Greetings everyone. A big thank you to the creators of this forum.
I would like to propose a new initiative: Educating people on sound money and helping them migrate from fiat currency to sound money.
Why? And how is this relevant?
Banks create new money through loans (it’s not from peoples savings - this is a common myth), but in so doing this new money takes it’s ‘value’ from everyone else in society who uses fiat currency. This gives tremendous power to the oligarchy relative to the average person. This is because the relative ‘value’ extracted from the poor through money creation is far greater compared to the wealthy.
Furthermore, banks create the principle of a loan as new currency, but they do not create the currency that must be repaid as interest. The interest on a long term loan can be many times the principle. This means that in order to pay back all the currency ever loaned + the interest is impossible. In fact the way the current monetary system works is like a pyramid scheme - more loans must be taken out all the time and the economy has to grow exponentially, in order for there to be enough currency to repay existing loans.
When central banks raise interest rates, fewer new loans are taken out and the overall supply of currency in the general economy is drained out as old loans are repaid but fewer new loans are made. This crushes the finances of the working class and leaves many homeless. It’s like a game of musical chairs, when the central bank raises rates, the music stops and people are left without a place to call home.
The more division between the wealthy and the poor, the more polarized society becomes and the more the wealthy become fearful and turn to the oligarchy to impose more and more societal controls on the masses.
The solution is to help the poor migrate out of fiat currency and into sound money. The easiest way would be to adopt silver.
Cryptocurrency is good for those who can deal with the technology, but it is still difficult for many and costly to use as a medium of exchange.
So I am advocating for an initiative to adopt silver as a medium of exchange and a solid way to change the paradigm of wealth destruction that has crippled the working class over the past century.
Hey Taj - I created a new area for Initiative Ideas and moved this over to its own topic.
I think your assessment of the current debt based monetary system is correct: it is a debt trap and a pyramid scheme. And I believe part of the reason for the central banks’ desires to move to CBDCs is they see the petro dollar and IMF strategy propping up the USD as ultimately unsustainable. Michael Hudson is a voice I’ve found helpful in understanding these dynamics.
Cryptocurrencies have their problems as you mentioned: one of the biggest is adoption, but also do we want to incentivize needless energy consumption like with Bitcoin? In my mind, our monetary and economic system should incentivize productive behavior like growing food, building houses, etc.
Let’s say we switch to silver or gold… There are some very old stockpiles of precious metals in the world. If our goal is to reduce wealth inequality, I don’t know if this gets us there. In addition, if we want to provide the liquidity to keep the economy flowing at its current scale… I don’t know if we have enough physical coinage to accomplish this. But are precious metals a good way to hedge your bets on fiat currency? Absolutely. Although one must be careful in the timing. The hype cycle is not the right time to buy.
Personally, my current thoughts on this are that there is nothing wrong with fiat. If it can be governed well, and governed locally, it would represent a shift of power away from central banks and back into the hands of producers. If currencies were declared regionally and tied to the economic output of the region, then an exchange rate could be determined based on the overall trust in governance and value of the goods and services produced against how much currency is issued, and any constraints put upon the issuance. Basically I’m in favor of many local experiments with fiat, and let the market judge the relative value.
The major problem with our current financial/economic system is that the people producing value have no say or representation in how it is governed. It’s been turned into a wealth extraction machine. That’s not a consequence of what medium we use for currency, it’s a consequence of who’s controlling currency issuance.
These are just my opinions. I’m glad you brought up the topic and looking forward to more conversation here!
There are many ways to achieve this with gold or silver. I prefer silver as it’s not nearly as hoarded by the oligarchy & banks - and I see no reason to reward them given they have wrought so much harm with their existing system.
The main way to have enough and in small enough denominations in physical form is to use goldback or silverbacks. I don’t think they are currently making more silverbacks at the moment, but they have been made with this tech and so could be made again.
If not metal backed, then governed locally for certain - there would be no other way to trust it. But that isolates community trade - there are negative and positive consequences for such. Crypto can be used for trade between communities and hopefully we will have the technology for a scalable fee-less crypto very soon (I would direct you to a project I support here: https://forum.autonomi.community/)
There are many big problems with our existing system of course. Money at it’s root level is a system of accounting between people that allows an extended economy and specialization. When some special group can counterfeit - create new money at a lower cost than the tradable value of the money, then that system of accounting is corrupted, the people defrauded, and the economy subverted.
So the key here is to remove as many centralized authorities in any system and to insure the cost of counterfeiting is greater than or equal to the value of the new money. Gold and Silver innately function this way as the cost to produce it plays a big role in setting it’s actual value, and as mining is intensive work, the value of the metal always maintains some value.
I’m familiar with MaidSafe and the Safe network, which it looks like Autonomi is an offspring of that. These are great ideas and the project looks legitimate to me both in terms of intention and capabilities.
When some special group can counterfeit - create new money at a lower cost than the tradable value of the money, then that system of accounting is corrupted, the people defrauded, and the economy subverted.
Agreed. Here’s an example from the United States: Blackrock being assigned to manage the distribution of the CARES Act money. This was supposedly a stimulus package to help us through Covid, but much of the money was handled by private parties at their own discretion… and remember that simultaneously small businesses were shut down by fiat due to lockdowns. Putting these two facts together, what we actually had was a massive wealth transfer under the cover of an emergency.
The source of that monetary influx was the Fed’s “Going Direct Reset”, the first time in the history of the Fed that they injected money directly into the retail economy rather than their normal role: issuing the reserve currency that banks hold in reserve in order to issue loans. So we now have the precedent that the Federal Reserve can go around the banks, print money, and put that money directly into private hands to do with what they will. For me this scenario certainly dispels any wishful thinking I might entertain about us having a “free market”.
Thanks for this post. I have made a rough cut that explains this issue for Ep 3 of the Stakeholder Capitalism documentary series. It’s an issue that we will discuss thoroughly and drive initiatives for I’m sure. Thanks and I look forward to debating this issue more with you.
I’m all for moving away from the private banking system.
Guernsey pound although linked to the regular pound there is no interest to be paid back on loans.
Greenbacks in the US were successful until private bankers lobbied and got it taken out.
What about the Bradbury pound?
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