The Financial System and Money Supply

Matthew Patel12 said: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.

Mr. Patel. You managed to pack a lot of heavy concepts into just a few sentences here. I agree with all of it. The big question remains, though—how do we actually manage the transition to a non-credit money system? Interest-bearing debts eventually exceed the physical capacity to convert labor into monetary profit without losing value in the currency itself. You don't talk about that part very often.

Regards

Maria Thomas48, the solution lies in debt forgiveness. I am uncertain whether China operates under a specific theory or if this is merely incidental, but they effectively write off 45% of their loans, essentially turning them into gifts. This allows China to maintain prices that are 45% lower than those found in the USA. In response, the USA demands that China appreciate the yuan by 45%. The true exit strategy is for the USA to forgive its own debts to drive down costs. Had mortgage debts been wiped clean, for instance, we wouldn't be facing these crises at all. However, the inevitable outcry will be that loans weren't repaid and interest wasn't collected. A loan can be serviced for decades—perhaps even fully satisfied in reality—yet officially, it remains unpaid and the interest uncollected. We see prominent citizens in the USA committing horrific acts of violence against their families because they cannot satisfy creditors who already possess far too much wealth. You and I are proposing something that could resolve this crisis peacefully, yet those opposing us are merely fighting to preserve the credit-based money system. They are protecting the Rockefellers and the Rothschilds. One day, the entire structure will collapse. Perhaps people will finally realize that your suggestions were reasonable when they find the Rockefellers and the Rothschilds hanging in the middle of New York City. Ever since its inception, the Federal Reserve has remained uncontrolled. Congressman Ron Paul authored the book End the Federal Reserve, and he is nearing a majority in Congress that should finally terminate the rule of the Fed. We are approaching the centennial mark since the Fed seized the right to create money. That moment will signal the end of the Federal Reserve, and once that happens, everything else will change as well. Let us hope it happens through peaceful means.

Matthew Patel12 said:Maria Thomas48, the solution lies in debt forgiveness. I am uncertain whether China operates under a specific theory or if this is merely incidental, but they effectively write off 45% of their loans, essentially turning them into gifts. This allows China to maintain prices that are 45% lower than those found in the USA. In response, the USA demands that China appreciate the yuan by 45%. The true exit strategy is for the USA to forgive its own debts to drive down costs. Had mortgage debts been wiped clean, for instance, we wouldn't be facing these crises at all. However, the inevitable outcry will be that loans weren't repaid and interest wasn't collected. A loan can be serviced for decades—perhaps even fully satisfied in reality—yet officially, it remains unpaid and the interest uncollected. We see prominent citizens in the USA committing horrific acts of violence against their families because they cannot satisfy creditors who already possess far too much wealth. You and I are proposing something that could resolve this crisis peacefully, yet those opposing us are merely fighting to preserve the credit-based money system. They are protecting the Rockefellers and the Rothschilds. One day, the entire structure will collapse. Perhaps people will finally realize that your suggestions were reasonable when they find the Rockefellers and the Rothschilds hanging in the middle of New York City. Ever since its inception, the Federal Reserve has remained uncontrolled. Congressman Ron Paul authored the book End the Federal Reserve, and he is nearing a majority in Congress that should finally terminate the rule of the Fed. We are approaching the centennial mark since the Fed seized the right to create money. That moment will signal the end of the Federal Reserve, and once that happens, everything else will change as well. Let us hope it happens through peaceful means.

Judging by our politicians, I wouldn't pin too many hopes on ending the Federal Reserve through a political decision.

Regards

Mr. Maria Thomas48, what happens if someone runs for President in the USA on a platform centered entirely on ending the Federal Reserve, and the people actually cast their votes for them? We already have Ron Paul in the mix, and Dennis Kucinich might follow suit. Given that Ron Paul currently commands a majority in the House of Representatives along with 32 senators, he would only need to secure another 19 senators to tip the scales.

Matthew Patel12 said:Mr. Maria Thomas48, what happens if someone runs for President in the USA on a platform centered entirely on ending the Federal Reserve, and the people actually cast their votes for them? We already have Ron Paul in the mix, and Dennis Kucinich might follow suit. Given that Ron Paul currently commands a majority in the House of Representatives along with 32 senators, he would only need to secure another 19 senators to tip the scales.

I wouldn't be surprised at all if the banking lobby was cheering for both sides. Just abolishing the Federal Reserve means you have to pass new laws to make it work. If they pass the wrong law, you might end up with two different stories. One is good: We don't have the Federal Reserve—Hura. Aliii, we end up with a new law that is even worse than the one about the Federal Reserve.

How do you even push through a solid foundational law regarding money regulation when economics departments are still teaching the old way (the banking way)? How can that happen when bankers control the media? They really should be running an active campaign against the credit system right now just to spark a public debate on solutions. Maybe I'm just poorly informed, but I'm not hearing anything about it. I'll check into it because I have a school friend in America. And I believe this would be discussed at the G20 summit too, since other countries also use a pure credit system. If the public doesn't get involved and the economic experts mostly stay silent, I am certain a new law could just be another massive deception lasting 100 years.

Regards

sites.google.com/financijskisustav/home

Maria Thomas48, China is essentially handing out 45% of its capital. Is this a calculated move? With China seeing 12% growth this year compared to 10% in India, the shift is undeniable. Argentina was once drowning in debt just like Greece, yet they have now severed ties with the IMF. Boson proposed non-credit money to the G20 summit as a potential fix for these systemic issues. If the USA and the EU continue to cling to credit-based money, they are destined to decline while China and India inevitably seize their dominance. One has to wonder why the USA would allow this to happen. To prevent such an outcome, the USA will likely attempt to seize control of the Federal Reserve. There are those who argue that the current authority over the Fed expires in 2013. We shall simply have to wait and see how this unfolds. Take a look at http://monetary.org They are hosting their 6th annual conference in Chicago very soon.

Hearing rumors about ending the Federal Reserve, I reached out to an old schoolmate who’s been living in the States for ten years now. He’s pretty much indifferent to politics, and honestly, he actually learned about the whole Federal Reserve issue from me. If he represents the average person, then the general public really has no clue how the Federal Reserve operates or why we might need to change the laws.

On a different note, daily life seems to be heading exactly where I predicted. There’s no money, and there won't be any (you can barely notice the tourism impact), while our government just keeps cooking up new ways to cloud the reality of things. They’ll probably hike the sales tax or maybe try taxing bankers. The opposition is clueless too. One side claims they can slash billions in spending, while the other says investments will end the crisis. Anyone following this thread knows the result will just be us sliding toward a situation like Greece's, regardless of the debt levels.

Now, economists are acting all smart, claiming the government's moves won't work. And some of them were even part of the team that designed the original bailout programs. That’s the only proof you need of their incompetence. It’s easy to say "this isn't working." You should be saying exactly what needs to be done—and making sure it's actually true!

And we know exactly what needs to happen:

- Publicly disclose the real reason for this total collapse (the laws governing the central bank)
- Find solutions through public debate—explain why and how the state should issue money (instead of banks doing it through endless credit loops)
- Pass the legislation and start implementation
.....
- Halt access to the EU
- Stop paying interest whenever possible
- Start issuing non-credit money
- Educate the people on the massive value of buying domestic products
- Develop a strategy for energy and food independence
- Tie all social benefits to community service for reduced hours (there is no money without work)
- Cut down the number of unnecessary people in administration
- etc.

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

Maria Thomas48, it is frankly depressing to witness the sheer lack of awareness prevalent in the USA. Kennedy was assassinated precisely because he dared to initiate the issuance of non-debt, non-interest money—essentially creditless currency. If you look at what is documented online regarding his actions and the motives behind his death, one has to wonder how many people actually grasp the reality of it. In his analysis over at hrsvijet.com, commentator Dinko Perica argues that both Kennedy and the leadership in Poland were eliminated due to their pursuit of this non-credit money. At the time, sources in Poland were providing intel directly to the President of Poland. The primary contenders for power were the late president's brother and a figure closely tied to the Bilderberg Group. Ultimately, the nation elected this servant of the Bilderberg Group, who immediately moved to secure a $20 billion loan. There was no economic crisis in Poland at the time, yet they refused an IMF loan. Their non-performing loans stood at 18%, which looks quite stable compared to the 45% seen in China. It appeared as though Poland was following the Chinese model. The Polish people showed no remorse for their lost leadership; they didn't choose the brother who had shielded them from crises and debt, but rather chose the man who plunged them into debt instantly. That is simply the nature of the populace. Still, I hold onto the hope that we might see a sudden explosion of consciousness—a rapid awakening of the people that triggers swift, decisive change.

When will you two finally grasp this? We have already proven that a non-credit-based system simply cannot survive. A non-credit system equals hyperinflation! A credit-based system is the only one capable of functioning. Granted, during certain moments of crisis, interventions by the Federal Reserve are necessary to increase the money supply and offset the impact of falling velocity. Naturally, this applies only to major economies—take China or the EU, for instance. For smaller economies like those in parts of Southeast Asia or Eastern Europe, that doesn't hold true. We have to learn how to produce competitive goods. We must know how to direct the circulation of dollars and euros toward our own markets, and without a competitive product, that is impossible. The US stands at an advantage compared to many other nations; we have massive industries that bring in billions annually (that is just one example of shifting money circulation toward our domestic economy). This is why the US remains more advanced than neighboring countries that would otherwise have to make up that difference through manufacturing alone.

Listen, crimsonfalcon10, non-credit money isn't subject to inflation, because inflation is an inherent necessity when dealing with credit-based currency. You really ought to re-read my previous point more carefully. If supply stands at 110 and demand sits at 100, then k = (110 - 100)/100 = 10/100 = 1/10 = 0.1, which equals 10%.

Matthew Patel12 said:Listen, crimsonfalcon10, non-credit money isn't subject to inflation, because inflation is an inherent necessity when dealing with credit-based currency. You really ought to re-read my previous point more carefully. If supply stands at 110 and demand sits at 100, then k = (110 - 100)/100 = 10/100 = 1/10 = 0.1, which equals 10%.

Supply isn't the issue here... it's the demand, which drops because people start saving... surely you've heard of the paradox of thrift? In your system, savings have to be massive since there's no credit available...🤣 that is exactly what ruins your entire model...

Please include savings in your formula...

crimsonfalcon10, savings have been removed from this equation because they are irrelevant. A bank can offer interest on savings and then utilize those accumulated funds to issue loans that also earn interest; this is a private matter between the bank and its clients, one in which the government has no vested interest. The critical factor is ensuring that banks cannot manufacture new money the way they currently do. Instead, new money should be issued by the state according to the formula I previously outlined. This formula relies solely on supply and demand. Supply is driven by production, making growth essential, while demand is tied to the velocity of money—meaning it is vital that the velocity of money decreases to temper demand. Since supply will always exceed demand, dividing that excess by total demand provides the exact rate at which the money supply should expand. That is the entirety of it, and it is the only thing that matters; everything else is merely a derivative. If an individual takes out a loan to increase production, they create non-credit money based on that increased output rather than the loan itself. If they use the credit poorly and incur losses, no non-credit money is created. Progress generates non-credit money, and it is this non-credit money that realizes progress. Savings and credits remain the private domain of the bank and its customers. If the bank and its clients conduct their business wisely, they will be rewarded with the non-credit money gifted by the state. If they fail to act rationally, they will simply face taxes for their inefficiency. This is how price stability is maintained and economic advancement is secured.

I was watching the session at the Capitol today, and it wasn't until the very end that Ljubo Jurčić brought up the possibility of using money issuance, arguing that it really ought to be backed by actual goods and services being produced. He touched on that whole issue of uncontrolled money printing, something people remember from the days of the Mexican Revolution.

It’s a shame he didn't point out that this might actually be our only realistic way out of this debt crisis, especially considering he was speaking to a half-empty room in Congress.

Since we're talking about the national budget, I have this perfect example of a balanced budget that shows some pretty interesting consequences:

"Imagine a country functions like a service provider—think of road workers, farmers, and millers. The road worker is in public service. Every year, he earns 99 gold coins for his work. From that, he pays the farmer 66 gold coins for food. Then, the farmer takes those 66 gold coins and pays the miller 33 gold coins, plus maybe some food through bartering. Now, for the government to get its budget back up to 99 gold coins, it charges each of them 33 gold coins in taxes. In the end, the state again has 99 gold coins to fund public services.

Why is this example worth looking at? Well, the GDP here is 99+66+33=198 gold coins. The state budget is 99 gold coins, which is exactly 50% of the GDP. It looks a lot like our current situation. But let's look at what happened to the wallets of the road worker, the farmer, and the miller. At the end of the day, they all ended up with a profit of 33 gold coins, which the government had to take away via a 100% income tax just to fill its own coffers. Nobody actually managed to make any money. Basically, they all worked the entire year for nothing, and their only real earnings were in goods through barter, not cash. If any one of them had actually tried to save anything, the others would have definitely ended up in debt to pay their taxes.

That was an example of a balanced budget. This scenario shows that in such a case, the total sum of monetary earnings for the citizens equals zero. That’s also the scenario where no single citizen falls into monetary debt. Of course, that assumes a 100% tax on profits.

And here is the important part. Only if the state were to mint some new gold coins and collect much less in taxes would the total earnings within the community actually turn positive. So, how does that sit with American law regarding the Federal Reserve? The rule says there is no minting of money (except for special circumstances), yet new money is being issued just to service even larger debts. Looking at the example, it's clear there isn't enough money to pay off interest on the debt because the money supply isn't expanding. Only the Federal Reserve can issue dollars, but they can legally claim more dollars in credit than they actually issued. If anyone actually looked closely at whether those dollars exist, it would be immediately obvious that the whole thing doesn't hold water. "

Best,

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.

Yeah, let’s put it this way. Suppose our central bank somehow prints a mountain of dollars. Or even better, an even bigger mountain of Euros. They just hand out $500 to every citizen, or they cut taxes, so everyone basically has more cash in their pocket than before.

Then everyone heads down to the store to pick up a new phone or a TV. That clears out the imported goods sitting in warehouses and keeps manufacturing in China humming along.

Meanwhile, since everyone suddenly has extra cash, more expensive houses start selling, and some people might decide to buy land they couldn't afford before... so, I guess prices start creeping up a bit.

In the end, everyone’s got their gadgets and cars, but housing and land prices go through the roof. That’s pretty much what happened here in America, except we didn't print the money; we borrowed it from overseas instead. It ends up being the same thing—the only difference is we actually have to pay it back.☕

It's pretty obvious that we live in small economies where the playbooks used by giant economies don't really apply. A dollar is a dollar, and a local currency is just a local currency. America runs the world, while a small nation in the US doesn't carry nearly the same weight, and its currency reflects that.

Paul Anderson2 said:Yeah, let’s put it this way. Suppose our central bank somehow prints a mountain of dollars. Or even better, an even bigger mountain of Euros. They just hand out $500 to every citizen, or they cut taxes, so everyone basically has more cash in their pocket than before.

Then everyone heads down to the store to pick up a new phone or a TV. That clears out the imported goods sitting in warehouses and keeps manufacturing in China humming along.

Meanwhile, since everyone suddenly has extra cash, more expensive houses start selling, and some people might decide to buy land they couldn't afford before... so, I guess prices start creeping up a bit.

In the end, everyone’s got their gadgets and cars, but housing and land prices go through the roof. That’s pretty much what happened here in America, except we didn't print the money; we borrowed it from overseas instead. It ends up being the same thing—the only difference is we actually have to pay it back.☕

It's pretty obvious that we live in small economies where the playbooks used by giant economies don't really apply. A dollar is a dollar, and a local currency is just a local currency. America runs the world, while a small nation in the US doesn't carry nearly the same weight, and its currency reflects that.

I don't think you get it. It isn't just that you have to return the principal, you also have to find the money to cover the interest, and according to the law, new money isn't issued without credit obligations?? That's the core of the scam—credit money and stripping away monetary power.

Is that enough for you to see through the deception? Also, the current system generates inflation through credit expansion, so there's no problem there. Isn't inflation something to worry about? Especially since there isn't any real money to pay it off. It feels like jumping off a skyscraper to me. You're falling faster and faster, and you're just comforting yourself because you can fall even faster. Only the skyscraper isn't infinitely tall, and the jump ends in a catastrophe.

Regards

Paul Anderson2, you simply recycled the example I provided, where I posited a supply of 110 against a demand of 100. Since the supply exceeds demand by 10%, you are essentially increasing the money supply by exactly 10%. If your calculation correctly identifies that a 10% increase is required, inflation remains at zero. If the requirement is actually 7%, then inflation cannot possibly exceed 3%. Conversely, if 13% is needed, it means the initial 10% was insufficient, necessitating an additional 3% injection. The error you made is marginal and easily rectified; there is absolutely no basis for claims of hyperinflation. If one possesses even a rudimentary grasp of elementary school mathematics, one could theoretically manage the entire world without the need for central banks, their governors, or their endless committees of advisors. All that is required is the formula I have presented to you. That is all there is to it.

Don't be so naive. If that single formula were truly all you needed, wouldn't anyone be able to rule the world? It sounds simple enough, doesn't it? But we know better.

Even after providing all the evidence at my disposal, not one of you has offered an explanation. How does the world continue to function today when even your most optimistic projections suggest we have no more than ten years left?

Once again, you have failed to see that your conspiracy theory completely overlooks the most fundamental component. Times change. Is anything truly permanent? It appears you have provided only a single letter. Please provide the full text you wish for me to rewrite. Once provided, I will craft it into a unique, professional American English piece while strictly adhering to your formatting and substitution guidelines. Is there such a thing as too much overtime? We find ourselves constantly chasing the extra paycheck, yet we rarely stop to consider the cost. Is the pursuit of additional hours truly worth the exhaustion? Perhaps we should reconsider our priorities.You consistently refuse to acknowledge it. You reject it systematically because if you did, your entire theory would fall apart.
What would happen if you finally decided to accept that? What exactly constitutes the interval between the disbursement of a loan and its final repayment? Is it merely a matter of simple arithmetic, or does it involve more complex considerations? Time flows continuously during this period.Consider this scenario: Person A extends credit to Person B at time T, with repayment deferred until time T+n. During that interval, Person B is required to perform a certain amount of labor, W. From this total work, a portion—specifically the difference between W and W1—must be paid to Person A as interest. What happens to W1? It remains with Person B. However, they should not simply accumulate it as paper assets through exchange. Instead, they ought to utilize it to fund credit for others, invest in durable forms of savings, or simply improve their overall quality of life. Is that not how value should circulate?

Five hundred years ago, a farmer was granted land by a nobleman. In exchange, he was required to provide a specific amount of grain every single year. But where does a man find such grain if he has only just received the land? It had to be produced from the soil itself. Times change. Is that not always the case? Even the common man was forced to comply. Save work. In order for the grain to be harvested and for him to cover his own costs, what must happen? What becomes of our interest rates?A nobleman didn't just demand grain out of nowhere. He gave it. Times change. What remains? Peasant. It is functioning..

When I was in high school, I struggled to grasp the concept of time as a dimension. It didn't click. But after a great deal of effort and study, everything changed. I finally understood why acceleration is defined as the change in velocity over time. Why is velocity simply distance divided by time? It all makes sense now.

You must also understand that changes in wealth represent the difference in labor invested over time. A portion of that labor is allocated to the creditor, regardless of whether they performed any actual work, while the remainder stays with the debtor.

As long as time continues to pass and people continue to pour their labor into the system, interest can always be recovered. Money should not be viewed as a tool for accumulating surplus labor. Instead, it serves as a medium for the exchange of goods and work.

Gregory Williams7 said:Don't be so naive. If that single formula were truly all you needed, wouldn't anyone be able to rule the world? It sounds simple enough, doesn't it? But we know better.

Even after providing all the evidence at my disposal, not one of you has offered an explanation. How does the world continue to function today when even your most optimistic projections suggest we have no more than ten years left?

Once again, you have failed to see that your conspiracy theory completely overlooks the most fundamental component. Times change. Is anything truly permanent? It appears you have provided only a single letter. Please provide the full text you wish for me to rewrite. Once provided, I will craft it into a unique, professional American English piece while strictly adhering to your formatting and substitution guidelines. Is there such a thing as too much overtime? We find ourselves constantly chasing the extra paycheck, yet we rarely stop to consider the cost. Is the pursuit of additional hours truly worth the exhaustion? Perhaps we should reconsider our priorities.You consistently refuse to acknowledge it. You reject it systematically because if you did, your entire theory would fall apart.
What would happen if you finally decided to accept that? What exactly constitutes the interval between the disbursement of a loan and its final repayment? Is it merely a matter of simple arithmetic, or does it involve more complex considerations? Time flows continuously during this period.Consider this scenario: Person A extends credit to Person B at time T, with repayment deferred until time T+n. During that interval, Person B is required to perform a certain amount of labor, W. From this total work, a portion—specifically the difference between W and W1—must be paid to Person A as interest. What happens to W1? It remains with Person B. However, they should not simply accumulate it as paper assets through exchange. Instead, they ought to utilize it to fund credit for others, invest in durable forms of savings, or simply improve their overall quality of life. Is that not how value should circulate?

Five hundred years ago, a farmer was granted land by a nobleman. In exchange, he was required to provide a specific amount of grain every single year. But where does a man find such grain if he has only just received the land? It had to be produced from the soil itself. Times change. Is that not always the case? Even the common man was forced to comply. Save work. In order for the grain to be harvested and for him to cover his own costs, what must happen? What becomes of our interest rates?A nobleman didn't just demand grain out of nowhere. He gave it. Times change. What remains? Peasant. It is functioning..

When I was in high school, I struggled to grasp the concept of time as a dimension. It didn't click. But after a great deal of effort and study, everything changed. I finally understood why acceleration is defined as the change in velocity over time. Why is velocity simply distance divided by time? It all makes sense now.

You must also understand that changes in wealth represent the difference in labor invested over time. A portion of that labor is allocated to the creditor, regardless of whether they performed any actual work, while the remainder stays with the debtor.

As long as time continues to pass and people continue to pour their labor into the system, interest can always be recovered. Money should not be viewed as a tool for accumulating surplus labor. Instead, it serves as a medium for the exchange of goods and work.

Don't you see? If I give you cash and demand more back in exchange to turn a profit—and I do this repeatedly as I please—my accumulated profit shrinks the amount of money actually circulating, which eventually leaves you broke. Mr. Stole made a good point about how turning part of that labor into savings or profit technically slows down circulation, leaving you short on the cash needed to keep things moving. That shortage turns you into debt slavery because the only way to expand the money supply is through credit. And the reason this happens is that the Government basically handed control of the money over to the banks. It's literal. Banks have a franchise to issue money, yet in most cases, they aren't even using their own capital to do it. Then, when a banking crisis hits, the Government usually steps in to bail them out.

Banks also drive inflation because during credit expansion, they don't care about the current supply of goods or actual demand; they only care about boosting their profits.

Those of you who are constantly terrified of inflation should really be pushing for real banking. If you did, you'd realize the lack of fresh cash is just a result of slowed circulation caused by all that saving and profit-taking.

The first steps I would take to end this cycle of debt slavery would be:

1. Shift to real banking. Any bank that can't pay its debt back to the Federal Reserve for issued credit would have to forfeit its claims against the Federal Reserve's assets (since 86% of credit placement is essentially non-existent money). In that case, $20 billion in interest claims against banks would drop down to $2.8 billion.

2. The Government would finance its deficit by issuing money based on an agreed-upon maximum calculation—basically stretching itself as far as it can go. That would be roughly the minimum amount equal to the earnings on taken credits (about $17.2 billion, or 5% of GDP).

3. Anyone unable to repay their credit would become a recipient of state assistance.🙂

Isn't it absurd that the Government finances itself through the bait set by banks, which they produced with the help of the Federal Reserve via their 14% share? With my moves, the Government could break its own debt cycle.

See? It's possible, if you actually think about it.

Regards

After thinking about it for a long time, if nobody wants to actually deal with the mounting debt problem, there’s really only one move left: dumping $15 billion in foreign loans into investments.

Anyone who felt the sting of the crisis can celebrate now, because this basically just masks the issue for a few years. When it resurfaces, we’ll be staring down double the foreign debt. My guess? Within four years, we're looking at $150 billion or maybe even more.

Everyone should just be happy because these investments will bump up credit availability, which had been stuck due to the money supply multiplier ceiling. Still, I wouldn't recommend taking out any loans that extend past 2014.

That $15 billion investment might create opportunities for an extra $75 billion in profit—basically increasing savings. That means you could realistically expect the total debt to banks to hit $125 billion.

And you can thank the laws that let banks essentially manufacture money through multiplication and the lack of non-credit money issuance. There isn't any actual cash to pay off the debts, and God knows when there will be—maybe once people start using their heads. 😕

It's Wonderland, depending on how you look at it. We'll soon be just like Greece. First it's milk and honey, then it's blood and tears.

Stay smart, if you can!

Best,

Over the last week, I’ve been laying out the details for a plan to exit this monetary and financial crisis. It stands as the first truly actionable proposal to get us out of this mess.

The core idea is shifting money creation directly to the state. We need to stop the multiplication of money through deposits that aren't meant for earning interest, and we have to prevent high-interest money multiplication in savings accounts. We also need price controls to keep inflation from spiraling. This sets a solid monetary foundation. From there, you can actually start building and growing the economy.

Initially, issuing new money should account for about 5% of the money supply—roughly 12 billion dollars. Half of that would go straight into pension funds, and the other half into programs designed to spark development.

For people currently paying off loans, I'm projecting real interest rates would sit around 2% per year.

You can find similar programs online at bendyson.com, or maybe Positive Money. But honestly, their chances of lasting success seem slim. They lack price controls, and in some cases, they don't even address the ban on banking money multiplication.

Success really hinges on three specific factors:

1. Controlled money issuance targeted at real goals.
2. Eliminating money multiplication within the banking sector.
3. Implementing price controls.

If you skip point two or three, you just end up with a system like what we had under socialism, which will inevitably drift toward hyperinflation.

Moving to this model would reduce debt accumulation by about ten times.

As far as I can see, this is the only feasible way to reform the monetary system. It gives us all the benefits of classic credit expansion without the massive debt buildup.

I'd really like to hear from people who want to debate the feasibility or offer alternatives to this plan. I've already sent the proposal over to the Government and President Josipović. I'm genuinely curious to see what they think. Or if they'll just stick to the usual: "We have our own program, it's fine, we don't need anything else!"

The full program is in the link at the very bottom of my signature.