ItsACrime

The system demands that people borrow more. Consider that 97% of money is numbers in bank accounts that is also debt. In other words the money supply is increased through debt and an increasing money supply is good for the economy to grow. In addition, people can only pay off their debts if more people get even more into debt so that the money supply is increased and so on. For example, is everyone decided to be sensible and pay off their debts, the total money in society would be 3% of what it is today. This is because repaid debt is money dissappearing into thin air where it came from. Clearly, as people pay their debts, there is insufficent money available i.e. its impossible. Increasing debt is the only way to go and lowing interest rates ecourages this.

Conventional money consists of paper money which is about 3% of the total and the rest is in the form of numbers in bank accounts which is created in parellel to debt. My question is whether there are other things which are effectively money. For example, many mints are running 24/7 producing gold coins which are now in high demand. Is this money? Is this therefore an inflationary increase in the money supply? What about art works and antiques? Governments don't seem to create money from nothing as they always borrow and increase the government debt. Is minting gold coins one way of doing so? http://www.shelteroffshore.com/index.php/g...-volumes-10073/

I have about 65k on my mortgage and about 35k in savings. My concern is that I'll lose my savings and keep my mortgage (if only the other way round). Should I pay off some of my mortgage or stop worrying?! Obviously savings are covered but what if there was a complete "meltdown"?

Everyone seems to be discussing whether we will have inflation or deflation. Is it possible that we will have inflation in commodities/fuel/food etc but deflation in housing? Is this an intended consequence or not including housing in inflation measures? Is the reason for this to keep either inflation or deflation under control?

I have just finished reading "Grip of Death" by Michael Rowbotham and it is astonishing. Money is only created out of debt by banks. It is a myth that central banks/governments create money - banks do, through endless lending and the fractional reserve system. It is through this they have created mayhem for centuries. The problem is that previous debts, including the interest on them can only be paid by the next generation creating even more money through going into more debt. This is why our economies are reliant on debt. The most successful economies have shifted the burden of this necessary debt from the individual to the country through the national debt. The problem is due to a basic flaw in economics illustrated by the following example. In a new economy, a light bulb factory is established through borrowing from the bank, in building it, money borrowed is released to workers who, when it is finished can then buy the bulbs. Money is then repaid to the banks including the interest, but there isn't enough money owned by the workers unless another factory is set up through borrowing and releasing money to them. This has to continue forever and means that economic growth is essential. If economies stop growing they can collapse. There are alternative methods to this which have been proposed. The most respected being that of Major C H Douglas which proposes to limit lending by banks and inject new debt free money into the economy through a national dividend. This would be small enough to prevent high inflation and large enough to provide purchasing power to the enconomy. It is effectively what is being done by countries using their national debts to fund an economy exept this would be sustainable.