Tag Archives: monetary reform

Ideas 3.1 (The Chicago Plan / video)

  By Mystic | October 27, 2012 - 01:49 | , ,
21 Comments

Ideas, so far.
Recessions are when business plans go wrong.
Depressions (and `Great Recessions) are when the people will not take on more debt.
To get the people to take on more debt, they must first shed some of the old debt (deleverage).
This can be `managed` into a beautiful deleveraging by three things happening in balance -
1. Writing down of the value of the debts.
2. Slowly paying off those debts.
3. Inflating the debts away.
Note that none of these are `quick fixes`~!

Austerity makes it harder for debts to be paid.
Government deficits make it easier for debts to be paid.
Quantitative Easing helps to gain time … that is all.

It is then up to the people concerned, to use that time to get the deleveraging done.

All of this, is to get us to a place, where we can `start all over again`.
Some people have put forward ideas, whereby it may be possible to avoid this ever repeating cycle.
(but old farty fuddydudds are in charge, so probably nothing much will change)

08:21 min.

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A Solution to Our Broken Economy

  By Gary S | October 6, 2011 - 18:23 | ,
10 Comments

Mystic encouraged me to post this so I’m going to “Give it a Go”

A Resource Based Economy – A New Idea    (on this website at least)

The Idea of a Resource Based Economy (RBE) has been around for several years but has become more popular since being promoted by the Zeitgeist Movement starting around 3 years ago. For those of you not familiar with the Zeitgeist Movement (ZM), there are many websites referring to it and promoting it on the internet.

As can be read on ZM’s global website – TheZeitgeistMovement.com

The world today has become very detached from the physical world, with techniques of production and distribution that have no relationship to the environment. Our use of a profit based, “growth” driven monetary system has become one of the greatest destroyers of the natural world and sustainable human values. It is important to understand that the entire global economy requires “cyclical consumption” to operate, which means that money must constantly be circulating. Thus, new goods and services must be constantly introduced regardless of the state of the environment and actual human necessity. This “perpetual” approach has a fatal flaw, for resources as we know it are simply not infinite. Resources are finite and the Earth is essentially a closed system.

 As with anything new, there are those who are opposed to a RBE. Personally, I agree with most of what ZM is advocating. No system is perfect, least of all the one we are currently living under.

Looking around the globe, it is easy to see that Capitalism, Socialism, Communism, or any other “ism” does not work. They are all based on the monetary system. We need to get rid of the old antiquated monetary system and start fresh with a totally new and modern system built around a RBE. Once again, as can be read directly from the ZM global website – A Resource-Based Economy utilizes existing resources rather than money, and provides an equitable method of distribution in the most humane and efficient manner for the entire population. It is a system in which all natural, man-made, machine-made, and synthetic resources would be available without the use of money, credits, barter, or any other form of symbolic exchange. A Resource-Based Economy would utilize existing resources from the land and sea, and the means of production, such as physical equipment and industrial plants, to enhance the lives of the total population. In an economy based on resources, conservation and the most advanced methods of science and technology, we could easily produce all of the necessities of life and provide a high standard of living for all. To do this, we have to overcome our current, outdated, established practices. This is the purpose of The Zeitgeist Movement- to create a global awareness to thus transition into a new, sustainable direction for humanity as a whole.

Since the beginning of the technological era, there is a trend that has been developing, and it is starting to have a profound impact on the current economic system. This trend has been termed ‘technological unemployment’ and is the rapid destruction of jobs by machines, robots, ATMs, etc. Currently, the monetary system relies on people to have jobs to earn a living, but also encourages employers to seek ways of reducing labour costs in order to boost profits. As a result of this, many jobs are gradually being eliminated by machinery or shipped overseas. By doing away with employees, companies are able to maximize profit, but if unemployed consumers aren’t making money, then who is buying the products? So if the natural tendency is to replace humans with machines then we should not fight it, but promote it, to the point where no one needs to work for a living. The RBE embraces modern technology and uses it to free people from having to work to survive. Not having to worry about finding or keeping a job would relieve a lot of stress, and we know how much stress affects one’s mental and physical health.

A video explaining how a Resource Based Economy works…..

http://www.youtube.com/watch?v=pxr51DrzdrE&feature=related

 

 

Who will it be~?

  By Mystic | October 5, 2011 - 11:27 |
6 Comments

I think `the economy` (if it really exists), is something that no one has ever understood….
….and it did not matter, after all, everything was going well enough and if things did seem to go wrong…….well, someone did something and it all turned out well enough.
Now, so many things are going wrong, that it is rather more important to find the people who may know what is wrong.
It won’t be one person. It won’t be a group of people (because no one knows enough to know which people to make up the group).
It won’t be `the normal suspects`……that is for sure.
Who will it be~?
I suspect that no one will ever be found, but `the normal suspects` will go on playing.
The problem is, that now, their playing is not neutral…It may be a matter of life and death.
[audio:http://overthepeak.com/wordpress/wp-content/uploads/2011/10/Wed5Oct-111.mp3|titles=Wed5Oct '11(1)]
[audio:http://overthepeak.com/wordpress/wp-content/uploads/2011/10/Wed5Oct-112.mp3|titles=Wed5Oct '11(2)]
19:30 min.

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#4 Social Credit – The Canadian Movement and the Michael Journal

  By Richard from Canada | August 19, 2011 - 13:22 | , ,
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Please find below the link to the Canadian site which had me reading alot on this Social Credit Movement.  I think you will find this movement in Canada has some surprising catholic religious links but the material really does  focus on the social, economic and political aspects of this movement so try not to be turned off by the site before you read a few of the key chapters of the book entitled “In This Age of Plenty”.    Here is the link

http://www.michaeljournal.org/plenty.htm

My key take aways.

They believe that a gold standard cannot work in this age of plenty, which I think we would all agree with on OTP ?  That’s not to say gold is not a great store of value ! 

They believe in horizontal and vertical money, but they call it private and public.  These guys therefore sound pretty MMT to me !

They believe that a dividend should be paid to every person out of the public funds, as opposed to the government spending the money into existence.  That makes these guys pretty libertarian.  I think most governments would like to determine how to spend the money into existence because spending money into existence is the power of being a politician and a government.

http://www.michaeljournal.org/noparty.htm

 All cartoons by Jude Potvin (VD)

http://michaeljournal.org/gallery.htm

#2 Social Credit – Money Creation, Private/Public Banking and Interest Rates

  By Richard from Canada | August 3, 2011 - 03:15 | , ,
5 Comments

 

It is interesting how the topic of horizontal and vertical money came into the discussions around the last post.  You will quickly see that the social credit movement really looked at things that way too…but called it public and private banking.  In fact is Quantative Easing (QE) not just a form of public banking ?  I think it would be if the US Federal Reserve were owned by the US Government (public bank)  instead of being a private bank.   However I think it does still qualify as a public bank in that “the U.S. Government receives all of the system’s annual profits, after a statutory dividend of 6% on member banks’ capital investment is paid, and an account surplus is maintained. In 2010, the Federal Reserve made a profit of $82 billion and transferred $79 billion to the U.S. Treasury.[16]“  (from http://en.wikipedia.org/wiki/Federal_Reserve_System)

What I offer below is based upon the Social Credit movement in Canada founded in the 1930s and who today continue to maintain an interesting web site.   I will share that location at a later date.

Remember when reading the quotes below that the Bank of Canada is owned by the Government of Canada thus making it a public bank and capable of horizontal money creation.

The creation of money

“One of the most pervasive myths about the government deficit is that governments which spend more than they receive in revenue must borrow the difference, thus increasing the public debt.”

“In fact, a government can choose to create the needed additional money instead of borrowing it from the banks, the public, or foreigners.”

“Business and the conservatives in politics and the media are horrified by the suggestion that the government exercise its right to create more money. They claim it would precipitate another ruinous bout of inflation.”

“But money creation is money creation — whether by a private bank or the Bank of Canada. And a government in debt only to the government’s own bank is not really in debt at all. If it wants to go through the rigamarole of having the Treasury «borrow» from the central bank and later pay interest, that is a minor matter of bookkeeping. As long as the central bank’s profits are returned to the Treasury, the results are much the same as if the Treasury had created the money itself.

During the war, and for 30 years afterward, the government could borrow what it needed at low rates of interest, because the government’s own bank produced up to half of all the new money.   That forced the private banks to keep their interest rates low, too.

“Since the mid-1970s, however, the Bank of Canada, with government consent, has been creating less and less of the new money, while letting the private banks create more and more. Today «our» bank creates a mere 2% of each year’s new money supply, while allowing the private banks to gouge the government — and of course you and me, as well — with outrageously high interest rates. And it is these extortionate interest charges that are the principal cause of the rapid escalation of the national debt. ”

“(Now read 1996 based upon this web site) the Bank of Canada has decided that any government spending not financed by taxation is inflationary, so it no longer extends credit to the government by holding bonds and Treasury bills. Its small holdings of government debt are confined to the banknotes needed by the economy for currency in circulation…”

 Interest rates and inflation

“Thousands of years of sad experience with the concentration of wealth and debt slavery caused all the ancient books of wisdom — including the Bible and the Koran — to condemn the charging of immoderate rates of interest.(…) The conventional wisdom, however, is that inflation is the greatest threat to the economy and must be restrained by raising interest rates. This flies in the face of the common-sense observation that rising prices (inflation) are caused by rising costs, and that interest rates are costs. So raising them will raise prices, not lower them.

So that is my current social credit review for today.  The observation that higher interest rates actually add to the cost of goods and is therefore inflationary is rather interesting concept that needs to be validated ?  Also does this not make QE a form of public banking  and is public banking not therefore part of MMT ?