Beyond Money

It seems that everything the government does to fix the economy only makes matters worse. Why? Because they are trying to sustain a moribund system of money, banking, and finance. The recent passage of a “financial reform” measure by Congress, while hailed as a measure to prevent a recurrence of the abuses of the recent past, will do nothing of the kind. In fact, it will enable them to continue and will further strengthen the huge financial institutions that have been robbing the American people.

Peter Schiff has a better understanding of the situation than most financial pundits. While even he does not seem to get quite to the root of what ails our economy and our society, his insights go deeper than most.  He offers three reasons why the new law will fail do achieve its stated purpose:

1. The bill doesn’t get to the root causes of the crisis.

2. The law fails to end ‘Too Big to Fail.’

3. More regulation means higher costs for smaller financial services firms, reducing competition.

He explains this in this brief video.

I have pointed out in my books and writings that the very nature of the money creation process is at fault. The creation of money by banks on the basis of interest-bearing debt creates a “debt imperative,” which in turn creates an economic “growth imperative.” Since the physical limits to growth have been reached on planet Earth, this money system cannot be sustained, yet every action by the governments of the developed nations attempts to do just that.

The crisis will continue to deepen until people create parallel decentralized systems of exchange (money) and finance that enhance the vitality of their communities and local economies. –t.h.g.

Reuters reports:

Increased housing commitments swelled U.S. taxpayers’ total support for the financial system by $700 billion in the past year to around $3.7 trillion, a government watchdog said on Wednesday. The Special Inspector General for the Troubled Asset Relief Program said the increase was due largely to the government’s pledges to supply capital to Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) and to guarantee more mortgages to the support the housing market. Increased guarantees for loans backed by the Federal Housing Administration, the Government National Mortgage Association and the Veterans administration increased the government’s commitments by $512.4 billion alone in the year to June 30, according to the report. “Indeed, the current outstanding balance of overall Federal support for the nation’s financial system…has actually increased more than 23% over the past year, from approximately $3.0 trillion to $3.7 trillion — the equivalent of a fully deployed TARP program — largely without congressional action, even as the banking crisis has, by most measures, abated from its most acute phases,” the TARP inspector general, Neil Barofsky, wrote in the report. The total includes Federal Reserve programs and a myriad of asset guarantees, including Federal Deposit Insurance Corp. protection for bank deposits. The increased government commitments more than offset about a $300 billion decline in the U.S. Treasury’s TARP commitments in the past year as programs have closed and banks have repaid taxpayer funds….  More…

Here is the first segment of a video series that provides an excellent description of our current predicament and the system that dominates our lives. The series contains 6 lessons divided into 12 segments and pretty well explains many of the points that I’ve been trying get across about the money system and the power structure. It dispels the myth that ours is a government by the people and for the people. In reality, we, and all our governmental entities are in a state of debt bondage. Who are we in bondage to? Watch it and find out.

The author’s solutions, which are presented in Lesson 6, are well intended and in the right direction, but he seems to have a mistaken notion that sovereignty resides in the national government. I take issue with his advocacy of the “greenback solution” (http://beyondmoney.net/resource-links/take-back-the-money-power/), but aside from that, I’m in close agreement with everything he says.

This series takes about 2 hours to watch, but if you don’t have time to watch it all, or if you are already somewhat knowledgeable about these matters you should watch at least Lessons 1 and 6.

I’ve added a link to Renaissance 2.0 under Recommended Sites.

I hope everyone will watch this series and spread the word to your networks.–t.h.g.

I’ve added a new monograph on the subject of demurrage to this site. You’ll find it in the sidebar to the right under Resources: Monographs: Demurrage: is it a good idea for a local currency or exchange system?

As cashless exchange becomes an ever more significant portion of total transactions in the economy, the regulatory issue will become a greater concern. It is important that trade exchanges NOT be perceived as issuers of credit, so as to avoid running afoul of banking regulations and possible tax liabilities. Everything that trade exchanges do needs to support the position that the role they play is that of “third-party record-keepers” and that it is the members themselves who provide credit to one another.

Paul Suplizio, former Executive Director of the International reciprocal Trade Association (IRTA), has expressed it this way:

“This means members with positive balances are the issuers of credit and the exchange has only administrative powers, delegated by the members, to regulate credit extension.”

It can be argued that the credit clearing process is simply one of generalizing (collectivizing) the longstanding practice of businesses transacting trades with one another on “open-account,” i.e., selling to one another on credit and allowing some period of time in which to pay.

It has properly been a cornerstone of the trade exchange business that there is no interest charged on negative account balances and no interest paid on positive balances. Therefore it cannot be argued that trade exchanges are acting as banks or lenders of money.

Here’s an inspiring talk by Cameron Herold on ways to become more self-reliant and less dependent on government programs. Couple that with sharing, cooperation, and community organizing and maybe we have a formula for creating the “butterfly economy.” — t.h.g.

Global Research provides some interesting facts that make it clear that we are at the end of an era in economics, finance, and the industrial economy.

The article, Desperate Financial Situation, Biggest Debt Bubble in World History: Fifty Statistics About The U.S. Economy, begins with the statement

Most Americans know that the U.S. economy is in bad shape, but what most Americans don’t know is how truly desperate the financial situation of the United States really is.  The truth is that what we are experiencing is not simply a “downturn” or a “recession”.  What we are witnessing is the beginning of the end for the greatest economic machine that the world has ever seen.  Our greed and our debt are literally eating our economy alive.  Total government, corporate and personal debt has now reached 360 percent of GDP, which is far higher than it ever reached during the Great Depression era.  We have nearly totally dismantled our once colossal manufacturing base, we have shipped millions upon millions of middle class jobs overseas, we have lived far beyond our means for decades and we have created the biggest debt bubble in the history of the world.  A great day of financial reckoning is fast approaching, and the vast majority of Americans are totally oblivious.

I should add that billionaire financier George Soros has projected that total U.S. debt will soon reach 500% of GDP. Governments are not going to fix the problem. It is time for people to look to their own resources and creativity and begin organizing in their communities to assure their survival and thrival as we make the transition to a steady-state economy and a more equitable, harmonious society.

This video with Dan Pink summarizes recent behavioral research that blasts the myth of homo economicus totally away. Once basic needs are met, what motivates people in performing complex cognitive tasks is NOT more pay, but autonomy, mastery, and purpose. Watch it. – t.h.g.

Wow! Here’s an amazing video by Jeremy Rifkin in which he sketches the evolution of human civilization and posits a vision of a world in which empathy has become the dominant motivating force and human unity is the global reality.

It is obvious to me that our individual identities need to go beyond traditional tribal, religious, and national boundaries to embrace the entire web of life. –t.h.g.

This video by Peter Schiff gives a pretty good explanation of the parallels between Greece’s current dilemma and the  disaster that will eventually overtake Americans.

Unfortunately, neither Schiff nor anyone else in the financial spotlight is talking about the only real solution, which is to end the debt imperative and the growth imperative by taking usury/interest out of the money system. It needs to be recognized that the entire system of global money, banking, and finance is bankrupt and cannot be sustained. I wrote about that more than twenty years ago in my first book, Money and Debt: A Solution to the Global Crisis which can be downloaded for free.

The Common Good Bank is a project with a great mission and a unique form of governance. You might consider making a commitment to participate. You and sign up at http://www.commongoodbank.com/signup.

Here’s a book that seems to get to the root of the matter. I’ve only read the Preface, but it seems to offer worthwhile insights into the dimensions of the geo-political juggernaut. It may be lacking in solutions, but hopefully my own books help to fill that gap. — t.h.g.

Michel Chossudovsky and Andrew Gavin Marshall (Editors)

Montreal, Global Research Publishers. Centre for Research on Globalization (CRG), 2010.
ISBN 978-0-9737147-3-9   (416 pages)

PREFACE

In all major regions of the world, the economic recession is deep-seated, resulting in mass unemployment, the collapse of state social programs and the impoverishment of millions of people. The economic crisis is accompanied by a worldwide process of militarization, a “war without borders” led by the United States of America and its NATO allies. The conduct of the Pentagon’s “long war” is intimately related to the restructuring of the global economy.

We are not dealing with a narrowly defined economic crisis or recession. The global financial architecture sustains strategic and national security objectives. In turn, the U.S.-NATO military agenda serves to endorse a powerful business elite which relentlessly overshadows and undermines the functions of civilian government.

This book takes the reader through the corridors of the Federal Reserve and the Council on Foreign Relations, behind closed doors at the Bank for International Settlements, into the plush corporate boardrooms on Wall Street where far-reaching financial transactions are routinely undertaken from computer terminals linked up to major stock markets, at the touch of a mouse button.

more…

Why are we not surprised? Senators voted down the Vitter Amendment to audit the Fed, 62 to 37.

Who does your senator work for?

The localization of an economy requires local control of credit. That can be achieved by participation in a local credit clearing association. There are many such business-to-business (B2B) exchanges that provide this service on a for-profit basis. Now the lines between for-profit and non-profit are beginning to blur as credit clearing services are teaming up with existing non-profit business organizations. One example is the Vermont Business Exchange which is now being launched in association with Vermont Business for Social Responsibility.

Watch this video of a recent interview in which Amy Kirschner explains the project history, vision, and current status.

In an interesting turn of events, Bloomberg News has filed a suit that would require the Fed to release details of where $2 trillion of bailout money went. Now the banks are trying to block a court order that would force release of that information. You can read all about it in this article:

Banks Threaten To Go To Supreme Court To Prevent Fed From Disclosing Details Of $2 Trillion In Bailout Loans They Received