By Paul Grignon, paulgrignon.netfirms.com/MoneyasDebt/Incorrect_Diagnosis.pdf
This article is Part 2 of 3 installments by Paul Grignon, the creator of the Money as Debt Trilogy of animated features. Paul’s Money as Debt movies have gone viral in the online video world exposing the fraudulent nature and mathematically dysfunctional design of our modern debt-money system to millions of people around the world in at least 24 languages. Visit moneyasdebt.net for DVDs, articles, Reviews and References, and translated versions online.
The two links below lead to illustrated logical proofs that the root of the “growth imperative” most critics ascribe to interest is actually the result of Principal that is NOT available to be earned on time to pay off the loan that created it.
Twice-lent Money: http://paulgrignon.netfirms.com/MoneyasDebt/twicelentanimated.html.
Analysis of Banking: http://paulgrignon.netfirms.com/MoneyasDebt/Analysis_of_Banking.html.
The fundamental problem is our concept of money
The fundamental problem is that money is a “single uniform commodity in limited supply” – a thing in itself that can be lent and then lent again. The mathematically inevitable result is two or more debts of the same money. This creates a borrow from Peter to pay Paul and borrow from Paul to pay Peter situation of perpetual debt that can never shrink by so much as a dollar without someone being in default. On the macroeconomic scale, it is why every little downturn in the economy results in defaults and foreclosures.
This model of money as a thing in itself in limited supply was required in the past because the use of high-value portable objects was the only technology available to transfer value over large distances.
Gold and silver coins and bullion eventually became the choice for this role worldwide. Precious metals were also a convenient way to store value because they took up little space, did not need to be consumed, and did not deteriorate over time.
But the technological limitations that required the use of physical coins as money were overcome long ago; and money is no longer a promise of gold or silver. But the concept of precious metal coins, “money as a thing in itself” carries on unquestioned.
Money supply = control
“Permit me to issue and control the money of a nation, and I care not who makes its laws”. ~ Mayer Amschel Rothschild
Throughout the transition from physical coins to money-as-debt, those in control know that there has to be a “money supply” that CAN be controlled. For centuries, money as a thing in itself has been accumulated, withheld, and used by the powerful to harness humanity with shackles of debt and get us to deliver to them our labour and common resource heritage. Currently, money IS, quite simply, a bank’s promise of paper cash and coin (legal tender) that it does NOT have, (and, in the aggregate, does NOT exist) which is created in exchange for the “borrower’s” promise to pay it back. In other words money is a fraudulent DEBT-of-money to a BANK.
Our total dependency on banks for our money supply requires that banking be backstopped with deposit insurance and ultimately taxpayer bailouts. In this way, money-as-a-debt-of-money loses all roots in any kind of reality except the profit motive of lenders.
But there is more than ONE concept of money.
Money is our most important social invention
To my mind, money is mankind’s most important social invention. Those who advocate “freedom from money” want to throw the baby out with the bath water.
Money is what enables third party and delayed exchanges which enable specialisation of labour which creates civilisation. Free and fair exchange using money is a self-organising economic system that could only be replaced by some form of bureaucratic control.
The nature and source of money need to be much better understood by far more people and, I think, radically changed. But the need for some form of money will always be with us. It has been since the late Stone Age. It is as necessary as language; because money, in its essence, is the language of exchange. (Please see The Essence of Money 7:36 www.youtube.com/watch?v=_dwL9lqVBxY) A “dictatorship of money” destroying our social and environmental life-support systems is not the inevitable result of a “language of exchange”. It is the result of “money as a thing in itself” which can be monopolised and manipulated.
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The Waging Wordsmiths
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