The Financial System and Money Supply

user123, I find your preoccupation with inflation and arbitrary figures quite misplaced, considering the US maintained a steady growth rate of 3% for years on end. Historically speaking, the US hasn't seen development exceeding that 3% threshold even during its most dominant eras; if you were issuing money at a 3% rate, it would function essentially as non-credit money. It is impossible to conjure the kind of inflation you are describing under those parameters. If one were to issue 3% more money as a direct grant while achieving 3% annual growth, inflation would effectively sit at zero and the dollar would maintain its exact value. Instead, the dollar has lost roughly 1% of its worth because money is being issued strictly in the form of credit. If money were distributed as a gift based on the formula I previously provided—k = (supply - demand) / demand—inflation simply wouldn't exist. This is elementary school mathematics. Run the numbers: determine how much the supply exceeds the demand and divide that by the demand. Even providing a rough percentage would be a significant improvement over our current reality. If your calculations are slightly off, correcting them should be a trivial matter.

@Matthew Patel12

Look, crimsonfalcon10, what on earth are you talking about when it comes to zeros and inflation? The US has sat at a 3% growth rate for years! The US hasn't even seen development higher than 3% back when things were actually running smoothly...

http://www.tradingeconomics.com/Econ...spx?Symbol=USD GDP

http://www.tradingeconomics.com/Econ...spx?Symbol=USD growth rate

http://www.tradingeconomics.com/Econ...spx?Symbol=USD inflation

Listen, lonehawk5, that 3% figure you mentioned covers a much broader timeframe than what we are discussing here. The links you provided track average GDP growth over several years, which pertains specifically to a credit-based economy. My point concerns a non-credit system entirely. In such a framework, GDP growth would be significantly more robust, while inflation would effectively vanish. Regardless, I appreciate you sharing the data; it doesn't undermine the case for non-credit money in the slightest.

So, what about the last few years?

If you select GDP from the dropdown, the data covers 1947 through 2010.
As for the unemployment rate, it runs from 1971 to 2010.

Ashley Barnes9 said:The current system is absolutely headed for disaster, and honestly, that goes for the architects who actually thought they could pull off this level of control. But let’s be real: any other system we tried to implement would eventually fall apart too. Human nature—driven by greed, power trips, and the urge to dominate others—is just too flawed for perfection. If anyone were going to find the loopholes and tear a system down, it would probably be us Americans...
😉

So, maybe what we're seeing right now is just a fair consequence for all of humanity. We keep chasing a seat at the table of the ultra-wealthy instead of building a society where everyone actually gets a fair shot.

I feel like this is such a typical American approach to solving problems. We run into a mess, we know exactly why it happened, and then—get this—we decide we deserve it. It's like we actively wish for things to go wrong. We should be aiming for better. I don't know about you guys, but I don't have any desire to become obscenely rich. Once your needs are met, having more wealth doesn't really matter much.

I'd tell crimsonfalcon10 to stop scaring people with talk of hyperinflation. That kind of logic is like arguing we should stop using fire because of forest fires, or stop taking medicine because of overdoses. It’s silly. When money is printed in ways nobody truly understands, anything can happen.

And how can economic science even function without addressing the calculation of non-credit money issuance? I've brought this up before, but it seems like everyone just ignores it. To me, that omission casts a massive shadow over what we call "economics" as a science today.

Best,

sites.google.com/site/financijskisustav/home

Maria Thomas48 said:I feel like this is such a typical American approach to solving problems. We run into a mess, we know exactly why it happened, and then—get this—we decide we deserve it. It's like we actively wish for things to go wrong. We should be aiming for better. I don't know about you guys, but I don't have any desire to become obscenely rich. Once your needs are met, having more wealth doesn't really matter much.

I'd tell crimsonfalcon10 to stop scaring people with talk of hyperinflation. That kind of logic is like arguing we should stop using fire because of forest fires, or stop taking medicine because of overdoses. It’s silly. When money is printed in ways nobody truly understands, anything can happen.

And how can economic science even function without addressing the calculation of non-credit money issuance? I've brought this up before, but it seems like everyone just ignores it. To me, that omission casts a massive shadow over what we call "economics" as a science today.

Best,

sites.google.com/site/financijskisustav/home

I am scaring no one... I am simply using pure mathematics, just like you... besides, take a look at the link below...

http://img686.imageshack.us/img686/6...itnisustav.jpg

The simulation assumes annual savings of 15% of GDP... we have already calculated this in previous posts since there is no credit in this system and everyone must save... the simulation uses a 3% annual GDP growth rate... we also considered the GDP increase if only 10% of those savings were reintroduced into circulation and what the resulting GDP would be... in that scenario, dividing that 10% of GDP by the standard GDP (which wouldn't account for the return of savings to circulation) gives us the inflation risk...

One solution to make this system work without inflation would be to establish a call center... when someone wants to spend part of their savings to buy a television, they would need to call that center so the government can pull that specific amount of money out of circulation at that moment... that way, his purchase of a television won't trigger inflation... 😂

We shall see if your vision, Maria Thomas48, actually holds any weight. It is quite simple.

In the name of justice and fairness, you would simply print money so that everyone could have everything they require. In doing so, you would strip resources from the workers and savers just to hand them over to debtors and those who refuse to work. And all this, supposedly, in the name of justice.

That system died a long time ago. If true justice exists anywhere in this world, we will never witness such a scheme again.

As for the American mindset, I found your perspective somewhat relatable in the past. Let us just print more cash and allow the fools who actually labor to subsidize the idle through our "brilliant" ideas.

By the way, no matter how you wrap it—even in fancy cellophane—garbage still smells.
The collapse of the former Eastern Bloc wasn't driven by nationalism, but by disastrous economic and fiscal policies.

crimsonfalcon10 said:I am scaring no one... I am simply using pure mathematics, just like you... besides, take a look at the link below...

http://img686.imageshack.us/img686/6...itnisustav.jpg

The simulation assumes annual savings of 15% of GDP... we have already calculated this in previous posts since there is no credit in this system and everyone must save... the simulation uses a 3% annual GDP growth rate... we also considered the GDP increase if only 10% of those savings were reintroduced into circulation and what the resulting GDP would be... in that scenario, dividing that 10% of GDP by the standard GDP (which wouldn't account for the return of savings to circulation) gives us the inflation risk...

One solution to make this system work without inflation would be to establish a call center... when someone wants to spend part of their savings to buy a television, they would need to call that center so the government can pull that specific amount of money out of circulation at that moment... that way, his purchase of a television won't trigger inflation... 😂

I think this long-term GDP growth thing is going to be more problematic than people realize. If you’re looking at a steady 3% annual growth rate, that basically means the economy doubles every 23 years, or triples itself every 46 years. I don't know the exact math on all the fallout, but it's bound to trigger some strange consequences. Either everything just gets more expensive, or people actually have to work harder. Personally, I think the price hikes are more likely. Think about it. A cashier at a local grocery store or a bakery isn't suddenly going to scan items twice as fast. Are tractors going to plow fields twice as quickly? Are professors going to lecture at double speed? Even looking at commercials, there’s only so much room for "increased efficiency" before you hit a wall. It can't just go on forever.

I also think that actual growth only really makes sense if it serves a purpose, like meeting people's needs or actually getting the unemployed back to work. Because of all this robotics stuff, we’re going to be able to produce way more than before. So, honestly, I find it hard to believe that real GDP can just keep climbing forever. At the very least, whatever growth we do see has to be more than just a result of the population increasing.

Let’s say we hit a point where GDP stops growing at its current pace. Even then, we’re still stuck dealing with the fundamental issues of how capitalism handles wealth accumulation. It's pretty obvious that if you don't keep increasing the amount of money circulating in the system, the whole capitalist structure starts to fracture. The logic usually follows a certain life cycle: while you're in your active working years, it makes sense to pour money into a retirement fund, and then you tap into those resources once you retire. In a perfect world, that kind of long-term saving just balances out later through consumption. But here's the catch—if people actually can't manage to save for their old age, like what we're seeing right now, the whole thing breaks down.

Maybe we need more non-credit money right now, but that doesn't mean we'll always need it. If we look at pension funds—which charge like a 2% annual management fee on total fund value, which is insane—and we start funding retirees through non-credit means instead, it creates this weird paradox. A larger number of retirees would actually lead to higher earnings for everyone still in the workforce. And obviously, the working population would have to be able to provide for everyone and meet all those needs too.

Any time GDP climbs—or more accurately, when we see more people getting hired and higher earnings per worker—prices tend to follow suit. It’s pretty hard to find an exception to that rule. Extra non-credit money usually fuels that GDP growth. But once we hit that sweet spot of full employment, things get tricky. You end up with too much cash chasing too few workers, which triggers inflation. Think about wages spiking because there just aren't enough skilled hands to go around. Plus, when everyone is working, you get this surplus of savings, but those funds can't really be reinvested into hiring more people since everyone is already employed.

Is the answer found in manufacturing and buying luxury goods? Or maybe just saving cash. Maybe investing in development institutions. Buying stocks. Putting money into new energy sources or focusing on energy efficiency. I don't really know. There is plenty of space and enough money out there to invest, but does that automatically trigger inflation? Not necessarily. The Government can step in with regulations to manage it.

It seems pretty clear from what's being written that there's a high chance non-credit money actually drives employment and general prosperity, rather than just people collecting checks without working. Right now, the system we have just uses this as a carrot on a stick—it's like a donkey chasing something it can never quite reach, while the boss just exploits the whole situation for his own gain.

It’s honestly tough to pin down the exact amount of non-credit money flowing through the system during a transition period. The problem is how we measure production against the GDP. I’ve mentioned this before, but you can legally inflate the GDP quite easily if you want to. Here are some pretty silly examples. If you have a complex corporation with multiple stages of manufacturing and you split up those production units, you end up with double or triple counting the GDP. Internal transfers just pump up the numbers for no reason. Even circular sales—selling the same goods back and forth—can artificially skyrocket the GDP, even though the actual trade result is zero. Every extra hand involved in moving a product adds to the GDP. And so on.
On top of that, we’re dealing with an insane level of interest rate burdens on loans, which means we really need to take some radical action there.

The bottom line is that the current system is a direct path toward endless debt, unemployment, poverty, and total destitution, all built on a foundation of fraudulent laws.

Non-credit money that is issued backed by labor invested in newly created value definitely won't lead to scarcity or poverty. You can't have the issuance of non-credit money following a permanent exponential curve because that money has to be matched by an equal amount of labor coverage. It is physically impossible to continuously invest labor along an exponential flow curve forever.

The government has to ensure that money isn't being handed out without real backing from actual work. That means no bloated bureaucracies where one boss oversees three workers. No dream pensions. No corruption or the shifting of wealth into the hands of a tiny few (which usually happens under the guise of "consolidating procurement"). No social welfare without some kind of community service attached to it. No exploiting the working class until there's nothing left. Etc.

Best,

Maria Thomas48, I find myself repeating this point indefinitely, yet it seems to fall on deaf ears.
The precise volume of non-credit money is always determined by a specific formula:
dM = kM ; k = (supply - demand)/demand ;
For instance, if supply equals 110 and demand equals 100.
k = (110 - 100)/100 = 10/100 = 1/10 = 0.1 = 10%.
If you issue 10% non-credit money, 5% will be directed toward boosting production, while the remaining 5% compensates for the deceleration in the velocity of money. Every single unit produced will be sold, including any unsold inventory that lingered simply because the circulation of money slowed down. This entire process occurs with prices remaining perfectly stable. In other words, there is no inflation.

Matthew Patel12 said:Maria Thomas48, I find myself repeating this point indefinitely, yet it seems to fall on deaf ears.
The precise volume of non-credit money is always determined by a specific formula:
dM = kM ; k = (supply - demand)/demand ;
For instance, if supply equals 110 and demand equals 100.
k = (110 - 100)/100 = 10/100 = 1/10 = 0.1 = 10%.
If you issue 10% non-credit money, 5% will be directed toward boosting production, while the remaining 5% compensates for the deceleration in the velocity of money. Every single unit produced will be sold, including any unsold inventory that lingered simply because the circulation of money slowed down. This entire process occurs with prices remaining perfectly stable. In other words, there is no inflation.

Now, look, Mr. Patel, formulas are one thing, but reality is quite another. In that scenario, 5% of the money went into savings. But savings isn't just an end goal; it should really be a temporary way to accumulate capital. Once you successfully sell everything you produce—and we aren't talking about producing more than what people actually need—it makes sense that an entrepreneur eventually wants to put those earnings back into an investment. Generally speaking, all the extra money added to the system eventually ends up as someone's profit. That money can then kickstart production and provide jobs for the unemployed. Eventually, after some time passes, we reach a point of ideal employment, high production levels, and consequently, a high demand for non-credit money to realize those monetary profits. At the same time, GDP growth generates great revenue for the Government, and I think you know what happens next. Public sector unions start demanding higher wages. Politicians—whoever they may be—and their economic advisors don't have a clue about the actual situation on the ground. They see the GDP climbing and assume it’ll just keep going like that forever, so they start planning bigger spending. That’s the core of it. Ignorance and a lack of understanding. Instead of saving the surplus tax revenue, they're already setting the table for a feast they haven't even earned yet. Any wage hike leads straight to inflation. We know why. Payroll taxes automatically increase as well (that's just how the law works), and that triggers inflation. Higher tax burdens lead to rising prices. This bloats the GDP value and increases the amount of non-credit money that needs to be issued.

My take is that real GDP growth can go higher until we hit full employment (natural unemployment levels) and satisfy everyone's needs within the community's means. After that, GDP growth might only come from export sectors—where you don't need to generate non-credit money—or from population growth. Another possibility is technological progress improving productivity, which could theoretically raise wages without causing inflation (since you need fewer workers in production). But honestly, expecting that to happen across every single industry at once is a stretch.

The whole mess comes down to the economic ignorance that keeps us stuck in the hole we're currently in. And if we don't start treating economics as a serious science, we're just going to dig ourselves into a new hole (maybe a slightly shallower one).

Best,
sites.google.com/site/financijskisustav/home

Matthew Patel12 said:Maria Thomas48, I find myself repeating this point indefinitely, yet it seems to fall on deaf ears.
The precise volume of non-credit money is always determined by a specific formula:
dM = kM ; k = (supply - demand)/demand ;
For instance, if supply equals 110 and demand equals 100.
k = (110 - 100)/100 = 10/100 = 1/10 = 0.1 = 10%.
If you issue 10% non-credit money, 5% will be directed toward boosting production, while the remaining 5% compensates for the deceleration in the velocity of money. Every single unit produced will be sold, including any unsold inventory that lingered simply because the circulation of money slowed down. This entire process occurs with prices remaining perfectly stable. In other words, there is no inflation.

Try plugging some actual numbers into your system... if someone pulls 15% of the GDP out as savings, you can't just make up for it with non-credit money... a mere 5% injection would vanish instantly because it wouldn't cover all the cash being pulled out through savings... the whole system would run dry in a heartbeat if you just pumped 5% more cash into it...

The advantage of a credit-based system is that money doesn't just sit under a mattress... once you put your money in a bank, they immediately lend it out to someone else... so savings don't pull money out of circulation like they do in your system... which creates a massive risk of inflation...

In a credit system, you also have the choice to live without debt... you can choose to take a loan and continue investing that capital to earn even more... or you can choose to blow the loan on something stupid... and that's where the credit system fails—when people waste money on nonsense... but that's your own fault... you have the first two options available, so there really shouldn't be an issue...

Maria Thomas48 said:Now, look, Mr. Patel, formulas are one thing, but reality is quite another. In that scenario, 5% of the money went into savings. But savings isn't just an end goal; it should really be a temporary way to accumulate capital. Once you successfully sell everything you produce—and we aren't talking about producing more than what people actually need—it makes sense that an entrepreneur eventually wants to put those earnings back into an investment. Generally speaking, all the extra money added to the system eventually ends up as someone's profit. That money can then kickstart production and provide jobs for the unemployed. Eventually, after some time passes, we reach a point of ideal employment, high production levels, and consequently, a high demand for non-credit money to realize those monetary profits. At the same time, GDP growth generates great revenue for the Government, and I think you know what happens next. Public sector unions start demanding higher wages. Politicians—whoever they may be—and their economic advisors don't have a clue about the actual situation on the ground. They see the GDP climbing and assume it’ll just keep going like that forever, so they start planning bigger spending. That’s the core of it. Ignorance and a lack of understanding. Instead of saving the surplus tax revenue, they're already setting the table for a feast they haven't even earned yet. Any wage hike leads straight to inflation. We know why. Payroll taxes automatically increase as well (that's just how the law works), and that triggers inflation. Higher tax burdens lead to rising prices. This bloats the GDP value and increases the amount of non-credit money that needs to be issued.

My take is that real GDP growth can go higher until we hit full employment (natural unemployment levels) and satisfy everyone's needs within the community's means. After that, GDP growth might only come from export sectors—where you don't need to generate non-credit money—or from population growth. Another possibility is technological progress improving productivity, which could theoretically raise wages without causing inflation (since you need fewer workers in production). But honestly, expecting that to happen across every single industry at once is a stretch.

The whole mess comes down to the economic ignorance that keeps us stuck in the hole we're currently in. And if we don't start treating economics as a serious science, we're just going to dig ourselves into a new hole (maybe a slightly shallower one).

Best,
sites.google.com/site/financijskisustav/home

A fundamental amateur error is mistaking consequences for causes.
Inflation is already embedded in the system the moment your non-credit money enters circulation. No wage increase is required to trigger it. You could theoretically freeze wages at baseline levels if you wished. What would follow? Hunger, poverty, and inevitable civil unrest. People would drag you into the streets, douse you in gasoline, and set you ablaze. But at least you would have your precious system.

Higher wages didn't cause inflation; freshly printed money did. This isn't just economic theory; it is basic common sense.

However, when you lack any actual proof, we must simply point out the fact that this "credit-based" system has functioned for nearly 70 years, right? Does anyone have an explanation for why, when all your models predict a total collapse within a few decades, the system persists?

Furthermore, your curve is negatively exponential. It only trends downward. This implies there is no "recovery" from this crisis. If we do not start handing out cash indiscriminately, we are heading toward absolute catastrophe—economic, political, social, and total. A disaster so profound that one might as well stock up on food and hide in a bunker. Is that your prediction?

So, if global economic growth actually resumes in two or three years, does your entire theory finally and permanently collapse?

I strongly suggest reading some foundational literature on inflation. Someone once shared a link regarding the history of inflation. It was excellent material; I regret not having it handy now.

In short, it demonstrated how people have spent centuries—ever since money was invented—trying to find prosperity through printing currency. And how it always ends.
The logical conclusion remains: we must strengthen the economy and boost production first. Only then should the economy follow suit. We must increase wages without printing new money. Only then will we see a true rise in the standard of living we all desire.

But naturally, you will continue to insist on your own way.

Gregory Williams7 said:A fundamental amateur error is mistaking consequences for causes.
Inflation is already embedded in the system the moment your non-credit money enters circulation. No wage increase is required to trigger it. You could theoretically freeze wages at baseline levels if you wished. What would follow? Hunger, poverty, and inevitable civil unrest. People would drag you into the streets, douse you in gasoline, and set you ablaze. But at least you would have your precious system.

Higher wages didn't cause inflation; freshly printed money did. This isn't just economic theory; it is basic common sense.

However, when you lack any actual proof, we must simply point out the fact that this "credit-based" system has functioned for nearly 70 years, right? Does anyone have an explanation for why, when all your models predict a total collapse within a few decades, the system persists?

Furthermore, your curve is negatively exponential. It only trends downward. This implies there is no "recovery" from this crisis. If we do not start handing out cash indiscriminately, we are heading toward absolute catastrophe—economic, political, social, and total. A disaster so profound that one might as well stock up on food and hide in a bunker. Is that your prediction?

So, if global economic growth actually resumes in two or three years, does your entire theory finally and permanently collapse?

I strongly suggest reading some foundational literature on inflation. Someone once shared a link regarding the history of inflation. It was excellent material; I regret not having it handy now.

In short, it demonstrated how people have spent centuries—ever since money was invented—trying to find prosperity through printing currency. And how it always ends.
The logical conclusion remains: we must strengthen the economy and boost production first. Only then should the economy follow suit. We must increase wages without printing new money. Only then will we see a true rise in the standard of living we all desire.

But naturally, you will continue to insist on your own way.

That’s just a bunch of wishes with zero chance of long-term success. That's basically the whole Government platform. Just a wishlist.

You can't actually hike wages and production without an influx of capital. Credit expansion is nothing more than a carrot on a stick for a donkey. It's just there to exploit them. The donkey never actually gets the carrot.

Besides, why even bother raising wages? Especially when it's obvious that money isn't being printed out of thin air, it's just being issued as credit. And credit always brings a deficit along with it.

For instance, we know credit expansion triggers inflation and debt slavery. Our beloved economists tell us we need GDP growth to pay off national debts. But they conveniently forget to mention that to get that kind of GDP growth, we have to take on even more debt than what we're trying to pay back. Just another gem from economics as a "science." Economic progress, in a nutshell, doesn't exist. You can't pay back what was invested (unless you're exporting to other countries). Long live ignorance.

Best,

Maria Thomas48, there is no distinction between a mathematical formula and reality; they are one and the same. You plug actual figures into a formula and you receive an actual result. If you input flawed data, the outcome will simply reflect those flaws. The result is invariably accurate because it precisely quantifies the amount of non-performing capital required. One must simply provide the correct variables to achieve a correct conclusion. Mathematics remains an exact science, regardless of opinion.

Matthew Patel12 said:Maria Thomas48, there is no distinction between a mathematical formula and reality; they are one and the same. You plug actual figures into a formula and you receive an actual result. If you input flawed data, the outcome will simply reflect those flaws. The result is invariably accurate because it precisely quantifies the amount of non-performing capital required. One must simply provide the correct variables to achieve a correct conclusion. Mathematics remains an exact science, regardless of opinion.

Sure, math is exact, but the amount of non-credit money being released has to be balanced by actual labor to keep the value steady. A lot of that money ends up sitting in savings—basically profit. That isn't an issue as long as there's room to grow employment and invest in things that create jobs. That’s how you back the money supply with real work. Once you hit a ceiling on employment, things change. We can see this happening in China right now with the effects of excess money—spending on luxury goods is climbing. In a way, that's fine because it creates ways to spend up those savings. Space tourism is a good example of that too. Extra cash opens up possibilities that wouldn't exist if we were always stuck with the same fixed amount of money. But, it also opens the door for price gouging on everyday essentials. It happened then and it'll happen again. Also, excess money gets dumped into real estate purely for speculation and profit, which is a problem since housing is a basic necessity. Rising home prices without rising wages doesn't lead to prosperity. The government contributes to this too through real estate transaction taxes. I think any tax on property transfers just drives prices higher. And taxing wealth itself is pretty questionable. Wealth doesn't just create money out of thin air. You should be taxing added value instead.

Best,
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Money is defined as a medium of exchange for goods and services.

Because of this definition, the system requires enough liquidity to ensure that all transactions proceed without friction.

Money is not a vehicle for savings. By definition, it is a mistake to maintain enough cash reserves for everyone to save in currency, as this inevitably triggers inflation—leading first to galloping inflation and ultimately to hyperinflation.

True savings are found in real assets: vacation homes, farmland, canned goods, tea, cigarettes, or other tangible stores of value that hold their worth over the long term and offer practical utility.
I realize it is easiest to reduce the concept of saving to the mere accumulation of paper. This is especially true when dealing with bank accounts where one loses track of the actual physical currency involved. However, in practice, paper money is not designed for that purpose. Your theory is flawed because its fundamental premise—that one should save in currency—is incorrect.

Gregory Williams7 said:Money is defined as a medium of exchange for goods and services.

Because of this definition, the system requires enough liquidity to ensure that all transactions proceed without friction.

Money is not a vehicle for savings. By definition, it is a mistake to maintain enough cash reserves for everyone to save in currency, as this inevitably triggers inflation—leading first to galloping inflation and ultimately to hyperinflation.

True savings are found in real assets: vacation homes, farmland, canned goods, tea, cigarettes, or other tangible stores of value that hold their worth over the long term and offer practical utility.
I realize it is easiest to reduce the concept of saving to the mere accumulation of paper. This is especially true when dealing with bank accounts where one loses track of the actual physical currency involved. However, in practice, paper money is not designed for that purpose. Your theory is flawed because its fundamental premise—that one should save in currency—is incorrect.

Fair enough. The idea itself makes sense, but it’s just not doable right now. Big multinational corporations, major banks, and all the massive capitalists out there hoard cash for very practical reasons. If you tie everything up in real estate, you run into liquidity issues when you actually need the capital.

Also, I personally think most of us think about cash savings first, and then once we have enough, we look into investing in something tangible and solid (which requires a bigger chunk of change). Right now, we can't even reach a stage where national-level savings are being built up, because the credit system just keeps creating debt and funneling earnings directly into the hands of lenders.

Best,

Mr. Maria Thomas48, an issue regarding non-credit money isn't something that can be accounted for through labor alone. Labor represents merely one segment of the total cost structure. It was only Mark who operated under the delusion that work was the sole variable of importance. According to my own formula, it becomes clear that supply and demand carry equal weight in this equation. If supply and demand reach equilibrium, then the introduction of new money becomes entirely unnecessary. For money to function, supply must exceed demand. That specific surplus—once adjusted by the velocity of circulation—determines the exact volume of currency required in circulation. This surplus serves as the fundamental backing for money, which essentially necessitates that money be treated as a gift. No amount of gold, silver, or credit can substitute for that reality.

Matthew Patel12 said:Mr. Maria Thomas48, an issue regarding non-credit money isn't something that can be accounted for through labor alone. Labor represents merely one segment of the total cost structure. It was only Mark who operated under the delusion that work was the sole variable of importance. According to my own formula, it becomes clear that supply and demand carry equal weight in this equation. If supply and demand reach equilibrium, then the introduction of new money becomes entirely unnecessary. For money to function, supply must exceed demand. That specific surplus—once adjusted by the velocity of circulation—determines the exact volume of currency required in circulation. This surplus serves as the fundamental backing for money, which essentially necessitates that money be treated as a gift. No amount of gold, silver, or credit can substitute for that reality.

Mathematically, that might hold up. But those formulas you're using don't actually show where this supply and demand imbalance comes from. The real cause lies in the combination of increased production and rising savings rates. Savings naturally drive down consumption—it’s just common sense, really, because once people have met their basic needs with less money, they stop spending. So, you end up with this surge in production that can't be placed on the market because there isn't enough cash circulating to cover it. That's where non-credit money becomes necessary. It's a gap, and trying to patch it solely with credit is just a mistake. Some of that non-credit money flows into profits, while the rest goes back into circulation, trickling down through various profit margins along the entire production chain. It is worth noting, though, that this surplus of supply stems directly from human labor—the so-called added value. Once production costs are covered, that value is what fundamentally creates earnings.

The whole point of issuing non-credit money is really just about turning a slice of total turnover into global cash savings—basically profit—within a closed monetary system. Since people are the ones who actually need the money, and people participate through labor, there’s this logical link where work essentially gets converted into a portion of that cash saving. It’s only a portion, though, because most of it just goes toward paying suppliers. Then those suppliers have their own profits and their own overhead to deal with. It's a cycle. Without injecting non-credit money into the mix, the only way to achieve any kind of monetary profit would be to rely on the financial losses of everyone else. If you run that loop over and over, you inevitably trigger an economic and financial crisis.

Access to credit basically paves the way for financial growth, helping businesses expand production and actually hire more people. It isn’t some magic wand that guarantees everyone will strike it rich. It just means there's a much smaller chance that a company with a killer product will go under simply because they lacked the liquid cash to scale up.

Here's an example. Why barbershops are failing. It isn't because the stylists lack skill or because they’re charging too much. They're struggling because the average blue-collar worker just doesn't have any extra cash left over to spend on personal grooming.

It’s actually pretty hard to pin down the exact amount of non-credit money floating around right now because the entire financial system has spiraled into this massive debt crisis. We’ve honestly been in a total mess for quite a while now, but nobody really wants to admit it. We’re looking at sixteen years of non-credit money supply gaps alongside even deeper levels of debt.

We really need to pivot toward non-credit-based money systems. At the same time, we have to take some massive, serious steps to actually tackle this debt crisis—I’m talking about direct government intervention in interest rates and total debt amounts. But here's the thing: you can't really do that while being part of the EU. Not at least for now. The administration and all these politicians... they just have the wrong objectives. They're basically lying to us about what the end results will actually mean for the country. Honestly, joining the EU was probably the worst move we could have made. Once that happens, you're stuck trying to convince 500 million people that the whole system is just one big scam. It’s just funny how much people love the system. Even when everyone is staring down the barrel of a massive financial meltdown, most folks still insist the problem lies somewhere else entirely. It's the same story in a hundred different countries. Honestly, you don't even need to look deep into it—just one glance at the terrible statistics tells you that something is seriously broken.Massive progress and endless construction everywhere, but the end result is just a mountain of debt used to generate infinite profit. Honestly, people need to wake up and just do the math.



It's just a basic logical reality. You don't even need to run the numbers to see that the whole system is broken and fundamentally dishonest.

Best,

Maria Thomas48, within a system of pure non-credit money, savings are essentially converted into credit, which becomes a private transaction between the bank and its clients. It is vital that banks refrain from creating new money through credit; instead, new money should be issued solely by the state as non-credit money. This type of currency is necessary to facilitate additional production, a point where you are entirely correct. Perhaps China is currently navigating that specific phase. However, the USA has entered a stage characterized by a decelerating velocity of money. While increasing production efficiency drives up supply, an increase in consumption rationality leads to a slowing velocity of money and a subsequent drop in demand. This imbalance is also offset by non-credit money. The amount of non-credit money required to support increased production is precisely equal to the amount needed to counter decreased consumption. Friedman proved this principle, though he failed to realize that non-credit money is the ultimate solution. Boson stated at the G20 summit, "We propose a system of non-credit money, where the creation of money is decoupled from lending." The headline of that piece reads, "To solve this crisis, we must think outside the box." Money is created as a gift and lent as credit. If we simply decouple the creation of money from the act of lending, our monetary problems will vanish.