The Financial System and Money Supply

Robert Vaughn10 says:
So—eliminate the deficit, eliminate interest, and favor savings and lending from the same pool. If anyone actually wants to turn a profit in that scenario, their only option would be through direct investment.

Amanda Allen4 said:

Robert Vaughn10 says:
So—eliminate the deficit, eliminate interest, and favor savings and lending from the same pool. If anyone actually wants to turn a profit in that scenario, their only option would be through direct investment.

How on earth can you just "eliminate" interest? It’s the very thing that incentivizes saving and generates the capital necessary for production investments! To make that work, interest rates would need to sit at least 2 to 3% above money inflation. Of course, in a stabilized monetary system, inflation wouldn't even exist—so why in the world would anyone bother keeping their money in a bank instead of under a mattress if they weren't earning interest? In our current mess of an inflationary monetary system, people keep their cash in banks regardless of whether the interest covers actual inflation, simply because it’s still better than nothing.

Robert Vaughn10 said:And one more thing...
By pumping money into the system through budget deficits—especially when it isn't distributed equally among everyone—you are violating the Constitution. On that basis alone, you're sowing the seeds of a new kind of evil; you're essentially taking from some to give to others. Budget deficits should be outlawed, and any funds seized through taxpayer-funded bailouts should be returned to people in terms of real purchasing power. I don't doubt your intentions are good, but reality is a far cry from what you consider "good." It's very far indeed...

Amanda Allen4 said:Exactly. That is precisely why the Kucinich Bill doesn't solve anything. Stealing from a thief isn't a solution—after all, the person who steals from a thief is just another thief.

Maria Thomas48 said:Text of the Kucinich Bill:

To create a full employment economy as a matter of national economic defense; to provide for public investment in capital infrastructure; to provide for reducing the cost of public investment; to retire public debt; to stabilize the Social Security retirement system; to restore the authority of Congress to create and regulate money, modernize and provide stability for the monetary system of the United States, retire public debt and reduce the cost of public investment, and for other public purposes.

Creating a full employment economy as a matter of national economic defense; providing for public investment in capital infrastructure; ensuring the reduction of public investment costs; retiring public debt; stabilizing the Social Security retirement system; restoring the authority of Congress to create and regulate money, modernizing and providing stability for the monetary system of the United States, retiring public debt, reducing the cost of public investment, and serving other public purposes.

Where is the theft mentioned there? It just mentions what everyone needs: jobs, reducing debt, pensions, Social Security, and funding capital investments.

Amanda Allen4 said:It is common knowledge that the current global monetary system is built upon fiat money—money without any actual backing—which can be increased infinitely. When you combine that with the mechanics of fractional reserve banking, you get a system that facilitates the systematic looting of capital from the vast majority of people using that money, all to line the pockets of the money elite! This entire setup is legalized by existing state laws, which is fundamentally unjust and serves as the root cause of those devastating crisis cycles that wreck our economy. Attempting to transfer such ill-gotten gains into the government treasury through taxes or other measures doesn't just fail to solve the problem—it’s inherently unfair, because you end up taxing the honest people who earned their money legitimately just as heavily as those who obtained it through this legalized robbery.

So, let's be clear: as long as we don't establish a system based on honest money, any attempt by the government to prevent such a capital transfer through the current—even if slightly modified—system will be a total failure. The Kucinich proposal is nowhere near the kind of radical solution needed to actually create honest money; at best, it represents a redistribution scheme designed to serve state fiscal policy—something clearly evidenced by the excerpt you provided (full employment, national economic defense, and so on). Wouldn't it be far more productive to create honest money that provides a solid, lasting foundation for capital accumulation and economic circulation, rather than attempting forced redistribution when a huge chunk of capital has already been hoarded as a direct result of the legal plunder enabled by today's fiat-based monetary system?

Gregory Williams7 said:Listen closely, Maria Thomas48, because I am going to tell you exactly what is coming.
The USA will eventually print 25% of its total money supply to meet its own needs. Some clerk sitting behind a desk will simply type an enormous number filled with zeros, hit enter, and just like that, the money is in the system.

Millions of small operators will then take billions of tiny accounts and begin distributing funds. We are talking about pensions, corporate expenses, salaries, maternity and child benefits, subsidies, scholarships, offshore accounts, fuel costs, infrastructure, and more.
Furthermore, it is highly likely that both NASA and the US Army will receive their share of the pie for space missions and military operations. It will take those small operators some time to input such massive figures into their computers, but it will happen.

The Chinese will soon realize—if they haven't already—that there is far too much of the dollar circulating. The Russians will feel the same. It will no longer make sense for them to purchase US Treasury bonds. They will start looking for ways to sell them and spend them while they still hold any value at all. A massive amount of dollars and various dollar-based derivatives will be unleashed onto the market in an incredibly short window. Various dealers and speculators will instantly recognize the shift and rush to offload their dollars as quickly as possible. Everyone will scramble to dump the dollar in exchange for anything else. The dollar will begin to plummet.

I must note that this is the optimistic scenario. The pessimistic version is that China and Russia, having been treated poorly by the USA, might lose patience and launch their entire nuclear arsenals at us. If the dollar is going to be worthless anyway, why should the country guaranteeing it remain standing? That is the worst-case scenario.

The next phase is hyperinflation of the dollar, which will occur overnight. Most Americans won't even realize what is happening. Very few people are capable of grasping the situation; the majority will think just like you and Stole: "Just give me the cash, and I'll be fine."

If this follows the historical pattern seen in Germany, hyperinflation will transition from being reasoned to being pure panic. The dollar will fall uncontrollably below its actual value, even without economic justification. The only escape is the issuance of a new currency and the wiping out of the old one. This is the model used by Germany and other nations throughout history, and it has always worked. It is known as denomination, or something similar. In practice, we both know it doesn't matter if you call the money dollars or something else entirely.

The ultimate result is a massive drop in living standards for everyone tied to that currency. All debts and savings in that currency are wiped out or reduced to negligible levels, creating a foundation for a new, healthier start. A common side effect is war, which often involves the genocide of nations blamed for the inflation. Throughout history, walls and certain ethnic groups have served this purpose; today, I suspect it might be Middle Eastern populations. This leads to the forced seizure of assets from specific races or nations to raise the living standards of the inflation-stricken population to keep them pacified.

Is it clear now what you are advocating for?

It is worth looking into.
http://www.zerohedge.com/article/day-dollar-died

Dennis Baker34 said:Honestly, give me a break. I’m trying my best to follow this conversation, but then I run into nonsense like this.
With US military bases scattered across every corner of the globe and a massive fleet of nuclear subs patrolling the oceans, the Americans wouldn't just sit there taking a hit like that without hitting back.
A nuclear strike aimed at actually wiping out the USA would pretty much result in the total collapse of human civilization as we know it...

Matthew Patel12 said:Gregory Williams7, Maria Thomas48, and I are simply relaying what has already been established as consensus in both the USA and the United Kingdom. On January 25, 2011—which is the day after tomorrow—the BBC is set to air a special program regarding non-credit money, hosted by one of their most prominent journalists. They refer to this concept of non-credit money as "positive money," which serves as the fundamental distinction. This very project currently under debate in Congress also enjoys the backing of Jerome Powell, the Governor of the Federal Reserve. One would be wise to keep a close eye on the developments unfolding in the USA and the United Kingdom. If the implications haven't fully registered yet, they certainly will once you watch the evening news. I expect our domestic networks here in the States will eventually follow suit and report on these global shifts. The truth is becoming impossible to suppress.

Gregory Williams7 said:You constantly bring up that example regarding Kennedy. To be perfectly honest, if someone told me they were going to issue 25% more money into the system where my savings reside, I would gladly hand over 24.5% of my life savings to someone just to settle the matter with a bullet. I hope you grasp my meaning.

By any sound logic, if one performs their duties well, there should not be an abundance of people wishing to shoot them. Especially not those competent enough to organize such an act.

Maria Thomas48, you still fail to realize that for a person to possess anything, they must first earn it. It is insufficient merely to work if there is no one willing to perform that labor and provide payment.
Once you understand that one must work specifically to possess, then you and I can continue this discussion with the goal of reaching new, useful conclusions.

Any attempt to glorify the artificial construct of the USSR in this debate is entirely misplaced. We all know what the USSR was and why it collapsed. The notion that the USSR fell because someone refused to accept a colleague's Master's thesis is, in my view, pure nonsense. However, everyone maintains a certain opinion of themselves and attempts to assign themselves a sense of purpose. If someone believes they could have saved the USSR with a single Master's thesis—leading to a world of plenty for everyone—that is merely their opinion, and I will not engage deeply in such arguments.

I will simply comment on what was said regarding Americans. There are many ways to conduct a war. Using a military is only one of them. What we see being served to us through the media bears little to no relation to the actual truth. A combination of genuine political and economic maneuvers by three global superpowers—who have accumulated massive amounts of US Treasury bonds—will result in an energy crisis in the USA, shortages of food and basic necessities, and the total collapse of what little remains of the American economy.

Go to any store and look at the label on every product to see where it was manufactured. Then, tally every product that originated in the USA. The answer will be zero, or very close to it. The reason is not that these products are too high in quality to be sold in America; rather, it is because those products simply do not exist here. A nation lacking domestic production can function only through debt, whether through positive or non-credit mechanisms, and that way of operating leads inevitably to hyperinflation.