Margrit Kennedy, the world leading authority on interest-free economics, has passed away at the age of 74.
The news is already almost two weeks old: she died December 28th, from cancer. She is survived by her husband Declan Kennedy (from Ireland) and her daughter Antja.
Kennedy was an architect, a professor at the University of Hannover and an environmentalist who set out to understand why humanity is destroying its own habitat. Her path led her to the monetary system, usury in particular.
Usury is the great driver behind growing debt, growing money and hence the need for perpetual economic ‘growth’ at whatever cost. It is the need to pay off eternally growing interest charges that forces debtors into ever more atrocious behavior, including rapacious plunder of Mother Nature.
It’s hard to think of anybody who has done more to expose the ravaging implications of Usury. Margrit wrote several books on the issue, the defining one being “Interest and Inflation Free Money: Creating an Exchange Medium That Works for Everybody and Protects the Earth”. Her last one is “Occupy Money“.
Her main source of inspiration was Helmut Creutz, whose work she tirelessly promoted. Creutz is the one who established that the poorest 80% pay more interest than they receive to the richest 10%. He also found out that 40% of prices we pay are cost for capital passed on by producers.
She was one of the key players behind the rise of dozens of Regional Currencies in Germany after the Euro was implemented. She travelled all over the world to spread the word. She was in Iceland to advise the Government during the default.
I remember meeting her a couple of years back in Amsterdam, where we were both speaking at a big rally for monetary reform. During the diner beforehand I was sitting next to her and without further ado she glanced at me and asked: “so, when did you first see it?”. Referring to that defining moment in a life when we suddenly see what Usury is.
I am glad I then had (and took) the opportunity to tell her how important her work was for me.
The global monetary reform movement has lost a leading light. A huge thought leader. But she has influenced many, many people and her thinking will continue to grow through them.
It is only in the years and decades ahead that the true impact of her efforts will be properly appreciated.
Thank you for everything Margrit. Rest in peace.
Bill Still remembers Margrit Kennedy:
A few weeks ago I had another chat with Robert Stark. It’s now posted at Counter Currents:
We talked about the major issues under discussion at Real Currencies the last few months:
- Banking reform in Ireland
- Immigration and the premeditated destruction of western civilization
- The real estate boom in Ireland
- The Winged Lion Award
- Hitler’s economic policies
- Gottfried Feder and National Socialism
- National Socialism vs. decentralism
- Capitalism and usury
- Capitalism and the concentration of wealth and power and the globalist agenda
- Ending usury as the key to preserving a middle class society with wide distribution of wealth
- G. Edward Griffin’s admission that most of the world’s gold is owned by banks
- Brother Nathaniel Kapner’s recent repudiation of libertarianism, Austrian economics, and the gold standard
- How money creation by banks undermines the “time preference” argument for usury
- Why money should not be scarce. Why money should be part of the commons.
- How ending usury makes socialist redistribution schemes unnecessary and superfluous
- Debt-free money vs. interest-free credit
- Why interest-free credit is superior to debt-free money
- Interest strike versus debt repudiation
- How money scarcity is caused by usury
- William Jennings Bryan
- Hungarian monetary policy: goodbye to the International Monetary Fund, no to the Euro
- How usury creates mass starvation in poor countries
- Education loans in the United States
- How usury is a driving force behind environmental devastation
- How usury is connected to cultural degeneracy and hedonism
- Usury and warRelated:
Robert Stark interviews Anthony Migchels
Every man must be a priest unto himself and his family and this is my sermon for the season………….
The fact that the Old and the New Testament are in the same book was already a major victory for the adversary. YHVH is not the Father. The Gnosts called him the ‘Demiurg’, a pseudo deity. The stories about genetic engineering in the Garden of Eden by some advanced alien are also more credible than the classical interpretation.
The ‘god’ of the OT is Christ’s enemy.
The story of Jesus’ life in the Gospels are not tenable and a mishmash of older legends and astrotheology.
However, the NT is still the most profound and important book that humanity has when it comes to spiritual truth.
Jesus Christ, the Prophet of the Spirit
Jesus was a prophet. I’ll go even so far as to say the most important of all, as he incarnated the Spirit like no one before did.
This was well known during his time, but the texts were corrupted and only around 340 the Bible was compiled. Many important texts were left out. Even more texts were ruthlessly surpressed by the nascent Vatican, coming back only the last few decades, with the Dead Sea scrolls and the Nag Hammadis.
By then the adversary, temporal power, had subverted the story, claiming Jesus was the Son. But Jesus, to my mind, makes quite clear the Spirit is the Son (God Immanent).The Father is God Transcendent, he’s not in his creation.
This can still be gathered from the NT, but only if you free your mind from the mind control.
For instance, the first verses of John are quite clear. They’re the most important ontological verses in the Bible:
1 In the beginning was the Word, and the Word was with God, and the Word was God.
2 The same was in the beginning with God.
3 All things were made by him; and without him was not any thing made that was made.
4 In him was life; and the life was the light of men.
A little later John goes on to say that the Word incarnated in Jesus.
Paul, also, on one or two occasions says ‘Jesus Christ, who has made everything’, clearly indicating it was not about Jesus the man.
The Spirit pervades creation and is not only the light of men, but of all life and indeed, anorganic matter. In this way pantheism is a subset of Christianity proper.
This whole story about Jesus the man being the Son of God is nonsense. Jesus says: ‘come to me and I will give you peace’. But how can we come to a dead man? But if you realize that ‘I’ is the Spirit, because that was who he truly was, than everything is clear.
Jesus says: he who knows Me has eternal life. But how can we know a dead man? The Spirit is in our heart, though, and knowing it means knowing what is Unchangeable and Eternal.
All the Gospels get a completely new meaning when you read them again, realizing ‘I’ is the Spirit and not the man when Jesus speaks. This is particulalry the case with the fourth Gospel, which is the most important one.
It was only after realizing this that I truly started to admire both Jesus the man and the Spirit and started to identify with Christianity.
Jesus Christ, then, is the name of the Spirit and the Spirit is the real God of the New Testament.
By knowing the Spirit and, very important, doing his will, we can also come to know the Father, when the Spirit considers us ready. This is the mystical experience that holy men and women have reported throughout the ages.
I believe this is the secret ‘esoteric’ Christianity of all ages.
It’s also completely congruent with Buddhism and Taoism and much of Gnosticism too, of which Jesus the man was a crucial exponent.
Gautama and Lao Tse preceded Jesus and culminated in him as the Great Prophets of the Spirit. The three of them often play Whist in heaven, having a good crack about all the silly disbelievers they met in their day on earth.
This, in short, is how I look at these things.
They’re very profound, but only if one realizes the above, otherwise it makes no sense at all. But while the NT is nowadays my favorite book, with a special place for Lao Tse in my heart too, I love all the religions. Not their exoteric tyrannical mind control, but their real message, which is still available for the thoughtful observer.
Having said that: I’m not happy with Judaism and, to a lesser extent, Islam, as they focus solely on the Father, and worse: on Law, which is antithetical to Christ. Lao Tse fought Law too, which was represented by Confucian thought in his day. But even Islam recognizes the Spirit (which it calls Fitrah) and says worshiping it is the real faith, adding, interestingly, ‘but the people don’t understand’.
Rumi and Sufis represent the Spirit in Islam.
Happy Birthday Jesus!
You were not born this day 2013 years ago. Christmas actually celebrates the Winter Solstice. But it does not matter, because it is about remembering you and what you represented: the Spirit, who created everything. Who is with us always. Who we can disobey at the cost of karma, and who we can obey to know hapiness and become legends of our own. All for good fun.
Help us crucify self and carry our cross, so we can transcend our carnal nature and become One with our maker!
Thank you for everything Jesus, because without you, we would not have known the Spirit and the Enemy would be winning!
Merry Christmas Everybody! May those of Good Will prevail!
(Left: a famous Usurer)
So I’ll get down upon my knees and bless the Working Man,
Who offers me a life of ease through all my mortal span;
Whose loins are lean to make me fat, who slaves to keep me free,
Who dies before his prime to get me round the century.
Whose wife and children toil in turn until their strength is spent,
That I may live in idleness upon my ten percent.
And if at times they curse me, why should I feel any blame,
For in my place, I know that they would do the very same.
(John Turmel, Thoughts of a Rich Man on Usury)
The idea that ‘the lender can’t use the money when he lends’ is the classical argument to rationalize Usury. But the bank doesn’t lend anything. It’s all credit by bookkeeping.
The ‘time value of money’ is the notion that holding money today is worth more than tomorrow. Between today and tomorrow there will be inflation and the missed opportunity of investing it.
It is at the core of modern theory of finance. It is the rationale for Usury, it can be heard each and every time when people defend it. It is the defining belief that creates acceptance for interest on loans of money.
Because Usury is supposed to be the compensation for the ‘lost’ ‘time value’ to the lender.
People will also point at risk, but there is no risk, there is collateral. Only bogus credit card debt and consumer loans are without collateral and the interest on these kinds of loans can be quite astonishing. But for serious credit, business loans, mortgages, there is collateral and there is no risk to the lender.
The fact that the time value idea still holds so much sway is quite astonishing, after 12 years of Truth Movement and mass exposure of fractional reserve banking.
Because the fact is: nowadays the creditors are usually banks and banks don’t lend anything. They create credit, by bookkeeping. That is what fractional reserve banking is: double-entry bookkeeping, in which debit and credit are implicit and automatic.
It is one thing with simply uninformed people, including most economists who are remarkable mainly for their ignorance in monetary matters. It is borderline bizarre with the Austrians, who are famous for their analysis of fractional reserve banking. But how can one on the one hand defend the ‘time value’ hoax and on the other hand explain that the banks create money and don’t have reserves for what they purportedly lend? It creates quite a cognitive dissonance.
The banks don’t lend and that’s why the ‘time value’ ‘argument’ is a total hoax. Utterly irrelevant. The bank wins nothing by creating money (other than the opportunity to extort the ‘borrower’, who doesn’t realize he isn’t borrowing anything real) and it gains nothing when the money is repaid: the bank takes it out of circulation and the money just ceases to exist as a concept. There is nothing in the books anymore.
The Austrians, and indeed also many paper money reformers, then go on to claim the problem is that the bank creates money! And that we will all feel much relieved when these are indeed savings when we borrow from the bank. Then our sense of ‘justice’ is satisfied.
This hoax is known as ‘full reserve banking‘ and nowadays there is a growing and unisono choir for ‘reform’ of banking based on this idea. The Financial Times’ Martin Wolf wants it. The Frankfurter Algemeine splashes a front page with this great idea. Dutch television is soon airing a major program defaming fractional reserve banking and hallowing our right to pay interest to ‘savers’ (the rich), instead of bookkeepers. The IMF is writing positively about it.
We don’t realize that this means that we will continue paying the same amount of money. Why aren’t we asking ourselves the question ‘but if the bank creates the money by bookkeeping, why am I paying interest?’
That is of course the rational response to the awareness that money is created at close to zero cost.
But even if money was printed debt-free or if we use Gold to back all the money, usury would still be both wrong and unnecessary. Because why do people save? To use it later! They don’t want to use it now, otherwise they would not save! So they lose absolutely zero by not being able to use it now if they lend it out. Not using it now but later is the essence of saving! And if we are not going to use it now, why not let somebody else use it in the mean time??
And even when we think of inflation we are wrong: most ‘inflation’ in the sense of rising prices since the war was caused by ever higher interest charges passed on through prices. It was not caused by money printing, the extra money was printed to pay off the usury. Interest bearing money cannot exist without eternally rising prices (or eternal deflation when the money supply cannot grow, as is the case with Gold). Interest-free money, on the other hand, will see stable prices if managed correctly.
So there is no ‘time value of money’. The rich are just insanely addicted to money and they want more. So they have spin doctors and useful idiots (‘economists’) think up excuses to explain it’s all so necessary and pay them a few hundred grand per year to have it look good.
Why do people have difficulty to see the iniquity of Usury? Someone recently said it is because people don’t see themselves as poor, but as ‘temporarily inconvenienced millionaires’. We are all raised to work hard and expect ‘success’. And ‘success’ is making a bundle and then retiring, having other inconvenienced millionaires sweat away to service the loans we will be giving them through our mutual funds.
But: working hard has little to do with it. There would be many millionaires if working hard was leading to wealth. It’s true that genius expresses itself through a combination of talent and hard work, but most of us are just beta males and the opulent want us to lick their boots, not to join their ranks.
We are raised to be ‘responsible’ adults and are told frugality and saving are a real part of that. We are learned the magic of compound interest at school. Nobody is telling us some other guys have picked up this trick a few centuries ago and have a bit of a head start, ripping society apart with the trillions that compound interest is now making them yearly. We are not told that paying compound interest to the rich is what is keeping us poor. No, morons like Peter Schiff now say we need to save more and we need incentives for that: higher interest rates. Peter Schiff is not explaining how people, who already lose more than half of their income to usury (partly passed on in prices and taxes), are going to save more when they have to pay even more interest to the rich, while they are already living from pay check to pay check, as most Americans are today. Even a good man like Paul Craig Roberts falls for this. It’s our economic illiteracy, not understanding money and Usury.
Because the simple fact is: by saying ‘I wouldn’t lend without interest’, we relegate ourselves and our brethren to interest slavery. Because we don’t lend, we borrow. By not lending to our brethren, they will not lend to us. We will have to go to the rich and to the banks. Why was the middle class sending their children to the bank for a mortgage when they had the assets to set them up with a good start in life with an interest-free mortgage? Why are people worrying about their savings today, while at the same time their children face foreclosure? Why are these savings not sunk into paying off the banks to save the wider family from the losses to usury?
We talk about ‘corruption’ in finance but we don’t see that finance itself is corrupt.
By saying: I want interest, we say it’s alright that we pay 300k interest over a 200k mortgage over 30 years. We say: it’s grand that I lose up to 40% of my income to usury passed on in prices even if I have zero debts. We say: how splendid the Government is losing up to 450 billion per year on servicing the National Debt. How great that there is income tax to pay off this money to the ueber-wealthy. We say: how magnificent that the ultra poor nations lose up to ten times more to usury on their foreign debts than they receive in development aid. We say: ah, just don’t get into debt, even when there would be no money if there was no debt. We say: yes, let’s destroy all economies with insane austerity, because the interest on this freshly printed money must be paid off.
Because, hey, I wouldn’t lend without interest!
There is no ‘time value’ of money. It is all created by bookkeeping and the bank loses nothing. It creates the money when lending and retires it when repaid. But even when we talk about savings, there is no real ‘time value’.
Meanwhile, when we say ‘I wouldn’t lend without interest’ we are just parroting the line of the rich. We don’t realize that we are the ones paying and that we should be saying: “hey, I’m an interest-slave, how do we bust this ‘time value’ hoax, I need interest-free credit, I don’t want to be a slave.”
But for that we have to rid ourselves of the slaver in our selves. We must abandon the American Dream. That nightmare of striking it rich and putting our own boot on the face of our brother.
Credit can be interest-free if it’s mutual. I give you credit, if you give me some. We don’t even have to give up any real money: we can have a credit facility keep the books at cost price. Credit and Debit are just two sides of the same coin in double-entry bookkeeping.
Yes, it requires a little new thinking, a little shedding of wrong beliefs. But the poorest 80% (us) are paying up to 10 trillion in usury per year globally to the richest 10% and most of this money actually ends up with the 1%. That 1% now owns 43% of all assets in the world and the poorest 80% (us) own only maybe 10% if we’re lucky. Usury is what is causing this. Even if we have zero debts, 40% of our disposable income is lost to usury passed on in prices, so it has nothing to do with ‘personal responsibility’. It is the System that we prop up that is keeping us down.
It is when we start to see this, when we start to see what exactly is making these ghouls in London and Wall Street so incredibly wealthy, that we can begin to mend the destruction that the Money Power has been wreaking for many centuries now.
Babylon = Usury! We want Interest-Free Money!
Ten Atrocities that would not exist without Usury
The Problem is not Debt, it’s Interest (with Video)
Forget about Full Reserve Banking
Full Reserve Banking Revisited
Gary North’s Bluff: the Lie he’s been sitting on for 50 years
A lively discussion ensued after the article on MPE’s take on inflation. But the basic issue remains: a misunderstanding about what determines the value of money.
I realize it’s all unpleasant.
I want to thank all who participated for the level of discussion on the previous article, both in term of content and tone of voice.
The whole discussion focused on price stability in MPE, with the MPE advocates maintaining prices will remain stable.
Whereas I stated that people could spend as many promissory notes as they had assets to back them with, this was nuanced, by the explanation that there is an organization (CMI, Common Monetary Infrastructure) that manages some issues, including checking whether people will have sufficient income to service the promissory note.
So people can spend promissory notes that they can both service and back with assets. Also, no asset can be used more than once to back a new promissory note, this is also useful to add.
What it all comes down to is this: MPE believes that the value of money is dependent on the underlying asset.
But the value of money is simply a matter of supply and demand in the economy. That’s the whole crux.
MPE implicitly assumes that there is always demand for asset backed paper. But the problem is that this paper is not very liquid. For instance: a promissory note spent to buy a new house can be paid off over the life span of the house, which could be a hundred years or even much longer.
What is the cash value of a paper asset nominally worth 100 that will mature over the coming century? 10? 20? 30 maybe?
Meanwhile, a great deal of this paper would flood the market, because in an interest-free economy people would have vastly improved creditability.
The value of money is not the underlying asset. Simple proof of that is basic debt free money. Just paper spent into circulation. There is no underlying asset. Still it has value. Why? Because we agree to use it as money and there is a certain demand for money in the economy. How much demand? It depends on how much is needed, how much is available and its price.
More money in circulation means a lower price for it and higher prices for all other assets. This is what MPE simply denies. This is also why its take on inflation is important. Interestingly, nobody addressed my basic critique that both growing volume and usury cause higher prices, not just usury. But failing to correctly address pure inflation in the economies of the West in the last few millennia, including Zimbabwe, is the basis for too many promissory notes in MPE.
While we create the money as credit, once it’s spent into circulation, it is ruled by the laws of money, not credit.
The Promissory Note versus Money as Part of the Commons
The promissory note is MPE’s answer to how the bank usurps our credit. MPE correctly concludes the bank doesn’t lend anything and that ‘their’ credit by bookkeeping is in fact our credit. The bank in fact creates the credit for us on the basis of our promise to pay. But if our promise to pay is all it takes, why do we need a bank? Let alone indentured servitude (usury) in return for exercising our right to promise to pay??
And since sovereigns and the opulent have forever paid with promises to pay, then perhaps so should we. That’s basically MPE’s take. We don’t need to go to a bank, we don’t need permission, there are just some basic rules, there must be assets and there must be enough income to service the promise.
In this way, MPE also avoids the annoying notion of debt. When using a promissory note, we are not going in debt, we are exercising our right to pay later.
Personally I believe MPE takes it too far here. Money does not exist in a vacuum. Why is money so difficult to reform? Because we need each other to make it work. My promissory note is dependent on your acceptance and vice versa. Money is an interplay of individuals. Of individuals and the ‘community’, whatever that may be.
To end the bank’s obfuscation (usurpation), we cannot just say, it’s not yours, it’s mine. Because it is ours too.
MPE, like so many, including myself, wants to avoid having to go someplace and face some technocrat and be dependent on him having a good day for you to get what you basically have a right to.
But the bottom line is: our promise to pay does imply a debt. To the community at large, who allows us to buy now and pay later. All individuals (‘the community’) allow each other this, this is the essential nature of mutual credit.
So I think it’s difficult to avoid: we will need some sort of credit facilities (not banks) who will have to manage it all. They should have clear charters and the understanding should be that within in certain rules we have a right to the credit and not because the credit facility is so good to us, but because it is our right and the credit facility only represents the community and does nothing but keeping the books for us.
But the credit facility is necessary, to make sure the assets are there, and that there is indeed the income to service the debt and, yes, to make sure the volume is managed properly.
We will have a right to credit, but not to as much credit as we like. Money is a part of the commons and it’s not unlike land and reforming land also does not mean that we just say go out there and take what you want. Simply because there is a limited supply of it.
How to manage volume?
The simple fact is: 2000 years of monetary theory and practice does not provide a clear cut formula in the sense that we can mathematically say ‘this economy needs so much money’.
But there are basic pointers. If both the volume of money and prices are rising, than most likely inflation is the cause and rising prices the effect. Deflation will cause economic contraction. Money scarcity will cause permanent depression. If money is scarce, adding money will not lead to rising prices, but to more activity.
Velocity of money is equally important to volume and the real volume of money is nominal value of the money supply times velocity of circulation. Usury slows down the velocity of money. A demurrage accelerates it.
The Money Power always makes sure money is scarce and Usury always causes money scarcity, there is never enough money to pay off interest + debt.
To manage volume, we must monitor economic activity and price levels. If activity is sluggish, money scarcity might be the problem. Add money until prices rise. If activity is still below par, there are other economic problems.
We must create as much money as stable prices allow and no less to avoid money scarcity. If economic activity grows, more money must be added to finance the extra activity, otherwise money scarcity will return and the economy will grow less than it naturally would.
This can be reasonably managed by a competent currency board. It’s not rocket science. If sufficient people in society realize what is going on, this can be managed transparently.
A Usury Free economy will see great abundance. The living standards of the many will rise several times over. But this abundance does not show by endless credit. It shows through lower prices, shorter working weeks, higher wages, self-employment, co-ownership, high levels of home ownership and low rents.
Mathematically Perfected Economy provides a high level appreciation of many monetary issues. There is great merit in Mike Montagne’s long standing efforts to address the most crucial issue of Usury, not just by analyzing the problem, but also by providing an attempt at an integral solution.
But the outright denial of the importance of ‘circular inflation’ for price levels is simply not substantiated with a real case and does nothing to address the clear and present evidence of the historical record. This shows in its management of volume of promissory notes.
This mistaken analysis of volume is quite prevalent in the wider interest-free credit community and will really have to be solved if the community is going to move on to the next level and make a real difference in the struggle against Usury.
Mutual Credit and Inflation
Interest-Free Credit (including MPE!) and the Management of Volume
How to manage the Volume of Money in Mutual CreditThe Cult of Mathematically Perfected Economy and its Ridiculous Stance on Inflation
(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!
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!
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 it’s 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.
The Facebook exchange about the above issue can be found in raw format in a PDF: MontagneMigchels.
(Left: the deeply troubled Karl Marx was used by the Banking Fraternity to create the evil dialectical twin to Capitalism, for the purposes of organizing the opposition and directing history)
Capitalism redistributes from the many to the few. It is a global monopoly in private hands.
Socialism then goes on to claim private property is the problem. It says this will be solved by nationalizing it. It is a monopoly in State hands.
But what good does it for the poor if the wealth is transferred from the rich to the State? Especially when we consider that the extremely wealthy have always owned the State? It is for that reason they financed Marx and the Bolshevist revolution, after all.
Capital intends to consolidate its private monopoly in State hands, in a World Government.
The problem is not private property. The problem is too much private property in too few hands. The problem is the ongoing redistribution of the private property of the many into the hands of a few. By the creation of artificial scarcity and associated high prices by Monopoly.
And the mother of all monopolies is the monopoly of money. As long as the Plutocracy can control the money supplies of the nations with its global Banking Cartel, and tax it with Usury, which is paid by the poor who need to borrow to the rich who lend, and which globally redistributes up to 10 Trillion per year to the very richest, we will never have either Justice, or Freedom.
Interest-Free Credit Now!
And here is an excellent TEDx talk by Jem Bendell on the problems of our money and the coming revolution in alternative currencies.
What in the world has happened to Brother Nathanael Kapner?
Some time ago, he came out with all guns blazing against Ron Paul’s monetary ‘reform’ program. He had been supporting him wholeheartedly for years. But he clearly awoke to the key issue: control of the money supply and Usury.
He made three videos, two denouncing Paul’s Austrianism and one with a clear call for interest-free Treasury Money, saying ‘monetary reform is the mother of all reform’.
This was a major U-turn and quite manly: to act on new insights, even after having invested quite a bit, including reputation, into a mistaken notion. It was much needed too. With his powerful voice, his videos typically get anywhere between thirty and a hundred thousand views, I considered it a bit of a watershed.
The Alternative Media still has not come to terms with the devastating blow that Ron Paul dealt to both our agenda and credibility and even now many leading outlets treat him with the respect and sycophancy he so very little deserves. We helped him disable the Movement in both the 2008 and 2012 elections and very few have recanted since, even in the face of the ever more transparent facts, including the breathtaking betrayal of supporting Romney, a move that was the plan from the very beginning.
But then the Brother simply took down the videos. Here’s the one called ‘a Plan to End the Fed‘ below. It’s now private.
And recently he posted a video called ‘a six point plan to end Jewish Rule’, without a word about monetary reform!!
Several people have been asking him for an explanation, but he doesn’t say a word.
I find this most disturbing. Something has happened, that much is clear. I’d sure like to know what.
The Ron Paul Challenge: 10 reasons why the Alternative Media is failing this test
The Ron and Rand Paul Betrayal
Five more reasons Ron Paul was a phoney all along
End the Fed: a Trojan Horse destroying the Truth Movement from within
Austrianism is Dying! Truthers Unite!
The last few months I have been very active on Facebook. It provides a good platform to share stuff and comment on articles.
This blog will of course certainly continue, but while it is well suited for serious articles and analysis, Facebook is excellent for short notes.
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