Posts by Maria Thomas48

It arrived a few days ago. It's from the Department of the Treasury. This is their response to my letter (I’ve been looking over this letter sent to the Government, and honestly, there's a lot to unpack here. It’s one of those situations where you just feel like the logic is being ignored by the people at the top. They aren't listening to the actual economic data coming out of the Bureau of Economic Analysis, and it feels like they're just drifting. The core issue is how the Federal Reserve and the European Central Bank are interacting with our local fiscal policy. You can't just ignore the massive shifts happening globally. When China moves, the ripples hit us immediately. And then there's the whole situation with the debt levels—it reminds me of what happened back when Greece was struggling. We have to be smarter than that. If we don't tighten things up, we're looking at a serious currency devaluation down the road. That's not an opinion; it's just math. I was reading some thoughts from Gregory Williams7 earlier, and he touched on similar points regarding the stability of our institutions. It’s all connected. You have the central bank trying to manage inflation while the Government is busy pushing policies that basically work against them. It’s frustrating to watch because it seems so avoidable. People like Andrew Booth29 usually have a different take on these macro trends, but even he has to admit that the current trajectory is shaky. We need more transparency. We need the decision-makers to actually look at the numbers instead of just reacting to political pressure. It’s about long-term stability versus short-term wins. I really believe if we don't address these structural flaws now, the fallout is going to be much harder to manage later. Just my two cents.Quote:

To whom it may concern,
We honestly appreciate all the hard work you've put in. We value every single initiative coming from citizens, so we took your presentation and gave it a really serious, thorough analysis.
Your argument basically suggests we should head in a completely different direction than the current economic policies set by the US Government and the Federal Reserve. Their whole foundation is built on one thing: keeping macroeconomic stability intact.
Thanks again to everyone for showing such interest and being willing to share your take on how things are looking.
Best regards,

Stanko Kršlović, Director of the Bureau of Economic Analysis

So, that’s just how it goes. That’s the response you get from economists when they need to build a professional argument for something.

I mean, I agree that a primary issuance of the local currency would definitely throw the exchange rate into question. But honestly, it isn’t really about the currency itself. It’s more about the limitations on the Federal Reserve—specifically their finite foreign exchange reserves. There's only so much they can do to swap those funds into other currencies before they hit a wall.

But if you check out that link I posted above, nobody actually addresses my point. There isn't a single reasoned response to what I said about how we simply can't pay back the loans taken out to cover the budget deficit, given the specific economic conditions here in the US. It makes me wonder. Does it mean people just don't care that the debt is fundamentally unpayable?

Look, just proving that the debt is unpayable isn't enough. If we actually pivot our strategy now, it would completely wreck price stability and trigger a massive currency devaluation. It’s a mess. And honestly, if the dollar stays fully convertible, then facing a period of heavy austerity might actually be justified. It's just how it works.

Is it obvious to everyone that by giving up primary emission, we’re essentially doing the same thing as using someone else's currency for our money? New money works based on maintained exchange rates, and the vast majority of import payments come from foreign loans. Then the Federal Reserve issues dollars and absorbs foreign exchange. If I’m reading the situation correctly, our debt has already surpassed our foreign exchange reserves when you combine them with foreign savings. Those reserves were spent on imports, not on paying back the debt. And regardless, we have to pay back more foreign currency than what we actually received through those loans. The US government basically acted like most regular citizens. It lived off credit and just hoped some miracle would show up to save it.

In a metaphorical sense, America has already gone bankrupt. We just aren't ready to admit it yet. We’re all just sitting around, waiting until the very last second to finally announce that everything is a complete disaster.

Look, here’s the deal. Someone points out that for 99% of countries, paying back these loans is basically impossible. We’ve actually been saying this for a few posts now, because all this new money is just more credit. You can’t pay off one debt with another loan unless you find a massive group of nations to buy up everything you produce—kind of like how China operates. So, what’s the move? The response is always the same: we have to keep prices stable and protect the value of the dollar at all costs. Nothing else matters. Let everything else fall apart if it has to, but the price index and the exchange rate have to stay steady. Eventually, we’ll reach the point where we’re down to our last bit of cash to swap for foreign currency to settle the debt, and then the problem just disappears because there won't be any dollars left in circulation. We just need to be patient, like Greece was, and wait it out. Once that happens, then maybe we can start thinking about a different economic strategy.

It doesn't surprise me one bit that some brilliant Russian mathematician turned down a million dollars. I honestly think his reasoning was just a polite way to avoid telling them what he really thinks about the value of money these days.

If you haven't a clue what I'm talking about, just go check out my dedicated page. It’s all there. I was looking through some old files on the financial system lately. It’s one of those things where you start reading about one thing and suddenly you're an hour deep into how everything connects. It's all very interconnected. You look at how the Federal Reserve operates and then you start wondering about the ripple effects on the rest of the market. Everything just moves in these big, slow waves. Sometimes it feels like we're just watching patterns unfold without really knowing when the shift happens. It's interesting, I guess. Just a lot of moving parts to keep track of.

Based on my own observations, people's interest in actually figuring out what’s going on and why it matters is sitting at less than 1%. It’s basically the same level of engagement you'd see for some random consumer product on a shelf. Given how much this stuff impacts everyone's actual fate, that lack of response is honestly pretty unusual. I even tried launching a chain email to spread the word, but instead of hitting that exponential growth curve, it just ended up suffocating itself and driving traffic down—even if there is still a tiny bit of activity left. All of this points to one thing: people's deep-seated disbelief is the main reason why anyone uncovering the secrets of the credit system is dismissed as a conspiracy theorist or just someone talking nonsense. It’s a telling statistic, really. It shows that you need a high level of intelligence to actually perceive and grasp the reality being manufactured by the credit finance system.

I should mention that the table showing just inflation-driven debt—the one they released earlier—has a tiny little math error in one of the rows (row 23, column 3), but honestly, it doesn’t really change the big picture much. It stays right around 1%. If you assume average inflation sits at 3.03% and the bank interest rate hits 7.5% (which feels pretty much like what we see here in the States), then after 20 years, that inflation-based debt is going to blow past the original value of the money. Basically, we'll end up owing more than there is actual cash in circulation.

Hey everyone,

The truth is what saves us.

Gregory Williams7 said:Could you explain to me why certain goods see price increases during periods of inflation?

If you think I’m going to sit here and develop some grand theory on inflation, you’ve got the wrong guy. There are plenty of theorists who have already tackled that problem. I don't really have anything to argue with their work. It’s all been written down, so just go read up on it.

I’m not actually interested in the cause. I care about the consequences for the economy and how it hits people's finances. Supply and demand, commodity exchange—none of that really matters to me.

The obvious side effect of inflation is that you need more cash to buy the same stuff. But the invisible side effect is the choice you face within the financial system. You either stick with the same amount of money, which means your purchasing power shrinks, or you increase your money supply to compensate and try to maintain that purchasing power. That’s just what any person would do for their family.

My choice was to try and hold onto that purchasing power by using credit to make up for the loss of cash value. Why credit? Because money isn't printed; it's issued through credit. Just look at the Federal Reserve laws and the Statute of the ECB.

So, if the ECB says they aren't distributing money, but rather providing credit, then any new money out there is either credit or someone's (foreign) savings being turned into an investment or a community grant.

If someone can't wrap their head around that, they probably haven't read the Federal Reserve laws or the Statute of the ECB enough times. Money isn't printed—it exists only as credit.

Honestly, only a fool could read the laws governing the Federal Reserve or the Statute of the ECB (and the Fed's own statutes) and still claim there’s some other way for the money supply to grow.
Sure, you might find a chest of gold coins or some other currency from before 1913, but that doesn't move the needle.

And that is the key point. Almost all the money in circulation (except for maybe a tiny percentage) is someone's credit—that includes the government, corporations, and individuals. So, claiming that an increased money supply doesn't come from credit is just nonsense. Or, more accurately, it's about 95% nonsense.

Now everything makes sense. Every bit of credit has its interest rate—its price. I’ve actually calculated it myself.
And now you probably expect me to explain inflation itself, or why the sky is blue, or why it rains. It’s irrelevant. If we need a larger money supply, we just need to know what it costs. And why is it like this? Just ask the global bankers who wrapped all of this up in fancy cellophane—calling it "price stability" and "exchange rates"—and sold it as the one perfect solution. Because there is no other way.

Isn't it weird that there are at least four different theories on inflation? Usually, when people don't know the truth, they try to force it into a theory.

The actual truth is: inflation = the need + greed for money.


So, I’m happy to let anyone try to prove me wrong with counterarguments—show me that today's money (new money that wasn't already part of an existing money supply) doesn't arrive via the method I described. I have the proof right there in the Statute of the ECB, the Fed, and the Federal Reserve laws. Except for interest on deposits held at the central bank, which isn't even worth mentioning.

Best,

Bradley Walker88 said:😂 You should've told him.

Don't stop now; we were just starting to catch a glimpse of what you're actually thinking. It's not fair to gatekeep all that wisdom. We can handle a little profanity if it means getting the truth. 😁

If you guys actually need details, I'll just mark the half-truths and the wrong stuff in BOLD.

Gregory Williams7 said:Very well, let's go through this step by step.

1) Inflation—by definition, implies an increase in the money supply.
In fact, an increase in the money supply is baked into the very definition of inflation.
Therefore, we don't need more money for the same value because inflation "decided" to show up today. We need more money for the same value because there is *more* money in the system, which automatically makes each unit worth less. The quantity of money has already increased at the exact moment the value drops. This is vital! Do not overlook this! Money doesn't lose value because inflation arrived, necessitating more printing; rather, money is being printed, which causes it to lose value. Printing more will only accelerate the devaluation.

2) Money enters the system through only one channel: the central bank. The Federal Reserve issues the primary supply of money, and no other entity holds that right. The money issued by the Fed must be "covered" somehow. This could be via foreign exchange, bonds, securities, and so on. Each of these elements behaves differently over time and influences the currency in its own way. A nation holding all its reserves in cash acts differently than one holding them in gold, bonds, or even fertilizer for the soil.
We see a massive gap between our exports and imports. I suspect exports cover barely 50% of imports. To claim this can be ignored is a grave error. However, even if it did have an impact, the effect would be deflationary rather than inflationary (dollars leaving the system rather than returning). Furthermore, the vast majority of loans issued in the US are in dollars. Their impact on the dollar is minimal. The budget deficit is the primary driver of inflation in America. Everything else is too negligible to consider.

3) If one nation runs a trade deficit, there must be another nation running an equal deficit with the opposite sign. This is essentially Newton's third law applied to economics, a concept taught at the start of high school. To claim that all nations must have a trade deficit is... well, let's call it vague. Does everyone import more than they export? From where? Mars? Ideally, every nation would have 100.00% of its imports covered by exports. That would be the perfect balance. In practice, however, that is impossible.

4) History shows us that it has never happened that everyone repaid their debt simultaneously. Someone always defaults. A debt default carries a certain probability, which is accounted for by interest. But in reality, money circulates. Money is merely a medium for exchanging goods and labor; it possesses no intrinsic value. It is "spent." Though, strictly speaking, it isn't spent—it is simply exchanged for goods. To simplify: you lend me $40 at 10% interest so I can open a bar. I pay you back $3.25 every month. The first month, I return $3.25 to you. You spend all that cash on a night out, those people go to the doctor for checkups, and the doctor takes those $3.25 to the bar to grab a drink. Suddenly, I have $3.25 again, which I return to you next month. It is a cycle. There is no conspiracy here. Where does the interest come from? Interest is generated through labor! The issue isn't the amount of money in the system; it is the lack of labor required to repay that money. Credit can fuel inflation only for a very short time—until the source runs dry—after which deflation follows. Budget deficits are a different matter entirely.

The money supply is irrelevant when discussing credits and debt repayment. The total amount of money in the system has nothing to do with the ability to repay a loan. The only theoretical problem arises if everyone were to save in cash. Saving in cash is, in practice, the worst form of saving possible. This is precisely why inflation exists; it serves as a corrective measure against hoarding cash, forcing us to put our savings into stocks, real estate, mutual funds, or whatever else.

5) Credit is not the reason for an increase in the money supply. At least not here in the US. Perhaps it happens elsewhere, but in the US, the money supply remains fixed relative to Euro reserves. This is actually beneficial because we practically import everything. Consequently, prices can only rise on domestic products.

Remember this: a healthy economy must be built upon saving and investing. Increasing the money supply generates inflation and discourages saving—and without saving, there can be no investment or development.
Economic policy will never be a generator of economic growth. At most, it can serve as a solid foundation for future development. Anyone who expects economic policy to generate growth all by itself is either delusional, foolish, or uneducated.

Why are these claims half-truths or just plain lies? Just look at the Federal Reserve statistics; the increase in the money supply was driven by credit, subsidies, and foreign investment (because there aren't any other options). The money supply has grown manifold, yet inflation has stayed within reasonable limits the whole time.

People intentionally refuse to admit that if the sources of the money supply are known, we can assume part of that money carries the inflationary mass while the rest does not. Therefore, using Fed data, we can calculate exactly how much of that is inflationary mass. This assumes the real value of the money supply remains constant. If the inflationary mass is tied to credit (which it is, since other sources are minimal), then you can precisely calculate the interest rates on that debt over time.

If someone has accurate inflation statistics from 1996 to 2009 and the total money supply figures from 1996 to today by year, I would be happy to calculate how much free value remains in the system (mostly pumped up by credit) above the inflationary mass. Basically, the money that didn't cause inflation. This contradicts the claim that all money supply causes inflation . Plus, if you had the yearly debt data, I could piece together quite a bit. The results would likely be interesting. That’s what I asked the Fed for, but they wouldn't run the numbers for me.

In step one, you're arguing for stopping the printing of money?! And credit is exactly what drives that printing. -- That’s the same thing I concluded when I said you shouldn't lend more than can be repaid. In other words, it's the same thought. But that has nothing to do with the actual claim. Inflation is measured by the rising price of goods. That means you need more money for the same item. So, the argument is wrong and lacks any basis
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Step two isn't countered by any actual arguments
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Step three is just a repetition without any counter-arguments
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Step four fails to provide another source of money for the inflationary mass
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Step five consists of false claims that contradict Fed statistics regarding the money supply
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Total score: zero points. Anyone can have an opinion, but you have to defend it with logic. This narrative doesn't hold water or even relate to the claims being made.

Beyond that, my explanation accounts for everything happening in America and globally (like Greece...).

Just a bitter dose of sugar that leads straight to economic diabetes.

The reason the Federal Reserve doesn't complain about the current state of things is simple. In this kind of crisis, maintaining the exchange rate and "price stability" isn't actually a struggle for them. If the government were ever forced to pay for actual new value through primary issuance, then the Fed would find itself in deep trouble. People would immediately rush to swap their dollars for foreign currency just to buy stuff from abroad. Foreign reserves would evaporate in the blink of an eye, leaving everyone holding a mountain of useless paper and no way to buy anything real. That’s the core issue. You could bypass this by using a global currency that any central bank would have the right to issue based on the national deficit. Of course, we aren't talking about running hot money printers 24/7; I mean under the constant supervision of independent auditors. This would eliminate the need for this type of exchange rate regulation, replacing it with strict oversight of the deficit within every federal budget according to a set formula. Everyone knows this is how the European Central Bank is supposed to function. It wouldn't stop bank lending entirely, but it would provide a way to limit credit expansion because current cash flow projections—which are totally unrealistic right now—would become grounded in reality.

There. Since I’ve pointed out the flaw, I’ve essentially solved the regulatory system too. Now we just need to actually implement it, and the cycle of endless debt will finally break.

As for those jabs at my intelligence, I think Jesus said it best:

"Father, forgive them, for they know not what they do."

Flaunting my IQ doesn't interest me. I didn't start this thread to outsmart anyone or brag about some specific number—numbers don't mean much if you haven't used your brain to apply them effectively. My goal was to use logic to prove that this entire financial system is unsustainable. Over the last few months, more mathematical arguments have surfaced that prove this point beyond any doubt.

That’s why I hold back from typing out the first thing that comes to mind when I read nonsense. Labeling someone isn't a valid argument in a debate. One insult just invites another, and that's a loop I'm not interested in joining. Being arrogant and rude is usually the exact opposite of being an intellectual.

Regards.

P.S. I'd appreciate it if someone could point me toward where I can find exact data on inflation (I have that part covered), the total money supply (in hard numbers), and the national debt (in hard numbers) broken down by year.

Gregory Williams7 said:Very well, let's go through this step by step.

1) Inflation—by definition, implies an increase in the money supply.
In fact, an increase in the money supply is baked into the very definition of inflation.
Therefore, we don't need more money for the same value because inflation "decided" to show up today. We need more money for the same value because there is *more* money in the system, which automatically makes each unit worth less. The quantity of money has already increased at the exact moment the value drops. This is vital! Do not overlook this! Money doesn't lose value because inflation arrived, necessitating more printing; rather, money is being printed, which causes it to lose value. Printing more will only accelerate the devaluation.

2) Money enters the system through only one channel: the central bank. The Federal Reserve issues the primary supply of money, and no other entity holds that right. The money issued by the Fed must be "covered" somehow. This could be via foreign exchange, bonds, securities, and so on. Each of these elements behaves differently over time and influences the currency in its own way. A nation holding all its reserves in cash acts differently than one holding them in gold, bonds, or even fertilizer for the soil.
We see a massive gap between our exports and imports. I suspect exports cover barely 50% of imports. To claim this can be ignored is a grave error. However, even if it did have an impact, the effect would be deflationary rather than inflationary (dollars leaving the system rather than returning). Furthermore, the vast majority of loans issued in the US are in dollars. Their impact on the dollar is minimal. The budget deficit is the primary driver of inflation in America. Everything else is too negligible to consider.

3) If one nation runs a trade deficit, there must be another nation running an equal deficit with the opposite sign. This is essentially Newton's third law applied to economics, a concept taught at the start of high school. To claim that all nations must have a trade deficit is... well, let's call it vague. Does everyone import more than they export? From where? Mars? Ideally, every nation would have 100.00% of its imports covered by exports. That would be the perfect balance. In practice, however, that is impossible.

4) History shows us that it has never happened that everyone repaid their debt simultaneously. Someone always defaults. A debt default carries a certain probability, which is accounted for by interest. But in reality, money circulates. Money is merely a medium for exchanging goods and labor; it possesses no intrinsic value. It is "spent." Though, strictly speaking, it isn't spent—it is simply exchanged for goods. To simplify: you lend me $40 at 10% interest so I can open a bar. I pay you back $3.25 every month. The first month, I return $3.25 to you. You spend all that cash on a night out, those people go to the doctor for checkups, and the doctor takes those $3.25 to the bar to grab a drink. Suddenly, I have $3.25 again, which I return to you next month. It is a cycle. There is no conspiracy here. Where does the interest come from? Interest is generated through labor! The issue isn't the amount of money in the system; it is the lack of labor required to repay that money. Credit can fuel inflation only for a very short time—until the source runs dry—after which deflation follows. Budget deficits are a different matter entirely.

The money supply is irrelevant when discussing credits and debt repayment. The total amount of money in the system has nothing to do with the ability to repay a loan. The only theoretical problem arises if everyone were to save in cash. Saving in cash is, in practice, the worst form of saving possible. This is precisely why inflation exists; it serves as a corrective measure against hoarding cash, forcing us to put our savings into stocks, real estate, mutual funds, or whatever else.

5) Credit is not the reason for an increase in the money supply. At least not here in the US. Perhaps it happens elsewhere, but in the US, the money supply remains fixed relative to Euro reserves. This is actually beneficial because we practically import everything. Consequently, prices can only rise on domestic products.

Remember this: a healthy economy must be built upon saving and investing. Increasing the money supply generates inflation and discourages saving—and without saving, there can be no investment or development.
Economic policy will never be a generator of economic growth. At most, it can serve as a solid foundation for future development. Anyone who expects economic policy to generate growth all by itself is either delusional, foolish, or uneducated.

Just one thought here:

Very few people can actually work through the math and wrap their heads around the theory of relativity. So, naturally, it’s probably just some difficult nonsense or a total lie.

Every single point made is just full of inaccuracies, which I can see quite clearly even though I'm not an expert in Macroeconomics. There isn't really a need for me to break it down step by step. Those who get it, get it, and those who don't will probably just end up failing the exam or paying for a passing grade.

I'd have plenty more to say about how amateur this all is, but I should probably try to stay polite.

bye

Gregory Williams7 said:Maria Thomas48, you are truly driving me to the brink of madness. I feel physically ill. 🙂
But I will try one more time...

Here is a perfect example of how competition can actually backfire. You go to a local farmers market and look at the prices for lettuce. Everyone is selling it at the exact same rate. $5.00It is highly unlikely that everyone uses the exact same supplier. Consider this alternative perspective. I am aware my product is inferior, yet I choose to highlight the price just as aggressively as the others. In doing so, I effectively undermine those who invest significant effort into offering high-quality goods at a premium. My salad costs less to produce, even if the quality is lower, because I am simply exploiting an uninformed customer base. To the casual observer, the products look identical. Meanwhile, a truly excellent producer is being driven out of business.

Suppose your cousin Luka offered to sell you some firewood at a discount. What would you say to him? It’s pure greed. Yet, he could easily do it. That is simply how the market works.

Competition and profit margins can exist in total opposition. Take the banking sector, for example. Banks often have little incentive to truly compete when they operate within a monopoly. If one major bank raises its fees, another might follow suit simply to capture more market share. Once that first bank sees there is still room to maneuver, they raise prices even further. It isn't a matter of intellect; it is purely a matter of greed. Everyone is at fault when a serious predator decides to pour massive capital into a business just to squeeze out a small amount of high-margin profit.

Here is another textbook example of what people call "healthy competition." Consider the cost of higher education. Universities operate as independent entities, and theoretically, they could hike tuition rates whenever necessary to balance supply and demand. It is a pure economic maneuver. They aim to transform academic institutions into profit-driven corporations where maximizing margins is the primary goal. The pharmaceutical industry operates under a similar logic. When drugs are effective but cannot be easily patented, companies find every possible way to obscure them from the market. The objective remains the same: maximize revenue, even if it comes at the expense of patient care. Is this truly how a society should function?

Take the salad analogy. It represents a genuine possibility within a functional system. However, to make the logic hold up, you have to introduce one more vital premise into the equation. It is this: "All people are idiots." Once you accept that, then you have:

Everyone is selling salad for fifteen dollars. Is this really happening?
The quality of this salad is simply inferior to the other options available. Is it too much to ask for consistency?
It seems everyone is simply an idiot. This is extremely important.
----------------------------------------------------------
The conclusion? Every vendor out there is selling the exact same salad for fifteen bucks.

In a system where not everyone is an idiot, rumors spread incredibly fast. You see it with your own eyes. If you serve a salad that is subpar—dry, stale, or just plain old—the whole thing falls apart. Why would anyone settle for less?
If I am going to buy inferior wood from my brother Luka, the premise remains the same. Suppose I were an idiot.Without that underlying premise, the entire system falls apart. How can it hold weight? If I spot a superior offer from another supplier, the logic fails.

What can one even say about the banks? It isn’t easy for them either. Nowadays, half the population—if you consider how many people actually think about their responsibilities—simply refuses to pay back what they owe. On top of that, a significant number of people are looking for capital abroad. How is a bank supposed to return funds to depositors when the borrower refuses to settle their debt? They resort to fees. They hike interest rates. They charge for late notices. The honest citizens are left struggling to make ends meet however they can. From the bank's perspective, they lent the money fairly. They drafted the contracts honestly. They laid out the terms transparently. Now, they are left hoping some shady, dishonest fraudster who signed those papers actually honors their obligation before disappearing. But let us get back to the main topic.

Universities. Let's take this on as a topic for a research paper. Why is it that in America, we have such a vast landscape of private universities, yet here in our country, everything seems centered around just one major public institution? In a place like Miami, you might see specialized programs for tourism management, but is that all there is to it? Does anyone else have any insights on this?

I will say it once more: you are profoundly mistaken. You have constructed a personal theory, convinced yourself that you have finally unlocked the hidden mechanics of the system, and yet you are completely off base. You are staring at a single pixel and claiming to understand the entire portrait. I repeat, you are wrong. You are deeply, fundamentally wrong. Go back to the beginning. Study the facts from scratch. And then, perhaps, reconsider your position.

A professor once told me this during my college days: when you stumble upon a brilliant idea—one that feels like pure strokes of genius—don't let your ego run away with you. You might feel incredibly lucky to have conceived it, wondering why nobody else thought of it first. But before you rush headlong into execution, stop. Do your homework. Research whether someone else has already attempted this and, more importantly, what their results were. Education is the only way to validate intuition.

I could offer you the exact same advice. The concept of printing money to solve liquidity shortages is an ancient idea—far older than you likely realize. Even in the Roman Empire, they used to debase coins by using lead cores wrapped in gold. It didn't take long before no sane person would trade for them. Have you ever wondered why the custom exists to bite a gold coin when someone hands it to you? It was to check its purity.

There is still so much you don't know. With such limited knowledge, you are attempting to lecture people who possess far more expertise than you—the administration, the President's advisors, the Federal Reserve, and university economics professors. To be perfectly honest, if I had received an email like yours, I wouldn't even bother replying. At most, I might send a brief note stating that your position has been noted.

So, I guess that's the trick, right? How to just... not answer the questions. I don't know. I just know that someone out there wrote something about this once, and you're out here looking for it. Of course they did. Someone definitely wrote it.

So, I finally got around to ordering a copy of dirkati Krueger's "Macroeconomics." Just as I was digging into the details, I stumbled right into that mathematical derivation. It looks like they’ve opened it up to the public community now.

I could probably go on about all the ways people might be pulling profit through indirect channels, but someone else already covered that ground earlier. You should probably just go back and read what was said before.

I've got a much tougher nut to crack here, and that's inflation within an exclusively credit-based system. I didn't really give it much thought at first, but honestly, it seems like the easiest way to prove the whole thing is just heading straight for a disaster.

Just focus on that steady, long-term inflation target. That's really all we need to look at.

There’s this theory floating around that the government actually turns a profit specifically because it doesn't just print money whenever it feels like it. It's an interesting way to look at things. Basically, by not just running the presses constantly, the state maintains its value and builds up its standing. It's all about that restraint.

I already laid out my projections: we’re looking at 3.5% inflation and bank interest rates sitting at 6%. I don't see what part of that isn't clear.

Let's take this one step at a time. If you just walk away now, you're basically admitting you can't prove your support. Either that, or you could just put together your own projection so we can actually see where you're coming from.

If inflation eats away at the value of money, then you basically need a larger volume of cash just to maintain the same real purchasing power. It’s pretty straightforward. The whole premise here is that we're trying to keep the actual, real-world money supply constant.

So, where does the money actually come from in the current system? It comes from credit, investments, budget deficits, and exports. But when you look at the budget deficit, that’s essentially just more credit. And as for exports—specifically the net difference between what we export and what we import—we can basically just assume that part is zero for the sake of this argument.

What are the actual permanent drivers behind inflation here? You’ve got trade surpluses and credit, though credit only works for so long before the debt levels get messy. A trade surplus isn't exactly a permanent fix or a universal solution for every nation. I mean, China is still pulling it off for now, but I honestly don't think that's going to last much longer. So, at the end of the day, credit remains the go-to move for most countries.

How does credit actually drive inflation? It’s pretty straightforward. When you take out a loan, you start buying stuff—everything from groceries to cars—and that cash stays moving through the economy. But here's the thing: not everyone can pay their loans back at the same time. If they did, we wouldn't see an increase in the money supply; we’d actually see it shrink. So, to keep things moving, even larger loans have to be taken out. That’s really the core of how you have to look at it. People can argue about this until they're blue in the face, but the logic holds up. If the total amount of money in circulation is growing due to inflation, the only way that happens is through someone taking on debt, either directly or indirectly. There just aren't any other permanent sources for increasing the money supply.

5. Now that we finally know it's... Credit. It’s just one of those things that sits there in the background of everything we do. You think about it when you're looking at a mortgage or maybe just trying to get a decent car loan, and then you realize how much it actually dictates the flow of life. It's all interconnected. People talk about interest rates and the Federal Reserve like they're these distant, abstract concepts, but it hits home when you're staring at a monthly statement. It’s heavy, honestly. Just something to ponder. (someone's state, personal, residential, etc.) The source of funding for increasing the money supply. It's a fundamental question. Basically, when you look at how the money supply expands, you're looking at the actions taken by the Federal Reserve. They control the levers. Through open market operations—buying up government securities, for instance—they inject liquidity directly into the system. This isn't just some abstract theory; it's how the gears actually turn in the US economy. You have the central bank facilitating this flow, which then trickles down through the commercial banking sector. It’s all interconnected. The expansion happens because the Fed decides to increase its balance sheet. Simple enough, really. That's where the new money enters the bloodstream of the financial system. It’s basically just an inflationary mass, really. You have to run a simulation over a specific number of years to see how it actually plays out. So, I went ahead and built that model myself.

So, the logic goes that if you don't like the result, then the whole process must be flawed. Yeah, right. That's just not how it works.

It’s the exact same deal as the budget deficit. It’s been proven that you can't just pay it back when it’s being funded through credit—especially under the same terms 99% of countries operate under—so it’s just not a sound move. This is basically the same thing as what dirkati Krueger talks about. I just added my own conclusions to it. I did the same thing when I added my takeaways regarding inflation.

I'm done writing novels. Just let me know which part doesn't make sense, okay?

Gregory Williams7 said:

If a family member tries to charge you twice for painting a house when they only did the job once—and without actually doing any work—do they really deserve that money?
If your son Ivica decides to start charging five times the standard rate for sweeping streets just because he suddenly needs extra cash, what does that actually accomplish? It isn't just about the money. It devalues the hard work of everyone else in the community. Is that not simply greed?
What happens if your cousin Marko decides to triple the price of firewood? What if he starts charging three times more for energy resources?

He didn't complete the work, so you shouldn't pay him. Isn't that exactly why oversight exists?
I have a son, Stevica, who isn't quite as sharp as Ivica. However, he notices that Ivica earns a steady living without much effort. Soon enough, he will come to me and say, "Dad, I’m going to do the exact same job for a lower price." In textbooks, they call this competition.
Then there is my brother, Luka, who also owns a forest. He sees that he could turn a profit if he starts selling timber too. And just like that, we have more competition.

Do you even grasp the fundamental definition of competition?
Do you realize that socialism has failed?
Seriously, take a moment to reflect. I am not attempting to trivialize the situation; it is quite clear that you are self-taught and lack any formal education. This isn't an insult. It is simply a factual observation. Is it not like suffering from an illness, yet refusing to listen to a doctor because you believe you know better than the medical professionals?
You are mistaken. You are completely, profoundly wrong.

What you are suggesting would create a disastrous system. It would be even worse than socialism, where profit is essentially eliminated. Was he being punished?It would kill any hope for productivity or hard work. The principle is simple: you won't pay me a cent more than I can get away with doing, until someone else shows up willing to do more for the exact same wage. At that point, the first person ends up out on the street in total misery.

Think about this for a second. I have to head to a lecture now, but your premises are fundamentally flawed. Your reasoning is incredibly poor. You are intentionally ignoring the basic principles of market competition just to push your own theory regarding profit penalties. Good grief... I really shouldn't listen to everything posted here. 🙂

Here's an example of how competition can be a double-edged sword. You go to a farmers market and look at the price of lettuce. Everyone has it for $5.00. It's unlikely they all have the same supplier. Now, consider another idea. I know my lettuce is lower quality, but I still list my price right alongside the others. In doing so, I ruin those who believe they should charge more because they put in more effort. My lettuce was cheaper to produce and it's worse, but I'm preying on the customer's ignorance. From the outside, the lettuce looks the same. Meanwhile, a great producer goes under.

For instance, your brother Luka could sell you birch wood at a slightly lower price. What are you going to tell him? Pure greed. But he could do it. That's the law of the market.

Competition and earnings can run counter to each other. Take banks, for example. They don't really want to compete with each other because it's basically a monopoly. If one raises rates, the other might raise them too because they see a chance to grab even more clients. Then the first one sees there's still room to hike prices further. And so on. It has nothing to do with brains, it's all about greed. Everyone is wrong when a competitor—a serious predator—invests huge amounts of money just to squeeze a little extra cash out of a business.

Here is another example of "good competition." Higher education. Universities are independent and theoretically could raise tuition enough to balance supply and demand. A true economic endeavor. Turning a school into a profit-driven corporation is desirable if you want higher earnings. It's the same with the pharmaceutical industry. Drugs that work but can't be patented in every possible way get hidden away. They need to make as much money as possible, even if it's at the expense of treating people.

Or take Bill Gates. The man made a fortune. Do you think he's thinking about offering products at lower prices? No way. The shareholders would have him ousted immediately. Grab as much cash as you can while you can. There's the Federal Reserve to print more to cover new debt. And who's going to pay for it? Bill Gates doesn't really care.

So much for competition and achieving optimal profit.

We’ve reached the point where solutions from this whole mess... they start looking like socialist or communist ideas. Sure, but those ideas stem from trying to find a source of profit, which in this case is the federal budget deficit (specifically the version involving printing money). It is a democratic right to vote on whether someone's labor is valued more than others—basically, deciding if there should be a cap on wage ratios. Even now, the government does this by demanding pay cuts for corporate executives.

Supporting pay without actual work leads straight to ruin.

First, we have to agree on where a community's indirect profit actually comes from. People still don't want to admit that.
Second. We have to realize that the current financial system isn't a permanent fix because it creates massive debts out of thin air. Take inflation, for example. You're wrong to conclude that the state profits from inflation. That's only true when the government prints the money. Nowadays, it's the banks making the real money, and they make way more. You mentioned correctly that the bank didn't profit because inflation ate it up, but you forgot that the exact same bank provided the entire inflationary sum in the first place.

For instance, looking at the projection after 14 years, the situation is:

Money supply = 161.87%
Inflationary mass = 61.87%
Interest from previous periods: 28.41%
Current interest: 5.42%
Total debt = inflationary mass + previous interest + current interest = 95.70%

Now, if we assume the money has lost value by 1.6187 times and normalize the resulting debt, we get 59.12% of the normalized money supply.

In economic terms, I see the same 100% real value, plus interest on 59% of that value (the inflationary part and the interest). To put it in plain, almost folksy terms: it's like someone telling you that you owe seven of your monthly salaries and you have to pay interest on that throughout the year. You can't even pay back the principal because that money doesn't exist—it's just part of the inflationary money supply. It works out to about 42% of a monthly salary that needs to be spread over 12 months. Maybe that comparison isn't perfect, but it's close. Except that in 8 years, you have to double your payments, and in 15 years, you have to double them again.
After four of those doublings, you'll have to hand over your entire income just to cover the interest on the inflationary mass. Basically, all your earnings will go toward feeding inflation.

The projection shows that by 2018, the normalized money supply and the normalized debt from the inflationary mass will equalize. In economic language, the bank (or several banks) will hold such large claims (due to the growing principal) that they will exceed the entire money supply. For those who grasp this less easily, it means that by then, we will globally become debt slaves with no way out.
So, in just 22 years, with 3.5% inflation and 6% interest, we become debt slaves solely due to the impact of inflation. If we add constant imports, the profits of other entities, and extra borrowing, it means this will happen much sooner. This is exactly what happened in Greece. We are just following their lead.

The projection isn't a perfect picture of reality, of course, but it shows the direction things are heading (even if different numbers are playing the role).

Inflation within a credit-based financial system is a topic they don't even touch in economics classes.
The indirect sources of profit for a community within a credit system (or any system, really) aren't taught in college either.

Analyzing these issues gives you the answer: the system is flawed and unsustainable.

Anyone can think whatever they want about this, but reality is what proves it.

Scarcity is caused exclusively by the credit system and inflation. There is absolutely no foundation for continuous prosperity because bank interest eats everything we have.

You don't need to be an economist to see the link between the system and the crisis. Everyone in this system is in a crisis (with very rare exceptions).

If someone is studying economics, they should ask these red questions to a competent professor. I'm really curious to hear the answer. They wouldn't give me one.

Cheers

Gregory Williams7 said:Look here...

To begin with, inflation is not some bolt from the blue that appears unexpectedly out of nowhere (though it seems you are convinced that 😉)
Inflation has precisely defined causes that remain constant: an increase in the money supply within the system.
Depending on average behavior—whether people are saving or spending—we experience either high or low price inflation. Furthermore, shifts in attitude manifest in prices. A nation that was once heavily inclined toward saving creates inflationary pressure the moment its citizens begin spending without thought.

Additionally, bank interest rates are not added to inflation; that is a terrible amateur mistake made by someone who lacks the fundamentals.
Inflation is the figure that shows how much less our money is worth. Interest is the figure that shows how much the bank charges per year on borrowed funds. If you view them together, regarding borrowed money, the bank realistically loses the inflation amount and gains the interest. Therefore, after one year of repayment, that money is worth less due to inflation and more due to interest. In terms of bank profit, you subtract inflation from the interest.

Regarding where interest actually comes from in the American system: a person takes out a loan, uses that loan to produce something, sells it abroad for US dollars, converts those dollars back into local currency, and pays the bank back in that currency. The bank collects the currency to pay taxes to the government, and the government injects that money back into the system through wages and other disbursements. If we are productive, the amount of currency in the system remains stable while we accumulate US dollars or other currencies. If we are unproductive, currency leaves the system and there is a "shortage of money." Although the money isn't actually missing, people simply aren't working; the money flows out, and no one is making an effort to return it to the system. Printing new money will not solve this problem. It will only deepen it. Instead of stopping the outflow of money from the system, we will continue to export it because we mistakenly believe it exists. We will only find ourselves in greater trouble.

Printing money is a mistake.

The banking system is not a perpetual motion machine. Inflation is a tax on savings (which goes to the government, not the bank), and interest rates are competitive because our banking market is open.

You are truly mistaken. You have some useful ideas on your previous page, some unfeasible ones, and some useless ones, but it is obvious you lack the basic principles required to reach a correct conclusion.

I’ve got some points here that pretty much nail exactly how things stand right now:

Under the Federal Reserve's actual mandate, they don't just print money out of thin air. It’s really about managing credit and issuing securities. That's how it works.

Money entering the money supply only comes from two places: credit and foreign investment. It's pretty straightforward. And just so we're clear, someone sitting on their savings doesn't remove that cash from the total money supply. It stays in the system.

There are plenty of reasons why inflation happens, but honestly, most of them aren't even worth debating. What actually matters is where the money comes from to cover that inflation—it’s the same logic you use when looking at how people turn a profit. You look at exports, foreign investment, or credit expansion. If you set aside the first two things here in the States, you're basically left with nothing but someone else's debt. And when that credit doesn't get paid back, you just end up with a massive pile of debt.

If you put money into an investment only to have it swallowed up by a massive spike in the money supply, you’ve basically thrown your cash down the drain. It's a total wash. The same logic applies to those bad loans that people can't pay back—they just end up sitting there, serving as nothing more than fuel to pump up inflation even further.

It seems like you’re just trying to downplay the results of that inflationary debt projection because they don't sit well with you. Honestly, everything is being done strictly by the book. I’ve gone through the key sections of the Federal Reserve Act myself. Just inflation alone has the potential to absolutely wreck us, driving the country into an endless cycle of debt if it's allowed to run unchecked within the credit system. That is simply the reality of the situation. That’s exactly why I reached out to Rohatinski. I wanted him to tell me straight up how much this inflation has already cost us in terms of debt and what the forecast looks like moving forward. I don't expect a straight answer, though. If he were to put anything in writing, it would basically confirm that our entire financial system—driven by this so-called "flexible monetary policy"—is nothing more than a total scam. It's unsustainable in the long run. It’s essentially just a banking perpetual motion machine designed to force financial subjugation and turn everyone into permanent debtors.

All four points are spot on. I mean, you can just keep spinning the truth into endless relativity forever if you really want to.

Regarding your attempt to dispute the points in the resolution, you honestly missed the mark on all your conclusions. You have to look at it this way: the federal budget, through its deficit, actually acts as an indirect source of revenue for the community.

Look, it’s pretty simple. You’re the one running the show in your family, the one footing the bill for everything. If you're the one providing that kind of support, what exactly is there to worry about? Nothing should bother you.

So, imagine this. Someone in your family tries to charge you twice for painting the house when they only actually did the job once. They’re basically asking for money for work that never happened. It's just... yeah. If you don't do the work, you shouldn't get the cash. Simple as that.
If Ivica decides he needs quick cash for some project and starts charging five times the usual rate for sweeping floors, he’s just devaluing everyone else's hard work. It really comes down to greed.
So, imagine this scenario. Your cousin Marko decides he’s going to start charging three times the normal rate just for firewood—you know, like some high-end energy provider or something. It’s just one of those things that happens.

And so on. I added some more stuff myself.

When you’re the one footing the entire bill, you start caring a lot more about how every single cent is spent and distributed. It matters. But looking at these arguments, it feels like they're all built on this weird theory that money just falls from the sky in endless amounts. Like there's no limit. If you assume money is infinite, then sure, you can just hike up wages indefinitely because, in that logic, there aren't any consequences. There's no catch.

Even if that money were just printed out of thin air, there has to be an equal amount of actual work backing it up from the previous period. That’s how it works. You don't trigger hyperinflation that way; instead, you're basically just incentivizing more labor and higher productivity. Making money without actually doing anything is the exact opposite—it's just pure extra profiteering. A typical mindset that leads straight to that trap is the whole "You can't pay me this little for such a small amount of work" attitude. In plain English, that translates to wanting the highest possible paycheck for the absolute minimum effort. Laziness also leads to hyperinflation. The costs are still there, but the actual results from the work just aren't.

Hey there

To save everyone some trouble, I put together an Excel spreadsheet to figure out how much inflationary debt builds up if we want to maintain the same real money supply value over the years.

inflation: 3.50%

bank interest: 6.00%

principal: 100

Columns are:Year; Money Supply; Inflationary Mass; Interest Debt; Accrued Interest; Total Debt

0 100.00 0.00 0.00 0.00 0.00 = 1996.
1 103.50 3.50 0.00 0.21 3.71
2 107.12 7.12 0.21 0.44 7.77
3 110.87 10.87 0.65 0.69 12.21
4 114.75 14.75 1.34 1.19 17.28
5 118.77 18.77 2.53 1.28 22.57
6 122.93 22.93 3.81 1.60 28.34
7 127.23 27.23 5.41 1.96 34.60
8 131.68 31.68 7.37 2.34 41.39
9 136.29 36.29 9.71 2.76 48.76
10 141.06 41.06 12.47 3.21 56.74
11 146.00 46.00 15.68 3.70 65.38
12 151.11 51.11 19.38 4.23 74.72
13 156.40 56.40 23.61 4.80 84.81
14 161.87 61.87 28.41 5.42 95.70 = 2010.
15 167.53 67.53 33.83 6.08 107.45
16 173.40 73.40 39.91 6.80 120.11
17 179.47 79.47 46.71 7.57 133.75
18 185.75 85.75 54.28 8.40 148.43
19 192.25 92.25 62.68 9.30 164.23
20 198.98 98.98 71.98 10.26 181.22
21 205.94 105.94 82.24 11.29 199.47 = 2017.
22 213.15 113.15 93.53 12.40 219.08
23 220.61 113.49 105.93 13.17 232.58
24 228.33 128.33 119.10 14.85 262.27
25 236.32 136.32 133.94 16.22 286.48
26 244.60 144.60 150.16 17.69 312.44
27 253.16 153.16 167.84 19.26 340.26
28 262.02 162.02 187.10 20.95 370.07
29 271.19 171.19 208.05 22.75 401.99 = 2025.
30 280.68 180.68 230.80 24.69 436.17

Conclusion: total interest tends toward the limit of inflation plus bank interest (3.5 + 6 = 9.5) because the inflationary debt and interest debt hit the principal level after just 14 years. When you factor in the trade deficit on top of that, things look even worse.

A practical take on these numbers. With average inflation at 3.5% and borrowing interest at 6%, we have basically reached the point where the initial money supply equals the debt required to generate extra money for inflation this year. In 7 years, the debt will double, and in 15 years, it will be four times larger. And that is just looking at inflation within a strictly credit-based financial system. Even China won't be able to sustain this for long. I heard they are having issues with inflation. This explains why the USA doubles its debt to the Federal Reserve in periods shorter than 6 years and why the borrowing has accelerated. Standard inflation is a clear indicator, but what about those worsening debt parameters?

Does anyone have an economic explanation for this banking perpetual motion machine? Or are we all just being dense and couldn't see this sooner. Maybe we should have learned it in college.

Note that all the money used for inflation comes from someone else's loan—a loan that was essentially sunk just to increase the money supply (to maintain the same real value)—and that party hasn't paid the debt back.

I don't really have anything to say about markotros. Just sitting here. Thinking about things. No specific thoughts on that particular user right now. Nothing much else going on. Maria Thomas48 says:
I'm right there with you on this. It’s exactly why when your car breaks down, you go talk to a mechanic instead of some economist.

Just thought I'd show you all what it would look like if they actually handed you the keys to the money supply.
The global economy is looking pretty shaky right now. You look at the headlines and it’s just one thing after another. There's this massive tension building up between the major powers, especially with how much influence China holds over everything these days. It feels like we're walking on eggshells. Everything is interconnected, you know? One shift in the markets and suddenly everyone is panicking about inflation or a recession hitting home here in the States. I was reading about how the big players are trying to steady the ship, but it's hard when the foundation feels so unsteady. It reminds me of how volatile things used to get back in the early 2000s, though maybe even more complex now because of how fast information travels. People are worried about their savings, their jobs, and whether the Federal Reserve is going to move too fast or too slow with interest rates. It's all very heavy. Sometimes I think we focus too much on the numbers and forget that there are actual people behind those percentages, just trying to figure out if they can afford their mortgage next month. It's a lot to process. Just a lot.

Look, Maria Thomas48, I’m saying it again. This global crisis didn't happen because there isn't enough money floating around in the system. Like you mentioned before, money is just a tool for exchange—it doesn't have any intrinsic value on its own. The real reason we're facing this mess is that people in certain countries have been living on credit for years. They spend and spend without actually producing anything. That's the core of it.

It was pretty bold to claim that the actual amount of money doesn't really matter. But looking at what’s happening today—where the government is basically settling its debts through barter instead of cash—it just shows that theory is wrong. It’s pretty clear now.

The whole economy just ground to a halt because one person couldn't pay someone else, and then that person couldn't pay a third person. It’s a chain reaction. People love to push this theory that the actual amount of money doesn't really matter, but you can debunk that pretty easily using mathematical induction. For instance, could an economy function if we stripped away just 1% of the money supply? Sure, it could. But then you take another 1% out of that remaining amount. And another. You keep going until you've theoretically extracted 100% of the money, proving on paper that everything still works perfectly fine. Well, we're about to see how that plays out in the real world, though I suspect the only thing left functioning will be simple bartering. It’s a lot like the human circulatory system. The body regenerates itself—it isn't built like a credit-based financial system—but just because you can survive losing 1% of your blood doesn't mean you can arbitrarily decide to take X% of it without facing some pretty dire consequences.

Money printing in the US is just different. It’s a whole other ballgame. The government ends up borrowing from the Federal Reserve because, honestly, there isn't really any other legal way to make it happen. And if you look at how the laws governing the Federal Reserve ended up looking so much like the rules for the European Central Bank, the Bank of England, or the Federal Reserve... man, that's a story all on its own. If anyone is into conspiracy theories, they could spend all day digging into that one.
The U.S. isn't going to be able to pay this debt back. Honestly, we’re just pushing the inevitable collapse further down the road by letting that debt grow exponentially. It feels like a ticking clock. That's why I think it's smarter to swap those dollars for gold. When you look at all the other fiat currencies out there, none of them are any more reliable than the dollar. Gold is just safer.

The math just doesn't lie when you look at the accounting. Based on the equations, there is simply no way to pay back that kind of debt through hard work alone. I mean, honestly, unless you're looking at a massive outlier like China right now, it’s basically impossible. You'd need a massive surge in exports or to start selling off pieces of territory just to break even. It's just how the numbers fall.

What I’m getting at here is essentially what Dirk Krueger laid out in his book on Macroeconomics—you can actually find a translated version of it if you look around a local university library. He provides that proof regarding an open economy. But, if we narrow our focus to a closed economy—treating it like a self-contained cell that has to be entirely self-sufficient to thrive—the equations change. Once you account for the lack of foreign trade deficits, you end up with the conclusion that the only possible permanent source of money is the government budget, specifically through its deficit.

First, we’d need to actually prove that economic growth is impossible without printing more money. People love to claim the US proved this back during the gold standard era, supposedly because there wasn't enough gold to cover all the profits and savings, which meant there was no monetary expansion. That's the argument, anyway.

Now that we've actually got the full picture, it’s pretty clear that a deficit isn't just inevitable—it’s a necessity. And honestly, once you look at how it scales against the GDP, the gap starts looking a lot more manageable than people think. It's just math, really.

All these settings just point toward a planned economy. It’s not some wild fantasy I’m dreaming up either, it's just the reality we're looking at. I don't exactly love the idea, and I'm certainly not out here campaigning for it. But honestly? There isn't any other way out of this mess.

So, what’s the actual way out here? First off, everyone needs to realize that the only real path forward involves a total overhaul of the financial system. That's just how it is. Second, we need to see energy companies being bought up or consolidated to actually stabilize fuel prices. I know, I know—it sounds crazy to even suggest that. But if you look at the data, we’re basically draining the bottom half of our reserves. At the current rate, unless we somehow get a handle on population growth and overall energy consumption, we’re going to be left high and dry in maybe 20 or 35 years. It's just a matter of math.

Thirdly. Corruption needs to be wiped out from the government apparatus, and ideally using a Chinese method of resolution (standing before a wall). Any major price gouging or hiking prices just for extra profit should be punished by expropriation (I’m talking about the essential stuff). The number of officials and agencies should be organized so that the maximum amount of work gets done with the absolute minimum number of people. Of course, the laws need to be written in a way that actually allows for that.

Fourth. There needs to be a precisely drawn-out plan. Some might call it a five-year plan. Salaries need to be brought down in accordance with our actual comparable GDP per capita. It’s only natural that we can't have salaries higher than those of people who have higher production per capita.

Fifth: Credit expansion should be cut back according to planned profit. That is, you shouldn't be giving out more credit than can be used to generate enough profit during that period to pay it back (along with other profits). Basically, there must be a strict limit on how much profit banks can pull out, and it has to be significantly less than the possible profit in that period.

Sixth: All of this needs to be coordinated with other countries to maintain currency parity. What America should be doing would serve as a general program for everyone. This would achieve convertibility for every currency that follows the plan. Working nations could have convertible currencies, not just the big ones.

Seventh: We need to solve the globalization problem where one group of workers is exploited just so another group can be undercut by cheap prices. This doesn't benefit the first group or the second. How do you fix it? An intergovernmental agreement is required. In the end, the state finances everything. If a state cares about its own population, it won't allow the import of cheap goods that could be profitably produced under our own conditions, because the state directly pays for that—it's essentially subsidizing a foreign economy. We first need to ensure prosperity as a closed community. Maybe the solution would be to reintroduce something like commodity reciprocity. If you want to export something, then you have to import something you actually need, rather than just cheap junk.

Eighth: Entrepreneurial freedom shouldn't be restricted as long as it isn't generating "extra" profit that ultimately covers the budget deficit. That kind of thing devalues money and triggers an inflationary spiral. Anyone seeking to achieve extra profit must spend that profit as effectively as possible or reduce it right from the start. Naturally, proven laundering of extra profits would be punished by expropriation.

Ninth: Greed for earnings should be sanctioned in drastic ways. Meaning, wholesalers, resellers, and middlemen must cap their margins at a certain percentage of the purchase price (including the real cost of transport).

The other solution is debt and misery.

Maybe some things could be handled differently, but the most important thing is understanding that under new regulations, the state indirectly regulates the profit of the community through the deficit. This cannot be "easy money" like in a fairy tale; it must correspond to the labor invested to earn that money, just as it did in the previous period.

Based on the fifth conclusion, it is clear that living on credit beyond one's means simply doesn't work. The only thing people still can't seem to grasp is that in a credit-based system, life only functions through exponential indebtedness (or through slave labor exclusively for exports). It doesn't really matter if you take out one loan or two when you know you can't repay even one, let alone two. The only difference is that with two loans, you get into debt twice as fast.

Actually, there is a lot here, but people just won't open their eyes and realize that the existing system has no actual source of money for profits and savings. What someone saves and profits from is essentially part of someone else's credit. And that person will never be able to repay it as long as the wealth isn't taken from the profiteers.

The final claim is mathematically provable. You have my examples involving three entities from my earlier posts. If the system doesn't function in isolation without credit, then it isn't good. And that is a proven truth.

I sent the core of the indebtedness problem to the President and the administration just to prove they are incompetent (or just false leaders), especially since they now have the problem laid out in black and white.

I am not an economist, nor do I want to be one. Anyone who actually finished an economics degree should have seen this coming. People were intentionally taught the wrong things. All those folks with PhDs in economics really ought to head back to campus and kick that whole crowd out of their positions until they can pass basic accounting principles for isolated communities. By hiding such a massive part of the truth, they’ve failed you as professionals and failed the entire country. Are these supposed to be the intellectuals and patriots fighting for the US with their knowledge? Someone is responsible here. This is our moral crisis. And if you look closely, that moral crisis is exactly what led us into this economic one. It's a crisis of morality among the economics professors and their students.

Just imagine being the Chair of the Federal Reserve and having absolutely no clue about any of this. And you don't even care. You didn't even whisper a word to the government back in 2007 when it became clear we were heading downhill—slowly, sure, but we were. That is a moral crisis. Even when someone asks you about the logical side of things, you aren't allowed to tell the truth, because then you'd be admitting you knew exactly where the ship was headed.

Even the responses from the White House and the President’s office suggest they have no desire to start a revolution. Paychecks keep coming, right on schedule every month. They say they're preparing for lean times, and so on. Americans will always find a way. "We've always managed before, and we'll manage now." But maybe one day we'll wake up and realize this was all just a bad dream.

Anyway, thanks for pushing back on my points. You're certainly more qualified than the people over on the Reddit forums. But what does that matter when my claims and evidence align 99% with what is actually happening on the ground.

Every single day on the news, you see companies in all sorts of industries filing for bankruptcy. That is pure proof that this crisis is exclusively about a lack of money. The Federal Reserve charts regarding credit expansion confirm this. Once the credit expansion stops—because there aren't any naive people left willing to take on more debt—everything collapses. But it collapses to a level lower than where we started, according to the formulas. We pumped up average wages through credit growth, and now we're killing small business owners with high debt loads for payroll and healthcare, but the money is gone. The banks and other high-profit corporations ate it all, along with all that importing.

Not a single one of these new-age economists can explain how inflation affects the economy when the financial system is purely credit-based. I even sent a letter to the Federal Reserve asking them to tell me exactly how much it costs us to feed this inflationary movement imported from abroad (like oil prices in the Gulf or gas from Russia, etc.).

Talking to people, I see a huge lack of interest and a real difficulty in grasping the problem (it's the same way here on this forum). The older generation doesn't care, and the younger ones aren't looking to build careers anyway; they just want pocket money. Everything else, they get from their parents.

For example, if you tried to present this truth to farmers, they wouldn't believe you. The collective state of mind isn't capable of recognizing such an obvious scam. Everyone gets distracted by the thrill of trading and fails to see the link between commerce and the actual lack of money. With credit, people think about living beyond their means, failing to see it's just masking the truth—that without credit, prosperity wouldn't be possible at all. We would have felt the consequences immediately within a couple of years, rather than waiting fifteen.

Even if I'm wrong about other things, just tell me: how much GDP growth would we need, if inflation is 3.5% and the bank interest rate is 6%, for the GDP growth to exceed the cost of inflation by 1%? Show me that for a long-term period of 20 years. Nothing else matters. Once you run that math, everything becomes clear.

Regards to everyone.

My attempts to alert the Government and the President about why this crisis is happening have actually paid off.
Alright, all jokes aside. I got a response from the President's office saying they’ve taken note of my position. There's really no need for me to elaborate further.

By the way, anyone who thought my equations were wrong can go ahead and start attacking Professor Dirkety Krueger too. In his book "Macroeconomics", specifically on page 27, he lays out the exact same thing for the open market. He just doesn't draw the necessary conclusions regarding the credit-based financial system and how inflation impacts the economy in that specific context.

For those interested in reading exactly what I sent to the Government, the President, and the Fed Chair, you can find everything right here: http://sites.google.com/site/financijskisustav/

And apparently, nobody cares. Even the President claims he'll fight for fairness and will never back down. Honestly, it feels like he isn't a man of his word.

I'm still holding onto the hope that the truth will be what saves us.

It’s not like the whole Government was in on this, really. It was just my letter from February 24, 2010, sent to President Jadranka Kosor, and with her blessing, passed along to Minister Ivan Šuker regarding his actions.

The substance of that letter lays out the proof that the crisis is happening because we lack the necessary primary issuance, and I backed it all up with mathematical evidence. I’ve already shared those specific details in my previous posts on this subject.

So, I am posting this now to make it official: Minister Šuker has been formally notified about the root cause of all these crises. From here on out, everything is in Godly hands.. 🙏

Smart people might say, "True heroes are revealed in times of trouble," or "Time will tell."

But I would just add, "The truth will be what saves us all."

Stay safe, everyone, and keep your fingers crossed that something good finally comes of all this for us.

David Williams7 said:It’s pretty obvious what’s actually going on here. This isn't about some recession or crisis or any of that nonsense. That's just the cover story. What we're looking at is straight-up financial terrorism. It's the final act—an attempt to dismantle every major global economy to build the New World Order from the ashes. Just keep an eye on the dollar; America will be the first to go down. They're getting sloppy in this final phase, too. They can't hide behind the usual excuses anymore because they have to take action, and their window is closing fast. A lot of people feel that sense of unease in the air, just like you did. Now it just comes down to who wins: us or them. Our edge is numbers; their edge is that most people are asleep at the wheel. We'll see how it plays out.

The New World Order is nothing but pure fascism and debt-based slavery. It’s a prison planet—basically hell on earth. Nothing good in it for us.

But hey, this is an economics forum and I'm just rambling on about nonsense, so I'm sure everything will be fine. I mean, look how long we've been stuck in this "crisis."🤣

I already noticed the first sign. Google switched the dollar currency to euros for AdSense earnings. Maybe it’s just a coincidence.

It's obvious the USA has to collapse because they can't carry that much debt. And honestly, they have themselves to blame. They had so much time to fix this. What were those mathematicians and analysts at the CIA even doing?
I don't worry about Americans. I worry about the total breakdown. Taking out loans for farms that were supposed to turn a profit for farmers turned into financial suicide. People who actually work the land know that only the countryside can save us. When things start tightening up, there won't be any imports from abroad because there won't be any money. And the farmers will all be wiped out by interest on loans they can't repay. The Government acts like they know what they're doing, but I think they're just waiting for their terms to end—maybe even sabotaging their own victory just so they don't accidentally win the elections. If they were true patriots, they’d tell people the truth straight to their faces, whatever happens. If there needs to be a revolution, better now than later. If there needs to be financial isolation, better now than later. I don't know what they're waiting for. I'm just an average mathematician and I easily proved where this is headed. A PhD in math would tear this apart in a few hours and tell them the truth.

Is it possible everyone has so much in secret accounts that they fear for their little scraps of wealth so much they'll turn us all into slaves before they ever let us be masters of our own land? That's usually called a coup... I think you know what I mean. Because our constitutional rights are being directly violated. There are no excuses for that. No politics justifies it. Venezuela is an example (maybe not the best one) of having solutions to such situations. We just don't have a leader with a vision. We could really use another Joe right now, if he wasn't so red.

David Williams7 said:It’s all just some global conspiracy by the Freemasons and the Illuminati in your eyes, I guess. :-)

Yeah, but honestly, does it even matter who is behind the plot if it ends up turning us all into slaves? It doesn't matter how long it’s been going on or who pulled the first trigger. What matters is that we figure out exactly what they are doing to us. We have to find out. And then we have to put pressure on our own Government to make them explain it to us.

Once one Government is forced to actually answer for it, other Governments will see that and get the courage to deal with it—to fix this mess properly.

We should be focusing on spreading the truth—the kind of truth we can actually prove—instead of just pushing conspiracy theories that are impossible to back up.

If you didn't buy what I was saying before about how this debt-based economy is just a trap designed to turn us all into indentured servants, then you really need to watch this video. I watched this video. It’s about how things work. How the money works. Most people don't see it. They just live their lives and pay their bills. But there is a structure underneath everything. A debt-based economy. That is what they are talking about here. It's all connected. The way the banks move and the way the government acts. You look at the big players like Goldman Sachs and you realize nothing is accidental. It is all very calculated. Very deliberate. People think it's just random chaos, but it isn't. There is a system. A very specific system designed to keep things moving in one direction. It's quite heavy when you really sit with it. Just thinking about it. Most people won't ever care. They won't look. But once you see the pattern, you can't unsee it. It's just there. Simple as that..

Debt-based economy. They’re going to convince everyone that this whole setup is perfectly legal, a legitimate system when really it's just a massive, organized scam. It’s a trap. We're being led straight into a swamp that we aren't ever going to crawl out of.

You guys seriously need to see this.

It's high time we all wake up and realize this isn't some fairy tale or a collection of fables. This is our actual reality, and it’s something that needs to be changed as soon as possible.

If you find yourself nodding along to my points and the evidence I've laid out here, you can just download my full collected article. The truth about the economic crisis.pdf I’m sending this out to everyone. Everyone needs to hear the truth, no matter how ugly or unbelievable it might seem, just so it can be known. There's an old saying: Quote : The
Public disbelief can actually be used to hide the biggest secrets. It’s a simple concept, really. When people stop trusting anything they hear, they stop looking for the truth altogether. They just tune out. And that's exactly when the most significant things can happen right under their noses without anyone noticing.

From a letter to a friend:

" They try to convince us that by simply taking out more loans, we’ll somehow have enough cash to cover both the principal and the interest. But there's no guarantee that new money will actually show up to pay those interest rates, or better yet, to create any kind of actual value for the community—real, newly created wealth. Nobody talks about that part. It isn't treated as an issue, and nobody seems worried because everyone just immediately jumps to inflation. Inflation becomes this big bogeyman that people accept any other solution to avoid. They just tell us, "We can't do this because of inflation, so this is our only option." And if we follow that logic, everything will be fine. But the government was the one who ordered the inflation in the first place. So, they claim they were being irresponsible with printing money and that it was wrong, but they weren't smart enough to realize they needed new liquidity. Our economists are absolute geniuses. Now, seeing as there clearly isn't enough money, Rohatinski is releasing $2.9 billion to be pumped back into the system through loans. Just look at the profit hidden in that over a single year with 6% interest. That's $174 million in interest alone. Or $133 per person. This means that in one year, banks will attempt to pull $174 million in real cash out of the economy based solely on this. And they'll do it every year. If that's true, it means banks collect $14 billion every year just from that 6% interest. Based on my math against a $333 billion GDP, that works out to 4%. Considering solid stocks like AT&T yield about 7%, and realistically capital should bring at least 5% annual profit, it feels like almost all of us are working just to pay off interest. Theoretically, this is happening only because there isn't enough money to cover the interest payments. Instead, they should probably inject, say, an extra 3% of a $118 billion budget—about $3.5 billion—through a primary offering ($482 million). That would be roughly 1.2% of existing savings, which isn't a sum large enough to trigger hyperinflation. It's about 1% of the GDP. Doing this would allow for a gain/saving per person of $292.

However, if bank savings sit at $290 billion, which is about $38 billion, and our national debt is even higher, it practically means we already know the debt can't be repaid since our savings are less than what we owe. Plus, every year, based on 6% interest on a $250 billion principal, banks are claiming $2 billion. Banks have operating costs too, though I don't know exactly how much.

We have inflation at 3.5%, and it didn't come from printing money? Who is drinking and who is paying? Where does this extra 3.5% of money—$10 billion, or 8.5% of the budget—come from every year? It comes from raising wages. But how can you raise wages if you aren't earning more? And how can you earn more if there is no new money? You have to speed up the exchange of goods (and shorten payment terms). So, things are happening in reverse and nobody is raising an eyebrow. The government steadily calculates that our average wage is 3.5% higher every year, and it's been that way for years. No problem, right? But if at some point everything doubles in price, an equivalent amount of money must appear in circulation (without using loans) to cover it. If you do that through credit, you have to be an absolute idiot, because then you're just paying interest on an artificial inflationary flow. In reality, there wasn't even inflation, because that would mean money lost value. The money still holds its value; it's just that an excess of credit appeared, which we mistakenly thought was inflationary money we could use to boost earnings. Then, with higher earnings, we took out even bigger loans. And so on.

If you take 1.035 and raise it to the 18th power (years), you get 1.85. Translated to 100% of savings, you have an additional 85% in credit, while the bank keeps a 15% mandatory reserve. There is 85% more money. Wages have risen that much, while the banks are rubbing their hands together with $2 billion in annual collections. Logically, it would make sense if they actually printed money, but then the banks wouldn't have their eternal cash cows. However, the ceiling has been reached. There is no room for new credit. Rohatinski is buying time by allowing for an even smaller mandatory reserve. Yet, the state still demands 3.5% more in contributions this year. It's interesting—even after significant salary cuts at various companies, the results look just like they did during the best years. Just when I thought average wages would start falling, and therefore contributions would drop too.

If you leverage 1,035 against 20, you end up with 1.99. Essentially, Rohatinski would have to allow for a mandatory 1% reserve, otherwise, banks won't have any foundation to back any kind of credit within a two-year window. It’s interesting, really. That was back in 2012. If you walked into any bank back then asking for money, they’d probably just hand you a number, tell you to go home, and say they'll notify you when you can actually withdraw your funds. So, I’d suggest moving all your cash out of the bank and into something secure—like a bank vault or converting it to gold."

Take Greece, for example. Their famous double-digit budget deficit proves that the old saying "as broke as Greece" is making a comeback. And the EU is acting surprised that they didn't see the bankruptcy coming. Maybe the old adage holds true: the EU will fall apart before America ever joins the union.

To get a full picture of this total chaos, I took the time to read the ECB statutes. I noticed something important: the latest version isn't even a text file; it's a scanned document. That means search engines can't index it. After a little extra digging, I managed to find an earlier version on a web archive site, and I found some fascinating data. The ECB exclusively finances banks and corporations. Of course, they finance national central banks too. However, there is absolutely no mention of a primary issuance mechanism. That’s strange, considering there is a clause regarding a founding capital of XXXX million euros. It might be time to ask ourselves: what came first, money or credit? This statute suggests that money existed first, and now only credit exists. The exception is interest on deposited funds, which is far too small to cover the demand for new money (for reasons I mentioned earlier).

I did some rough math, and it looks like Americans need about 2 billion dollars in liquidity per year just to cover interest payments to banks. That means the credits being discussed might only plug the hole until late summer, assuming you factor in the time needed to secure and spend the funds.

By the way, anyone using cards for cashless payments should probably ask themselves what the bank's commission actually is. It’s typically 5%, if I’m not mistaken. If you lost 5% just trying to withdraw cash from an ATM, people would call it a peasant revolt. The same thing would happen if you had to pay 5% extra just to buy something; banks are basically holding merchants hostage by imposing a percentage fee on every transaction. Even if you think you aren't losing anything personally, we are being depleted globally. Final consumption accounts for anywhere from 30% to 60% of GDP. If everything were paid via card, those bank fees would represent 1.5% to 3% of the entire US GDP. And while that might not sound like much, we can certainly afford it. We’re talking about 5 to 10 billion dollars. To put it bluntly, a 60 million dollar robbery is a catastrophe, but we can easily stomach it when it's done legally. On $333 card payments, the bank earns 50. If you spend your entire paycheck of $2333 through a card, the bank has made $117 off you. I honestly wonder why they even charge annual membership fees. I guess it helps maintain the illusion that they aren't profiting. So, stick to cash. The "robbery" involved in cash deposits for businesses is significantly lower, around 0.4% of the total. That leaves the company with 4.6% of their gross turnover. In my opinion, any honest customer wants their supplier to stay afloat.

Anyway, my plan to alert the media and other key players—TV, radio, newspapers, the government, unions, environmentalists, etc.—has met with absolutely zero response. I wasn't expecting a standing ovation, obviously, but total silence is genuinely concerning. It implies one of two things: either most people have no clue what the actual truth is, or the people responsible for informing and leading us aren't reacting to the facts because... well, several things could be happening:

• The leaders know exactly what's going on, but nobody wants to take action.
• Or, the situation is so unbelievable that everyone assumes it's just nonsense.
• Or, everyone is terrified to publish the truth for fear of sparking a massive uprising.

Personally, I think it's the last one. Especially when you look at the scenes from the anti-globalist protests.

Even though I am one of the few willing to waste time pointing out the problems dragging us toward ruin, that doesn't mean I'm wrong. I've even heard it said that the goal of education is indoctrination. So, it makes sense that as a non-economist, I’ve managed to prove the system's deception more effectively than a degreed economist. In any closed system, treating costs and revenues as taboo subjects in economic studies is standard practice. It fits perfectly with the recent summer programs held at the University of Chicago.

People will probably rally to save five little trees before they ever try to fix a fraudulent monetary system. It’s just because those trees get cut down in an hour, while banks bleed you dry for years. And when they hit you, you take it personally instead of seeing the bigger picture. You always end up thinking if you had been luckier, things might have gone differently.

Success on a global scale is impossible. Here’s a simple way to look at it. Imagine a small state with a million people where everyone takes out a loan from $333. For every billion borrowed, there needs to be a hundred million returned. That brings the total to 1100 million. What’s the final balance? Everyone ends up with $33 less. Now everyone is short on cash again, so they all take out more loans. This time they’re larger by $33, totaling $367. You see where this goes. But it can't go on forever. Even roulette players have a system that works, provided they can keep raising their bets indefinitely. But that doesn't work here. The bank always wins. They just had to make sure there was no primary issuance of money (just look at the Federal Reserve statutes and the laws governing the Fed).

Over at http://sites.google.com/site/financijskisustav/, I’ve laid out the mathematical proof regarding the deficit, along with copies of letters sent to Rohatinski and President Obama. I wrote to Obama because he once said: "We must not be afraid, we must not be silent, and we must not turn our heads," "It is courage that overcomes injustice and creates a better society," and "In the fight for justice, I will never tire." Well, now we wait to see if those were just empty words or not.

Regards to everyone

neonhound10 said:Value is something you build from the ground up, and money works exactly the same way.

On the flip side, when you look at import and export dynamics—say, between the USA and the European Union—you don't necessarily have to print more cash to see a shift; sometimes it’s just about the exchange rate adjusting itself, which creates this sort of illusion where the actual amount of money stays the same, but its purchasing power effectively climbs...

I'm not entirely sure, honestly. I don't have enough expertise on the subject to say for certain that it's wrong. It just feels like someone has to pay for quality with quantity.

neonhound10 said:That airport is definitely going to pay off its initial investment—and I’ll admit I might be stretching things a bit there, since an airport is really such a vital public utility—but it’s absolutely going to end up turning a profit...

I'm with you there. If the money from the primary issuance goes toward building export profits, then it's fine. But I still feel strongly that it shouldn't be put on the market if it's part of the permanent state assets that aren't up for sale.

Nicole Collins13 said:It isn't.

Actually, it gets worse. Imagine they lend you the money, but then you have to pay them back with interest.😁

neonhound10 said:From what I understand—or at least, how I see things working—money is printed based on actual backing, meaning every single dollar issued represents some kind of real value, you know, something tangible...

At the same time, there’s always that careful balancing act of pulling money back out of the market just to make sure the currency stays steady and reliable.

Honestly, a government running a deficit isn't the disaster people make it out to be, provided all the other economic indicators are looking healthy and positive; sometimes, you just have to take on debt to reach that next level of growth. Because if that wasn't how the world worked, you and I probably wouldn't be sitting here typing away right now, and we'd likely be freezing somewhere else entirely...

The whole point of money is that it keeps moving. The absolute worst-case scenario is when the people who actually have cash just stop spending it. Think of it like swimming upstream in a river: you're in a surplus if you're making headway against the current, you're in stagnation if you're just treading water, and you're in a deficit if the current starts pulling you back... It doesn't mean everything is falling apart. I mean, remember when Canada ran low on KM in the treasury recently?

And look, the math doesn't always have to balance out to zero perfectly every single time. Some years the plum trees yield a massive harvest, and other years they barely produce anything; when the crop is great, you're in a surplus, and when it fails, you're in a deficit. And then, maybe the following year, it's a bumper crop of olives instead...

If new currency is issued against a specific value, then that value has to be deposited. It’s that classic gold standard system. You can't just let that value float around the market to chase profits; it should only surface when you're pulling those issued dollars back and storing them in the same vault as the mint. If you use newly issued money to build an airport, you shouldn't sell it and count that as income. That would basically be treating primary issuance as revenue, which isn't right because you haven't actually provided anything in exchange for it. In my view, the best way to use money from primary issuance is to pay for labor. Once you've received the value of that work—like administrative services and stuff—you can't really go out and sell that work to someone else later.🙂

neonhound10 said:From what I understand—or at least, how I see things working—money is printed based on actual backing, meaning every single dollar issued represents some kind of real value, you know, something tangible...

At the same time, there’s always that careful balancing act of pulling money back out of the market just to make sure the currency stays steady and reliable.

Honestly, a government running a deficit isn't the disaster people make it out to be, provided all the other economic indicators are looking healthy and positive; sometimes, you just have to take on debt to reach that next level of growth. Because if that wasn't how the world worked, you and I probably wouldn't be sitting here typing away right now, and we'd likely be freezing somewhere else entirely...

The whole point of money is that it keeps moving. The absolute worst-case scenario is when the people who actually have cash just stop spending it. Think of it like swimming upstream in a river: you're in a surplus if you're making headway against the current, you're in stagnation if you're just treading water, and you're in a deficit if the current starts pulling you back... It doesn't mean everything is falling apart. I mean, remember when Canada ran low on KM in the treasury recently?

And look, the math doesn't always have to balance out to zero perfectly every single time. Some years the plum trees yield a massive harvest, and other years they barely produce anything; when the crop is great, you're in a surplus, and when it fails, you're in a deficit. And then, maybe the following year, it's a bumper crop of olives instead...

What sum are we talking about here?

Douglas Reed3 said:So according to you, Zimbabwe should just be bursting with profits right now instead of dealing with hyperinflation, starvation, and 94% unemployment?

I mean, you’ve got to see the math on this. It’s just not realistic to expect a tiny 6% slice of the workforce to generate enough profit to keep the entire country running. If that happens, you end up with a massive deficit like they have in Zimbabwe, where all that new money becomes completely worthless. At the end of the day, that new cash doesn't actually represent any real value—not like it did back before hyperinflation took over everything.

Those mathematical formulas they throw around need to be supplemented with actual, real-world estimates of newly created value. If we want a budget deficit that actually means something, it needs to be based on real value. For instance, it would probably be a better move if the government only used deficit spending to cover salaries for public sector employees. They don't turn much of a profit anyway, and you could honestly employ a lot more people that way. But here’s the thing. If the private sector isn't actually creating any new value—if it's just full of middlemen who squeeze the original producers—then we have a problem. You see this all the time in the dairy industry or with big agribusiness. These middlemen take massive profits while doing very little actual work, which essentially undervalues our currency and drives up inflation. Basically, the desire to grab huge margins with minimal labor leads directly to either money inflation or widespread bankruptcies, depending on how the government decides to fund that deficit. Some brilliant economist could probably write a whole dissertation proving that point. Now, this doesn't apply to export businesses. When companies earn dollars from exports, those funds just get swapped back into our domestic currency. Or, the Federal Reserve takes the foreign reserves and issues more dollars—it's effectively the same thing. On a macro level, it's actually beneficial for the country to maintain a large surplus, even if it involves relatively little labor. However, when a nation focuses on selling overpriced goods to others, they end up running a high trade deficit, and the entire problem just shifts onto the national debt.

It’s tough to get an accurate mathematical read on our current situation because the actual financial system relies on secondary bank emissions that completely distort the picture of what's happening in the country. Then there's the trade deficit. You can easily plug that into a formula, but once you do, the result looks even uglier than we care to admit. Of course, if someone actually had access to the real data—things like cumulative bank lending, current loan placements, expected repayment values, production numbers, and probably a dozen other metrics—they could plug those variables into the equations and know exactly where this nation stands before the news even catches wind of it. They could predict things with incredible accuracy. And if they knew that, maybe they'd also know which levers to pull to steer the outcome in the right direction. That's supposed to be the job of a macroeconomist. I don't plan on studying economics just to realize something is broken.

But honestly, when you take these equations and layer them over some basic statistical data, it becomes pretty obvious. Even someone who isn't an economist could see that the government is making the wrong calls here. They're just leading us all straight toward a disaster.

I’d like someone to actually prove why primary issuance is such a bad idea. Specifically, I want to see proof that the debt we pile up by financing budget deficits through loans can actually be paid back after, say, X number of years. You have to look at the reality of the situation here—we don't have a trade surplus to work with. Watch out for selling off state assets just to pay down debt—like selling off national parks or public lands. It might look like you're creating a surplus on paper, but in reality, it’s a massive loss. You're basically just shrinking the country's capital to make the debt numbers look smaller.

If what’s being described above is actually an impossible mission, then we might as well just come out and admit it right now. 😕

How would you actually envision an exit strategy from this crisis, given everything we’re seeing right now? If the answer is supposed to be running a surplus in international trade, why hasn't that worked for us for all these years? I think we can all agree that having a trade surplus is basically the prerequisite for moving away from a pegged currency system. But honestly, telling someone that is like walking up to a guy living in poverty and saying, "I have the solution for you: just get rich." It doesn't mean much. We need a plan that actually functions, and we haven't had one since the last decade. To make things even more interesting, it’s incredibly hard to find any country that actually maintains a surplus in the exchange of goods. I know for a fact that China pulls it off, as do the oil producers in the Middle East, and Russia is close to it because they leaned so heavily into energy trading. If you strip away bank loans, the sum of all national balances should technically equal zero. As it stands, the total earnings across the board are deep in the red. Or maybe I'm just wrong about that. But if that were true, what would the implications be? You’d essentially have to create new money just to balance the scales back to zero.

So. Look. If you actually have the data on current debt levels versus the cumulative total earnings (external) for all countries, you can just add them up. And if that number isn't zero, it would be pretty weird if it were positive. But if it’s negative, then obviously you can't balance the books without injecting new money into the system. And that happens by printing banknotes. Or maybe by minting gold coins. Personally, I'd prefer the coin route. Honestly, maybe the solution is to start mining gold from the Mississippi River again and use that to pay off the debt. I think bankers would jump at the chance to settle debts with gold right away.