Simple Explanation of a Financial Meltdown.

Simple Explanation of a Financial Meltdown.
(And How to Avoid It!)


As most of you know, here in the United States we have what is called "legal tender". Whatever the lawyer definition of that word means, to people it simply means "This is the money."


We have been taught to use it, trust it, and believe anything else is counterfeit.


The one thing we haven't been taught, which all of us must know, is this: The federal reserve bank and the treasury work together to create the currency we call "money". THIS IS THE ONLY SOURCE OF CASH.

This money is put into the economy by means of a LOAN. Along with this loan is attached interest (of course!).


Now... do this little thought experiment with me. Since the banks that brought money into existence loaned it to us, at interest, how do we get the interest to pay them back?


The answer is, WE CAN'T. Well, not exactly. The bank is always there, happy to LOAN us more money when we need it.


So to pay the previous loans back (and their interest that comes with it) we have to go to the bank again and take out ANOTHER LOAN. Now we have enough to pay them back, but we are also in debt more.


It doesn't take a genius to see that this system can't go on forever. There will be a day where the interest on all the loans will get so big that EVERY DOLLAR WE MAKE WILL BE REQUIRED TO KEEP UP ON INTEREST PAYMENTS.


AHA!


Now there's the problem. That day is closing in. When will it be? No one knows for sure, but there are signs that it is happening.

The real nasty thing is that once all the buying and selling is done you find out who is holding all the real assets, and who is holding nothing but debt. This has been seen before in history, and it always goes like this: the criminals own everything, and the hard workers in society end up with nothing at all.


See, we the people have organized and built all the things that have value in society. So why should we be in debt to anyone for having built this world? It doesn't make any sense.

Further, those who have scammed us and ended up "owning" everything are no different than other criminals and thieves. What they have possession of in terms of the law they do not possess in terms of justice.


So we must ask ourselves, are we going to keep participating and supporting a system which is robbing us blind, and turning us all into slaves?


Or will we do the alternative?


For that matter, what IS the alternative?


Good news! It's SIMPLE. It's EASY. You ready?


FORBID THE CREATION OF MONEY AS LOANS,
AND FORBID COMPOUND INTEREST.


Just do those two things, and the world will right itself.


Common sense will tell you that these two common practices are disastrous. If you allow one person the right to create money but only if they can put you in debt for using it, it stands to reason that soon those who use this money will be in debt to the creator. Also, no one should be allowed to sit on their rear end and let the mere fact that they have money make them more wealthy. The wealth of one man growing on the labor of others is just a clever form of slavery. You don't want to be a slave, do you?


So, how do we use money in the new system? Simple. We create money as we see fit. We do NOT let profit-run investment bankers create money as THEY see fit.

One example can be found in Ithaca, New York:


Many communities are giving up waiting on large corporations or government to invest or provide jobs, and are instead building on their own strengths and resources.

The people of Ithaca have done so by issuing their own paper currency, called Ithaca HOURS. Residents list the goods or services they have to offer in a large catalog - and then use the HOURS they earn to purchase goods and services from others. For some, this barter system provides a crucial margin of financial support. For others, it's a great way to meet people and build a sense of community. All find their spending habits redirected locally.

Here in Ithaca, New York, we've begun to gain control of the social and environmental effects of commerce by issuing over $50,000 of our own local paper money, to over 950 participants, since 1991. Thousands of purchases and many new friendships have been made with this cash, and about $500,000 of local trade has been added to the Grassroots National Product.

We printed our own money because we watched Federal dollars come to town, shake a few hands, then leave to buy rainforest lumber and to fight wars. Ithaca HOURS, by contrast, stay in our region to help us hire each other. While dollars make us increasingly dependent on multinational corporations and bankers, HOURS reinforce community trade and expand commerce that is more responsive to our concern for ecology and social justice.

Here's how it works. The Ithaca HOUR is Ithaca's $10 bill, because $10 per hour is the average of wages/salaries in Tompkins County. These HOUR notes, in four denominations, buy plumbing, carpentry, electrical work, roofing, nursing, chiropractic care, child care, car and bike repair, food, eyeglasses, firewood, gifts, and thousands of other goods and services. Our credit union accepts them for mortgage and loan fees. People pay rent with HOURS. The best restaurants in town take them, as do movie theaters, bowling alleys, health clubs, two large locally-owned grocery stores, and 30 farmers' market vendors. Anyone may use HOURS, and hundreds have done so.



So, easy as that. We don't have to overhaul society. We just have to change our minds. Once a society decides to use sound money, then sound business practices follow, followed by sound economies, stable societies, and freedom and prosperity for all.

Let the crooks deceive you, and we're all in a mess.

It's our choice.


[edit on 23-11-2007 by dionysius9]

Did you take a wrong turn and get lost? Maybe you should have taken a left at the lights instead of going straight on?

Judging from the above post, I think someone is calling me crazy.

I wonder what part of what I said doesn't make sense.

Could it be that I tried to explain the world of banking and finance, and it sounded... bizarre?

Possibly.

In response to that, I would say that I understand why people just go "what?" when they hear these kinds of things.


In his book, "Money: Whence it Came, Where it Went", on page 29 John Kenneth Galbraith says, “The process by which banks create money is so simple that the mind is repelled.” and "The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it."


Carl Sagan writes "One of the saddest lessons of history is this: If we’ve been bamboozled long enough, we tend to reject any evidence of the bamboozle. We’re no longer interested in finding out the truth. The bamboozle has captured us. It is simply too painful to acknowledge - even to ourselves - that we’ve been so credulous."


I remember being told the story of Noah's Ark as a child. In that story I was told that as Noah was building his ark, the people watching him laughed and ridiculed him. Until the rain came... then he didn't seem so crazy, but for the people it was too late.

What I'm offering in the above post is a clear explanation of the problem, and a clear solution to it, so that anyone who reads it will be armed with some knowledge to work against the corrupt money system being forced upon us which has the power to wreck societies. This money system is going to create some real problems in the near future, making the great depression of the 1930's look like a picnic, unless we as a population start to realize how this works against us, and can create for ourselves a system of money that works FOR us instead.

[edit on 23-11-2007 by dionysius9]

Don't think too hard dionysius, see, you end up being lost.
Ask the mods to move this to pts economic issue.

FORBID THE CREATION OF MONEY AS LOANS, AND FORBID COMPOUND INTEREST
That means total deconstruction of the current world economy regime. So, it's not gonna happen.

reply to post by Jazzyguy




Hey, I'm not saying it isn't going to hurt somebody. But those somebodies can get real jobs.


Being a "financier" is being a social parasite. You want to get rich, own things, order people around, but never do the dirty work yourself. I have no respect for these people.


Allowing them to exist is one of the reasons America is headed for financial ruin.


Sorry if this sounds like a rant. I'm just upset. I can feel a nightmare looming on the horizon, and I don't know if any of us are going to like the way the world looks in the near future.


What I would like to see instead is the population disarming this bomb before it explodes. Because as ugly as it is to fire every banker, its going to be much uglier to let this fiasco keep going...

/rant off


Oh, and apologies if this ended up in the wrong forum. My bad.

100% correct dionysius.


Its also a neat way of avoiding government tax

Originally posted by dionysius9
Being a "financier" is being a social parasite. You want to get rich, own things, order people around, but never do the dirty work yourself. I have no respect for these people.
Allowing them to exist is one of the reasons America is headed for financial ruin.

I'm actually with you, dionysius. I also don't like the current economy regime.

As with the population disarming the bomb. Who exactly is going to disarm the bomb? The masses don't really have power. And the people in charge like the status quo.

You do sound really upset. Exactly what do you think is going to happen? And how is it going to affect your life?

I believe the "bomb" can be disarmed slowly and gracefully. The way to do this is to plant local support for alternative currencies, and let them grow.

Over time, their system will find competition with a system that will energize the economy, and start the lifeblood of human creativity pumping again.

Right now, their system has everyone in a cut-throat competition with each other fighting over scarce money.


Effects of allowing interest to be attached to the use of money:

*Expensive goods. The cost of borrowing money has to be factored in.
*Consumers broke. Interest and banking charges eat up incomes.
*Surplus of goods. Populations can't afford everything attempting to be sold.
*Fierce competition. Wages are held down, jobs are cut, product quality suffers, and cheap imports from slave nations are the result of the effort to maintain a bottom line. Competition between countries wastes transportation resources trying to find markets all over the globe.
*Increasing debt. Interest is a fee to use money. Every time money is used, our debt increases.
*Inflation. To give people the money to pay back previous loans + interest, new loans must be made from the bank. This inflates the money supply, devaluing the currency.
*Poverty. The profit motive and the desire to increase wealth through the use of money results in the concentration of wealth into a few hands. The other side of this coin is that the vast majority of people eventually become poor.
*Corrupt government. If the public won't pay for new government expenses through taxes, the government pays for what it wants by getting money printed from the Fed. This causes inflation with all its ill effects, wastes human effort on programs that aren't desired by the public, and pillages the economy.


An interesting note: a positive interest rate (+ some %) has the effects on society listed above.

NEGATIVE interest rates reverse this effect! "Negative interest rate, that's crazy!" you say? Well, it's been tried, historically. Guess what? IT WORKS. When you work a day, what you created or did gets undone over time. So the money that represents that creation should decrease in value over time as well.

Societies that have tried this have found it to be an incredibly powerful tool for righting the wrongs that a corrupt money system creates. The problem is that people are generally ignorant on the subject of economic and monetary theory. Given this fact, those who do understand typically can't resist the temptation to abuse the ignorance of the masses.

[edit on 23-11-2007 by dionysius9]

THE REAL CAUSE OF THE REVOLUTION

Benjamin Franklin.

A short while before the American Revolution, Benjamin Franklin was sent to England to demand the monarchy relax taxes. The colonists had become prominent traders, skillful ship builders, and equally skillful evaders of the many excessive duties levied upon their shipping trade. In the spirit which inspired representative government, they rose to demand justice from the king.

Franklin was a renown author, publisher, amateur scientist, philosopher and statesman, and there was tremendous anticipation of his arrival. In England, the little news returned from the colonies was conveyed largely by disreputable sailors in equally disreputable places. Little was believed of these tales. Despite Franklin's reputation, it was broadly assumed he would prove a crude, uncultured woodsmen, hardly fit to represent his peers against the established power of the English monarchy. History however would prove his peers light years ahead of their time, and even the many generations who followed them.

Upon his arrival he was whisked to a prominent engagement, where, before the ruling class of England, Franklin, the guest of honor and object of great skepticism, was soon compelled to make a speech. Amid considerable ado, Franklin walked to the podium. He turned to survey his audience, and after adjusting the spectacles he had invented, he asks them, "What's your pleasure?" They beseeched he tell about the colonies.

Franklin was a student of the state of English affairs, and thinking how much despair the English "economy" suffered under the Bank of England, he composed his answer. He knew that even prominent lawyers spent a good part of the year behind on their rent. They often went hungry. Few non-aristocrats owned land. Many suffered from poor diet. Common citizens spent their lives hoping to pay imposing debt — ever hopeful of meaningful employment, and in constant, dire need.

Thinking to comfort them with the hope of the colonies, finally Franklin replied slowly and deliberately, that they might digest each phrase: "Well. You can leave your ship with just your baggage, walk beyond the furthest homestead, and become an immediate landowner."

Franklin was immediately interrupted by an outcry of disbelief. Once it began, practically the entire audience shouted the improbability of such a thing.

Knowing he spoke the perfect truth, Franklin calmly waited to resume his answer: "The forests are vast. You can cut down all the trees you can imagine, and build whatever kind of home you please. The soil is rich and fertile. You can clear all the land you want. You can plant practically any crop you desire, and it will grow with great vitality. There are unspoiled streams everywhere. The water is pure and good, and may be diverted to irrigate your fields. The wilderness is full of game, and there is no possible shortage of meat. The people are happy and busy, and prosperous."

End of speech.

Outright disclaim erupted. Angrily, a man shouted, "How can you possibly account for prosperity in the colonies?" A whole audience of doubters loudly saluted the question.

When they finally quieted, Franklin again answered steadily, "It's quite simple. We have created our own currency."

Again an uproar erupted. Who were the colonies to create their own currency? How could a currency possibly sustain prosperity?

Franklin waited patiently to explain: "If for instance one man raises fowl, and another raises feed, and the first intends in the next season to double his production, he may approach the second, wanting him to produce the additional feed required. They agree how much of the production of each will be traded to the other, and their eventual contracts are evidence of their debts to each other."

"Their notes may then be circulated as currency. The cultivator of the feed for instance may write a note against the fowl to be delivered to him, to pay for a doctor to take care of his family. The doctor may pay for goods with the same note at the local store. The store then will ultimately collect the fowl originally promised to the cultivator. When the production is delivered, the respective notes are fulfilled, and the money passes from circulation. The circulation is perpetually regulated according to need; and will support any conceivable, desired prosperity."

The audience was shocked. Their indoctrination suggested they find a reason to denounce this foreign system, and to their relief the same angry man shouted, "That's preposterous! How could you levy taxes or fund government with this mere scrip?"

Laughter and sarcasm erupted.

Franklin again answered the derision: "That's quite simple as well."

"Suppose we have a township on one side of a river which is unnavigable and unfordable, and an opposing township on the other. One of these townships might build a lumber mill. The other builds a grist mill. Foreseeing the eventual need to support activity above initial demands, each builds their mill to much greater capability than at first required."

"As each township needs the services of the other township's mills, it is proposed to build a bridge across the river. A group of men agree to build the bridge to agreed standards; and when we agree on a fee to pay them for this service, likewise we simply create the necessary notes, and pay them. As the increased commerce requires the increased circulation to sustain it, there is no inflation; and therefore we have provided in all ways to sustain the desired commerce."

"To fund the proper services of government — such as the creation of this bridge — we have no need to levy taxes or to subject our people to eternal multiplication of debt. We have provided the real service of government without cost."

Blood would be shed for this excellent explanation.

Franklin's heckler was an officer of the Bank of England, attending with several officers of Parliament. "British" Parliament thus immediately passed a resolution outlawing "colonial scrip" as currency. The future Americans were required to turn in their vital scrip for bonds issued by the Bank of England, and although they were to be paid some menial interest for the bonds, the bonds as well were outlawed as circulation. Trade therefore would be impossible without further recourse.

Consequently, the final aspect of this provision allowed the colonists to turn in the bonds for notes issued by the Bank of England — for which they were to pay some thirty-percent annual interest. Franklin was forced to take this unhappy news back to his people.


The colonists of course prevailed in the ensuing military conflict. The governments of Europe however were further threatened by the new philosophy promoted by this revolution; and as true freedom — and particularly true free enterprise — are the hope of the oppressed and the gravest danger to tyranny, few European citizens dared openly support the colonial efforts. In many cases, even former associations with the colonists endangered European citizens before their authoritarian governments. Friendships, however deep, were cut off. In restoring one such relationship after the war, Franklin explained the real cause of the American Revolution:

"We would gladly have borne the little tax on tea, and other matters, had it not been that they took from us our money, which created great unemployment and dissatisfaction. Within a year, the poor houses were filled. The hungry and homeless walked the streets everywhere."

The people jointly (through assented government) certify and issue the notes created in Franklin's story by the two agricultural producers. Interest-free debts are paid at the rate of consumption of the related asset. A debt related to a $100,000 home with a hundred-year lifespan therefore is paid off at the rate of $1,000 per year, or $83.33 per month. To eliminate inflation, the bridge is financed too by interest-free debt, and paid at the rate of consumption. Neither the promises to pay (notes) of the people or the government are debts multiplied for the profit of private entities which have only usurped our right and responsibility to publish our own evidences of debt.

reply to post by dionysius9

Franklin is already dead. You have to find another Franklin. And look how they try to tackle Ron Paul. I don't even know whether Ron Paul is the real thing or not.

In case you forgot how the current administration feel about "funny money".
www.abovepolitics.com...