[p2p-research] Fwd: The Outrage Of Economics

Fri Feb 12 06:37:57 CET 2010

---------- Forwarded message ----------
From: The Voice Of Economics <thevoiceofeconomics at gmail.com>
Date: Fri, Feb 12, 2010 at 2:22 AM
Subject: The Outrage Of Economics
To: michelsub2004 at gmail.com

The Outrage Of Economics

by

The Voice Of Economics

Using police power to protect public safety is a virtue. Using police
power to protect the price of money, or to restrict real things from

being used as money, or to limit money creation to the act of lending,
is a menace that dilutes the value of human life. Any talk of peace
without this primary disarmament is nothing more than a resounding gong

and a clanging cymbal.

Because all individuals are unique and serve each other uniquely,
unemployment (un-granularity) is essentially impossible. Removing police
power from non-safety assignment encourages maximum granularity. Any

talk of less than one hundred percent granularity is an attempt to frighten.

Because
 man is inherently creative, value is always increasing and
global recession (defined as synchronized decrease by billions of people

for six consecutive months) is essentially impossible. Removing police
power from non-safety assignment ensures that increase manifests. Any
talk of global recession is an attempt to instill guilt.

Because commercial intercourse is fun, economics is not dismal but

joyous. Removing police power from non-safety assignment allows fun to
begin. The opposite of war is fun -- let the fun begin.

The "full faith and credit" of any government simply refers to its power

to tax at gunpoint and that is what backs central bank paper. It is not
a viable business model for any monetary system and that is why all
governments are going bust. So the next time you hear about three
billion people subsisting on less than one dollar per day, do not insult

them by calling them poor
 but realize they are slaves held at gunpoint.
Do not sing kumbaya for them or for yourself -- join a mutual credit
exchange instead.

People are bypassing central banks and national currencies through the

use of mutual credit exchanges. There are hundreds of credit exchanges
currently in existence doing billions in business (google "barter",
which is a misnomer, because money is created interest-free in the

process of purchase). Two good examples of such exchanges are the
original WIR in Switzerland (founded in 1934, in 2004 it did 1.65B CHF
of business, wiki it) and the Community Exchange System in South Africa.

Denomination can be in grams of gold or other commodity. Each exchange
member has a trading (or "buy") account of virtual grams, and a
collateral (or "sell") account where the member lists his collateral

(i.e. his product for sale). Valid collateral/product can be anything
real, for
 example, hours of ditch digging, kilos of widgets, or kilos of
commodity. The trading account starts from zero. If party A buys from

party B, A goes negative x grams on the trading account, B goes positive
x grams on the trading account. The exchange sets the clearing rules,
and the architecture ideally is peer to peer, replicated, and mirrored.

Smartcards extend the trading account to brick and mortar stores. In
some exchanges, all accounts are public for the ultimate in transparency
and safety.

Fiat money is a monster that benefits some at the expense of many,

whether named "capitalism", "socialism", or "communism". Gold failed in
the past because it was the "coin of the realm" and therefore could be
clipped or manipulated in other ways. The current system of the "paper

of the realm" is worse. The proposed system of the "paper of the world"
would be worst for three reasons:

Firstly,
 in a debt based currency, by definition, there are not enough
financial instruments to pay the interest, which means the users are

indentured to the issuers for the interest via the medium of labor.
Issuers play the two-faced role of issuer and user, and at any given
time there is only one pool of money. For example, when someone is paid

to wax a bank's floors, his earnings will go to pay for interest, while
the bank is actually paying him his own money deposited previously.
Since all money in the current system is created by bank loan, all

non-issuing users of money are, directly or indirectly, in the position
of the bank floor waxer.

Secondly, the process of debasement is continuous, which means the users
are ripped off constantly.

Thirdly, legal tender laws lock in the roles of issuer and user.

Anything real is money. Commodities are easiest to quantify but
manufactured
 goods and time/labor are also money. Credit is money if and

only if based on something real. Credit based on something other than
that which is real, such as a promise or a threat, is counterfeit money.
Being afraid that there are not enough commodities in the world to

"back" the world's credit needs is like being afraid there are not
enough meters in the world to measure the world's distances. Being
afraid that commodities are too unstable to function as money is like

being afraid that equilibrium is superior to death. When people see that
mining is more profitable than clothes-making, mining gains at the
expense of clothes-making, and when people see that clothes- making is

more profitable than mining, clothes- making gains at the expense of
mining. The use of a basket of commodities instead of only gold lends
even more equanimity to the equilibrium. But when fiat money is created

out of nothing,
 existing money holders are ripped off, and those that
get the new money first win.

The mechanism of inflating the money supply to provide credit for a
specific person or project is perfectly acceptable as long as it is

understood that all members of the population are "shareholders" in the
monetary system, and that in return for their dilution, all interest
payments go back to them, less a commission to the broker/bank that

arranged the loan. This happens naturally in a mutual credit exchange.
The current system of public risk, private profit, in contrast, is
contemptuous both of the unit of measure and of the population from whom

credit is created. This is why after the invention of electricity, the
gas engine, nuclear power, etc, purchasing power has only grown about 1%
per year -- the value is constantly siphoned off by the financial sector

and the government.

When you think you
 are giving your money to the bank for warehousing and
storage (demand deposit, in distinction to lending money to the bank),
they loan it out nine times. They say that if they did not do this, loan

rates would be much higher, and that they need to guarantee themselves a
return. The truth is that because there is no accountability back to the
people from whom the money was created, all nine loans may be reckless,

and likely include dictators-murderers. The fact that "demand deposit"
money is loaned out nine times makes it impossible for everyone to
withdraw their money at the same time. Needless to say, if all the loans

go bad, the "demand deposit" vanishes. In a mutual credit exchange,
demand deposits are identified as demand deposits, loans are identified
as loans, and never the twain shall meet.

Money and credit systems provide logistical convenience to the use of

real things as a unit of
 measure and to the exchange of credit. Removing
the laws that forbid competition with so called "central banks" is the
single most urgent issue facing the world today, because it

single-handedly removes the gun that currently enslaves the world in the
economics of violence. Indeed the term "central bank" is a misnomer of
both words. "Central" is an utterly misleading adjective referring to

space or geography - a functional adjective would be "monopoly". The
term "bank" of course connotes "treasury" which it is not - here "bank"
denotes loan broker. Therefore, I will conclude with three quotes and a

recommendation.

First, President Thomas Jefferson:

"If the American people ever allow private banks to control the issue of
their currency, first by inflation, then by deflation, the banks and the

corporations which grow up around them will deprive the people of all
property until their
 children wake up homeless on the continent their
fathers conquered."

Second, President James Garfield:

"Whoever controls the volume of money in any country is absolute master
of all industry and commerce... and when you realize that the entire
system is very easily controlled, one way or another, by a few powerful

men at the top, you will not have to be told how periods of inflation
and depression originate."

Third, economist Frederic Hayek: "The only way to save civilization will
be to deprive governments of the power over the supply of money."

To get out from under the gun - the economics of injustice, limitation,
pain, genocide, starvation, disease, and harm, both methods, the use of
mutual credit exchanges, and the repeal of monopoly paper laws, should

be pursued. If enough people use mutual credit exchanges, then monopoly
paper laws will be obsoleted to everyone's
 blessing - good money will
drive out bad. The time for good money is always right now !

http://www.thevoiceofeconomics.blogspot.com/

-- 
Work: http://en.wikipedia.org/wiki/Dhurakij_Pundit_University - Think thank:
http://www.asianforesightinstitute.org/index.php/eng/The-AFI

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