Transcending Accounting Economics
Porteages are to The Fractional Reserve Money System as that was to gold coin finance.
Staying ahead of escalating debt fuels is practically everything we do. It forces us directly and indirectly out of bed in the morning to go to jobs that most of us despise.
Corporations make their decisions around first how to service their snowballing debt, and secondly around profit. Real values are neglected. Governments spend all their time worrying about how to service the increasing debt load of deficit spending while meeting their social agendas while at the same time.
The Debt Engine is unrelenting a forever increasing juggernaut of private and government debt exceeding all other factors propelling our insane dash of the planet towards self destruction.
Massive unrepayable mountains of debt
creates a social environment where certain types of behavior flourish and
inhibits or destroys any tendency towards long term concerns and nourishment.
Unrepayable Debt differs from the everyday normal life debt. Unrepayable Debt is a built in flaw of our monetary system. No one benefits except those intimately connected with the banking industry.
This flaw can be fixed.
Inherently, humans can’t live sustainably under Pyranomics because money is credit created on the basis of loans made by banks at compound interest.
The debt bomb accounting system behind money is a system with a positive feedback that can never find equilibrium, so it always eventually explodes
Demand for more and debt be created to enable the payment of interest. This gives rise to a growth imperative preventing the emergence of a steady-state economy.
Production increase in business activity cannot satisfy the lenders demands for repayment.
The Centralized Global money system controlled by a small Elite is fundamentally flawed. It is the root cause of the crisis confronting civilization. This flawed system has to be transcended for resolution to become possible to address intertwined problems we face.
This system causes a debt imperative which drives a growth imperative that forces destructive competition for the available supply of money which is never sufficient to enable all the debtors to pay what they owe.
This produces the destruction of the very ecosystem that supports us. The result of all this is an increasing environmental despoilation and social degradation.
So entire system inherently favors authoritarian government by increasing concentrations of wealth and power
Favors short-range planning in the production of short-lived disposable junk over durable less profitable consumer products.
The economy is entering its
insolvency phase. Pyramiding cannot restore equilibrium.
Common ideas about money. About who controls it? Where it comes from and how it operates.
- Some say the government prints it
- Others hard work makes money
- Others guess it’s something to do with gold.
- They might picture it as a vast pile with everyone competing for as much as they can get.
Bankers inflame our passions by claiming that the government has grabbed the money and there is none left for private industry.
Our money supply isn’t created by the government; a brilliant idea doesn’t make money and neither does hard work, except for the counterfeiting business.
Vector Pyramoney is an accounting system of who
owes what to whom owned and operated by private banking industry. Vector Pyramoney is a man created
Money flicks in and out of existence as credit and debit balances. Money supply swells and contracts continuously as loans are created and then destroyed.
During the 18th century a Scotsman, John Law invented the monetary system that we use today. He invented a new type of money to replace the old one of specie through the use of coins.
He created the mechanism to
finance the industrial revolution and our modern technological world.
Most inventions of the time would never have been born without John Law and his invention: the Fractional Reserve Money System became primary.
No railroads, no Nissans or G.M.’s, nor would there have been any super highways to drive them on.
There would have been no space
shuttle, no Love Canal, no drift net fishing, no heart transplants and no
With his invention the Industrial Revolution was enabled. Without him and his innovation, the Revolution would have fizzled and died. And with it, our technological world.
Early 1700’s newly industrializing nations of the world were in perpetual states of economic crisis because their coinage system of money could not keep up with demand. Governments tried everything to increase the money supply. One trick was to make new coins much smaller than the old thereby getting more per ounce, but it was a stop gap measure at best.
To grasp the magnitude of the problem, try to imagine building just one modern skyscraper using only gold coins as finance.
The industrialists of the
Industrial Revolution were faced with a similar problem; how to build their
factories, mills and railroads using only scarce gold coins.
John Law’s solution was to create a national paper money supply. Banknotes would be officially recognized as “real money”.
The advantages were obvious. Paper
money could be expanded indefinitely and was much cheaper than specie to make.
To get and keep initial public confidence, Law suggested a fraction of gold be
always kept on hand for the few people who wanted to redeem their notes.
Through a process of trial and error it was found that specie could support about ten times its value in paper money. That is, a bank which held $10 in gold could safely print and loan out about $100 in paper money. The gold held in reserve was obviously a mere fraction of the banknotes which it supported and so the system became known as the Fractional Reserve System.
The private banking industry was
chartered by government to create the new money supply of paper notes. Until
earlier in this century, banks literally printed their own supply against their
own gold reserves with their name on each note, and lent them out to the public
and government. Now the federal government has taken on the printing job but
the notes are still drawn on private banks.
In the 1930’s the convertibility of bank notes was dropped but the Fractional Reserve System is alive and well today, albeit in a more sophisticated form.
Cheques or credit cards have
largely replaced paper money but the principle remains the same; the banking
industry creates the money which government and society then borrows at a cost.
John Law’s method of money creation is still the dynamo that powers our present world. By replacing specie with a simple national accounting system of credit and debit, he made money infinitely more flexible, able to be contracted or expanded to meet any situation.
However, using the Fractional Reserve System has a built in mechanical flaw that always keeps total national and private debt ahead of the money available to repay it. In fact the more a nation expands, the more it automatically goes into debt to the system over and above the money that it borrows.
To explain, imagine the first bank which prints and lends out $100. For its efforts it asks for the borrower to return $110 in one year; that is it asks for 10% interest. Unwittingly, or maybe wittingly, the bank has created a mathematically impossible situation. The only way in which the borrower can return 110 of the bank’s notes is if the bank prints, and lends, $10 more…at 10% interest.
When presented with this scenario, there is often a tendency to think :”Ah, but the borrower can always make the extra $10 somewhere else, through hard work or a deal overseas.” However, although we frequently inter change the two sayings, earning money is not the same as making it. Earnings are simply a transfer of money from on ownership to another and neither increase nor decrease the total money in existence. Making money actually does increase the nation’s money supply but no-one can do that but the banking industry itself as laid down in its charter from the federal government.
The result of creating 100 and demanding 110 in return, is that the collective borrowers of a nation are forever chasing a phantom which can never be caught; the mythical $10 that were never created. The debt in fact is unrepayable. Each time $100 is created for the nation, the nation’s overall indebtedness to the system is increased by $110.
The only solution at present is increased borrowing to cover the principle plus the interest of what has been borrowed. The business or government that cannot expand its borrowing every year is seized by its increasing debt load and dragged under.
Many economists are not unmindful of the problem but pass it off as irrelevant. They say that if the marketplace economy keeps expanding, thereby fuelling an increase in the total money supply, there is no problem with meeting interest payments on an increasing debt load. But under such circumstances, economic expansion is not a luxury but an imperative to stay ahead.
In John Law’s day, the need to continuously expand to meet growing debt repayments was seen as a minor problem of no consequence. Today however we all know the planet cannot sustain unlimited growth. Even so, we are stuck with a monetary system that demands continuous expansion or face the chaos of total economic collapse.
The consequences of the Debt Engine are everywhere. Political and business leaders are sacrificing the planet to stay ahead of bankruptcy. Technology is not being used to create a sane and sustainable lifestyle for us all but is being channeled into the most narrow band of activity: the market place activity of “making” money. Just as governments are forced into ignoring vital social and environmental questions in their efforts to balance the books, so many corporations are putting to one side such things as resource depletion and the destruction of the ecosystem in their frantic efforts to remain economically alive.
But the situation is not completely bleak. Just as John Law found a way around the impasse of coinage, so there are solutions for the problem of unrepayable debt. Obviously the first thing to do is make sure that the ratio of credit to debt is always the same. Under the Fractional Reserve System, $100 credit is created and $110 debt is demanded in return; that is, there is always more debt than credit. This equation should be $100 credit equals $100 debt.
The mechanics of how to achieve this were proposed over one hundred and fifty years ago. It was proposed that the nation’s money be created by two agencies: the banking industry and government.
Instead of taxes, government would be empowered to create money for its own expenses up to the balance the debt shortfall. Thus, if the banking industry created $100 in a year, the government would create $10 which it would use for its own expenses. Abraham Lincoln used this successfully when he created $500 million of “greenbacks” to fight the Civil War.
A government which creates its own money supply becomes independent and the most important result of freeing government from its present debtor relationship to the banking industry would be to make it more able to respond to social pressures for reform.
A financially independent government would be able to pursue long term agendas for the betterment of society. For instance, a twin source of money creation could not only rapidly reduce taxes, but create additional funding for other initiatives.
A government having the same right
of issue as is now monopolized by the banking industry could fund vital job
creating initiatives such as environmental repair and sustainable technology on
a scale that is hard to imagine.
We have the resources to lead ourselves into a sustainable future. But we need a monetarysystem which will allow for our resources to be mobilized towards a greater destiny than marketplace superiority. Such a new monetary system with all of its potential requires a dramatic upgrading of society’s consciousness and understanding of money. We move from a simplistic belief in money having an intrinsic value of its own and see it as a bookkeeping system of the real wealth of our nations. Ultimately our collective creativity is based on the human and natural resources.
We have passed beyond an age of scarcity. The challenge is not about solving problems of want, but dealing with abundance and how to use it to create a sustainable future.
With computerization, robotics, advances in genetics and food growing, we have the potential to turn the planet into a sustainable ecosystem capable of supporting all. We have the technology to genuinely contemplate colonizing the solar system.
We can drop an 18th century money system designed around the endless rape of the planet.
John Law enabled humanity to scrabble out of scarcity but now his system is antiquated and has to be reconditioned.
Philosophically it is based on the robber baron mentality and technically it is fundamentally flawed saddled with Unrepayable Debt.
As such it is unable to respond either to the abundance which it
created or the problems which it spawned.
The Debt Engine has distorted the potential of the Industrial Revolution and forced us into a narrow focus of marketplace ethic.
A Wholonomic system ensures funding of vital issues unlocking the creative potential of the Whole humanity.
We redirect the focus to a new Paradigm enabling those who can think in terms of abundance not only for themselves but how also to use it for the benefit of the entire planet.
This crisis is an opportunity to create a world we want to live in and leave for posterity
Creating an adequate inexpensive medium of exchange helps the world make a transformational leap into a sustainable steady-state economy. As steward’s for the global environment we create a life of liberty and dignity for all
Emergence decentralised sustainable systems of Exchange
Reserve notes function on the real bills Doctrine
Giftcurrents represent real value in the form of goods and services ready to be bought and consumed. This is the proper basis upon which currents are issued. The proper operation of the exchange is that currents are created on the basis of goods and services in the markets already or will be shortly in the market.
Reserve notes AR address the need of for long-term credit this enables stores a value formation a store of value issuing of the reserve notes is matched by Reserve sources
this way investment is matched to reserve savings currants are matched with goods and services in the market already
Reserve notes deliver goods and services to the market later this way the value of the currents are not diluted therefore we do not have Rising prices and in fact technological advances can have a deflationary effect on prices without reducing income creating a collective wealth formation
currents are short-term to facilitate Exchange and our newly created resource Reserve notes are long-term they fund stores of value development
they reallocate existing reserves from the holders of the reserves to entrepreneurs.
The political money system starves productive Enterprises but finances the destructive activities of War