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Theoretical and Practical Definition of Money
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TEMA: Theoretical and Practical Definition of Money

Theoretical and Practical Definition of Money prije 10 godine, 4 mjeseci #1324

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Lecture given by Prof. Giacinto Auriti
Universiti di Teramo, Facolti di Giurisprudenza

If we do not establish who is the owner of money with respect to the original title of ownership at the act of issue, we cannot distinguish between debtor and creditor, which illustrates the gravity of a legislative deficiency that can no longer be tolerated. This serious deficiency in the legislative framework surrounding the monetary system has arisen from the fact that there is no scientific definition of the concept of money itself, and thus it has not been possible to consider it as a real good and an object of the law of ownership.

Only in the light of these preliminary considerations is it possible to give a scientific definition of money, filling a conceptual void which can no longer be tolerated. Money has value because it measures value. Every unit of measure is determined by the corresponding quality of what it measures. If the metre is characterized by the quality of length because it measures length, money necessarily has the quality of value because it measures value. In this particular instance, conventional activity produces not only the measure of value, but also the "value of the measure" i.e. what we call "purchasing power".

Like every other unit of measure, money has only got utility if there are objects to measure. If there were no objects to measure in length, a metre would be as useless as money would be if there were no objects whose value could be measured.

After proving that money is simultaneously a measure of value and the value of the measure, it is unquestionably true that the monetary mass constitutes a mirror-like duplicate of the value of real goods, measured or measurable in terms of their value. This duplicate value can have the positive sign of an asset (and in this case, it doubles the people's wealth) or the negative sign of a debt (in which case it creates a desperate and agonising situation because of inevitable insolvency).

When money was made from gold the bearer was also the owner. Since the advent of "nominal money" he has, without realising it, become a debtor. All "nominal money" is issued by the banks in the form of loans. Thus, all money in circulation is burdened with debt to the central banks. Therefore if someone wants to pay off a debt of money with money, it would be the same as paying a debt with another debt. IT CANNOT BE DONE. In the long run, he is forced to pay with his own capital and with the produce of his labour.

With the discovery of induced value as a legal value, it not only proven that money must be considered as the property of the national community but also that currently the central bank, by loaning out what is in fact due, imposes a cost of 200% on money at the act of issue: the initial 100% because it expropriates the community of the induced value (only an owner can lend money), and a further 100% by forcing the national community into debt to the same extent.

Furthermore, it is also evident that banks and other credit institutes "create" money in a surreptitious way. Applying the principle of so-called credit multiplication, they lend money in an increased proportion to the sums which have been deposited with them. For example, they lend 100% with a 20% monetary liquidity reserve. All this can be done because a great part of the lent money is deposited in a bank again, so that a reserve of 20% is usually sufficient to satisfy a request for money. Hence, it is evident that a bank can lend money which it does not have to an amount of 80% of the loan. Consequently, this difference of 80% is in fact induced value (not credit value) which should be represented by legal tender paper money not by instruments of credit. Properly considered, its ownership should be attributed to the community (not to the banks), who could then deposit it in a bank, as creditors and not as debtors.

This principle of credit multiplication expropriates the people and causes debts to the extent of the induced value as explained above, thus results in "debt multiplication" which was a consequence and a corollary of the scheme developed by Paterson in 1694 for the Bank of England, founded with the aim of making loans using the "notes of the bank" (i.e. bills of exchange) in place of money (gold). These bank-notes were "nominal money" and also "debt-money".

As a result of these practices, the people of the world have been dispossessed of their own money, forced into debt without receiving anything in return.

"Debt-money" is the instrument which the "exploiters" have used in order to become the real puppet-masters of history.

With this new monetary system, the central bank can at any time lay claim to as much money as it requires in "repayment", because all money has been issued by the bank in the form of of loans. Since the bank exercises control over the political authority, or at least the Treasury and hence budgetary and fiscal matters, it can at any time retire all the money it desires from the market by means of fiscal levies (taxation) or interest rates.

The people have really and truly become cows to be milked.

By manipulating the conditioned reflex of habitually giving an equivalent to get money, the central banks have forced all the people of the world to accept, at the moment of issue, monetary symbols of negligible cost as the equivalent of a debt. But this is an unfair exchange because the debt is not proportionate to the cost of the symbols (as it should have been) but rather to the induced value of the money (which is not produced by the bank of issue but by social convention).

It is as if someone lending empty fish-baskets to fishermen, thereby forced them into debt not only for fish-baskets but also for fish.

Money has been issued as a debt to the people.
So, the banking system expropriates the national community and forces them into debt by lending what is in fact owed to them. This means that at the act of issue, the cost of money is already 200% . This enormous and heavy cost is usury (as explicitly confirmed by Dr. Luigi Donato, co-director of the supervisory board of the Banca d'Italia in reply to a specific question by the author of this article on the occassion of a conference on the subject of usury held at the University of Macerata on Feb. 7 1996).

For these reasons we have proposed a new type of money:

Art.1 "At the act of issue, money is the property of all Italian citizens and must be credited to the state by the central bank".

Here the most important word is "credited" which replaces "debited". In this way, debt-money becomes asset-money.

We are living in a time of great change, where the heads of the banking system are attempting to destroy masses of living people by means of phantoms. Humanity can only survive if it attains the consciousness that it is the owner of the world of values.

The only possibility to eliminate the hegemony of the "great usury" in order to allow humanity to live and enjoy life on a new human dimension, is to inscribe in the legal code of all nations, the principle of the popular ownership of money.


Dear ___________:
It is obvious that you and your paralegal do not understand the simple fact that there is no money in circulation and that you cannot demand paper instruments backed by credit. You obtained a money judgment, not a credit judgment. It is a principal of law universally accepted that a State judge cannot make a legal determination contrary to Article 1, Section 10 of the Constitution of the United States or Louisiana Revised Statute 1-53. All judicial judgments must comply with both.

You now have the problem of execution, which must be executed, by the very same trial court that lost subject matter jurisdiction via a vague order. There is no money to satisfy judgment and any attempt to seize property will be met with an injunction prohibiting sale upon the ground that the judgment obtained is absolutely null. Any motion for examination of judgment debtor will be met with a motion to quash the summons upon the same ground. This is my intent. Act as you feel compelled but be prepared to discuss money and payment in all future hearings.
In your letter you say, “We would be willing to accept payment in the full amount owed to our client (principal sum of $21,462.10).” 21,000 of what? What you are willing to accept is not the issue. The issue is what are you legally able to demand? What kind/species of money aggregate type (M1, M2, or, M3) was loaned and are you asking for a different type to be repaid? Below is a brief explanation and I shall expect a reply or we will let the Judge reply.

M1 consists of (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) travelers checks of nonbank issuers; (3) demand deposits at commercial banks (excluding those amounts held by depository institutions, the U.S. government, and foreign banks and official institutions) less cash items in the process of collection and Federal Reserve float; and (4) other checkable deposits (OCDs), consisting of negotiable order of withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, credit union share draft accounts, and demand deposits at thrift institutions. Seasonally adjusted M1 is constructed by summing currency, travelers checks, demand deposits, and OCDs, each seasonally adjusted separately.

M2 consists of M1 plus (1) savings deposits (including money market deposit accounts); (2) small-denomination time deposits (time deposits in amounts of less than $100,000), less individual retirement account (IRA) and Keogh balances at depository institutions; and (3) balances in retail money market mutual funds, less IRA and Keogh balances at money market mutual funds. Seasonally adjusted M2 is constructed by summing savings deposits, small-denomination time deposits, and retail money funds, each seasonally adjusted separately, and adding this result to seasonally adjusted M1.

M3 consists of M2 plus (1) balances in institutional money market mutual funds; (2) large-denomination time deposits (time deposits in amounts of $100,000 or more); (3) repurchase agreement (RP) liabilities of depository institutions, in denominations of $100,000 or more, on U.S. government and federal agency securities; and (4) Eurodollars held by U.S. addressees at foreign branches of U.S. banks worldwide and at all banking offices in the United Kingdom and Canada. Large-denomination time deposits, RPs, and Eurodollars exclude those amounts held by depository institutions, the U.S. government, foreign banks and official institutions, and money market mutual funds. Seasonally adjusted M3 is constructed by summing institutional money funds, large-denomination time deposits, RPs, and Eurodollars, each adjusted separately, and adding this result to seasonally adjusted M2.

An Elementary Explanation on Money.

What's a dollar? A simple question. Yet no court will render a determination.

This is not hard, and even though elementary in my approach, it is a simple means to make a simple principle understandable...So again:

To those who answered YES, I most certainly agree. Since a Tuna is a fish, wouldn't 10 (ten) Tuna have to be 10 fish? ABSOLUTELY!

YES an apple is a piece of fruit, and 10 apples would be 10 pieces of fruit. GREAT!

And if you answered YES to that question, then please answer the following:


If a dollar is a piece of paper, how could two halves, four quarters, ten dimes, twenty nickels or one hundred pennies BE A DOLLAR?


If I held an apple in my hand in such a way that you could only see one half of it and then proceeded to ask you : "What am I holding in my hand"? Would you answer "An apple"?

But what if, much to your surprise, I showed you the part of the apple that was concealed in my hand, and it had stamped on it : TEN APPLES - U.S. DEPARTMENT OF AGRICULTURE...? Would you still say I had an apple, or would you say now I really had ten apples? Think about this, for you do it every day! I believe intelligent people should answer questions correctly. And of course, just because the USDA stamped 10 on my apple, or the privately owned Federal Reserve prints 10 on their imaginary notes, certainly doesn't make one become ten AND YOU KNOW IT! The law says:

"United States money is expressed in dollars..." - Title 31, United States Code, Sec.5101.

And land in the USA is "expressed" in acres, so deeds to land are also expressed in acres - although an "acre" is not the land, nor is "dollar" the money BUT the UNIT OF MEASURE of gold and silver in coin form, ONLY when gold and silver are current AS the money! Gold and silver have been used AS money for a long time throughout history and for very good reasons including but not limited to: 1) relative scarcity; 2) doesn't rust or spoil; and, 3) has universal acceptance...again, we don't need any government to force us to accept gold or silver, but they have to force us to take paper.

A convenient unit of weight was needed to express gold and silver; the shekel of old later giving way to the troy ounce of today. But Americans officially in 1792 - [Coinage (Mint) Act of 1792, which the Boston Federal Reserve Bank states: still the law..."] adopted the decimal system for weighing gold and silver, the "dollar" being the primary unit of measure.

Nevertheless, just as gravel is measured in cubic yards, sugar in pounds, and milk is expressed in quarts, so too, silver and gold were weighed in dollars. And since no tangible entity answers to a 'gravel cubic yard', 'sugar pound', or a 'milk quart' - it stands to reason no tangible commodity could answer to a gold or silver 'dollar'! And the reason you do NOT have a 'silver dollar' in your secret hiding place, is the same reason you do NOT have a 'milk quart' in your refrigerator - that is, NEITHER EXIST.

Intangible units of measure are not fashioned from tangible substances! So, why do you correctly say "a quart of milk", and incorrectly say "a silver dollar"? Accurate or lawful delivery [PAYMENT] of a substance or thing requires three elements or indicia: 1) Numeric quantity; 2) Unit of measure; and 3) the thing or substance being measured. In fact with out all three of the above indicia, no merchant can do business with any customer, anywhere - consider:
You own a deli with a fine array of meats and cheeses, etc...and I approach you with this request: "Could I please have 3 pounds please"? In order to fill my order you need all three indicia and I only gave you two - quantity = 3, unit of measure = pound, but I failed to tell you what the substance was, so you must ask; "3 POUNDS OF WHAT?" Then, once I tell you "smoked turkey breast", you have no problem filling my order. So, what do you do when I next order: "Could I please have pounds of Swiss cheese"? This time you must ask: "HOW MANY POUNDS of Swiss Cheese"? - Get it? By now, as a deli owner, you are wondering if I am not the dumbest person on earth, yet when I ask you how much is my total order, you say: "Ten dollars please"?, and if I asked you "TEN DOLLARS OF WHAT?" you'd be dumbfounded!

When we used gold/silver AS the money, you would have said: TEN DOLLARS OF GOLD (pricy shop you run!), and we could both conduct our business...So today - TEN DOLLARS OF WHAT? Dollars of dollars? Do we have "gallons of gallons"? See the scam, fraud and CON?
If you have ever seen a pre-1963 dollar bill of credit, you might have noticed the CONTRACT concealed in plain view: Who?: "The United States of America", Will do what/when: "Pay to the Bearer on Demand - ONE DOLLAR" What/where: "This note is legal tender for all debts, Public and Private, and is redeemable in lawful money at the United States Treasury, or at any Federal Reserve Bank."

"The terms 'lawful money' or 'lawful money of the United States' shall be construed to mean gold or silver coin of the United States." {Title 12 United States Code, Section 152]

Can a note that PROMISES to PAY ' LAWFUL MONEY' be the "Lawful money'?In the pre-1963 bills of credit, or notes, you had to look at three different places on the face of the bill, and read four different fonts/styles of print to see the contract concealed in plain view. Now, pull out a post-1963 bill of credit, any denomination if you like, and look closely at its face:


That's it! They removed the PROMISE and by doing so the bill magically became the thing once promised! UNDER YOUR NOSE! The modern day FEDERAL RESERVE NOTE promises nothing to no one ever! It can't be redeemed for anything, it is not "federal" embraces NO "reserves" and is NOT a "note".

The very first person who "spends" one into the market place will give nothing for it and get anything with it...YOU SLAVE, must work for it and if you hold onto it too long, will get nothing for it! Just as deeds to land cannot be the land, notes [promises to pay the money], or now, worse - imaginary notes with no promises to pay the money, cannot be the money.

Again - "So what - I can spend it" cry the slaves...But looking beyond their elementary short-sightedness, it should be obvious that for the creators of imaginary notes a phenomenal economic and political clout can be had...for the rest of us, serious problems.

"Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily, and while the process impoverishes many, it actually enriches some." Keynes on Inflation, 1980 Annual Report, FRB of Richmond, p.6.

Legalized theft of our wealth with imaginary money GIVEN PHYSICAL SUBSTANCE with paper and copper/nickel slugs creates a dilemma since fraud of this magnitude is difficult to conceal. Our master's solution: Charge interest on loans of nothing! Who would ever suspect a bank of creating imaginary principal when everyone thinks they need more of what they get for nothing?

But interest creates another problem. How does the non bank public return more 'funny money' to the banks than they pretend to lend??? How can all debtors repay the principal plus interest when banks only lend principal? In other words, how do we repay 4 eggs on a 3 egg loan - when the banks own all the chickens?

Our master's solution: Just encourage the next generation to climb aboard the treadmill. By borrowing new 'dollars' into circulation, they enable the first generation to earn that '4th egg'. This also gives the first generation an incentive to enslave their own offspring and escape foreclosure!

It is the nature of an imaginary monetary system that is ever expanding and all consuming to collapse. Public CONfidence in this self-destructive, "it's gonna kill us all" system is enhanced by: 1) fond memories of 'redeemable notes'; 2) interest levied on non-loans; 3) vaults and armed guards to protect bogus IOU's, and 4) public schools to delude students into exchanging assets [labor, wealth or production] for bank liabilities [notes and checks] and call it PAYMENT instead of THEFT!


In your letter you asked for $.

Professor Florian Cajori dealt with the $ sign question rather definitively more than 60 years ago in A History of Mathematical Notations and could get quite indignant on the subject. He noted in his book, "About a dozen different theories [on the $ sign's origin] have been advanced by men of imaginative minds, but not one of these would-be historians permitted himself to be hampered by the underlying facts." Among the deficient hypotheses:

1. The $ sign was originally the letters U and S superimposed. The idea here is that the original $ sign had two vertical lines, not one. Popular though this idea is, there is zero documentary evidence for it. Furthermore, Robert Morris, the Revolutionary War financier and the first U.S. official to use the sign, made it with a single vertical stroke.
2. It's a version of the letters IHS, the Greek abbreviation of the name Jesus. No further comment required.
3. It was originally a P combined with an 8. The dollar, you'll recall, is descended from the Spanish Mill Dollar, also known as the "piece of eight" because it consisted of eight reals. Plausible, and as we shall see not that far from the truth, but still wrong.
4. The $ sign was inspired by the Spanish "pillar dollar," which on one side had two columns signifying the "pillars of Hercules" at Gibraltar. These were represented in the dollar sign by the two vertical lines, with the S being some sort of scroll wrapped around them.

In reality, Professor Cajori contends in his book, the $ sign is an abbreviation for "pesos." Bear in mind that the Spanish dollar, also known as the peso de 8 reales, was the principal coin in circulation in the U.S. up until 1794, when we began minting our own money. In handwriting, "pesos" was usually abbreviated lowercase "ps," with S above and to the right of the P and with the hook on the latter written with one or two deep strokes. As time went on, the P and the S tended to get mashed together and the result was $. The dollar sign and the PS abbreviation were used interchangeably from around 1775 until the end of the century, after which the latter faded from view. Professor Cajori backs up his argument with examples from manuscripts of the period. It is thought by some that the changes from double stroke to single stroke dollar signs parallel changes from asset-backed currency to credit backed currency. It appears that nobody really knows or has any documentary evidence as to the meaning of the single and/or double line $ sign until one studies a one-dollar stamp. Close examination of such will immediately reveal that somebody certainly knows the difference between the symbol. A bill or judgment for a $ does not support an action. If someone knows what a $ is then the court must surely know because the judgment herein contains the single line $ sign and without clarification it is impossible for Clyde Scott to know what it means in this action. Therefore, clarification is mandatory so that I can comply with your PAYMENT request. I cannot tender a $ until I know what a $ is.


I am a student of monetary law and have studied this issue extensively for the last several years, and thus I sincerely believe that my views on this subject have weight, merit and authority. I have also requested my local public servants to provide to me a similar determination, but I have been unsuccessful in this respect. The conclusion I have reached in reference to this failure of public officials to answer these basis questions posed by citizens is that these officials have no knowledge of monetary law. Since I suspect that you likewise may have some misconception in your own mind concerning this topic, I would like to offer you my views and opinion, in a Christian spirit.

The common monetary unit in circulation in our country prior to and during the Revolutionary War was the Spanish Milled Dollar. This coin was so prevalent that the word “dollar” was commonly understood by all people to be a reference to this coin. When the Constitution was drafted in 1787 and later ratified by the states in 1788, the constitutional references to “dollars” in this instrument meant these coins.

During the period of time that the Articles of Confederation were in force, the Confederate Congress made a factual determination that the “dollar” was the basic monetary unit of our country. By 1792, the Congress under the Constitution made a factual determination that the “dollar” was a weight of silver consisting of 371.25 grains of pure silver: see 1 stat. 246. This was the first act of Congress in reference to the subject of money; and there have been additional congressional acts adopted since the Coinage Act of 1792, but these acts have culminated in such a fashion as to only cause confusion in the field of monetary law.

A recitation of all the coinage acts of Congress is pointless here, although I would be happy to provide these cites to you. Acts in this regard were adopted, among other times, in 1834, 1837, 1878, 1900, 1933, 1934, and 1967. But, in reference to decisive acts of Congress in reference to the term “dollar” it is acts passed in 1972 and 1976 by Congress which clearly lead to the confusion so prevalent today in regards to the subject of monetary law.

Louisiana follows the common law and, of course, the common law is most important in reference to the subject of monetary law. At common law, the monetary standard of a nation was immutable, meaning that it could not be changed by any legislative body. This principle is expounded by many common law authorities and is an established principle of law. This being the case, Congress lacks all power to change the ancient monetary standard of our nation, which is the “dollar” of silver defined in the Coinage Act of 1792.

I am fully cognizant of the fact that there exist many powerful and influential advocate that maintain that the monetary standard is mutable meaning that it can be changed by Congress. These partisans further maintain that all power over the monetary standard is vested in the hands of Congress. If you accept this premise, then it logically follows that a “dollar” is today a legal fiction. The last definition of a “dollar” via a federal statute was contained in the Par Value Modification Act of March 31, 1972, 86 Stat. 116 formally 31 U.S.C. section 449. Section 2 of this act defined a “dollar” as being equal to 1/38 of a fine troy ounce of gold; in the alternative, 38 “dollars” equaled an ounce of such fine gold. This definition of a gold “dollar” was in effect until October 19, 1976, when congress adopted the Act to Amend the Bretton Woods Agreement, 90 Stat. 2660. Section 6 of this act repealed section 2 of the Par Value Modification Act. Since that time, congress has totally failed, and refused to enact any legislation defining a “dollar”. If you accept the argument that congress possesses total control over the monetary standard, then you must also accept the proposition that a “dollar” is today a legal fiction. It is indeed odd that our entire economy and society operate upon an entity which is unknown and legally undefined.

Another point I would like to make with you concerns the Federal Reserve Note. Many people contend that Federal Reserve Notes are legal tender pursuant to 31 U.S.C. section 3103. But, notwithstanding this statute, one must look to the substance instead of the form to determine if such notes are really, legally, legal tender. The essential attribute of any legal tender currency is that it must be in fact an obligation of the United States. To be an obligation of the United States, Congress must have adopted an act authorizing the issuance of some quantity of these notes, and the same must be enforceable against the United States. However, I have not found any statute whereby congress has authorized any amount of these notes to be issued and since this is the case, such notes are not United States obligations and are not legal tender. Further, these notes are not enforceable against the United States. The ultimate hypocrisy is that these notes are not even enforceable against the banks, which issued them. I have studied the matter for 20 years and written an extensive brief on the point that Federal Reserve Notes are not a legal tender, which I will save to counter any erroneous position taken in any official determination.

I hope that the points I am making in this letter are perceptible to you. There is a real and substantial issue concerning what is legally a “dollar” with on one extreme it being contended that a “dollar” is a weight of silver and on the other extreme it being contended that a “dollar” is a legal fiction. Further, some people contend that Federal Reserve Notes are legal tender and others answer that they are not, and these people who contend otherwise, including myself, have the weight of law to support their argument. With such obvious confusion, it is only natural that I cannot pay a “dollar” of liability in any judgment or settlement.

It is a well-known fact that a court that does not have a remedy has no subject matter jurisdiction to create one unless such is contracted. In this instant there is no remedy because payment of a judgment in money of account expressed in “dollars” and pursuant to HJR-192 there are no lawful dollars in circulation. Since HJR 192 we can only discharge a liability with the approval of John W. Snow Secretary of the Treasury. If John W. Snow does not give his approval any judgment, settlement, or debt can only become an unenforceable and expensive nullity.

As a matter of law the money accounts of this state must be expressed in dollars or units, cents or hundredths, and mills or thousandths; and all accounts in banks and public offices, and all proceedings in the courts of this state, shall be kept in conformity herewith.

Since this state must express its judgment in “dollars” an official determination is mandatory to eliminate confusion and performance, so I can legally and lawfully pay, settle, or discharge the claim with “dollars” or by the Bill of Exchange remedy found in House Joint Resolution 192.

The matter is further complicated by the fact that the State is prohibited from making paper a tender in payment of debt. See Article 1, Section 10 of the Constitution of the United States. Which states:
“No State shall make anything but gold and silver coin a tender in payment of debt.”

A check with the Louisiana Secretary of State clearly shows that in his opinion Article 1, Section 10 is binding upon the State of Louisiana. So, as you can see, in view of these authorities, statutes, resolutions, and articles, I have no remedy or way to comply with the payment of “dollars” or the $ you requested and therefore must conditionally accept for value and return for value your presentment pending an official determination of a “dollar” expressed in your claim or tender a $1 Money Order each month until Congress puts money back into circulation. I have no duty to pay you or MBNA anything, unless you submit proof of claim that there is a way to pay the “dollars” you are demanding. Additionally, Every competent jurist knows that the created cannot possess a power that the creator did not have to give. The State of Louisiana does not have the power to make paper a tender in payment of debt and neither does any corporation created by the state or federal government. Such would be an act of ultra vires.

Years of research clearly show that the United States is without a dollar of “public or lawful money”. All we have today is the private Federal Reserve unbacked credit dollars which are not money or property and only confers the user an equitable interest but denies allodial title. It is no accident that the United States is without a dollar unit coin. In recent years the Eisenhower dollar coin received widespread acceptance, but the Treasury minted them in limited number, which encouraged hoarding. This same fate befell the Kennedy half dollars, which circulated as silver sandwiched clads between 1965-1969 and were hoarded for their intrinsic value and not spent. Next came the Susan B. Anthony dollar, an awkward coin which was instantly rejected as planned. The remaining unit is the privately issued Federal Reserve note unit dollar (which is not money see 105 So. 305 ‘1925’) with no viable competitors. Back in 1935 the Fed had persuaded the Treasury to discontinue minting silver dollars because the public preferred them over dollar bills. That the public money system has become awkward, discouraging its use, is no accident. It was planned that way. There is no way to plug a judicial judgment into a private money system pursuant to Article one, Section ten. I clearly would love to litigate any premise counter to these assertions.

If printing the word note on a piece of green paper makes it a note, could we not print the word orange on it and get juice from it?

We Americans SHOULD have the right to know what the value of a dollar is in clear and unequivocal terms since, if we are liable for a tax by clear and unequivocal language, we must be able to calculate that tax using: "The unit (dollar) employed in the United States in calculating money values." Blacks Law Dictionary, 4th Edition Revised (1957) (See report). Because if we cannot use the dollar to calculate "income" (whatever that is) then we CANNOT know the "value" of whatever we accepted as payment.

Keeping in mind the well-settled rule that the citizen is exempt from taxation unless the same is imposed by clear and unequivocal language, and that where the construction of a tax law is doubtful, the doubt is to be resolved in favor of those upon whom the tax is sought to be laid … Spreckels Sugar Refining Co. v. McClain,192 U.S. 397, 24 S.Ct. 376, 418, U.S. 1904

The "Federal Reserve" dollar in its current form is an instrument of debt, plain and simple. If all debt were satisfied in full at the same time, those dollars would cease to exist.

EVERY DOLLAR from inception is created as an instrument of debt. The only way to keep the Ponzi scheme in motion is to inflate via more and more loans, creating the impression that there is "enough money" to pay all the debt AND all the interest, but at any given time, there are NOT enough 'dollars' to pay both in full. Not that there is much chance of all debt ever being paid in full simultaneously. It is that "float" of money that keeps the system in motion.

Re:Theoretical and Practical Definition of Money prije 10 godine, 4 mjeseci #1325

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FDIC Insures $4.7 Trillion in Deposits with a $13.6 Billion Deposit Insurance Fund

This is like going into a hurricane with a 99 cent store umbrella.

Fractional Banking: Ignorance Of Legal Arguments

From: Jesus Huerta de Soto,Money, Bank Credit, and Economic Cycles - Auburn: Mises Institute, 2006

Theorists of fractional-reserve banking tend to exclude legal considerations from their analysis. They fail to see that the study of banking issues must be chiefly multidisciplinary, and they overlook the close theoretical and practical connection between the legal and economic aspects of all social processes.
Thus free-banking theorists lose sight of the fact that fractional-reserve banking involves a logical impossibility from a legal standpoint. Indeed at the beginning of this book we explained that any bank loan granted against demand-deposit funds results in the dual availability of the same quantity of money: the same money is accessible to the original depositor and to the borrower who receives the loan. Obviously the same thing cannot be available to two people simultaneously, and to grant the availability of something to a second person while it remains available to the first is to act fraudulently.156
Such an act clearly constitutes misappropriation and fraud, offenses committed during at least the early stages in the development of the modern banking system, as we saw in chapter 2.
Once bankers obtained from governments the privilege of operating with a fractional reserve, from the standpoint of positive law this banking method ceased to be a crime, and when citizens act in a system backed in this way by law, we must rule out the possibility of criminal fraud. Nevertheless, as we saw in chapters 1 through 3, this privilege in no way provides the monetary bank-deposit contract with an appropriate legal nature. Quite the opposite is true. In most cases this contract is null and void, due to a discrepancy concerning its cause: depositors view the transaction as a deposit, while bankers view it as a loan. According to general legal principles, whenever the parties involved in an exchange hold conflicting beliefs as to the nature of the contract entered into, the contract is null and void.
Moreover even if depositors and bankers agreed that their transaction amounts to a loan, the legal nature of the monetary bank-deposit contract would be no more appropriate.
From an economic perspective, we have seen that it is theoretically impossible for banks to return, under all circumstances, the deposits entrusted to them beyond the amount of reserves they hold. Furthermore this impossibility is aggravated to the extent that fractional-reserve banking itself tends to provoke economic crises and recessions which repetitively endanger banks’ solvency. According to general legal principles, contracts which are impossible to put into practice are also null and void. Only a 100-percent reserve requirement, which would guarantee the return of all deposits at any moment, or the support of a central bank, which would supply all necessary liquidity in times of difficulty, could make such “loan” contracts (with an agreement for the return of the face value at any time) possible and therefore valid.
The argument that monetary bank-deposit contracts are impossible to honor only periodically and under extreme circumstances cannot redeem the legal nature of the contract either, since fractional-reserve banking constitutes a breach of public order and harms third parties. In fact, because fractional-reserve banking expands loans without the support of real saving, it distorts the productive structure and therefore leads loan recipients, entrepreneurs deceived by the increased flexibility of credit terms, to make ultimately unprofitable investments. With the eruption of the inevitable economic crisis, businessmen are forced to halt and liquidate these investment projects. As a result, a high economic, social, and personal cost must be borne by not only the entrepreneurs “guilty” of the errors, but also all other economic agents involved in the production process (workers, suppliers, etc.).
Hence we may not argue, as White, Selgin, and others do, that in a free society bankers and their customers should be free to make whatever contractual agreements they deem most appropriate.157 For even an agreement found satisfactory by both parties is invalid if it represents a misuse of law or harms third parties and therefore disrupts the public order.
This applies to monetary bank deposits which are held with a fractional reserve and in which, contrary to the norm, both parties are fully aware of the true legal nature and implications of the agreement.
Hans-Hermann Hoppe158 explains that this type of contract is detrimental to third parties in at least three different ways. First, credit expansion increases the money supply and thereby diminishes the purchasing power of the monetary units held by all others with cash balances, individuals whose monetary units thus drop in buying power in relation to the value they would have had in the absence of credit expansion.
Second, depositors in general are harmed, since the credit expansion process reduces the probability that, in the absence of a central bank, they will be able to recover all of the monetary units originally deposited; if a central bank exists, depositors are wronged in that, even if they are guaranteed the repayment of their deposits at any time, no one can guarantee they will be repaid in monetary units of undiminished purchasing power. Third, all other borrowers and economic agents are harmed, since the creation of fiduciary credit and its injection into the economic system jeopardizes the entire credit system and distorts the productive structure, thus increasing the risk that entrepreneurs will launch projects which will fail in the process of their completion and cause untold human suffering when credit expansion ushers in the stage of economic recession.159
In a free-banking system, when the purchasing power of money declines in relation to the value money would have were credit not expanded in a fractional-reserve environment, participants (depositors and, especially, bankers) act to the detriment of third parties. The very definition of money reveals that any manipulation of it, society’s universal medium of exchange, will exert harmful effects on almost all third-party participants throughout the economic system.
Therefore it does not matter whether or not depositors, bankers, and borrowers voluntarily reach specific agreements if, through fractional-reserve banking, such agreements influence money and harm the public in general (third parties).
Such damage renders the contract null and void, due to its disruption of the public order.160 Economically speaking, the qualitative effects of credit expansion are identical to those of the criminal act of counterfeiting banknotes and coins, an offense covered, for instance, by articles 386–389 of the new Spanish Penal Code.161 Both acts entail the creation of money, the redistribution of income in favor of a few citizens and to the detriment of all others, and the distortion of the productive structure. Nonetheless, from a quantitative standpoint, only credit expansion can increase the money supply at a fast enough pace and on a large enough scale to feed an artificial boom and provoke a recession. In comparison with the credit expansion of fractional-reserve banking and the manipulation of money by governments and central banks, the criminal act of counterfeiting currency is child’s play with practically imperceptible social consequences.
The above legal considerations have not failed to influence White, Selgin, and other modern free-banking theorists, who have proposed, as a last line of defense to guarantee the stability of their system, that “free” banks establish a “safeguard” clause on their notes and deposits, a clause to inform customers that the bank may decide at any moment to suspend or postpone the return of deposits or the payment of notes in specie.162 Clearly the introduction of this clause would mean eliminating from the corresponding instruments an important characteristic of money: perfect, i.e., immediate, complete, and never conditional, liquidity. Thus not only would depositors become forced lenders at the will of the banker, but a deposit would become a type of aleatory contract or lottery, in which the possibility of withdrawing the cash deposited would depend on the particular circumstances of each moment.
There can be no objection to the voluntary decision of certain parties to enter into such an atypical aleatory contract as that mentioned above. However, even if a “safeguard” clause were introduced and participants (bankers and their customers)
were fully aware of it, to the extent that these individuals and all other economic agents subjectively considered demand deposits and notes to be perfect money substitutes, the clause referred to would only be capable of preventing the immediate suspension of payments or failure of banks in the event of a bank run. It would not prevent all of the recurrent processes of expansion, crisis and recession which are typical of fractional-reserve banking, seriously harm third parties and disrupt the public order. (It does not matter which “option clauses” are included in contracts, if the general public considers the above instruments to be perfect money substitutes.)
Hence, at most, option clauses can protect banks, but not society nor the economic system, from successive stages of credit expansion, boom and recession. Therefore White and Selgin’s last line of defense in no way abolishes the fact that fractional-reserve banking inflicts severe, systematic damage on third parties and disrupts the public order.163


156 Hoppe, “How is Fiat Money Possible?—or, The Devolution of Money and Credit,” p. 67.

157 See, for example, White, Competition and Currency (New York: New York University Press, 1989), pp. 55–56, and Selgin, “Short-Changed in Chile,” p. 5.

158 Hoppe, “How is Fiat Money Possible?—or, The Devolution of Money and Credit,” pp. 70–71.

159 The multidisciplinary nature inherent in the critical analysis of the fractional-reserve banking system and the resulting importance of both legal and economic considerations in this analysis not only comprise the focal point of this book; Walter Block also highlights them in his article, “Fractional Reserve Banking: An Interdisciplinary Perspective,” published as chapter 3 of Man, Economy, and Liberty: Essays in Honor of Murray N. Rothbard, Walter Block and Llewellyn H. Rockwell, Jr., eds. (Auburn, Ala.: Ludwig von Mises Institute, 1988), pp. 24–32. Block points out the curious fact that no theorist from the modern, Fractional-Reserve Free-Banking School has built a critical, systematic case against the proposal of a banking system with a 100-percent reserve requirement.
In fact, except for a few comments from Horwitz, neo-banking theorists have yet to even attempt to show that a banking system with a 100-percent reserve requirement would fail to guarantee “monetary equilibrium” and an absence of economic cycles. See Horwitz, “Keynes’ Special Theory,” pp. 431–32, footnote 18.

160 Our position on this point is even more radical than the one Alberto Benegas Lynch takes in his book, Poder y razón razonable (Buenos Aires and Barcelona: Librería “El Ateneo” Editorial, 1992), pp. 313–14.

161 The following shall be punishable by a prison term of eight to twelve years and a fine of up to ten times the face value of the currency: 1. The creation of counterfeit currency. (Article 386 of the new Spanish Penal Code)
It is important to note that credit expansion, like the counterfeiting of money, inflicts particularly diffuse damage on society, and therefore it would be exceedingly difficult, if not impossible, to fight this crime based on each injured party’s demonstration of harm suffered. The crime of producing counterfeit currency is defined in terms of a perpetrator’s act and not in terms of the specific personal damage caused by the act.

162 Such “option clauses” were in force in Scottish banks from 1730 to 1765 and reserved the right to temporarily suspend payment in specie of the notes banks had issued. Thus, in reference to bank runs, Selgin states:
Banks in a free banking system might however avoid such a fate by issuing liabilities contractually subject to a ‘restriction’ of base money payments. By restricting payments banks can insulate the money stock and other nominal magnitudes from panic-related effects. (Selgin, “Free Banking and Monetary Control,” p. 1455)
The fact that Selgin considers resorting to such clauses to avoid bank runs is as significant in terms of the “solvency” of his own theory as it is surprising from a legal perspective that the attempt is made to base a system on the expropriation, albeit partial and temporary, of the property rights of depositors and note holders, who, in a crisis, would be transformed into forced lenders and would no longer be considered true depositors and holders of monetary units, or more specifically, perfect money substitutes. Let us remember a comment from Adam Smith himself:
The directors of some of those [Scottish] banks sometimes took advantage of this optional clause, and sometimes threatened those who demanded gold and silver in exchange for a considerable number of their notes, that they would take advantage of it, unless such demanders would content themselves with a part of what they demanded. (Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Book II, chap. 2, pp. 394–95)
On option clauses, see Parth J. Shah, “The Option Clause in Free Banking Theory and History: A Reappraisal,” a manuscript presented at the 2nd Austrian Scholars Conference (Auburn, Ala.: Ludwig von Mises Institute, April 4–5, 1997), later printed in the Review of Austrian Economics 10, no. 2 (1997): 1–25.

163 It is interesting to note that many free-banking theorists fail to see that fractional-reserve banking is illegitimate from the standpoint of general legal principles, and instead of proposing the eradication of fractional-reserve banking, they suggest the banking system be completely privatized and the central bank be eliminated. This measure would certainly tend to check the practically unlimited abuses authorities have committed in the financial field, but it would not prevent the possibility of abuses (on a smaller scale) in the private sphere. This situation resembles that which would arise if governments were allowed to systematically engage in murder, robbery, or any other crime. The harm to society would be tremendous, given the enormous power and the monopolistic nature of the state. The privatization of these criminal acts (an end to governments’ systematic perpetration of them) would undoubtedly tend to “improve” the situation considerably, since the great criminal power of the state would disappear and private economic agents would be permitted to spontaneously develop methods to prevent and defend themselves against such crimes. Nevertheless the privatization of criminal activity is no definitive solution to the problems crime poses. We can only completely solve these problems by fighting crime by all possible means, even when private agents are the perpetrators. Thus we conclude with Murray N. Rothbard that in an ideal free-market economic system:
[F]ractional-reserve bankers must be treated not as mere entrepreneurs who made unfortunate business decisions but as counterfeiters and embezzlers who should be cracked down on by the full majesty of the law. Forced repayment to all the victims plus substantial jail terms should serve as a deterrent as well as to meet punishment for this criminal activity.
(Murray N. Rothbard, “The Present State of Austrian Economics,” Journal des Economistes et des Etudes Humaines 6, no. 1 [March 1995]: 80–81; reprinted in Rothbard, The Logic of Action I [Cheltenham, U.K.: Edward Elgar, 1997], p. 165)

Re:Theoretical and Practical Definition of Money prije 10 godine, 4 mjeseci #1326

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The Nature of Money: the Federal Reserve Note’s Duality.

Last Saturday, I explored the “Hidden Forces” of “money”. This week, I’ll consider some of the questions surrounding the Federal Reserve Notes you carry in your wallet and call “money”.

I have photocopies of three letters allegedly from the Department of The Treasury discussing the nature of Federal Reserve Notes (FRN's). The dates on the first two letters are A.D. 1977 and A.D. 1982; the third letter's date is unclear.
I can't prove the photocopies are legiti¬mate, but I believe they are. Assuming these letters are legitimate, they offer an interesting (and bewildering) glimpse into the nature of our purported “money”. If you (or I) could fully understand these three letters, we’d be among the handful of people in the whole country who truly understand the “nature of money”. As a result, we’d probably be rich and powerful. We’d certainly be dangerous.
• The first letter is marked "Exhibit 0-8" and was apparently used in someone's trial, but the name of the recipient has been erased and is unknown to me. It's simply one of those document's that drift like autumn leaves across the internet. (The italicized highlights in all three letters are my additions.)

Department of the Treasury
Office of The General Counsel
Washington, D.C. 20220
Feb 18, 1977

This is to respond to your letter of November 23, 1976 in which you request a definition of the dollar as distinguished from a Federal Reserve note.
Federal Reserve notes are not dollars. Those notes are denomi¬nated in dollars, which are the unit of account of the United States money. The Coinage Act of 1792 established the dollar as the basic unit of the United States currency, by providing that "The money of account of the United States shall be expressed in dollars or units, dimes or tenths, cents or hundredths . . . ." 31 U.S.C. § 371.
The fact that Federal Reserve notes may not be converted into gold or silver does not render them worthless. Mr. Bernard of the Federal Reserve Board is quite correct in stating that the value of the dollar is its purchasing power. Professor Samuelson, in his text Eco¬nomics, notes that the dollar, as our medium of exchange, is wanted not for its own sake, but for the things it will buy.
I trust this information responds to your inquiry.
Sincerely yours,
Russell L. Munk
Assistant General Counsel
Note that FRNs are 1) not dollars; but 2) are “units of account”.
What’s a “unit of account”? It is not a “unit of value”. It is merely a number. That’s all. As you’ll read, if your FRNs are mere “numbers,” what are you paying taxes on?

• The second letter was written in 1982 from the Department of The Treasury to Bryon Dale—a very astute student of the American money system.
As Mr. Dale knew (and the letter confirms), in A.D. 1982, the federal government printed our paper money (FRNs) for $20.60 per thousand physical notes, then sold the Notes at cost to the Federal Reserve, which ultimately loaned the notes to the public at full face value—plus interest (the interest alone is typically more than the cost for printing the Note).
Under this arrangement, the Federal Reserve could buy a $100 FRN from our government for about a nickel, and ultimately loan it back to the American people at full face value ($100). Plus interest.
Quite a deal, hmm? How'd you like to have a monopoly that allowed you to buy mere pieces of paper for a nickel each and then lend 'em out for $100 each—plus interest?!
Given that the feds were selling $100 notes to the Federal Reserve for a nickel each, Byron Dale sent a $1 FRN to the Bureau of Engraving and Printing and offered to buy a freshly-printed $100 bill directly from the gov¬ernment for $1 FRN. That offer sounds silly, but technically, it was a much better deal than gov-co had from the Federal Reserve that (then) would only pay two cents for a $100 bill. I.e., Byron's $1 offer was roughly 50 times better than the Fed’s.
Here's government's response to Mr. Dale's "generous" offer:

Department Of The Treasury
Bureau Of Engraving And Printing
Washington, D.C. 20228
December 14, 1982

Mr. Byron C. Dale

Dear Mr. Dale:
This is in response to your letter of November 15, 1982 in which you enclosed a $1 Federal Reserve note and request to purchase a one hundred dollar bill.
The Bureau of Engraving and Printing produces the Nation's pa¬per currency and sells it to the Federal Reserve system for $20.60 per one thousand notes. The notes, however, are not money until they are monetarized and issued by a Federal Reserve Bank. To obtain notes, a Federal Reserve Bank must pledge collateral equal to the face value of the note. Collateral must consist of the following assets, alone or in any combination: 1) gold certificates, 2) special Drawing Right certificates, 3) U.S. Government securities, and 4) "eli¬gible paper," as described by Statute.
Federal Reserve Notes are obligations of the United States, and have a first lien on the assets of the issuing Federal Reserve bank. Money without backing is worthless, and in effect, you are suggest¬ing that currency be printed without the necessary collateral which is required of the Federal Reserve Bank.
I hope this information is helpful. Your $1 FR note is returned.

M. M. Schneider
Acting Executive Assistant

Sadly, the Bureau of Printing and Engraving didn't take Mr. Dale's generous offer.
Although gov-co admitted that "Money without backing is worthless", it also as¬sured Mr. Dale that any mix of “assets” described as "gold certificates, special drawing Right certificates, U.S. Government securities, and 'eligible paper' as de¬scribed by statute" would provide the necessary backing to make FRNs worth something (as opposed to "worth¬less"). Note that all of these alleged “assets” that give the FRN worth are nothing but paper-debt instruments (IOUs). FRNs are not backed by real assets (like gold or silver); they’re backed by debt.

• Here's the third letter (date uncertain) from Treasury which discusses FRNs:

Department Of The Treasury
Washington, D.C. 20220
Gaylon L. Harrell
Latham, Illinois

Dear Mr. Harrell:
This is in response to your letter to me of August 10 in which you asked a further question about Federal Reserve notes.
Federal Reserve notes are legal tender currency (31 U.S.C. 5103). They are issued by the twelve Federal Reserve Banks pursuant to Sec¬tion 16 of the Federal Reserve Act of 1913 (12 U.S.C. 411). A commer¬cial bank which belongs to the Federal Reserve System can obtain Federal Reserve notes from the Federal Reserve Bank in its district whenever it wishes, but it must pay for them in full, dollar for dollar, by drawing down its account with its district Federal Reserve Bank.
The Federal Reserve Bank in turn obtains the notes from the Bureau of Engraving and Printing in the United States Treasury De¬partment. It pays to the Bureau the cost of producing the notes. The Federal Reserve notes then become liabilities of the twelve Federal Reserve Banks. Because the notes are Federal Reserve liabilities, the issuing Bank records both a liability and an asset when it re-ceives the notes from the Bureau of Engraving and Printing, and there¬fore does not show any earnings as a result of the transaction.
In addition to being liabilities of the Federal Reserve Banks, Fed¬eral Reserve notes are obligations of the United States Government (12 U.S.C. 411). Congress has specified that a Federal Reserve Bank must hold collateral (chiefly gold certificates and United States secu¬rities) equal in value to the Federal Reserve notes which that Bank receives (12 U.S.C. 412). The purpose of this section, initially en-acted in 1913, was to provide backing for the note issue. The idea was that if the Federal Reserve System were ever dissolved, the United States would take over the notes (liabilities) thus meeting the re¬quirements of [12 U.S.C.] 411, but would also take over the assets, which would be of equal value. The notes are a first lien on all the assets of the Federal Reserve Banks, as well as on the collateral specifically held against them (12 U.S.C. 412).
Federal Reserve notes are not redeemable in gold or silver or in any other commodity. They have not been redeemable since 1933. Thus, after 1933, a Federal Reserve note did not represent a promise to pay gold or anything else, even though the term "note" was re¬tained as part of the name of the currency. In the sense that they are not redeemable, Federal Reserve notes have not been backed by anything since 1933. They are valued not for themselves, but for what they will buy. In another sense, because they are a legal tender, Federal Reserve notes are "backed" by all goods and services in the economy.
I hope that this information is useful to you.
Russell L. Munk
Assistant General Counsel

First, note that “Federal Reserve Notes” are not “dollars,” nor are they “notes”. The term “Federal Reserve Note” is merely a name for those green pieces of paper (whatever they are). Recall also that the second letter described FRNs as worthless. Then, note that the third letter declares paper “gold certificates” and “United States treasuries” to be of “equal value” to FRNs. This implies that, if the FRN is worthless, then, according to the Department of Treasury, paper “gold certificates” and paper U.S. treasuries are also intrinsically worthless.
But are FRN's really worthless?
The author of the third letter won’t quite say. He hedged his comments by saying "In the sense that they are not re¬deemable,” FRNs are worthless—but "In another sense, because they are a legal ten¬der, Federal Reserve notes are 'backed' by all goods and services in the economy." (But not the “Full faith and credit of the American People?)
Hmm. Sounds mysterious. "In the sense that" vs. "In another sense" . . . golly, which "sense" do you suppose is correct? Are FRNs worthless or are they not? And why do you suppose assistant General Counsel Munk wouldn't provide a straight answer but instead preferred the ambiguity of "in another sense"?
The answer to which "sense" applies is suggested in the first letter which declared the value of a FRN is in its "purchasing power," in "the things it will buy". Virtually every analyst agrees that due to inflation, the purchasing power of the A.D. 1933 $1 FRN has been reduced to less than a nickel. Therefore, while we can't truly say the FRN is "worthless" (it's still worth a couple of cents as compared to A.D. 1933), it's fair to say the FRN is almost worth¬less—and, given its persistent seven-decade-long decline—is "in that sense" likely to soon become "completely" worthless (i.e., "obviously worthless” even to the public). Thus, the time may be approaching when there'll be no more “greater fools” to take FRNs in trade for real property or services.

• Does this mean we should abandon our FRNs and start hoarding gold coins in a tin can buried in the back yard?
Seems so.
After all, even government subtly discourages use of FRN's by encouraging suspicions about anyone who pays his bills with cash. Aren't we a little embarrassed if we don't have credit cards? Think you can pay cash for a new home or car without arousing suspicions of the real estate agent or car dealer? For the past decade, laws have mandated that not only banks, but even merchants notify the feds if someone pays more than $10,000 in cash for any products or services. How valuable can paper FRNs be if even government discourages their use?
• According to the third letter: "Because the notes are Federal Reserve liabilities, the issuing Bank records both a liability and an asset when it receives the notes from the Bureau of Engraving and Printing, and therefore does not show any earnings as a result of the transaction."
(If a bank doesn’t show any “earnings,” what is its tax liability?)
Insofar as FRNs can be "recorded as both liabilities and assets,” their dual nature reminds me of esoteric theories of physics wherein matter can simultaneously be both waves and particles. These dualities seem irrational and bizarre.
It's easy to see that if you earn $100,000 in real, asset-based money (like gold or silver), your personal assets have increased, you’ve experienced real “income” and you may therefore be subject to income tax. It's also possible to imagine that if your "income" is denominated in a debt-based currency, you've actually suffered a loss and might be exempt from income taxes. But what about an income denominated in a currency that is both as¬set and liability? With double-entry book keeping, do payments in FRNs result in a “zero sum”? What is the tax liability on a zero sum?
• If, as the third letter claims, FRNs are both "liabilities" and "assets," what are they? Accounting units. Numbers. That’s all.
If the liabilities and assets inherent in each FRN are equal, then the value of any FRN is zero. I.e., if I have a $100 FRN that represents $100 in assets and $100 in liabilities—what is my FRN worth? Subtract the liabilities from the assets. If they're equal ($100 asset minus $100 liability), the answer's zee-ro.
So what is a FRN?
It's a unit of measure, no different from inches, feet, pounds, tons, and centigrams. It's a unit of account rather than a unit of value. It’s a mere number.
What is the proper tax liability on a number?
• Is the tax on “100,000” more than the tax on “1,000”?
It depends.
100,000 what? 1,000 what? The tax on 100,000 dollars is clearly more than the tax on 1,000 pennies. A tax on 1,000 pennies is greater than the tax on 10,000 grains of sand. The object of taxation should not be the unit of account (mere measurement; the intangible “number”), but rather the unit of value earned or received as a tangible asset.
Therefore, is the tax on $100 in gold-backed money the same as the tax on $100 FRN? Can I be lawfully taxed on the basis of an income denominated in units of account that the issuing Federal Re¬serve Bank leads me to believe are worth zero? If the Federal Re-serve Bank can count a FRN as both an asset and liability—a plus and a minus—can I do the same with my income and also have no earnings to be taxed?
Confusing? You bet.
My questions may sound ridiculous (and even dangerous unless you don’t mind going to jail). But—surprisingly—those questions are reasonable insofar as they are implicitly supported by law: 31 U.S.C. § 742 and 18 U.S.C. § 8.

Re:Theoretical and Practical Definition of Money prije 10 godine, 4 mjeseci #1720

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PREFACE: This mathematical analysis shows how:

1. The creation of credit/money via T-securities in the amount of the principal of the security, with a promise to repay the principal PLUS the interest, is impossible. The interest is never created; the debt is perpetual and must continually be increased or it will collapse. Any contract that cannot be culminated is an act of fraud and is void from its inception.

2. Because of the exponential growth of the interest in the Ponzi scheme, the interest will increase until it consumes the entire wealth of society. All other fiscal obligations of the nation must be curtailed to roll over the debt while the growth in interest will escalate.

3. ALL money created by Treasury securities goes into the pocket of the Fed. Not only does the Fed receive the interest (if not sold), but also the value of the security upon maturity (or by sale). Congress has temporary benefit of the fiat money (until maturity).

4. The operation is, as in any Ponzi scheme, predestined for inherent national bankruptcy when buyers to roll over the debt cannot be found. As the scheme becomes visibly precarious, the interest rate will sky-rocket and accelerate the collapse.


The Federal Reserve uses euphemistic smoke and mirrors to obscure their scam. With full knowledge the following is not the way the Fed/government describes the system, allow me to offer a different analysis of their operation.

Congress can pay for federal expenses with funds collected from taxes, but Congress is never satisfied with this amount. The desire to buy votes/campaign contributions from special interest groups induces congress-critters to spend more, and this is identified as deficit spending. To create this make-believe money requires the assistance of the Federal Reserve.

Congress will give the Fed a T-security (bill, bond, or note) and the Fed will accept the document as an asset of one of the twelve FR Banks. The Fed will then establish a line of credit for the U.S. government in the same amount and list the liability as Federal Reserve Notes. Voila !! Fiat money has just been created for Congress to spend. Ref: 2009 Annual Report to Congress by the Board of Governors, page 448. The accumulated securities that are not redeemed add up to the national debt.

The public debt is now over $13 trillion, or over $40,000 for every man, woman, and child in the U.S. The value is $200,000 per person if the unfounded debt is included. Through no action of his own, or even an opportunity to reject the imposition, every resident of the United States has become obligated for a debt---for life---that cannot be relieved. It is manifestly clear that an obligation of $40,000 can only be visualized as an unrestricted claim on the future earnings of the citizenry. The citizen has been reduced to an indentured servant, or slave, compelled to work for the company store and still face an ever increasing amount of debt. There is no possible relief. If the earnings of a citizen are properly subject to confiscation by taxation, the government can take the entirety and return what pittance Congress in their largess may bestow. A nation of sovereign people has been reduced to haves and have-nots; the middle class has been eliminated.

If the Fed retained all of the securities, the public would quickly complain that interest payments (approximately $400 billion annually) are of no benefit and the inflationary pressure would also be obvious. The Fed therefore wants to sell a major portion of the securities so it has arranged with the Treasury department to act as auctioneer for selling to the Primary Dealers. The PD submit sealed bids. Since the security has a fixed face value and interest rate, the higher the bid, the lower the interest rate for the buyer.

The Primary Dealers are branches of the huge international banks/finance centers. Seven Wall Street agencies include Bank of America, Citigroup, J.P. Morgan, Morgan Stanley, Goldman, Jefferies, and Fitzgerald. Foreign agencies of Barclays, HSBC, Credit Suisse, UBS, Deutsche, BNP Paribas, RBS, Daiwa, Mizuho, Nomura, and RBC of Canada are also included. Whether these are the entities that Bloomberg is attempting to identify by FOIA as recipients of bail-out funds that is now in the 2nd Circuit Court of Appeals remains to be seen.

The Fed recently obtained $700 billion bailout funds. It begged Congress, on actual bended knee, for money and Congress gave them $700 billion in securities and the Fed swapped the securities to GSE (Freddie and Fannie)/international bankers for toxic MBS‘s. The Annual Report lists Assets of $776 billion securities and $908 billion Government Sponsored Enterprise Mortgage Backed securities out of $2.2 trillion total assets. Whether the bailout money was a quid pro quo with the PD to avoid lawsuits for fraud is beyond the scope of this writing. The Mafia does not lightly tolerate transgression. The continued mutual benefit of programs, paid for by taxpayers, should evidence Wall Street and the Fed/international bankers constitutes a Siamese twin.

The touted concept that the Treasury’s auction is used to obtain money for Congress to spend is a cleverly designed disinformation. Such a methodology cannot conceivably create fiat money to fund Congress. Even when people know the government funds itself by printing money, they accept the illusion the government funds itself by “Borrowing from the Public.” Ref. , Table 2.

The math is going to get more detailed. If the Fed sold all of the securities at face value, there would be no money left in circulation. The money that was created by the securities would all be taken out of circulation and returned to the vaults of the Fed. The operation is identical to the FOMC selling or buying of securities to alter the amount of money in circulation.

The value of any securities not sold by the Fed is still in circulation and becomes the Reserves for commercial banks. The Reserves (known as base money) are then multiplied via loans from commercial banks utilizing the fractional reserve practice. The Fed currently holds about $750 billion of $12.5 trillion issued securities. Ref. Chart OFS-1.

Observe that the amount of money created by the security is the amount of the principal but the amount promised to be repaid is the principal AND the interest. The interest is never created but payment is required by the agreement. It is impossible. The linear expansion of base money via fractional reserves to create commercial loans does not change this. If, hypothetically, all money in circulation was used to pay off the securities issued by Congress, all bank reserves would be wiped out and the commercial loans would collapse---and every dollar of interest accumulated from day one would still be outstanding---but there would be no money outside of the Fed’s vaults to pay it.

The debt created by usury based sovereign debt is perpetual; it can never be paid off. The contract cannot be culminated. Any contract that cannot be culminated is an act of fraud. A contract based upon fraud is invalid from its inception. It would appear the national debt is not legally enforceable. (A debt incurred by a state or municipality is not a sovereign debt as used in this analysis. Such a debt is akin to a commercial loan and is completely repayable.) One source claims the common law, and the UCC, declare that money loaned that is known not to be able to be paid back is an unenforceable loan.

There is more skullduggery involved. Let us assume a newly established sovereign nation is setting up a usury based economy with the issuance of 100 unit securities, a five year maturity, and an annual interest rate of 20 percent over a span of five years. The identifications of Congress and the Fed will be used to convey the images.

Upon the issuance of the first security, Congress has 100 units to spend. At the end of the year, Congress/Treasury has to pay 20 units to the Fed for interest. If the nation had to pay off the security at the end of the first year, the bankruptcy is obvious. There have never been 120 units created. Twenty units could be removed from society but that would leave only 80 units in circulation, cause great financial hardships, and still leave an impossible obligation to redeem a 100 unit security. The solution is to put off the interest payment until the next issue of security for the second year. The interest is paid from the principal created by the second issue.

During the second year there are 200 units in circulation but the actual rate of interest on the second issue is not 20 percent. Since 20 units had to be paid to the security holders, congress only received 180 units to spend (100 + 80) but they are committed to pay 40 units of interest on the security at the end of the second year. The interest rate of 40 divided by 180 is 22.2 percent. Considering the second year alone, the interest is 20 divided by 80 or 25 percent.

When the security for the third year is issued, the interest of 40 units for the first two years securities will not be available for congress. Congress will receive only 60 units for public projects but will have to pay 20 units interest at the end of the year. The 240 units received by congress (100 + 80 + 60) will require 60 units of interest at the end of the third year. The cumulative interest rate (60 divided by 240) is 25 percent. The interest rate for the third year alone (20 divided by 60) is 33.3 percent.

At the start of the fourth year, the security will have to cover the interest charge for the three prior years of 60 units. Congress will receive 40 units for government spending. The 280 units received by congress (100 + 80 + 60 + 40) will demand 80 units of interest at the end of the fourth year. The cumulative interest rate (80 divided by 280) is 28.5 percent. The interest rate for the fourth year alone (20 divided by 40) is 50 percent.

The security issued for the fifth year will pay the 80-unit interest for the prior four years. Congress will have 20 units to splurge. The 300 units received by congress (100 + 80 + 60 + 40 + 20) will require 100 units of interest at the end of the fifth year. The cumulative interest rate (100 divided by 300) is 33.3 percent. The interest rate for the fifth year alone (20 units received--20 units in interest) is 100 percent.

At the end of the fifth year, 100 units must be found to redeem the maturing security issued the first year in addition to 100 units of interest that must be paid. Congress has an obligation to pay 200 units. This factor alone makes it obvious that more debt must be incurred to continue the scheme. The inescapable whirlpool of usury debt can only avoid obvious default by increasing the value of future securities. Increasing the value of issued securities merely postpones the inevitable result.

In summary, as the sixth year approaches, the Fed holds 500 units of securities that must be redeemed by the Treasury before year eleven. The Fed has already received 200 units as interest while Congress retains 300 units from those securities. Before year eleven, the securities will accumulate an additional 300 units of interest payable to the Fed. That accounts for the entire 1000 units of securities and interest that have been involved over the five years. (Each of the five 100 unit securities involved 100 units of interest.)

Do not let the subtly of the fund transfers escape you. As the example demonstrates, the Fed receives the total value of the security and the interest if it does not sell the security. If the security is sold (at auction) as is it is in virtually all cases, the Fed receives the value of the security from the Primary Dealer and the ultimate purchaser is then reimbursed by the Treasury at maturity. Either way, the Fed eventually receives the value of the security. The value of all redeemed T-securities is a clear profit for the Fed, along with the value of all securities sold to/held by Primary Dealers, funds, nations, states, or financial institutes.

The total value of auctions in 2010 was $8.4 trillion. Approximately $6 trillion matured in less than one year.

The handling of auction funds is the responsibility of the Fed. Ref. GAO FINANCIAL REPORT TO SECRETARY OF TREASURY, Nov 2010, page 17. This writer conclude the purchases are credited to an account of the Fed and not to an account of the Treasury.

The $8 trillion in income does not reveal itself in the ANNUAL REPORT TO CONGRESS; Ref. Tables 10 and 11, pages 454 to 462 REPORT for 2009. (Auctions are not Open Market transactions). This appears to be $8 trillion in profit that is concealed from Congress and the public.

The NY Fed also handles redeeming the securities. Ref. ACCOUNTING FOR TREASURY SECURITIES AT THE FEDERAL RESERVE BANK OF NEW YORK , GAO /AFMD-84-10, May 2, 1984, page 9 of 30, The report does not identify the account that is being used to redeem the securities. This writer concludes the payments are debited to an account of the Treasury and not to an account of the Fed.

Confirmation is found in the ANNUAL REPORT: BUDGET REVIEW 2010, “The Reserve Banks auction, issue, maintain and redeem securities…(and handle) paper U.S. savings bonds and book-entry marketable Treasury securities.” p 5.

The Fed’s receiving the value from auctions is disputed by public statements. Ref. Treasury financial statements also claim “borrowing from the public” finances government operations. Direct borrowing from the public cannot, in any way, expand the monetary system or result in the creation of fiat money; i.e., inflation. The label is deliberatively misleading.

By either of the two methods, the Fed has received the value of the security. The total value of all issued T-securities becomes a gain for the Fed. Good luck on trying to follow this sequence in the accounting records. Even Enron, World Com, and Bernie were able to cook the books---and they were audited. But the Fed explains: the accounting records do not reflect “securities purchased under agreements to resell.” Ref. Table 9A, note 4, Annual Report.

But even then, the scam is not over. If the perfidy is not discovered and terminated, there remains the necessity of Congress to fund the asserted obligations after the fifth year. If we resume the example during the fifth year, we find the Fed will have a 100 unit security and 100 units of interest due at the end of the fifth year (we will not calculate the accumulating six and seventh year obligations). The only way for Congress to get the funding is to issue a 200 unit security at the end of the fifth year and ALL of the value will be instantly due to the Fed. The scheme is not only perpetual but it must increase in size to continue. And of course, when the 200 unit security matures, the value will belong to the Fed. And then a larger security must be issued to pay for the 200 unit security and the accruing interest further down the road.

A high rate of interest has been selected for the example to minimize repetitive calculations. A ten percent interest rate will return 100 percent of the security value in ten years; a five percent interest rate will take twenty years. Lower rates of interest merely require more years to reach the same inherent bankruptcy. (Actually, bankruptcy occurs the first year irrespective of the interest rate, but then again, since the debt can never be paid off, the entire scheme is based upon fraud. A contract based upon fraud is void from its inception.)

But 5 year securities are a slow game. If we shifted our attention to 13 week bills, or even four-week bills, we could visualize obligations that would mature, and must be repeatedly rolled over very quickly and accumulating brokers commissions.
People who have a counterfeiting printing press in their basement can live a lot better than their neighbors.

An economic scheme that utilizes later investors to pay the interest due earlier investors is identified as a Ponzi scheme. This is precisely the scheme that has been presented above. The scheme will survive only as long as more principal is generated to pay the interest. This action only postpones the ultimate time of a much larger reckoning. If purchasers of the new debt cannot be found, the interest must be paid from previously generated principal and the scheme quickly collapses like any Ponzi scheme. Astute investors will demand a higher rate of interest than inflation (resulting from the creation of new principal) or they will suffer a loss of actual wealth. The increase in interest will always be greater than the increase in principal because of compounding effects.

A newspaper article a couple of years ago informed us the annual increase in interest to be 15 percent while the budget only grew 7 percent. That reflects the exponential growth of interest. More recently the deficit has been increasing much faster to fund/conceal the rapid growth in interest requirement. Professor Bob Blain, Southern Illinois University, Edwardsville has graphed the exponential growth in debt from 1915 to be irregular only during the 1930’s. It was that period when the Fed repeatedly made reserve calls on the banks to force gold certificates and gold coins out of circulation---which repeatedly deepened the recession. This was followed by the U.S. being manipulated into WW II and flooding the economy with interest bearing fiat Federal Reserve Notes. Ref. America’s Great Depression by Murray N. Rothbard. The interest is paid by Congress to holders of T-securities. The future will see ever-increasing demands for debt---and interest---and war is the cause celebre. Ref. JFK, AND THE UNSPEAKABLE by James Douglas.

In 1790 during Congress’ consideration of Alexander Hamilton’s proposal to pay the national debt with a usury based obligation placed upon the citizens, congressman James Jackson, after lengthy reflection on the devastation similar plans had imposed on European countries and cities, included the following observations to Congress:

“Let us take warning by the errors of Europe, and guard against the introduction of a system followed by calamities so universal…The funding of the debt will occasion enormous taxes for the payment of the interest…(such a system) must hereafter settle upon our posterity a burthen (sic) which they can neither bear nor relieve themselves from.” Ref. ANNALS OF CONGRESS, Vol. 1, 1790, pp. 1141-2.

In actual practice within the United States, a collection of taxes for part of the government spending is well known. Payment of part of the government expenses by taxation does not alter the government’s usury program; for analytical analysis they can stand alone. The current pattern of increasingly larger deficit spending is the escalation as the climax of chaos beyond description approaches.
Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants, but debt is the money of slaves.

Re: Theoretical and Practical Definition of Money prije 7 godine, 3 mjeseci #2879

Re: Theoretical and Practical Definition of Money prije 5 godine, 4 mjeseci #3119

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On Principal And Interest, Hermetic Magick, And The Lords of Time

“I would like to continue with an examination of Time. From the moment we enter this life we are in the flow of it. We measure it and we mark it. But we cannot defy it. We cannot even speed it up or, slow it down. Or can we?” – Eisenheim, The Illusionist

Time. The Fourth Dimension. The Universal Agent.

Imagine having the power to control Time. To manipulate Time. To become its master. Instead of feeling like a slave to Time, imagine what you might do, if you had the power to make Time work for you?

Men have always dreamed of possessing this power. In 15th century Italy, the discovery of mysterious ancient documents in Byzantium finally made it possible.

Today, we often speak of the value of “our time”. We speak of “spending time”, and “buying time”. But in truth, it is not “our” time at all.

Throughout the world, our Time is controlled, manipulated and directed, by ‘Masters of the Universe’. Men who are adepts in these ancient secrets, and have the power to make “our” Time work for them.

They are the bookkeepers. The men who keep score. And just as it is said of the game of golf that “a good scorer can always beat a good player”, so it is with the mystical, magical art of double-entry bookkeeping.

“For every debit there must be a credit, and for every credit there must be a debit” – Alas! How few consider that if this must be the case, the rule to go by, nothing is more easy than to make a set of books wear the appearance of correctness, which at the same time is full of errors, or of false entries, made on purpose to deceive!1

When the “Father of the Renaissance”, a humanist scholar, priest, and astrologer by the name of Marsilio Ficino translated the Corpus Hermeticum from Greek into Latin, he could not have known that his labour would, in time, condemn most of humanity to slave labour for the Lords of Time.

Bust of Ficino by Andrea Ferrucci in Florence Cathedral

Ficino’s lifelong patron was Cosimo de Medici, scion of the famous Italian merchant banking dynasty, and ruler of the Florentine Republic. His circle of friends included the greatest philosophers, mathematicians, and elite movers-and-shakers in the Western world. They now had in their hands the ancient secrets of Hermes Trismegistus, the “Thrice-Greatest”.

Hermes Trismegistus, floor mosaic in the Cathedral of Siena

Starting at the Medici-sponsored Platonic Academy headed by Ficino, the rediscovered Hermetic secret knowledge would light the imaginative fires of the principal scholars, philosophers, and financiers of the Renaissance — also known as the “Hermetic Reformation”2. It would influence the mind of a monk, magician, mathematician, the Father of Accounting and the man who wrote the seminal book on double-entry bookkeeping, Fra Luca Bartolomeo de Pacioli, the “constant companion of Leonardo da Vinci”3. And in a grand syncretism with Neo-Platonism and Jewish Kabbalah, conjured up and expounded by fellow Renaissance men such as Pico della Mirandola (900 Theses), Johannes Reuchlin (De Arte Cabbalistica), and Heinrich Cornelius Agrippa (De Occulta Philosophia Libri Tres), it would spread throughout the western world, deeply embedded in commerce and banking, the arts and sciences, social philosophy, ethics and morality. It would change the course of human history (bold and italicised emphasis added):

Our modern urge to measure everything dates back to the late Middle Ages when a “radical change of perception” took place in which mathematics, Venetian bookkeeping, and Luca Pacioli played a key role. Historian Alfred W. Crosby explains this “radical change”:

‘In practical terms the new approach was simply this: reduce what you are trying to think about to the minimum required by its definition; visualise it on paper, or at least in your mind … and divide it, either in fact or in imagination, into equal quanta. Then you can measure it, that is, count the quanta.’

And once you can measure something, then you have a quantitative or numerical representation of your subject which you can manipulate and experiment with, no matter how great its errors or omissions. Such data can acquire an apparent independence from its human creators and, when fed into a twenty-first century computer model, an authority that appears irrefutable.4

Portrait of Luca Pacioli, traditionally attributed to Jacopo de' Barbari, 1495

Now, it is well worth our time to pause for a moment in our journey through past time, to consider the identity of Hermes Trismegistus. Today, he is considered to be a syncretism of the Greek god Hermes, and the Egyptian god Thoth. The Greeks considered Hermes to be the god of boundaries and transitions – in particular, the transition to the after-life. He was also the god of commerce, travel, the patron of thieves and orators, and a cunning trickster who outwits other gods for his own satisfaction. The Greeks equated him with the Egyptian god Thoth, who shared similar attributes. Thoth was seen by the Egyptians as the god who maintained the universe, the mediator in disputes between good and evil. He was the god of equilibrium, who unified or balanced the opposites. Importantly, in both of their respective cultures, Hermes and Thoth were the gods of writing, and magic.

The more astute reader, and in particular, the reader who has a grasp of the Duality Principle of double-entry bookkeeping — “for every credit there must be an equal debit” — may already be seeing a little light dawning in a corner of their mind.

Ficino and his influential friends at the Medicean court were to discover in the Corpus Hermeticum and in Kabbalah Ma’asit (“practical Kabbalah”) the secrets to controlling Time, the Universal Agent. At the heart of Hermetic teachings was the idea that man could influence or even control the forces of nature. To do so, one needed to master the “Three Parts of the Wisdom of the Whole Universe”. One of these parts, along with Astrology and Theurgy, was the magical art of Alchemy. Similarly, at the heart of Kabbalistic theurgy was the idea that man could magically invoke the creative or Life force — using esoteric knowledge of divine language and writing — for personal advantage in this world.

As with double-entry bookkeeping — and similarly, the dark art of keeping two sets of books — the magic of Alchemy involves a dual aspect or dual nature. In its esoteric (inner) doctrine, it is the work of spiritual purification; a transformation of common impure man, into pure and perfect Man. In its exoteric (outer) doctrine, it is the notion that man can transform common “impure” metals into pure gold, through the discovery and mastery of the “Universal Solvent”.

The magic of Hermeticism, with its emphasis on practical experimentation to discover and control the forces of nature, would have a powerful effect on the greatest scientific minds (such as Isaac Newton) for centuries to come. At the same time, its intrinsic get-rich-quick appeal would pose a constant attraction for over-indebted kings and princes — and for too-big-to-fail international bankers such as the Medici, whose compound interest-bearing loans the princes of Europe could not repay without borrowing even more.

The Emerald Tablet, a key text of Western Alchemy, in a 17th-century edition

Some four hundred years later, a great revival of spiritualism and the magick arts swept over Europe during the late nineteenth through early twentieth centuries. It is from this time, in the writings of adepts such as the famous occultists Aleister Crowley and Eliphas Lévi, that we can see clearly stated the most fundamental principles of Hermetic-Kabbalistic magick.

As we will see, they are precisely the same principles that form the basic rules of double-entry bookkeeping. Hermetic-Kabbalistic magick has been carried down from the Hermetic Reformation of the 15th century to our time, deeply embedded at the very core of all economic and social life; in commerce, economic theory, the fundamentals of capitalism, and banking.

The Hermetic-Kabbalistic magick principle of double perception is embedded at the core of the money system itself. In the very act of ex nihilo (“out of nothing”) creation of “our” money in the form of loans — using nothing more “real” than electronic double-entry bookkeeping — bankers enjoy the power of creator gods, employing “divine” magick principles in writing and language to harness the force of Time, transforming it into wealth for themselves.

“Money” created by bankers is simply the symbolic, written expression of this double perception. Each Dollar, Euro, or Pound created as a new loan magically appears (to the borrower) as both a debt (Liability) that must be repaid plus interest to the bank, and simultaneously, a credit (Asset) that the borrower can spend.

At the same time, to the bank that very same Dollar, Euro, or Pound magically appears as both an Asset (money that must be repaid by the borrower), and, a Liability too, because the bank must make it available to the borrower to spend.

This is the embodiment of the Kabbalistic concept of achdut hashvaah (“Unity of Opposites”) — (bold emphasis added):

The coincidence of opposites that characterizes God, humanity and the world can be approximately understood by the simultaneous adoption of two points of view. As put by the founder of the Chabad movement, Schneur Zalman of Lyadi (1745-1813):

(Looking) upwards from below, as it appears to eyes of flesh, the tangible world seems to be Yesh and a thing, while spirituality, which is above, is an aspect of Ayin (nothingness). (But looking) downwards from above the world is an aspect of Ayin, and everything which is linked downwards and descends lower and lower is more and more Ayin and is considered as naught truly as nothing and null.5

When viewed from this Kabbalistic “higher” logic perspective, the mathematical expression “-1 = +1” is actually true; an object and its exact opposite are seen to be one and the same thing. A single unit of “money” is both credit and debit, liability and asset; it just depends on whose perspective it is seen from. But all things balance themselves out, when viewed from the hidden “All-Seeing Eye” perspective of the divine nothingness or Ein Sof. Each number is created from the same central number (“0”); the space “0” between -1 and +1 is exactly “1” from either side, and so each cancels out the other:

When it arose within Ein-sof (the Infinite) to weave Yesh (Something) from its Ayin (Nothing), Ein-sof performed an act of Tzimtzum, contracting and concealing itself from a point, thereby forming a central, metaphysical void. It is in this void that the Primordial Man, Adam Kadmon, and all the countless Worlds (Olamot) emerge.6

In the cryptic, mystical language of Hermetic-Kabbalistic magick, Aleister Crowley, the man once dubbed “The Most Wicked Man In The World”, explains the fundamentals of Magick In Theory And Practice (bold emphasis added):

…the object of any magick ceremony is to unite the Macrocosm and the Microcosm.

It is as in optics; the angles of incidence and reflection are equal. You must get your Macrocosm and Microcosm exactly balanced, vertically and horizontally, or the images will not coincide.

This equilibrium is affirmed by the magician in arranging the Temple. Nothing must be lop-sided. If you have anything in the North, you must put something equal and opposite to it in the South. The importance of this is so great, and the truth of it so obvious, that no one with the most mediocre capacity for magick can tolerate any unbalanced object for a moment. His instinct instantly revolts. …

…the arrangement of the weapons of the altar must be such that they “look” balanced…

…And however little he move to the right, let him balance it by an equivalent movement to the left; or if forwards, backwards; and let him correct each idea by implying the contradictory contained therein.

…let him show the basis of that Stability to be constant change, just as the stability of a molecule is secured by the momentum of the swift atoms contained in it.

In this way let every idea go forth as a triangle on the base of two opposites, making an apex transcending their contradiction in a higher harmony.

It is not safe to use any thought in Magick, unless that thought has been thus equilibrated and destroyed.7

In his magnum opus Transcendental Magic, French occultist Eliphas Lévi explains that:

There exists in Nature a force which is immeasurably more powerful than steam, and a single man, who is able to adapt and direct it, might change thereby the face of the whole world. This force was known to the ancients; it consists in a Universal Agent having equilibrium for its supreme law, while its direction is concerned immediately with the Great Arcanum of Transcendental Magic. … This agent… is precisely that which the adepts of the Middle Ages denominated the First Matter of the Great Work.8

Now the ancients, observing that equilibrium is the universal law in physics, and is consequent on the apparent opposition of two forces, argued from physical to metaphysical equilibrium, and maintained that in God, that is, in the First Living and Active Cause, there must be recognized two properties which are necessary to each other—stability and motion, necessity and liberty, rational order and volitional autonomy, justice and love, whence also severity and mercy. And these two attributes were personified, so to speak, by the kabalistic Jews under the names of GEBURAH and CHESED.9

Lévi says that to gain control over the “Great Magical Agent”, one must learn how to use the alchemical formula of opposites, “Solve et Coagula” (SOLVE, to dissolve, to project, to move; and COAGULA, to coagulate, to concentrate, to fix):

The Great Magical Agent, by us termed the Astral Light, …this occult, unique and indubitable force, is the key of all empire, the secret of all power. … To know how to make use of this Agent is to be the trustee of God’s own power; all real, effective Magic, all occult force is there, and its demonstration is the sole end of all genuine books of science. To have control over the Great Magical Agent there are two operations necessary — to concentrate and project, or, in other words, to fix and to move.10

Who can fail to see here, hidden in plain sight, the distilled essence, the Philosopher’s Stone, the whole alchemical formulation of double-entry bookkeeping?

The adept takes every single “common” transaction, and on entering it into his books, he first dissolves it (SOLVE) into a pair of opposites (debit entry and credit entry).

When it comes time to determine his Profits — and in turn, his total wealth or Capital — he “coagulates” (COAGULA) all of the entries in each of two columns (DR and CR) into a single number.

This then, is the apex of the triangle, the “higher harmony” of the “base of two opposites”, “transcending their contradiction”.

Seal of Solomon, front page of Eliphas Lévi's 'Transcendental Magic, its Doctrine and Ritual'

Eliphas Lévi tells us plainly that the purpose of the Great Work is to gain control over one’s future; that is to say, to gain control of Time itself:

The Great Work is, before all things, the creation of man by himself, that is to say, the full and entire conquest of his faculties and his future; it is especially the perfect emancipation of his will, assuring him… full power over the Universal Magical Agent.11

For the man who is greedy for gain, who sees financial wealth as the secret to a long and happy life, the possession of money is the means to attain “the full and entire conquest of his…future”. He can transform himself from a pauper into a prince — “the creation of man by himself” — and become a “self-made man”.

How so?

Money is the means of controlling Time. By lending his money at compound interest, the skillful adept increases his wealth, without risking his health through manual labour. His little pile of wealth (“capital”) grows inexorably, compounding into an ever larger pile over time. Just as in Eisenheim’s great illusion of the Orange Tree, the “seed” which was taken by dividing a single orange into two equal parts, grows at a speed which defies Time, “producing” even more golden fruit – fruit that the magician assures us is “quite real”.

This wondrous power is all thanks to the magic of what has been called “the greatest mathematical discovery of all time” and “the most powerful force in the universe” — compound interest.

But in a classic example of circular reasoning, the alchemical wizard’s “right” to charge compound interest is all thanks to a cunning rhetorical device (remember, Hermes was the god of oratory) — the so-called “Time value” of money.

Money, wrote [Luca Pacioli’s mentor, Leon Battista] Alberti in the 1430s, is “the root of all things”: “with money one can have a town house or a villa; and all the trades and craftsmen will toil like servants for the man who has money. He who has none goes without everything, and money is required for every purpose.” As historian Fernand Braudel argues, something new enters European consciousness in Alberti’s writing – along with his celebration of money went thriftiness and a concern with the value of time…12

This clever sophistry of the “Time value of money” has its origin in one of the greatest moral arguments of all time; whether the charging of interest on money (usury) is right, or wrong.

For over 1,000 years the Christian West officially prohibited the practice of charging interest on money (usury). But in the 15th century, the advocates for usury found themselves equipped with a new box of rhetorical and symbolic tricks with which to convince their audience. The syncretism of Neo-Platonic, Kabbalistic, and Hermetic philosophies in the Renaissance (“rebirth” in French) resulted in the resurrection of ancient Greco-Roman paganism. With it came an individualistic, “Me”-centred rather than “God”-centred worldview, with all-pervading emphasis on rationalism, and numerical calculation. In particular, the calculation of profit (bold emphasis added):

[German economist Werner Sombart] says that by enabling a numerical, monetary (and hence, in his view, “rational”) calculation of profit, double-entry bookkeeping provided the basis on which commerce could be seen as a process of acquisition: as an unending, systematic pursuit of profit.13

Like Sombart, [Max] Weber argues that double entry is significant because it makes possible an abstract measure of income and expenses – and therefore enables the calculation of profit, the key component of capitalistic business practice.14

The economist Joseph Schumpeter (1883-1950) also traces the development of capitalism back to double-entry bookkeeping. … Schumpeter says that capitalism adds a new edge to rationality by “exalting the monetary unit – not itself a creation of capitalism – into a unit of account. That is to say, capitalist practice turns the unit of account into a tool of rational cost-profit calculations, of which the towering monument is double-entry bookkeeping.” In his view, double entry’s “cost-profit calculus” drives capitalist enterprise – and then spreads throughout the whole culture: “And thus defined and quantified for the economic sector, this type of logic or attitude or method then starts upon its conqueror’s career subjugating – rationalizing – man’s tools and philosophies, his medical practice, his picture of the cosmos, his outlook on life, everything in fact including his concepts of beauty and justice and his spiritual ambitions.” For Schumpeter, capitalism “generates a formal spirit of critique where the good, the true and the beautiful no longer are honoured; only the useful remains – and that is determined solely by the critical spirit of the accountant’s cost-benefit calculation”.15

Double-entry bookkeeping would then, as now, serve the purpose not only of helping the merchant calculate his profits. It would enable the merchant to “prove” that his profit-making was legitimate; that is to say, in context of the times, that he had not been practicing usury in violation of the Church’s official prohibition (bold emphasis added):

[Luca] Pacioli advises merchants to incorporate explicit signs of Christianity into their books as a way of legitimising their profit-seeking activities. The use of double entry itself was like the Catholic confession: if a merchant confessed – or accounted for – all his worldly activities before God, then perhaps his sins would be absolved.16

This notion of ‘good’ bookkeeping was soon extended to the point that the use of double entry was seen to confer moral legitimacy on a merchant’s work. As Pacioli had, Hugh Oldcastle encouraged merchants to use their account books as a space in which to invoke God. He wrote in 1588: “it behoveth him [the merchant] first in all his workes and business to call to minde the name of God in all such writings, or in any other reckonings, that he shall beginne.” The first cashbook of the Bank of England, established in 1694, opens with ‘Laus Deo‘ – ‘Praise God’. As we saw with the merchants of Prato and with Pacioli, such appeals to God were a common feature of the earliest double-entry books and in some parts of Europe continued until the eighteenth century: through the exactitude of their earthly accounting, merchants hoped to gain divine approval in God’s heavenly accounts.17

If you are a businessman concerned with the morality of making a profit, then keeping the fullest possible set of accounts is a bit like confessing your sins.

Even if you are doing something morally suspect, at least you are making a clean breast of it.18

Indeed exactly because accountancy looks like a dry, value-free activity, it can be used as a kind of moral laundry.

When the Nazis stole the personal property of Europe’s Jews, Himmler insisted that all the looted property be meticulously accounted for.

By enforcing stringent accounting, he argued that “in carrying out this most difficult of tasks… we have suffered no harm to our inner being, our soul, our character.” Theft was transformed into book-

For an enormously successful usurer like Cosimo de Medici, who had the rare quality for a banker of suffering from a guilty conscience20, the matter of having one’s sins absolved had a profound importance. At that time, the only way to be absolved of the mortal sin of usury, and so be assured of a transition to Heaven in the after-life (hello Hermes/Thoth), was by making full restitution of all one’s ill-gotten gains. This meant, of course, that you could not pass on your wealth to your heirs; if you failed to make restitution before death, then in order to set you free from purgatory, your heirs would have to make restitution of all your usurious gains on your behalf:

Giovanni di Bicci de Medici, founder of the Medici Bank and Cosimo de Medici’s father … died intestate because in making out a will “he would have denounced himself as a usurer and might have caused considerable trouble for his heirs.” This practice had become a Medici family tradition, which Cosimo, Giovanni’s son would continue.21

Cosimo de Medici, Portrait by Bronzino

The popularisation of double-entry bookkeeping in the Medici’s time offered another profoundly important benefit. It gave the merchant a way to “rationally” justify all of his “costs” — including the “costs” he perceives himself to have suffered, in extending (lending) “credit” to customers.

This would prove crucial in context of the historical argument on usury. Then, as now, those who argued in favour of usury have claimed that a man who lends his money to another has a moral right to be compensated for a wholly imaginary expense — the “opportunity cost” of his not being able to use the money he loaned out, to earn more money in some other way.

The “logic” of this argument for charging interest rests on an arrogant presumption — that the lender is certain of earning a “return” in that “other way”, and therefore, he must certainly be suffering a “cost” of lost “opportunity” to “earn”, if he lends his money out instead.

The unstated notion here, of course, is that, one way or another, the owner of money must always receive even more money. Gimme gimme gimme, more more moar!

It is on the foundation of this sophistry of an imaginary “opportunity cost” suffered by the money-lender — and “proven” to be real simply by writing it into his double-entry accounting books — that an even greater sophistry is built — that of the Time Value of Money.

In a 1991 paper on accounting and rhetoric, Bruce G. Carruthers and Wendy Nelson Espeland argue that the symbolic language of double-entry bookkeeping is as significant as its technical capabilities … They argue that a double-entry account is not just a piece of neutral information, but also an “account” or story; that accounting is not merely a technical practice, but also a means of framing a set of business transactions with a rhetorical purpose.22

Accounting’s use of numbers gives it an air of scientific rectitude and certitude, and yet fundamental uncertainties lurk at its heart. Indeed, accounting is as subjective and partial as the art of storytelling, the other meaning of the word “account”.23

The illusion – for that is precisely what it is – that money possesses within itself an innate characteristic called “Time value”, is quite simply the greatest public deception of all time. When the arcane teachings of Hermes Trismegistus were infused and codified in el modo vinegia (“the Venetian method”) of double-entry bookkeeping in the 15th century, the twin magic arts of writing and sophistry were woven together to form the material of the magician’s cloak, and the curtain behind which the Wizards of Oz have hidden ever since.24

As Jakob Burckhardt, and following him, Frederich Nietzsche, said of the Italian Renaissance, it was a time of sophistic. The sophistic character of the Renaissance is apparent not simply from its rhetorical perspectives and practices, but in its use of the first sophists as well.25

In an essay published in 1985, the historian James Aho linked double-entry bookkeeping to the ancient art of rhetoric, the rules used to make persuasive arguments perfected by the Roman lawyer and orator Cicero (an art, incidentally, which Aristotle says sprang from a property dispute). According to this argument, medieval merchants used double-entry bookkeeping as a rhetorical tool of capitalist propaganda, to persuade their ‘audience’ that their business was honest, morally sound and its profit-making justified.

Why would bookkeeping need to persuade? Because, says Aho, it was used to defend these businesses against the Church’s ban on usury. The rhetoric of a well-kept ledger argued for the honesty of a business and the legitimacy of its profits, as this advice from 1683 makes clear: “If [the merchant] be fortunate and acquire much, [double entry] directs him the way to Imploy it to the best advantage, if he be unfortunate it satisfies the world of his just dealing, and is the fairest and best Apologie of his Innocence and honesty to the World.”26

Today, we are born into a world where the “logic” that money possesses a Time Value seems self-evident. The idea is so deeply embedded in our individual and collective consciousness, it has become part of our common language. Everyone knows that “Time is Money”.

This belief that money has an intrinsic Time Value is, however, nothing more than a spectacularly sly, self-serving example of self-interested swindlers successfully selling a self-referential, “self-creating” sophistry. For over 500 years, its purpose has been to persuade us all that money will certainly earn more money over time; and therefore, money possesses the innate power to earn more money over time; and therefore, the Lords of Time must have the right to charge interest for the use of money lent out, as compensation for their “lost opportunity” (ie, Time) to “earn” more money from their money’s innate power to earn more money.

This first half of the “Time Value of money” circular flow of illogical reasoning has come to be universally accepted, largely because so few pause to consider the unstated second half of the circle, which goes like this: and therefore, the Lords of Time must also have the right to pay interest (if they wish) to people who deposit money with them for “safe-keeping” (storage), as compensation for their “lost opportunity” to “earn” more money from money’s innate power to earn more money — err, say what now?! — (and whose deposits the Lords of Time can also lend out and charge interest for); and therefore, since it is now firmly established that money deposited with the Lords of Time will earn interest over time, this proves that money will certainly earn more money over time, and therefore money obviously possesses the innate power to earn more money over Time, etc etc, ad infinitum.

In its definition of the Time Value of Money, Investopedia unwittingly lets the cat out of the bag, highlighting this circular reasoning which lies (pun intended) at the dark heart of the grand mystical numberland of finance (bold and italicised emphasis added):


The idea that money available at the present time is worth more than the same amount in the future due to its potential earning capacity. This core principle of finance holds that, provided money can earn interest, any amount of money is worth more the sooner it is received.

Everyone knows that money deposited in a savings account will earn interest. Because of this universal fact, we would prefer to receive money today rather than the same amount in the future.27

Clearly then, the circular logic of the supposed Time Value of Money fails, if ever the “universal fact” that “money deposited in a savings account will earn interest” fails.

Like, err, now.

At this present time, so-called “ZIRP” (Zero Interest Rate Policy) and even “NIRP” (Negative Interest Rate Policy) is spreading all over the moribund economies of the Western world. We now receive zero interest on money deposited in a savings account. Not only that, in an increasing number of Western countries, the Lords of Time are now charging interest (ie, paying negative interest) on money deposited in a savings account. Yes, that’s right … if not now, then very soon, they will charge you interest for “holding” money on deposit in the “safe-keeping” of their bank.

Why are they doing this? As with so many magician’s tricks, the key to successfully pulling off the illusion, is movement. In the sideshow hustler’s game of Thimblerig or Three Shells and a Pea28, the faster the hustler moves his hands, the more difficult it is to see that he has moved or even pocketed the pea.

"The Conjurer," painted by Hieronymus Bosch (between 1496 - 1520). The painting accurately displays a performer doing the cups and balls routine, which has been practiced since Egyptian times. The shell game does have some origins in this old trick. The real trick of this painting is the pickpocket who is working for the conjurer. The pickpocket is robbing the spectator who is bent over.

In the great alchemical trick of Hermes the Thrice-Greatest and his Latter-Day Saints, this vital movement is called “Flow”, or the “Velocity of the Circulation of Money”. So long as the flow of money in the economy is fast enough, no one notices that the game is actually rigged. That is, no one notices that there is insufficient money in the system to pay interest.

This policy of zero (or even negative) interest rates on bank deposits, is all about trying to speed up the flow of money in the economy. The Lords of Time are hoping that this policy will encourage people to spend (“Flow”), not save (“Stock-pile”) money.

Why? Because the only way for the Lords of Time to keep on “earning” compound interest on the intergalactic levels of debt that they have lent to the world, is to make the “money” flow fast enough.

The real truth of the Money Illusion is this: If everyone had to settle their debts at the same time, there is always far more money owed, than there is money to pay with. The game only seems to work fairly and honestly if we only look under one shell at any time, and, if we believe the hustler’s claim that the missing pea really is just hiding under one of the other shells all the time.

In a recent article in Forbes titled “The Principal And Interest On Debt Myth”,29 a modern day mathematician and globally renowned academic economist set out to prove to the now-growing crowd of questioning (and in some cases, hostile) finger-pointers, that we should all just “Move along now, there’s nothing to see here”.

That is to say, he challenged the view that “because banks lend principal, but insist that principal and interest be paid by the debtor, the money supply has to grow continuously to make this possible”.

His proof?

A simple model of a “simplest possible financial system” … based on double-entry bookkeeping:

Alas, the accounting fraud-riddled history of double-entry bookkeeping ever since its Western popularisation by Fra Luca Pacioli (and more importantly, by his powerful patrons in the world of money-lending), strongly suggests that a reliance on the “logic” of double entry to “prove” anything with regard to banking, money, debt, and compounding interest, is tantamount to using the casino’s own roulette wheel in an attempt to “prove” that the game of roulette is not rigged in favour of the house.

Or, to return to our shell game analogy, it is tantamount to relying on a sideshow hustler’s own sleight of hand skills to “prove” that the pea you couldn’t see really was under one of those three shells all the time.

It all works fine (for the hustler), whilst ever the “flow” of the hustler’s hands is fast enough to fool the common man. But if the flow is slowed – in economic terms, by a growing “loss of confidence” in the game, resulting in too many people saving or “hoarding” money (Stability) rather than spending it (Movement) — suddenly the hustle begins to be exposed. At a slower rate of “flow”, it becomes much more easy to see that the hustler has been pocketing the pea all along.

Happily, the economist writing in Forbes did admit that the money-lenders’ money-shuffling game only works “so long as those flows are large enough”:

He also admitted that his simple model does not reflect the real world, which “is far more complicated”:

He also admitted that it is possible to enter different values for the limited set of parameters he chose for his simple model, that would make his conclusion (that interest can be paid without increasing the money supply) “untenable”:

But arguably his most important admission of all was not included in his Forbes article. Rather, it is on his Twitter account that we find his admission, that it is mathematically impossible for everyone to pay their debts at the same time:

In his zeal to disprove the claims of a growing crowd of questioning onlookers who are pointing out that the monetary alchemists’ shell game is rigged, the good professor has fallen afoul of the error of oversimplification. A simple double-entry bookkeeping model, of a “simplest possible financial system”, having a limited set of parameters, that obviously does not include all the parameters of the real world’s financial system, but that does include a number of invalid assumptions (eg, the notion that banks are “consumers”, who spend all their earnings back into the “flow” of the national economy); a model that does not reflect the real world “which is far more complicated”, is a model that is quite obviously too simple, and does not prove (or disprove) anything at all.

Jane Gleeson-White, author of Double Entry: How The Merchants of Venice Shaped Modern Finance, relates an interesting and relevant anecdote regarding Fra Luca Pacioli, the acclaimed father of accounting. On 11 August 1508, Pacioli gave an introductory public lecture at the church of San Bartolomeo near the Rialto Bridge in Venice (bold emphasis added):

Some five hundred people came to hear the celebrated mathematician speak … The famous Venetian printer Aldus Manutius was there and may have brought along Erasmus, who was staying with him near the Rialto while supervising the printing of his translation of Euripedes and a collection of ancient proverbs.

Intriguingly, after leaving Italy in 1509 Erasmus wrote his famous satire, In Praise of Folly, in which he mocks scientists who use maths to bamboozle their audience. His description of these boffins rather accurately parodies the methods used by Luca Pacioli in his talk on Euclid: “When they especially disdain the vulgar crowd is when they bring out their triangles, quadrangles, circles, and mathematical pictures of the sort, lay one upon the other, intertwine them into a maze, then deploy some letters as if in line of battle, and presently do it over in reverse order – and all to involve the uninitiated in darkness.” In his book, Erasmus set out to deflate the pretensions of anyone who claimed special knowledge or importance, whether they were philosophers, merchants or clerics.30

In his Praise of Folly .. he calls Mercury the inventor of tricks or of conjuring (“Quos nos ludos exhibet furtis ac praestigiis Hermes?”—“What entertainments does Hermes show us, with his tricks and sleight-of-hand?”)31

Bernard Lietaer is a former central banker, fund manager, and co-designer of the European Currency Unit (precursor to the Euro), who was named “the world’s top currency trader” by Businessweek in 1992. Today, Lietaer is a currency system reformer with almost 40 years active experience in the field. In Rethinking Money, he uses the brilliant analogy of the game of musical chairs, to help explain how “our” alchemical money system really works.

His analogy helps to illuminate this fundamental point – that it is only when the music (money “flow”) slows (“economic slowdown”) or stops (“credit crunch”), and people get nervous (“economic con-fidence”) and start looking for a chair to sit on, that we discover there never was enough chairs (“money”) for everyone:

Essentially, to pay back interest on a loan requires using someone else’s principal. In other words, not creating the money to pay interest is the device used to generate the scarcity necessary for a bank-debt monetary system to function. It forces people to compete with each other for money that was never created, and it penalizes them with bankruptcy should they not succeed. When a bank checks a customer’s creditworthiness, it is really verifying his or her ability to compete successfully against the other players – that is to say, assessing the customer’s ability to extract from others the money that is required to reimburse the interest payment. One is obliged in the current monetary system to incur debt and compete with others in order to perform exchanges and pay the resulting interest to the banks and lenders.32

Although new loans are being created, the interest on the principal is not. Nowhere in the system is this additional money created. This gives rise to scarcity, which, in turn, creates competition to acquire the extra money to cover the loans’ interest. This magic, where one person’s loan becomes another’s deposit, and whereby when you pay interest you are using someone else’s principal, is really monetary alchemy. This monetary alchemy is one of the esoteric secrets of the monetary system.33

A key point to keep in mind is that this entire money-creation process hinges on loans. If all debts were repaid, money would simply disappear, because the entire process of money creation would reverse itself. Reimbursing all loans would automatically use up all the deposits.34

When a banker checks a customer’s credit score, it is to assess how successful or aggressive that individual or business will be in contending with others to obtain funds that are not created in sufficiency to pay back the interest on the loan.35

In a manner of speaking, it’s like a game of musical chairs in that there are never enough seats for everyone. Someone will end up getting squeezed out. There isn’t enough money to pay the interest on all the loans, just like the missing chair. Both are highly competitive games. In the money game, however, the stakes are elevated, as it means grappling with certain poverty or, worse still, having to declare bankruptcy.36

The real brilliance of Lietaer’s musical chairs analogy is that it helps the “common” man and woman to easily visualise, and understand, the alchemists’ critical need for monetary “motion” as opposed to “stability”, in order to conjure an apparent economic “equilibrium” of “constant change” (ie, constant economic “growth”) moving through time. It is, we now see, an illusory “equilibrium”, built on the ancient magic of sophistry and numbers, and contrived to “produce” compound “yields” for the Wizards of Oz hiding behind the curtain:

…let him show the basis of that Stability to be constant change, just as the stability of a molecule is secured by the momentum of the swift atoms contained in it.

In this way let every idea go forth as a triangle on the base of two opposites, making an apex transcending their contradiction in a higher harmony.

It is not safe to use any thought in Magick, unless that thought has been thus equilibrated and destroyed.37

Unlike these present-day Lords of Time and their legions of high priests all preaching the obscure doctrines of Hermetic-Kabbalistic economic theology, Lietaer is speaking an everyday, “common” language — of “common” imagery and symbols — that we can easily understand. Most important to notice though, is that his clear and simple language is a result of his motivation. He seeks not to obfuscate but to elucidate.

In a telling passage of John Maynard Keynes: Vol 2 The Economist As Saviour 1920-1937, Keynes’ biographer Robert Skidelsky informs us that (bold and italicised emphasis added):

In Keynes’s view capitalism’s driving force is a vice which he called “love of money” … in the General Theory “the propensity to hoard” or “liquidity preference” plays a vital part in the mechanics of an economy’s rundown, once something has happened to make investment less attractive. And this links up with Keynes’s sense that, at some level too deep to be captured by mathematics, “love of money” as an end, not a means, is at the root of the world’s economic problem.38

Nearly two thousand years earlier, Jesus of Nazareth pointed to the same thing, in debunking the money-lenders’ illusion (delusion) that “‘Time’ (‘God’) is ‘Money'”:

No one can serve two masters; for either he will hate the one and love the other, or else he will be loyal to the one and despise the other. You cannot serve God and mammon [money].39


UPDATE 2/2/2016

“To know and not to know, to be conscious of complete truthfulness while telling carefully constructed lies, to hold simultaneously two opinions which cancelled out, knowing them to be contradictory and believing in them both, to use logic against logic, to repudiate morality while laying claim to it (…) To tell deliberate lies while genuinely believing in them, to forget any fact that has become inconvenient, and then, when it becomes necessary again, to draw it back from oblivion for just as long as it is needed, to deny the existence of objective reality.” — George Orwell, defining “doublethink” in his book 1984

“Today, many nations are revising their moral values and ethical norms, eroding ethnic traditions and differences between peoples and cultures. Society is now required not only to recognise everyone’s right to the freedom of consciousness, political views and privacy, but also to accept without question the equality of good and evil, strange as it seems, concepts that are opposite in meaning. This destruction of traditional values from above not only leads to negative consequences for society, but is also essentially anti-democratic, since it is carried out on the basis of abstract, speculative ideas, contrary to the will of the majority, which does not accept the changes occurring or the proposed revision of values.” — Vladimir Putin, Presidential Address to the Federal Assembly, December 12, 2013
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