The Financial System and Money Supply

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

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

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

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

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

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

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

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

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

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

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

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

Best,

sites.google.com/site/financijskisustav/home

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

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

It's just the way it is...

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

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

It's just the way it is...

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

Maria Thomas48 said:Fair enough. But look at it this way. If you tell a farmer out in rural Kansas that there's a fox raiding his coop and stealing three chickens every single day, should he wait until he's down to his last three birds before he does something about it? Or should he act sooner?

See, destruction is just so much easier for people than actually building something up...

It’s way simpler to talk someone into drilling holes and sawing through their own foundation than it is to convince them to stop doing it...

It’s the same thing here; a farmer might wait until he’s forced to cull livestock just to survive. That’s why the government provides subsidies for livestock lost to predators—it’s meant to discourage people from taking matters into their own hands by hunting wolves or bears...

Human beings find it incredibly easy to tear things down, but building something lasting is a whole different struggle...

The thing is, the entire economy is essentially built on psychology and how people feel, and honestly, I think that's exactly why economic models fail so often...

Economics isn't quite like physics or pure mathematics where you can just work solely with hard facts, though we really ought to treat it that way. Psychology exists to analyze what happened, not necessarily to predict the future, yet everyone expects these American caricatures who get celebrated whenever they fly over to the US to give a lecture to act like prophets...

Of course, you can learn a lot from those experts, but they’re really just sharing past experiences. It’s never going to be a universal recipe or a one-size-fits-all solution for anyone else because you have to account for every specific circumstance and the unique behavior of society...

It's just like how you can't truly compare two different economies, even though people try to do it all the time...

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

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

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

I would simply remind you that according to medieval Christian philosophy and Biblical teachings, charging interest on loans was strictly forbidden. Historically, Christians did not engage in lending.
Why didn't they provide credit? Because there was no incentive. If I lend you money, you might pay me back, or you might not. Even in the best-case scenario where you return everything on schedule, I still lose value due to inflation. Why would I ever lend?

For that reason, the only people providing credit were the Jewish community. They amassed wealth through this process quite ruthlessly. Ultimately, this led to a dynamic where the Jewish population lived off interest, while the Christian population worked merely to service that interest.

The solution to this predicament lies in export-surplus nations that build up massive reserves (such as China, the United Arab Emirates, or India) beginning to spend those reserves on labor from heavily indebted countries (like the USA or the European Union, including America).
This shift will occur very rapidly. Our standard of living will decline slightly, while the standards of China and similar nations will rise. This is the inevitable sequence of events. There will be no systemic collapse, nor an apocalyptic uprising of the people.

I am writing this here for the seventh or eighth time. I am quite stubborn. I do not expect it to suddenly sink into your minds 😉 But then again, one can never be certain.

The current system of free trade is arguably the finest conceptual framework ever devised by man. Every individual, through their own supply and demand, influences the value of goods for others. We will likely never devise anything superior to this.

The most significant proof—which remains irrefutable even after seven hundred pages of forum posts (seven specifically dedicated to this nebulous topic)—is that this system continues to function. It has already weathered several crises identical to this one throughout history. It still works. And it will continue to work, especially as some of the major economic powers have already begun to achieve economic growth.

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

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

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

That's debatable. When you consider the current state of the USA, it's simply incorrect, especially since inflation is already outpacing interest rates. It has been proven countless times that printing money doesn't work, yet that is exactly what is happening right now...

I am Stojan Nenadović, a retiree living in St. Louis. Maria Thomas48 shared the link to my website http://noncredit-money.org along with my piece titled "Non-Credit Money as a Gift." The concept of non-credit money acting as a gift allows it to enter circulation without adding overhead to prices, thereby reflecting true costs and actual market values. This is why non-credit money, functioning as a gift, stands as the only realistic form of currency. Credit-based money, conversely, enters the system as debt layered atop real costs, creating nominal expenses and prices that can never truly be satisfied by debt-based money, since there is perpetually less such money available than what is required to cover a product's nominal cost. Consequently, inflation becomes an inevitable byproduct of credit-based debt. To implement non-credit money as a gift, one requires an additional amount of money in circulation (dM) calculated as a percentage (k) of the existing money supply (M).
dM = kM ; k = (supply - demand)/demand ; for instance, k = 5%.
If non-credit money is issued according to this specific formula, inflation becomes impossible. Certain taxes and debts would be liquidated by the volume of non-credit money introduced. Consumers would pay less while producers earn more than they do under our current credit-based order, which places a heavy burden on both costs and pricing. Everyone benefits from the introduction of non-credit money as a gift. The fundamental source of this non-credit money lies in the expansion of economic rationality; it essentially represents the monetization of human progress. Such a system could exist as both national and global non-credit money, and the time has come to establish both a national and a global non-credit monetary order.
China is currently writing off 45% of its credits, effectively transforming them into gifts. This is precisely why Chinese prices remain 45% lower than global averages, even as their GDP growth hits 12% this year. In China, taxation is virtually non-existent.

Consumers pay less while producers receive more than they do today.

You made an astute observation. But if that is the case, where does the surplus go? It goes to the entity issuing that credit money. In other words, it goes to the government. This is simply another form of taxation used to fill the federal coffers when the fiscal year winds down. Does the state know this? Certainly. Do the people know? Most likely. But will the government ever relinquish its role as guarantor? Not a chance. It would be like asking them to abolish sales tax or income tax. Impossible.

And things aren't much better in China than they are here in the USA 🙂. Just try living there and you will see 🙂. The lifestyle you enjoy is ultimately paid for by every single dollar you earn.

Mr. Mark Rothko, you’ve already detailed where the surplus from credit money flows, but my focus remains strictly on non-credit currency; that capital goes entirely to the people—to consumers and vendors alike—leaving absolutely no residual margin for the issuing authority. When the state issues this type of money, it carries no inherent cost and exists solely to serve the public interest and stimulate industrial growth. China utilizes this system in a somewhat half-hearted manner, yet even their limited application serves as a sufficient starting point. History shows us the most extreme demonstrations of this power under Hitler. In just five years, he transformed Germany from what was arguably the most broken nation on earth following the Weimar hyperinflation into a global titan, increasing its wealth thirtyfold. Following World War II, Europe was rebuilt through the Marshall Plan. The USA provided $12 billion—roughly 5% of the American GDP—which effectively boosted the European GDP by 30% in only four years.

Dear Mr. Stole, you are unfortunately failing to see the big picture, focusing instead on mere fragments. In what way did Hitler exert pressure from Germany? He did so by issuing credit money to pay off reparations from World War I, effectively exporting inflation beyond his borders. This is precisely what the USA is doing right now. We all know what happened once the world realized the truth.

The USA did not build 30% of Europe's GDP from scratch; rather, they simply restored Europe to its pre-war status. There is a massive difference between repairing what was broken and creating something entirely new. Europe possessed everything: the conditions, the experience, the workforce, the industrial mindset, the education, the tradition, the knowledge, and the technology. The war only damaged the infrastructure. I hope you will agree that raising GDP in such a manner is quite simple.

Gregory Williams7 said:Dear Mr. Stole, you are unfortunately failing to see the big picture, focusing instead on mere fragments. In what way did Hitler exert pressure from Germany? He did so by issuing credit money to pay off reparations from World War I, effectively exporting inflation beyond his borders. This is precisely what the USA is doing right now. We all know what happened once the world realized the truth.

The USA did not build 30% of Europe's GDP from scratch; rather, they simply restored Europe to its pre-war status. There is a massive difference between repairing what was broken and creating something entirely new. Europe possessed everything: the conditions, the experience, the workforce, the industrial mindset, the education, the tradition, the knowledge, and the technology. The war only damaged the infrastructure. I hope you will agree that raising GDP in such a manner is quite simple.

Precisely. So, what is the takeaway for our current situation?
For both the public and the government to value actual assets again, we have to restore the values you mentioned above...☕
Speculation has overtaken manufacturing...
That is why today's landscape is so much harder to navigate than it was a few decades ago. Once that shifts, we'll be out of the crisis in an instant.

Dear Mr. Mark Rothko, it is my contention that the debts from World War I were fully settled well before Hitler ascended to power. Given that he took control in 1933 and spent only five years preparing for conflict, such rapid mobilization can only be explained by massive infrastructure expansion fueled by non-credit money. I see the exact same pattern in how China operates. This isn't exclusive to China, either; we see similar shifts in India, Brazil, Argentina, and throughout Southeast Asia. The fact that Chinese goods are priced 45% lower than the rest of the global market suggests that their underlying credits have essentially been written off by 45%. In banking terms, these are non-performing loans—the worst kind of debt, deemed unrecoverable and subsequently scrubbed from the books. When those loans are written off, they effectively transform into non-credit money, essentially becoming a state gift. Furthermore, the common assumption that wages in China are meager is fundamentally flawed; the gap between gross and net income is virtually nonexistent, implying an almost negligible tax burden. These are all classic hallmarks of non-credit money. I am no expert, merely making observations, but even the Chinese merchants who have flooded global markets claim the state is essentially handing them money. Do you have any insight into this phenomenon?

Listen, Matthew Patel12, wasn't it enough for you back then when Uncle Milton tore you apart and started quoting senior Keynes? 😁

By all means, sir, I suggest you revisit the Treaty of Versailles. It seems a significant portion of that agreement has, shall we say, escaped your attention.

I have taken the liberty of doing some research for you.
http://en.wikipedia.org/wiki/Treaty_of_Versailles

From the start of 1929, Germany was required to pay war reparations totaling $5 billion, with the remaining balance, to be determined later, payable over a period of 30 years.

Nicole Collins13, I actually owe Friedman a thank you for tearing into me, because his outburst only served to highlight his own ignorance. He insisted that I am incapable of grasping the notion "that profit is also a cost," a sentiment echoed by Marx. Marx argued that value is essentially labor embodied in a commodity; I contend that labor itself is a cost. While Marx posits that profit is unpaid surplus labor, from my perspective, that simply means profit is an unpaid cost. This brings us right back to Friedman’s original point. From where I stand, there is no meaningful distinction between Marxist theory and bourgeois economics. They all occupy the same side of the equation, while I remain on the opposite. I hope I am not shouting into the void here; many Americans have already embraced this view, and I trust you might eventually do the same.
Gregory Williams7, I have studied the Treaty of Versailles and found nothing in its terms other than a calculated attempt to impoverish Germany. It says absolutely nothing about how Hitler managed to rebuild the nation in just five years, to the point where he believed it was powerful enough to challenge the entire world. In my estimation, such a feat could only be achieved through the use of non-credit money. Today, one could achieve similar success using non-credit money specifically to drive up production and employment levels.

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

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

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

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

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

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

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

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

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

Gregory Williams7, credit is essentially just newly minted money entering circulation as a sort of gift, injected in precisely the amount required to maintain a perfect equilibrium between inflation and deflation.
Once that capital is actually out in the world, it can be saved or lent, with interest being paid on both sides of the transaction, though the general public remains blissfully indifferent to such mechanics. That is strictly a private affair between you and your bank; at that stage, money simply changes hands without increasing its total volume, which prevents any inflationary spikes. Only the highest sovereign authority in a nation possesses the mandate to create new currency, yet today, the central banks responsible for this expansion are held in private hands. In the US, we are looking at the Rockefellers and the Rothschilds, while in other nations, it is merely those acting on their behalf. At the very apex of this pyramid sits the Bilderberg Group. However, the Federal Reserve was granted a hundred-year mandate to control the money supply back in 1913. We are approaching a point where, once their influence wanes, the entire global order will collapse like a house of cards—even more rapidly than communism fell.

The core issue is that money is nothing more than dyed paper. It is a worthless raw material used solely to fuel fires.
We assigned it value simply to facilitate easier trade.
We appointed "referees" to ensure no one uses that currency to cause chaos.
What has occurred is that some of those referees have overstepped their bounds for various reasons. However, that does not change the fact that money remains nothing but colored paper without intrinsic worth.
Whatever you refuse to tolerate in that paper, you must ultimately renounce.
Only 3% of Americans earn enough to cover all their needs because they live beyond their means. Do not attempt to tell me otherwise. No one is stopping them from moving into the woods and living in a cave with nothing. Expenses equal zero; income equals zero. Here is the simplest math, which should be clear to anyone. You would never need another single unit of currency for your "needs." Zero equals zero!

Therefore, I suggest you revise your financial model once again.

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

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