The Financial System and Money Supply

A question for Maria Thomas48—I have to hand it to you, that was a fascinating thesis you laid out. If our current monetary system, built entirely on debt, is driving us toward a reality where everything ends up being owned by the banks—and history tells us we've never actually seen that happen before—do we have any historical precedents for a "hard reset"? I'm talking about a total break in the cycle that forces everything back to square one.

Could it be through war and the total collapse of a currency, like what happened with the Reichsmark? Or perhaps a full-scale national bankruptcy and a complete restart, similar to what we saw in Argentina, Russia, or Iceland? Maybe even hyperinflation, much like the chaos in America?

Maria Thomas48 said:It’s pretty obvious the new Treasury Secretary hasn't got a clue how to actually fund the budget deficit. It feels like he hasn't even glanced at this thread, otherwise, there would be plenty of much better ideas than what we're seeing right now.

Instead, he relies on these academic advisors from top economics departments who have spent their whole careers proving they're great at whatever favors they need to secure. I wonder if our Treasury Secretary will ever truly grasp where the real money in this country actually comes from.

Whether he understands it or not, do you honestly think primary issuance of currency is even feasible? What would it take? We’d need a total overhaul of the Federal Reserve laws, facing a barrage of criticism from every angle, and ultimately, massive external pressure. The issue isn't just that the US shouldn't print its currency in a way that offends the banksters; it's that we can't allow such a precedent to succeed, lest larger, more powerful nations follow suit. Will enough pressure be applied, or will there be a "sudden accident," a forced regime change, or perhaps an "accidental" nuclear strike on Washington, D.C.?

Ashley Thompson10 said:A question for Maria Thomas48—I have to hand it to you, that was a fascinating thesis you laid out. If our current monetary system, built entirely on debt, is driving us toward a reality where everything ends up being owned by the banks—and history tells us we've never actually seen that happen before—do we have any historical precedents for a "hard reset"? I'm talking about a total break in the cycle that forces everything back to square one.

Could it be through war and the total collapse of a currency, like what happened with the Reichsmark? Or perhaps a full-scale national bankruptcy and a complete restart, similar to what we saw in Argentina, Russia, or Iceland? Maybe even hyperinflation, much like the chaos in America?

I'm no historian, so it's hard for me to make definitive claims. But look at the Reichsmark printed by the Weimar Republic; that was a clear case where intentional inflation was used to try and squeeze out more cash to pay off Germany's WWI reparations. A state going bankrupt without introducing non-credit-based money is just a failure. Even Argentina is struggling right now.

The inflation issues in America were essentially the result of excessive money printing paired with banking multiplication.

Actually, the real goal isn't for the bank itself to own everything, but rather for its owners to own everything. Anyone who takes a moment to think about how banks actually operate will realize that bank profits really come from the money deposited in them. Basically, someone takes money out of our wallets and lends it to others, but they stash a good chunk of that cash in their own sock. In the end, the bank ends up with a mountain of fictitious deposits and a pile of issued loans that can't be repaid, while a large portion of the actual money has already shifted into the hands of manipulators. The depositors? They can't exactly demand a share of those profits from the bankers.😕

Ashley Thompson10 said:Whether he understands it or not, do you honestly think primary issuance of currency is even feasible? What would it take? We’d need a total overhaul of the Federal Reserve laws, facing a barrage of criticism from every angle, and ultimately, massive external pressure. The issue isn't just that the US shouldn't print its currency in a way that offends the banksters; it's that we can't allow such a precedent to succeed, lest larger, more powerful nations follow suit. Will enough pressure be applied, or will there be a "sudden accident," a forced regime change, or perhaps an "accidental" nuclear strike on Washington, D.C.?

If we simply started printing money to cover the budget deficit, we’d hit hyperinflation almost immediately. We'd run into exchange rate issues, problems with currency clauses, and so on. Real change requires state-led money issuance, taking over the banks, decreeing a massive reduction in foreign debt—maybe cutting it to one-third—restricting imports to prevent a deficit against our debt payments, incentivizing domestic production to substitute imports, controlling price growth, etc.

The backlash from all sides is both possible and expected. But wealth is held by a minority. This means the reform might spread because many other countries today lack any real alternative.

I’m joking a little when I say that Viktor Orbán could get a bomb from NATO if he doesn't change his policy (just look at Muammar Gaddafi). More likely, they'll use provocateurs to supposedly stir up the people against a "bad" government. Anything is possible. There could be massive crises, food shortages, trouble maintaining machinery because of a lack of foreign parts, and things like that.

But there really is no alternative if you want to break free. I've said it many times: there is zero chance they will admit the whole thing was a scam, that we don't owe anything, and that money regulation needs a total overhaul. If they did, the lawsuits would fly and the bankers would lose everything.

Anyone who watched the second part on Josip Broz Marshall might have heard Herta Haas mention that Marshall actually read economic literature. Our Ivo wouldn't dream of it. The paychecks keep coming regardless. Who is the authority that would introduce a lecture on true, honest macroeconomics into our business schools? Everyone shies away from it, terrified of the consequences. It’s symptomatic, really—most of the famous experts I've tried to email won't even bother to debunk my evidence with mathematical analysis. They’re all afraid that if they did, they’d have to admit I’m right and that their own knowledge was flawed. And then what? The entire foundation of modern economic thought would have to be rebuilt.

In fact, I just sent a condensed version of my text regarding the EU (http://sites.google.com/site/financi...europska-unija) to Branka Grčić. I'm genuinely curious to see how she responds to questions about the misinformation surrounding the EU. The EU is the root cause of the problems in the US, and it's through them that we ended up in this situation where our debt grows at 14% annually.

Regards

It’s no joke if Viktor Orbán were to receive a missile from NATO, though as you suggested, other, less dramatic methods of removal—like a grassroots uprising—seem far more likely. I caught a piece in the latest Globe about Orbán, and it’s a perfect example of why you shouldn't touch the "sacred" concept of central bank independence. It was a terrible read, frankly, just pure indoctrination. So many civil servants, journalists, and influential figures in this country are so deeply brainwashed that they stop thinking the moment anyone questions these "sacred cows."

The list of shifts you mentioned—state-backed money printing, nationalizing banks, slashing foreign debt by decree (say, cutting repayments to a third), restricting imports to fix the deficit, boosting domestic production through import substitution, price controls, and so on—sounds familiar. About a year ago, an American representative at the WTO floated similar ideas regarding import restrictions (given the massive US deficit). The German representative, coming from a nation with a huge surplus, dismissed it as a "return to a planned economy." And we all know how much value a planned economy actually holds. It's worth nothing.

Do you honestly think a small state like Rhode Island has any chance of significantly curbing imports? Even if we did pivot back to a planned economy, how could Rhode Island sustainably fund its current level of consumption? On the revenue side, we rely heavily on tourism and remittances from people living abroad. We might be able to get agriculture up to speed relatively quickly, but when it comes to complex goods—machinery, electronics, automobiles—our domestic versions would be inferior and nearly impossible to export. Just look at the history of old American manufacturing giants that couldn't compete; our own citizens would revolt against those low-quality domestic products anyway.

Regarding the trade balance, the concept of "offsetting" used in arms deals sounds intriguing. You see it often—take the debates over whether to buy Saab jets or Mikoyan fighters. If the US buys aircraft for, say, a billion Euros, the Swedes might commit to importing a billion Euros worth of American goods in return. It has nothing to do with free trade, but it’s certainly balanced and fair. Perhaps that logic could apply to general commerce: for every import, you don't just find a seller; you mandate an offset for exports and then find a buyer for those exports too. At first glance, it sounds like bartering, but if there were an electronic exchange where such trades happened instantly, maybe it could work? Offset-based trade?

Ashley Thompson10 said:It’s no joke if Viktor Orbán were to receive a missile from NATO, though as you suggested, other, less dramatic methods of removal—like a grassroots uprising—seem far more likely. I caught a piece in the latest Globe about Orbán, and it’s a perfect example of why you shouldn't touch the "sacred" concept of central bank independence. It was a terrible read, frankly, just pure indoctrination. So many civil servants, journalists, and influential figures in this country are so deeply brainwashed that they stop thinking the moment anyone questions these "sacred cows."

The list of shifts you mentioned—state-backed money printing, nationalizing banks, slashing foreign debt by decree (say, cutting repayments to a third), restricting imports to fix the deficit, boosting domestic production through import substitution, price controls, and so on—sounds familiar. About a year ago, an American representative at the WTO floated similar ideas regarding import restrictions (given the massive US deficit). The German representative, coming from a nation with a huge surplus, dismissed it as a "return to a planned economy." And we all know how much value a planned economy actually holds. It's worth nothing.

Do you honestly think a small state like Rhode Island has any chance of significantly curbing imports? Even if we did pivot back to a planned economy, how could Rhode Island sustainably fund its current level of consumption? On the revenue side, we rely heavily on tourism and remittances from people living abroad. We might be able to get agriculture up to speed relatively quickly, but when it comes to complex goods—machinery, electronics, automobiles—our domestic versions would be inferior and nearly impossible to export. Just look at the history of old American manufacturing giants that couldn't compete; our own citizens would revolt against those low-quality domestic products anyway.

Regarding the trade balance, the concept of "offsetting" used in arms deals sounds intriguing. You see it often—take the debates over whether to buy Saab jets or Mikoyan fighters. If the US buys aircraft for, say, a billion Euros, the Swedes might commit to importing a billion Euros worth of American goods in return. It has nothing to do with free trade, but it’s certainly balanced and fair. Perhaps that logic could apply to general commerce: for every import, you don't just find a seller; you mandate an offset for exports and then find a buyer for those exports too. At first glance, it sounds like bartering, but if there were an electronic exchange where such trades happened instantly, maybe it could work? Offset-based trade?

This is how the West handles things. An expert in nuclear matters just weighed in on the whole situation. It’s interesting how these things unfold. There is a lot of talk about security lately. People are worried about stability, and honestly, I think the experts have some valid points to make here. You look at the current landscape and realize that everything is interconnected. It isn't just about one single policy or one specific leader like Viktor Orbán. It’s bigger than that. It involves global institutions and how we manage risks in an era where technology moves faster than our ability to regulate it. I was reading about how these specialists view the threat levels, and it feels very heavy. It’s a lot to process. Everything seems to be shifting under our feet constantly. Just something to think about while you're going about your day.It’s hard to get anyone to convince me that there isn't some level of foreign interference at play here. It just feels obvious.

Quincy:

Everything you’re saying about those massive shifts—things like state-led money printing, government takeovers of banks, slashing foreign debt by decree so we only pay back a third at a time, putting caps on imports to fix that massive deficit, boosting local manufacturing, and keeping price hikes under control—it all sounds familiar. About a year ago, an American representative brought up the idea of limiting imports during WTO talks because of our huge trade deficit. The German representative, coming from a country with a massive surplus, immediately dismissed it as a "return to a planned economy." And honestly, it’s pretty obvious that a planned economy isn't worth a damn.

Whenever anyone brings up a planned economy, everyone starts losing their minds immediately. It’s always the same reaction. But honestly, once a war is over, that kind of system is really the only thing that stays upright. Since we are essentially dealing with an economic war right now, it feels like avoiding a planned economy isn't even an option anymore. We can't just sidestep it. This is a much bigger conversation than people want to admit.

Quincy:

Do you think a small nation like Rhode Island actually has any shot at significantly cutting back on imports? I mean, even if we pivoted back toward some kind of planned economy, how would a place like this sustainably fund everything we consume today? On the revenue side, there are definitely big wins from tourism and those financial transfers from people living abroad. We could probably get agriculture up to speed relatively quickly, too. But when it comes to complex goods—think heavy machinery, electronics, or cars—our domestic versions would likely be inferior. It would be tough to export them, and honestly, our local brands would just end up struggling miserably against the global giants. Just look at what happened with old-school American manufacturing icons that couldn't compete anymore.

It’s pretty tough for any small nation to develop every single industry to a point where they can actually compete on price. But honestly, we aren't talking about total self-sufficiency here; it's more about light specialization. The goal should be to produce as much as we possibly can just to reduce our dependency on others. Then, we pick one specific sector to focus on—something we can master—and use those exports to trade for everything else we need. It just makes sense.

Quincy:

When you look at trade balances, I find the whole concept of "offsets" pretty interesting. It’s that thing you see all the time in defense contracts—like those stories about the US bidding on Saab jets versus Mikoyan fighters. If the US buys a billion dollars worth of planes, the seller might commit to importing a billion dollars worth of American goods to balance things out. It doesn't really align with the strict idea of free trade, but it feels balanced. It feels fair. Maybe there's a way to apply that logic to general commerce. Imagine if, for every import, you didn't just need to find a buyer for what you're bringing in, but you also had to secure an offset export and a buyer for that export too. At first glance, it sounds like nothing more than a giant barter system. But honestly, if there were a digital exchange where these kinds of swaps could happen instantly and electronically... maybe it would actually work. Some kind of offset-based trading system. Just a thought.

Balanced trade is just the fairest way for any nation to operate. Here is why:

1. You don't run into that whole debt creation issue during exchanges.
2. The ratio between goods and money stays steady. Only the type of goods changes. This basically keeps inflation in check when an export economy gets too much cash flowing in against too little product.
3. When a country maintains planned balanced trade, managing money and development becomes much, much easier.
4. Domestic profitability depends entirely on money issuance, not on whether foreign investments come in or pull out. It means independence from foreign currency—you only depend on the stuff you can't make yourself.
5. And so on. People will probably think of other reasons themselves.

But what about corporations? What is their role here? Why shouldn't the government just buy up corporations and reduce the money supply meant for their profits since the state would be the owner? These are the questions that naturally follow. Some people will claim this leads straight to socialism, while others see it as a path toward a better future. The only real hurdle is how the state is managed. In the end, it will likely turn out that the most rewarded individuals will be those working on new inventions and technologies that reduce the need for manual labor while raising living standards sustainably. It all feels very similar to the Zeitgeist Venus Project. Just a roundabout way of getting there.

I think this is one reason why constructive thoughts like these always get sidelined. There is this assumption that introducing real money would trigger a social revolution. Divide and conquer is still a method that works, and it has plenty of fertile ground to grow in. Let's hope that by 2012, things become transparent in the financial sector.

Here in America, people still believe in the dream of getting rich overnight, living on credit, or making money off bank interest. They buy cheap imported goods without ever thinking about whether that business model is sustainable. Nobody stops to ask where the money for profit actually comes from. That is why the topic of "The Financial System and the source of money" exists. Today, the source of money is the biggest issue. We have the topic "Money as Debt—the greatest problem." Solving it leads to a fight against economic slavery and structural reforms that could last forever.

Resistance from those who benefit from economic slavery is expected, and you can see it in the link above. For this to work, the majority of people need to understand it. I have gathered my articles on various issues regarding improper money regulation into one book: http://sites.google.com/site/financi..._novac.pdf?d=1. This collective knowledge is something every patriot should know if they want America to remain financially and economically viable. Of course, that isn't everything, but it is the bare minimum needed to prevent bad governance that ends in bankruptcy and a fire sale of national assets. That is why I started writing on the volunteer forums and opened a thread called "Who is really in charge," where I comment on the government's poor decisions (it is hard to find good ones). I believe those who fought in the wars deserve to know how the country is being dismantled afterward.

A question for Maria Thomas48:
I’ve been following your writing since last spring, and so far, you haven't been wrong. I just finished reading your section regarding euros versus the Swiss Franc in your booklet.
Is there actually anything we can do, those of us stuck with home loans tied to the Swiss Franc? It seems to me that the Franc Association is mostly just a distraction, pulling the energy of debtors toward their activities while banks continue to bleed us dry every month with installments that are 40% higher than they were three years ago. I don't mean to be a doomsayer, but I am skeptical about the Association's moves.

Morgan Wright6 said:A question for Maria Thomas48:
I’ve been following your writing since last spring, and so far, you haven't been wrong. I just finished reading your section regarding euros versus the Swiss Franc in your booklet.
Is there actually anything we can do, those of us stuck with home loans tied to the Swiss Franc? It seems to me that the Franc Association is mostly just a distraction, pulling the energy of debtors toward their activities while banks continue to bleed us dry every month with installments that are 40% higher than they were three years ago. I don't mean to be a doomsayer, but I am skeptical about the Association's moves.

Since the banks are privately owned, they can charge whatever interest they want as long as there isn't a specific law stopping them. In our legal system, they made sure to avoid any mention of economic slavery. If they were to ban economic slavery in the Constitution, the government wouldn't be allowed to import more than it exports, and the state would have to maintain control over money—which is essentially the tool used to create that economic slavery.

In this specific situation, I believe the only real salvation would be to scrap the currency clause entirely and convert all loans into a recognized, stable currency—the US Dollar.

In this specific situation, I suppose the only real solution would be to scrap the currency clause entirely and convert all loans into the local US Dollar. [/

QUOTE]

Thanks. It seems obvious to me that the fix is to eliminate the currency clause and recalculate the loans based on the exchange rate at the time of disbursement, while factoring in all previous payments. Unfortunately, I don't think that’s going to happen anytime soon.
From my perspective, the biggest issue facing my family is the massive spike in our remaining principal when converted to Dollars. As things stand, we won't be able to keep up unless there is some kind of 50% correction in the exchange rate.
Is there anything we can actually control here? I wonder if the lesser of two evils would be taking out a new loan in Dollars without a currency clause—accepting the current inflated principal—or simply sticking with these existing terms.

Morgan Wright6 said:

In this specific situation, I suppose the only real solution would be to scrap the currency clause entirely and convert all loans into the local US Dollar. [/

QUOTE]

Thanks. It seems obvious to me that the fix is to eliminate the currency clause and recalculate the loans based on the exchange rate at the time of disbursement, while factoring in all previous payments. Unfortunately, I don't think that’s going to happen anytime soon.
From my perspective, the biggest issue facing my family is the massive spike in our remaining principal when converted to Dollars. As things stand, we won't be able to keep up unless there is some kind of 50% correction in the exchange rate.
Is there anything we can actually control here? I wonder if the lesser of two evils would be taking out a new loan in Dollars without a currency clause—accepting the current inflated principal—or simply sticking with these existing terms.

The value of the dollar is really under threat because of how these loans are being paid back. Since interest rates on new debt are going to be high, people are going to have to tighten their belts in the budget. I don't know how likely it is that the government will manage to kickstart massive infrastructure projects, but honestly, only a huge influx of cash into the country could actually drive down interest rates on any kind of loan. Banks usually lower rates when there’s more money circulating just to lure in more naive people into the credit trap. I don't see any way this stays sustainable, so if rates do drop, it'll probably just be temporary. If the IMF steps in, then rates definitely won't fall, because saving and paying off maturing debts will shrink the money supply. Since banks won't have much else to grab onto, rates will stay high. That's just my take.

From what I can see, converting the loan to dollars might seem like a good move. But it seems to me that interest rates on dollar loans are higher. As for the dollar... there are really only two ways this goes. Either the country goes bankrupt, or we hit a period of hyper-inflationary credit. Some rumors suggest bankruptcy is coming, but the Federal Reserve can always step in to buy up maturing bonds and weaken the dollar. They'll likely just balance things however they need to in order to drag out the agony.

The value of the Swiss Franc against the dollar could fluctuate based on speculation, and if a bankruptcy happens, the Franc could spike significantly (just my thoughts). Italy, Greece, Spain, and France are all facing bankruptcy risks (if we are too). How long this drags on just depends on the patience of the public, whose standard of living will keep dropping as unemployment rises. With the stability pact in place, I expect heavy pressure on the European Union to scrap it. If they don't, we might end up with a peasant revolt. Here in the US, I expect unemployment to rise until those big energy sector investments finally arrive. Even so, in a few years, we're looking at almost doubling our foreign debt and seeing an even worse credit rating.

Holding onto a long-term loan is pretty risky right now. I can't tell you whether it's better to get rid of it or not. It's up to you to decide.

Just one day later and I’ve already got confirmation that my hunch about interest rates climbing was right:
http://www.wsj.com/articles/business/finance/interest-rates-and-loans.html

Morgan Wright6 said:A question for Maria Thomas48:
I’ve been following your writing since last spring, and so far, you haven't been wrong. I just finished reading your section regarding euros versus the Swiss Franc in your booklet.
Is there actually anything we can do, those of us stuck with home loans tied to the Swiss Franc? It seems to me that the Franc Association is mostly just a distraction, pulling the energy of debtors toward their activities while banks continue to bleed us dry every month with installments that are 40% higher than they were three years ago. I don't mean to be a doomsayer, but I am skeptical about the Association's moves.

I feel compelled to respond to this, as I am a member of the group actively participating in the work of the association. The Franc Association does not exist for the reasons you outlined; rather, its purpose is to unite those who are rightfully indignant over the conduct of banks—specifically regarding interest rate manipulation and the deceptive "bait-and-switch" tactics used with Swiss Franc loans—so that we may fight against this institutionalized robbery.
The mechanism for achieving our objectives is through legal warfare.

The notion that some armchair intellectuals expect a revolution to spontaneously erupt while they sit on the sidelines, calculating exactly when and how to jump onto the moving train, is a fantasy; such a thing will never happen through an association.

No one within the association has ever opposed individuals taking their own independent action. Quite the opposite: if an action makes sense, they will receive our unreserved support.

As for the ideas put forth by Maria Thomas48, I generally find myself in agreement. However, those ideas—much like communism—rely entirely upon the honesty and integrity of every single individual involved in the process. Unfortunately, the current state of public consciousness is simply not prepared for such things, a fact we have seen repeated throughout history. That is my personal, subjective assessment.

mistyhawk17 said:I feel compelled to respond to this, as I am a member of the group actively participating in the work of the association. The Franc Association does not exist for the reasons you outlined; rather, its purpose is to unite those who are rightfully indignant over the conduct of banks—specifically regarding interest rate manipulation and the deceptive "bait-and-switch" tactics used with Swiss Franc loans—so that we may fight against this institutionalized robbery.
The mechanism for achieving our objectives is through legal warfare.

The notion that some armchair intellectuals expect a revolution to spontaneously erupt while they sit on the sidelines, calculating exactly when and how to jump onto the moving train, is a fantasy; such a thing will never happen through an association.

No one within the association has ever opposed individuals taking their own independent action. Quite the opposite: if an action makes sense, they will receive our unreserved support.

As for the ideas put forth by Maria Thomas48, I generally find myself in agreement. However, those ideas—much like communism—rely entirely upon the honesty and integrity of every single individual involved in the process. Unfortunately, the current state of public consciousness is simply not prepared for such things, a fact we have seen repeated throughout history. That is my personal, subjective assessment.

It’s standard for the Franc Association to fight using legal means, but I have to point out the math here. It is mathematically obvious that loans in America cannot be easily repaid because profit in a country has to come from cash inflows. Right now, most of that inflow comes from government borrowing. So, repaying debt depends on the government taking on more debt—creating an even larger national deficit. And eventually, all of us will have to pay that off. For now, it's an impossible mission because we’re running a massive trade deficit with foreign nations.

Who sees a solution here without a revolution? Only the naive ones. The same people who voted for the Anschluss into the European Union. Now they're already cheering for the move to the Euro. In America, everything just passes through. I just don't know how much longer everyone can keep turning a blind eye. In a few years, America is going to be a ruined state.

Maria Thomas48 said:It’s standard for the Franc Association to fight using legal means, but I have to point out the math here. It is mathematically obvious that loans in America cannot be easily repaid because profit in a country has to come from cash inflows. Right now, most of that inflow comes from government borrowing. So, repaying debt depends on the government taking on more debt—creating an even larger national deficit. And eventually, all of us will have to pay that off. For now, it's an impossible mission because we’re running a massive trade deficit with foreign nations.

Who sees a solution here without a revolution? Only the naive ones. The same people who voted for the Anschluss into the European Union. Now they're already cheering for the move to the Euro. In America, everything just passes through. I just don't know how much longer everyone can keep turning a blind eye. In a few years, America is going to be a ruined state.

There is no revolution without bloodshed, Maria Thomas48. Who among us is truly prepared for that in a society that, let's face it, lives far too comfortably? If we look back forty years, we are incredibly wealthy by comparison—certainly not like sixty years ago, when people in this part of the world were actually starving to death.
To start with, for those of you who spend all your time spitting on the system and wondering why nothing ever changes: I suggest you lead by example. Why don't you physically sacrifice yourselves? Go camp out right in front of the Federal Reserve until your demands are met. If you truly care about the welfare of society, prove it through action. Once you show some skin in the game, then perhaps we mere mortals will follow your lead.
It is remarkably easy to play philosopher on internet forums and Facebook, acting as though you are a genius, but when it comes time to actually stand behind your convictions and remain consistent, they vanish without a trace.

mistyhawk17 said:There is no revolution without bloodshed, Maria Thomas48. Who among us is truly prepared for that in a society that, let's face it, lives far too comfortably? If we look back forty years, we are incredibly wealthy by comparison—certainly not like sixty years ago, when people in this part of the world were actually starving to death.
To start with, for those of you who spend all your time spitting on the system and wondering why nothing ever changes: I suggest you lead by example. Why don't you physically sacrifice yourselves? Go camp out right in front of the Federal Reserve until your demands are met. If you truly care about the welfare of society, prove it through action. Once you show some skin in the game, then perhaps we mere mortals will follow your lead.
It is remarkably easy to play philosopher on internet forums and Facebook, acting as though you are a genius, but when it comes time to actually stand behind your convictions and remain consistent, they vanish without a trace.

Fine. No revolution without blood. No victory without a fight. So I guess evidence doesn't matter to reasonable people? You just need someone else to fight the battle for your interests. We aren't going to get anywhere if we sit around waiting for someone else to take the lead.

Just a quote for you all:

"First they came for the communists, and I did not speak out—because I was not a communist.
Then they came for the Jews, and I did not speak out—because I was not a Jew.
Then they came for the Catholics, and I did not speak out—because I was not a Catholic.
Then they came for me—and there was no one left to speak out for me."
(Martin Niemöller)

The solution to everything is just to bury your head in the sand and wait. That's the plan. If we don't act today, a violent revolution is definitely coming tomorrow. You'll see that this becomes the truth eventually.

Thanks to Maria Thomas48 for her perspective regarding mortgage loans with a Swiss Franc currency clause.

I went ahead and made an early payoff on my remaining principal. I suppose it’s less painful to accept a slightly higher principal due to the exchange rate than to live in constant anxiety, checking the Federal Reserve Bank of America's daily exchange rates every single morning. My savings are essentially wiped out now, but at least I can sleep through the night without worrying about this loan. I closed all my stock positions, liquidated both my wife's and my own housing savings, dipped into some of our cash reserves, and even borrowed a bit. It seems obvious that holding any kind of savings isn't practical when you're carrying debt on the other side, but we spent three years convinced the Swiss Franc couldn't possibly climb any higher... thinking it would drop any moment so we could make a larger payment... but that didn't happen. It just kept rising, leaving us in a cycle of daily disappointment.

I feel for many people I know who won't be able to do what I did. I sincerely hope a solution is found for their loans in the coming years. My fear is that, unfortunately, those with dollar-denominated debt might suffer now, followed by those with foreign currency loans, because regardless of how much the Governor claims to protect the currency, the dollar has been steadily depreciating against the Euro for years. I doubt we will see a rate of 4.5 per Swiss Franc and $2.50 per Euro anytime soon.

Maria Thomas48, thank you once again for laying out the facts. To those who disagree with you and those who agree, I wish you all the best.

Morgan Wright6 said:Thanks to Maria Thomas48 for her perspective regarding mortgage loans with a Swiss Franc currency clause.

I went ahead and made an early payoff on my remaining principal. I suppose it’s less painful to accept a slightly higher principal due to the exchange rate than to live in constant anxiety, checking the Federal Reserve Bank of America's daily exchange rates every single morning. My savings are essentially wiped out now, but at least I can sleep through the night without worrying about this loan. I closed all my stock positions, liquidated both my wife's and my own housing savings, dipped into some of our cash reserves, and even borrowed a bit. It seems obvious that holding any kind of savings isn't practical when you're carrying debt on the other side, but we spent three years convinced the Swiss Franc couldn't possibly climb any higher... thinking it would drop any moment so we could make a larger payment... but that didn't happen. It just kept rising, leaving us in a cycle of daily disappointment.

I feel for many people I know who won't be able to do what I did. I sincerely hope a solution is found for their loans in the coming years. My fear is that, unfortunately, those with dollar-denominated debt might suffer now, followed by those with foreign currency loans, because regardless of how much the Governor claims to protect the currency, the dollar has been steadily depreciating against the Euro for years. I doubt we will see a rate of 4.5 per Swiss Franc and $2.50 per Euro anytime soon.

Maria Thomas48, thank you once again for laying out the facts. To those who disagree with you and those who agree, I wish you all the best.

I'm glad you got rid of that loan, because really tough times are ahead (trying to save money while the economy collapses) and there's a chance some banks might go under. In plain English, that means even a solid company could vanish in an instant if its bank fails.

I also wiped out my home savings because the bank was bleeding me dry with administrative fees, and they made the payout conditional on opening a checking account, which is just another extra cost. In the end, I closed all five of my cyclical savings plans and I don't want to put my money into banks anymore. Not now that I see how things actually stand.

Maybe I was a little off when I said the US Dollar would rise because the Swiss central bank pegged it to the Euro. But my point still stands that the dollar won't fall because the Euro has weakened so much due to these rising interest rates on government bonds, and I don't see anything that can revive the Euro right now. The debt crisis in the European Union is only going to get worse. The EU doesn't want to fix it.

And interest rates will stay high because there's no expansionary monetary policy happening (banks don't have anything left to grab, so they aren't even bothering to cast lines with low rates). The government will help them out by keeping interest rates on government bonds high.

I just hope the public realizes sooner rather than later who is actually running the show and who they are doing it for.

Balancing the federal budget is a topic that never really goes away. If you look at a simple example from an article about balanced budgets, it shows that a budget can only be closed if you essentially pull back all the money that was spent. But in that specific scenario, they aren't accounting for things like foreign exchange, loans, investments, or specific tax and tariff rates. It’s too isolated.

We could run a theoretical macroeconomic calculation by looking at the actual inflow of cash and figuring out the maximum amount of money available for circulation. In the first part of this calculation, we'd factor in everything: imports, exports, smuggling, domestic loans, various excise taxes, foreign aid, both domestic and foreign investment, international loans, any non-credit emissions, and the black market just to find the total liquid money available. That initial phase would also calculate potential tax revenue, retained profits, and the trade balance, both with and without credit.

In the second part of the calculation, using the principle of taxable transactions, we'd figure out how much total turnover can actually happen before that available money turns into pure profit and tax. Someone’s spending—which might come from government funds or other sources—eventually ends up as someone else's savings, collected taxes, or more money being spent elsewhere.


The process just repeats itself with each subsequent round of spending, but the amount of money involved gets smaller every time. In math theory, this is just the sum of a geometric series.

Gross Turnover = Someone's Spending * (1+tax)/(tax+profit)

Total Savings = Someone's Spending * profit/(profit+tax)

Collected Tax = Someone's Spending * tax/(profit+tax)

Total Savings + Collected Tax = Someone's Spending

In these formulas, "tax" represents the tax rate applied to the base, and "profit" is the percentage of that base that stays behind as savings. So, the tax rate could technically be zero or even higher than 100%, while savings could range from 0 to 100%. You get a similar result for the black market where the tax rate is effectively zero.

You could make the calculation even more complex by splitting the money being spent or entering the system into different groups of actors based on certain ratios. That way, you could assign specific amounts of money to certain groups for certain activities, giving them unique characteristics like profit margins, shares, interest rates, or levels of government ownership.

Looking at that formula for collected tax, it’s clear that collected tax will always be less than someone's spending if there is a savings rate involved. However, if you factor in loans and money flowing in from overseas, there is a chance to balance the budget or even create a surplus. Of course, if it's a loan, the consequence is debt—which is basically a cost in the future that exceeds the profit made today. The theoretical calculation shows this quite clearly.

Another thing you see from the gross turnover formula is that turnover increases if the tax rate drops, but if the profit margin stays the same, then the Total Savings also increases. Ultimately, this leads to lower tax revenue. This means the government can't actually fill its coffers by cutting taxes unless the real sector lowers its profit margin. For that to work, the real sector has to increase productivity—meaning they have to achieve the same profit through higher production. The real sector shouldn't get too excited about tax cuts, because for that to be sustainable, their realized profit has to stay constant. How that happens in a market economy is the real question.

Thirdly, the formula for gross turnover shows that increasing the money available for spending also boosts turnover. This is where the true role of credit comes in. Credit essentially spends future profits to create tax revenue in the present. By increasing spending through credit expansion, it’s possible to balance a current federal budget or even hit a surplus. Does this give public service unions a green light to fight for higher wages? It’s an interesting question. Yet, it happens all the time. Clearly, balancing the budget depends on the additional supply of money for spending. Reducing credit leads to lower tax revenue, lower domestic consumption, and lower corporate profits. The alternatives to credit expansion are:

• getting foreign cash without debt
• the debt-free money emission show

Look, it’s obviously way easier to just take out a loan than it is to actually build up a big enough trade surplus with other countries. And while this idea of emitting money without creating debt sounds great on paper, there’s a catch. Since our local currency isn't globally convertible, it doesn't really fix the underlying issue of a constant trade deficit. Basically, if you want to use non-credit money emission, you have to pair it with fixing that trade gap first. Taking loans from overseas is unfortunately just the easiest path for an economy that's essentially delaying its own bankruptcy. If you actually plan on paying those loans back, the math shows you need a real source of funds to do it. You can pay off foreign loans using a trade surplus, sure, but domestic loans could theoretically be paid back through non-credit money emission. Still, you can't turn that domestic debt repayment into foreign currency to move it out of the country unless you have that trade surplus. It seems like without hitting that necessary trade surplus, avoiding national bankruptcy is impossible. Non-credit emission should really only be used for what the Federal Reserve is supposed to do—providing liquidity for our own economy.

If you look at the calculations, having the government hold larger stakes in profitable companies tends to shrink the budget deficit. This means that privatization—where the government sells off those shares—actually forces the budget deficit to grow if profit margins stay the same. And let's be honest, a private company is always going to prioritize maximizing its profit margin rather than helping lower the deficit.

Here is the table for the theoretical macroeconomic calculations: https://sites.google.com/site/financ...roracun_11.xls

I might update or add to this table over time. There's a "Description" tab that explains all the terms used in the sheet.

Well, we finally hit the point where the topic gets blocked on Meta. Every single time I try to include the link from my signature, it gets rejected for supposedly violating community standards. 😵

Honestly, I have no clue how it even got to this point.

Anyway, while everyone is debating the federal budget and the administration is busy bragging about running a surplus—which, let’s be real, is mostly just the result of foreign subsidies coming in from our refugee populations—you could actually verify all of this using that theoretical macroeconomic calculation I mentioned earlier. But naturally, nobody has commented on it.

If you look at that calculation, those foreign subsidies could easily jump from 1% of GDP to 5% of GDP. If that happens, you can swing from a -0.42% deficit straight into a 2.67% surplus. GDP being the total federal budget here.

Here is the latest Excel spreadsheet for the budget: https://mega.nz/#!SZYVnSqY!orOlR-Zry...MMkJpfEApJtu0E

Best,

At first glance, it seems like they’re just adjusting rates because money loses value, trying to compensate so they don't take a hit. But that logic only holds up if banks aren't the ones driving inflation through credit expansion—like, if it wasn't just a massive influx of foreign capital or the government printing money without taking on debt.

If banks are actually the primary drivers of inflation—and it looks like they are, since they're basically creating money out of thin air which then fuels the inflation—then assuming the entire money supply consists of bank credit, and that people are taking out new loans just to maintain their current purchasing power, the math follows. If they're inflating the money supply like this, banks end up charging interest on the total amount of money circulating, which hasn't actually lost its real value under this assumption. So, the bank's profit stays untouched by inflation because their own credit expansion pumped up the money supply while keeping the real value steady.

And that's why raising interest rates to account for "inflation" is essentially the biggest economic scam ever devised and modern "economic science" just ignores it. Banks are pulling in these massive extra profits during periods of inflation that they created themselves.
Then, once they start the whole "saving the financial system" routine, they hike interest rates on an already bloated money supply and tighten credit, which just lets them rake in even more.

I reached this conclusion back in 2010 while watching how debt climbs if we only borrow just to keep our money's purchasing power from dropping. It turns out debt grows nominally by the sum of the bank interest plus inflation, but in real terms, it grows by the interest rate alone.

In today's environment with high inflation, if you raise the interest rate to match inflation, then the debt grows by the interest rate plus inflation, plus the inflation itself. It ends up looking like the debt is growing in real terms by the interest rate plus inflation. That can be many times higher than just the bank's interest when inflation is low. Honestly, it's proof that banks fuel inflation and this cycle has to be stopped, otherwise, both the real economy and the banking sector will collapse, which would wreck the whole American financial system. And obviously, the banks won't allow that. They'd rather just let the real economy break instead.

Now that we see this, it's obvious anyone with this understanding could have predicted that they'll try to crush high inflation "at any cost."