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The Cult of Mathematically Perfected Economy and its Ridiculous Stance on Inflation

by on December 2, 2013
Mike Montagne Mathematically Perfected Economy

(Left: Eleventh hour pretender Mike Montagne dreaming about how he invented both the 5000 year old struggle against Usury AND its ‘singular solution’)

Mathematically Perfected Economy invented nothing and is fatally flawed. It is ‘just’ another form of interest-free Mutual Credit, with a mindblowingly simple minded take on the all important issue of the volume of money (inflation) and is run by a blowhard of uncanny proportions to boot.

Ever since I started this blog, people have been claiming Mathematically Perfected Economy (MPE) is the ‘singular solution’ to Usury. Why? Your guess is as good as mine. MPE is just another interest-free credit proposal, like there are many, and 95% similar to several systems that have operated in the past or proposed today.

But both on this blog and on many other platforms I’ve seen Mike Montagne (the creator of MPE) maligning everybody he came across as ‘eleventh hour pretender’ and ‘plagiarist’, because they dare have some opinions on Usury and its solutions too. Of course I have not been spared his wrath either, but that’s ok: if you have not been called a plagiarizer by Montagne you count for nothing in this business.

A few months ago I posted an article on the management of volume of money and a few weeks ago I faced some of Montagne’s people on one of Facebook’s economics groups regarding this issue, and a little later himself. In fairness: talk about big mouths, blowing of steam, misrepresentation and ideology!

Should I have the choice between dealing with Libertarians and MPE drones, I’ll take the Austrianistas any day.

Unfortunately, I’ll have to fend off both………….

The Making of a Cult
How does one create a cult? Why, that’s easy!

Study of group dynamics shows that the group will automatically side with the Leader, because otherwise it’s the end of the group.

To build a cult, you take a group, become its Leader and foul-mouth everybody in the group that does not verbatim replicate your thoughts. You will scold, patronize, condescend, swear, all in front of the group, so the disobedient follower is shamed to the max if he disagrees. If a group member is loyal and faithful, he will receive praise, also in front of the group, so that the group too can affirm the good boys and girls.

This does two things: it drives away everybody who values independence, mutual respect and truth (and could thus be a problem for the Leader) and makes those that stay choose to be as blindly loyal as possible, to avoid the scorn of the Master and the taking away of privilege and group affirmation. These drones will then start to maintain group discipline by using the same tactics on those out of line. In exchange for elevated status with the group and the Leader.

It works the same everywhere, with the Jehovas, Charles Manson’s girls, Austrianism (just think of Gary North’s ‘monetary crank’!), narcissistic moms,  cultish ‘personal development’ courses like Landmark, Essence/the Source and Avatar and, indeed, Mathematically Perfected Economy and its hero Mike Montagne.

Everywhere you go you find them, the obsessed Montagne MPE Minions, claiming to represent the ‘singular solution’ and even calling others plagiarists because they dare talk Usury and monetary reform without kissing Mike’s ring. Oh, and don’t dare disagree or find fault in MPE, because that lands you into real trouble!

I’ve heard of a couple of people who left because of this going on in the MPE Skype chat room and at other occasions.

So I guess it’s not surprising the interaction I had with them immediately degenerated into ‘fuck you Migchels’ and ‘you fucking maggot’.

MPE’s ridiculous stance on Inflation
Of course this kind of childish petulance can be easily overlooked, if they have the facts on their side. But this is simply not the case. It’s not even about the unmerited claims to MPE’s singular uniqueness, it’s about the very important question of volume of money and inflation.

Mathematically Perfected Economy rightly claims that usury causes rising prices. This is a well established truism, it’s very old. The initiated ancients probably already knew this. Islamic scholars have been saying it forever.

It’s simple to understand why: producers must pass on their cost for capital to their consumers.

I don’t know why Montagne claims he invented this, perhaps he discovered it independently, he did at any rate do some work on the underlying math, coming up with the P(rincipal) < P + I(nterest) equation, implying there is never enough money to pay off the debt plus interest, forcing a growing money supply.

Interestingly, this is impossible under a Gold standard, meaning that usury greatly worsens money scarcity under Gold and implying eternal deflationary pressures, off setting the upward pressures on prices that usury brings.

But, true as it may be that usury causes rising prices, MPE goes completely and utterly overboard and goes on to claim Usury is the only cause of rising prices!

Yes, you’ve read that right: MPE claims rising prices are never ever caused by a rising money supply, but says the money supply only rises to pay off ever higher interest charges and that these higher interest charges, and only these, are the cause of rising prices:

“Circulatory Inflation or hyper inflation: Never happens because the rate of circulatory deflation (caused by the interest drain, A.M.)…….. always, always, always exceeds the rate of any prior reflation by national debt, clearly evident by perpetually  increasing  sums of  national debt upon further cycles of reflation  which is indeed necessary today to service the prior sum of debt.” (Source)

Make no mistake: I’m a sucker for contrarian thought and always love it when people off handedly do away with truisms of the age. If they have the goodies to back it up, that is.

But to just simply say, as Montagne did in our discussion, that I can offer no proof ‘circulatory inflation’ (increasing volume) can cause rising prices, while ‘his’ math proves that usury does cause ‘price inflation’ (rising prices) and that thus the onus is on me to prove ‘circulatory inflation’ even exists is of course insanity. Nothing wrong with making bold claims, but nothing wrong with demanding some proof either.

When I mentioned the Continental, George Washington’s money and a famous case of money destroyed by printing, Montagne replied scornfully that I apparently didn’t know about British counterfeiting. But by saying this, he just flaunts his own ignorance. Why assume I would not know something so commonly known as British counterfeiting of the Continental?

Much worse: it matters absolutely nothing whether the money supply grows because of Government printing or counterfeiting. The counterfeit notes will be used to pay and they will effectively add to the volume of money. If Montagne claims counterfeiting caused the hyperinflation of the Continental, he implicitly admits ‘circulatory inflation’ causes rising prices!

Hyperinflation in Zimbabwe caused by Usury?
Claims Australia4MPE: we’re just being brainwashed with this ‘circulatory inflation’ meme. Usury causes all inflation, including that in Zimbabwe. Unfortunately, in a 10 minute vid, he offers absolutely zero proof for this.

So let’s have a look: did Usury cause the hyperinflation in Zimbabwe? If this is the case, it must be true that “the rate of circulatory deflation (caused by the interest drain, A.M.)…….. always, always, always exceeds the rate of any prior reflation by national debt”.

This means that interest rates must be on par with the growth of money. The interest-rate determines the rate of ‘circulatory deflation’ and the amount of new money that must be printed to off set this.

However, in 2007, a year before the hyperinflation peaked, prices rose 6,600% in Zimbabwe and interest rates were raised from 650% to………800%. Proving that Usury was only part of the cause of the rising prices and not by far enough to explain the price levels, growing eight times quicker than the interest rate would suggest. (Source)

So no: it’s simply not true that the growth of volume is always smaller than the interest-drain. It most certainly was not the case in Zimbabwe. What happened there is that Mugabe and his Central Bank just printed whatever they needed to keep their soldiers and Government employees happy. And the IMF, of course. It was rampant printing that caused the hyperinflation in Zimbabwe, not Usury.

The Housing Bubble
‘Circulatory inflation’, says MPE, can only exist when the money is not backed by assets.
What is more: MPE claims people can spend as many promissory notes (the MPE equivalent of interest-free credit) as they want, as long as they have the assets to back them.

My basic critique in the previous article was, that people would spend promissory notes on buying assets on bubbly markets, meaning they would back their promissory notes with assets at already inflated and further inflating prices.

But, Montagne merrily replies: this can never happen in MPE, because asset bubbles are caused by Usury and there is no Usury in MPE, so all promissory notes will always be backed by assets at legitimate prices!

Pfieuw!

If anything, the housing bubble, which was caused by unchecked massive credit expansion because of very low interest rates, shows what will happen if people can get all the credit they want at low prices. The volume of money will start to grow. Uncontrollably start to grow and this will lead to rising prices and this will lead to optimism and people will start saying to each other: “this will go on forever, there is a structural demand for housing”. They will see housing is going up and they don’t want to miss out, buying some more, spending some more promissory notes into circulation, leading to even more money.

This is the basic positive feedback loop that causes asset bubbles. Not Usury!

Conclusion
Our three problems with money are usury, the manipulation of volume (boom/bust cycle, artificial scarcity of money) and the centralized control of credit allocation, meaning it’s bankers who decide who can invest in what.

MPE solves two of these three problems. Their promissory notes will devolve the decision making to the people. It will end usury.

But its take on inflation is ridiculous. Completely outrageous. They offer no proof whatsoever that circulatory inflation is not a major cause of rising prices. They maintain volume can grow unhindered if backed by assets, completely negating that these assets will be inflating as they are used to back ever more promissory notes.

They offer zero proof in denying that volume is not a key cause of rising prices, notwithstanding two millennia of serious inflations and the clear correlation with rising volume in these instances. For example the inflation of the 1500′s, when the Spanish were bringing in specie from the Americas. The Continental. The Weimar inflation (where the Reichsbank was printing money to pay off the tribute the Allies demanded at Versaille). The simple minded zero proof way that they do away with Zimbabwean hyperinflation is particularly egregious, because it’s pretty easy to get the associated data.

The fact that a growing volume of money can lead to rising prices and most assuredly will lead to rising prices in extreme cases is the commonly held wisdom of the ages held by economists of many persuasions. This does not make it true in itself, but they have a strong case and a good story is needed to negate all this. This MPE simply does not offer.

It does show that Usury also can cause rising prices and I fully agree that it was Usury that was the cause of the structural rise in prices after the war. But after the war too, there were purely volume related inflations, concurrent with the Usury effect. For instance the late sixties, with the Vietnam war and the Great Society. Or the housing bubble of the previous decade.

If you start a reasonable dialogue about these issues you can expect a couple of MPE drones to insult you everywhere, from Facebook to their blogs. Montagne will call you a ‘fucking maggot’.

And for what? Simply to hide his own insecurities and his stupidly overblown ego which actually needs to believe that not only is he the only one that understands the problem, he actually was the first to even see it AND the man to find the ‘singular solution’, from which all other ‘eleventh hour pretenders’ just aim to distract!

But the simple fact is: MPE is a disaster. Its implementation would lead to horrible inflation.

Meanwhile, MPE is completely useless in the wider monetary reform movement. Its leader is incapable of normal discussion of the issues. One can imagine the field day a serious Austrian or Mainstreamer, scarce as they may be, would have should they put in sufficient effort to understand MPE’s vocabulary, so that he can actually understand what they’re saying. It would discredit the entire monetary reform movement.

Thankfully we don’t need MPE. What we need is interest-free mutual credit based money, of which MPE is just one example, or debt free demurrage money.

With properly managed volume.

Related:
Mutual Credit and Inflation
Interest-Free Credit (including MPE!) and the Management of Volume
How to manage the Volume of Money in Mutual Credit

The Facebook exchange about the above issue can be found in raw format in a PDF: MontagneMigchels.

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160 Comments
  1. Darren Rooke permalink

    MPE IS FLAWED!! We (Darren and Derek) have proof, we are happy to debate our findings with anybody from the mpe group, especially MIKE MONTAGNE. we challenge them to a skype call with the agreement that it shall be recorded and whatever the outcome, shall be put up on youtube.

    • Paulio permalink

      Who are you Darren? got a blog or youtube channel? Any word back on your challenge yet?

    • Darren Rooke permalink

      No.

  2. Rick Hart permalink

    Hi Anthony. You ask some very interesting questions…

    “Let me put this to you too Jake, I’m curious what you make of it:

    “Take for instance a mortgage. I believe MPE works out the mortgage can be repaid over the lifespan of the house and that this would mean something like $83 per month for a 100k house if the lifespan is 100 years.

    Do you see what this means for the credit worthiness of the mortgagee?

    Do you see what kind of commitments he could take on? Especially when we consider the vastly improved purchasing power in a usury free economy for the commoner?

    Can you not see that this means the ‘limits’ to volume in MPE don’t come close to the limits of volume money needs to allow stable prices?””

    My understanding of this Anthony is that you are correct, in terms of supply and demand, supply being equal and demand rising dramatically, prices in my estimation will increase. This is until supply catches up with demand (I like to separate monetary policy and free markets to help see clearly what is really happening). Anyway, in my own opinion MPE should be phased in slowly to allow markets to react accordingly. This should mitigate the initial price inflation that would result. Once the economy is stabilized then MPE should work as designed. There are other things to consider such as defaults. The asset at any given time under MPE would be worth what is owed but the costs associated with selling the asset would subtract from the amount needed to be retired from circulation. A down payment just for this purpose could solve this problem. Insurance could be another.

    I like your line of reasoning Anthony. You seem to be honestly seeking the truth of the whole manner. If you’d like lets continue hashing out these ideas more fully. I once heard a line in a movie “I never learned anything listening to myself” Take care, hope to hear from you!

    • Great comment Rick. Cheers!

  3. Darren Rooke permalink

    At one time we used to barter and now because we’ve gone one step further to a piece of paper all is in error. My question is HOW!!!!!!!!!!!!. What is it about a piece of paper that only tracks our trading activity could be causing us problems. Is it then to say trading is wrong including exchanging this information because this is even value exchange, only difference being this interaction has not been monetize. Just think about this. 1000 couples living in 500 houses all with four kids, their kids become of age and there are no houses to move into because bringing “too much money” into circulation causes price inflation so sorry kids going to have to stay at home, your kidding me. This is to say then we need to regulate the number of people being born and not money for it may cost the ones living more. HOW! This is the implication of what you are saying whether you know it or not. So how is what your saying in concert with the reality of that more people “ARE” being born?. I could put it this way By what right do you claim to be able regulate other peoples behavior when their behavior is based on the free choice of two consenting people and that by definition can injury no one. The only thing that could occur that is injury “is” to regulate this.
    So to sum up If money can’t represent the facts then what does it represent? and may be its the fact it don’t represent the facts and that is the error. Go figure. By the way I am an MPE advocate notice the lack of terms. Take care Anthony. Ps Mind traps are brilliant for you don’t know your in one till some one pulls you out. I know ive been in too many to mention and I don’t claim I am not above doing it again for that’s a mind trap in of its self. Peace.

    • But how do you know you’re not still in a mind trap?

  4. Darren Rooke permalink

    What appears to have been missed here (and if its not then ive missed it) is this.Say two houses are stood at the side of each other both at the same price. The first one sold is for £100,000 the second at £105,000 because its the last one on the street. SO WHAT! The price was determined bilaterally point number 1. point number 2 MPE does not create price discovery it protects the price that is discovered over the life cycle of the contractual obligation to pay the agreed purchase price and not a cent more, It comes down to this, its to say natural demand can ever be deemed an inherent wrong, How do you figure, In a market free from exploitation when house prices rise its a business opportunity to build them for less, the market is self correcting and needs no one to regulate it. If you think you can, you scare me to death. For in truth why don’t you crack your skull open and re wire your brain? You don’t because it works without interference.

    • I think you are missing the basic point.
      The volume of money is what ultimately determines prices. If it grows, prices will too.

      Price is a matter of demand and supply…………and the volume of money.
      That’s a little secret that economics tends to ignore, but it’s true.

      • I think your missing the point in that volume is more or less equal to whatever it represents, so how in the world can you state that a growing volume will result in higher prices?

        • By spending money, demand is realized. By increasing the volume of money, more people can spend money, leading to higher demand. Higher demand puts greater pressure on supply. If supply can grow (ex. socks), then it will tend to grow because by increasing supply, the seller can make more profit. They may or may not raise prices while increasing their supply. However, some supplies are limited (fossil fuels, gold, etc.), so because the supply of limited resources can’t grow fast enough to keep up with increased demand, the seller(s) will raise prices in order to increase their profits.

          If volume of money increases, businesses might also just raise prices because they know that there is more money out there to be spent.

          However, volume of money can increase without causing prices changes IF the monetary unit is coveted and hoarded. It will only be hoarded if it is trusted as a store of value.

          • Volume of money can also increase without causing price changes if supply increases, if this wasn’t clear in my previous post. Sometimes even “limited” resources (oil, gold, etc.) can be increased in supply, for a while.

            There is also the possibility that increasing volumes of money won’t help more people to spend money – it might just help a small group to spend more money. For example: if the increasing volume of money all falls into the pockets of a very small group, who then hoard most of it. Under this situation, price inflation would occur very slowly as the increased volume of money slowly trickles down on a middle class. This is actually how our present system works: the money supply is always increasing as debtors spend new bank credit into circulation, but it all comes back (plus interest) into the pockets of a small plutocracy, who then loan the money back out and repeat the cycle. In the current system, as long as new loans are put into circulation, then we can expect some small steady inflation. The repaying of loans is deflationary because it takes money out of circulation. If the bank stops loaning money (creating bank credit), the deflationary repaying of loans continues…

            In the 1980′s, under Reagan, interest rates were raised in order to combat inflation. In general, raising interest rates is seen as a way to combat inflation because by increasing interest rates, more money is taken out of circulation and is paid to (typically wealthy) creditors.

            When MPE starts pumping interest-free credit/money into circulation, that credit/money stays in circulation longer because debtors aren’t slaving to quickly take it out of circulation. Because that money stays in circulation longer, it will allow more people to realize their demand (i.e. spend money), therefore increasing demand. Increased volume and increased demand tend to lead to increased prices. So how would MPE respond? Interest rates? Refusing loans? Price controls? Nationalizing industry (no thanks)? I don’t know how an MPE regime would respond, because MPE advocates like to pretend that prices ONLY increase because of usury/private profiteering. MPE advocates would be caught off-guard if prices increased due to increased volume of money and/or increased demand. Or if prices increased because of supply shortages. Or if prices increased due to an asset bubble. Or if businesses conspired to raise prices because they knew that people could afford to finance their higher profits. Or if prices increased because people en masse stopped trusting MPE money as a store of value and dumped it in favor of gold, silver or something else. Fortunately for humanity, most people (and economists) aren’t as naive as an MPE advocate, which is why MPE is seen as a “ridiculous cult” by the mainstream. Indeed, it is. It is a “mind trap.” Some people are very committed to this mind trap, but minds can change for a reason. What reason is enough?

            • MPE does not start pumping money into circulation. We create money, not MPE. The money stays in circulation as long as needed as per depreciation of whatever it represents. Because of that the circulation is always more or less equall to whatever it represents. Yes, we will become much more liquid but why would that necessarily lead to increasing prices. Think of competition, but more importantly the cost of producing will dramatically decrease because interest is eliminated. Implementation/transition period should however be carefully managed. Supply/demand issues tend to be short lived because production will increase. There will always be asset bubbles, but not due to issuance of promissory obligations to fuel those asset bubbles. Collectables for instance will not be financed by MPE. (Price) Cartel practices are illegal, also under MPE. Who do you think you are kidding??

              • By “we,” you mean the people who manage the MPE, which is what I meant. Same thing.

                Cartel practices can only be undermined by competition, not by making them illegal. Trying to prevent “price cartel practices” by making them illegal is the same thing as using the government to control prices.

                Just because loans won’t be extended for the purchase of “collectibles” (like gold) does not mean that the money already in circulation won’t be used to buy “collectibles.” The money already in circulation can still cause a spike in demand for “collectibles,” which can cause a panic. The panic can cause people to dump MPE money in exchange for commodities, thus causing spikes in demand, spikes in prices, and distrust of MPE money. I’m trying to hear how MPE would respond to such a crisis, but all I hear is denials that this is even possible. The collapse of a currency due to a combination of irregular consumption patterns and psychological factors is entirely possible. That’s all I’m saying. Yet you deny that it is possible, which is naive because if powerful people ever wished to destroy MPE money, that is how they would do it.

                I think that MPE could work as it works in theory (if everybody trusted it and was on board with it), but everything can work in theory. This is because when working out the theoretical functioning of (let’s say) an economic system on paper, you always beat your opponents… In reality, sometimes your enemies win. I’m just playing devil’s advocate to see what an MPE advocate would do if their system was faced with widespread inflating prices by arguing that inflating prices are possible (due to sabotage, counterfeiting, speculation or mass distrust/dumping of MPE money, for example). Unfortunately, instead of hearing how an MPE regime would respond, I’m hearing that MPE advocates believe that widespread inflation is simply not possible under MPE. I want to hear how MPE would correct inflation if it happened.

                • No, by ¨we¨ I mean you, me, and everyone else who´s creditworthiness is in check. Yes, you can absolutely use money in circulation to speculate. It´s your money/responsibility, pls feel free to do with it what you want.

                  Why would people distrust MPC??

                  As said before, MPC can never increase demand, because it sustains a 1:1:1 ratio between units of circulation, remaining value of represented property, and remaining obligation *to pay* *the* remaining circulation *for* the remaining value of represented property.

                  And yes, shit happens. Always will. So what, we can deal with that.

                  btw: did you read Absolute Concensual Representation (ACR)? Please do if you have time. http://www.perfectedeconomy.org

                  • “MPC can never increase demand, because it sustains a 1:1:1 ratio between units of circulation, remaining value of represented property, and remaining obligation *to pay* *the* remaining circulation *for* the remaining value of represented property.” I’m not denying that MPC would exist in a 1:1:1 ratio. However I strongly believe that it is a false assumption and that the 1:1:1 ratio cannot *guarantee* price stability and trust in MPC. You probably disagree with me, but humor me for a moment. Pretend that the following 2 scenarios occurred under a MPE regime:

                    (1.) Let’s say that more and more new MPC units were issued (all representing property in a 1:1:1 ratio), and prices rose. Maybe it is just the price of real estate that rises (like an asset bubble), or maybe the new money causes widespread low-level inflation. This is scenario 1. If there is moderate inflation, how would an MPE regime respond? Would it stop issuing new interest-free “loans?” Would it raise interest rates in order to remove excess money from circulation (even though this would undermine the 1:1:1 ratio)? Or would it do something else?

                    (2.) “Why would people distrust MPC??” People aren’t guaranteed to distrust MPC, but if there was the widespread belief that the value of MPC was about to depreciate, then people might begin to dump MPC en masse (currency speculation). At that point, the depreciation of MPC would become a self-fulfilling prophecy.

                    (2.) Why might people believe that MPC is set to depreciate in value? There are a few possibilities. Mass psychosis (perhaps a media coup against MPC), insider sabotage or counterfeiting are obvious examples. There is also the possibility that an elite group would accumulate absurdly large amounts of MPC – if they dumped their cache of cash (especially if they dumped it in coordination with the media coup), then they cause prices to spike. This spike in prices and media coup could trigger currency speculation, thus undermining faith in MPC. Is this guaranteed to happen? No. Can it happen? In theory, yes. It might not happen until years after switching to MPE/MPC because the accumulation of MPC money in the hands of speculators might take a while, but it is possible. If this did happen, there would probably be gold bugs waiting to go back to gold, so it wouldn’t be just about short-term profit, but long-term power (and profit). This is scenario 2: mass panic and currency collapse. How would a MPE regime respond?

                    That’s all I want to know: how would MPE respond to those scenarios? I realize that we are at an irreconcilable impasse regarding whether or not the 1:1:1 ratio can guarantee price stability and trust in MPC.

                    • Sorry for late reply as I was traveling. 1.) MPE is not a regime. It´s a simple set of rules, eradicating interest and an obligatory schedule of repaying principal only at the rate of depreciation. So, there would be no respons whatsoever. 2. See 1.

                    • The set of rules that make up MPE would be governed by a regime. Just because you don’t like the word “regime” does not mean that a government that institutes MPE is not a regime. Either way, you didn’t answer my question, which reinforces my belief that MPE advocates do not have a plan of action if MPC inflates.

                      In my understanding of MPE, there is a financial institution that issues MPC when it extends interest-free credit and receives/retires MPC when interest-free “loans” are paid back. This financial institution would have much centralized control over the MP Economy, similar to the centralized control that banks exercise over the economy now. This financial institution would have the final say regarding whether or not people are “creditworthy” and whether or not to issue interest-free credit. Under MPE, there would still be a form of creditocracy. There would still be a government that supports this financial institution too. The pro-MPE government would be an MPE regime and the financial institution that manages MPC would be part of that regime.

                      The current banking system likes to say that it is managed by the concourse of investors (creditors) and debtors. Although this is true to an extent, this view hides the fact that banks themselves (financial institutions) exercise control over the economy. Banks can change interest rates, negotiate contracts, and decide is someone is or is not worthy of credit. The financial institution that would issue MPC would have similar control over the MP Economy. To claim that MPC/MPE is managed by everyone is not entirely false, but it purposefully hides the power of the financial institution that issues MPC. The MPC financial institution has the power to deny credit to people – that is a huge (arbitrary) power over the economy.

                      If MPC inflated because too much credit was issued (as MPE critics maintain is possible), then action would probably be taken by the financial institution that manages MPC (and/or the pro-MPE government). I’m still waiting to hear what action would be taken if MPC inflated. Raising interest rates is often used to combat inflation (like in the 1980′s under Reagan), but charging interest under MPE would undermine the 1:1:1 ratio. Would the response instead be to deny credit to more people? It seems to me that denying more people credit would make the MPE/MPC creditocracy more pronounced. What other steps could be taken?

                    • Appreciate your input, but your just inventing bullshit beyond how money inevitably works. You can’t “devalue” *the only* representation which sustains the relative value of money and property. Nor have you shown how. You just claim this would happen, as if someone would choose another money and run for that for no real condition you can even raise. You can’t have legitimate representation of entitlement for less cost; so there’s no room for a competing currency there. Neither can you preserve representation of entitlement at further (redundant) cost — because that cost itself destroys representation of entitlement at the outset. So what currency are they going to run to? They choose more cost for destruction of entitlement — and run to that? This is getting stupid.

                    • You refuse to answer my question and have again reverted to defending the assumption that MPE is infallible by assuming that it is infallible. Your above statement does not prove anything. There is no analysis, just heavy-handed jargon hiding the same old assumptions.

                      You said: “You just claim this would happen, as if someone would choose another money and run for that for no real condition you can even raise.” In previous posts I’ve actually talked about a variety of conditions that could arise, but you have either ignored them or forgotten them (because you clearly do not actually try to understand everything that I’ve written. Instead, you reply with jargon that does not address what I’ve written.) People can always dump MPC for precious metals (or even something like bitcoin) if they don’t trust MPC to maintain its purchasing power. (There, I repeated myself again – if you want more talk regarding conditions that can potentially arise, then read all of my earlier posts.)

                      As for your jargon… “You can’t have legitimate representation of entitlement for less cost; so there’s no room for a competing currency there. Neither can you preserve representation of entitlement at further (redundant) cost — because that cost itself destroys representation of entitlement at the outset.” Cost to who? What’s legitimate? Who decides what is legitimate? What if people disagree (Oh my..)? Why, if MPE is so perfect, is there “no room for a competing currency,” like silver, gold or bitcoin (just to name some obvious examples)? Are you suggesting that any potential alternative money will be illegal? Are you aware how dogmatic and unresponsive your defense of MPE is? You keep replying to me by pretending that nothing bad can ever happen to the value of MPC. All I wish is that you’d answer my question: How would MPE infrastructure respond IF MPC inflated?

                    • MPC will inflate and deflate as per whatever it represents, dynamically, and without any intervention. If you prefer other *currency* please feel free to do so.

                    • I believe that REN did not compare MPE to a parasite (and I only quoted REN.) REN argued that the financial institution in charge of MPE is placing itself in the same position of power that the banking system currently holds. REN referred to contemporary banks as parasites, but never directly compared MPE to a parasite. Maybe he would make that comparison, maybe not. I would not call MPE parasitic, but I do believe that it is power-hungry. I made this statement earlier, which I believe is effectively what REN was arguing. I wrote:

                      “In my understanding of MPE, there is a financial institution that issues MPC when it extends interest-free credit and receives/retires MPC when interest-free “loans” are paid back. This financial institution would have much centralized control over the MP Economy, similar to the centralized control that banks exercise over the economy now. This financial institution would have the final say regarding whether or not people are “creditworthy” and whether or not to issue interest-free credit. Under MPE, there would still be a form of creditocracy.”

                      “The current banking system likes to say that it is managed by the concourse of investors (creditors) and debtors. Although this is true to an extent, this view hides the fact that banks themselves (financial institutions) exercise control over the economy. Banks can change interest rates, negotiate contracts, and decide is someone is or is not worthy of credit. The financial institution that would issue MPC would have similar control over the MP Economy. To claim that MPC/MPE is managed by everyone is not entirely false, but it purposefully hides the power of the financial institution that issues MPC. The MPC financial institution has the power to deny credit to people – that is a huge (arbitrary) power over the economy.”

                    • Sorry, that last post belonged lower down.

                    • “MPC will inflate and deflate as per whatever it represents.” OK, so if more MPC is issued, then you expect inflation, and if less is issued, then you expect deflation. So if MPC inflates, I deduce that the financial institution that emits/retires MPC will restrict credit and deny credit to more people.

                    • No, the CMI does not control/manipulate the volume of circulation, nor does it has the intention to do so. Please differentiate between monetary and price inflation, for the latter can only occur due to temporarily supply/demand issues or temporarily during the transition fase if not properly managed. Why would price inflation occur when more MPC is recorded? If inflation and deflation are defined as increases and decreases in circulation per represented wealth. There´s 1 MPC in circulation per 1 lollypop, another lollypop is produced and monetized, now there are 2 MPC per 2 lollypops. As you eat the lollypops the money is slowly retired as per the rate of consumption until there are no lollypops anymore, and the 2 MPC are retired from circulation.

          • One should alse take competition into account. If you think you can just raise prices because people are more liquid, competition will take over your market.

            • That is true, I should have mentioned competition. Competition can prevent price gouging when supply is ample. Of course, competition can be undermined by monopolies or if competitors collude together or simply agree on a price. Inflation, supply shortages, asset bubbles, and rapid increases in aggregate demand are also factors that impact all businesses, thus encouraging all businesses to raise prices together. But yes, I should have mentioned competition, especially as it helps to prevent price gouging.

  5. REN permalink

    Quotes from http://australia4mpe.wordpress.com/ are in “quotation” marks.

    Nice website by the way. Some questions and comments.

    “A National NON PROFIT Accounting Common monetary Infrastructure (CMI) that proves & demonstrates it commits no crimes against us will be established by UNITED PEOPLES MANDATE by the people for the people to handle all obligations / deposits (NO BANKS), credit / money will be created & issued at NO INTEREST by the people.”

    -When people sign up for MPE money, an instrument is created, this defines the money created and payback rate. Therefore, somebody is selecting the price value of the “good” based on some sort of feedback, probably the marketplace. The marketplace is often rigged by various means, thus prices are not always real. Prices passed on by industry include waste and distribution, not just interest as assumed by MPE.

    “Politicians have absolutely NO ability or power whatsoever to intervene or regulate the CMI outlined in the mandate.”

    -With Social Credit or Sovereign Currency, there is a fourth branch of government, the monetary authority – answerable to the people. It is an institution, like a Sheriff who follows the law, and watches the ENTIRE economy. This is somewhat similar to CMI but broader in scope, and can issue both money and credit. The protection of constitutional law would prevent funny business with a monetary authority.-

    -The actual history of government money is superior to that of private creation of money. Governments today are usurped by private money powers, making Gov seem corrupted, which they are. But, the default private creditor position, that government shouldn’t have money power, must be challenged to my thinking.-

    -Legally binding contracts are “law” based, and the issue in contention is usually money. Therefore some kind of “legal tender” is necessary, and MPE must then assume legal tender status. Is MPE also going to force government to accept its unit for taxes and contracts?-

    “MPE™ is a sovereign economy where No one is borrowing or loaning money from anyone because we create money (principal only) so its only a obligation then to pay & rightfully retire (principal only).”

    -At a philosophical level I have trouble with this. Current hypothecation bankers have interjected themselves between creditors and debtors, thus assuming money power. This is where the banking parasite lives, and MPE is placing itself in the same location. The banker creates money and holds the debt instrument – guiding society.

    - We humans evolved with a gift economy, where we were simultaneous creditors and debtors with each other. A sovereign money system allows people to lend their savings to others, thus mimicking a gift economy. With Sovereign money, banks are gyro…they cannot create credit or money, they are simply accountants. People use already existing money currently in the money supply, and said money supply is monitored on our behalf.-

    – MPE should call itself Mathematically Perfected Debt Instruments (MPDE). -

    -Mutual Credit also mimics our gift economy evolution, where people are mutually in credit and debt with each other. -

    http://sovereignmoney.eu/

    -MPE also fails the comet strike scenario. There has to be some sort of social authority counter spending when people freak out and hoard. Does the CMI assume that power too?-

    • “-At a philosophical level I have trouble with this. Current hypothecation bankers have interjected themselves between creditors and debtors, thus assuming money power. This is where the banking parasite lives, and MPE is placing itself in the same location. The banker creates money and holds the debt instrument – guiding society.”

      This is a very important criticism against MPE and I agree with it.

      • How you can even compare MPE to a parasite is beyond me.

        • I believe that REN did not compare MPE to a parasite (and I only quoted REN.) REN argued that the financial institution in charge of MPE is placing itself in the same position of power that the banking system currently holds. REN referred to contemporary banks as parasites, but never directly compared MPE to a parasite. Maybe he would make that comparison, maybe not. I would not call MPE parasitic, but I do believe that it is power-hungry. I made this statement earlier, which I believe is effectively what REN was arguing. I wrote:

          “In my understanding of MPE, there is a financial institution that issues MPC when it extends interest-free credit and receives/retires MPC when interest-free “loans” are paid back. This financial institution would have much centralized control over the MP Economy, similar to the centralized control that banks exercise over the economy now. This financial institution would have the final say regarding whether or not people are “creditworthy” and whether or not to issue interest-free credit. Under MPE, there would still be a form of creditocracy.”

          “The current banking system likes to say that it is managed by the concourse of investors (creditors) and debtors. Although this is true to an extent, this view hides the fact that banks themselves (financial institutions) exercise control over the economy. Banks can change interest rates, negotiate contracts, and decide is someone is or is not worthy of credit. The financial institution that would issue MPC would have similar control over the MP Economy. To claim that MPC/MPE is managed by everyone is not entirely false, but it purposefully hides the power of the financial institution that issues MPC. The MPC financial institution has the power to deny credit to people – that is a huge (arbitrary) power over the economy.”

  6. The discussion seems to be overly concerned with possible inflation as any 0% interest system; including MPE, eliminates the biggest reason for inflation – interest that can compound across the distribution network. The bigger concern with MPE and any “all debt” money system is deflation resulting from an inadequate amount of money.

    If a 0% loan system were widely implemented across a nation, then it would stand to reason that prosperity would be enhanced. People would keep more of their hard earned money which would probably mean two things – less borrowing and more savings (hoarding).

    If all new money results from loans, then it should be expected that there would be less money and the needs of a vibrant economy would suffer.

    MV = PQ
    Where M is the money supply, V is velocity, P is prices of goods and services and Q is quantity of goods and services. Both M and V would decrease which would reduce Q (GDP).

    Some amount of debt free money would be required to keep the economy rolling. We effectively have this today as the +$17 trillion national debt is NEVER repaid. Eliminate this and you eliminate the economy.

    • Dark Dirk permalink

      All mutual credit system including MPE have the same problem: they are based on money with absolute value that can be hoarded. If money can be hoarded they will be hoarded and there will be deflation. If there is deflation you have to print new money in order to keep economy going. In mutual credit system that means that you have to rise credit level. That finally will lead to rising prices and hyperinflation. Actually mutual credit system is just subcase of current money system. Instead of giving credit just hang out the same amount of money to the new participant. He will spent the money and after that he has two options: borrow new money or earn some money. Because he have spent the given money (or have reached his credit limit if you wish to say) he have to borrow the money from other participants. There is nothing that will stop them of asking interest. They will say: well, you have spent your money (credit) and you want more, but I do not want to spend mine money, so borrow them at interest.

      Conclusion: Mutual credit system with money of absolute value is just subcase of current money system. There have to be something that will force people to spent their money or force them to ask lower or zero interest. That is way Silvio Gesell proposed demmurage currency.

      • I agree with Greenbacker84 here Dark Dirk: 0% interest credit would see far less hoarding. True, a demurrage would all but exclude it, and this is not the case in interest-free credit, but still, velocity would much improve, there is little doubt about that.

        • Dark Dirk permalink

          That 0% credit have to have limit. There always be people who will spent all of their credit and will want more. You cannot extend the their credit line indefinitely. So they will go to other people and ask for more credit. And other people will give them credit, but with interest. And if there is no demurrage, there always will be people that will hoard their credits and wait until all other people reach their limit. After that point mutual credit system will become ordinary money system with interest. Always look over the whole picture. 0% credit sound good, but without demurrage, there in no force for spending. And mutual credit means nothing. It is the same as hanging money to new participant. Silvio Gesell sad that with demurrage interest will go near zero, not zero, may be even negative, in natural way. You just cannot forbid interest. It have to go naturally. So there have to be force that will make people spent money. And that force is demurrage.

          • Well, I completely agree that there is a greater need for credit than for money and that we will need additional schemes to provide it interest free. In fact: a demurrage on the credit based money supply is fully feasible. But I also continue to promote JAK banking. This could be easily organized: the credit facility could for instance use the deposits of savers to lend interest free, guaranteeing the savers against loss.

            I too don’t believe that outlawing interest is no good, but I think you’re a little too hung up on demurrage: why not look at it from the perspective of ending usury and considering all possible solutions?

            Hybrid systems are probably the future anyway. I see a great synthesis, not one system.

            • Dark Dirk permalink

              “why not look at it from the perspective of ending usury and considering all possible solutions”
              Because for example people in Japan love to save money in metallic safes, not in banks. Those money are not available to other people. You have to give them intensive to put them in a bank (JAK back for example if you wish to say it that way). Good will is not enough. So you have to give them interest or you have make them want to spent that money or invest them. In order to make them at will, without gun, you have two options: inflation of money supply (e.t. printing more money) or demurrage. I think that demurrage is the better option, because demurrage is negative feedback to the system. Inflation is positive feedback and will cause hyperinflation. Antony, I also want there to be other options, but there are not. If you use system with money with absolute value, sooner or later you will be forced to inflate money supply, because of savers. Saver sooner will become bankers. I think that there is no such thing as great conspiracy to control all people of the world. Modern banking accrued naturally as a result of using money with absolute value (no demurrage). At first in gold standard deflationary forces was so big, that politicians and bankers had forced to remove it. That happed is US at 1972 (or 1971, I do not remember exact date), but it was soon after hinting peak oil in US. FED realized that they will lose all their gold to arabs, and decided that it is time to remove gold standard. So printing of new money began. But again in 1990s they reached banking money creation limit, so they had to make some financial inventions to keep the system going (inflating). And again in 2007 world hited global peak oil. Oil become attractive investment and bankers make a big balloon of it. And global economy collapsed. Big quantities of money at level M4 was destroyed and global money supply collapsed. FED was forced to do quantitative easing’s (print more money on base M1) to refinance economy (keep the American dream going). This will continue to year 2015. At that year global oil supply will begin to decrease. Oil prices will begin to soar again. New financial collapse will follow.

              • Actually QE isn’t a factor in circulated inflation. As Ellen Brown states, “The popular perception is that QE stimulates the economy by increasing bank reserves, which increase the money supply through a multiplier effect. But as shown earlier here, QE is just an asset swap – assets for cash reserves that never leave bank balance sheets.” http://ellenbrown.com/2013/07/22/5835/

                • Dark Dirk permalink

                  I agree with you. FED makes QE to fix balance sheet of banks, otherwise they will collapse. Saving money is deflationary force and in order to save Americans savings, witch increase constantly, FED have to add more and more reserves, because required reserves put a limit on money creation. But interest forces money supply to grow indefinitely, so FED have to two choices: 1. print money 2. financial collapse, because there is no money in the system to pay interest. There are two types of inflation: 1. inflation of prices 2. inflation of money supply. Those two can go at opposite directions. Money printed by FED with QE at the moment, just go to savings accounts and wait until new bubble is formed. When they see bubble they jump into it. Many gets burned, people scream, and FED do QE to “save” their savings. This will continue again and again with increasing velocity until final collapse of the system or world war witch will erase depts.

                • Yes, this is correct: the new dollars replace all sorts of derivatives. M1 and M2 rise through QE, but the more important M3 does not as a result of this.

    • Greenbacker84 permalink

      Interest free money would be ‘hoarded’??
      This is not gold we are talking about, or a precious metal. Nor is it even interest bearing.
      Why do people suddenly talk like gold-bugs whenever MPE is discussed?

      Would people have more disposable income? Yes
      Does keeping more of our just reward for work equate to hoarding? No that is the kind of lunatic fascistic thinking that discredits monetary reform.

      People would have no requirement to ‘hoard’ money under MPE, its a means of transaction. They have every right to keep, save or send their money as THEY see fit (just like today). How they invest (or don’t) that money is up to them. E.g. in my case I’d spend more time on vacation, build a home for myself etc etc.

      Money under MPE is neither excessively scarce nor ‘too much’. It just matches the productive capacity we DECIDE to create against our existing assets.

      • Dark Dirk permalink

        If money have absolute value they will be hoarded, because people like to save. Everybody want to have money in reserve. And if there is no demurrage, there will be nothing that will make them spent. So in MPE there always have to be inflation in order to counteract deflationary forces caused by saving money. MPE is the same as current money system.

        • Greenbacker84 permalink

          Dirk,
          You are so full of it its not even funny. So far half MPE’s detractors say its DEFLATIONARY, the other half think it’s INFLATIONARY. Seriously guys??

          Lets deconstruct your nonsense..

          >>>’If money have absolute value they will be hoarded, because people like to save.’
          What do you even mean ‘absolute’ value. The money has value, NO that does not mean it will be hoarded.
          Yes SOME people like to save, that’s their RIGHT if they wish to do so. Not everyone will do so, nor can you even proove so.

          >>>Everybody want to have money in reserve. And if there is no demurrage, there will be nothing that will make them spent.
          ORLY?
          So suddenly the cost of living is FREE?
          My rent/mortgage/transport/fuel/energy/food/vacation/investments are suddenly at no cost.
          What planet do you inhabit? Is this some goldbug fantasy land Ive yet to discover?

          >>>So in MPE there always have to be inflation in order to counteract deflationary forces caused by saving money.
          Again you write utter nonsense without a shred of evidence.
          Increased disposable income does not equal ‘deflation’ or ‘hoarding’.
          There is no circulatory ‘inflation’ or deflation simply people DECIDING themselves to conduct trade as FREE INDIVIDUALS using their promissory obligations.
          So again, there does not have’ to be any artificial inflation as there is no savings based deflation to counteract.
          Your literally making up strawmen arguments and evading the facts.

          >>>MPE is the same as current money system.
          This is beyond absurd.
          Lets see the current system
          Banks launder our our promissory contracts (MPE does not)
          Banks claim ownership of our contracts and falsify debt to themselves (MPE does not. It simply records the transaction and publishes evidence)
          Banks charge interest doubling or tripling the cost of our homes (MPE simply retires/pays principal alone at an agreed schedule of payments)
          Banks claim principal plus interest (MPE would eradicate all falsified banker debts, counting principal towards interest. Any remaining principal can be retired at the rate of depreciation).
          The usury central banking banking system demands income taxation (MPE has NO income tax)
          The current system means constant price inflation and volumetric deflation (MPE solved this 40 years ago.

          • Dark Dirk permalink

            Saving money is deflationary force. Saving extract money from money supply and there is less money to do business. So to counteract that force you have to make people want to spent their saved money. You have to options: 1. Demurrage 2. Inflation. There is no demurrage in MPE, so you have to inflate. Inflate indefinitely. So at the end you will hyper inflate. It is the same as the current system.

            • Greenbacker84 permalink

              Saving money is deflationary force.

              >>>This is not a gold standard mate. There is no shiny rock we are depending upon to transact business.
              ‘Hoarding’ is applicable to a scarce metal currency controlled and issued by bankers and acquiring interest.

              MPE does not play ‘begger thy neighbour’. I don’t need to force-ably steal (or borrow/’demerooge’) my neighbors money supply to issue my own unexploited promissory obligation.

              If I EARN money and its paid into my account, whatever I have left over after spending is NOT deflationary. The money STILL exists and is NOT short circuiting the supply you berk.

              To suggest any money left in my account is a ‘deflationary problem’ is fascistic lunacy. Keep digging that whole for everyone to see.Why not DEDUCT ALL of my money and we can save ourselves from deflation entirely. Amirite?

              Saving extract money from money supply and there is less money to do business.

              >>>So people should have NO money left in their account at the end of each month?
              YOU wish to decide how much of my earned money should be deducted to solve a non-existent problem associated with scarce money/usury based currencies? Your certifiably nuts.

              So to counteract that force you have to make people want to spent their saved money.
              >>>People dont need to be ‘forced’ to spend under an interest free economy. We can CHOOSE to spend on whatever the hell we want be that homes, cars, travelling…whatever that be.

              >>>You have to options: 1. Demurrage 2. Inflation. There is no demurrage in MPE, so you have to inflate. Inflate indefinitely. So at the end you will hyper inflate. It is the same as the current system.

              Here we have a prime victim of lobotomy.
              We don’t require either mate. Any newly issued money is a debt to be retired/paid principal alone at an obligatory schedule of payments. Your full of sh** Dirk I think anyone with grey matter can piece that much together.

    • There would be downward pressure on borrowing in the sense that less money would be needed to pay interest charges. Furthermore, velocity of money would greatly improve: without interest there is little incentive to hoard money. This would also lessen the need for money.

      But 0% interest credit would on the other hand vastly INCREASE the demand for credit, simply because of its low price. Look at the housing bubble Larry: people want to borrow, if they can afford it!

      • Greenbacker84 permalink

        I believe the exact opposite to be true.
        If we have far MORE disposable income, and the COST of production decreases, it REDUCES the need to go into further debt Anthony.

        Even today under our usury system of excess interest cost, the main uses of ‘credit’ are to buy a home. Overtimes a car or vacation or home furniture.

        With MPE there is no income tax, far more income and hence LESS need to use credit.
        We don’t issue promissory notes for low ticket items there is no need.

        As for the housing ‘bubble’ low interest did NOT cause the bubble. The ‘bubble’ is pseudo Austrian speak to hide the perpetual theft of our promissory contracts by banks and the imposition of interest. The costs are so high, and the repayment schedule because a faux creditor bank has intervened between every buyer and seller committing contract fraud.

        • I don’t think you really appreciate what drives bubbles: speculation and the fervor of people hoping to make money with money. Any money system will have to address this basic feature of our carnal nature.

          The housing bubble was CAUSED by greed and ENABLED by low cost of credit and high availability. It’s a fact of life Greenbacker84. The bankers are bad, but they cater to our lower aspects and sound money must deal with that.

          • Greenbacker84 permalink

            And here yet again you revert to the Ron Paul Austrian tripe you claim be against??

            FFS Anthony how can you even say with a straight face the ‘low cost’ of credit?
            How is having your home promissory contract laundered by a pretend lender (bank) and compound interest (at any rate) cheap?? How is paying 2x, 3x 4x the cost of your home ‘cheap’?

            The CAUSE and ENABLEMENT is BANKS laundering promissory contracts between every home buyer and seller and the imposing interest which compounds (at whatever rate) until debt explodes in proportion to a circulation consisting only of principal.

            If credit was ‘cheap’ as you suddenly claim we would not have millions of homeless and unemployed being turfed out of their houses. Housing markets collapse when the cost of servicing the (artificial interest bearing) debts become more than the household sector can afford causing a chain reaction of foreclosure.

            Bottom line with MPE there is no banker middleman laundering our contracts and multiplying our debts (untill collapse) via interest.

            • I’m not against cheap credit Greenbacker84, to me it’s not a derogatory phrase. We want cheap credit, interest-free. Of course I agree it’s always too expensive in a usurious environment, but don’t dance around the bush: the housing bubble was unthinkable with 10% interest and you know it full well. In the current system interest rates are used to regulate demand for credit. Simple as that. We don’t like that, but that’s the way it works. Bubbles are blown by providing cheap and abundant credit. The greed of the common man does the rest. That’s how it works.

              • The housing bubble was also caused by the intentional issuance of credit/loans to unworthy people. These liars loans reaped in billions to the CEOs that originated them but caused all the bubbles in the secondary markets where they have been sold fraudulently as having a AAA status.

              • Greenbacker84 permalink

                With a 10% rate we’d have explosion of debt, economic collapse, and perma recession.
                Cant you see what a waste of time going down that path is? Why would you even raise that as a serious alternative?
                Here we are two supposedly anti-usury activists and yet one of us claims ‘cheap credit’ caused the crash and high interest would have saved us form the ‘bubble’ which was a banker created problem in the first place.

                We don’t have ‘too much’ money circulating we have too little (due to interest) and bringing up 10% rates as some kind of practical solution (when its a means of wealth destruction and transfer to the plutocrats) is ridiculous.

                Its as if you claim to be anti usury/banking and as soon as MPE appears you switch off the mike and start with the Austrian cheap money/credit spiel. Its frankly bizarre to watch.

                The very banks you wish to preserve caused the crash by stealing pour promissory contracts and imposing interest.
                Is man kind greedy? Yes
                Is he fallen? Yes (I’m a christian)

                Does that mean I blame the discredited banker controlled ‘business cycle’ of boom and bust on the sheeple?
                Heck no.
                They are being defrauded through the entire monetary process from the theft of the promissory note (by the banks) the imposition of interest (by the banks), the price inflation/volumetric deflation (by the banks) engineered crashes (by the banks) excess taxation (to pay the banks).

                The list goes on and on Anthony. ALL of it is rooted in the theft of our promissory notes by the banks and its the root cause that you can’t seem to accept, hence your desire to KEEP the banks (JAK? Islamic?) in place.

                • Greenbacker, what are you doing? Are you just making conversation?

                  we are dealing with human nature. I just returned from Ireland where they had a horrible housing bubble and are now squeezed to the max. Part of why they accept it is because they realized they were in a stupor. The easy credit had made them all go crazy and they know it.

                  Of course the banks are total criminals, do I really have to defend myself about that??

                  Does that mean we can now give all the people all the credit they want?

                  Does that now mean it’s no longer well known that sustained cheap credit creates bubbles? And that the banks use this to create the boom/bust cycle??

                  • Who says MPE is going to give all the people all the ¨credit¨ they want?

  7. Henrique permalink

    To be honest, there would be a World War before any serious alteration in the usury/arbitrary volume control/Central Banks to International Banks debt relationship happened. The cabal at the top wouldn’t have it. Even the most brilliant theory will probably never be put in practice, so it’s useless to exchange insults over flying elephants – yeah pessimism. Too much ego, and in the web you get dehumanized faster than you think.

    • I agree with your criticisms of MPE, I think you’re spot on. My one criticism of this piece, which does not really take away from your overall argument, is this example: “Weimar inflation (where the Reichsbank was printing money to pay off the tribute the Allies demanded at Versaille).” I recall reading in Zarlenga’s book that this is a common misunderstanding and that Weimar inflation was not caused by money printing in order to pay WWI reparations since those reparations had to be paid in foreign currencies (e.g. British Pound), thus printing more Deutsche Marks in order to pay the reparations would be futile. Instead, Zarlenga’s research argued that Weimar inflation was caused by currency speculators in the banking community. The speculators took out major loans, purchased tons of commodities which caused prices to rise (aggregate increase in demand), and then sold those commodities at higher prices because people were willing to pay the higher prices due to panic. Currency speculation like that provides a perfect example of how prices can rise due to speculation/demand increases and psychology, rather than usury.

      Through my studies, I’ve concluded that there are 2 mechanisms by which prices rise due to an increase in the volume of money. The 1st in psychological: If a business knows that there has been an increase in the money supply, then that business could raise prices simply in anticipation that other prices (taxes, wages, interest rates, raw materials, etc.) are going to rise. This is essentially a self-fulfilling prophecy. If you expect prices to rise due to money supply growth, then join the herd and raise prices as well.

      The 2nd way that prices can rise due to an increase in the money supply is via an aggregate increase in demand. Let’s say that there is a counterfeiter who is so talented that his notes are never discovered to be fake and so they circulate just like legal money. Let’s say this master counterfeiter creates $5 billion in fake notes and leaves it all in a chest in his basement. Will prices rise while the notes are hoarded (not circulated) in that chest, unbeknowst to anybody except the counterfeiter? Methinks no. Now let’s say that counterfeiter starts putting them into circulation, but nobody discovers his notes to be fake and thus the extra $5 billion is now in circulation. In short, let’s say that nobody knows that the money supply has grown. If those extra $5 billion in circulation cause/allow more people to spend more money at various businesses, then those businesses will likely conclude that demand has increased. Those businesses will likely raise their prices in response to the percieved increase in demand.

      I used the counterfeiter example because that allowed me to create an example in which psychology was not a major factor. However, these 2 mechanisms (psychology and demand increases) typically occur simultaneously and reinforce each other.

      • (@ Anthony)

      • thanks TR, interesting.

      • Everyone talks about Weimar inflation, but what did Hitler do to halt it and how did he build a Germany that took the entire “free” world a half a decade to defeat? Of course he used “unconventional” means to do it, to quote Quigley. We should all know what that means. He printed whatever was necessary to a point, and heavily regulated the rest — including the criminal activities of those inflating prices on purpose, which is BTW a cartel which is illegal anyway.

        Outside of criminal activities, MPE is a great solution because it at least the highest level of corruption has been removed. If that alone were accomplished, the world would be a completely different place than it is now.

        The best evidence that MPE will work is the fact that our broken system is working today. Imagine everything as it is, but remove interest payments from all loans, and change the schedule of repayment. Simplistically, there you have MPE.

    • I wish you were wrong.

      • this was to Henrique

    • When the freedom they desired most was the freedom from responsibility, then Athens ceased to be free, and never was free again. Edith Hamilton

      • Henrique permalink

        What I meant is that this idea that by creating some intellectual tradition or “school of thought” to make a case for a particular model is bullshit in many senses, if not accompanied by political action. People today are egomaniacs and exhibitionists that only respect power, so this bickering is unfruitful; all you’ll accomplish is the fragmentation of the “monetary reform” field to a point of dysfunction and dogmatism, coupled with societal marginalization – there will be one “school of thought” more enlightened than the other, and another five being formed every month. Most of the arguments degenerate fast into ad hominem paradise.
        Create a “political wing’ in the MPE movement, to start electing your people into the establishment to prepare the soil for the future reforms. That’s something real and “responsible”. People respect the current system because it exists, they don’t understand it. That”s how 98% of people work. But like I said, good luck when “removing” the current bunch.

        • I have the perfect political wing for monetary reform: the Tax Wallstreet Party! http://taxwallstreetparty.org/

          It’s a grassroots party founded by Randy Credico. You can form your own chapter and run for office as long as you adhere to the core beliefs of “nationalizing the Fed, 1% (or more) Wallstreet sales tax, Protect industry with a 10% tariff (tax) on all imported goods, Protect family farms with a fair (parity) price on all storable grains , Protect savers and investors by re-regulating the financial sector , Provide Medicare for All: public, not-for profit health insurance , Provide dignity for retirees by strengthening Social Security , Stop foreclosures, and fight usury with public credit to ensure access to affordable, quality public education and housing for all Americans “

        • There is truth in this Henrique, but there is also simply the scientific debate and education. You’re right it quickly devolves into bickering, I try to avoid it but I admit I’m not completely successful at it.

          So the real question is: how do we converse as men without destroying the greater good?

  8. Actually circulatory deflation is caused by a theft of ” principal & interest ” Anthony so you have that incorrect for starters which blows the rest you have written clean out of the water as unqualified assumptions , however its true the cause of an irreversible multiplication of artificial debt is the sum of interest paid above the sum of principal the people pay out of circulation that’s only ever comprised of principal on their very own personal but falsified debts .

    For the record I will provide the source that Anthony has forgotten to mention in his misinterpretation of what I have written on my blog & quote from it .

    http://australia4mpe.wordpress.com/category/what-is-the-root-cause-of-all-inflation/

    QUOTE:

    (I actually DID put in the source Australia4mpe, people can look it up both by following the link in the article and by the one you provided above, so I took out the text since it takes up half the page. A.M.)

    So the underlining question Anthony is faced with is how on earth can he possibly first demonstrate an overinflated volume of circulation in MPE would irreversibly multiply artificial debt to begin with that can only then result in asset bubbles or putting it simply how can any volume of circulation even cause an irreversible multiplication of artificial debt in MPE ? & this is logically what Anthony has to qualify first before he can rationally even consider purported asset bubbles . It only stands to logic & reason that booms & bust are a result of irreversible multiplication of artificial debt where industry & commerce can no longer service this artificial debt resulting in a bust of an asset bubble that was a bubble * artificially inflated in price only * caused by an irreversible multiplication of artificial debt to begin with , so indeed where has anthony actually demonstrated an overinflated volume of circulation has been the very cause of irreversible multiplication of artificial debt that may result in an asset bubble either in history or in MPE ?

    http://australia4mpe.wordpress.com/refuting-anthony-migchels/#comment

    For the record I follow no one but my own heart doing what is ethically & morally right , you should try it sometime Anthony & if anyone called mike their leader quite frankly he would laugh at them because there is no one leader above the rest who advocate MPE , we are all leaders as a matter of fact, so you could further irrationally assert that we are all individual cultists who follow our one cult leader which is our own heart .

    Have a nice day Anthony :)

    Ps:This will be my last & final post on your preposterous blog Anthony ,not even to entertain anymore of your persistent misinterpretations of MPE .

    • The asset bubble is NOT caused by ‘irreversibly multiply artificial debt’. It is caused by growing demand in the economy as a result of excess money.

      • By the way: my (very simple) calculation of interest rates and price rises in Zimbabwe showed quite clearly there are a few problems with ‘your’ take on hyperinflation there and in general Australia4MPE (what’s your real name?)

        Do you care to comment on this little bit of practical data before pointing at my purported ‘unqualified assumptions’?

      • “The asset bubble is NOT caused by ‘irreversibly multiply artificial debt’. It is caused by growing demand in the economy as a result of excess money.”

        Given there is no “excess money” in THIS “economy subject to interest,” how do bubbles grow?

        The answer is: dumb asses. MPE won’t stop you from walking over a cliff.

  9. REN permalink

    The money path includes a temporal dimension and also has prices affecting asset values via the marketplace. The recent housing bubble was money borrowed today, to push housing asset prices, to pay off with money made tomorrow. I don’t see these complex dimensions codified in MPE doctrine. In other words, the MPE credit spins in the marketplace for a time before it is recalled. It will not recall to that exact ledger.

    Also not included is the notion that money can change form, for example, during bankruptcy – the former credit becomes floating money.

    Industry distributes money in the forms of dividends and wages, but includes waste in the price of goods. This gap between wages and prices can create a wage price spiral as wage demands (to buy overpriced goods) finds its way into prices, which makes more wage demands, etc. in a positive feedback spiral.

    Duke of Bedford on Inflation:

    http://douglassocialcredit.com/resources/archives/poverty_and_%20over_taxation_duke_of_bedford.pdf

    It is most important that people should realize what inflation is and what inflation is not. It is extremely easy to understand and it is very strange that even economists should often make stupid mistakes about it. Inflation is letting the supply of money get above the supply of desired goods—when this happens prices tend to rise.

    Increasing the supply of money is not necessarily inflation: increasing the supply of paper money above the supply of gold is not inflation either. If a country has 100 lots of goods that people want immediately, which are worth £1 each, and if it has £100 in a form free to buy them, that is the perfect balance between goods and money.

    If it increases its supply of goods and money together until it has 1,000 lots of goods and £1,000, that is Social Credit; the perfect balance between money and goods is retained and there is still no inflation. But if a country with 100 lots of goods and £100, without increasing its goods-supply, increases its money supply to £200, then there will be inflation and the goods which were selling at first for £1 each will soon be selling for £2. Or, if the country with 100 lots of goods and £100 met with a disaster and the quantity of goods dropped to 50, if it did not destroy £50 of its money, or “deflate”, as it is called, again there would be inflation, even though the money supply had not been increased. It is neither sense nor logic to argue, as many people do, that because all cases of real inflation have been accompanied by increases of money, therefore all increases of money must be real inflation.

    • Just for the record Ross: That’s not what I am saying. I agree with your analysis. Extra money CAN lead to rising prices, but only if the economy is running at (near) max capacity. If new productive capacity is kick started by the new money, no rising prices will occur.

  10. Anthony wrote: “ I don’t know why Montagne claims he invented this, perhaps he discovered it independently, he did at any rate do some work on the underlying math, coming up with the P(rincipal) < P + I(nterest) equation, implying there is never enough money to pay off the debt plus interest, forcing a growing money supply.

    I’m quite certain that Mike did not coin this mathematical expression; “P < P+I”, though he no doubt understands its irrefutable meaning (mathematically speaking, there will always be more debt than money when interest is charged).

    This mathematical truism has been around for many years and clearly exposes that our all debt based (interest bearing) money creation system is a pyramid scheme – defaults are a certainty. John Turmel calls the scheme a “death gamble.” The money supply must continuously grow to prevent a collapse.

    In a ” Formal Stability Analysis of Common Lending Practices” Marc Gavin adds time and interest variables to illustrate the basic expression shown above:

    Simple Interest
    Yk = P(1+kr1)

    Compund Interest
    Yk = P(1+r)k

    Mike Montagne models the math in his spreadsheet that is available for free download. This is a great tool in that you can change the variables to model eventual outcomes. This begs the question… why don’t the watch-guards of our economy use basic modeling?

    While I don’t agree with Mike’s solution (MPE), I think he brings some very sound analysis of the current system of usury.

    • This was spammed for some reason Larry.

      Interesting stuff, thanks.

    • Larry, what is it that you don´t agree with in MPE?

      • Holland4MPE – I don’t want to sound too negative towards MPE as I learned some things from Mike and appreciate him approaching the Reagan administration with a mathematical model that detailed the coming collapse that usury inevitably brings.

        Since you asked; there are a couple of things that I would like to see changed in MPE.

        First, MPE will increase the duration of many loans, including mortgages which will effectively expand leverage. For example, by increasing the duration of mortgages to 100 years (a factor of 3.3 against average), the mortgage market in the U.S. could quickly expand from around $13 trillion (today) to around $42 trillion. This could cause a giant bubble in housing and very few would ever live long enough to repay their mortgages.

        I understand a little about financial deprecation and am very skeptical about the MPE approach which seems to use some fuzzy numbers derived from the anticipated service life of the asset. This looks risky to me.

        Second, I am convinced that at least some amount of debt free money would needed at least to make the transformation from usury to freedom. For example, the national debt could be eliminated by providing repayment with debt free money – instantly; without inflation and in avoiding millions of law suits that would come with default.

        MPE, like many others offering reforms, would take a wrecking ball to the economy in simply defaulting on the loans. Massive defaults would break the legal system. This can be avoided in an orderly transition that would honor existing contracts by using debt free money.

        • I wouldn’t honor the existing contracts based upon usury and fraud. A prime example of the latter would be all the mortgages involved in the MERS fraud. The banks destroyed original titles to these properties and created new ones, so they can avoid taxes and resell them innumerable times to different counterparties. In effect, the mortgage owner can never pay off his home, as there are many creditors to this property. The bank meanwhile continues to collect on a mortgage that has long been paid off.

          • pm – I think you would be creating many problems that could simply be avoided. For example, mortgages could be rolled over into new 0% contracts as they become available. There is no need for defaults.

            Same with the national debt. The outstanding balance can be paid with debt free money which enables an orderly unwinding. If a bank created money to buy the bond, the bond would simply cease to exist as would the obligation to the bank. If an individual or private company bought treasury bonds in good faith, the contract should be completed with debt free dollars.

            Again, the transition would be orderly – we must avoid the chaos that will ensue upon massive defaults.

            • The difference between me and you is that the only thing I believe we owe these people is a jail cell.

              If you want to put interest free banking system to its proper use, cancel the fraud from the people’s debt and have them pay only what is actually owed. By my reckoning , the people have a refund coming.

        • Expand leverage”?

          Leverage of *what*? *For* what?

          “and very few would ever live long enough to repay their mortgages.”

          So what? The homes/mortgages are paid out of the estate until someone else assumes the remainder of the promissory obligation.

          There IS no “mortgage market” under MPE™.

          “and am very skeptical about the MPE approach which seems to use some fuzzy numbers derived from the anticipated service life of the asset. This looks risky to me.”

          Talk about a fuzzy “statement.”

          “For example, the national debt could be eliminated by providing repayment with debt free money – instantly; without inflation and in avoiding millions of law suits that would come with default.”

          Absolutely idiotic. No wonder you don´t understand. Your not listening. Nobody is providing “debt free money.” The debts are resolved to their only rightful state by restoring the original promissory obligations to their bare facts.

          “MPE, like many others offering reforms, would take a wrecking ball to the economy in simply defaulting on the loans.”

          Absolute bullshit. No loan is defaulted. No wrecking ball. It’s a giant vagina, with perfect tits — a boob job. What are you thinking man?

          *What* defaults would break the system?

          People would only service the principal at the rate of consumption. How does that break THEM?

          Whose fucking debt free money? You mean Anthony Migchels’ Gelre printing press?

          IDIOTS!
          They can’t keep a fact straight for 15 seconds.

          Hey, this espresso machine i bought yesterday is the cat’s meow. It increases the leverage of cafe without deleveraging the back-breaking task of suing the feds for the bank’s obfuscations by issuing caffeine-free beans which magically re-caffeinate the espresso. Works like a charm. All you gotta do is not understand what you’re doing!

          • I believe mike is referring to the pre existing debts, largely of interest and fraud (derivatives, cdo, ect.), that are outstanding prior to the implementation of an MPE system — not contractual obligations from legit purchases. How would MPE handle these [bogus] claims? They need to be obviated: mike’s way is to buy them off with the issuance of the required interest free credit; mine is renunciation and prosecution. What’s yours?

            • I’m sorry, I said mike when I should have sais Larry. my apologies.

            • We simply calculate prior interest payments towards principal (this in itself would make many people debt free instantly), and then re-finance further at 0% under MPE. It´s what Mike calls: Resolving the rightfull state of our promissorry obligations.

  11. I understand where you are coming from Anthony, but there is no process in MPE by which you “could potentially monetize the entire asset position of the nation…” to monetize further assets. Nothing but credit-worthiness to do so allows you to do so. Nonetheless, all the while it is literally impossible for the circulation to increase above assets we can afford to monetize, or beyond the remaining value of all monetized property. There is simply never, never, never any circulatory inflation under MPE. If this is unclear to you I am more than happy to take you through the basics of MPE.

    • As we have said so many times, the CMI certifies credit-worthiness. The most anyone can issue promissory obligations for is what they can service; and, as MPE monetizes any permitted thing just once; and as MPE compels the obligor to pay only the remaining value at any time, no way in the world is the obligor going to pay more: not the original obligor, nor anyone after.

      • Let me put this to you too Jake, I’m curious what you make of it:

        “Take for instance a mortgage. I believe MPE works out the mortgage can be repaid over the lifespan of the house and that this would mean something like $83 per month for a 100k house if the lifespan is 100 years.

        Do you see what this means for the credit worthiness of the mortgagee?

        Do you see what kind of commitments he could take on? Especially when we consider the vastly improved purchasing power in a usury free economy for the commoner?

        Can you not see that this means the ‘limits’ to volume in MPE don’t come close to the limits of volume money needs to allow stable prices?”

        • Greenbacker84 permalink

          You seem to be confusing a greatly increased (natural) purchasing power with out of control inflation.
          It is in fact INTEREST which is doubling and tripling the cost of our homes.
          With interest free currency, paying of principal alone, homes would LOWER in cost and we could build/purchase homes much closer to the TRUE cost of production (without banker financing).

          Paying principal alone for our home does not equal hyperinflation. To claim so is utterly ridiculous.
          Ive been following this sight for years Anthony, you claim to ‘get’ interest free currency and now vilify the only real solution to issuing OUR OWN unexploited promissory obligations.

          IMO you have pitched your tent in the ‘regional currencies’/islamic banking/social credit camp and so purposely IGNORE/DENIGRATE or misrepresent MPE. You seem to have a personal stake in pushing alternative lesser options and now outright ATTACK Mike. This shows a real lack of credibility. You wish to PRESERVE the very banks robbing us, THAT seems to be the real problem you have with MPE.

          • “You seem to be confusing a greatly increased (natural) purchasing power with out of control inflation.”
            Nono Greenbacker84, I see both, I realize full well there will be greatly increased purchasing power in a usury free economy.

            But this purchasing power is going to come from higher wages, lower prices, lower taxes, and higher income for the self employed!

            Yes, there will be also more access to credit, and this will CAUSE all of the above goodies, but it is NOT so that we can now just endlessly monetize anything we can service.

          • “IMO you have pitched your tent in the ‘regional currencies’/islamic banking/social credit camp and so purposely IGNORE/DENIGRATE or misrepresent MPE”

            Total bullshit Greenbacker.
            I’m one of the very few that consistently calls for the closure of all banks. I don’t have to explain I’m against Usury.

            I have no agenda in ‘attacking’ MPE. I don’t attack MPE. I’m setting the record straight concerning how Montagne and some of his drones, Adriano something in particular, then thought they could attack me. I don’t care about that, but then don’t come howlering if your little baby gets bitch slapped around a little bit because he can show no manners himself.

            This volume issue is way too important to just settle on because of Mike’s blue eyes. I tried to discuss it manly and thankfully we are having a good discussion here too, so that’s good, let’s keep it that way.

            As you can gather from the comments several serious people have similar issues here. And it’s not difficult to understand why: MPE is making some wildly sweeping statements here and they have NOT been validated.

        • The commitment he/she can take on will depend on his/her credit worthiness. No I do not see that. In MPE the volume of money is always dynamically balanced with whatever it represents. This is how the currency will maintain its immutability. No inflation, and no deflation.

          Having said that I am researching implementation of MPE which could temporarily affect price levels due to possible supply/demand issues. This should however for a great deal be offset by substantially lower production costs due to the interest free environment. Further measures can be taken (democratically) to allow for adjustments without upsetting communities. There are more aspects we need to take into account such as environment, and land but that´s not the topic right now. It is advisable in that respect to read Absolute Concensual Representation (ACR) which can be found on http://www.perfectedeconomy.org

          MPE is a fantastic concept and answers all questions with respect to the three categoric faults including a just volume of money at all times. To just say we keep printing until prices go up is a poor and dangerous attempt to balance the circulation, and why would you if the solution is right in front of you!

          • Of course MPE is in many respects very well thought out Jake, I’ll be the first to say, there is a good level of knowledge and many aspects are discussed at a high level.

            But there is a fundamental mistake concerning inflation and volume. Money’s value is NOT based on the underlying asset. It is a result of demand and supply in the economy.

            That is the basic issue.

            A good further chat could and should be had about how exactly it SHOULD be managed. Print as much as stable prices permit and then Indexing volume to economic activity and maintaining parity is in short what I gather from 2000 years of monetary thought and practice.

            • You do look a bit aged but are you that old?! jeez

            • I just explained you how it SHOULD be managed, and it is the only way it can be managed to maintain an immutable currency across the board. Just like bankers you try to interject yourself between creditors and debtors, but with no credible systematic money management rules in place. This is where most monetary reform fail, and you proof no different.

              • Ed.G permalink

                @Jake,

                When a change was made from a weekly salary payment to a monthly payment, companies needed large loans to make those payments.
                Suddenly much more money was needed.

                Does MPE predict and explain that need ?
                If so, can tou show me how ?

            • “But there is a fundamental mistake concerning inflation and volume. ”

              Your assertion is unproven. You assume a mistake. Remember what it means to assume.

      • ??? permalink

        I have a few straightforward questions about MPE, hopefully you can clarify them for me and anyone else who reads.

        1. If MPE were instituted, could I get credit for any of my assets (land, computer, car, etc.) whenever I want (assuming that they have not already been used as collateral)? Or is the CMI an arbiter that can deny me if it chooses (whatever the reason), even if I have an asset to offer?

        2. Under MPE, could I get credit if I was poor and without assets?

        3. Under MPE, if I got a mortgage and repaid most/all of it, could I remortgage my house?

        4. Could I mortgage my future house in order to purchase that house (like nowadays), or can I only mortgage my house once I have already paid for it with money from somewhere else?

        5. Under MPE, will there be physical notes that I can hold in my hand?

        • Welcome. Please find answers below your questions, remember though that some of your questions would require democratic decision making by the people/country and are not decided by some institute or uber computer. We are the voice that finally implements the rule in the monetary infrastructure.

          1. If MPE were instituted, could I get credit for any of my assets (land, computer, car, etc.) whenever I want (assuming that they have not already been used as collateral)? Or is the CMI an arbiter that can deny me if it chooses (whatever the reason), even if I have an asset to offer?

          This is something that should be democratically decided by a country. In my own view land should never be privatized, but leased/used for permitted purposes and maintained in it´s original state i.e. the ones using the land is held responsible for that. Why should we allow for land to be privatized? We use it temporarily and then it moves on to the next generation. Just my opinion. As far as I´m concerned you cannot monetize your computer, car, etc if they already have been paid for collateralized or not. Yes, our CMI (remember its not an institution but a monetary infrastructure for us and by us) can deny credit however the people of that country sets the rules.

          2. Under MPE, could I get credit if I was poor and without assets?

          No. But again, a country/people can decide on social infrastructure. Since income tax (amongst other taxes) will dissapear there will be enough available to supply for that.

          3. Under MPE, if I got a mortgage and repaid most/all of it, could I remortgage my house?

          Its not called a mortgage under MPE but yes you can. However, explain to me why would you pay off your mortgage quicker than the rate of depreciation? (and then free up the cash again).

          4. Could I mortgage my future house in order to purchase that house (like nowadays), or can I only mortgage my house once I have already paid for it with money from somewhere else?

          Yes, you can finance your future house if your creditworthiness is certified and at the free market value of the house. In my opinion we need to oppose towards house speculation. Again we must decide these things democratically.

          5. Under MPE, will there be physical notes that I can hold in my hand?

          Yes, afcourse. But subject to the same democratic decision making process. If the people decide to go to a cashless society, so let it be.

          • ??? permalink

            Thanks for the quick response!

          • ??? permalink

            Thinking on your answers, I have a few more brief questions.

            1. If I have yet to buy a computer or car, could I get credit to buy one?

            2. Also, what about student loans? Or is the financing of higher education to be covered by some sort of free education social program?

            I’m trying to reconcile your answers to #2 and #4 above too. I presume that if I was poor and without assets but had income, then I would have to save up and buy assets before I could get credit? Or could someone without assets get credit just by having a job/income?

            For #4, I gather that I could get an interest-free mortgage (with a different name) to buy my future house, but if I don’t yet own the future house, then I don’t have that asset yet and so it’s possible that I am without assets. According to #2, shouldn’t I be denied credit? Or does it come down to my job/income? If I have other assets (car, 2nd house, etc.), would they impact my creditworthiness?

            • 1. If I have yet to buy a computer or car, could I get credit to buy one?

              Yes, when creditworthiness is certified. Paying back principal (only) non-lineair at the rate of depreciation. However, for buying a computer you will probably not need a ¨credit¨ because you purchasing power will have significantly increased. Most ¨credit¨ needed will only be for housing and transport.

              2. Also, what about student loans? Or is the financing of higher education to be covered by some sort of free education social program?

              Of course we can arrange for student ¨loans¨ interest free or however a society decides.

              I’m trying to reconcile your answers to #2 and #4 above too. I presume that if I was poor and without assets but had income, then I would have to save up and buy assets before I could get credit? Or could someone without assets get credit just by having a job/income?

              Yes, if you have income you can apply for ¨credit¨ to buy a house for example. There is no need to first buy assets. The house you buy with the ¨credit¨ is the asset/collateral.

              For #4, I gather that I could get an interest-free mortgage (with a different name) to buy my future house, but if I don’t yet own the future house, then I don’t have that asset yet and so it’s possible that I am without assets. According to #2, shouldn’t I be denied credit? Or does it come down to my job/income? If I have other assets (car, 2nd house, etc.), would they impact my creditworthiness?

              I think I aswered that. You could free up cash with your 2nd house and maybe your car (depends on how the rules are decided by your society). Creditworthiness is key.

              • ??? permalink

                Thank you. The picture is coming together quite well now. It’s essentially a bank that doesn’t charge interest (theoretically bringing down prices by reducing total cost of things purchased on loan) and because it doesn’t charge interest, there is always enough money to repay the loans (unless paper notes are destroyed). (I gather how this is unlike contemporary banking, where total debt is larger than total money created due to interest.) Of course, people can still default on loans under MPE if they personally don’t have the money (if money is being hoarded or if that person is simply down on his financial luck due to a lost job, injury and medical costs, etc.).

                I thought it was going to be like a Lombard bank, in which any commodity can be deposited at a warehouse in exchange for credit, but it is more like your average modern bank in that it is more picky with what assets it will allow as collateral. (Of course, modern banks and Lombard banks charge interest, whereas MPE does not.)

                MPE seems to maintain the creditocracy of today too. Only creditworthy people can get credit; MPE is not concerned with charity. Of course, charity would still exist in the private market, just like interest – “I will gladly pay you Tuesday (plus interest), for a hamburger today.” I see how MPE is attractive though, what with interest free loans for the creditworthy, which theoretically brings down prices for everybody since businesses will have lower expenses.

                If, under MPE, people can be denied credit based upon creditworthiness, then I don’t understand the hostility against Anthony, who likewise finds it necessary to limit the emission of credit.

                I think it’s important to acknowledge that wage-earners would still have to be protected against exploitation under MPE (I’m sure you’d agree).

                You said that “purchasing power will have significantly increased” (ideally for everybody, so let’s assume that wage-earners aren’t exploited), thus it will be easier for people to buy stuff. What if people, with their increased purchasing power, took out a ton of interest-free loans, and started buying up tons of land at a alarmingly fast pace. Would the price of land rise? Hypothetically, what if the super rich elite don’t trust MPE notes as a store of value (or simply wish to destroy MPE by undermining people’s faith in MPE money), so they take tons of MPE notes and start buying up as much silver and gold as possible. Would the price of silver and gold rise – would the seller raise prices? Let’s say that in addition to their long-established massive hoards of MPE notes, the super rich took out a bunch of loans and then dumped all that money in commodity markets. Let’s say the super rich start buying as much gold, silver, oil, food and land as possible, then the resulting market irregularities (and media reaction) causes a panic, so everybody starts dumping their MPE notes for commodities now, believing that the notes will be worth less tomorrow. Of course, the super rich already bought a massive store of commodities when prices were lower, so now the super rich are selling those commodities back to the panicking mob at higher and higher prices (which makes it really easy to repay those loans that the super rich took out at the beginning of this hypothetical speculative binge). Destroy people’s faith in money, and money becomes worth less. MPE is not free from this problem.

                I think MPE is a neat idea and I appreciate you answering my questions, but I’m not sold on MPE.

                • I can only read the left half of your reply, but from what I can read you don´t get the full picture yet. We can discuss further on Skype. Send a Skype invite to: m_montagne. Or open a thread on http://www.holland4mpe.wordpress.com

                  • ??? permalink

                    It’s doing the same thing on my screen. If you copy my previous post and paste it in microsoft word or some other word processor, then it should all be there.

                  • hit reply to read truncated text.

          • ??? permalink

            It’s doing the same thing on my screen. If you copy my previous post and paste it in microsoft word or some other word processor, then it should all be there.

          • ??? permalink

            (Or I’ll just repost this here)

            Thank you. The picture is coming together quite well now. It’s essentially a bank that doesn’t charge interest (theoretically bringing down prices by reducing total cost of things purchased on loan) and because it doesn’t charge interest, there is always enough money to repay the loans (unless paper notes are destroyed). (I gather how this is unlike contemporary banking, where total debt is larger than total money created due to interest.) Of course, people can still default on loans under MPE if they personally don’t have the money (if money is being hoarded or if that person is simply down on his financial luck due to a lost job, injury and medical costs, etc.).

            I thought it was going to be like a Lombard bank, in which any commodity can be deposited at a warehouse in exchange for credit, but it is more like your average modern bank in that it is more picky with what assets it will allow as collateral. (Of course, modern banks and Lombard banks charge interest, whereas MPE does not.)

            MPE seems to maintain the creditocracy of today too. Only creditworthy people can get credit; MPE is not concerned with charity. Of course, charity would still exist in the private market, just like interest – “I will gladly pay you Tuesday (plus interest), for a hamburger today.” I see how MPE is attractive though, what with interest free loans for the creditworthy, which theoretically brings down prices for everybody since businesses will have lower expenses.

            If, under MPE, people can be denied credit based upon creditworthiness, then I don’t understand the hostility against Anthony, who likewise finds it necessary to limit the emission of credit.

            I think it’s important to acknowledge that wage-earners would still have to be protected against exploitation under MPE (I’m sure you’d agree).

            You said that “purchasing power will have significantly increased” (ideally for everybody, so let’s assume that wage-earners aren’t exploited), thus it will be easier for people to buy stuff. What if people, with their increased purchasing power, took out a ton of interest-free loans, and started buying up tons of land at a alarmingly fast pace. Would the price of land rise? Hypothetically, what if the super rich elite don’t trust MPE notes as a store of value (or simply wish to destroy MPE by undermining people’s faith in MPE money), so they take tons of MPE notes and start buying up as much silver and gold as possible. Would the price of silver and gold rise – would the seller raise prices? Let’s say that in addition to their long-established massive hoards of MPE notes, the super rich took out a bunch of loans and then dumped all that money in commodity markets. Let’s say the super rich start buying as much gold, silver, oil, food and land as possible, then the resulting market irregularities (and media reaction) causes a panic, so everybody starts dumping their MPE notes for commodities now, believing that the notes will be worth less tomorrow. Of course, the super rich already bought a massive store of commodities when prices were lower, so now the super rich are selling those commodities back to the panicking mob at higher and higher prices (which makes it really easy to repay those loans that the super rich took out at the beginning of this hypothetical speculative binge). Destroy people’s faith in money, and money becomes worth less. MPE is not free from this problem.

            I think MPE is a neat idea and I appreciate you answering my questions, but I think there are some major weaknesses to MPE. I don’t think that MPE can guarantee that prices won’t inflate.

            • ??? permalink

              I also gather that MPE won’t have reserve ratios like modern banks, another key difference.

              • No need for that. It´s just accounting for whatever needs to be accounted for. 1:1:1

            • Thank you. The picture is coming together quite well now. It’s essentially a bank that doesn’t charge interest (theoretically bringing down prices by reducing total cost of things purchased on loan) and because it doesn’t charge interest, there is always enough money to repay the loans (unless paper notes are destroyed). (I gather how this is unlike contemporary banking, where total debt is larger than total money created due to interest.) Of course, people can still default on loans under MPE if they personally don’t have the money (if money is being hoarded or if that person is simply down on his financial luck due to a lost job, injury and medical costs, etc.).
              As you know we call it the Common Monetary Infrastructure (CMI) (non-profit) which is indeed no more than an accounting software/system to keep track of our promissory obligations to each other. A bank is a total different thing and we do not want to be associated with that term.
              I thought it was going to be like a Lombard bank, in which any commodity can be deposited at a warehouse in exchange for credit, but it is more like your average modern bank in that it is more picky with what assets it will allow as collateral. (Of course, modern banks and Lombard banks charge interest, whereas MPE does not.)
              Our (you, me, and everybody elses) CMI is non-profit. Not only does the CMI keep track of our promissory obligations, it also certifies creditworthiness if you want to issue your promissory obligation against for example a home, and it also verifies if the home is priced according to free market value. In any case, whatever you pay for the home is your responsibility to pay back at the rate of depreciation. Principal only, in a non-linear fashion. The cost of running the CMI is paid out of some tax by all of us and is peanuts in the scheme of things.
              MPE seems to maintain the creditocracy of today too. Only creditworthy people can get credit; MPE is not concerned with charity. Of course, charity would still exist in the private market, just like interest – “I will gladly pay you Tuesday (plus interest), for a hamburger today.” I see how MPE is attractive though, what with interest free loans for the creditworthy, which theoretically brings down prices for everybody since businesses will have lower expenses.
              If, under MPE, people can be denied credit based upon creditworthiness, then I don’t understand the hostility against Anthony, who likewise finds it necessary to limit the emission of credit.
              Let Anthony explain how he balances the circulation against goods and services and keep inflation and deflation in check. He gives no credible answers to that, and it is one of the only thing (and he knows that) that makes MPE unique. Because there is only ONE solution to inflation and deflation. And that is a money circulation that is at all times more or less equal to the things it represents thereby safeguarding the immutability of our currency.
              I think it’s important to acknowledge that wage-earners would still have to be protected against exploitation under MPE (I’m sure you’d agree).
              You said that “purchasing power will have significantly increased” (ideally for everybody, so let’s assume that wage-earners aren’t exploited), thus it will be easier for people to buy stuff. What if people, with their increased purchasing power, took out a ton of interest-free loans, and started buying up tons of land at a alarmingly fast pace. Would the price of land rise?
              To be democratically decided but in my MPE environment you cannot buy land.
              Hypothetically, what if the super rich elite don’t trust MPE notes as a store of value (or simply wish to destroy MPE by undermining people’s faith in MPE money), so they take tons of MPE notes and start buying up as much silver and gold as possible. Would the price of silver and gold rise – would the seller raise prices? Let’s say that in addition to their long-established massive hoards of MPE notes, the super rich took out a bunch of loans and then dumped all that money in commodity markets. Let’s say the super rich start buying as much gold, silver, oil, food and land as possible, then the resulting market irregularities (and media reaction) causes a panic, so everybody starts dumping their MPE notes for commodities now, believing that the notes will be worth less tomorrow. Of course, the super rich already bought a massive store of commodities when prices were lower, so now the super rich are selling those commodities back to the panicking mob at higher and higher prices (which makes it really easy to repay those loans that the super rich took out at the beginning of this hypothetical speculative binge). Destroy people’s faith in money, and money becomes worth less. MPE is not free from this problem.
              Impossible under MPE. Why? Because MPE is the only set of rules that guarantees the immutability of our currency. If the superrich want to buy gold, silver (land is not possible) they can do that, but not by issuing MPE promissory obligations. We simply do not allow for that and gold/silver etc does not depreciate. Commodity speculation, stock markets, and the likes do not exist in a MPE environment. If you like please read the mandate called Absolute Consensual Representation (ACR). MPE is the maths (money management/rules), and ACR provides the frame work.
              I think MPE is a neat idea and I appreciate you answering my questions, but I think there are some major weaknesses to MPE. I don’t think that MPE can guarantee that prices won’t inflate.
              MPE does not guarantee prices won´t inflate. There will always be supply and demand issues being reflected in prices, but prices will then return again to their previous levels unless it has become impossible to produce more of it.
              MPE does however offer true price discovery because prices of whatever are not being distorted by interest, speculation, or other external manipulation/exploitation.

            • I post this again. WordPress is not build for long discussions. I just wish we could move this to Skype or similair. But then again, it could be Anthony or another pretender I´m talking to :-) Here ya go bro…

              Thank you. The picture is coming together quite well now. It’s essentially a bank that doesn’t charge interest (theoretically bringing down prices by reducing total cost of things purchased on loan) and because it doesn’t charge interest, there is always enough money to repay the loans (unless paper notes are destroyed). (I gather how this is unlike contemporary banking, where total debt is larger than total money created due to interest.) Of course, people can still default on loans under MPE if they personally don’t have the money (if money is being hoarded or if that person is simply down on his financial luck due to a lost job, injury and medical costs, etc.).

              1. As you know we call it the Common Monetary Infrastructure (CMI) (non-profit) which is indeed no more than an accounting software/system to keep track of our promissory obligations to each other. A bank is a total different thing and we do not want to be associated with that term.

              I thought it was going to be like a Lombard bank, in which any commodity can be deposited at a warehouse in exchange for credit, but it is more like your average modern bank in that it is more picky with what assets it will allow as collateral. (Of course, modern banks and Lombard banks charge interest, whereas MPE does not.)

              2. Our (you, me, and everybody elses) CMI is non-profit. Not only does the CMI keep track of our promissory obligations, it also certifies creditworthiness if you want to issue your promissory obligation against for example a home, and it also verifies if the home is priced according to free market value. In any case, whatever you pay for the home is your responsibility to pay back at the rate of depreciation. Principal only, in a non-linear fashion. The cost of running the CMI is paid out of some tax by all of us and is peanuts in the scheme of things.

              MPE seems to maintain the creditocracy of today too. Only creditworthy people can get credit; MPE is not concerned with charity. Of course, charity would still exist in the private market, just like interest – “I will gladly pay you Tuesday (plus interest), for a hamburger today.” I see how MPE is attractive though, what with interest free loans for the creditworthy, which theoretically brings down prices for everybody since businesses will have lower expenses.
              If, under MPE, people can be denied credit based upon creditworthiness, then I don’t understand the hostility against Anthony, who likewise finds it necessary to limit the emission of credit.

              3. Let Anthony explain how he balances the circulation against goods and services and keep inflation and deflation in check. He gives no credible answers to that, and it is one of the only thing (and he knows that) that makes MPE unique. Because there is only ONE solution to inflation and deflation. And that is a money circulation that is at all times more or less equal to the things it represents thereby safeguarding the immutability of our currency.

              I think it’s important to acknowledge that wage-earners would still have to be protected against exploitation under MPE (I’m sure you’d agree).
              You said that “purchasing power will have significantly increased” (ideally for everybody, so let’s assume that wage-earners aren’t exploited), thus it will be easier for people to buy stuff. What if people, with their increased purchasing power, took out a ton of interest-free loans, and started buying up tons of land at a alarmingly fast pace. Would the price of land rise?

              4. To be democratically decided but in my MPE environment you cannot buy land.

              Hypothetically, what if the super rich elite don’t trust MPE notes as a store of value (or simply wish to destroy MPE by undermining people’s faith in MPE money), so they take tons of MPE notes and start buying up as much silver and gold as possible. Would the price of silver and gold rise – would the seller raise prices? Let’s say that in addition to their long-established massive hoards of MPE notes, the super rich took out a bunch of loans and then dumped all that money in commodity markets. Let’s say the super rich start buying as much gold, silver, oil, food and land as possible, then the resulting market irregularities (and media reaction) causes a panic, so everybody starts dumping their MPE notes for commodities now, believing that the notes will be worth less tomorrow. Of course, the super rich already bought a massive store of commodities when prices were lower, so now the super rich are selling those commodities back to the panicking mob at higher and higher prices (which makes it really easy to repay those loans that the super rich took out at the beginning of this hypothetical speculative binge). Destroy people’s faith in money, and money becomes worth less. MPE is not free from this problem.

              5. Impossible under MPE. Why? Because MPE is the only set of rules that guarantees the immutability of our currency and this will be clear to most of us when the majority understand it. If the superrich want to buy gold, silver (land is not possible) they can do that, but not by issuing MPE promissory obligations. We simply do not allow for that and gold/silver etc does not depreciate. Commodity speculation, stock markets, and the likes do not exist in a MPE environment. If you like please read the mandate called Absolute Consensual Representation (ACR). MPE is the maths (money management/rules), and ACR provides the frame work.

              I think MPE is a neat idea and I appreciate you answering my questions, but I think there are some major weaknesses to MPE. I don’t think that MPE can guarantee that prices won’t inflate.

              6. MPE does not guarantee prices won´t inflate. There will always be supply and demand issues being reflected in prices, but prices will then return again to their previous levels unless it has become impossible to produce more of it.
              MPE does however offer true price discovery because prices of whatever are not being distorted by interest, speculation, or other external manipulation.

              Just imagine how different the world would become, and how quickly we would progress as a people.

              • ??? permalink

                Now under MPE one can’t own land? Sounds like communism. Also, you seem to keep contradicting yourself. Why have mortgages if we can’t own land?

                You can’t prevent commodity speculation unless you tell people when they can buy and sell, and that’s tyranny. MPE cannot guarantee that speculation cannot happen, even if it stops giving out loans, because the money that MPE has already put into circulation can be used for speculative purposes.

                • I said that it is my opinion one cannot own/purchase land, just lease/use the land for whatever purposes we allow to use it for and return in its orginal state when the lease ends. I pointed out that the decision about land amongst other things should be taken democratically.

                  Why can we not have ¨mortgages¨ to buy/own a house exluding the land it is build upon?

                  With respect to commodity speculation its not that difficult to cut out the middleman and speculator. Producer to consumer (non-profit distribution network paid out of taxes replacing the middleman). Why would we allow people to speculate with our commodities with no further benefit to society as a whole, but just the financial interest of the individual while exploiting producers and consumers? Under MPE there would be no (need for) commodity exchanges, stock exchanges, etc.

                  But again, many of these things have to be decided democratically.

                  Did you read the mandate (ACR)?

                  • ??? permalink

                    Yes, I read it and was disgusted. Montagne is a wannabe tyrant and is a demogogue hiding behind what he calls “democracy.”

                    He wrote: “Being therefore as consensual representation hinges always upon a fact of comprehensive disclosure; therefore disinformation in any quarter of public affairs, however misleading, shall be treason: 1. “disinformation” shall be understood as to mislead public opinion either by inaccuracy or omission; 2. “public affairs” shall be understood to be any matter upon which actual representation hinges; 3. and therefore it is our perpetual duty to recognize not only that we have rights to free development of opinion, but that a perpetual obligation exists likewise to ensure our opinions indeed serve the common good;” Montagne wishes to control governments and censor free speech in order to prevent any challenges against his arrogantly named Mathematically “Perfected” Economy. His “Absolute Consensual Representation” is neither absolute (because he must crush opposition with censorship), nor consensual representation (I oppose him, so he doesn’t have my consent to represent me!). But then he contradicts himself: We have “free development of opinion,” but we can’t criticize MPE because his MPE cult will say that any of our criticisms are false/”inaccurate” or “omitting” the heavy handed, uncritical jargon that “proves” MPE (even though MPE is completely unproven so Montagne’s arrogant claims of economic perfection are unproven).

                    Another quote: “In proving a singular solution for the volumetric and dispositional improprieties of today’s pretended economies therefore, this proposition of mathematically perfected economy and absolute consensual representation™ is the only reasonable impetus for an ascendant humanity to secure inevitable justice; and of necessity then, we hold it is the duty of every apprehending citizen to ratify these authorities; that mathematically perfected economy and absolute consensual representation™ are inherent rights of every just person; that by our signatures, we and we alone rightly ratify these indispensable rights; that our ratification rightly prevails immediately over the every affair of every signatory; that to eradicate political betrayal, we must deny every seated or future government any authority whatever but to comply; and that necessarily therefore, our signatures immediately establish omnipotent personal authorities not only to fully protect ourselves from every transgression of these facts, but to prosecute every deviate for every related crime against us — each and every which deviate government, entity, and person therefore, from the moment of our signature forth, is guilty of the gravest treasons against us.” – MPE aspires to tyranny, without a doubt. Fortunately, if MPE ever gains enough followers to catch public attention, mainstream economists will skewer it for its major flaws (flaws that MPE followers don’t want to see, and thus ignore). Finally, Montagne is terribly dogmatic and a sorry excuse for an economist, the inability of MPE advocates to even acknowledge the legitimate criticisms of MPE skeptics is a very, very bad sign. Take the blinders off.

                    • What is it you are afraid for, or perhaps you don´t understand ACR. And what has ACR to do with Mike Montagne? Please make notes and amendments on how you want to organise representation and we can dicuss it. Its open source, and if you can add meaningfull additions/changes that would be great. Thanks

                    • ??? permalink

                      MPE could start by removing all references to intellectual treason or censorship in its ACR, since censorship and punishing intellectual opponents of MPE is anti-democratic (i.e. tyrannical).

  12. searching for common ground here …. might wanna throw a ‘fresh’ log on the fire …

    shortlived blog

    http://societalinnovationandlearning.com/patterns-in-a-potential-transformational-change-the-money-system/

    reviews Greco’s work

    Patterns in a Potential Transformational Change – the money system
    By John Bristow — 1 Comment
    A Potentially Transformational Socio-Technical Change – Patterns and an Example: The Money System – Exchange Alternatives and a Web-based Trading Platform. See Thomas Greco The End of Money and http://www.reinventingmoney.com ) You can download this, as with all text on this website by clicking on the pdf icon at the end of this document.

    http://reinventingmoney.com/documents-of-ulrich-von-beckerath/

    about 10 larger pieces, including the corr. w Meulen (pre-war editor of the Individualist) in 6 parts (which i actual have the butterbach version of since 03/04, which i ‘mirrored’ back then as flattened text, no line breaks or alineas whatsoever) …. BEST VALUE FOR CLICKING on the whole world wide web!!!! Over 5Mb worth of txt …. now more urgent than ever!!!!!!!

    http://monetary-freedom.net/reinventingmoney/beckerath-correspondance-mag6.html

    .. up since 2011 … seems to be a collab w Zube … only a few posts ..

    http://freebankingmoney.info/ .. made in 07 .. just a few links, phat ones though ..

    http://www.butterbach.net/freebank.htm

    400 page thing
    …. and a few other good ones

    Documents_Kurt_Schuler.htm

    http://www.monetary-freedom-handbook.net/Forum2010/FB_Archive/Kurt_Schuler/Documents_Kurt_Schuler.htm

    http://eh.net/book_reviews/currency-boards-and-dollarization/

    economic history association

    http://www.hacer.org/pdf/Schuler01.pdf?Diese Seite übersetzen
    von SH Hanke – ?1999 – ?Zitiert durch: 52 – ?Ähnliche Artikel
    RULES FOR DOLLARIZATION. Steve H. Hanke and Kurt Schuler … An orthodox currency board system is a monetary institution that issues notes and coins.

    http://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=1609506

    his 90s papers just posted this year, includes a Cato article published last year:
    social science research network

    http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2243874&download=yes

    Where is Private Note Issue Legal?
    William McBride
    Tax Foundation
    Kurt Schuler
    Center for Financial Stability
    2012
    Cato Journal, Vol. 32, No. 2, 2012
    Abstract:
    During the 18th and 19th centuries and for part of the 20th century, more than 60 countries had free banking. The major characteristics of free banking are competitive issue of notes (paper money) and deposits by commercial banks, low legal barriers to entry, little regulation unique to the industry, and no central control of reserves (the monetary base) within the national monetary system (Dowd 1992, White 1995). Among the countries that had a form of free banking was the United States. Even after the freest period of free banking ended, with the Civil War, banks continued to issue notes until the federal government effectively monopolized note issue in 1935.

    Number of Pages in PDF File: 16
    Keywords: free banking, monetary policy, fiat currency, money supply, federal reserve, free markets, central banking

    http://books.google.nl/books/about/Currency_boards_for_developing_countries.html?id=RSm3AAAAIAAJ&redir_esc=y

    Currency boards for developing countries: a handbook – Google Books
    books.google.com › Business & Economics › General
    Currency boards for developing countries: a handbook. Front Cover. Steve H. Hanke, Kurt Schuler. ICS Press, Oct 1, 1994 – Business & Economics – 120 pages.
    The Case for Currency Boards – 11 pages
    The Case against Central Banks – 18 pages

    http://www.centerforfinancialstability.org/KSchuler.php

    he’s on the board there
    .. plenny of reports, the fresh ones require an email request

    http://marketmonetarist.com/category/kurt-schuler/

    4 recent posts by a sympathizer

    • And how does that solve inflation and deflation?

  13. buzz permalink

    Hi Anthony,
    I’m glad you sorted out the MPE and Montagne for me. In the past i tried to graps MPE and tried to listen to Montagne explain things in a long and dreary presentation. Quite boring, and never getting to the point, and so I have to admit that I gave up after a while, and filed it under the heading ‘it may be true, but this so-called economy won’t spread fast because it isn’t very exciting to get into’
    And of course that claim of being the only solution…
    So thank you for saving me a lot of time. I trust you on this. Anyway, my gut feeling said there was something wrong with it. Other monetary reformers (Like Postive Money UK), at least manage to grab my attention with interesting presentation.
    MPE is just boring and arrogant … I think you’ve done a tremendous amount of work to understand it, so thank you for that!

    • Gavin permalink

      What a classic case of the “dependency culture” and the abandonment of responsibility … the very that has allowed the banking system to enslave humanity in the first place!

      You say that “I’m glad you sorted out the MPE and Montagne … for me” !!

      So many people want someone to fix things FOR THEM, instead of putting in the work to comprehend things for themselves.

      So strong is that desire, that even when someone makes such a flawed case as this above, there are always going to be people who “grasp at straws”, so as to mask their poor “graps” [sic] of the “boring” (for that read “too challenging to bother with”) matter at hand.

      Oh Mike “gets to the point alright” … it’s just that some people don’t like the responsibility that “goes with the territory” of acquiring the knowledge.

      So the subject, ludicrously gets “filed” as being “boring”, “not very exciting”, and the ultimate in lazy anti-thinking … “it may be true”. Oh well that’s just great … why not sweep it under the carpet while you’re at it !!

      But it’s ok folks … we’re all safe now … because someone’s “gut feeling” just SO totally “said” to them all along … that “there was something wrong with” MPE.

      Hurrah! … We’re saved !! Phew … that was a close one !! For a minute there, I thought we were going to have to think and take some responsibility!

      And then … as if that weren’t enough … we Mr. Ambassador does further “spoil us” with this absolute gem of incisive sheer razor sharp intellectual rigor … this following admission of a soporific, somnambulant “herd mentality”, and “sheep” thinking …. drum roll … wait for it … “So thank you for saving me a lot of time. I trust you on this”.

      Ah well that’s ok then … let’s all just sleep on … let’s just all rely on … well … er … “someone else’s brain farts” shall we ??

      Tell you what … why don’t we just subscribe to “I was just following orders” mantra too … like the Nazi prison guards DIDN’T get away with at the Nuremberg trials !!

      BOTH of those flaming “kop outs”, come from the same, lazy, “screw everyone else” stable, of non-thinking.

      They are what turn mere “adherence”, into a supposed virtue and art form.

      they are the height of disrespect for our fellow human beings, and an absolute abrogation of our personal responsibility to our children, and our children’s children.

      They are from the “I’ve made up my mind … now don’t confuse me with the facts” chool of un-thinking; a place where mere “gut feeling”-based “opinion”, are somehow magically elevated to be on a par with, and have the same status as, reason and logic themselves.

      No wonder that the Banking Money Changers laugh at the “livestock” that they have driven into abject slavery and bankruptcy … and little wonder too, that they persecutes those few that take the time to “lift the veil” on the obfuscation of our Promissory Obligations … the ONE issue that all the monetary system RE-FORM bloggers and their attendant trolls, “conveniently” themselves obfuscate !!

      If you want to at least help, and not hinder, then just “get” the single issue of the FACT that banking NEVER loans put money … they ONLY steal our Promissory Obligations.

      That way, you won’t waste time “getting in the way”, and wasting the time of the emergency services … and …. you might at the same time, inadvertently wake someone up with a fact … rather than just burping out gut feeling lullabies at them, that will just keep them asleep.

      • uhhhhh………..Gavin………..please take it easy with these kind of endless emotional outbursts without really making any points. I can’t have you take over the whole page with them.

        • Gavin permalink

          Anthony … please … you surely understood, that the particular post was written in an “ironic” manner, and not as an “emotional outburst”. Surely you can see that. I’m really not quite sure why you seemingly *won’t* … and maybe don’t want to … “get” that.

          It’s maybe a language and cultural barrier, given that, despite your excellent grasp of English, still some of the nuances of irony, may have escaped you.

          But, it’s also my guess, that you are minimizing and overlooking the glaringly obvious flaws in the approach and thinking of Buzz, simply because their post, backs up your stance. Pretty mercenary really, and that sort of “virtual nepotism”, really does you no favors, in your attempts to be seen as an “honest broker” in the MPE debate.

          But, putting that obvious, perhaps even deliberate, “misunderstanding” aside, you nonetheless simply “gloss over” the underlying point of my post; a point which surely you, as a researcher, can’t condone.

          I’m afraid though, that what you have just written in reply, comes across to me, as you simply deliberately evading and “missing the point”.

          Instead of acknowledging that point, you instead take the easy “pretend offense” route, and you lazily brand my “pointing out the bleeding obvious”, as being out an … “emotional outburst” … a “meaningless judgement” and mere opinion, that you cannot possibly objectively offer up with any degree of credibility by the way, given that you, nor anyone else for that matter, have any way of knowing with any degree of accuracy, the emotional mind state of another person, at any given time.

          Hence you are simply “subjectively guessing” at best, and deliberately communicating something which you do not even feel, at worst.

          In choosing to evade the obvious thrust of the post, and instead focus on your own emotional response to it, you are fostering the “create followers” meme, by “buttering up”, and “massaging the ego” of one of your supporters, rather than fostering the “create teachers” meme, by acknowledging the obvious.

          In so doing, you do neither yourself, nor Buzz, any favors at all.

          • Like I said in the follow up comment Gavin: MPE’s jargon is very difficult to penetrate for many people. I’m not interested in followers, I’m interested in growing awareness. If I can provide a service by breaking unnecessarily complicated language down to normal English allowing more people to obtain basic economic literacy, I’m happy for it. That’s all.

          • buzz permalink

            Gavin, i can assure you that Anthony Migchels English capacity is way above par, and Anthony is clearly able to express himself well.

            It sounds to me that you are the one who feels offended because mpe has been analysed and found to be lacking.

            I am not one of Anthony ‘followers’ … I am my own person with my own convictions. I like reading Anthony’s blog because he gets to the point. So in that sense Anthony has done his readers (including me) many favors.

            Please do yourself a favor and being so closed minded.

            I actually do a lot of research. I’m just glad I don’t have to give MPE any more attention. This will save me a lot of time. I’ve got many other things to research. Although it has taken a stance against usury, I find MPE boring, arrogant and below par as a solution to our economic problems

            • buzz permalink

              I meant to say: Please do yourself a favor and *stop* being so closed mind

      • In fact: Buzz alludes to a serious issue with MPE: a verbose and heavy handed jargon. It DOES take a lot of effort to try to understand what words MPE invented to describe universal concepts.

        My take is that Economics, while not overly complicated in itself, is made impenetrable with jargon and Mike is doing this too.

        Normal A-level English is more than sufficient to lay out the basic concepts and language can easily be used to obfuscate, instead clarify.

      • buzz permalink

        Gavin, I don’t think it’s my responsibility to investigate every alternative to the current economic system. It’s just like shopping. One way to find out where to shop is to go to every shop in town. Another way is to find out through word of mouth of people you trust. If someone tells me it’s no good shopping at a certain place because the prices or high or the quality is bad, than I don’t have to investigate this myself, as long as i trust the person’s judgement.

        “Shopping” at mpe has been a needlessly boring mostly because I haven’t learned anything. And to call anyone that doesn’t “shop” at mpe mindless cattle, just shows the cult-like nature of mr Motagne and his followers. (I presume you are one of Montagne’s followers)

        There are many alterenatives to the current system, and Positive Money UK or Sacred Economics (Charles Eisenstein) have managed to capture my attention and I have revisted their information and found that I actually learned something.

        I also like revisiting Real Currencies because i found that Anthony has a good grasp of the different posibities in monetary policy.

        All that’s happened is that Anthony confirmed what I felt all along. And your bulldog like reaction confirms it again. No need to delve into mpe, because as Anthony explains well, mpe is off the mark. I can scratch them off my list. It’s just a matter of working together to understand the different monetary systems … Obviously there is something wrong with mpe.

        • Greenbacker84 permalink

          Pathetic. There’s really not much else to be said to someone who thanks others for helping them not use their own brain and think for once.

          • buzz permalink

            Apperantly you don’t use your brain when you read.

            I do use my brain. That doesn’t mean i have to read and investigate everything that you think is important.

            Obviously there is something wrong with the people supporting mpe. I am thanking Anthony for giving me a summary. I don’t have to go through hours of studying the mpe bs myself.
            I’d rather save my thinking power for something more worthwhile (as I said in the reply above.)

            Now fuck off

            • Greenbacker84 permalink

              Like I said PATHETIC.

              The only person you’ve f*** off is yourself and generations to come through sheer PIG IGNORANCE.

              • Ok boys, let’s leave it at this.

  14. I guess the Tulip mania of the past was also a scenario of rampant asset-based money-creation that should not have produced inflation, since everything was backed up by “assets”.

    Asset prices can easily be manipulated – even in a demurraged interest-free currency system. Imagine everyone being able to take out 10. mio. $ and buying estates with the money. Sure – the credit would be instantly backed up by the palatial estates that anyone could afford, but even stretching the repayment schedule to 80 years would not cut it for most people. Volume does matter – it has to be based on current individual cash-flows and realistic repayment schedules.

  15. Louis permalink

    Interest causes house prices to rise. On a $100,000 loan over 30 years you will have paid $300,000 – $500,000. If you were to sell that house, you would want at least what you paid for it. This causes inflation. You assume that MPE would inflate the money supply thus driving up prices. But how would this actually happen? Do you see the price of autos, electronics and other goods increasing dramatically in the last 30 years? I bought my first laptop 20 years ago for $2000 and last year I bought one for $300. And there is much more money in circulation now than 20 years ago.

    You spent an entire article bashing MPE but then ended with, “Thankfully we don’t need MPE. What we need is interest free mutual credit based money, of which MPE is just one example, or debt free demurage money.”

    How do you advocate interest free mutual credit based money if MPE is an example of this and you claim, “MPE is a disaster. It’s implementation would lead to horrible inflation.”

    I’m not getting it!

    • Yes, ok, in the previous article I discussed what I understand to be the correct way: allow as much credit as possible without rising prices.

      The credit must be basically equitably shared, several reasonable ways of doing so exist.

      Also additional interest-free banking models are necessary to allow all the credit we need: because we need more credit than money, so some units will have to be relent. Jak Banking is an example of this.

      MPE would inflate the money supply, because people would control it themselves. There would be no real limit to what they could spend.

      • Gavin permalink

        You say that “There would be no real limit to what they could spend”.

        But you know full well that that is NOT even possible with “MPE’s 1:1:1 ratio”, because Promissory Obligations will ONLY be able to be created against the property concerned in the transaction.

        So of course there is a “limit to what could be spent” … THAT is one of the very basic components of the whole theorem!

        MPE is not QE !! You’re getting your alphabet mixed up !!

        • If you look at it from that perspective, ok, there is a limit.

          But I look at it from the perspective of the money supply and the demand for money in the economy and from that perspective it means that people could potentially monetize the entire asset position of the nation and continue to for ever value it at higher prices.

          People can just buy a house in MPE and use that house to back their promissory note. There is nothing stopping them from using ever more to do so, as long as the obtain assets for them.

          • Gavin permalink

            Sorry … not buying that either I’m afraid. I have no idea what you’re talking about. It’s as if you haven’t grasped the first principles of MPE even.

            You can’t just talk about “the money supply”, as it exists now, and then just add it’s inherent injustices and improprieties into the debate, and mix them in with and pollute MPE … only to then “cry foul” that MPE doesn’t work !! Stop mixing your metaphors. You can’t just make shit up, and then simply blame the resultant crappy mess on MPE, when you have got the frikin recipe wrong in the first place!

            Neither can you just bleet on about “the demand for money” … AGAIN *as if* the current bloated and unjust money production process, where you indeed CAN, monetize every grain of sand and brain fart on the planet, without so much as a thought about value and depreciation!

            And… again … you say that “people could potentially monetize the entire asset position of the nation and continue to for ever value it at higher prices”.

            Seriously Anthony …. what part of the 1:1:1 ratio do you not understand? Because the imaginary “straw man argumentation” of a non-problem that you then “cleverly” knock down, isn’t even possible in the way that you describe!

            Bottom line, is that you are misleading your followers about the baseline facts … and so “obviously” you can knock down, that which no one ever even built !!

            • Greenbacker84 permalink

              Gavin
              Thankyou for an epic post.
              That is all..

            • MPE assumes that this 1:1:1 ratio (circulation, remaining debt/obligation, and remaining value of the related property) will guarantee the immutable value (unchanging over time) of the currency, but it is just an unproven assumption. It strategically ignores (perhaps because it has no control over) changing consumption patterns, people’s faith in the currency, and supply/demand for commodities/services, all of which can impact the value of the currency. Since these other factors can undermine the “immutability” of the currency, the “immutability” of the currency is just another unproven assumption of MPE. The problem with assumptions is that if you assume they are true, then you stop being critical of them. Repeating MPE jargon over and over again without disproving the criticisms of MPE opponents does not prove MPE… If anything it proves how dogmatic and cult-ish MPE followers can be. Now let all the MPE followers dislike what I have said, as if that makes me wrong and them right.

              • FICTITIOUS HANDLE CHALLENGES MPE™’S PERPETUAL 1:1:1 RATIO

                I was forwarded this contesting post yesterday to offer my answer:

                OPPOSING POST

                MPE assumes that this 1:1:1 ratio (circulation, remaining debt/obligation, and remaining value of the related property) will guarantee the immutable value (unchanging over time) of the currency, but it is just an unproven assumption. It strategically ignores (perhaps because it has no control over) changing consumption patterns, people’s faith in the currency, and supply/demand for commodities/services, all of which can impact the value of the currency. Since these other factors can undermine the “immutability” of the currency, the “immutability” of the currency is just another unproven assumption of MPE. The problem with assumptions is that if you assume they are true, then you stop being critical of them. Repeating MPE jargon over and over again without disproving the criticisms of MPE opponents does not prove MPE… If anything it proves how dogmatic and cult-ish MPE followers can be. Now let all the MPE followers dislike what I have said, as if that makes me wrong and them right.

                OPPOSING STATEMENTS ENUMERATED AS SUBMITTED BY POST

                1. MPE assumes that this 1:1:1 ratio (circulation, remaining debt/obligation, and remaining value of the related property) will guarantee the immutable value (unchanging over time) of the currency, but it is just an unproven assumption.

                2. It strategically ignores (perhaps because it has no control over) changing consumption patterns,

                3. people’s faith in the currency,

                4. and supply/demand for commodities/services, all of which can impact the value of the currency.

                5. Since these other factors can undermine the “immutability” of the currency, the “immutability” of the currency is just another unproven assumption of MPE.

                6. The problem with assumptions is that if you assume they are true, then you stop being critical of them. Repeating MPE jargon over and over again without disproving the criticisms of MPE opponents does not prove MPE… If anything it proves how dogmatic and cult-ish MPE followers can be. Now let all the MPE followers dislike what I have said, as if that makes me wrong and them right.

                RESPONSE TO EACH ASSERTION IN ORDER OF CORRESPONDING EXPLANATION

                6. Much as the author of these Austrian-style assertions might merely to claim they have proven consumption patterns (2), faith (3), or supply and demand (4) *just somehow* nullify or subvert a perpetual and universal obligation *to pay* the remaining circulation *for* represented property or entitlement, neither does the post prove consumption patterns (2), people’s faith in the currency (3), or supply and demand (4) have any impact whatever on the perpetual 1:1:1 ratio preserved by an eradication of interest and obligatory schedule of payment retiring all principal at the rate of consumption of related property.

                This is no more than the pot calling the kettle black. Worse, it hardly concedes the ratio is the only solution to circulatory inflation and deflation, which (however validly or invalidly) are held themselves to *cause* price inflation/deflation. However much instead either might instead *tolerate* price inflation/deflation, the both nonetheless are not only eradicated by perpetually sustaining remaining obligation *to pay* *the* remaining value of all property *with* a circulation sufficient and wholly dedicated to doing so, but furthermore, every case of monetization makes it compulsory to do so.

                There is no tolerance in monetized property for price to change then.

                3. Moreover, the only currency a people can have faith in must likewise guarantee redeemability equivalent to representation of entitlement. This too can only be guaranteed by the subject ratio, because the obligation to produce and to furnish production equivalent to the circulation is both compulsory (in fulfilling promissory obligations to which obligors consent) and always equivalent to representation of entitlement.

                As much as in no other equation or ratio are these requisites sustained, then not only can no legitimate faith in any other currency exist, neither can the only fundamentally useful object of money — immutable representation of entitlement — be delivered otherwise.

                2. No one here is “strategically ignoring” consumption (or production) patterns. The post itself assumably recognizes this ratio is indispensable *at least* to solving circulatory inflation and deflation — which are only said (however validly or invalidly) *to cause* price inflation/deflation by the very disparate or vacillating proportions which mathematically perfected economy™ indeed must rectify in its perpetual 1:1:1 ratio.

                Thus we have no means or occasion whatsoever to subvert the ratio’s immutable preservation of the value of money and related property in the case of all already-monetized property.

                4. Supply and demand furthermore are themselves no more than supposed disruptive factors. Let’s account for them, regardless.

                The hypocrisy of the opposing post is that contemporary “economics” hold that supply and demand in truly free markets inevitably decide *the right* price. *If supply and demand in fact ***do*** predicate proper prices, there of course can be no issue raised by the contesting post, for on the contrary, supply and demand then would determine the proper cost or price for production, and mathematically perfected economy™ would only sustain proper price in its intrinsic process of monetization and resultant life cycle of all currency — the latter being in accord with the natural/inherent disposition and life cycle of promissory obligations.

                But *do* “supply and demand” *actually* determine rightful price?

                Absolutely not; and normative practice corroborates this fact:

                On the contrary, a contractor competing to build a home for example, carefully costs out the prospective production of the home. In so doing (except for the effects of maldisposition attributed to the present obfuscation of our currency), they account for reasonable hours at reasonable wages not only in all work to be done, but likewise in the cost of all production of materials to be incorporated in production of the home. In normative practice then, at least two vital objects determine price instead; and these are competitive costs of production at reasonable relative wages.

                Except for the effects of maldisposition attributed to the present obfuscation of our currency then, reasonable relative wages are what we settle for in evaluating the comparative value or output of our work in comparison to others’. The necessity of greater education for example, or greater precision in executing a task, or more efficient execution of a task are taken into consideration as much as they can be determined and sustained subject to maldisposition (dedication of ever more of every unit of circulation to sustaining an escalation of falsified debt, as opposed to sustaining the industry and commerce which are artificially obliged to service the escalation of falsified debt).

                In normative practice, when we solicit a price from a contractor to build, in relatively well-decided relative wages, what ought to be a $100,000 home, should the contractor learn we have $200,000 to spend, the contractor does not revise projected costs to double. When another prospective owner comes to the contractor, the contractor does not double the price because there is twice the demand.

                Why not? Because competition eradicates any opportunity to do so. All of us, in agreeing to just prices, seek to confirm on the contrary that the work invested in what we purchase is justified in cost, relative to what we and others earn for our production.

                Thus competition restrains deviation to a scope which is relatively undetectable at least, because we are compelled to resolve any detectable deviation from proper/relative pricing, *as we are compelled both to spend and to earn according to the relative value of our own work*, *because* we are compelled to fulfill our promissory obligations, and to reap for representation of entitlement, *as is necessarily preserved in the perpetual 1:1:1 relationship of mathematically perfected economy*.

                In other words, in both their earnings and spendings, *owing to the perpetual 1:1:1 relationship of MPE™*, *every person* is compelled to personally police whether they are earning and spending as is justified in the relative value of their own work in regard to the relative value of compulsory payments, of which the currency is comprised.

                There is no escaping this obligation to determine relative value in free industry and commerce, *but* it must be noted that anyone who tolerates the least deviation *to their detriment* suffers the consequences their self. So much as the only truly free industry and commerce therefore determine and agree to relative value *well*, there is no deviation from a pattern of relative value, because everything that is monetized cements relative value of property *perpetually* in the relative value and volume of representation of entitlement (however well the only truly free enterprise determines relative value).

                The only leeway to deviate from immutable representation of entitlement as perpetually perserved in the currency of MPE™ then is to pay the price of lax determination — however consequential or negligible.

                Where do “supply and demand” come into play?

                Their role on the contrary is restricted to systems intended to sustain exploitation.

                Why, or how so?

                Because it is only the opportunity of a monied class (empowered by takings beyond production)… to accumulate production or to control markets or distribution, such as enables extortion of prices exceeding just earnings for (instead) production.

                The power to do this is itself neutralized or nullified under mathematically perfected economy™, because for example, markets controlled for the sake of exploitation can monetize a market free of exploitation. In other words, not being denied our rightful capacity to compete with exploitation which can never compete effectively against free competition for just earnings, the false impetus of “supply and demand” to corrupt prices artificially and redundantly upward is eliminated.

                5. So, no factor whatever is established to affect immutable value of a volume of currency, represented entitlement, and represented property, in after all, not only sustaining perpetual equivalence between the three, but sustaining the obligation *to pay* the circulation *for* the remaining value of represented property — which is naturally sustained across truly free and just enterprise by normative mechanisms of just determination and competition.

                1. Thus the poster *their self* only assumes that any normative circumstance or event nullifies implicit obligations *to sustain* relative value cemented by the 1:1:1 ratio in all that we do.

                7. One further thing may be said:

                In advocating truly free enterprise and minimal government, we realize the natural impetus is to determine and to sustain relative worth — however much *possible* deviation penalizes only the deviate.

                Nonetheless, a society could readily impose standards of relative value if it wanted to — and this would certainly close the issue *if* it weren’t sufficient that *we* naturally and necessarily determine relative value in our own affairs, *as we desire to*.

                The person or entity which means to exceed relative worth for its own undeserved profit at expense to the remainder of the system is inherently an enemy of the principle of true free enterprise, for the only universal object is just reward for potential production. Neither supply or demand however determine cost: On the contrary, cost is determined by the just relative value of all the human effort involved in production. However perfectly or imperfectly we determine or agree to relative worth in our own wages and spendings, nonetheless mathematically perfected economy™ perfectly sustains our determinations *as we intended* — in fact *guaranteeing* redeemability in exactly what we determine is a sufficient equivalent of whatever we gave up for currency which immutable sustains the original value determined.

                Can the just cost of production change over time? Yes. Where resources are more difficult to render to production, the costs of resources may increase. Likewise they may decrease where general increases in efficiency increase production or reduce the costs of production. Whichever the case, each are normatively, regularly, and routinely decided by competitive rates, subject to the relative value of monetized property, already produced at competitive rates. All natural factors are thus free to determine rightful price, not by subverting just cost, but by sustaining the principles of just cost in means of monetization and guaranteed redeemability which *necessarily do so* — according to patterns of consumption *and production* as always, necessarily, determine just cost — to the usually negligible detriment of anyone who substantially fails to do so.

                This, it ought to be noted however, is not failure of the monetary system to sustain the value of money and represented property — for it does so in this perpetual 1:1:1 ratio. On the contrary, the only prospective failures are for the subjects to eradicate exploitation, by competing, and by deciding *themselves* just price.

                • Thanks for proving my points.

                • “Thus the poster *their self* only assumes that any normative circumstance or event nullifies implicit obligations *to sustain* relative value cemented by the 1:1:1 ratio in all that we do.” – For the record, I never said that consumption patterns, faith(lessness) in MPE money, and supply/demand nullifies or subverts the 1:1:1 ratio, only price stability. You just assumed that you could respond to my criticisms by repeating the 1:1:1 immutability jargon, but I never attacked the ability of MPE to maintain the 1:1:1 ratio… No, I said that the 1:1:1 ratio is insufficient to guarantee price stability in the face of those factors.

                  However, I should have undermined the 1:1:1 assumption (circulating money, remaining debt/obligation, and remaining value of the related property). Circulating money might not equal the other two because paper notes can be destroyed or hoarded (hoarding removes money from circulation). Assuming that money is not destroyed or hopelessly hoarded, then yes, circulating money and remaining debt/obligation will be in a 1:1 ratio. As for remaining value of the related property, this factor is beyond your control because the subjective valuation of said related property can change due to supply and demand factors (or improvements/destruction of said property). Such changes in the valuation of the related property can undermine the 1:1:1 ratio. Of course, that doesn’t really matter anyway, since the circulating money:remaining debt ratio is far more important.

                  Even if people are able to repay all of their loans and the ratio between circulating money and remaining debt remains 1:1, this alone does not guarantee price stability or faith in MPE money. “I can calculate the motion of heavenly bodies but not the madness of people.” – Sir Isaac Newton

                  Your #3 is absurd. To claim that people can only have faith in MPE money is counter-rational, for people now have faith in many other types of money, and in the past people have had faith in precious metal monies. Faith is purely psychological, the 1:1:1 ratio might get some people to trust MPE money, but that is far from guaranteed.

                  As for supply and demand, you wrote: “But *do* “supply and demand” *actually* determine rightful price? Absolutely not; and normative practice corroborates this fact.” If you could actually prove this, then you should write a book disproving over 300 years of economic theory – you’d be famous! Now, I understand that prices are ultimately set by people, but people consider supply and demand, which you later partially conceded: “Can the just cost of production change over time? Yes. Where resources are more difficult to render to production, the costs of resources may increase. Likewise they may decrease where general increases in efficiency increase production or reduce the costs of production.” (Impact of supply conceded.) You even concede the role of demand: “*we* naturally and necessarily determine relative value in our own affairs, *as we desire [demand] to*.”

                  “The person or entity which means to exceed relative worth for its own undeserved profit at expense to the remainder of the system is inherently an enemy of the principle of true free enterprise, for the only universal object is just reward for potential production. Neither supply or demand however determine cost: On the contrary, cost is determined by the just relative value of all the human effort involved in production.” However, you ignorantly brush off the impact of demand (and supply) because you seem to consider demand to be primarily a figment of the exploiter’s imagination, which said exploiter only calls upon to justify exploitative prices. Of course, when demand increases and more people are buying, the supply of relatively scarce goods (fossil fuels, gold, silver, land) decreases – justifying higher prices. The two are linked. If you read between the lines, MPE is the enemy of free enterprise, for the obsession with “just price” is the urge to control prices. If someone tries to sell their unique property for too much (according to the state or maybe the customer, who informs on the seller), how will such “exploitation” or “deviation from just price” be prevented? The price police? Will prices just be controlled? The impulse for “just price” (a purely subjective concept) is what will destroy free enterprise, since that impulse seeks to control prices. (What some might consider tyranny.)

                  Finally, and you should really try to take this to heart, I don’t deny that MPE is functional in theory. What I’m saying is that monetary policy cannot prevent other factors from destabilizing prices in the economy or even MPE money itself. If, in mass, people lose faith in MPE notes, panic, and rapidly dump the existing MPE money into commodity markets, commodity prices can spike and MPE money can fail. No monetary system is free from such destabilizing possibilities, hence why claiming to have mathematically “perfected” economics is such an arrogant, yet ultimately pointless claim. You even concede that MPE can falter: “the only prospective failures [of the money system] are for the subjects to eradicate exploitation, by competing, and by deciding *themselves* just price.” Excepting the word “only,” this statement is true of all monetary systems, so I do agree. But to deny that unruly production/consumption patterns, supply/demand and faithlessness in MPE money are potentially destabilizing factors is ridiculous. MPE money is not guaranteed to work (i.e. maintain its value), which is my humble point. Consequentially, to say that “we have no means or occasion whatsoever to subvert the ratio’s immutable preservation of the value of money” is FALSE because it assumes that the ratio alone is adequate to preserve the value of money. The value of money is realized when prices are determined, and prices are impacted by production/consumption (supply/demand) and faith in money. To say that a house costs $100,000 is to make a statement regarding the value of both the house and the money supply. If people lose faith in their money, they will dump it for commodities, causing an increase in demand for commodities and a subsequent spike in commodity prices. When the price of commodities increases, the purchasing power of the money in question necessarily decreases. This is not guaranteed to happen, but it definitely can.. MPE money is not guaranteed to maintain its value should such a psychological phenomenon occur.

                  PS – ease up on the jargon.

                • I forgot to mention, though it was implied, that if faithlessness in MPE money and supply/demand factors cause commodity prices to shift, the 1:1:1 ratio will inevitably be undermined. The 1:1 ratio of circulating money to remaining debt might hold, but the remaining value of related property (the final :1) would change if people began dumping their MPE money for commodities. So the 1:1:1 ratio would be reduced to a 1:1 ratio between circulating money and remaining debt.

                  • As much as price/cost *do* change, MPE™ sustains the changes the society desires to monetize. Simple as that — as it ought to.

                    In other words, you mean wrongly to imply monetization should reflect downstream vacillating cost in prior monetization. Their precept is that if today, that $100,000 home can be built for $90,000, the 1:1:1 ratio ought to reflect the price at which *new* homes *can* be built. Absolutely not: the commitment to which prior obligors agreed was based on costs *then*. To sustain the value of that money, the represented entitlement, and the value of that property, on the contrary, the 1:1:1 ratio not only succeeds, but is obligatory.
                    (Which is *why* people can only have faith in MPC™. You *have* to sustain the integrity of the promissory obligations, or you have no integrity in “money.”)

                    • Ok I misunderstood the third :1 of the 1:1:1 ratio. If the third :1 is the “remaining value of the related property” from the time the property was purchased (not accounting for new changes in the market price of that property), then the equality of the remaining debt and remaining value of the related property is a truism, but it still does not guarantee the “immutable value” of MPE money. The destabilizing potential of other the other factors that I talked about, specifically potential faithlessness in MPE money, have not been disproved (because you can’t disprove them).

                      Which is why this: “(Which is *why* people can only have faith in MPC™. You *have* to sustain the integrity of the promissory obligations, or you have no integrity in “money.”)” is only a half-truth. Of course integrity of money must be maintained, but to say that people can only have faith in MPC (I assume means Mathematically Perfected Currency) is absurd. People have faith in today’s currency and, in the past, people have had faith in other money (gold, silver, etc.).

                      I’m not trying to say that MPE/MPC is not potentially functional. It could work. What I’m trying to do is to see if there is any humility in this self-described “perfect” economic movement. Without humility, how can this movement ever face its weaknesses? If it isn’t perfect, and MPE becomes policy and its money inflates rapidly, how will it respond? It’s attitude right now appears to be: pretend this is impossible. But if the failure of MPE money is possible (as I contest), and MPE becomes law, then fails, MPE will be unprepared.

                      The best way to get rid of a problem is to pretend it doesn’t exist.

                    • “but it still does not guarantee the “immutable value” of MPE money.”

                      There is no compromisation of this principle/relationship which *can* preserve the value of money and related property; *moreover* all your doing is *denying* the people will determine the relative value of new production *as it relates* to existing monetization — *to which they are nonetheless committed*. This is as if to say, after we have provided in every way to sustain life just as we desire to sustain it ourselves… that we’ll just commit suicide. Suicide is possible. But even if suicide or any other preposterous aberration because a threat to MPE™, an intelligent society could step in — not by monetary means (which subvert sustaining vital principles), but by imposing regulations or standards — to avert or arrest other injustices. The “humility” you ask for is to confess that market forces and competition will subvert proper price. We join in government to protect ourselves from injustice, and to provide for our collective existence as we ought, to sustain common objects. What you want is MPE™ to guarantee George Soros won’t somehow ruin a mathematically perfected economy™. Only the subject society can guarantee that to itself. MPE™ sustains the relationships which precipitate from our promissory obligations to each other. It sustains the only reasonable vehicle or embodiment of money which accomplishes our only reasonable, common objects. MPE™ is the only true free enterprise. No aberration or permutation sustains our vital objects. The careful and sufficiently vigilant society protects itself against any assault of those principles. No monetary system in eternity ought to do so, for with freedom comes the responsibility of preserving justice.

                      So spare us humility where you, yourself ask for it; and pretend not yourself that every necessary principle isn’t sustained. No reasonable person on the contrary has any faith in today’s currency, for not only were they never offered even the opportunity to give truly knowledgeable assent to it — the frequently exalted currency only multiplies falsified debt into terminal sums of falsified debt, dysfunctionality, and defeasance.

                    • I’m sorry I lack the humility to join your unbridled celebration of MPE.

                    • *unbridled and uncritical

          • Aren’t all loans, even in the predatory usury systems, controlled an assessment of ones ability to repay — e.g., legally mandated due diligence. I mean isn’t the assumption that people can have access to unlimited amounts of money in practice absurd? Sound banking principles would be a natural check on volume. Or am I being too simplistic as well?

            • Sound banking principles in themselves is not really enough. Total population creditworthiness AND the demand for credit are both undoubtedly greater than the total need for money.

              There will have to be some sort of currency board to make sure there is a stable supply of money and that no more credit is doled out than there is a need for money.

      • You’re forgetting one important thing here, I think, and that is that any promissory obligation, prior to being issued can only be issued to individuals who are credit worthy and can demonstrate their ability to pay down the note over a period of time. That is the upper limit of the system which regulates the amount of debt that can be issued.

        I’m also going to come to the defense of Mike. In my time interacting with the MPE group, I’ve only had one minor run-in with the people there. I understand your concern about the rigidity of thought among the group but if you reflect upon the principles there you will see like most things in life, there are absolute unalterable truth’s that cannot be deviated from and then within that framework you are free to explore. My personal opinion is that we ought to be more patient and free to have people think for themselves (as you’ve pointed out) and then if they are off track, point out the errors in a respectful way.

        • Let me put this to you too Jake, I’m curious what you make of it:

          “Take for instance a mortgage. I believe MPE works out the mortgage can be repaid over the lifespan of the house and that this would mean something like $83 per month for a 100k house if the lifespan is 100 years.

          Do you see what this means for the credit worthiness of the mortgagee?

          Do you see what kind of commitments he could take on? Especially when we consider the vastly improved purchasing power in a usury free economy for the commoner?

          Can you not see that this means the ‘limits’ to volume in MPE don’t come close to the limits of volume money needs to allow stable prices?”

          • The commitment he/she can take on will depend on his/her credit worthiness. No I do not see that. In MPE the volume of money is always dynamically balanced with whatever it represents. This is how the currency will maintain its immutability. No inflation, and no deflation.

            Having said that I am researching implementation of MPE which could temporarily affect price levels due to possible supply/demand issues. This should however for a great deal be offset by substantially lower production costs due to the interest free environment. Further measures can be taken (democratically) to allow for adjustments without upsetting communities. There are more aspects we need to take into account such as environment, and land but that´s not the topic right now. It is advisable in that respect to read Absolute Concensual Representation (ACR) which can be found on http://www.perfectedeconomy.org

            MPE is a fantastic concept and answers all questions with respect to the three categoric faults including a just volume of money at all times. To just say we keep printing until prices go up is a poor and dangerous attempt to balance the circulation, and why would you if the solution is right in front of you!

      • Gavin permalink

        You also say this Anthony, that … “MPE would inflate the money supply … because people would control it themselves … ”

        Wow … well who IS going to control the issuance of money in the ideal world you envisage, if NOT the individual?

        If not the individual, then will it be some sort of nebulous “collective” that decides? A Corporation maybe? Or how about “The State”, that has proven to be such a protector of the rights of the individual? Not!

        You have to be kidding me. That’s the same “broken thinking” that got us where we are now, where a bunch of psychopaths have broken into the counting house, and have rigged the system for their own benefit ever since.

        That’s why we have a situation, right now, where just the richest 300 people on the planet, have accumulated more wealth, than the bottom 50% of the population of the planet combined !!

        And you want to facilitate the furtherance of that status quo, by continuing to exclude the people from the process … like some Nanny Statist?!

        THAT Anthony, is what happens when the “people” (that you seem to so clearly scorn, as being incapable of conducting their own affairs) are wrenched away from the natural processes, to which they MUST be, intimately involved, if we are ever to see a just world.

        It is sickening to contemplate that the perpetuation of that core injustice, is a bedrock of what you then go on to propose.

        By reading just that one sentence alone Anthony, you betray yourself, and everyone else on the planet, and you would condemn us all, to being crushed under the “jackboot heel” of ANYTHING which is NOT the direct and individually expressed free will of the human being involved in the creation of their own money. Any other third party interloper or “representative”, can ONLY interfere with natural law, and hence, unbalance the system.

        Because really Anthony, CAN money, EVER, “represent” anything else other than OUR energy and assets? No, it can’t!

        And yet … “right from the get go”, you make the massive error of “detaching the spark from the source” as it were, by severing the individual, from their right, AND responsibility, to conduct their own affairs. And then, you wonder why you have logic problems, and why people criticize you?

        Even the current corrupt banking system, that you appear to so castigate at times, at least tacitly admits the truth by theor actions; the truth that ONLY, OUR PROPERTY … *OUR* signed Promissory Obligations, have ANY inherent value, in the entire money creation process. A fact that they prove they appreciate, by their massive impatience to steal them all, right from under our noses, only to then sell them on, as the “stolen goods handlers” that they most surely are, to their fellow criminal friends in Wall Street.

        They barely have the decency to let the ink dry on their counterfeited pieces of paper, before they cash in on their ill-gotten gains from their ancient ruse.

        And yet YOU Anthony, you ALSO, would PERPETUATE the violence of that primary theft, by CONTINUING to sever the “umbilical cord” of that inalienable right to self determination, that is critical to justice itself … replacing it with who knows, and frankly who cares, what else you have in mind. Whatever else it is, it’s already flawed.

        And so, the question remains, that if you’re NOT advocating and protecting that baseline, core, human right of the individual … their right to control the use of our very own words even … our very own “promises” in the form of their own Promissory Obligations (free from banking obfuscation and theft) … then whose rights ARE you protecting? Because your intervention here, is sure NOT neutral. If you are AGAINST the rights of “the people” in this way, then you “de facto” FOR the rights of those who have created the mess in the first place.

        Is it the “rights” of the Corporations that you are supporting?

        Is it the “rights” of “The State” or “The Government maybe? Those fictitious, unlawful, scamming institutions, that hide behind legalese-created, so-called immunity, just because THEY have stolen power, and therefore “they say so”? Might, does not make right, and in turning your back on the “people” as you do, you automatically ally yourself with the enemies of the people.

        Given your statement above, that YOU do NOT trust “the individual” to manage their own affairs, you are clearly advocating then, that we continue to allow “foxes” to remain in charge of the “hen house”! And you are asking us to believe that somehow THAT, constitutes some sort of viable solution?

        Make no mistake, if you’re not for the people, you are for fascism or communism … that sickening ‘axis if evil’ hybrid alliance, between BOTH The State and The Corporations, as Mussolini himself rightly said, in identifying the true nature meaning of the word fascism itself.

        The second law that you disregard, is linked to the first, and it is the law that says that you will “reap what you sow”. And of course that is what all forms of State control, endeavor to “protect the people” from. Which is of course both a massive lie, and a logical impossibility.

        In other words, in this context we’re talking about, where MPE would have people being responsible for their OWN credit worthiness, YOU on the other hand, would violate that principle, by wrenching them away from them, access to money creation process entirely. Once you do that, then you simply cannot avoid “reaping the whirlwind” and messing up the entire economy to follow.

        So you do yourself a massive disservice then Anthony, when you run around like the “little boy who cried wolf”, howling at the moon (and anyone else who’ll listen) about a problem that you simply do not understand, promoting a solution that simply cannot work.

        If you’re going to set yourself up as a critic Anthony, then you at least have to be accurate in describing the what the PROBLEM is, first of all, before anyone even *can* take you seriously, when you say that that you have a found a SOLUTION.

        Surely we can at least expect THAT.

        The problem you face Anthony, is that long before you qualify to judge, you need to first of all PROVE that you understand, that which you are about to criticize … and you have clearly shown that you do not understand.

        And secondly, you have to base your proposed “counter solution”, on a philosophically, not to mention logically, sound and solid basis.

        I’m sorry, but you have not done that either.

        You have already had to admit, in the first words that you wrote in reply to me, that … “if you look at it from that perspective, ok, there is a limit”.

        Er, well there ISN’T any other “perspective”, because the purported “spanner” that you have thrown in the “works”, is NOT part of the problem being addressed, nor is it part of the MPE theorem … which is purportedly the thing that you are criticizing.

        So no wonder, that once you inject impossible problems into the mix, that you can THEN see ghosts!

        Now, if you want to talk about the “dangers and injustices”, inherent in the further law, “The Law of Supply & Demand”; a law that will always exist in any materials-based economy, that utilizes finite natural resources … then THAT is a wholly different external argument, and one common to (yet detached from) ANY unit of accounting monetary system, MPE included.

        Dirt will always be cheaper that diamonds. And there will always be a whole world of ever-changing variables in “perceived value” in raw materials, in between those two extremes; all based on the unchangeable facts of “supply & demand”.

        But … that type of unavoidable, “price variation”, has nothing to do with the fight to eradicate deliberately fabricated inflation, caused by usury.

        You cannot simply criticize the MPE, simply because supply & demand exists. That’s like blaming nature, just because gravity exists. ALL possible systems of accounting will have to grapple with that, your included.

        MPE doesn’t claim to reverse the laws of the universe. So Supply & Demand pressures aren’t going to disappear, for anyone. But then neither does MPE claim to do eradicate them. It instead, claims to eradicate the inherent inflationary dynamics of an unjust monetary system, that is deliberately skewed through the imposition of usury and by the obfuscation of our Promissory Obligations by banking.

        And so inserting an extraneous “problem” into the mix, one that neither needs to be included, nor needs to be addressed, does not genius make.

        So what you’re suffering from Anthony, is a case serious case of “Smart Arse Syndrome”.

        You have stumbled across Mike’s work, and have at least had the sense to realise, after the event, that it’s still relevant and still being talked about, 40+ years on. And you then thought that you could just stroll along onto the film set, and “ride the crest of another man’s wave”, by crowing on about a problem, that you unnaturally “bolt on” to the debate … only to then wait for the plaudits to come flooding in.

        It’s like the guy who invaded the stadium at the Olympics, to run the last lap of the marathon, hoping to claim the gold medal.

        I don’t think so.

        And by the way, if you’re worried about hyper inflation, even by your flawed definition and view of it, then your aversion the “the people” being involved in the money creation process, absolutely paves the way for the abused power of The State, to monoplize the process.

        So no matter which way you slice & dice it Anthony, your premise doesn’t work.

        I suggest you study some philosophy, before you preach economy, because you seriously need a foundation upon which to build your premise even.

        • Yes, Mike’s work is talked about Gavin, so dry your cheeks of those crocodile tears in defending the poor bastard against my hateful criticism. He himself has no qualms to malign everybody with much, much starker words than my brotherly poke in the side as above.

          But, you raise a fundamental point: the relationship between the individual and the collective.

          I’m all for maximum individual rights. But one of the basic mistaken notions of MPE is that it is just the individual that should control money. This is not the case: money cannot exists with an individual: it’s our mutual acceptance that is quintessential to the nature of money.

          Mutual acceptance means mutual needs and these mutual needs by individuals limit the scope of the individuals as much as it empowers him.

          This MPE does not want to see, hence the promissory note instead of credit and hence this forced theory of volume, trying to make the obvious go away: that the community has a say in money. That there indeed must be some sort of regulatory body, however much we all (including myself) would have liked to see it otherwise.

          Why is money the last thing the truthseeker investigates? Because it requires togetherness. It’s something that cannot be solved alone. Unlike health (just don’t visit a doctor and educate yourself on diet and natural therapies) and food (just grow some in your backyard), we need each other to create solid money.

          • How anyone could think advocating MPE is akin to being a cult member is beyond me. And as a recovering cult member, I can attest that MPE has nothing on the real cults that are out there. I would recommend, Anthony, to take that out of the title of this blog, it reduces the validity of what you are trying to say. I do appreciate the points about MPE that you have made, but suggest there are legitimate answers for your questions and concerns. I also agree that maligning you and attacking you is not the best way to go about it, but I think we all often feel a little beaten up as we labor to get out from this mess that we are in.

            I have no idea why you claim the truth seeker investigates money last either. To me, it was the first thing that made no sense, at age 10, and I didn’t get the answers I sought for more than 20 years more, more than a decade ago.

            • in fairness, it’s basically first thing I investigated too, but surely you must see this is not the norm?

              Ah, you’ll have to allow me some poetic licence, I don’t think ill of Mike and MPE, they’re just full of it sometimes and I don’t mind pointing that out.

              In general there is a tendency with monetary reformers to be a little all too excited about their proposed solutions. They all do this, the Austrians, the Social Crediters and indeed MPE too.

              But having seen them all my take is they’ve all got strengths and weaknesses and I tire sometimes from the fanatical and purely ideological fervor that makes people defend clearly troublesome positions.

          • Darren Rooke permalink

            It looks like the old faithful cup of sugar routine is in order. I am short of 1 cup of sugar I duly come round to your house and ask you for said cup of sugar, i write you out a note that says I Darren Rooke promise to pay one cup of sugar in an agreed time limit, like after ive used it. In a community that recognized Darren Rooke is good for one cup of sugar you could even redeem said note with your neighbor or you could simply hang on to it till i return said cup of sugar. Now tell me where this needs to be regulated beyond the giver of the sugar and the man who wrote the note out. So because something is bilateral how does that equate to a regulatory body beyond the individuals involved. We all know that a contract has to be a two party thing I mean that’s a no brainier to even quote.
            Can you imagine saying i cant let you have the sugar because this will put up the price of the sugar beyond the sugar, My question is simple How, Well ill tell you how its because someone wants something for nothing simple really. that’s the irreducible your all arguing about that’s unarguable. The root of price increases is some one wants something beyond there production. I’ve got some thing i paid £5 for ive not even touched it and now i want £6 do you get it? that’s what puts prices up WE DO!!!!!!!!!!!!!!!!!!! the money is a reflection of are actions not the other way round. money has no ability to put prices up in of its self the person trading puts prices up, come on people wheres your heads. .

        • Gavin – I agree with you; heavy handed government control is NOT the answer. People should be free to conduct their own affairs without intervention of new agencies and boards.

          • There is nothing but religion and politics that creates more confusion than economics :-)
            Check out the following diagrams to clearly see what is being talked about as far as MPE is concerned. 1) http://wp.me/a3S0hU-2 and 2) http://wp.me/a3S0hU-f

            The diagram 2 refers to the 3rd process of diagram 1.

            The second diagram is pegged to the depreciation of the financed asset and the *remaining money left in circulation* and *the remaining amount left to be paid* are both pegged to that. That’s really how simple it is! Don’t let the simplicity fool you though, its affects are staggering if you really think about everything it will affect, consumer spending, state and federal gvt. spending, business expenses, literally everything that is financed!

            The financial institution in the diagram is non-profit, paid for by the people who use it and those who are given the public trust to run it are elected periodically. This gives these individuals accountability to those they serve, incentive to do a good job and reward for their labor. No exponential profit which re-distributes the individuals labor into the hands of the banking establishment.

            In my own opinion, I believe this takes care of the monetary system part of our economy but there is also the free market enterprise part that may need addressing as well. This is usually done through fiscal policy which is controlled by the government via taxation and government spending. MPE probably addresses this as well but I’m still looking into it at the moment.

            Thanks for listening

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