Tag Archives: Debt as Money

Positive Money UK is on the right track

10/10/2014 Portland, Oregon – Pop in your mints…

For some time we have followed a group known as Positive Money UK on Twitter.  They seem to be among the few people/groups that have a decent comprehension of the flaws in what we call the insane debt based monetary system in which the inhabitants of the earth are either coerced or compelled to live by.  They describe themselves as “a movement to democratise money and banking so it works for society and not against it.”

We were reminded of this by one of their tweets today:

Positive Money Tweet

The alien meme sums up what we have been driving at for some time now here at The Mint.  We tend to focus on the acceleration of the damage that humankind causes to nature as the nasty side effect of using debt as money, but it is well noted in other corners that indeed, many of the distortions in relationships between persons and nations have the concept of extinguishing debt as their root.

The video which is linked to in the above Tweet from Positive Money UK is presented as a public service below, it does a nice job of showing how the only way to create money in our insane, debt based monetary system, is to go deeper into debt or have someone else go into debt.

While the video is spot on in terms of money creation, they present only half of the solution (which we find is common in many monetary reform circles, namely Bitcoin).  The second half that is too often ignored is that 1) money, as a concept, necessarily will take on many forms in the world and 2) whatever is used as money by a majority will necessarily require an associated debt market to successfully operate for any length of time (the lack of a viable debt market is killing Bitcoin).  This is the great supposed advantage of using debt in the form of Central Bank notes as money, infinite debt markets = infinite liquidity, meaning there is always money available.  It is this advantage that any viable monetary reform must include, or else it is doomed from the start.

On their website, Positive Money UK points out that “Only 1 in 10 MPs understand that 97% of money is created by banks.”  As the English are generally cleverer than Americans, we would imagine the ratio in the governing bodies on the US side of the pond to be even lower.  If you need proof of this, just watch the next Senate Banking Committee session on C-Span.

Nobody seems to get that today, circa 2014, money and debt are the SAME THING.  What passes as money today are nothing more than liabilities of Central Banks.  This is a worldwide phenomenon, and the effects are profound.

Money is a concept that attaches itself to certain real world things in various forms.  Credit is another concept which attaches itself to various agreements.  They are the antithesis of each other.  Most people generally understand this and spend a good deal of their time working or causing others to work in order to attain a reasonable balance between the two on their ledgers, regardless of the size.

However, as the above video partially illustrates, most people are wrong, the only way to “make money” is to “make debt.”  This is causing SEVERE imbalances in the natural world as the activities of mankind continue with an unconscious disregard for the effects of the real world.

The effects on the real world are this:  There is an inordinate amount of fallow land left unattended while an increasing share of mankind passes time in urban settings, with their own productive capacity squarely aligned, day in, day out, in conflict with the needs of the natural world.

The irony is that many have taken note of the dire state of affairs of nature (read Climate Change, etc.) and then misdiagnose the cause.  They clamor for more “money” to solve problems that have come about as an indirect result of the creation of more “money.”

Humankind was never meant to live under that shadow of such an overabundance of credit.  The removal of limits on credit creation has effectively removed the natural governor of the activities of man, the need to create real, free market money, making certain that debts are settled in terms of real goods which are demanded by a free market economy.  The return to this natural governor on human activity is indispensable if humankind is to even begin to address climate change and world peace.

The return to this natural governor will be painful, but it is inevitable, and the more one can prepare now to operate in a world where money and credit operate in their appropriate the capacities and take their appropriate places in a balanced economy, the better.

The world is headed, kicking and screaming, towards a forced monetary reset, and things will be much different than they are now.

We applaud the efforts of Positive Money UK, for they are on the right track.  You too can follow them on Twitter or YouTube and learn more about this fascinating and important subject that, by our own reckoning, only one in a million comprehend.  Will that one be you?

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Key Indicators for October 10, 2014

Copper Price per Lb: $3.04
Oil Price per Barrel (WTI):  $85.82

Corn Price per Bushel:  $3.34
10 Yr US Treasury Bond:  2.31%
Bitcoin price in US:  $360.13
FED Target Rate:  0.08%
Gold Price Per Ounce:  $1,223

MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  5.9%
Inflation Rate (CPI):   -0.2%
Dow Jones Industrial Average:  16,544
M1 Monetary Base:  $2,969,100,000,000

M2 Monetary Base:  $11,407,100,000,000

The ECB negative rate announcement is a cannibalistic non-event

6/22/2014 Portland, Oregon – Pop in your mints…

On June 5th, the European Central Bank made modern Central Banking history by providing the world with its first announcement of what they call a negative interest rate. For those who may be scratching their heads at the concept of a negative interest rate, we offer the following layman’s definition:

It is a commission that is charged every month for holding too many Euros in the wrong place.

In the mind of the clever central banker, a negative interest rate provides a simple disincentive to hoard Euros. In his or her mind, the way to invigorate the European economy is to force Euros into circulation by turning them into a sort of hot potato, though at -0.10% the analogy is more akin to a potato emanating scarcely enough heat to melt a pat of butter.

Following the infallible logic of the central banker, the banks will take the money and lend it, as putting 100% of deposits at risk via a loan in a terribly disjointed economic zone is clearly a better alternative that loosing a guaranteed 0.10% annually by parking it overnight at the ECB.

This would be a brilliant solution were the simple hoarding of Euros the only thing ailing the Euro system. Unfortunately for the ECB and indeed, Euro holders in general, the problem with the Euro is that it is dying a strange death at the hands of deflation and strangulating the European economy in the process. Following this set of facts, it would hold that the safer bet for those who find themselves holding excess Euros would be to pay down higher rate liabilities in lieu of holding Euros overnight at the cannibalistic ECB, whose actions, while for the moment are foreseen to be a non-event, will ultimately lead to an implosion of the 15 year-old Euro currency.

What is lost on the European central bank is that they are managing a debt-based currency that looks like money but smells something much different. While charging a commission on bank deposits in hopes of getting currency flowing again may seem a good idea, the dynamics of the debt-based currency make this strategy akin to economic suicide.  Fabian for Liberty appears to take a slightly different slant on the subject and arrives at the same conclusion:

Debt is the lifeblood of modern currency, and a large part of what gives debt based currency its allure is the illusion of getting something for nothing in the form of usury. On June 5th, the ECB pierced the veil on interest rates and the illusion of getting something for nothing along with it. This has never been attempted by a modern monetary authority, and once again the ECB has shown that if there are errors to be made in the management of debt based currency, they are willing to make it.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for June 22, 2014

Copper Price per Lb: $3.10
Oil Price per Barrel:  $106.83

Corn Price per Bushel:  $4.53
10 Yr US Treasury Bond:  2.62%
Bitcoin price in US: $599.07
FED Target Rate:  0.10%
Gold Price Per Ounce:  $1,315

MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  6.3%
Inflation Rate (CPI):  0.4%
Dow Jones Industrial Average:  16,947
M1 Monetary Base:  $2,728,900,000,000

M2 Monetary Base:  $11,306,300,000,000

The Bible Clearly Explains the Consequences of a Debt based Monetary System

2/28/2012 Portland, Oregon – Pop in your mints…

Yesterday we took our fellow taxpayers for a detour which is leading us into what, for some, may be uncharted waters.  These waters are commonly known as the Bible, or the Word of God.  While seemingly unrelated to the discipline of economics and specifically monetary theory, it is important to gain an understanding of the Bible for two reasons:

  1. It is the most widely read book in the history of the world to date
  2. In its labyrinth of narratives, poetry, song, and prophecy, it provides the only coherent framework within which humans, who have been given the gift of reasoning, can understand the world in which they inhabit and what they are to do with their time here.

If only for these reasons alone, it is of the utmost importance that the Bible be understood if we are to gain any meaningful understanding of what is called the “economy” and our specific area of interest, monetary theory, as these disciplines make absolutely no sense without an understanding of the framework in which they operate.

Regardless of one’s preconceived judgments about the Bible’s ability to provide this framework, it is important to understand that a number of one’s fellow humans believe that the Bible provides this framework.  With this given, it can be inferred that this belief is, in whole or in part, is driving their choice of actions. 

A Bible Handwritten in Latin in Malmesbury Abbey, Wilshire, England. Transcribed in Belgium in the year 1407

However, if you remain unconvinced or simply do not have time or motivation to undertake a careful study of the Bible, we will relate what we understand, it is in no way a substitute for one’s personal and corporate study of the Bible, but we appreciate your confidence.

The lessons of the Bible are important and we reiterate, without an understanding of the framework of the Bible, nothing that is going to take place in the future will make sense but will appear to simply occur at random:

Truly we tell you, the events to come have been foretold.  The Kingdom of God is advancing.

What does it have to do with money?  Why is a proper understanding of what we use as money important?

We are glad you asked, allow us to explain:

The current monetary system which most of the Western world uses to each day is built on debt.  Debt, at its essence, is built a faith that persons will perform certain actions in the future.  Performance of these actions from the debtor’s perspective is homogenized as being able to order delivery of the debts of others to the creditor in order to satisfy the debt.

This activity and its consequences are conveniently summed up in Bible as the parable of the Unforgiving Debtor, which can be found in the Bible in the book of Matthew, Chapter  18, verses 21-35.

Wrapped up in a narrative which will take under two minutes to read, the final consequences of using debt as money have never been more clearly stated.  Please give it a read, it is important.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

 

Key Indicators for February 28, 2012

Copper Price per Lb: $3.86

Oil Price per Barrel:  $106.55

Corn Price per Bushel:  $6.53

10 Yr US Treasury Bond:  1.93%

FED Target Rate:  0.10%  ON AUTOPILOT, THE FED IS DEAD!

Gold Price Per Ounce:  $1,784

MINT Perceived Target Rate*:  1.00% AWAY WE GO!

Unemployment Rate:  8.3%

Inflation Rate (CPI):  0.2%

Dow Jones Industrial Average: 13,005

M1 Monetary Base:  $2,137,600,000,000

M2 Monetary Base:  $9,763,200,000,000