Thursday, 05 December 2013 18:34

The Economic Recovery

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We are told the economy is recovering, we are told not to worry.  "All is well, we are seeing the recovery now", I have been hearing and reading words like these for some time now.  I think I'd need to be on drugs to believe this message.

How can there be a debt problem in a monetary system that relies on the creation of debt to facilitate the creation of new money?  If debt is a problem and is considered generally to be a problem in the world of banking, money and political finance then it seems like a devastating error to have made it a part of the actual process of creating money in the first place.  Of course debt is a problem when it is an integral part of the finance process.


Money doesn't exist until a debt is created first.  That money needs to be paid back by whomsoever borrows that money.  It's what gives that money value in the first place.  If it were just a case of printing money then value may not emerge as a quality of that money naturally.  This is the system we live under right now.  You borrow money from the bank, the bank creates that money to meet the demand.  This is a crude simplification, but the essential elements are there.

The problem comes when the arrangement is made to give that money its value.  In order to satisfy the debt that created that money in the first place, an obligation is put in place to repay the money.  Then, interest is applied to that debt and the amount of money now obligated to be repaid is higher than the amount of money just created.  If I borrow £100 but pay back £140 where does the extra £40 come from?

I really don't have an answer for this.  No matter which way I play it out that £40 must itself have orignially been created using the same debt creation mechanism.

Money really is a work of fiction.

If I take an apple from the apple tree and that tree charged interest, how many apples do I now owe the tree?  If I breathe in then exhale 2 gallons of air and the Earth charged interest, how much air must I replenish?  The river does not need us to put more fish in the river when we take one out for lunch.  We replenish the fields once we have harvested its produce, but we cannot do so without the movement of money.  Hunger will not move the apple from the tree until money has changed hands between the farmer, the pickers, the distributers, the wholesalers, the shops and the eaters.

Why do we need money?

Everything in our environment seems to maintain a balance, a continuous cycle of consumption and re-growth.  It dosn't need us to pay for it.  Without us it'd be fine.  It's almost as if we are not from around here, as though we had come in from out of town and began dividing and itemising everything we found on our arrival.  We seem to be able to put a price on everything we find yet we don't seem able to invent enough money to pay for it all.  Money may be the most ridiculas invention of all.

Half the world will go hungry not because there is not enough food to feed them but because there was not enough money to pay for the food.  Half of the food the Earth produces goes to waste when there is not enough money to move it to where it's needed.  And the majority of those who have enough money to buy the food waste their time toiling and working in a pursuit that ultimately reduces the money supply even further.  I refer to the seemingly endless supply of service industry jobs that actually produce nothing of any worth to the cycle of life.

What we need is not an economic recovery, the economic system we had before it needed recovering now was, let's face it, crap.  What we need is sane recovery, the recovery of our sanity.

Read 41754 times Last modified on Friday, 06 December 2013 10:44


If a free society cannot help the many who are poor, it cannot save the few who are rich. Inaugural Address of John F. Kennedy FRIDAY, JANUARY 20, 1961