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Contents: Introduction - Basic problem 1: interest - Basic problem 2: origin of the money - Consequence: a constant redistribution from poor to rich - Solutions! - Links - Quotes
„We can only overcome
the fear from a future we
are afraid of with pictures
from a future we want.“
Wilhelm Ernſt Barkhoff,
Initiator of the GLS Bank
Since I currently do not follow any English-language newspapers I must refer to the Wikipedia article about the financial crisis of 2007 to the present, which also includes a lot of information on the situation in the European Union and Greece. This whole page is not an exact translation of the German original, but uses different quotations and gives different (and less!) recommendations for further reading.
Something must give when the mathematics of interest-bearing debt overwhelms the economy’s ability to pay. For awhile the growing debt burden may be met by selling off or forfeiting property to creditors, but an active public policy response is needed to save the economy’s land and natural resources, mines and public monopolies, physical capital and other productive assets from being lost to creditors.
From Michael Hudson’s Why the “Miracle of Compound Interest” leads to Financial Crises (2007)
$100 “invested” (or owed) at different interest rates | ||||||
1.00% | 2.00% | 3.00% | 5.00% | 7.00% | 10.00% | |
---|---|---|---|---|---|---|
10 years | 110.46 | 121.90 | 134.39 | 162.89 | 196.72 | 259.37 |
20 years | 122.02 | 148.59 | 180.61 | 265.33 | 386.97 | 672.75 |
30 years | 134.78 | 181.14 | 242.73 | 432.19 | 761.23 | 1744.94 |
40 years | 148.89 | 220.80 | 326.20 | 704.00 | 1497.45 | 4525.93 |
50 years | 164.46 | 269.16 | 438.39 | 1146.74 | 2945.70 | 11739.09 |
60 years | 181.67 | 328.10 | 589.16 | 1867.92 | 5794.64 | 30448.16 |
70 years | 200.68 | 399.96 | 791.78 | 3042.64 | 11398.94 | 78974.70 |
80 years | 221.67 | 487.54 | 1064.09 | 4956.14 | 22423.44 | 204840.02 |
90 years | 244.86 | 594.31 | 1430.05 | 8073.04 | 44110.30 | 531302.26 |
100 years | 270.48 | 724.46 | 1921.86 | 13150.13 | 86771.63 | 1378061.23 |
doubling in: | < 70 y | < 36 y | < 24 y | < 15 y | < 11 y | < 8 y |
The story The Earth Plus 5% written by the Australian Larry Hannigan in 1971, strikingly explains why money at first was good for most people, but in the course of time made more and more of them fall into poverty. Thus our current money became the culprit for the worst of crimes, especially the constant wars. In short: since almost all money in the world come into existence as credit, there just is not enough money to pay back all loans. So there always have to be “losers” who cannot pay back their loans. While the number of “losers” increases over time, all the money concentrates in the hands of just a few. Incidentally it does not matter whether you see evil forces at work, as the story suggests, or if you consider it an unfortunate automatism of the money produced so far: the interest system’s repercussions described in the story and currently witnessed by us are real. When you click the link to the story you also get to hear the text, if your computer supports sound. If English is not your preferred language there is an extensive list of translations available (albeit without the audio version): Bulgarian, Catalan, Czech, Dansk, English, Español, Francais, German, Italian, Japanese, Latvian Malay, Indonesian, Polski, Portugues, Russian, Serbo-Croatian, Turkish, Urdu.The system of banking we have both equally and ever reprobated. I contemplate it as a blot left in all our constitutions, which if not covered, will end in their destruction, which is already hit by the gamblers in corruption, and is sweeping away in its progress the fortunes and morals of our citizens. [...] And I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.
Thomas Jefferson (1743-1826), Third President of the United States, in a letter on republican government to philosopher John Taylor.
Money requires the State, without a State money is not possible; indeed the foundation of the State may be said to date from the introduction of money.
Silvio Gesell in The Natural Economic Order (1920)
I chose this quote to show that the existing (i.e. produced by the European Central Bank, the Federal Reserve, or their respective counterparts) money needs not be accepted as “natural”. In fact it is just an agreement between men, which can be cancelled or modified.
I pin a lot of hope on a new money like the “Freigeld” Silvio Gesell describes it his book The Natural Economic Order. The full text of the book seems to be available online in English, French, German, Spanish, and Italian.
If Germany had a working circulation safeguard (Freigeld), the redistribution of money from poor to rich, as displayed above, would no longer exist. Instead there would be a slight redistribution from those holding a lot of cash to those living on less money. With my Freigeld Calculator you can immediately start playing with different values for the circulation safeguard!
Based on Silvio Gesell’s ideas (“on the shoulders of giants”) I developed the concept of an online market place with its own neutral money: freimarkt.org
I hope to be able to make this operational as soon as possible - or for someone else to implement the concept!
“Prime minister Jose Zapatero justified austerity by saying his ‘hands are tied’ by the financial markets. This has encouraged a widespread view that there is no real democracy in Spain.”
SocialistWorker online, 24 May 2011
The ideas of and the motivations for the monetary reform proposed on this website are related to the ideas behind a basic income guarantee - so I conclude by “quoting” a pictogram the Pirate Party Berlin uses to advertise the basic income guarantee: