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The Relationship Between Money Systems, Time Perception and Sustainability

Posted on April 17, 2006
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Excerpted and adapted from pp.242-248 of The Future of Money, © Bernard Lietar

Monetary specialists and Greens alike typically see no connection between the money system and sustainability. What follows will show that this is a massive oversight. The gentlest way to acquaint ourselves with that connection is through a short fairy tale for my godchild:

The Man with the Near-Seeing Glasses
(Fairy tale for Kamir, Seven years old)

Once upon a time, in a very near place, there was a man who had been wearing glasses for so long that he even forgot he had them on. The main problem, however, was that his glasses, instead of correcting his vision, were making him so near-sighted that he couldn’t see anything further than his nose.

He would bump against everybody or everything because they would always suddenly appear to him without warning, when it was already too late to avoid the obstacle. He was getting worried enough about the problem that he finally went to consult a Scientist.

The Scientist listened to the problem carefully, then pulled out a very thick book on Optics filled with equations and diagrams. And he showed him that it was very normal to see better closer up than far away. He explained something about the number of light particles decreasing by the square of the distance from which he saw them. The Man with the Near-Seeing Glasses did not quite understand the explanation, but he was very relieved to hear that there was a scientific reason for his situation, which made it all very normal.

So he went on bumping against people, trees, even his own green front door and everything else which popped up suddenly as he was hitting them with his nose. After he hit a particularly hard red brick wall with his forehead, he began getting worried again and felt depressed about all the bumps he kept collecting. So he went to see a Psychiatrist.

The Psychiatrist told him to lie down on a big couch and started asking him a lot of questions… Then he told him that it was very normal that he was depressed, and asked him to come back every week for some in depth treatment about all that.

One day, much later, as the Man with the Near-Seeing Glasses came back from his appointment with the Psychiatrist more depressed than ever, he bumped against his little five-year old granddaughter who was waiting for him in front of his house. He was very happy to see her again, and they went into the house to play together.

As the little girl was playing horsy on her grandfather’s knees, she suddenly grabbed at the horse’s bridle and ripped off the Near-Seeing Glasses from her grandfather’s nose. Just as suddenly, the Man discovered that he could see much further than his nose after all! His granddaughter’s smiling face was clear. The green door he’d smashed into last week was clear. He even noticed that the red brick wall needed some repairs where he had hit his head. Seeing things beyond his own nose before bumping into them made a lot of sense after all.

We can now rephrase the relationship as follows: interest rates create a built-in tendency to disregard the future, to create a world-view with “near-seeing glasses.” Furthermore, the higher the interest rate, the more that tendency prevails.

We have already seen how interest rates are deeply woven into the very process of creating money in our prevailing money system. Understanding the relationship between interest rates and time perception will be accomplished in the three following steps:

1) Comprehend how capital allocation decisions are generally made through the financial technique of “discounted cash flow”;
2) Understand how such discounting of the future is one of the key underlying causes which create a direct conflict between financial criteria and ecological sustainability under our present monetary system;
3) See how the discount rate used in the discounted cash flow technique is directly affected by the interest rate of the currency used in the cash flow analysis

Discounted Cash Flow = ‘Discounting the Future’

“Discounted cash flow” is the financial technique generally used to decide on whether to invest in a given project, or to compare different projects. It is presented in full detail in any finance textbook.

What we need to understand about it here can be explained by a simple example. Let’s assume that a particular project requires a $1,000 investment today, and that it will produce a net profit of $100 each subsequent year for the next 15 years. Let’s further assume that there is no inflation during that period of time. Figure 8.3 shows what the real cash flow of that project would like: it starts with a negative - $1,000 when the cash outflow occurs today, and for each of the next 15 years we earn back $100.

Financial analysts, however, will see the project differently. (Figure 8.4) The project still requires a $1000 initial investment in year 0. But the income of $100 after the first year is worth only $91, assuming a flat interest rate of 10% per year for the entire duration of the project. (All values are rounded to the nearest dollar for illustration pursposes, since carrying a lot of decimals would not modify the argument presented)

We all “know” that money in the future is worth less than money today. How much less depends critically on the ‘discount rate’ applied to the project.

Our analyst knows that he could deposit $91 in a bank today at a 10% risk free rate of return, and automatically get $100 a year from now. Therefore the $100 a year from now is identical to $91 today. By the same reasoning, the second year’s $100 is only worth $83, the third’s $75, etc. By the tenth year, the $100 inflow only represents only $39 to him, and in the fifteenth year, a paltry $24.

So what looked like a perfectly reasonable investment – getting back $1,500 on a $1,000 investment – turns out to be a lackluster project when looked at through the Near-Seeing Glasses of the modern financial analyst.

If we projected this forward for a century, the last $100 would really be worth only seven cents. Two centuries out, we are looking at a few hundredths of a cent. No wonder that in our societies we do not usually think about the effect of our decisions on the future, let alone “for the seventh generation,” a process which would require us to take into account looking two centuries into the future…

There is nothing wrong with the financial analyst’s eyesight or his reasoning. He just applies the straightforward financial logic that he has been taught to a currency which has a positive interest rate.

Short-term Vision Versus Sustainability

As this same reasoning applies to all financially motivated investments, it collectively creates the well-known pressure by the financial system for short-term returns at the expense of any longer-term consideration – including long-term sustainability.

When a corporate executive complains that financial pressures force him to focus only on the next quarter’s results, he is the victim of the Near-Seeing Glasses. When the Chinese say they cannot afford cleaner energy production technologies, they are really saying the costs of the long-term future economic consequences discounted to today are negligible compared with the immediate cost savings made possible with the “dirty” technologies they are planning to use. When a homeowner decides it is too expensive to install solar panels for heating the household water, she is implicitly saying that the cost of purchasing electricity or gas from the grid in the long run discounted to today is cheaper than the initial capital outlay required. When we build a house on the cheap, without appropriate insulation, we are really making a trade-off between the higher heating costs in the future discounted to today and the higher construction costs.

Far Seeing Glasses

What happens when you reverse the way you look into binoculars? Suddenly, instead of bringing distant objects closer, it makes everything look far away.

In our metaphor of the Near-Seeing Glasses, positive interest rates are the feature of our current monetary system, which creates a generalized financial myopia, and makes the future appear less relevant. The higher the interest rates, the stronger the myopia. In other words, the result of positive interest rates is what happens when one looks through the wrong end of binoculars.

What would happen if we reversed the financial analyst’s glasses? Remember the demurrage charges mentioned at the end of the previous chapter? Demurrage was the brainchild of Silvio Gesell (1862-1930), and was most recently used as an anti-hoarding device for the stamp scrip currencies of the 1930’s. Gesell’s starting premise was that money is a kind of public service, like a bus ride. So a small fee is charged for the time that one hoards it.

From a financial perspective, a demurrage charge on money is mathematically equivalent to a negative interest rate. For reasons that will soon become clear, I will call this time-related charge a “sustainability fee.” Now, what would such a sustainability fee or demurrage charge do to the eyesight of our financial analyst?

The project described in Figure 8.3 would suddenly appear to him as described in Figure 8.5.

This is true not just due to the mechanical application of the equations of discounted cash flow. Even if it looks strange at first sight, even if it contradicts what we are used to with our normal currencies, it still makes perfect financial sense.

Let’s assume that I give you a choice between 100 units of an inflation-proof currency charged by a sustainability fee, either today, or a year from now. If you do not need the money for immediate consumption, and you are not worried about my creditworthiness over the next year, then you should logically prefer the money a year from now. Why? By receiving the money in a year’s time, you will not have to pay the sustainability fee for that year. In technical terms, discounted to today’s value, the 100 units will be more valuable a year from now than if you received them today. They will be worth 100 plus the sustainability fee.

When sustainability-fee-charged currencies are used, the future becomes more valuable with time, exactly the opposite of what happens with our normal, positive-interest rate currencies.

There remain two fundamental issues to be addressed:

How could such an idea be implemented? Who could take the initiative for such a new global currency system in the foreseeable future?

Is such an unorthodox money system sound? What would be its economic consequences?

Excerpted and adapted from pp.242-248 of The Future of Money, © Bernard Lietar

Related articles:
Alternatives to the Fiat Currency Regime
The Eleventh Round: The Roots of Consumerism

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41 Comments so far
  1. Bill McCormack April 17, 2006 3:12 pm

    For heavens sake! What a load of absolute drivel! The problem we have is not that people are saving too much it is that they are saving too little. Further are you only taxing money itselfi.e. the paper dollars. A savings account actually has no paper money attached to it. What about demurrage on all the other forms of wealth? What are we trying to do here? Bring back the great Socialist state?

    Essentially your whole premise is wrong. Higher interest rates make the future more valuable. The higher the interest rate the greater the tendency to postpone expenditure and the more sustainable our environment and financial system would be. The problem you outline with discounting is a problem of calculating costs and returns correctly.

    The effect of a demurrage would be to increase immediate expenditure so that you are not holding currency.

  2. ron April 17, 2006 5:32 pm

    The proposed Tobin tax (.5% tax on currency exchage) would function a little like this idea. In essence all taxes have something of this in them. The rest of the developped world pays for a greater portion of it’s services through taxation, ergo they get a greater effect.

    Obviously this would be distributed accross asset classes. One example of this system in the U.S. is property taxes. We could study the relative advantages/disadvantages among States that tax relatively higher on property. Some countries have 1% annual wealth taxes on high wealth individuals. This has the added benefit of wealth concentration deterence. Taxes of this nature can be used to offset reductions in taxation on the working poor, thus allowing for demand side economic growth. Not taxing wealth allows the economy to contract as wealth is concentrated among the wealthy due to the power of compounding. Eventually it must be redistributed through estate taxes or some such mechanism or the economy collapses. Our media is dominated by hyperventilating ideologues who try to deny this structural fact.

  3. qrswave April 17, 2006 9:52 pm

    Great post! Demurrage is a brilliant idea. I see you have one myopic response already!

    Very interesting comment, Ron.

    Besides being utterly unsustainable and inefficient, positive interest depends on exploitation to be collected, therefore it’s also morally reprehensible.

  4. cornhusker April 18, 2006 5:43 am
  5. DF April 18, 2006 6:03 am

    Hey I thought depression2 had died … Good to see there’s a new site.

  6. g April 18, 2006 10:14 am

    The size of a Gazelle population is proportional to the availability of need.

    More Water = More Grass = More Gazelles = More Cheetahs

    If grass and water decline and there are too many Gazelles to eat and drink what’s left, then the population declines.

    If the number of Gazelles decline, so do the Cheetahs.

    If money is future want, but buys present need, then too much money may create artificially large supplies of need, creating too many Gazelles to sustain.

    If increasing populations surpass natural need replenishment,

    over-consumption of present need can eliminate another’s future. (our children)

    The availability of more money at low interest rates creates need over-consumption

    Less money at higher rates destroys consumption.

    We are the cheetahs who eat gazelles who eat money.

    if the money supply declines, we will eat less.

  7. Rich April 18, 2006 1:14 pm

    Hey g, beautiful analysis, pure logic, I love it.

    Unfortunately not only do we have too many cheetahs and not enough gazelles, but we also have a lot of cheaters and too many sheep who follow them!

    Cheers Rich

  8. john edwards April 18, 2006 7:15 pm

    We already have a sustainability fee. It’s called inflation. Due to the policy followed by the Fed. and both Bush administrations we are about to have a Weimar sustainability fee. This is when your pension cheque would not buy the stamp on the envelope in which it was sent to you.
    Dismal John

  9. Marc Authier April 18, 2006 7:22 pm

    The ultimate truth about the bankers of the world is that their objective is to make of us: their slaves like in the ancient world. The result is that labour across the world is worth less and less. Not just precious metals have been depreciated. Working people that make real products and give real services have in general been eaten alive by inflation and stagnant wages. Meanwhile the beast of finance, the stockcrapper society, the paper shufflers have raped on and on the real economy to their own benefit. Buying real assets, paying creditors with more and more worthless paper, doing the same thing to the ordinary worker. That is the formula that is practised fromm Tokyo to Timboucto. Fiat money is a tool of enslavment and utimate tool of the crooks operating the central banks of the world. Money in 2006, is just a dirty word that means nothing. The system is based fundementally on worldwide counterfeiting. And the only people in this system that win, are the ones that sell you the counterfeit money and have access to the printing presses.

  10. the stranger April 18, 2006 8:03 pm

    Well, I looked up demurrage, and that didn’t help. I’m not sure I get it. My current frame of reference tells me the interest rate is governed by the propensity to save and the discount rate is governed by the propensity to consume.

    The former would be perhaps gold and silver and the latter as a bill backed by a commodity in immediate demand. Adam Smith’s Real Bills, as I understand them, were a self liquidating form of credit that tied up a fraction of the hard cash to propel goods through the system; thus providing increased liquidity without inflation.

    Real money is labor past, I think. It can be used for future want, current want, or lent for future gain. Gazelles and Cheetahs never left the proverbial garden, and neither did our Hunter/Gathering cousins. They didn’t save, so they couldn’t have wealth; defined as stored-forward-life. If you lend out your stored-forward-life, you risk losing it; so compensation would be interest. Or you could utilize the capital to be more productive, gaining more stored-forward-life.

    But those two scenarios still don’t consider a fractional reserve or fiat money. It’s always being discounted, if that was the goal. More is printed with no backing, it loses value. And that is a tax. Besides, interest rates that are lower than the real inflation already promote spending. Isn’t that what we have now? I guess I see the man with the near-seeing glasses, as walking around in our current system. Like walking through the House of Mirrors on LSD, but you can’t take off the glasses.

  11. Turk April 19, 2006 12:19 am

    The worlds bankers have been very slowly pushing the planet towards a total global digital currency since technology has advanced enough to make it possible. This would eliminate paper cash in your pocket. I argue on the side against change for the sake of change. In other words, just because we can do it doesn’t mean its a good idea. A little near sightedness doesn’t always hurt. If you think the worlds banks have almost total control of the population today, you ain’t seen nothing yet. As morally flawed as the worlds paper currency may be, (arguable), it still empowers even the least powerful to have the ability to stand on a corner and pan handle enough cash to survive another day. I can’t see where one could pan handle bits and kilobytes, but then I may be bumping my short sighted head against a wall.

  12. Rich April 19, 2006 5:43 am

    Obfuscation and plausible denialbility have replaced principles.

    We live in a controlled global economy with a world fiat currency, backed by the ability to get the masses to support an illusion.

    Simple really!

    Cheers Rich

  13. Administrator April 19, 2006 5:53 am

    The point of this post is simply to demonstrate that other monetary systems, operating under different rules, are possible.

    The current, positiveinterest rate regime is not a matter of natural law, in is a man-made artifact. For hundreds of years usury was outlawed by Judiasm, Islam and Christianity. Usury was taken to mean any way of taking advantage of a person unfairly - not simply a high rate of interest, but any rate of interest.

    Interest on saved capital encourages the hoarding of money, and is the automatic mechanism by which the rich get richer (without doing anything) and the poor get poorer (because money is not circulating, it is being hoarded).

    From the example above, we see that positive interest rates cause us to discount the value of the future: We value the present and put the future off for another day. Perhaps we’ll never live to see that day, or if we do, it will hopefully be someone else’s problem.

    As a result of doing this for the past 150 years (at least), we now find ourselves in the future that has always been discounted and never planned for. Many lament the fact that business has such a short-term finacnial focus, but this article argues that it is not the fault of the people, but the fault of the system in which we operate. People act rationally in the context of the system, and we are living in the results: Underfunded pensions, huge debts, global warming, and a crumbling infrastructure.

    Most business decisions today are made with horizons of five years or less, if not from quarter to quarter. Why is that so? It is the monetary system which forces such decisions - this is the spontaneous, rational response.

    However, in the “Age of Cathedrals” in Western Europe, (10th - 13th Century) the concept of demurrage was operational. Demurrage is a form of negative interest that discourages hoarding, and encourages people to circulate their money. Money is viewed as a public service, like electricity. Imagine if one person/company wanted to hoard all the electricity in the world instead of share it (oh wait, wasn’t that Enron?)

    Under the demurrage system in the “Age of Cathedrals”, people spontaneously created buildings and artforms that were designed to last forever. You can still go visit them today — hundreds of years later. Compare that to the cheapo, ticky-tac McMansions that builders are throwing up today — Build them fast and cheap as possible. These buildings will be lucky to last 50 years.

    These are the values we hold today, and they are rational within the context of our current fiat money/positive interest rate regime. But they are detrimental to our future survival and prosperity.

    There are other ways for humanity to organize itself, and there are better ways. If humanity is to survive, we had better start investigating them.

  14. John Roberts April 19, 2006 5:55 am

    Okay Rich (#12), excellent analysis of the problem. So what are you going to do about it?

  15. Nish April 19, 2006 8:35 am

    This would work if we got rid of a centralized money system. The whole point of discounting at a positive interest rate is due to the fact that money is worth less tomorrow than today, because the expectation is that someone will be printing more money tomorrow than today. We need to either eliminate that, or decentralize the economy and money system by creating new local currencies that people will believe in. Then communities will have to trade internally with the local currencies and externally with real physical goods and services. Then the idea of dehording money would work.

    So, what is the best investments for today and tomorrow to not necessarily get rich but protect purchacing power. Gold and Silver will work in the long / long run, but does anyone have other ideas.

  16. KTM April 19, 2006 9:22 am

    Ultimately wealth is simply control of the means of production. That’s why entrepreneurs start businesses and capitalists invest in businesses. Money is a convenient medium of exchange but it no more equals wealth than a photograph of a chocolate cake equals a delicious dessert.

    We now live in a society where most people believe the acquisition of money is more important than the creation of wealth. The majority no longer understands the basis of wealth, only the spending of money. Since our politicians will follow the votes and do the bidding of these banal hoards, it’s not surprising to me that we’re headed down a path that will lead to no good.

  17. g April 19, 2006 10:55 am

    here’s the whole thing, as of 04,06

    1. ‘Living things’ need food, water and a temperate climate.

    The size of a Gazelle population is usually proportional to available need.

    If more water and grass lead to more Gazelles, and Cheetahs need to drink water and eat Gazelles, then more Gazelles should lead to more Cheetahs.

    More Water = More Grass = More Gazelles = More Cheetahs

    If water and grass decline and there are too many Gazelles to eat and drink what’s left, then the Gazelle population declines.

    If the number of Gazelles decline, the Cheetahs population does too.

    2. If foragers consumed the closest food and water in the shortest time with the least risk, then they probably started hunting, which is harder, more dangerous and takes longer, when gathering became more difficult.

    3. Want is everything but present food, water and a temperate climate.

    If tools accumulated more needs faster, and more food and water led to more people, then hunting, agriculture, herding and migration began only after too many people needed to eat and drink declining supplies.

    Wants, like money, were exchangeable between those with different levels of surplus and deficit, like better food, tools, weapons, storage, people, clothes or protection for future use.

    If need is consumed in the present, then money represents want in the future.
    4. If one family has meat, and another is growing vegetables that aren’t ready yet, then the meat family may accept an ’I Owe yoU’ for some future vegetables, plus extra, in exchange for some present meat.
    If the veggie family buys a present need with a future IOU, then the IOU is money.
    If the veggie family has to repay the IOU with the current vegetable values plus extra, then they’re borrowing from what they may need in the future to acquire what they want in the present.

    The vegetable IOU is backed by the veggie family’s promise and ability to produce the meat family’s future wants.
    There is no certainty that an IOU for future vegetables will retain value.

    5. The meat family may exchange the vegetable IOU for an axe.
    The quality of axe offered to the meat family depends on the axe family’s perceived value of the vegetable IOU.
    As long as faith exists in the vegetable IOU’s worth, its value should remain relatively stable until delivery.

    The veggie family might have to promise even more extra vegetables if people think an over-abundantly large crop may reduce an individual vegetables’ value,
    which could make the meat family’s veggie IOU re-exchangeable for a lower quality axe.

    If enough people ‘think’ the veggie family made more IOU’s than vegetables, the axe family might not want to swap an axe for the meat family’s veggie IOU.

    If the veggie family’s elders don’t pay back all the vegetable IOU’s created for present want, their dependents may get less future need.
    6. Money is exchangeable for future want, like weapons, tools, nails, seed, salt, fishing hooks, animal skins, tobacco, ammunition, rope, clothes, or shelter.
    If money trades a future promise for present goods, then the consensus of future exchangeability determines money’s present value.
    If people think the quality of money decreased and more is needed for what was ‘less’ before, then more income is needed to maintain the same standard of living.

    7. As the human population grew to about 100 million in 500 BCE,
    non-perishable metals became widely accepted as money. Source: census.gov/ipc/www/worldhis, History of Technology, Singer, Holmyard and Hall

    The government of ancient Athens, with strong religious, military, tax and trade systems, minted coins of silver and gold.
    To maintain Peloponnesian war time spending levels, the Athenian government created more coins by decreasing the gold and silver content, eventually completely switching to copper. Source: lynncoins.com/money-history-episode2.htm#Athens
    Near the end of the war, as gold and silver ran low after paying soldiers and allies outside Greece, the increasingly copper based Athenian currency lost value.

    “Athenian money… defined a pattern which was to repeat in other empires which were to follow: dominance of trade; influx of gold to balance exports; public wealth; liberty; overconfidence; the discovery of loosely managed money as a stimulating solution to stagnation in an economy near its zenith; an ongoing success born of cultural momentum and monetary expansion… before finally the emptiness of the monetary promise was exposed, leading to rapid national collapse.”
    - Paul Tustain
    For 50 years after losing the war, Athenian citizens accepted government issued copper coins ‘directly’ redeemable for silver, until the states political and military dominance declined. Source: lynncoins.com/money-history-episode2.htm#Athens

    “Men keep agreements when it is to the advantage of neither to break them.”
    - Solon

    8. As the world’s population hit about 300 million around 64 CE, Roman Emperor Nero increased the quantity of money the government could spend by reducing the size and silver content of the empire’s coins to make more. Source: census.gov/ipc/www/worldhis

    Less silver per coin led sellers to ask for more coins from buyers.

    By the reign of Emperor Gallienus, (260-8), the silver content of Roman currency was less than 5% of 200 years before. Source: The Collapse of Complex Societies, Tainter 1

    “The decline of great powers is caused by simple economic over extension.”

    - Paul Kennedy, The Rise and Fall of the Great Powers

    9. Before and shortly after the American Revolution, when Earth’s population was about 900 million, English, Spanish, and French gold and silver coins were used for money in North America. Source: census.gov/ipc/www/worldhis

    In 1775, to help pay for war against England, the Continental Congress issued paper money, ‘backed’ by gold reserves and the ‘anticipation’ of tax revenues, which became virtually worthless after the treasury printed so much money,

    it lost its perceived value.

    “The Congress shall have Power to borrow Money on the credit of the United States; To coin Money, regulate the Value thereof, and of foreign Coin”
    - Article. I., Section 8, The Constitution of the United States

    10. The Coinage Act of 1792 mandated that $10, $5 and $2.50 pieces be made of gold, all dollars; four hundred and sixteen grains of silver, quarter dollars; one hundred and four; all dimes, forty-one; and all cents, eleven penny-weights of copper. Source: coins.about.com

    “…if any of the gold or silver coins which shall be struck or coined at the said mint shall be debased or made worse as to the proportion of the fine gold or fine silver therein contained, or shall be of less weight or value… every such officer or person who shall commit any or either of the said offenses, shall be deemed guilty of felony, and shall suffer death.”
    - Section 19, coinage act of 1792.

    11. As the US population grew over 31 million, the Legal Tender Act of 1862 authorized the use of US notes, direct issues by the US Treasury, to unify the nation’s currency during the Civil War. Source: Kansas City Federal Reserve, kc.frb.org, cdcga.org/HTMLs/decades/1860s
    Gold certificates, authorized and issued by the US Treasury in 1865, were directly exchangeable for gold coin and bullion. Source: Kansas City Federal Reserve, kc.frb.org
    In 1878, silver certificates were directly exchangeable for silver dollars, and accounted for almost all $1 notes in circulation.

    “In the absence of the gold standard,
    there is no way to protect savings from confiscation through inflation.
    There is no safe store of value.”

    - Alan Greenspan

    In 1933, President Roosevelt imposed a ban on US citizens’ buying, selling or owning gold after the supply of paper money declined more than 30%, decreasing the accessibility of present need. Source: Federal Reserve

    12. To stabilize international currency transactions after WWII, as the world’s population surpassed 2.4 billion, the US used its dominant economic and military position to negotiate the Bretton Woods agreements, which obligated participating countries to maintain fixed exchange rates within 1% of the US dollar, directly backed by gold, at $35 an ounce. Source: census.gov/ipc/www/worldhis

    Under the gold backed Bretten Woods system, countries were required to maintain exchange rates and were prohibited from ‘printing’ more money than was directly held in gold reserves by each nation.

    As the foundation of trade and denomination of debt between nations, the percieved strength of the US dollar effectively replaced the phisical delivery of precious metals in international financial transactions, increasing American economic power.

    13. In the late sixties and early seventies, to avoid directly taxing American citizens to pay for Vietnam and social benefit programs, the government used the dollar’s strength to indirectly tax anyone holding US currency by ‘printing’ increasing amounts of Federal Reserve Notes, over and above what was represented by metal reserves.

    Federal Reserve Notes were and are, like the ‘paper’ currency issued by every nation on Earth, as Gold and silver certificates were directly “payable to the bearer on demand…in coin,”

    Federal Reserve Notes are “legal tender for all debts, public and private,” and “In God we trust.”

    “The world supply of gold is insufficient to make the present system workable, particularly as the use of the dollar as a reserve currency is essential to create the required international liquidity to sustain world trade and growth.”
    - U.S. President Lyndon Baines Johnson

    “History teaches that wars begin
    when governments believe the price of aggression is cheap.

    - Ronald Reagan, Jan 16, 1984

    14. If a nation prints more paper money, like cutting a 16 inch pizza into 12 slices instead of eight, the twelve slices may end up perceived to be worth less.

    “The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost… By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so,the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services… under a paper-money system,a determined government can always generate higher spending and hence positive inflation.”
    - Ben Bernanke, Chairman of the Federal Reserve

    15. The more other countries accepted American dollars as a reserve currency, the more the US expanded international influence through foreign aid and military power paid for with increasing supplies of printed money.

    “In the United States neither paper currency nor deposits have value as commodities. Intrinsically, a dollar bill is just a piece of paper.
    Deposits are merely book entries.
    Coins do have some intrinsic value as metal,
    but generally far less than their face amount.”

    - Federal Reserve Bank of Chicago, Modern Money Mechanics

    16. The Coinage Act of 1965 authorized silver not be used for quarters and dimes and half-dollar silver content was reduced to 40% from 90%. Source: coins.about.com
    All silver certificate redemption in silver was stopped in 1968. Source: ronscurrency.com
    By the late 1960s, some foreign governments began exchanging US paper currency for their metal ‘equivalents’.

    “No generation has a right to contract debts greater than can be paid off during the course of its own existence.”
    - George Washington to James Madison 1789

    17. In 1971, the US Mint issued silver-less silver dollars.

    As the size of the Treasury Department’s prescious metal reserves fell to less than 25% of the governments ‘paper’ dollars in circulation, President Nixon stopped exchanging ‘paper’ dollars for gold and silver, rendering American money redeemable only for itself, ending the Bretton Woods agreements. Source:http://en.wikipedia.org/wiki/Bretton_Woods_system, Congressman Ron Paul, hermes-press.com

    “Currency cannot be redeemed, or exchanged, for Treasury gold
    or any other asset used as backing.

    The question of just what assets ‘back’ Federal Reserve notes
    has little but bookkeeping significance.”

    - Federal Reserve Bank of New York

    “All the perplexities, confusion and distresses in America arise not from defects in the Constitution or confederation, nor from want of honor or virtue, as much from downright ignorance of the nature of coin, credit, and circulation.”
    - John Adams in a letter to Thomas Jefferson

    18. In the 1970’s, after agreements to price oil exclusively in dollars, the US effectively converted the ‘backing’ of American currency from gold to oil, creating demand for increasing amounts of US money in exchange for political stability and military protection, preserving America’s dominance of the international currency reserve system. Sources: Congressman Ron Paul, Texas, February 15, 2006, US House of Representatives, Dr. Krassimir Petrov, The Iranian Oil Exchange Proposal, January, 13, 2006

    “All the perplexities, confusion and distress in America arise,
    not from the defects in the Constitution or confederation,
    not from want of honor or virtue,
    so much as from downright ignorance of the nature of coin, credit and circulation.”

    - John Quincy Adams, 1829

    The US buys discounted oil and foreign manufactured goods from increasing populations with growing supplies of newly ‘printed’ non-asset backed money, raising international circulation of US dollars and other monies, increasing economic growth, demand for more oil and more money from more people.

    “Modern monetary systems have a fiat base — literally money by decree — with depository institutions, acting as fiduciaries, creating obligations against themselves with the fiat base acting in part as reserves. The decree appears on the currency notes:
    ‘This note is legal tender for all debts, public and private.’

    The regional Federal Reserve banks are not government agencies. …but are independent, privately owned and locally controlled corporations.”

    - Federal Reserve Bank of St. Louis
    19. In August 1971, there were 744 billion US dollars and almost 208 million Americans among the worlds 3.7 billion people. Source: census.gov/ipc/www/worldpophttp, u-s-history.com/pages/h980, infoplease.com/yearbyyear.html, M3
    As privately held gold possession lost its significance, it was re-legalized in 1975.

    “There is no subtler, no surer means of overturning the existing basis of society
    than to debauch the currency. The process engages all the hidden forces of economic laws
    on the side of destruction,
    and does it in a manner which not one in a million is able to diagnose.”
    - John Mayard Keynes

    In 1982, the copper content of US pennies went from 95% copper and 5% zinc, to 97.5% zinc, and a 2.5% copper mix. Source: coins.about.com, frbatlanta.org
    In February 1996, there were 4.7 trillion US dollars and more than 265 million Americans among 5.7 billion people. Source: census.gov/ipc/www/worldpop, federalreserve.gov/releases, infoplease.com/year/1996

    …a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.”
    - Article. I., Section 8, The Constitution of the United States

    In February 2006, there were 10.298 trillion US dollars, about 300 million Americans and more than 6.5 billion people on Earth. Source: federalreserve.gov/releases, census.gov/ipc/www/worldpop

    “On March 23, 2006, the Board of Governors of the Federal Reserve System will cease publication of the M3 monetary aggregate.”
    US Federal Reserve announcement, November 10, 2005

    “It is well that the people of the nation do not understand our banking and monetary system, for if they did,

    I believe there would be a revolution before tomorrow morning.”

    - Henry Ford

    20. Between 1971 and 2006, the US money supply increased by 1,384%,
    the American population rose less than 31% and Earth’s population increased by 43%, or 2.8 billion.

    If the dollar’s value depended on the output of about 208 million people in 1971, and the population grew by 31% to about 300 million, then the dollar should have increased proportionately, from $744 billion to about $975 billion, to retain value.

    21. If a nation’s currency grows from $744 billion to 10.298 trillion without a corresponding increase in population, then some may have chosen to create more present want for themselves by borrowing form their children’s future need.

    22. If ‘everybody’ thinks the veggie family created more IOU’s than vegetables, the axe family might not want to swap an axe for the veggie IOU’s.
    If the veggie family’s elders don’t pay back all the IOU’s created to get present want, their dependents may have less need later.

    23. If water is money, and too much water artificially creates unsustainable supplies of grass, which begets more Gazelles and Cheetahs,
    and the money supply fell,
    there would be less grass, Gazelles and Cheetahs.

    Present need consumption can eliminate future want if the size of a population surpasses the supply of renewable needs.

  18. barter this April 19, 2006 12:45 pm

    Simply put we have no wealth.

    “MONEY”THE GREATEST HOAX ON EARTH

    ——————————————————————————–

    “Money” in the United States is: Make-believe “Dollars”; paper and ink records of numbers preceded by a dollar sign ($) in bookkeepin entries, accepted by the people as imaginary mediums of exchange, whose volume increases daily with official and individual conjurings; are seignioragge, credit, inflation, money, and totally intangible, cannot be sighted, heard, smelled, tasted, or touched, can exist in human thought only, and are shifted about by check and credit card to “settle by imagination” ninety five percent of all indebtedness.

    An Eyewitness To Counterfeiting

    In every nation in the history of the world, has it not always ended up a war between the ruling class and the people? The king wants more and more, and the people continually settle for less and less. In 20th century America, the bureaucracy reversed the roles of master and servant by absconding with the wealth — lawful money — and silently became that ruling class. The currency switch was one chimerical sleight-of-hand, the installation of slug coins another which was not so easy. Here is how it was done.

    In late 1959, National Rejectors of St. Louis, Missouri — the manufacturer of ninety-seven per cent of the coin acceptance devices in the United States — received an unannounced visit from several agents of the U.S. Treasury Department officiously flashing their badges and credentials. The company’s top inventor-designer was a brilliant New Yorker from Brooklyn by the name of Merrill Jenkins. The officers desired an interview with Mr. Jenkins regarding a subject that was normally kept under tight corporate security.

    “What techniques,” the government agents asked him, “might a counterfeiter use to deceive state-of-the-art coin acceptance machines?” Believing that he was helping to protect the interests of the United States Treasury and, therewith, the American people, Jenkins revealed over the course of the interview that the counterfeiter who could manufacture a copper slug sandwiched between two faces of nickel would have himself a coin costing between one and two cents (depending upon its size). The mechanical acceptors would then mistakenly read the coin as being made of the silver the machines were designed to receive.

    “But don’t worry about it,” Jenkins assured the officials. “We are talking about a complicated process. Only a very sophisticated syndicate with unlimited resources could turn out these coins in quantity.” Little did he realize that he was revealing secrets of national security to that very syndicate, the actual one with its eye on discovering the method of creating unlimited resources. “The counterfeiter the Treasury was pretending to guard against,” he later constantly told lecture audiences for the rest of his life, “was the Treasury Department itself.”

    When the Coinage Act of 1965 began turning those coins out in dime, quarter, half-dollar, and dollar denominations, the middle-aged inventor was shocked. Merrill Jenkins felt his confidence had been betrayed. Eventually, he quit the firm and began exploring the historical relationship of governments to money, and he spent the rest of his life writing books and speaking publicly in an attempt to help ordinary mortals comprehend the gravity of the situation. Strange to him at the time, no major publishing house would touch his writings, and he had to self-publish each piece as he could afford it. After his death in 1979, a handful of followers picked up his torch.

    At the time of Mr. Jenkin’s death, America had endured more than a decade of the infusion of fiat money. Both the coins and currency in circulation were irredeemable in gold or silver for the first time since the “Not worth a Continental” days of the 1780s. Predictably, the once great nation had plunged itself into the very kind of economic chaos the Constitution had been written to cure and prevent. Inflation began to creep like never before in their lifetimes, but the people swallowed all the economic propaganda without question.

    For years we have been warned by those who have been there: “Don’t try to explain the money issue to a jury. They just can’t get it in one short lesson.” Agreed. But if the “Paper Money” scheme seems tough to sort out, believe it that the coinage fraud is even tougher.

    Merrill Jenkins understood it better than anyone. After all, he lived the deception first hand. From his masterpiece, Money – The Greatest Hoax on Earth, from which there is an education on every page, we glean a tidbit:

    “If it were possible to educate the people, and if it were possible to go back to wealth media, the extraction of wealth would cease and our nation would resume its progress toward ever greater individual standards of living. That is why they outlawed gold and silver coins. This was our wealth media. That is why they melted our silver coins and sold our silver at auction. They don’t want us to use wealth media. If we use our wealth media, we own our wealth and the elected officials become servants of the people. The public would regain the power to direct the policies of their government.” Merrill Jenkins’ works are a “must” for the bookshelf of any monetary realist.

    Slaves to the masters, until there is a revolt.

    How about setting up a debit card account backed by gold. No money changes hands, yet all spending in backed by gold of equal value. Is this possible? What would the banks do I wonder?

  19. bp April 19, 2006 2:34 pm

    hm, debit card account backed by gold - sounds interesting, but there seems to be a lot of loose ends that would need to be worked out - can you go into more detail, say starting small like in a local community

  20. Loren April 19, 2006 3:10 pm

    I think that the cathedrals and such were build more by non wiling workers than by demurrage of the money. At the time that all those wonderful buildings were being built the average person (serf) lived in near total poverty.

    The problem with fake money is that the rules are not there. People can adapt to nearly any set of rules as long as they have some confidence they aren’t going to change. The problem with paper money isn’t the inflation or deflation, it’s that the future is up to a few privledged people who don’t necessarily care about fair play. You could get along fine with a 10% inflation rate or a 10% deflation rate, you’d just plan accordingly, but when inflation is 10% one year, 20% the next and -5% the year after it’s impossible to make any kind of rational plans.

    By the way, I’ve never seen an economic system where some of the players weren’t far and above better off than average. It just so happens that the average are better off in some systems than others. There will always be filthy rich and filthy poor. What we should be looking at is the system that does the best for the most. Cathedrals don’t feed or clothe the poor, now do they? Farms and Factories are what benefit most folks, and what system does the best at managing them?

  21. the stranger April 19, 2006 5:49 pm

    I found this, going backward in the blogs last night, at the end of that particular string. It’s on this page too, but it didn’t register until I read it by itself.  “Gesell’s starting premise was that money is a kind of public service, like a bus ride. So a small fee is charged for the time that one hoards it.” Two issues I see with the premise; “public service” and “hoard.”

    In that blog-past there is a considerable explanation about the coinage act, and the key here is that “the people” own the money. That is fundamental; the government was to regulate it, standardize it – it was not own it (or sell it to the Federal Reserve). Real money is barter, advanced barter perhaps, and money is just humans discovering that distilled-rare-earth was a superb commodity with which to barter. You can still use whiskey to barter (and I’m sure we do) but why do we think money would work better if it were owned by a third party, private or public? Personally, I think it’s because we’re analyzing a broken system. The more I comprehend of the US Constitution the more convinced I become that we’re not even using it – we just worship the document.

    And I have problem with the use of the term “hoard.” It has a derogatory connotation. If I raise cows and sell milk for a living, how do I save up milk for a new tractor? It’s perishable. Whiskey would be superior, gold even better. Saving is good, it takes discipline and foresight and the potential rewards can be life itself. But I can’t save – that would be hoarding. I expect to see the term “hoarding” a lot from 2006 forward. The term hoarding, used in this context, is a subversion of the concept of saving. Newspeak again…

    Well, those were my thoughts from last night. One new post mentions IOUs. But they carry risk unlike real money, where the transaction is complete. Another post said, “How about setting up a debit card account backed by gold.” Anglo Far East – your account backed in gold, silver, or oil; $20,000.00 minimum for the debit card (but hey, it exists). Goldmoney.com, you can keep your money in gold or silver, same account. No debit card though and it takes a day or two to transfer. (Btw – I noticed six weeks ago that the roughly $3500 in my checking would not be needed to pay bills for almost two months. I transferred it to my Goldmoney account -silver- and its $4500 today) And don’t forget Liberty Dollars; they’re a petition against the Fed and they’re inflation proof.

    Michael, your post seemed to (as it should) be pulling us back to the topic. I’m certainly no expert, but the more I assimilate from Anton Fekete, Adam Smith, and the Austrian school - the more I contemplate that many of the these principles may well be science or physics truisms (they just read like philosophy). Intellectual giants, such as Mises, didn’t invent them; rather they discovered and explained them. I find these various “laws” useful for all monetary thought. They tend to explain why it works or doesn’t. Electronic formulas work no matter who made the circuit board, and whether broken or not.

    But getting to the point… if my contention is valid, and I’m not smart enough to prove it, then money and monetary “laws” will reassert themselves spontaneously, and possibly soon. I think a blueprint for an alternative (new to us) monetary system already exists; we just have to blow the dust off.

  22. the stranger April 19, 2006 6:55 pm

    Money – The Greatest Hoax on Earth
    I gata check that out…

  23. barter this April 20, 2006 6:23 am

    bp
    Debit cards backed in gold rather than dollars. At the time of sale the card company sells gold from your account for cash up to the point at which it covers the transaction. If a certain company seems to be getting a lot of transactions from card customers, the card company alerts them of this and inquires if they would like to open an account. The store opening the account reduces fees paid by the card holders and opens the door for gold denominated transactions.

  24. ron April 20, 2006 1:55 pm

    Inflation harms those who can’t anticipate it, it benefits those who are able to plan for it. Imagine being in the know as to the Bush administration’s brinksmanship threats.You could make endless fortunes on oil futures etc… Demurage may be more fair(less corrupt)than inflating the dollar.

  25. the stranger April 20, 2006 4:36 pm

    You can’t properly anticipate what you can’t measure. Inflation is morally wrong and this current system is unlawful by constitutional standards. And it’s the time element that makes it so difficult to discern. All of us at this site should be able to see what is going on with inflation - right now. But most will not. Some may be medical doctors or other professionals; they aren’t stupid because they don’t study this. It’s unfair and it’s wrong.

    And why are we letting the government send our brave youth off to war? Congress did not declare a war? It’s illegal on its face. The young soldiers don’t study politics (most young people don’t) they trust us for that. We let em’ down.

    All checks and balances provided for in the constitution has been summarily bypassed, nullified, or otherwise rejected. And it was all made possible by the destruction of lawful money. Look around you, mutated forms of socialism. Everything we’ve ever known. The real set was taken down before we got here. And it’s not too bad, is it? But this is the good stage – it never was sustainable. I swear, at least the Russians knew they were fed bull. Americans make better communists than Russians ever did. We traded freedom for a temporary paradise while nationalism supplants patriotism. Scares me to death. How are we going to dismantle this thing? And it was all made possible with the destruction of lawful money.

    After reading “The Constitution of No Authority” by Lysander Spooner twenty years ago, I had no problem viewing the founding oligarchs as people. But during my tax rebel days and ever since, trying to find mistakes in the constitution (because I know they’re there) have been all but an exercise in futility.

    Reading Rothbard or Fekete isn’t easy; it’s dry at times and I feel like an idiot trying to envisage one more concept. Hell, I get excited when I see a new analogy. Gazelles? Cool. Then I read it and think “what?” …what did I miss? Money is future want? I don’t get it. 22 long rifle hollow points are money. Deal me in.

    Of course I was just as wrong when I countered “Real money is labor past” because I conveniently left out clear cut forests, slaves, and oil. But I had to think of something quick …drive me crazy with a statement like that. Oh man, I just going to write one sentence – I spilled words all over the place.

  26. Robert Sczech April 20, 2006 8:05 pm

    The great advantage of our present fiat Dollar system is that it allows a great number of Americans to enjoy a standard of life which could not possibly be sustained under any other monetary system. Unfortunately, as many people have pointed out in previous posts, our fractional reserve system where money = debt is not sustainable. The party can not last forever, that’s for sure. However, considering the alternatives, I suggest we should all pray that the party lasts as long as possible. Whatever comes afterwards will be very unpleasent.

    Ultimately money does not matter. What matters is the productivity of the economy. We need money and politics in order to distribute the produced wealth of the country. Any emphasis on sound money is always aiming at the economic interest of individuals at the expense of the rest of society. Fiat inflation is largely the result of diminuishing natural resources - the consequence of a booming population. It is no accident that the gold standard was abandoned at a time when the growth rate of the world population could not be matched anymore by the rate at which gold could be mined.

  27. Kentar April 20, 2006 9:39 pm

    Imagine that you wake up tomorrow morning to the sound of someone knocking on your door. You rub your eyes as you walk to the door. You open the door to the Publisher’s Clearinghouse Prize Patrol. They have a larger than life check with your name on it for $10 Million. All of a sudden, you’re rich! You do a spastic dance in the front yard, not caring that everyone in the neighborhood is watching. You start daydreaming, thinking about all the things you’re going to do with the money. You always wanted a big fishing boat and you know where you can get a really nice 40 foot yacht for just $1 Million. You won’t have to work now, just play. As you’re thinking about other things to buy, you wave goodbye to the Prize Patrol. They go over to their van and pull out an equally big check and walk across the street to your neighbor, almost getting run over by a couple of cars speeding down the street. They give the check to the neighbor who goes through the same hysteria that you just did. They wave goodbye and pull out another check from their van. Curious, you go out to find out what is going on. They tell you that they’re giving $10 Million to every family in America. When you ask where the money came from, they tell you that the Federal Reserve is funding it. This is much classier than using helicopters.

    Looking up the street, you see dumbfounded people on their porches holding onto larger than life checks. All of a sudden, you realize that you’re not special anymore. There still may be time left to get something out of that money. After all, they may have started the giveaway on your street. The rest of the world may not know about Uncle Ben’s gift.

    You throw on some clothes, jump into your car, and race for the bank. When you get there, the line is hundreds of people long. The checks are too big to fit in the ATM and the bank isn’t open yet. Rather than wait in line, you decide to go to the boat dealer. Maybe you can trade this check for a larger than life $10 Million yacht.

    When you get there, the manager has just arrived, but there are also a dozen other people there (with big checks.) The manager doesn’t know about the Prize Patrol, but he sees these checks and realizes he doesn’t have enough luxury inventory to satisfy these people. Drooling, he starts his sales pitch. Several more cars pull up. One guy blurts out that he’ll buy the 40 footer right now for the asking price. As the manager turns to close the deal with a handshake, another guy says he’ll give $1.5 Million for the same boat. Panic sets in and the bidding quickly escalates to $10 Million. Everyone there (including you) will gladly exchange their large $10 Million paper check for this $1 Million yacht. At that point, one of the men says that he won’t be greedy and will settle for the 30′ yacht (listed at $500K) in exchange for his check. Meanwhile, more people are arriving at the store. The panic sets in again and in a short time, people are willing to trade their check for a $1,000 used personal water craft. After all, isn’t it better to get something while you still can?

    You stop yourself from getting caught up in the frenzy and realize that everything is going to be more expensive. Shoot, the breakfast special at Denny’s will probably cost $1,000. You’re going to need this check, just to be average. Without it, you’re at a huge disadvantage.

    All your savings, your checking account, your retirement, your 401(k) is for the exact same dollar amount that it was yesterday. Yesterday, your total savings made you feel comfortable about the future. What about now that you have so much more? Will you continue to work for your current hourly wage? Do you think anyone will?

    My grandmother lived through the hyperinflationary Weimar Republic in Germany. She said that just before the collapse, she was able to buy a pair of shoe laces with what was a month’s wages just a few hours earlier. People couldn’t cart enough money around and the printing presses couldn’t add enough zeroes. In the end, zero was all it was worth.

    Kentar

  28. qrswave April 21, 2006 12:02 pm

    Very creative illustration, kentar!

    All this talk about time and relativity reminds me of something I wrote earlier: Time is Money; Or, is it?

    I’m beginning to think Einstein was a huckster. His theory on relativity laid the groundwork for every hoax imaginable.

  29. the stranger April 21, 2006 4:31 pm

    - that was interesting; and some other great stuff at the truth will set you free. I’ve been reading and re-reading Alternatives to the Fiat Currency Regime - qrswave, m_astera, rich, barter, ect; informative comments…

  30. khill April 21, 2006 7:02 pm

    Money doesn’t matter in a world facing first Peak Oil,then Peak Food and then Peak Water does it?Maybe the false wealth and rolling bubbles have bought the world some time and given us a better chance to survive.Knowledge is growing exponentially and hopefully a technological answer will come to bail us out of disaster.What if the fraud,alchemy and imbalances of our debt based economies are exposed to the masses and the system collapses and everyone buys gold?How does that help?Will the truth set us free or will it kill us?I would like to hold off collapse,choas and carnage as long as possible if you don’t mind.Long live the debt bubble and may the U.S. dollar die slowly!

  31. qrswave April 21, 2006 8:22 pm

    khill,

    Everyone dies, eventually. It’s how you’ve lived that counts.

  32. Rich April 22, 2006 6:22 am

    I’m calling it “Peak Humanity.”

    Cheers Rich

  33. the stranger April 22, 2006 9:46 am

    I’m teaching my fourteen year old, “everyone dies, eventually - it’s how you’ve lived that counts,” but I also want to get him to the other side. Over at cryptogon, our fellow wordsmith effectively just said, “screw the discussion group - can you slaughter a pig?” Peak oil is peak-food, peak-water, peak-electricity, etc. Sure, call it peak-humanity; or even peak-magic? When I’m reading the daily blues, I can’t help picture Mad Max shoving Tupperware under twisted wreckage for a few drops of gas.
    And I don’t really envision Costner’s “Postman” bringing Smith’s real-bills to a future dark-age, I’m just looking for navigational clues. In the big pic, money doesn’t matter really, it’s just the means to augment trade. And I think you’re right khill, gold isn’t much use except maybe for paying off debt or buying property (if you’re selling into it and if that would even matter). When this or some piece of this is exposed to the masses, or understood by the masses, I think the truth could kill us. "may the U.S. dollar die slowly" - that’s what I’m hoping for too.

  34. barter this April 22, 2006 11:37 am

    We in our family recycle as much as possible.
    Examples: We buy 95% of our clothes from the local thrift stores.
    My husband knows how to work on all of our automobiles(all pre-80’s)
    ,lawn mowers,tillers, etc…
    We buy cheeply and effeciently.
    We have country TV, no cable and slow dialup.
    We own NO credit cards, morgage is paid off.
    We barter and trade for lots of stuff.
    We are starting to grow our garden this year. So canning and freezing are coming up.
    We eat deer meat, and raise chickens.
    We are stocking up on water and extra food, just incase…
    Not self-sufficent yet, bet well on our way. Looking into a different form of electricity system… on the cheep, any ideas?
    So unless we are just sucked down the tube, we will not be hurting too bad when the bottom falls out.

    I know this is off the course of the conversation, but I feel if we were to ALL take responsibility in and for our lives WE would not be in the shape we are in.

    I learned in the 7th grade at school that the Spanish Concesstidors??came to America for three things…GOLD, GREED and GLORY. Things haven’t changed in the last 500 years have they?

  35. qrswave April 22, 2006 12:31 pm

    barter, I applaud and admire you. I wish I could get out of the city and do the same.

    But, so many do not have this option. For most, a real and dangerous crisis will descend upon them if something’s not done to stop this monetary madness.

  36. bp April 22, 2006 4:07 pm

    hm, seems we are all feeling similar about this stuff - what’s sad is that I’ve seen people under stress and that is where their character really shows - you just don’t know people until they are up against the wall

    I too think that it is how you live that is important, learning to cooperate and trust in this country is getting difficult - I know my relatives tell me my grandfather lost $10,000 when the banks went down in the depression; and I know others whose parents lost money in stock because the stockbrocker cheated them when the stock market crashed - so i’m thinking knowing who to trust and cooperate with is going to be important - again character

  37. Rich April 23, 2006 9:06 am

    Hey Michael.

    Totally off subject, but what about this for a debate?

    Bernanke is the worlds foremost expert on the Great Depression, that’s a fact. So why is he the new Fed Chair?

    Either his job is to avoid a Second Great Depression, or to engineer it. Which is it??

    Most of us here have reached the conclusion that there is going to be a depression, and we’re not rocket scientists.

    So what is going on here?

    Does the establishment fear another depression, or are they engineering it?

    What can we see that would suggest one theory over another?

    Cheers Rich

  38. Robert Sczech April 23, 2006 10:59 am

    Rich: the depression can not be avoided. The job of Bernanke is to delay the inevitable only.

  39. the stranger April 23, 2006 1:40 pm

    …the depression can’t be avoided? Bernanke thinks so. Extremely relevant questions Rich, right to the heart-of-the-matter. I’ll stop; I tangent enough.

  40. qrswave April 23, 2006 6:25 pm

    Bernanke wasn’t hired to engineer it, Greenspan and his banking buddies did that. Neither was he hired to avoid it, because as Robert points out, that’s impossible.

    He was hired to STEER it so that the world’s BIGGEST bankers - the ones he’s accountable to - BENEFIT from it.

    Money never disappears during depressions - it’s just redistributed. They want to make sure they are on the receiving end.

    They’ve given the IMF more powers to make sure it happens and they are backed by private standing armies should anyone resist.

  41. Michael Nystrom April 23, 2006 8:40 pm

    Thank you all - I’ve got to close up this thread. The spammers have been vicious in their attacks. I’ve opened a new thread, and the current discussion should port over nicely:

    Is America a Democracy? The poll numbers from this site overwhelmingly say no…

    http://www.bullnotbull.com/blog/?p=53

    Michael

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