The Financial Road To Serfdom

[The Spaniard]

Apologies if this essay by Michael Hudson has already been posted, but it's well worth a read:

http://www.globalresearch.ca/index.php?context=va&aid=25250

[Conrad]

Scary stuff, but can you blame the elite for trying to curb our excess population and consumption. Serfdom = sustainablity maybe. To quote agent smith from the matrix. " your species is a disease and we are the cure"

What would you do if you were in control?

[The Spaniard]

Scary stuff, but can you blame the elite for trying to curb our excess population and consumption. Serfdom = sustainablity maybe. To quote agent smith from the matrix. " your species is a disease and we are the cure"

What would you do if you were in control?

As I read it, the essay is about the disastrous relationship between the debt-based money and banking system and supposedly sovereign nations rather than "excess population and consumption."

It seems obvious to me that a cohesive, trading people who value self-determinism should issue collectively their own debt-free, persistently circulating means of exchange rather than have to borrow their essential money supply from commercial banks.

[Reck B]

Scary stuff, but can you blame the elite for trying to curb our excess population and consumption. Serfdom = sustainablity maybe. To quote agent smith from the matrix. " your species is a disease and we are the cure"

What would you do if you were in control?

The main beneficiaries of showering the world with cheap 'money' are those who created it and are now taking it away. Whilst they remove these ultimately meaningless tokens, they are seizing stuff of real value.

He's right - this is actually a war, we just don't realise it because of the lack of corpses

A war for resources perpertated by the banksters on everyone while politicians, (either paid for & placed / or useful idiot politicians) are allowing it to happen through evil or ignorance.

We'll never be governed by good people will we?

Edited July 1, 2011 by Reck B

[Injin]

As I read it, the essay is about the disastrous relationship between the debt-based money and banking system and supposedly sovereign nations rather than "excess population and consumption."

Tis true, but really the issue is about people who want fantasy over reality. Mary Croft has some very interesting things to say about the psychology of debt.

It seems obvious to me that a cohesive, trading people who value self-determinism should issue collectively their own debt-free, persistently circulating means of exchange rather than have to borrow their essential money supply from commercial banks.

They already can.

They also can already get rid of all their debts by asking a few questions.

The real question then is - why don't they?

[Reck B]

Tis true, but really the issue is about people who want fantasy over reality. Mary Croft has some very interesting things to say about the psychology of debt.

They already can.

They also can already get rid of all their debts by asking a few questions.

The real question then is - why don't they?

I suspect a critical mass of people have been brainwashed/ have withdrawn from reality enough to be taken advantage of.

[Injin]

I suspect a critical mass of people have been brainwashed/ have withdrawn from reality enough to be taken advantage of.

Sure.

But the questions then become - how did it happen?

Why does it continue?

How does it change?

[Thane Tasker]

Tis true, but really the issue is about people who want fantasy over reality. Mary Croft has some very interesting things to say about the psychology of debt.

They already can.

They also can already get rid of all their debts by asking a few questions.

The real question then is - why don't they?

Is it because they want to be a slave or that they've been trained to be a slave? Hard Question with many shades of grey.

[fluffy666]

Scary stuff, but can you blame the elite for trying to curb our excess population and consumption. Serfdom = sustainablity maybe. To quote agent smith from the matrix. " your species is a disease and we are the cure"

What would you do if you were in control?

Well, if we're going hollywood, then Terminator 2's 'No fate but what we make'..

There is no physical reason why we cannot have a world of 10 billion people living at 1st world standards. There is no physical reason why anyone has to go hungry or un-housed; the problem is more that a huge proportion of our surplus productivity ends up in the pockets of the rentier class. Plus plenty of ideological misconceptions, cronyism and the rest, of course..

[The Spaniard]

The real question then is - why don't they?

One important factor is the elaborately maintained illusion that we conduct our business in "base money" and that the commercial banks provide the supposedly valuable service of "extending credit" in this real money by typing spendable credit-money numbers ("broad money") into our bank accounts.

The reality is that in practice their expensive credit-money numbers are all that we have (excepting the relatively tiny and hopelessly inadequate amount of physical cash in circulation.)

We operate our economy using an unnecessarily costly "rent-a-currency" money supply.

[Thane Tasker]

This is a very interesting film on this subject

http://video.google.com/videoplay?docid=4387527599419254364#

[Traktion]

Sure.

But the questions then become - how did it happen?

Why does it continue?

How does it change?

I would say it's probably because both sides thought they were getting something they wanted. The creditor accumulates interest and a bigger bank balance, while the debtors are able to borrow to buy more stuff. It's only when you run out of track that it is obviously unsustainable. At which point, the rich try to get the rules changed, to keep what they have accumulated, rather than let the free market judge them by their foolishness.

[Reck B]

Sure.

But the questions then become - how did it happen?

Evil minds at the top of society knowing the human, under artificially set conditions can be pliable co-erced and can therefore be easily farmed if the will is there.

Why does it continue?

Not enough people have awoken to the reality of the situation because they are comfortably numb. Plus the education system will have an important role to play. Kids are being bred to be dumb and unquestioning.

How does it change?

Collapse/Pain/Proper Education

Edited July 1, 2011 by Reck B

[Injin]

One important factor is the elaborately maintained illusion that we conduct our business in "base money" and that the commercial banks provide the supposedly valuable service of "extending credit" in this real money by typing spendable credit-money numbers ("broad money") into our bank accounts.

The reality is that in practice their expensive credit-money numbers are all that we have (excepting the relatively tiny and hopelessly inadequate amount of physical cash in circulation.)

We operate our economy using an unnecessarily costly "rent-a-currency" money supply.

Base money is just paper. Even if it was all base money, the whole thing is laughable.

There are no countries.

These things are easy, obvious.

But why are so many prey to delusion?

And why did you try and defend the laughable?

[Traktion]

One important factor is the elaborately maintained illusion that we conduct our business in "base money" and that the commercial banks provide the supposedly valuable service of "extending credit" in this real money by typing spendable credit-money numbers ("broad money") into our bank accounts.

The reality is that in practice their expensive credit-money numbers are all that we have (excepting the relatively tiny and hopelessly inadequate amount of physical cash in circulation.)

We operate our economy using an unnecessarily costly "rent-a-currency" money supply.

This is wrong - we only have base money* and the rest is promises (or lies, depending on your perspective). The promises were never a full replacement for base money - they can be broken on a whim. The free market would have seen many of these broken, presenting the foolish with a stark reality - they would have far less money than they thought.

Unfortunately, the government is too weak to let the free market do it's thing. Instead it decided to replace the promises with base money, thus breaking this distinction between risky promises and less risky base money (ie. notes/coins). The result is people like yourself ask all of the wrong questions and reach the wrong conclusions.

I respect you for being interested in improving peoples' lot, but I can't help feeling that you've fallen down the wrong rabbit hole.

* Arguably, much of base money's demand is based on promises force to pay taxes. Whether people would freely use it without taxation is a good question. People would probably choose something else, if they had the choice (not the threat of prison time) in the first place.

Edited July 1, 2011 by Traktion

[The Spaniard]

This is wrong - we only have base money and the rest is promises (or lies, depending on your perspective). The promises were never a full replacement for base money - they can be broken on a whim. The free market would have seen many of these broken, presenting the foolish with a stark reality - they would have far less money than they thought.

Unfortunately, the government is too weak to let the free market do it's thing. Instead it decided to replace the promises with base money, thus breaking this distinction between risky promises and less risky base money (ie. notes/coins). The result is people like yourself ask all of the wrong questions and reach the wrong conclusions.

I respect you for being interested in improving peoples' lot, but I can't help feeling that you've fallen down the wrong rabbit hole.

I am looking here at the pragmatics of the present day UK two-tier money system.

What do we actually use (day to day) to conduct our business?

What do most people think they are using?

The whole free market in money issue is another (bigger) question.

[Injin]

I am looking here at the pragmatics of the present day UK two-tier money system.

What do we actually use (day to day) to conduct our business?

What do most people think they are using?

The whole free market in money issue is another (bigger) question.

The question is "why no questions?"

[Traktion]

I am looking here at the pragmatics of the present day UK two-tier money system.

What do we actually use (day to day) to conduct our business?

What do most people think they are using?

The whole free market in money issue is another (bigger) question.

I think you need to break it down into components. Consider what base money is. Consider how banking works. It then becomes obvious that promises were never meant to be as safe as cash. Even if you had full reserve banking, this would still be the same - people can still fail to pay back the loan. It's very much a case of one (tenner) in the hand is worth two (promises of tenners) in the bush (bank).

If people think they bank money is no more risky than cash in hand, they are wrong. They need to learn this as otherwise the whole system will break down, as demands for bailouts become shrill, with the risk being pushed onto the taxpayer indefinitely (we've already had to stomach the first round).

Although I agree that free market money is another (related) topic, a free market in banking does not require this* - failing banks must to be liquidated, not bailed out. Otherwise, the problems will just compound until we have an utterly broken system.

* Having a free market as a subset of a centrally planned one has an obvious contradiction, but I hope it makes my point.

EDIT: reworded

Edited July 1, 2011 by Traktion

[DTMark]

The question is "why no questions?"

I think it's simply because the population at large don't actually think that the monetary system works like this.

We used to exchange e.g. coins with each other and the public at large see the banking system as an electronic representation of that.

Prior to joining this forum I used to wonder how the BOE managed to keep roughly the same amount of notes and coins in circulation - how did they know how many were taken out of the country or destroyed to know how many new ones to print?

Of course now, the above question is laughable. But it's what I would have asked before I knew how this all works.

I think the "man in the street" probably thinks the job of the BOE is closer to what I've put above than its actual role because if you explained how the monetary system actually works to many people they'd look at you and assume you're barking mad.

Hence Meryn King's recent speech which highlighted not rate, not debt, but "confidence" as the main thing. "We're in danger of losing confidence" (or something like that). Yes, that's what it all depends on, and the current situation has brought the average bod perilously close to figuring it out.

[The Spaniard]

I think you need to break it down into components. Consider what base money is. Consider how banking works. It then becomes obvious that promises were never meant to be as safe as cash. Even if you had full reserve banking, this would still be the same - people can still fail to pay back the loan. It's very much a case of one (tenner) in the hand is worth two (promises of tenners) in the bush (bank).

If people think they bank money is no more risky than cash in hand, they are wrong. They need to learn this as otherwise the whole system will break down, as demands for bailouts become shrill, with the risk being pushed onto the taxpayer indefinitely (we've already had to stomach the first round).

Although I agree that free market money is another (related) topic, a free market in banking does not require this* - failing banks must to be liquidated, not bailed out. Otherwise, the problems will just compound until we have an utterly broken system.

* Having a free market as a subset of a centrally planned one has an obvious contradiction, but I hope it makes my point.

EDIT: reworded

I more or less agree with all that, and it is not at all in contradiction with anything I wrote before.

Please read my posts carefully and as far as possible from first principles.

[Traktion]

I more or less agree with all that, and it is not at all in contradiction with anything I wrote before.

Please read my posts carefully and as far as possible from first principles.

As far as I can understand, you're suggesting that because people don't think that credit money is any different from base money, then we should formalise credit money in some way. I just can't see how that is possible, because it will mean you would somehow have to make risky lending, risk free - this is impossible.

Ofc the banks are parasitic, but with competition, they should only be able to cream off enough profit to operate. You could argue that the banking regulations and implicit bailouts, create a cartel for the big banks, allowing them to take more than they should, but that is a different argument again - it's not about the way banks work, but the way the state works.

Lastly, governments don't have to borrow, but they choose to as it wins votes. The fact that they can't balance a budget, should not mean that they can print up the difference - they should just balance the bloody budget.

If I am missing something key to your point, please highlight it, but otherwise I'm struggling here.

[Traktion]

I think it's simply because the population at large don't actually think that the monetary system works like this.

We used to exchange e.g. coins with each other and the public at large see the banking system as an electronic representation of that.

Prior to joining this forum I used to wonder how the BOE managed to keep roughly the same amount of notes and coins in circulation - how did they know how many were taken out of the country or destroyed to know how many new ones to print?

Of course now, the above question is laughable. But it's what I would have asked before I knew how this all works.

I think the "man in the street" probably thinks the job of the BOE is closer to what I've put above than its actual role because if you explained how the monetary system actually works to many people they'd look at you and assume you're barking mad.

Hence Meryn King's recent speech which highlighted not rate, not debt, but "confidence" as the main thing. "We're in danger of losing confidence" (or something like that). Yes, that's what it all depends on, and the current situation has brought the average bod perilously close to figuring it out.

When the confidence is running low, the government just resorts to more violence. It's their answer to everything.

[The Spaniard]

As far as I can understand, you're suggesting that because people don't think that credit money is any different from base money, then we should formalise credit money in some way. I just can't see how that is possible, because it will mean you would somehow have to make risky lending, risk free - this is impossible.

Ofc the banks are parasitic, but with competition, they should only be able to cream off enough profit to operate. You could argue that the banking regulations and implicit bailouts, create a cartel for the big banks, allowing them to take more than they should, but that is a different argument again - it's not about the way banks work, but the way the state works.

Lastly, governments don't have to borrow, but they choose to as it wins votes. The fact that they can't balance a budget, should not mean that they can print up the difference - they should just balance the bloody budget.

If I am missing something key to your point, please highlight it, but otherwise I'm struggling here.

Briefly ...

I advocate what James Robertson calls "plain" money, a unitary money supply issued debt-free by the state and with 100% reserve commercial banking. Not, as you say, to formalise credit-money, but rather to do away with it altogether.

So no commercially created credit-money, just an adequate supply of publicly issued base money in general circulation with banks acting both as custodians of their customers' deposited monies and as intermediaries and/or brokers between willing and informed lenders and borrowers of the persistently circulating money stock. All lending to be at the money owner's risk. No bailouts.

Note that the depositor remains the legal owner of money in the custody of a bank, just as when you leave your car parked at an airport.

Banks become competitive service providers - professional money handlers with no power to expand or contract the money supply.

I make the observation that many people are currently under the illusion that this is how it is now.

New money to be created in lockstep with new real wealth and spent into the economy by the state. Note that in all probability this would be but a small fraction of total state spending. No state borrowing.

[billybong]

The European Union’s financial planners claim that Greece and other debtor countries have a problem that is easy to cure by imposing austerity. Pension savings, Social Security and medical insurance are to be downsized so as to “free” more debt service to be paid to creditors. Insisting that Greece only has a “liquidity problem,” European Central Bank (ECB) extremists deem an economy “solvent” as long as it has assets to privatize. ECB executive board member Lorenzo Bini Smaghi explained the plan in a Financial Times interview:

FT: Otmar Issing, your former colleague, says Greece is insolvent and it “will not be physically possible” for it to repay its debts. Is he right?

LBS: He is wrong because Greece is solvent if it applies the programme. They have assets that they can sell and reduce their debt and they have the instruments to change their tax and expenditure systems to reduce the debt. This is the assessment of the IMF, it is the assessment of the European Commission.

Poor developing countries have no assets, their income is low, and so they become insolvent easily. If you look at the balance sheet of Greece, it is not insolvent.

The key problem is political will on the part of the government and parliament. Privatisation proceeds of €50bn, which is being talked about – some mention more - would reduce the peak debt to GDP ratio from 160 per cent to about 140 per cent or 135 per cent and this could be reduced further.[2]

And so step by step eventually they own the entire planet.

Edited July 1, 2011 by billybong

[erranta]

<br />The main beneficiaries of showering the world with cheap 'money' are those who created it and are now taking it away.  Whilst they remove these ultimately meaningless tokens, they are seizing stuff of <u>real</u> value.<br /><br />He's right - this is actually a war, we just don't realise it because of the lack of corpses<br /><br />A war for resources perpertated by the banksters on everyone while politicians, (either paid for & placed / or useful idiot politicians) are allowing it to happen through evil or ignorance.<br /><br />We'll never be governed by <u>good</u> people will we?<br />

Mcdonalds clan has hidden Germanic-Jewish origins. (Hamburg)er It's also a 'glo-bal' entity!

BurgerKreig = civil war (which they have secretly declared on us Goyim(Jewish Cabalah declares that Gentiles are the slaves of the Jews.) - note the colours are red(Roth)schild Ashkenazi Jew bankers

The Kreigs emigrated to New York (big apple/Manhattan bankers) - the most evil have formed the Biblical Synagogue of Satan thru which they are creating chaos throught the World to bring in their new order! (Big-Mac + fries pleeze)