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Why the Economy MUST grow

by on February 13, 2013

Economic growth is forced because of an ever growing money supply as a result of Interest. This is one of the hallmarks of Interest Free Economics.

This guy nails it one minute and that is instructive.

Related:
On Interest
Budget of an Interest Slave
The Problem is not Debt, it’s Interest
Usury: why we don’t build Cathedrals these days….

25 Comments
  1. REN permalink

    Here is another video about why the economy must grow:

    • REN permalink

      By the way, the authors/producers do get some things wrong, and some of their backers seem to be Von Mises and Ron Paul types. But, the idea that a video can explain the “money system” is important in that most young people today are visually oriented. Youth today tend to watch videos rather than reading. This video does a good job on the evils of debt money, but ignores usury. Imagery is for hard money, such as gold.

  2. Anthony,

    One of the arguments I hear for the charging of interest is that without it the entire society would be poorer, since throwing that extra money in the economy increases the money supply and makes everyone richer overall. I question how true this is, especially since all value comes from labor, and interest will just be paid with labor value that might have been put elsewhere. Plus, with a mutual credit system that’s controlled by its users, money can be taken in and out of circulation quite smoothly, so there’s no worry about a stalled economy. What do you think?

    Also, I wrote this a few weeks ago. Tell me if you agree that capitalism is just a “usury-based economy” like Graeber and I argue: http://propagandalalaland.blogspot.com/2013/01/blog-post_29.html

    Hope all is well with you. I heard the banks in the Netherlands are being bailed out again.

    • Hi Julia,

      Yeah, that’s one of their more typical ‘arguments’. Saying the total pie grows and that is good for everybody. That’s how they sell ‘economic growth’ (which is basically nothing more than monetizing ever more resources, including ‘human resources’) too.

      They ‘forget’ to mention that it all ends up with the very rich. Larry recently commented the top 1% own 42%. But that is the official statistic, we know they own the entire economy, including all banks and all transnationals. All the ‘economic growth’ goes to them, while real wages in the west have been declining since the seventies.

      The total global wealth transfer through usury per year is anywhere between 5 to 10 trillion from the poorest 80 to the richest 10%, as you probably know. The millionaires pay usury to the billionaires, who pay usury to the trillionaires. It goes all the way up.

      My take on Capitalism is here:
      https://realcurrencies.wordpress.com/2011/12/20/what-is-capitalism/

      The core:
      “Capitalism is an economic system where Capital dominates Labor through control of the money supply.”
      In our system, and throughout modern history, Capital has been controlling labor through the control of the money supply.

      The money supply is used for control first by keeping money scarce, and second by making money as expensive as possible.

      By keeping the medium of exchange scarce, there is always unemployment, forcing Labor to accept detrimental conditions.

      Not only is money scarce, because of interest it is excruciatingly expensive. The poorest 80% of the western populace pay trillions in interest per year to the richest 10% (the next richest 10% pay as much interest as they receive).

      It’s basically common sense.

      • I completely agree with your analysis of why interest doesn’t help the majority of us. Interest on money may expand the amount of wealth in society, but it does NOT go us. It goes to the ultra-wealthy who sit on it. Of course, there is always those who will bring up Say’s Law and claim that the rich will spend that money, but that has been empirically proven false. Plus you could say that the money would be much better spent if it were given to people like us rather than the richest 0.01%

        You’ll enjoy the letters here:

        http://praxeology.net/FB-PJP-DOI.htm

    • PS: Yes, billions more ‘lost’ and the sheeple are really remarkably calm here in Holland.

      I’m in great form, thanks for asking! Hope you are too!

  3. Aaargh. It’s gone straight up..
    KB

    • I removed it Kevin, thanks for the notification. I really respect his work, I’ve studied his site extensively. Of course it’s impossible to agree with everything, but he’s one of the few who so rightly focuses on self-crucifixion. He also promotes these two little booklets by the two listeners, which are just a treasure.

      But it is also quite clear he’s a hard-headed warrior and I don’t believe the world will be saved by digging op the Arch of the Covenant in Ireland……

      But hey, I’ve been wrong about just about everything in my life!

      Contact me at info(at)gelre.org any time you please.

  4. Gary S permalink

    As a former banker–I think money and interest can play a valuable role in the economy if the economy is regulated and all players [big and small] play according to the rule book. I also strongly believe that the currency should be issued by the sovereign state–not by a brunch of crooks in suits who hang out at the federal reserve and other central banks.

    But I’m if someone could help me out on the video guest date of “legal currency” origination: 1200AD. How/why/where does he come up with this date? I thought the usury thing and centralized banking started with the Rothschilds in the 1600s.

    Please advise.

    GaryS

    • Hi Gary,
      you’re right, the 1200 AD thing is wrong, I think he may be referring to Magna Carta as a beginning of modern history, but the Money Power only got back in the saddle 1400/1500 Italy and a little later in Northern Europe.

      I completely disagree with your interest statement, but not because of the vid’s statements, however relevant. The mechanical problems of interest are annoying, but manageable (would the system not be run by the maniacs in suits that you refer to).

      The main problem is with the wealth transfer that is interest: the poor pay to the rich and the rich pay to the ultra rich, who at the end receive ALL the interest.
      How much interest? The poorest 80% pay 5 to 10 trillion to richest 10% per year globally. Please let that number sink in to grasp what Usury is actually all about.

      See the Interest Free economics page (https://realcurrencies.wordpress.com/interest-free-economics/) under heading ‘the Problem’ for the ins and outs.

  5. kristin permalink

    I don’t know why there are so many articles, opinions, stories and books on this whole money thing creating a gigantic complex field. It’s quite simple and boils down to one thing: satan. Usury is evil, and the love of money is the root of ALL evil. Why waste time and resources beating a dead horse.

    • Because control of the Money Supply and using that control to rake in 5 to 10 trillion per year in usury is the foundation of Satan’s rule on earth.
      To obscure this, Satan’s helpers create all the confusion with endless economic ‘theories’. As a result, only a very small fraction of the people have the astute awareness about usury and avarice that you show in this short comment.

      Here’s John Galbraith’s famous quote on the matter: “The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it. The process by which banks create money is so simple the mind is repelled. With something so important, a deeper mystery seems only decent”.

      People’s moral and spiritual compass is corrupted, partly because of Satan’s centuries old propaganda effort.

      That’s why we have to patiently dissect all Satan’s lies, to help open the eyes of those who not yet see.

  6. Natasha permalink

    Steve Keen economics prof in Sydney has shown (mathematically proved) that interest does not inflate the money supply. Interest does however pump wealth from the bottom 80% to the already richest top 10% according to Margrit Kennedy.

    • I agree that the original P>P+I is not really correct. If the banks respend the usury back into circulation. And this is the key Natasha: they don’t.
      Of course they use part of the interest to erect all these magnificent modern age castles (‘skyscrapers’) to put their workers in, and to hand out massive bribes to their employees to manage their conscience.

      However, all the PROFIT they make, they either siphon off to the ‘financial economy’ (the black hole where untold trillions disappear into, where they are used for all sorts of strange games like FOREX, derivative speculation and weird black ops budget) or the RELEND the interest back into circulation (further aggravating the capital costs associated with the money supply).

      So while the original Interest-Free economics take is not completely correct, it is hinting in the right direction and usury on the money supply DOES have a structural deflationary effect that can only be solved by providing new credit, leading to more interest etc.

      • Hello Anthony et al;, wanted to offer another way of looking at interest in the creation of new money (pyramid scheme). The problem is systemic and no amount of user behavior or correction or will make it mathematically sustainable.

        I think “P>P+I” is an accurate math statement (P=Principal & I=Interest) but it’s impact on the “political economy” is often debated; e.g. spending all of the interest payments back into the economy. Can that really happen and would it eliminate the debtor death spiral if it did?

        If we stop the clock (no more borrowing; money creation at interest), there will be more debt than money – it will be impossible to satisfy all loans (P+I). The system relies on newly created future money to satisfy current payments. The amount of new money must grow over time – exponentially – which can’t be satisfied. It ends in massive defaults and the transfer of wealth through collateral.

        The other side of the usury coin is that some will have their fortune grow exponentially as they collect the interest. This is a small group as by far, most pay more than they receive through interest though it is not always obvious (e.g. interest on the supply chain – see Margrit Kennedy). The top 1% In the US hold around 42% of the wealth.

        • Dark Dirk permalink

          “it will be impossible to satisfy all loans” – because modern money have created as debt. When you repay the debt the money got destroyed. We have to disconnect money from debt. The money have to be spent into economy, not lent into existence. And you have to remove the immortality from money in order to remove their satan properties. To say it simply: we have to use demurrage (mortal) currency. Money should NOT be saved. They alway have to circulate in economy. That way they will be able to repay all debt.

      • Natasha permalink

        Interest is a terrible problem, I agree. however we must be accurate in reporting its effects. If the interest banks ‘earn’ is saved or reinvested by them – spent not loaned, since it is profit, and was created previously via another contract and so doesn’t have to be extinguished immediately when its returned to the bank as interest, (but it does have to be extinguished later on and elsewhere by the original contracts) – outside the ‘real’ economy then yes, the supply will have to increase (however its created) to maintain the same liquidity in the real economy. I guess we need to know the proportion that goes to real vs the virtual economy to form an accurate debating position? IMHO If the virtual economy was effectively disabled (e.g. via full reserve reforms) this could fix the problem on creation interest too? Though of course interest post emission wold still be legal in many versions of full reserve banking, and (Margrit Kennedy’s) supply chain wealth pump would remain.

        • I agree: accuracy is important. This particular issue is at the cutting edge of Interest-Free economics and there is no consensus about it: many still take P>P+I at face value.

          To get a hunch about the size of the financial economy: see the graph in this article:
          https://realcurrencies.wordpress.com/we-are-in-stagflation/

        • REN permalink

          Natasha, I’ve read most of Keen’s material. He is zeroing in on individual branches using circuit theory. He is also trying to define the branches by giving limitations and rates. All Good. However, he is still allowing credit and money to mix in his equations. They are two different units due to their attributes. In other words, we don’t have the right mathematics to add different units. 1 Apple plus 1 Orange does not equal 2, and this is where most economist go of the rails, Keen included. I’ve challenged him on this, and the result is silence. Money as a unit that morphs and changes may be beyond what most economists can grasp; this is why Keen also recommends that non economists i.e. engineers and physicists take up the mantle. Particle physics may be a more suitable mathematical approach.

          Dick Eastman describes the two loops, where the “upper” loop is the usury path. Anthony calls it the financial economy. Money should match wealth production and redound back toward the wealth producers. But, it does not due to the usury mechanism – instead it forms usury capital pools. Those pools are then latent demand that distort the real economy. Financial capitalism steals, and then redirects society. This means we do not have a democracy or even a republic.

          Financial usury capital pools in this era often do not even intersect the real economy. They circulate in their own stratosphere, trading debt instruments with each other with only the most tenuous link to the real economy. Derivatives are a good example: They are bets over things like the price of hamburger meat. If the price moves one way or the other, then one party is a loser and the other a winner. The top tier banks make these bets, then rig the system to make sure the bet goes their way, e.g. the LIBOR scandal. Quantitative easing is another example, creating money then trading for a bond. The bond then stays in the reserve loop of a bank and does not exit. Then the bank makes cheap loans for overseas carry trades, yet more distortion of real economies.

          Keen still maintains that we cannot get rid of the debt system as all of our “money” would disappear, although he is most certainly familiar with AMI’s position, as he speaks at their events. So, I think he is a little confused, but he is getting there.

          Let’s say we have positive interest in a credit money system, then the usury aggregates into that “banking” system, and then to the upper loop.

          http://www.citizensamericaparty.org/socialcredit.htm

          If we have positive usury interest in a real money system, say 100 percent reserves, then it aggregates toward the creditor “lender.” The lender could be somebody who monopolizes land’s gifts, such as minerals or oil, The tax system would then have to be “Georgist” to return the usury. No matter the system, usury sorts wealth toward oligarchy, leading to the debt driven civilization oligarch/fuedalism/King cycles Aristotle wrote about centuries ago.

          We know that you can make a money system usury free using by demurrage, and we can make the money unit behave by constraining it to bounds. With usury free systems, wealth automatically cycles back to the lower loop, and evil is defunded. Economists are some of the worst people to listen to due to their indoctrination, and Keen would agree.

          • Amen REN.

          • Natasha permalink

            Thank you REN very informative🙂

  7. http://www.nujij.nl/algemeen/waarom-de-economie-moet-groeien-maar-het.21560250.lynkx

  8. An accelerating money supply to reinflate however much they steel out of only some remaining principal. Resulting in an ever escalating debt as a result of interest. He doesn´t exactly nails it but rather just touches it on the surface. Hopefull though!

    • Of course. But it’s either short or comprehensive. Both is impossible.

      I think he did an admirable job for the non-initiated.

      Thanks for the link Jac, much appreciated!

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  1. Is there enough money to pay off debt plus interest? A closer look. | Real Currencies

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