Registrato: 01/07/19 09:30
|Has anyone ever told you that as the entire money supply rises , the total amount of money per capita simultaneously lessens? Just how can this be you say? Thatís a contradiction in itself. Well, actually it isnít. It is just a paradox that will be the attention of this report. Keep in mind, if private bankers didnít hold the unconstitutional right to create money and chosen officials did, we would not be enduring such serious complications within our society at this time.
Letís begin by setting up this situation. First off, you have to realise that in an honest money system the money supply will increase simultaneously together with GDP and also human population expansion. In the event the money supply is expanded at a rate faster than Gross Domestic Product, we have now a surplus of money inside the economy and the economy obviously responds by increasing prices on all goods and services. Any time Gross Domestic Product grows at a rate quicker than the money supply , there becomes a shortage of new capital and societies experience deflation.
Once again, to keep everything basic, lets imagine that for our illustration weíve got 5 individuals in our little economy. Thereís only $10 within the entire money supply at this time, $9.00 is on loan, which means 90% of the entire money supply for this illustration is debt money. In real life the actual amount is around 95%, but this is only an example. On top of that , there is $14 in overall outstanding debt, meaning the $9 in the economy in addition to the total interest will equal $14 for this example.
So, letís just take a second to check out all of the complications weíve got up to now. Bear in mind, this is just the setup of this example, an actual presentation on how it operates hasnít been carried out just yet. We now know that for the marketplace to function the money supply needs to rise at a rate somewhat proportional with Gross Domestic Product. Yet, there is currently an issue within our illustration. $9 is loan money , which means that as everyone pay off that loan, the credit is being permanently deleted out of the money supply! Just like money can be produced from air, so can it be erased. What does this mean? To ensure that the marketplace to function, more debt money has to be created to keep at par with GDP!
For the second problem, there exists $10 within the money supply total for the illustration, but $14 is going to be required to repay. Consequently in the event that everybody in our example was to try and pay off all their debts it would not be possible. This produces a couple of problems. We now need an ever growing expansion of loans straight into our economy. Second , itís a mathematical fact that a specific number of individuals within this kind of monetary system arenít going to pay off their loans, resulting in reposessions, recessions, and overall lose of hope.
Now to the working illustration. Letís say one business owner of the five people within this example decides to get a $1.00 loan. This individual spends it into the economy to help improve his company. Within a couple of months he eventually ends up making $1.50. He now owes the bank the $1 he received plus the interest, say 25%. So, he now owes the bank a total of $1.25 and then he pockets $.25 for himself as profit. Since this is an essential part of this article , listen up. What just took place is the lender got $0.25 in interest, however the lender in no way created this interest. The financial institution merely makes the principal or money part of the loan, and not the interest! This is what creates a constantly growing shortage within the total sum of money individuals may compete for in the money supply!
Letís examine this even closer. First we began with $10.00 within our economy, and $14 in total outstanding credit debt. As soon as $1.00 loan was approved we had $11.00 within the money supply, and $15.25 in total debt. Assuming no one else repaid any of their debt other than the business man, we now possess $10.25 in our money supply ($10 as well as the $.25 the entrepreneur profited) , $14.00 in total debt, and the lender now has $0.25. Notice how the lenders profit wasnít incorporated as part of the money supply. This happens because virtually all of this earnings wonít be made available for people to compete for. Rather, the majority of this $.25 profit is going to be redistributed in the form of debt money, therefore they are adding fuel to the fire. Remember, banking institutions simply create the principal, and not the interest. The $0.25 earnings the lender redistributes in the form of new credit is actually debt money getting reloaned with more interest.
An intelligent individual will ask himself or herself , how can this particular area of the banking system be fixed? As most difficult things, it is easier said than done. Basically, the president needs to nationalize or take control of the Fed central banking system. This way, the money supply as well as the credit creation process will be back in selected representatives possession, rather than unconscience bankers. Now, the government can print itís very own capital instead of borrowing it at interest from the Federal Reserve. All of the interest collected can now be distributed or spent back into the marketplace , thereby keeping the money supply at par with GDP. Even better, the government can decide to make all loans offered with 0% interest! Better yet, congress can decide to inject money into the marketplace in the form of grant money versus debt money, allowing the money to flow indefinately! The possibilities are unlimited when you have a truthful money system!
If you think this particular element of the money system is repulsive just wait, this really is only the beginning! For our dollar to survive, other petro producin