April 4, 2013

Money, Reprise


One of the basic lies is that there’s only a “fixed” amount of money available at any given time, and that the measure of this amount is based on how much of a particular metal you have. This metal has usually been gold. According to system lies, if more paper money is issued than is justified by the amount of gold the system holds, the result is inevitably destructive inflation.
The lies here are that money is a real thing in itself, that this real thing is naturally based on gold, and that inflation as such is a bad thing. The goldbuggers often add an element of moralizing, that money not based on gold would be immoral and reckless, and that inflation is the consequence of a moral failure.
(I’ll add that the banks always overstate the amount of gold which is actually available. If at any time, including today, everyone who has invested in gold were to demand physical redemption, they’d immediately discover that they’d been sold fraudulent paper backed by nothing. So even given the framework of the gold standard, the banksters were precisely the immoral inflationists they accused others of being, along with committing flat out fraud.)
The truth is that money is nothing in itself, but in a normal economy would merely reflect the real production of that economy. As one Populist put it, money is just the yardstick measuring the yarn. But the goldbug ideology claims that the yardstick itself is worth as much as the yarn it measures.
Money’s only constructive role would be to exist in sufficient form to represent the real economy’s production, and to represent its productive capacity. This latter means that there should always be somewhat more money in circulation than the value of what the real economy is producing at the moment, since this extra money is what greases the skids of new productive investment and innovation. (I’ll add that it also means that to have legitimacy, money must always be circulating. The “velocity of money”, in the jargon, must be high. Money’s legitimate functions are as a medium of exchange and, as Graeber emphasizes, a unit of account. But to hoard money, to use it as a “store of value”, is always illegitimate. Taking money out of active circulation renders it pointless and therefore malevolent, since it’s no longer reflecting real productivity.)
It follows from this that if you’re going to have a central government and centralized money, the government should directly issue money in a sufficient amount to lubricate the entire productive capacity of the economy. This is called greenbackerism, named after the “greenbacks” the Lincoln administration issued to finance the Civil War (which of course couldn’t be financed with the existing gold-constrained system). This would bring only mild, constructive inflation. This mild inflation is economically healthy and good for borrowers. Real production, wages, and quality of life would increase in tandem. In fact, it’s increasing productivity which ought to dictate the pace and amount of money issuance. But the goldbug straitjacket, dedicated as it is to the artificial scarcity of money and to a generally deflationary pressure (which favors creditors over debtors), constantly puts an artificial ceiling on productivity, resulting in frequent economic crises and depressions.
Goldbuggery is utterly incapable of dealing with the complexities and productive surge of a modern fossil fuel economy. To maintain bankster control of the money but render this control more flexible, the banks dictated the establishment of the Fed in 1913. The Fed is nominally a hybrid government-bank institution, but is 100% under the control of Wall Street. In this way Wall Street continues to issue the money, which the government borrows.
(Meanwhile the silver scam has twice been the system’s response, under duress, to an uncomfortable debate and confrontation between gold and greenbacks. Most famously, in 1896 the People’s Party, having heroically forced the greenbacker idea into the public discussion, committed ignoble suicide by selling out to silver and embracing the Democratic Party instead of fighting for itself and the Populist movement which extruded it in the first place. Sound familiar? In 1896, at the LATEST, history proved that the Democratic Party was a tar pit for all human aspiration. Yet to this day people rush in droves to entomb themselves in this pit.)
I can’t stress enough that the money belongs to the people. We create 100% of the real productivity and wealth, of which money is a reflection. It’s OUR MONEY. If there’s to be a central government at all, then directly issuing the money is indisputably one of the core functions of this government. The Constitution itself mandates this.
But under all systems of bank money, including the system centered on the Fed, the government abdicates this core role, the banks illicitly usurp it, and we the people now have to pay extortion rates to rent OUR MONEY back from the banks who stole it.
One of the infinite vilenesses of the liberals is how we the people had a golden opportunity (pardon the pun, and note the profound corruption of the vernacular itself) in 2009 to smash this system once and for all and take back our money. But instead the liberals presided over the aggressive bailout of Wall Street, using trillions in taxpayer money to bail out the robbers who intentionally crashed the economy. This example was at least as awesomely self-destructive as 1896, and far more malevolent. Will America learn a lesson this time?



  1. Russ thanks for this posting. If the government would end debt currency and fractional banking it would end all government debt issues.

    Comment by beene — April 4, 2013 @ 8:05 am

    • A government sovereign in its own currency has no debt issues as long as it spends constructively and its spending doesn’t grossly exceed the productive capacity of the economy. That’s the basic premise of greenbackerism, including its current version, Modern Monetary Theory (MMT).

      What we have, however, are lies about alleged debt constraints, the deficit scare-mongering which is meant to conjure the right political environment for “austerity”. To the credit of the people, they haven’t let themselves be stampeded by this propaganda. The people consistently consider the deficit and debt to be lesser issues, compared to the quality of government spending. I.e., that it should be on programs which benefit the people as a whole, rather than which benefits corporations. We see how the Washington class and their corporate media simply impose this deficit-terror program against the will of the people.

      Which leads to the second point, that US government spending is almost all corporate welfare, and simply goes down a destructive rathole. The only exceptions are pre-existing programs like Social Security, which the elites, including both Washington parties, want to gut.

      I’m writing about this today to highlight again how the government’s ploys are all simply setting us up for further austerity assaults, when in fact there’s zero reason why the quantity of the deficit or debt, as opposed to its quality, ought to be an issue at all.

      On the other hand there’s excellent reason why the quality, the fact of the government budget as a massive corporate welfare planned economy, should be one of the most pressing issues. I’d encourage anyone who still wants to try to reform the system to focus completely on this, to fight to end all corporate welfare. Even if one’s really worried about the deficit, that’s the only real answer – abolish corporate welfare.

      Beyond that, fight to Take Back Our Money from Wall Street. Fight to End the Fed, abolish it. But not in favor of something stupid and elite-controlled like gold. No, End the Fed in favor of restoring the people’s monetary sovereignty. The Constitution itself demands that what’s supposed to be “our” government directly issue what can only be our money. If there’s to be centrally issued currency at all, this is by definition the people’s money. So if you believe this is the people’s government, then force it to live up to that. Force it to take back the people’s money from the criminal banks who have hijacked it.

      That’s what greenbackerism, monetary sovereignty, is about.

      Comment by Russ — April 4, 2013 @ 8:47 am

  2. This is a really good statement. Do you think that we have a productive economy in any sane sense of that word “productive?” We produce waste and until more people recognize that it won’t matter how much money they have. Our system not only steals our money but it forces us to spend what we have on toxic wasteful products. I fear that most people love this waste. Maybe I am wrong. Happy spring though. Supposed to warm up this weekend.

    Comment by Ellen Anderson — April 4, 2013 @ 8:05 am

    • Those who work produce a vast amount of wealth. But most of this value is stolen, and much is destroyed, by the corporate economic and political system, which is set up to usurp most of the wealth for the 1% and its monstrous structures. Thus the real economy is controlled by the finance sector, forced into the strait jacket of this sector’s measurements, and tortured by its manipulations. Meanwhile corporations directly steal as much of the productive people’s wealth as they can, physically poisoning and destroying the Earth in the process, and indirectly steal most of the rest through the corporate welfare command economy forced upon the people by central governments.

      That’s why the human imperative is to abolish the corporate state, and short of that for all activism to focus on trying to force the government to act directly for the people and to abolish all corporate welfare.

      Leaving aside the question of whether reformism is, by definition, in vain, we can state as a proven fact that no reformism which seeks anything less than these last two goals is anything but a criminal scam.

      Happy Spring. I sure hope it warms up. I’m behind on my plot preparation and planting. How’s things at your farm?

      Comment by Russ — April 4, 2013 @ 8:57 am

  3. You might like this if you don’t already read this blog. I haven’t been reading NC since you stopped posting.

    Comment by Ellen Anderson — April 4, 2013 @ 8:21 am

    • Thanks Ellen, that’s pretty good. And thanks for what you said about NC. The fossil fuel economy is by definition unsustainable, and it’s really amazing how almost everyone engages in magical thinking about that.

      Comment by Russ — April 4, 2013 @ 9:05 am

  4. Why do you call “lies” what people not only believe, but want to believe ?
    So…is the 10€ note that I hold in my hand the… equivalent of a check for 10€, or a bankcard payment of 10€ ?
    In your mind ? In mine ? In that most nebulous and impossible to pin down “reality” dixit “the people”‘s mind ?
    I think… not. There has to be a difference in our minds between what we can touch, and see, and what we can’t touch and see.
    That is an elementary observation, one too often forgotten, unfortunately.
    The money problem illustrates the failure of our symbolic systems (resting on our language) to accomodate the problem that they are not the identical, strict equivalent of what they represent.
    When you represent something… well, there is an intangible, unmeasurable, unqualifiable aspect of that something that escapes representation.
    At the same time, if you bottom out the FICTION of representation by transforming it, as you and many others do, into a lie, well, you bring your symbolic systems down.
    And when you bring your symbolic systems down, you take your.. community out too.
    And when you do that ??
    “The people” don’t mean nothing at all…

    Comment by Debra — April 4, 2013 @ 5:16 pm

  5. […] There’s no such thing as a deficit crisis as such, and any “budget crisis” is purely fabricated. It’s a government exercise in […]

    Pingback by Two-For-One Sale (Deficit Terrorism and the Monsanto Protection Act) | Volatility — April 6, 2013 @ 6:20 am

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