporting is the only way out, yet that's impossible for the entire planet to sustain, then it’s clear evidence that the system itself is broken.

First, economists need to just throw their hands up, admit they've been wrong, and tell us the truth: they've been lying and misleading us for decades. This whole setup is a sham because new money is nothing more than credit.

Second. Once we finally accept that, we have to define how real money is going to be generated (primary budget issuance and specifically how much).

I wouldn't even bother looking at point two until point one happens. Any kind of money generation that isn't backed by actual labor leads straight to ruin through hyperinflation, and that's where you have to draw a hard line. Everything else—things like savings, streamlining administration, wiping out corruption and rigged contracts—is all valid, but it won't work without that first step. It's impossible otherwise.

That's really it. People need to understand exactly where new money comes from, why it holds value, and what causes it to lose that value. Until that level of awareness exists, nothing else matters. And this has to be driven by economists, politicians, and the media. But they won't do it because they prefer staying mindless and acting as servants to others.

Without non-credit money, our labor is essentially worthless. Or rather, we can only partially convert it into money (savings) which is actually just hiding someone else's massive debt.

The worst-case scenario is just aimlessly drifting along without an actual plan and dealing with the fallout. Unemployment, bankruptcies, bank failures, foreclosures on homes and property, strikes without a purpose, civil unrest, robberies, and so on. It's everything we saw in Greece. And Greece didn't truly recover. They just quieted down a bit. There will be more to come.

Regards

Well, Secretary Šuker just made our day by approving a $2 billion loan. Meanwhile, the head of the Federal Reserve mentioned in a recent report that we need to tighten our belts, though he lacked the guts to admit that neither austerity nor taking out even larger loans will actually solve anything. That’s not really his job description, I suppose. He could have just been honest about it, but then he probably wouldn't be the Fed Chair for much longer.

A few months back, I figured out that we need over $2 billion in new capital every single year just to keep things running. And sure enough, the amount of debt we've taken on this year has already hit $2.5 billion. Sure, we spent some money paying down old debt, but fundamentally, the mountain of debt is just getting taller.

I caught Gust Santini on TV today. More than a month ago, I handed him clear, written evidence regarding this, but he doesn't use it when he goes on air. He just said we can keep borrowing as long as someone is willing to lend to us, but eventually, interest rates will spike, making further borrowing a total suicide mission. He didn't say anything else that I wouldn't have said myself. He also added that we absolutely need to focus on being export-oriented. I've said that's the only way out of this mess—assuming people actually start using their brains—but the man won't say what really needs to be done. Even when Slavko Kulić mentioned it recently on ABC. The US lacks an independent monetary authority. And the news anchor didn't even follow up with him on it. But hey, if you know, you know. Monetary authority is about the power to issue money. We basically just gave that up because we lack common sense.

So, here we go, following the Greek path. Only those who truly see the picture can recognize the small truths popping up in the media, but even those aren't enough for the masses to understand where the wind is blowing from or why.

In the meantime, everything is playing out exactly how I assumed it would. Businesses across all sectors are slowly sliding into losses and shuttering their doors. In a society without enough inflow of new money, those who are profiting can only do so at the expense of everyone else. And those other people can't endure it forever before they go bankrupt. Eventually, even the profitable ones won't be able to pull profits indefinitely. As the less profitable firms fall away, the profitable ones will be next in line.

I know from first-hand experience that a ton of companies are barely scraping together enough cash for payroll, and they're compensating for everything else through trades. Basically, they're generating turnover without actually using liquid cash. Some owners are already wondering how much longer they can hang on.

Long live economic ignorance.

sites.google.com/site/financijskisustav/home

Look, Japan is basically proving what happens to 99% of nations because of this purely credit-based system. Their debt is sitting at 200% of their GDP.

I've been trying to get a hold of some big-name economists, but it always ends up at the same stage. They just say they'll look over the material and get back to me.

An article I wrote for my site was censored by the editors at a major US news outlet, so the link to the content is gone now.

Our unions are fighting over laws that honestly won't even be followed, especially since we know the whole system relies on credit, and there aren't any bigger credits coming down the pipeline. At the end of the day, regardless of what kind of law passes, the money simply won't be there. If the government spends less, they collect less in taxes. Massive austerity just leads to less money circulating, which means people can't earn higher wages, so you can expect that half-baked plan to shorten payment cycles to be a total disaster. They’d be much better off fighting to change the foundational law that pushes us all into crisis—the law governing the Federal Reserve that keeps money issuance strictly credit-based.

In the meantime, I've put together some extra readings over at http://sites.google.com/site/financijskisustav/home so everyone can find out the actual truth about how the financial system works.

While searching through various authors, I stumbled upon an author from Mexico named Stojan Nenedović who wrote a paper titled "non-credit money as a gift" http://noncredit-money.org/?cat=34&lang=en. For thirty years, people have tried to present this theory to the USA and Mexico, but it gets rejected. Even if his specific method for regulating money isn't perfectly clear and would face hurdles in real-world implementation, the main point is that there were thinkers decades ago—long before this credit system became part of our lives—who realized that non-credit money issuance is necessary.

And the main takeaways for that kind of non-credit issuance are actually quite interesting:

- lower inflation (since bank credit activity is the cause)
- lower production costs
- a more competitive economy without unnecessary interest burdens
- lower taxes (because the state's finances aren't weighed down by interest)
- higher employment and a stable economy
- etc.

A lot of people won't agree with this, but those same people won't admit that prosperity in a purely credit-based system is only possible for bankers and a tiny handful of winners.

Best,

http://sites.google.com/site/financijskisustav/home

Larry Collins19 said:Andrew Mellon once said regarding the Great Depression: "Liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate… it will purge the rottenness out of the system." Honestly, that looks like the fastest way out for America too...

And you’re out here arguing against inflation, yet somehow claiming it's one of the things that would actually fix the crisis... :P

I’ve already shared my thoughts on inflation in some of my earlier posts.

Inflation in our current system—where money only enters circulation through credit—is absolutely wrecking the economy. It’s pretty straightforward: if you want to maintain the same real mass, basically keeping purchasing power steady, then the total sum of inflation plus interest rates has to keep climbing against the money supply. If that doesn't make sense, just go back and look at that Excel sheet I posted earlier. That was just a projection, sure, but reality is hovering right around those numbers. We expect the real money supply to dip because people are going to tighten their belts and cut back on spending, but that can't last forever. Eventually, the only way forward is to let a larger volume of credit circulate to keep the money supply moving.

Once you finally move away from relying on credit as your primary source of cash, that’s when printing money starts driving inflation. And since we were always so reckless with our lending, it stands to reason we’ll be just as reckless when it comes to printing.

The secret to calculating an exact money supply that won't trigger inflation lies with those trained economists—the very same ones pretending they don't see exactly where the crisis is coming from. It’s actually pretty simple. In basic terms, primary money issuance should strictly match the total profits generated by all economic actors, like corporations and individuals. You also have to factor in losses, treating them as negative values. If our money expansion mirrors the expansion seen overseas, then we wouldn't be dealing with exchange rate issues. Of course, there's a catch: our profits have to be backed by an equal amount of actual labor. Take foreign banks, for instance. They rake in massive profits here in the States, while making significantly less back home. This essentially means they are devaluing the currency by extracting high profits without contributing much real work. We need to be rigorous about this. Anyone looking for a free ride—wanting the bread without doing the heavy lifting—needs to be cut off by deducting their assets. Greed has to be dismantled. I'm talking about the predatory lenders, the shady contractors, the highway construction outfits, and those lawyers with their outrageous billable hours. You can fight back against all of them by establishing state-owned enterprises that operate on legitimate profits rather than manufactured losses. When the rules of market competition start working in reverse, you have to use forced regulation to push things back onto the right track.

If we could just achieve a baseline level of independence when it comes to energy and food, we’d actually be headed in the right direction. It’s pretty simple. Being dependent on outside sources for energy—especially with a trade deficit like ours—is basically a fast track to a debt crisis. It’s inevitable. And honestly, the same logic applies to food security too. We need to be self-sufficient if we want to stay stable.

Are we really being that blind? It’s pretty simple when you think about it. We need energy and food, and we need them constantly. All this talk about planning becomes pretty much meaningless when we’re importing all our gas anyway. Honestly, it would be more realistic if Russia just footed the bill for our energy infrastructure, but then people would start asking questions like, "Wait, why is Russia setting up our gas lines?"

That’s something that really needs fixing. When you have cheap imports like that, they only look favorable on paper. It's not the full story. Let's be real here. Importing all this stuff without any actual reason? It’s just a massive waste of cash. We really need to be buying domestic products. Even if they have some foreign components mixed in there, they’re still better than just straight-up importing everything from overseas. It just makes more sense.

Every single import we make just piles more onto our debt. How? It’s simple. The Federal Reserve burns through foreign exchange reserves to manage things, and those reserves—along with private holdings—are exactly what allow us to pay off our debts. Just keep that in mind next time you're grabbing something made overseas. If you buy a domestic product, the "loss" is basically just the manufacturer's retained profit. But with an import? That loss is 100%. Think about it. That cumulative profit kept by a local maker is what ends up in long-term savings instead of being spent or reinvested. If that margin is around 5%, then buying an imported item at the same price is actually twenty times more damaging than buying something made here. I mean, if it took us 15 years to hit this crisis, focusing entirely on domestic goods would have stretched that timeline out to 300 years. Even the Romans had to deal with currency inflation of just a few percent to see that kind of impact.

Basically, an import only really makes sense if it's like 20 times cheaper than what we produce locally, assuming the quality is actually the same.

Best,

Everything I’ve pointed out regarding flaws in economics actually has a logical foundation.

You really should take a close look at the section in The Globalization Guide because it ties directly into the evidence I've laid out.

It fits perfectly with all my mathematical proofs.

Here is where they overlap:

"Basically, a single $100 bill issued by a central banker costs about 30 cents to produce, yet citizens are left holding a debt of $103—a debt that can never be repaid, even theoretically, because the bank only issues the principal and never the money required to cover interest payments." The Federal Reserve Act and the statutes of the Federal Reserve confirm this. It should also be noted that if there isn't enough money to generate earnings for the central bank, there certainly isn't enough to support the entire community.

"- By funding or directly owning business and economic schools, financing research, publishing works, hosting economic conferences, and providing direct payments to economists, they condition and restrict the general understanding of economics, its instruments, and specifically the relationship between monetary control and macroeconomic events." This is clearly visible in the responses from the Administration and the President's office.

"- They pass budgetary regulations that legalize unnecessary public borrowing from the banking cartel to fund government spending, while simultaneously approving tax levies." I have proven mathematically that this debt cannot be repaid without massive exports, which is a globally impossible mission for any nation.

"Fraudsters and thieves among top-tier global bankers, charlatans within university economics departments, workshops, thinkers, and intellectuals who provide logical cover in exchange for corruption—they all continue to insist that this fake version of a free market in a globalized world is perfectly fine and would have functioned flawlessly if governments hadn't interfered.
We see their sophisticated arguments and theses, which nobody else can truly grasp, appearing daily in the press, on television, and across digital media." This is my recent thought regarding the complicity of anyone who believes the current system provides prosperity (even though that can't be proven theoretically, statistically, or practically).

But what good is all the evidence if people lack the IQ to connect the dots and understand it?

Does anyone else honestly think this is all nonsense? What are we supposed to do? Does anyone actually believe the Administration will lead us out of this crisis without increasing debt? And debt itself is just a crisis generator due to interest payments.

I've brought everything down to earth and proved it with math. Greece serves as a practical example of this reality. We aren't far behind.

Right now, we're looking at electricity prices jumping by 13%, and that might just be the beginning. Remember, in this system, inflation doesn't just devalue money; it creates infinite debt over time. Once you get a chain reaction of price hikes for all goods and services combined with total cash shortages and high interest rates, you'll face crisis and anarchy. Tourists will start bypassing us like we're a war zone.

That is what's coming. And the administration keeps lying to us about the causes of the crisis and how to fix it. We can tighten our belts until we're unconscious, but it won't work because that isn't the way out. We urgently need an energy independence strategy. Apparently, the Russians are pulling oil from 7.5 miles depths where it should never have been found. We need to make agriculture capable of meeting our own food needs. Then, we need to work on amending the Federal Reserve Act to allow for real money emission through the budget, rather than making credit the only option. The value of the dollar is a whole other issue. We need to control imports—cancel those free trade agreements and write new ones that balance imports and exports. In that scenario, the exchange rate matters less because we'd be trading goods directly. Tourism would become pure export, instead of the current mess where we import food just to feed the tourists. We couldn't have made stupider decisions.
Joining the European Union should be put on hold until they fix these same issues within the EU. Anyone would do that within their own family, wouldn't they? What good is all that advanced imported technology if we're living like debt slaves?

The way this whole system is set up, there’s just no escaping the crisis. It’s built to trigger these crashes by its very nature. We need a total overhaul because the structure itself is the problem.

Does anyone actually have a better way forward—and I don't mean just some vague theory? What we really need is a concrete, actionable plan.

Best,

http://sites.google.com/site/financijskisustav/

Robert Vaughn10 said:So, the U.S. Government has decided to monetize its debt. I suppose we'll get to see how that actually plays out...

I honestly think the administration is just blowing smoke to squeeze out every last cent they can. They're just pretending to work on a solution. Sure, it’s fine that they're "trying" to shorten payment deadlines for suppliers. But there's a massive difference between actually shortening those terms and just claiming you're doing it.

The rest of it is just moving money from one empty pocket to another.

We still haven't gotten a straight answer: what actually caused this crisis, especially after everything seemed to be going so "well" for us? If we don't even understand the root causes—whether here in the States, in the European Union, or globally—then there’s really a slim chance we’re going to fix anything.

Best,

brightlynx11 said:You keep actual purchasing power steady through salary negotiations that factor in inflation. People don't just go into debt to stay even—that assumption is flat-out wrong. Go look into some recent breakthroughs in behavioral economics— http://en.wikipedia.org/wiki/Behavioral_economics

Purchasing power is basically real wages divided by the aggregate price level. Taking out a loan is just an intertemporal shift. From a purchasing power standpoint, it's neutral because paying back that debt eats into your future disposable income.

Bottom line—http://www.getobjects.com/Components/Finance/TVM/concepts.html
Go study Time Value of Money concepts used in finance management.

That assumes velocity of money is constant. It isn't.

Yeah, we can. 🙂

Real purchasing power depends on a whole bunch of other stuff—wages, productivity, etc. Your premise is stupid. Bad premise = bad model.

http://en.wikipedia.org/wiki/Fisher_equation

*tap tap*

*sigh*
Inflation isn't always just about money supply. Maybe try reading Samuelson before you start trying to "discover" major economic theories in an Excel sheet.

I'm not going to respond to every single troll comment. That’s just not how I work. Here is the reality. Inflation means prices go up. Everyone understands that when they look at their own household budget. When products get more expensive, we can buy less with the exact same amount of money. Our purchasing power drops. It keeps dropping until we eventually find ourselves only able to afford the absolute bare essentials.

If you want to offset the drop in purchasing power, you have to increase income. If we’re talking about doing this at a community level, there simply needs to be more money in circulation. You can try selling people on those theories about velocity of money, but honestly, take that argument somewhere else. If that logic actually worked, we would never have crises, and besides, the money wouldn't even stay in circulation long enough for anyone to actually see it. Do you really think you can just ramp up the velocity by 3 or 4% every single year indefinitely? That’s an exponential function. At that rate, it would double every 17 to 23 years. It doesn't hold up.

To be blunt, the US doesn't have an export surplus to speak of, nor is there any kind of long-term investment coming in to bridge that gap. It's just not happening.

When you’ve got a massive amount of liquidity floating around because of credit expansion—plus all those other moving parts like inflation—you still have the resources to keep things running. A portion of that credit never actually gets paid back, which just keeps feeding the pool of circulating cash. It isn't a direct link, mind you, but more of an indirect connection. Honestly, if we hadn't relied on credit in the first place, we wouldn't be staring down these debts right now. The crisis would have hit us way sooner, too. Without that cushion, a shortage of foreign currency to pay for oil imports would have triggered an immediate collapse.

The Federal Reserve laws basically state that new money only enters the system through credit. That's just how it works.

So I put together this Excel sheet to track inflationary debt and realized something pretty straightforward. The total debt just keeps climbing because you're essentially adding up the interest on inflation plus the actual interest rates. It’s a cycle. You have to spend a portion of any new credit just to cover the new inflation, while the interest keeps piling up on top of what you already owe. You can't exactly pay the debt back, either. If you tried to wipe it out, you'd be draining the money supply entirely, and that would trigger a massive economic crisis.

You can see the proof in how things actually play out. When companies and banks get sold off, it injects fresh cash into the system, which basically gives the financial sector enough breathing room to handle those long-term payment cycles again. That credit expansion from the new bank owners, combined with all that investment into the interstate highway system, ended up padding the Federal Reserve's foreign exchange reserves and making imports much easier to manage. All that flood of cash coming from loans really jump-started the economy, and the idea was that it would eventually kickstart domestic manufacturing for export. But because the exchange rate was so favorable, nobody actually found it profitable to produce anything locally. Everyone just pivoted toward import businesses instead. That's just how it went.

Sure, that’s all just theoretical. In reality, we can see that every major industrial nation is drowning in massive debt, and they aren't actually paying it off—they're just piling it higher and higher. If your theory actually held water, at least 20% of countries would be in an incredible position right now. But honestly, the saddest part is that the most technologically advanced nations are the ones carrying the heaviest debt loads. I've pointed this out a few times before. Are we really supposed to act like fools and follow the lead of the Japanese for fifty years? It won't work. Hard work alone isn't going to solve a debt crisis like this; eventually, people will just be working just to put bread and water on the table. Everyone ends up in the same place in the end. Those who had everything will lose it all because of the debt, and those who started with nothing will stay exactly where they are.

What’s the common denominator for all these issues? Basically, if that one specific problem exists, you just get constant disruptions. It’s like the only way new money actually enters the system is through credit.

This whole "flexible monetary system" thing started being rolled out nearly a century ago, and now that it’s been spread to almost every country on Earth, it’s basically become the root cause of constant crises and debt slavery. People argue about it all the time. They claim a standard system might let inflation eat away at the money supply, but at least it doesn't trap everyone in a cycle of debt that’s impossible to work off. Some people try to make that point, but they clearly don't get that the old way actually worked here in the States until the mid-90s. When the Federal Reserve got its new mandate, it managed to keep the dollar and prices relatively "stable," sure, but it also paved the way for these catastrophic long-term consequences. It just turns out there wasn't anyone around back then with the guts to actually say it.

By the way, everyone who insisted my equations were wrong can go ahead and start attacking Professor Dirk Krueger too. He laid out the exact same thing for an open economy on page 27 of his book "Macroeconomics". He just fails to draw the necessary conclusions regarding the credit-based financial system specifically, and how inflation impacts the economy in that context. I wonder why that is.

To all those telling me I need more education: maybe try reading the Federal Reserve Act and the statutes of the European Central Bank first—which, by the way, will soon be our law. It’s the same reason I’m against joining the EU. We should only join once at least 70% of their current members aren't drowning in debt. Only a fool would jump into a group that's already struggling this hard with debt.

Best,

casuallynx8 said:That isn't quite right. The real interest rate is the difference between the nominal interest rate and the inflation rate, rather than their sum. To use your own example, the real interest rate you are paying on a loan would be 7.5 - 4 = 3.5%, not the 11.5% you suggested.

Consequently, if you borrowed $333 at a 7.5% interest rate, you would owe $358 after one year. However, if an item that cost $333 at the moment the loan was taken requires $347 to purchase by the time you repay, then the real profit your creditor realized is merely 35, not $25.

It is much like how, in decades past, one could settle certain debts for the price of a pack of cigarettes; under your logic, such a feat would be impossible.

Furthermore, I struggle to see how, according to your reasoning, anyone manages to repay any debts or loans at all.😁

Well, I was naive enough to think that too. That logic works for a standard loan, but it doesn't apply to inflationary debt. I mentioned this earlier, so just go back and read it.

In short. My starting point is the assumption that you're trying to maintain purchasing power by taking out a loan. You can't actually pay the loan back because you need that money to maintain your purchasing power. It’s not entirely accurate in a real-world system, though, because as we drive more expensive cars, we need more money in circulation since they aren't built to last as long. Economists can probably analyze that better than I can. I just made the simplest assumption that you're holding onto the status quo and keeping your real purchasing power exactly the same.

I plugged this into an Excel sheet and soon realized that debt tends toward the sum of inflation and interest over time.

There isn't some complex mathematical derivation here; it's easy to work out. Just look at the spreadsheet. I know it looks like a disaster for everyone, but we have to face the facts and say: This is the truth.

The Federal Reserve didn't give me any answers on this topic at all. They don't seem to care about the consequences of inflation.

Based on the Federal Reserve's own charter and laws, the only new money entering the system is credit. Period. Which means we feed inflation through credit. I just calculated what happens next.

Best,

Gregory Williams7 said:That is precisely what he ignores. He relies on a mathematical formula spanning twenty years, yet completely disregards any newly emerging values. To him, those variables equal zero. Consequently, his model fails to account for reality; according to his logic, the system should have collapsed ten years after its inception—somewhere around 5000 BC. But it didn't. It survived. Even today, it remains operational. How can he express such bewilderment that the system still functions when his own mathematics dictated its demise? We attempt to explain the discrepancies to him, but it is like talking to a brick wall. There is simply no way to make him see reason.

Regardless, he is merely one lost soul. For ages, he will continue to shout, "It should have failed!" And perhaps some people will believe him. However, practice will always dictate the truth, no matter how loudly he cries out. As for me, I am still paying my bills in US dollars, managing my savings, loans, interest rates, and inflation. Everything continues to function perfectly. No matter how much he shouts.

Sure, there is new value being created. But at the same time, money is losing its punch because of this endless cycle of credit expansion that just devalues everything. Plus, you can't ignore how much people are just driven by pure greed for cash.

Best,

casuallynx8 said:With all due respect, your theory isn't quite hitting the mark.

Could you walk me through what you mean by Equation 3? To be honest, the math following it is a bit murky; it would benefit from some clearer exposition... I stopped reading shortly thereafter.

The fundamental issue lies in your premise. You seem to be operating under the assumption that total income must equal total expenditure—essentially the sum of private consumption, investment, and government spending. However, this doesn't imply that the economy functions as a zero-sum game. Real income is derived from the creation of new value. At its most basic level, we have to eat, which means we must produce food through our labor just to survive. If we followed your logic, half the population would effectively starve in the first year, because for one group to show a "profit" in resources, the other would necessarily have to absorb the loss.😁

Do you see my point? An individual generates a specific amount of value through their work, which constitutes their income (Y). From there, only three things can happen with that value:
the individual spends it on consumption (C).
the individual deposits it into a bank as savings, which the bank then lends out for investment (I), or they invest it themselves if they are an entrepreneur.
they pay it to the government via taxes, and the state then handles the spending (G) on their behalf.
That is the underlying logic of the Y = C + I + G formula (for a closed economy; if you factor in imports and exports, you simply add the net export differential to the right side of the equation). We are talking about actual newly created value, rather than just shifting existing wealth from one pocket to another (as you suggest happens when losers fund those making a profit).

The equation is correct. It's backed up by an Excel spreadsheet on closed community profitability. There aren't any errors or bad moves in the derivation. No amount of moving the goalposts changes that. Even Dirk Krueger uses this exact same derivation with standard economic symbols in his book "Macroeconomics"—page 29. The link to the Excel file and the PDF was shared earlier.

I'm just following the logical conclusions. And naturally, the conclusions aren't exactly pleasant.

Best,

I honestly don't care what money is actually used for. All that matters to me is that it serves its purpose as a way to settle my bills. That's really it.

If you’ve taken a look at that XLS spreadsheet showing the association's profits, you'll see exactly why the payments end up getting stalled after a while.

Here’s why: The middleman sectors—those entities that exist solely to squeeze a little extra off the top for everyone else—are drying up. Eventually, they’ll just vanish because there won't be any indirect profit left to grab. It happens. One day the margins disappear and then suddenly, there's nothing left to facilitate.Next up are the ones who aren't making much money. Because business has dried up, they’re sliding into the red and struggling to stay on top of their bills. Since even the companies already in the hole haven't been hitting their tax obligations to the government, this drop in revenue means the new loss-makers are falling behind on taxes too. It all circles back to the same thing—the government ends up seeing a dip in tax revenue, which shows up as them pushing back payment deadlines for services and products ordered by the state.

It’s the same thing that happens when credit expansion hits a wall. Loans stop growing. Those companies that were once pure sellers suddenly find themselves without any business at all, and they start operating at a loss. You know how the rest goes. It’s like that whole story about the housing contractors who were making money left and right. I'll get to that. Once the loans have to be paid back, there’s less work available because those construction crews aren't out there spending money on anything else anymore. It reminds me of back during the big highway expansion era. Remote parts of the Midwest were absolutely booming during those years. Money was just flying everywhere. Everyone was winning.

People always seem to miss the connection between prosperity and a steady influx of new capital. It’s a simple equation, really. If you can't link the two, then you're just ignoring how things work. Without that constant flow of new money coming into the system, you have to expect stagnation. In fact, it's more than that. You should pretty much count on the whole society regressing. It's just basic logic.

You can pretty much model all of that in a spreadsheet if you want to. But in a real American community, we’re dealing with imports that constantly drain our cash flow, not to mention the inflation we basically import from overseas—like how fuel prices spike and then drag every other price up with them. It just speeds everything up and makes the whole situation worse.

The whole idea that inflation actually drives economic growth? It’s not exactly right. There's definitely a connection there, I guess, but there are consequences too. It's complicated like that. People still don't get it. You can't just conjure up money to cover inflation out of thin air. It only comes from credit. That's just how it works.You could basically compare this kind of inflation that drives the economy to drugs. It makes you feel good in the moment, sure, but it eventually leads you straight to ruin.Nobody can actually fuel inflation through debt because the total amount of debt just grows by the sum of the interest rates and the inflation rate itself. It's basic math.The real debt is definitely climbing faster than the bank interest rates, and inflation isn't doing anything to offset that. If you look at an Excel spreadsheet tracking inflation-adjusted debt, the math is right there. Say you're looking at 4% inflation and a 7.5% interest rate; that means your debt is actually growing by 11.5% annually relative to the money supply. You can't just pay that back with standard currency. Over a typical 20-year stretch, the debt eventually outpaces the initial money supply in terms of real value. It’s just how it works.

It’s also about that 4% chunk of cash. Sure, the value might have climbed slightly, but now those funds are just sitting there, frozen. You need that liquidity to keep things moving through the system. Honestly, inflation is really the only thing that triggers these payment bottlenecks once it starts piling up over the years. It’s basically just mathematical induction playing out in real time. Can I function without that 4%? Yeah, I can. So, shave off another 4%. Still fine. And another 4%... I can still manage. But eventually, you hit a wall where you just can't anymore. That’s when the crisis actually hits. Suddenly, there's no money left. Payments get delayed, solid companies start folding, people lose their jobs, loans go unpaid, and everything just breaks down.

It all gets paid back during credit expansion—you know, the inflation, the import surges, those terrible investments, all that stuff. Then, once the credit expansion finally hits a wall and stops, everything just surfaces at once. Everyone acts like they’re caught completely off guard, staring around like total idiots. They start asking, "Wait, what happened? We were doing so well just a second ago."

So, there it is. That’s basically why the payments are stalled. It all comes down to the cash flow drying up.

It all boils down to where the money is coming from. You see plenty of posts on this site covering that exact topic. Once those revenue streams dry up, we’re looking at a total crisis..

Hey there.

I was looking through this site about the financial system earlier. It’s interesting stuff. Very technical. A lot of points on how everything connects. I think there's some value here if you actually take the time to sit down and read through the layers. Most people just skim over these kinds of things, but there's a certain logic to it once you get past the initial complexity. It's all very straightforward if you don't overthink the mechanics. Just a lot of data to process. Definitely worth a look for anyone trying to wrap their head around how the money moves.
Profit_community.xls

Robert Vaughn10 said:I see you get the point about credit cards and how money leaks away needlessly, but I still disagree regarding savings. One might jump to the conclusion that keeping money in a bank is a bad move. Personally, I expect my bank to invest those funds into productive ventures and pay me out for it. If someone ends up in the red or failed to run the numbers correctly for their small business, that’s on them. You can't generate profit that way, and nobody else is to blame but themselves. So, I believe the formula "work + savings" is viable. It is incredibly difficult at the start, but hypothetically imagine if most people operated this way. The value of money would rise simply because there would be less—or at least no more—of it in circulation, and prices would likely drop as demand falls due to increased saving. Gregory Williams7 made a good point that the capacity for labor is limitless, and by extension, productivity is too... I would add that any scenario where a person doesn't spend more than they earn is a win for society. Broke? Build your position step by step; don't dive into everything until you have a solid foundation. That is the root of the crisis. They handed out loans like candy to people who couldn't possibly pay them back. For instance, the US government shouldn't be taking out loans to cover its deficit. A guy like Koch wouldn't be able to get a loan unless it was for production plants rather than refinancing existing debt... and so on. If we only extended credit for production and taxed consumption instead, things would be much easier. Of course, that requires stripping away all those various taxes on production and wages. That would actually incentivize both work and saving.

The Federal Reserve usually manages savings by setting interest rates on deposits. When they drop those rates, there’s no point in saving, so people start dumping cash into real estate, stocks, or other investments instead. Because the Federal Reserve doesn't want to flood the market with cheap loans—which could destabilize the dollar and drain our foreign reserves—we end up stuck with what we have. High interest rates and a lack of liquidity regardless.

Saving money in a bank mostly benefits the bank itself. Honestly, maybe it would be better to put it into precious metals or something actually secure. Savings feel like a necessary evil because everything else is pretty risky. Take stocks, for example. If everyone pours all their profits back into stocks, you eventually hit a wall where it becomes obvious that not everyone can cash out at current prices because that actual cash simply isn't there. All that profit is just trapped in stock value. You end up with the same amount of cash but a massive pile of shares. What happens then? Most people get burned. It doesn't matter if the stocks are technically worth more on paper. There is no liquid cash to realize that value. Market laws tend to wipe out all that accumulated gain. This happened to Americans not too long ago. It can happen anytime people decide they want to dump huge amounts of stock at once.
It's the same deal with banks. You could drive any bank into bankruptcy. First, you play nice, deposit your money, and wait for them to issue loans. Then, everyone simultaneously cancels their CDs and withdraws their deposits. Suddenly, the bank is insolvent, and if they can't snag a loan, they go under.

The core issue is that accumulating savings or profits temporarily pulls money out of circulation. Loans replace that money, but those loans have to be repaid using whatever cash is left over, not from that initial pool of savings. So, the higher the level of savings, the harder it becomes to pay back those loans. Around here, miracles happen thanks to the Federal Reserve and our negative trade deficit. Savings are high, cash is tight, and interest rates are sky-high. It's a terrible setup for loan repayment. I honestly wonder about companies taking out loans right now. They might be better off just locking their doors and calling it quits.

Savings should really just be a buffer before spending. Like, instead of taking out a loan, you should save so things end up being cheaper. Saving without a specific goal to spend later isn't generally great for the community. It's just like making a profit without any intention of investing it.

Best regards