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More On Social Credit And A Letter By Dick Eastman

by on April 14, 2015
Dick Eastman

(Left/Above: the erudite Dick Eastman)

Recently, Social Crediters have been campaigning against the notion that Usury is the core of our monetary problems. To them it’s the Gap, the difference between purchasing power of the consumer base and output of the productive sector.

However, the Gap is mostly caused by Usury and it’s becoming more and more difficult to understand why the Social Crediters are not willing to admit to this.

(Here’s my analysis of Social Credit for those new to the issue)

Here’s a recent effort by Oliver Heydorn for the Social Credit camp on the website.

Dick Eastman convincingly took him to task on the issue of Usury being the Gap. Dick communicates via his email list, so I can’t link to it, but email me if you want to get on Dick’s list to receive his top notch work.

And next he wrote me a friendly letter (see below this article), looking to bridge our differences.

The Gap is the difference between what workers produce and the wages they receive. Because wages are lower than the value of production, there is a constant lack of purchasing power for the workers to mop up their own production.

Major Douglas was the one to point at this phenomenon. He proposed printing debt free money by the Government and allowing the people to spend the new money into circulation. If you print only as much money as is necessary to buy up ‘excess’ production, no ‘inflation’ (rising prices) will ensue, Douglas claimed.

I’m not really convinced that this will be ‘inflation’-free, by the way, and I don’t think Dick Eastman is either, he just doesn’t care much and correctly notes that inflation is really the very least of our problems as it stimulates economic growth and reduces the value of debts, things only bankers and the ultra rich hate.

Be that as it may, bottom line is that Social Credit to some extent compensates for Usury in this way and this is why I personally sympathize  with the scheme.

Dick Eastman, who wants to use Social Credit to end Rothschild tyranny, has been making the case for years that Douglas’ ‘Gap’ is basically the interest on loans of money. As Eastman correctly notes, the Bankers don’t spend the money back into circulation, but hoard it, to cause deflation.

I’m adding to this they also simply lend it back into circulation, as the extra interest drain of the interest lent back into circulation will only worsen the deflationary pressures both in the medium and long term. In this way they let compound interest also work to crunch us with ever worsening money scarcity (while printing ever more money! Neat, huh?)

The Gap is calculated to be around 50% of production by Social Crediters. Obviously, it’s no coincidence that about 40% of the prices we pay for goods and services are Usury passed by the producers. As calculated in Helmut Creutz’ ‘the Money Syndrome’.

It seems to me that this more or less speaks for itself and in the to and fro between the Social Crediters and Dick Eastman I also could not find any real rebuttal of this by the SC’ers. Dick’s simply right. It’s not an ‘accounting issue’ (as the SC’ers put it), it’s the interest-drain.

Downside of Social Credit
Clearly, this being the case, we need to solve Usury first and what remains of the Gap after we do, can be solved with some extra liquidity if needs be.

Social Credit’s main problem is that it compensates what people lose to Usury. However, people will still be paying, even with freshly printed notes.

Why do the Usurers need to continue to suck up Trillions per year? That’s the whole issue, is it not? We have a couple of Trillionaires at the top of the food chain who have stolen the rightful inheritance of the Earth’s masses through compound interest.

It’s all unearned income. All that these guys do during the day to ‘make’ this money is bribe politicians, newspapers and ‘economists’.

Compensating people for the interest-drain is not enough. The interest-drain itself must be stopped.

Responding to Dick Eastman
As Dick notes, we do agree on a great many issues and we share a hobby too: preparing Austrians for luncheon. Especially the Austrians’ criminal defense of deflation is something both Dick and myself feel very strongly about indeed.

Furthermore, while I do have a proposal of my own, I’m not at all hung up on it.

The Goals of Monetary Reform as I see them are to
1) end Usury and its associated scarcity of money
2) end artificial inflations and deflations, the boom-bust cycle
3) democratize credit allocation, so bankers nor technocrats can direct the economy.

These are the parameters along which I have analyzed the different monetary reform proposals out there, including Dick Eastman’s (the latter in email correspondence, not on Real Currencies).

I support with reservations anything that moves in the right direction, and unreservedly all proposals that achieve the three main goals of monetary reform as I see them.

Dick wants to replace the current usurious credit based money supply with Social Credit and allow for free full reserve banking, assuming that competition between banks will lead to low interest rates and decent behavior of these institutions.

In the diagrams in his letter we can see how his proposal would lead to constant circulation of all the money, including that used for interest-payments. So the interest-drain, or gap, will be solved.

However, in doing so Dick, like the wider Social Credit community, also overlooks that Usury is paid by those who don’t have money to those that do. Ie: the poor will borrow from the middle classes, who in turn will borrow from the rich. At least some of the wealth transfer through Usury will continue. It will still be the rich depositing money to lend in these banks.

Furthermore, while Eastman hopes to reach out to our Muslim brethren in the faith, he ignores why Islam rejects Usury: because it is unearned income. In Islam every transaction must lead to both participants adding to the greater whole. The Usurer just takes. He adds nothing, risks nothing and loses nothing.

In an interest-free environment there is no ‘risk’ as all risk is mutually insured, just as the credit is mutual. ‘Debtors’ (people promising to pay) pay a one off service charge to cover the risks for the community. Since most lending will come with collateral, risk is minimal as it is anyway.

This is in fact already the case today. There is no real ‘risk’ in the financial industry. For instance: houses going under water is because of the deflation the banks cause themselves willfully.

Last, I’m not as optimistic as Dick is about the disciplining effects of the market on bankers. Bankers will be bankers, experience shows. Eastman puts them in a cage, but a wild animal can find ways to escape, especially if its incentive, Usury, remains in place. They will be colluding again in no time. Such is the power of the love of money and its weaponization: interest on loans of money.

He puts my position as: “Your answer is simple enough. Kill the vampire  — and have government make the loans at zero interest.  Certainly that remedy would fix the problem.   Usury is killed.  You are happy.  Luther is happy.  Mohammed (pbuh) is happy.  God is happy.  Right?

But then points at the problem of Government being in control of credit creation and allocation.

And that obviously is indeed a major problem, if Government is the one to dole out the credit.

However, that is not my position. It would not achieve goal number three: democratic credit allocation.

I’m looking for interest-free credit facilities that work according to a clear cut charter, semi-private, semi-public not-for-profit institutions. And they should allocate the credit based on rights. The understanding must be that people simply have a right to credit as it is their promise to pay which is monetized. The Money Supply and the Credit of the Nation are part of the Commons and all commoners have rights to access to their fair share in the available credit. Based on rules that balance the needs and rights of both individuals and the community (other individuals).

They must be credit worthy, based on collateral and have a reasonable plan (a normal business, a mortgage). The credit facility must provide no more credit than stable prices allow.

In this way credit allocation can be to a large extent made to be predictable. No technocrats looking for control, but professionals simply facilitating people’s natural rights.

90% of society’s demand for credit can be covered in this way. What remains are risky ventures. These need financing too, but this can be reasonably done on an investment basis, where those providing the capital also share in the risk. Brokerages can provide the infrastructure for this.

What is more, and this is the key point: what Eastman proposes, full reserve banking, can just as well be done interest-free! People can just save with ‘banks’ (for lack of a better word) interest-free and their money can be used for lending, as long as the ‘bank’ guarantees the deposit, which can be well done by having borrowers pay one off charges to cover uncollateralized defaults. This is known as JAK Banking.

And let us not forget that Usury is the main cause of defaults to begin with. Clearly the credit worthiness of people vastly increases if they don’t have to pay interest on their loans.

Solving Usury will solve at least 80% of the gap. It’s really hard to see how the Social Crediters can get around this.

However, Usury is worse than just the gap. It’s a wealth transfer from those who don’t have money and thus must borrow to those who have already more of it than they can spend.

It is unearned income.

The whole idea that money should breed money is irrelevant.

The Time Value of Money is a hoax, cooked up by 16th century Jesuit monks in Salamanca, who laid the groundworks for what later became Libertarianism. This was the end of Usury prohibition in Europe. It paved the way for centuries of Usury and is leading directly to the destruction of the West and to World Government.

There is no need for Government nor Banks to control lending, it can all be done in democratic, decentralized, and not-for-profit fashion.

Let us end all rents and unearned income. The economy should be based on production, not parasiticism.

Having said this, I admire Dick’s work and I’m grateful for this opportunity to make this case against Usury once more, and to fire up everyone to take up arms against the Money Power menace.

Let us not rest until this Demon is defeated once and for all!

Social Credit
Social Credit With Demurrage
More On Mutual Credit
Rationalizing Usury: The Time Value Hoax
The Difference Between Debt-Free Money And Interest-Free Credit
The Goal Of Monetary Reform
Forget About Full Reserve Banking

Dick Eastman’s letter:

Dear Anthony,

Very good to receive this email from you.

We have been sharing thoughts and friendship for a long time.   We agree on almost everything  — including the deflation that results from the practices and systems of usury.  Our common goals might be better attained if we could agree on the same remedy.  I think we can.

As I understand it you are saying that usury is wrong in the sense of a morality that is a morality that best serves people.  The last I looked it appeared to me that you advocate the elimination of interest on loans under all circumstances and that you would have a government agency make all loans interest free.  Yes, that would eliminate usury.  The structure of the financial system would be so changed that the gap in purchasing power due to the draining of interest to financiers/capitalists/bankers would be gone.  End of problem.  End of story.

In my opinion, not without some thought,  you charging money to allow others to spend your money today instead of you spending it,  provided they promise and do give you that same amount of money later on,  is a freedom that in a well designed market economy/ money system/ lending system could be a positive benefit to both borrower, lender and society as a whole.

My idea has been to find out exactly where interest under the present system is killing us and to do something about that.  Why is the usury system killing us?

I think I have isolated what is good and what is bad about usury under the present system  — and what would be all good without bad under a different system.

The system of today’s usury I call the Bank-of-England/Rothschild system, named after both the bank that initiated the system and the family name of those who have most effectively used the system to the detriment of all nations and peoples except their own.

I have identified elements of the Bank-of-England/Rothschild system that cause the most trouble.   Sometimes the gold standard.  Always the private issue of the nations money.  The tendency to want deflation to make the money the monopolize to be worth more per unit so they can increase their real wealth by simply hoarding money and not spending — the cause of the leakage of purchasing power from the real economy, causing hardship and loss in the “lower loop” (most households, businesses, local government that provides public services).   The Bank-of-England/Rothschild system has always opposed national treasury money — the green-backs backed only by the word and authority of a good government.  Such a money system would cut down their power from that of just short of God to something more on a scale of of their standing among common humanity.

In the past I have just hinted at the problem with this diagram:

But now I have two diagrams that together, I think, captures the essense of the problem.



New money comes in only a few ways —  all involve borrowing at interest.  These ways are 1) commercial bank loans at interest and secured by collateral or primacy lenders’ claims in any bankruptcy; and 2) bond financing  — where money comes when a corporation or government writes an IOU promising to pay some amount in the future — which is then sold for a lower price in the current bond market.  The new money is not really new — it comes from the interest earnings that are being hoarded by those who have been holding on to money simply to create deflation and to gain from deflation.  But bond financing also involves interest drain.  The hoarders give up the gain from hoarding for the bigger interest gain in buying an IOU (bond) — and the bond maker gets the money and spends it on war or new Wal Mart outlet buildings or high fructose processing plants  — which for a time increases money in circulation (monetary inflation)  — but as with bank lending and interest collecting  —  the IOU stipulates a face value that must be paid at a future date that is bigger than the bond price the bond sold for — and on many bonds their is a coupon amount that must be paid at regular intervals as well.  Soon the gain in money circulating from the buying of a new bond with money that was being hoarded — is soon followed by the payment of coupon amonts and bond face value back to the hoarders  — more deflation  — unless the corporation or government chooses to roll over the debt buy writing new IOUs to get money to pay the obligation on the old IOU.   This is the true heart of darkness  — both bond financing and bank loan financing have the same effect.  An upward jump in money supply followed by a decline — as principal and interest are paid and as coupon and face value are paid — that takes the money circulation lower than before the financing was undertaken.

There is one more mechanism for making new money  — the bonds themselves can be sold by those holding them to the central bank in exchange for funds — referred to by the concealing euphemism Quantitative Easing (QE) — but thise of course gives money only to the hoarding class  — the people who only part with their money deposits when interest rates are very high or when bankrupt assets and privatized public utilities come up for distress sales in extreme buyer’s markets.

The above explains everything.  Why depressions happen.  Why bust follows boom.  The debt increases to trillions upon trillions of dollars owed.  Why possession of the world is being transfered to the credit monopoly that provides the credit money (the all-borrowed money supply).

I know this has been your understanding of the matter too.  This is the great evil exposed.  The vampire has two fangs — the all-borrowed money supply and deflation-intensified-by-hoarding which only higher interest rates or a Greek Island or Chrysler Motors going up for auction in a distress sale can induce to spend.

This is the system we both do not like.  This is the system that grips our countries, Holland and the US, and everyone else’s country as well.

Your answer is simple enough. Kill the vampire  — and have government make the loans at zero interest.  Certainly that remedy would fix the problem.   Usury is killed.  You are happy.  Luther is happy.  Mohammed (pbuh) is happy.  God is happy.  Right?

But then comes the old crotchety American who says the government passing out money interest free is garl-durn socialism, even communism, where Congress (or the Tweede Kamer over there) , our federal legislature is the  biggest whorehouse in the world, I am sure the Tweede Kamer operates the same.  Buying votes.  Giving contracts to those who contribute to the elections or who control the political parties that decides who will be ministers will run the government.  BUT ONCE YOUR COUNTRY’S POLITICIANS OR MY COUNTRIES POLITICIANS HAVE THE POWER TO CREATE MONEY AND THEN LEND IT OUT AT THEIR OWN DISCRETION  you will have created a monster of state power that is just as terrible and corrupt as Bank-of-England/Rothschild power.  The state will be a god.  People will wait in line for loans like people wait in line for an operation or a CAT scan under socialized medicine.  And only those who contribute to the party and the politician will get moved to a shorter line.  The heck with that noise.  Can’t a European see the problem there?

I can’t join with you if you insist upon replacing usury with a government that makes money and then passes it out in loans to those the government chooses to lend them to, to those the state deems to be “deserving.”   They can’t just lend to everyone all they want at zero interest  — or everyone would borrow and borrow with promises to repay later until they die — and then try to collect after they are dead.  So there must be some kind of rationing, some constraint on who gets loans — and you would leave that up to the government, to politicians, to the political parties, to those who pay the bosses of the political parties  — in fact the same people who already own congress and the Tweede Kamer under the Bank-of-England/Rothschild system our two countries have now.

So I ask you.  Can we agree to be rid of the Bank-of-England/Rothschild system — but not replace it with the all powerful National Money Power that you have been so naively proposing.

Now you are not the only one I would like to come to full agreement with.  There are also the Moslems (peace be upon them all in this world and the next).  They too are against usury.  Like you they reject my proposals because they are simply evil and unjust  and socially destructive.

Well, I have extended an olive branch to you and to them — but have not gotten a response.  I propose a system where business people who want to make a new kind of device, for example, can get a lot of money from a lot of people on condition that those people get their money back after the device is build and selling, plus some more money for their willingness to lend.

But would not that not necessarily be usury?

No.  I thinking of a replacement for usury, that is not usury, but which does allow little people to pool their money to support an entrepreneur with a good idea in the hope of a gain for themselves later on.  What I propose to accomplish this will not be usury, but will be an actual silent partnership, where the vampire  “lender” is transformed into a small silent partner — sharing in risk, having the rights of a small partner rather than a creditor.   Here is how it would work.

The economy has plenty of money in it, coming from the state and being introduced exclusively through the new money dividend  — debt free money to each person in each household on a regular unfailing basis.

Now there will be people with great inventions or ideas for products that people would enjoy if only someone would make them  — but these inventors have no money to realize their idea and put it on the market.  They need money, and “advance” so they can pay employees and materials suppliers and tool suppliers until the product is selling and can pay for itself.    \

Now instead of going to a bank for a loan like they do now, and instead of writing up an IOU and selling it as they do now (bond financing), we would instead have, not a Bank, but a populist institution called a “Pank.”  I slightly change the name because I want to underscore  the idea that the “Pank” is something completely different for the following reasons.

Here is how Anthony Migchels would start a “Pank.”  He calls up his internet friends and says,  “I know a sharp young fellow named Daan whose wife Isa is a great dress designer, really different and cool.  And Daan has invented a new treatment for fabric that makes it really fantastic to touch and that draps in a really attractive way that every woman will want to own one.   We need to hire five hundred seamstresses and buy 500 sewing machines, plus the material, plus the building, plus the chemicals for the treatment and so forth.   I want to open a “Pank” to provide Daan and Isa with the advance they need.  Will you you subscribe  —  (this replaces becoming a depositor in a bank) ?     And what if I, Anthony Migchels the “Panker” am wrong  and Daan’s idea is no good, or the government will not let him use his chemicals, or the style of dress Isa designs just doesn’t sell?  Well then, in that case, we as silent partners must share the loss with Daan and Isa.  If you put up  ƒ300 (gulden  — post-euro)   and the business fails, you are only entitled to claim half of what you subscribed.  (Now THAT is what makes this no longer usury.  A banker would lay claim to the full debt obligation and would have priority before Daan and Isa could get one tiny penningen from liquidation.  But under the new Dutch “Panking System”  no such loan contract would be legal.  Pankers and the subscribers the panker attracts will not be insured by the governrment.  Panker and subscriber would be exposed to all the risk Daan and Isa are exposed to.

Then why would anyone every become a subscriber to Anthony Migchel’s bank?  Because everyone knows that since the early 21st century Migchel’s has been known as one of the most honest men in Holland, a man with good sense and an eye for a good deal and a man with a good heart who would not ask people to subscribe to his Pank  to a venture unless he was sure it would succeed.  In other words  — when you subscribe you money to a “panking” venture you are putting your trust in the integrity of the “panker” to pick the right entrepreneur with the right idea in the right market at the right time given all the factors that might affect the success or failure of such fashion design innovation.

Is then “panking” usury?  You might look at the fact that the panker takes money from people with an understanding he will return that much and more later on if the venture of Daan and Isa succeeds.  That looks like banking and therefore like usury.  But then again — notice that the “panker” and the subscribers are taking the same risk as Daan and Isa.  Notice that in the event that the business fails and cannot pay the “pank” what was hoped — that Anthony and Daan and Isa and the subscribers divide the loss among themselves.  That is partnership, not usury.  Under usury the lenders must get completely paid before employees, or other crediters get a penningen.

Furthermore it is not percent of the loan that is owed the pank and the subscribers — but a return of the advance plus a share of the profits.  And it would be the hard work and intelligence and shrewdness of Anthony Migchels the panker (remember a panker is one who creates the lending institution that replaces the usurous “bank” of today.

(Note:  There is a city called Panker in Shleswig-Holstein in Germany — and in northeastern Pennsylvaina “to pank” means to press down and compact soil or other loose type of material into a more compact mass — which is what in the present usage is what the “panker” does with subscriber’s money before handing it to Daan and Isa to start their dress company. —       but otherwise the word “pank” seems to be free for this use.)

Now in Islamic banking riba (usury) is haraam (sin) with no exceptions.  However partnerships are not haraam.  The pank, with Anthony Migchels, as panker in this case,  — anyone can be a panker if they have the name and reputation that earns the confidence of subscribers to take the risk  —  calls the shots for who gets the money — for whom to partner with, in this case partnering with Daan and Isa.

There is no riba or usury involved in repaying the amount of the advance (called the paying the principal in the Bank-of-England/Rothschid system, so the big question is whether the extra money that Anthony and the subscribers get back is riba or, in Christian eyes, usury  — or whether it is shared profit or some other thing.  For example, the arrangment could be a joint venture (Musharakah rather than a borrower-lender arrangment), or it could be set up as a work-and-earn-to-own arrangment  —  where the pank pays for the business and its early operations, paying  Daan and Isa fully for their contributions of entrepreneurship, management, know-how, and labor — enough for them to live on while the ownership of the business is sold to Daan and Isa in installments by a pre-specified formula. The pank would take profit left over after paying Daan and Isa what is owed them  — until the business —  Daan en Isa Mooie Jurken  — becomes completely owned by Daan and Isa.   The deal is this:  The Pank says, we will pay for starting the business you want and for its early operations, paying Daan and Isa a fee for all of their contribution, including Isa’s original designs, and the worth of the chemical formula as purchased by the pank from Daan.  The pank will take profits over that  — half of profits going to the Pankers (Anthony and his subscribers)  — the subscribers replace the savers who put their money in time savings accounts in the old Bank-of-England/Rothschid system.)  And that is enough about that — the point is that the pooling of money so that good business ideas can be undertaken can be done without usury, riba or “charging interest” . 

Whether Theologicans against usury and  Moslems against riba give American populist social credit a “pass” on avoiding sin  — the fact remains that the creation of a permanent money supply provided for free to every citizen  — and the ending of money creation by banks, and the requirment that banks only lend money that savers entrust to them to lend  — will end the tendency and the incentive for the financial system to deflate the quantity of money in circulation.  That in itself will end deflationary depression, end the waves of defaults and bankruptcies, end the mounting indebedness to lenders, end the transfer of real asset wealth from the borrowing class to the lending class.  It would make businesses more profitable.  It would allow businesses expanding and innovating from their own profit to replace borrowing from banks because money is not available to innovate without going to the usurers.

So, Anthony,  why can’t we agree that the Bank-of-England/Rolthschild system leads to national ruin all the time, that it is an instrument of class warfare and piracy of rich exploiting the helpless poor.  And why can we not also agree that with competitive “panking”  –  where anyone can become a bank if he has the reputation to attract subscribers  — buyer beware!  subscriber beware!    because we allow panks to fail  (if the panker cannot pick good entrepreneurs to invest in, cannot understand all that may affect  supply and demand   to pick the right entrepreneur with the right venture  — whether giving a retailer money to fill his shelves — or betting on a new invention  —  if he fails he fails  — no one will want to subscribe to his pank again.   

This would be highly competitive “panking”  —  a pank is only as good as the ventures it is investing in.   The pank would allow little people to get the gains that today only the rich can do  — get involved in investing in something big.

Today inder the Bank of England’/Rothschild system  — these is no competitive banking.  Interest rates are fixed.  Everything is fixed.  And the game is rigged all in favor of the lender and against the borrower.  That will end.

But remember this.  Companies that satisfy coustomers will never suffer a bad day because of macroeconomic deflation.  There will be no deflation, no laps in consumer purchasing power.  And firms will be as successful as the businessman dreamed when he started his business  — if he is a good businessman and entreprneur.  That means we will be back in a land of opportunity. 

There will be no more macroeconomics.  No monetary policy.  No tending of the national economy.  There will be no national interest rate, no international money markets.   (I have not gotten into the other phase of American Populist Social Credit  — the elimination of corporations and a return to having all businesses either single proprietorship (single owner) or partnerships  — with full liability to owners. 

There is no democracy unless the people — all of the people equally — are the ones who spend all new money into circulation.  The Rothschilds and Rockefellers owning Goldman-Sachs and JP Morgan-Chase should not be creating money and lending it to people at interest to give the economy its money supply.  Nor should politicians have that power to create money and spend it into circulation — because that power would lead to corruption and a totalitarian state at least as bad as what we have now.

Let the people have all new money and let them be free to pool their money and jointly undertake big things, if they want to  — with a populist banking system (or “panking system” if we want a new name to go with a new system).  The populist banks will not be able to create money — they will just be places where good opportunity spotters will find the best entreprneurs to provide money to  — ‘advances” can replace the term loans — or “investment money”  — or “partnership funds” 

let us have a system that Moslems and Christians against riba and usury can participate in with clear conscious that no sin is being committed against god and the ways of righteousness found in the Holy Books.

But most of all let us do away with the evil lies and theft of the Bank-of_England/Rothschild system that plunders the people who create the wealth from the world that God has provided us all to enjoy.

  1. Reblogged this on tomaz2015.

    • I liked almost all of Anthony’s conclusion. But he departs from reality by ignoring human nature when he asserts there is no need for Government to control lending. How does he expect violators (Usurers) to be prosecuted if and when they ignore any laws against usury, if there are any? One of the best legal minds of the 20th century wrote that democracy is nothing more than mob rule. If Anthony thinks the inherent goodness in people will cause them to rise above the love of money and the anarchy that will follow as the results from democratic processes, then he has not truly analyzed the facts of history.

      We have a fairly good Constitution in the US. But the liberty it was supposed to provide for citizens has been usurped by usurers. So should we allow more democracy to rectify the imbalance created as the result of democracy? Or should we stop the liberty to practice usury, which is the real cause for the imbalance? If it is truly the reason for the imbalance, for the upward transfer of capital to a chosen few, then this practice prevents the people as a whole to enjoy the blessings of economic liberty.

      I cannot visualize anyone lending money once not for profit is a requirement. Who would want to lend their money in this way if they do not have the ability to create currency or credit? And even if communities somehow learn how to issue usury free credit, how could people in the communities who have aspirations of moving elsewhere rely on being able to spend their earnings in other communities where a different system is used?

      Here is a short passage about Salmon P. Chase’s thinking on a national currency. Abraham Lincoln’s treasury secretary Salmon P. Chase was in favor of instituting a national currency, “uniformity of circulation, in place of a bank-note circulation dependent on the laws of 34 States and 1600 private corporations.” There are reformers active today who claim that decentralization is the key to keeping commercial systems free of predatory, monopoly banking. But the history Jefferson and Chase show here refutes that theory squarely.

      I can’t give Eastman the same admiration Anthony does. One would think any economist would let go of trusting human nature when it comes to money, especially after examining history across the past five hundred years. Exactly how will social credit solve these problems that usury causes without the outlawing of usury? I spent time in their forums. With all of the SC experts participating therein, never one of them offered support for the outlawing of usury. If usury is not outlawed, the usurers will simply raise interest rates when they see the population walking around with a social credit dividend in their bank accounts. How will the SCers “gap” evanesce if interest rates are raised much, much higher? Will the increase in the money supply also cause price inflation? The princes of industry may therefore follow the bankers by raising prices for goods and services simply because they perceive people have a few more dollars. With the usurers still in charge of creating our currency and credit, social credit will not have one bit of effect on who controls the political process. The usurers own the US Beltway.

      At another forum I recently read an article by Robert B. Record. This gentleman has crafted in the best of language a very brief synopsis of the abyss we would be responsible for without a national system of laws. After reading it anyone who has had incorrect ideas about the Bible will certainly learn that modern churchianity has completely failed their commission. If the theologians cannot get a firm grasp about fundamental Biblical interpretation, how can we expect economists to comprehend the actual laws on economics found in the Bible? So here it is Anthony. Since a man of your intellect has been able to wrap your mind about how destructive usury really is to the lives of most every person on the planet, you ought also to comprehend the validity of Robert B. Record’s findings.

      Why Our Political And Economic Machinery
      Are Fast Grinding To A Halt!

      By Robert B. Record

      Strange, is it not, that in spite of the fact that our political and economic machinery are fast grinding to a halt, it has not yet begun to dawn on our leaders just where our trouble lies? In spite of the fact that the Democrats have passed the buck to the Republicans and the Republicans to the Democrats, neither has been able to come up with any solution. This only illustrates the fact that if there is something wrong with the motor of an automobile, simply changing drivers will not make it run.

      The Failure to Declare The Whole Counsel of God

      Our trouble, to begin with, lies largely with the preachers who have failed to declare the whole counsel of God. Altogether too many ministers have confined their preaching to a simple gospel message. The people of Christendom are therefore largely milk-fed, and thus untaught and unlearned in the Scriptures. As the writer of Hebrews puts it, they are “imperfectly acquainted with the doctrines of righteousness,” and their spiritual faculties have not been trained to distinguish good from evil. Hebrews 5:11-14 (Weymouth). The empty husks of religion do not feed the saints; and there is no light or edification in fable and tradition which only too often supplant the Word and make if of none effect.

      In spite of the fact that fully 70% of the Bible is national, and deals with civil and national affairs, you can hardly find a preacher anywhere who has any message from the Bible for the nation – save in a vague, general sort of way.

      God’s Law Given To A Nation

      Civil and national affairs are governed by laws. The Law of God was given to a nation for this purpose. That law is the Divine standard of right and wrong; it is God’s way of doing things in contrast to man’s. And the violation of God’s law is sin – whether personal or national! And sin invites trouble and the judgments of God.

      As King David thought on the Law of the Lord in Psalm 19:7-8, we find him saying, “The Law of the Lord is perfect, converting the soul: the testimony of the Lord is sure, making wise the simple. The statutes of the Lord are right, rejoicing the heart: the commandments of the Lord are pure, enlightening the eyes.”

      But where is the preacher who bears witness to the wisdom and necessity of Divine Law? Most of them have thrown the law of God in the wastebasket, or they have little or nothing to say about national sin and national righteousness. If the clergy today were preaching the law of God for the nation and pointing to its violation as a cause for most of our troubles, our politicians in Washington would begin to get wise and start correcting many of the evils that plague our nation. But no. Most clergy have been brainwashed to the point where they think that such preaching would meddle in politics, or constitute a breach in the separation of Church and State. But the fact is, such preaching is a part of their duty and responsibility.

      The Purpose of Law
      So imbued are most preachers with the personal message of the Bible, and of salvation by grace, that the moment you start talking about the wisdom and necessity of the Law of God for the nation, they accuse you of being a legalist and of teaching salvation by works. What nonsense! People who make such statements declare that they know not the purpose of God’s law in the first place. At no time does the Bible ever set forth obedience to the law as a means of salvation. The man never lived who was ever saved by his works of obedience. The Bible declares that if we violate the law in one point, we are guilty of all. And as Paul declares in Rom.3:23, “All have sinned and come short of the glory of God.” Therefore the ceremonial law of sacrifice and ritual was instituted to make an atonement for sin until Christ, our Passover, came to make the one perfect and complete sacrifice for sin. The faith of the believer in Old Testament times, rested not on his works, but in the efficacy of the blood that was shed to make an atonement for his sins.

      And if you are one of those who claims that the only law the Christian needs to keep is the law of love, I would like to ask just how you would go about keeping this law? How would people know that you were keeping this one law? What did Jesus say – He who was God manifest in the flesh? In John 14:21 Jesus declares, “He that hath My commandments and keepeth them, he it is that loveth Me.” To what commandments was Jesus referring? To just the one commandment of love, or to a few oral commandments which He uttered while here on earth? Then why were they never codified so we would know that they were?

      Perhaps we had best let Paul clear up this matter for us. In Romans 3:31 he asks: “Do we make void the law through faith?” And what was his answer? “God forbid! Yea, we establish the law.”

      Then the law of the Lord is still the Divine standard of right and wrong. The violation of that law is still sin, and it is the violation of God’s law that is the basic cause of all our troubles.

      God’s Law and Our Economy

      It has been estimated by men in Washington that about 90% or our national problems are economic. They have to do with money in some way, shape, or form. Money has been called the life-blood of business and industry. A healthy economy has to have plenty of money. Money issued or spent into circulation should balance production so as to facilitate the transfer of goods from producer to consumer.

      But that is not the way our economy works. Supply and demand no longer have anything to do with the price of goods or the amount of money in circulation. You see, a private corporation called, “The Federal Reserve Banks,” has been given the exclusive right by Congress to distribute our money among the other banks of the nation. And where do the Federal Reserve Banks get their money? They get it upon demand from the government printing presses for the mere cost of printing. How would you like to be a part of a corporation that could get money like that? It is almost unbelievable that Congress, which represents the people, would deliberately and with their eyes wide open, farm out their constitutional right to coin and issue our money to private banking interests – and without a constitutional amendment. These banking interests represent no one but themselves. They are the distributors of our money; they get it for the cost of printing, and then loan it back to the government by taking a bonded indebtedness on the country, and on which we are now paying billions a month in interest to the moneychangers.

      This is a monstrous evil perpetrated upon the American people by Congress. Through their control of our money, the banks have exploited, robbed and enslaved our whole people and nation until we are fast becoming renters on a land we once owned. Any graduate from elementary school can see the evil and injustice of such a system. Yet Congress – your representatives and mine — have stood by in stolid indifference for 92 years whole the moneychangers proceeded to take this country and its people to the cleaners. Which can only mean we have either had a lot of pinheaded lawmakers in Washington all these years, or they have been so brainwashed as to act like obedient zombies in the hands of the moneychangers.

      The Taking of Interest Outlawed

      What is more important, the Supreme Law-Giver of the universe had decreed that the taking of interest or usury is wrong. In a land of plenty and abundance, and where there was a proper distribution of the goods and wealth of the nation, only the poor would have to borrow money. He would be the exception, rather than the rule. And in Lev. 25:35-37 the Law of the Lord declares:

      “If thy brother be waxen and poor, and fallen into decay with thee; then
      to shalt relieve him (not take advantage of him) …that he may live with
      thee. Take no usury (interest) of him, or increase: but fear thy God; that
      thy brother may live with thee. Thou shalt not give him thy money upon
      usury, nor lend him thy victuals for increase.”

      But have the preachers cried out against the violation of this law? The fact is, more often than not they and their churches are part and party to the whole iniquitous system. They see no wrong in it. They even ask you to loan them money and they offer you a sizeable interest rate for the use of it. Apparently they have never read
      Proverbs 28:8 which reads:

      “He that by usury and unjust gain increaseth his substance, he shall gather it
      for him that will pity the poor.”

      And the next verse reads:

      “He that turneth away his ear from hearing the law, even his prayer shall
      be an abomination.”

      Need I say more? It should be abundantly clear in the light of the truths we have set forth, just why our country is in a bind, and our people are suffering from bondage, enslavement, and privation. The time is long past due for Congress to come to its senses and make reparations to the American people for the multitude of wrongs they have heaped upon them. And with the end of the age upon us, and the Kingdom of Heaven at hand, our lawmakers have no choice, but to repent of their sins and get back to God and His law in our national life. That is, they have no other alternative. It is just a question of what it will take to wake them up and turn them back to God.


      Originally Published in The National Review

      • Daniel, thank you for sharing your thoughts. As a young man in my thirties, I’ve been frustrated by my Church leaders dullness of spiritual perception to properly understand, valuate, and respond to the issue of usury. I feel a sense of comfort in hearing your critiques and especially the call for Christian leaders to speak out as a means of holding our elected officials accountable. I’ve been very frustrated with this from the Church of my youth and what I perceive of Christians at large, with respect to Bush’s legacy, especially since this was an important demographic in his election.

        I’m encouraged by the discussion and to see “iron sharpening iron.” This Proverb is a wonderful definition of manhood and friendship.

        Before I address your specific comments, I’d like to make a few general comments of the immediate context (i.e. Anthony and Dick’s conversation).

        I am afraid my friends here are not accurately defining the problem, and while they have reached some consensus, more investigation and a deeper understanding is required. The definition of the problem and assumptions related to it need to be sated with greater clarity and a deeper understanding of the core issues.

        This entire discussion is off base.

        For it does not go back far enough historically and is based on a misconception of usury.

        There are two sides to the coin of usury: (1) debt and (2) interest.

        Money created as debt will always be deflationary for at the termination of the contract the principle is destroyed.

        Any discussion, therefore, that still includes “Credit” as a solution doesn’t understand the depth of the problem.

        Even slight misunderstanding “usury” and “money” gives the most subtle beast of the find room for infiltration and deception.

        Looking to Christ is important for he, himself, overthrew the moneychangers and declared “make not my Father’s house a house of merchandise.”

        With respect to the parties responsible, it must be acknowledged that contracts have two parties. If the people refused to borrow from the lender the lender would have no power over them. “Get up, stand up, stand up for your rights.”

        Your voice is great, in terms of holding parties accountable. While Congress has a responsibility, and so does Christian ministers. But we can’t blame them, really. This is supposed to be a government of the people, by the people, for the people. The Constitution, although imperfect, was sufficient to allow the people to succeed in this endeavor. They have not discharged the duty and absolve themselves of the responsibility.

        The general problem in Christianity is a lack of dialogue and too much top/down preaching. Not enough male friendships and too much theological/ intellectual servitude. Jesus called it the “traditions of your fathers.”

        It is through blaming others that we fail to take up our individual and collective responsibilities. We need to own our own story and overcome our internal shame, first. Then we can speak from a sense of compassion.

        Compare the song by Tool: “Schism.”

        I hope you find my thoughts helpful to think about these problems.

        • Comments were traded today at Rasha Foda’s Facebook page. The comments are directly connected with your reply of today. Rasha Foda tagged one of my replies to appear separately at their page. Using a plural reference to Rasha Foda is in compliance with postings of theirs in which the plural was used. The Facebook page is

          Here is the discussion:
          “Daniel Krynicki – “The only political battle worth promoting is twofold. Sever both a carotid and jugular simultaneously. Outlaw usury with creation of money as a public function.

          You may think an elected official identifying the symptoms of this disease I call usury capitalism can somehow begin the process of healing our land. But elected officials do not make and interpret our laws. Corporate lobbyists do that for them. And Wall Street has a several legions of lobbyists also.

          After all, they create all our money at interest. They also channel money as loans into their anonymously owned shell corporations from which they do whatever they want politically without divulging their involvement.

          They are much more sophisticated at political maneuvering than activists realize. Until the people go for the severing of at least two main powers, nothing under the sun will change.

          Another thing some people think will help us is the full Glass-Steagall that FDR gave us. Well weren’t the Wall Street lobbyists fully capable of having Republicans dismantle it in 1999 with a Democrat signing the bill? It was the Financial Services Modernization Act of 1999. Did Glass-Steagall prevent them from doing this?

          Moses wrote in Exodus 22 and in Leviticus 23, “No domestic usury is allowable”. Yet not one economist I know of like Zarlenga and even Bill Still is contemplating a usury free domestic economy. With the myriad of federal agencies created during the 1930s as an example of what a good government can do, exactly what is holding America back from outlawing usury and making money creation a public function?

          Go Figure.” — Daniel Krynicki

          “James Andrew Rovnak – “The Creature from Jekyll Island” by Griffin

          “Daniel Krynicki – Everyone including Griffin, Ron Paul, the Austrian School, Stephen Zarlenga and Bill Still desire to end credit. But did they ever view the good that credit does when the money supply is expanded with it? What if credit should be administered publicly and usury free through a nationally chartered agency of the Treasury? Simultaneously with usury free public credit, all usury free legal tender currency emissions by the same agency can only be issued to pay for the operational costs of all levels of government and public infrastructure. Where then will be need for any taxes but one to balance the money supply with the economy? What then happens to inheritance taxes, income tax, property tax, toll road taxes and sales taxes? One tax on increase in estate value to balance the money supply with the economy, that is all that is needed. This was the model Moses presented 3,450 years ago in Exodus and Leviticus.

          I purchased Griffin’s book long ago. I have also looked into Ron Paul’s “End the Fed”. Neither identifies usury as something that should be outlawed. As far as I’m concerned, they both miss the mark by never considering usury free economics even though they all make good points in their theses.”

          You mentioned in your post about the need for laws. Isn’t that exactly why the Torah was committed to writing, as a national Constitution for ancient Israel? If Moses was directed by God to institute a national government by God, then we ought to believe that such a necessity goes without saying.

          The study of history indeed reveals that every turn which mankind has taken has always been done ignoring the divine laws.

          Daniel Krynicki

  2. The punishment of stoning must be taken in the context that two or three eyewitnesses had to provide testimony in order to carry the weight of conviction. Modern jurisprudence lacks this requirement for conviction. Again, mercy was also an option.

    You wrote, “Careful, Daniel, a little knowledge”. This is why one of full maturity should be cautious enough to reference the entire Bible as I mentioned with the verse from Micah. All mercy and no justice makes for an empowered criminal element. If we don’t first seek justice for all, including justice against the violators who teach usury is okay, we keep dooming ourselves to making the same mistakes over and over.

    Circumcision has not been repudiated. One might say that it has been replaced with circumcision of the heart now as a requirement. But OT circumcision is still allowed, but not a requirement.

    Some of the books you may count as Scripture have spurious historical data that conflicts with the 66 books that are in harmony. If you want to read these spurious book, fine, there were even more written in NT times that are in conflict with the Apostolic set counted as Scripture. All of these were preserved by the clergy of the Greek Orthodox Church in a direct line of transmission back to the second century AD.

    Finally, we get to the heart of the argument against SC.

    Who sets interest rates? As soon as the population begins receiving national credit dividends no strings attached, to what level will interest rates rise? You may think that borrowing may evanesce upon inauguration of SC. It may for a time, but if borrowing does not stop, and with bankers still creating our money supply, expecting bankers to sit back and allow money to be plentiful is like living in dreamland. Most in the labor class will assuredly need to borrow for a home and a car anyway. Professionals like dentists and doctors will always need borrowed front capital to hang up their shingle. The high cost of education in some nations is not a problem; it is free to the student; but here in America it is not free and it is a serious problem. Will not the money creators simply direct their elected puppets to ignore clamors for lower interest on loans? Will prices correspondingly reflect the interest rate increases? With the usury paid on national debt and bank credit estimated to presently be a 40% to 50% component in all prices of goods and services, this dividend will open the door for higher rates and thus simply drive prices higher. Remember, Douglas had answers for all the naysayers of dividends for the people. But who controls all the elected officials? It certainly isn’t Douglas’s followers. It’s the money creators who own the lawmaking process.

    Insteading of struggling for something that when attained may produce other side effects that could be even worse, why not aim our sights at the roots of their power, money creation and usury? Outlawing usury is the Bible solution.

    If we would study the actual Biblical teaching against usury, it might be possible to attract a large enough coalition that would demand of our elected officials that they follow the true Christian position. Once the money power is broken, you could then press for your project of SC. Usury must come first.

    • “Which of you, if your son asks for bread, will give him a stone? Matthew 7: 9

  3. Peter Dul permalink

    do you have a succint proposal for monetary reform (I assume you do not consider Positive Money’s proposals go far enough) that could be put forward to a country. I should welcome an email from you

    • Yes, here it is. Below the article you’ll find some associated links for further study:

      • The SCers, the followers of Maj. Clifford Hugh Douglas, never did satisfy the arguments I made against giving dividends to the slothful and morally degenerates. The argument is still sound that something to do can be found for everyone who is able to work. For these, a stipend should be provided. I’m still against dividends, escept to those who have attained retirement whether disability or age. But Charity for widows, fatherless, handicapped and political asylum seekers is something that cannot be neglected.
        I did a brief review of Margrit Kennedy’s booklet. She started out great; but her conclusion fell apart leaving money in the hands of the same projectors who have controlled it since before the Bank of England was established.
        Your “More On Social Credit And A Letter By Dick Eastman” shows promise. It identifies some desirable objectives. But as with all reformers, it does not give the people a clear direction as to how these objectives can be accomplished.
        I suspect your three point plan contains a clue for this: “3) democratize credit allocation, so no bankers nor technocrats can direct the economy.”
        Our main obstacle today remains: The political end of present economic control is directed by the money creators. The money creators also own the media. Education of a large percentage of the population will be mandatory for any hope of success. Monetary reformers are few in number when compared with the general population at large. Unless the presstitutes rebel against their masters, that general population at large will remain ignorant of the facts.

        • Margrit Kennedy doesn’t have to justify allowing for disbursing social credit to all people. The right to life is unalienable; it is bestowed upon us by our Creator — not by any other man or institution. If you don’t believe in God, then it is a natural law: the right of self preservation inheres and is unalienable to every man.

          • Life, liberty and private property ownership, here we have three fourths of our American Constitution enshrining this only as the objective for which our government could obtain consent of the governed. The missing fourth neglected the method by which an antidote for economic oppression and tyranny could also be achieved. Even studying Jefferson from his writings of 230 years ago we can learn the American founders had as many economic problems as we have today. Jefferson called bankers swindlers and shavers.

            This is where we come in today. Anthony’s number 3) plank is the place where we must continue the progress made by the American founders: “democratize credit allocation, so bankers nor technocrats can direct the economy.” While democracy is really nothing more than mob rule, I can agree with this provided some qualifications are first understood. And even more than this, it still remains incumbent upon a government of, for and by the people to also create our legal tender money supply, not just credit.

            Those of you who claim that the right to live is unalienable are incorrect in this assumption.
            There is only one authority to reference for any claim offered that appeals to a Creator. If a Creator indeed exists, He has communicated to us through the written records of the Bible. Christians are told in the New Testament that the Mosaic Law and the Prophets are to be implemented through the government of man. We are thus compelled to support our position by this authority that He also visited the earth some thirty five hundred years ago to establish a national constitution as an example for us.

            In the book of Genesis the story of Noah teaches us that we are to be subject to government authority by man. The authority to punish criminals was given sanction , even to the extent of taking of human life for egregious crimes such as murder and rape, but only at the confirmation of at least two eyewitnesses. The right to life therefore is contingent upon observing of the commandments.

            As for the right to self preservation, this concept speak for itself. It is incumbent upon every person to see to this for themselves. For this statement we can find many Biblical sayings which prove that slothful, chronically unemployed and criminals should not get a subsidy from government issued money.

            I suspect that many who support dividends to everyone cannot bring references from Biblical citations to support their theories. Did CH Douglas ever bring up these citations?

            Most important is overturning completely the Ponzi Scheme nature of lending at interest.

            “Economics is Not Science”
            Most people do not grasp why economic panics, recessions and depressions continually occur at regular intervals. The human mind tends to ignore confusion. People think the crashes are attributable to natural causes. Thus, most people do not analyze financial conditions for what they are. Here then is the real syllogism needed for the study of economics.

            (A) Money = (A) Currency

            (A) Money = (B) Credit

            Here we must qualify that over 90% of the business world accepts credit.
            It works well as money

            (A) Money = (C) Legal Tender Currency

            But (B) Credit ≠ (C) Legal Tender Currency
            Yet both of them equal (A) as money or currency.

            Here is the Identity Theorem from Algebra:
            If A = B and B = C, then A = C.

            We see here that the ?science? of economics does not follow the rules of mathematics at all. This is how they keep people confused. The universities teach that economics is some sort of science, but they do not reveal that they are not following the rules of mathematics as the real sciences do. The economists are disguising their pseudo-science in the universities with an aura of respectability. In reality, they teach their own version of the magician’s illusion.

            We can loosely say that the currency stream (or the M1 money supply) consists of both legal tender currency and credit. Thus, confusion persists for some when we point out that credit is deflationary. It is so because it assists the money creators in transferring legal tender currency into the accounts of the money creators through the interest they charge for this credit. And they get this windfall from honest laborers who must earn their legal tender currency. The money creators issue both our legal tender currency and credit. They continually rake in interest that is comprised of legal tender currency for credit they issue to consumers. To compensate for the removal of this legal tender they also issue more legal tender currency as debt to their host nations through national bond issues from treasury departments. At present they are wielding a double edged sword. Both sides are against honest labor by 1) collecting usury for the legal tender they issue in exchange for Treasury-Bonds, and 2) collecting usury on the credit they issue directly to consumers. It always was a Ponzi-Scheme.

            As for Margrit Kennedy, her booklet “Interest and Inflation Free Money” started very good identifying interest as the problem. She did not suggest social credit as her answer. Her answer would leave private money creators in control using demurrage as the solution. Demurrage is negative interest; but it is still interest. I’ts why I disagree with this answer. Seriously now, could not a National Currency and Credit Administration serving as an arm of a government of, for and by the people issue both currency and credit interest free and with no fees like demurrage?

            • In the Bible it does not qualify who we should not feed when they are hungry, give drink when they are thirsty clothe when they are naked or visit when sick or in prison. Matthew 25:35 Furthermore, we as Christians commanded to love our enemies Matthew 5:44 and others as ourselves Mark 12:30-31. If Government is to be Christian, it must serve all equally according to God’s commandments. This is not to say that criminals should not be punished, but that even they have fundamental unalienable rights to foregoing in prison.

              Regarding how unalienable rights are derived from self preservation, they must be viewed from perspective of enlightened egoism.

              • Yes, the Christian Bible teaches those things. So we should indeed give sluggards and criminals food and warm shelter if and when they need it. But there are other qualifications listed therein that enable the righteous government to also meet out justice when it is called for.

                As far as enemies go, should we be giving them so much of our own substance that it will endanger our own ability to subsist? This same Christian Bible also teaches that all are allowed in self defense to meet with deadly force an intruder into one’s house.

                Nowhere in the Christian Bible is it written that a righteous government is to give a free social credit dividend to everyone.

                1 Timothy 5:8, 18
                “But if any provide not for his own, and specially for those of his own house, he hath denied the faith, and is worse than an infidel.
                For the scripture saith, Thou shalt not muzzle the ox that treadeth out the corn. And, The labourer is worthy of his reward.”
                2 Thessalonians 3:10-13
                “For even when we were with you, this we commanded you, that if any would not work, neither should he eat. For we hear that there are some which walk among you disorderly, working not at all, but are busybodies.
                Now them that are such we command and exhort by our Lord Jesus Christ, that with quietness they work, and eat their own bread.
                But ye, brethren, be not weary in well doing.”
                2 Timothy 2:6 “The husbandman that laboureth must be first partaker of the fruits.”
                2 Timothy 3:13-17 “But evil men and seducers shall wax worse and worse, deceiving, and being deceived. But continue thou in the things which thou hast learned and hast been assured of, knowing of whom thou hast learned them; And that from a child thou hast known the holy scriptures, which are able to make thee wise unto salvation through faith which is in Christ Jesus. All scripture is given by inspiration of God,
                and is profitable for doctrine, for reproof, for correction, for instruction in righteousness: That the man of God may be perfect, thoroughly furnished unto all good works.”
                Hebrews 2:7 “Thou madest him a little lower than the angels; thou crownedst him with glory and honour, and didst set him over the works of thy hands.” Hebrews 6:12 “That ye be not slothful, but followers of them who through faith and patience inherit the promises.”
                Romans 12:11 “Not slothful in business; fervent in spirit; serving the Lord;” Matthew 25:26 “His lord answered and said unto him, Thou wicked and slothful servant, thou knewest that I reap where I sowed not, and gather where I have not strawed:”
                Ecclesiastes 10:18 “By much slothfulness the building decayeth; and through idleness of the hands the house droppeth through.”
                Proverbs 21:25 “The desire of the slothful killeth him; for his hands refuse to labour.”
                Proverbs 6:6 “Go to the ant, thou sluggard; consider her ways, and be wise:” Proverbs 6:9 “How long wilt thou sleep, O sluggard? when wilt thou arise out of thy sleep?”
                Proverbs 10:26 “As vinegar to the teeth, and as smoke to the eyes, so is the sluggard to them that send him.”
                Proverbs 13:4 “The soul of the sluggard desireth,
                and hath nothing: but the soul of the diligent shall be made fat.”
                Proverbs 20:4 “The sluggard will not plow by reason of the cold; therefore shall he beg in harvest, and have nothing.”
                Proverbs 26:16 “The sluggard is wiser in his own conceit than seven men that can render a reason.”
                Proverbs 12:24 “The hand of the diligent shall bear rule: but the slothful shall be under tribute.”
                Proverbs 12:27 “The slothful man roasteth not that which he took in hunting: but the substance of a diligent man is precious.”
                Proverbs 15:19 “The way of the slothful man is as an hedge of thorns: but the way of the righteous is made plain.”
                Proverbs 18:9 “He also that is slothful in his work is brother to him that is a great waster.”
                Proverbs 19:15 “Slothfulness casteth into a deep sleep; and an idle soul shall suffer hunger.”
                Proverbs 19:24 “A slothful man hideth his hand in his bosom, and will not so much as bring it to his mouth again.”
                Proverbs 22:1 “The slothful man saith, There is a lion without, I shall be slain in the streets.”
                Proverbs 24:30 “I went by the field of the slothful, and by the vineyard of the man void of understanding.”
                Proverbs 26:13 “The slothful man saith, There is a lion in the way; a lion is in the streets.”
                Proverbs 26:14 “As the door turneth upon his hinges, so doth the slothful upon his bed.”
                Proverbs 26:15 “The slothful hideth his hand in his bosom; it grieveth him to bring it again to his mouth.”

                • Unalienable rights are not revocable and the Bible nowhere contradicts this. The passages you site are condemnations of sinful behavior, not an exhortation for man to judge people unworthy of life. You may fancy otherwise, but realize that this assessment is unjust and tyrannical. You may like a society run by this sort of tribunal but most would not.

                  • During this epoch in which governments of men are commissioned to punish criminals, they are not judging them unworthy of life. God makes his sun to rise on the just and on the unjust. But woe are we when the criminals go unpunished. With God’s perfect laws in the commandments, statutes and judgements we have been given perfectly clear instructions as to their administration. Even the New Testament continues with the keeping of His commandments.

                    The criminals in government largely go unpunished because we have given this pathological element of humanity control over the creation and manipulation of our currency and credit. If we look to solve this problem with another interpretation that violates the directions He has given us, we will simply be keeping the doors open for more abuses with the incorrect solutions that are contrary to God’s laws.

                    A wise economist by the name of Walter Williams out of George Mason University long ago wrote, “Scum Also Rises to the Top”. While we are in this epoch of human government, it is our responsibility to administer God’s righteous laws, all of them. Picking and choosing will only lead to more injustice. So it’s time to follow the apostle Paul’s advice in 1 Corinthians 12:28 and recognize that understanding of governments is one of the gifts of the Spirit. “And God hath set some in the church, first apostles, secondarily prophets, thirdly teachers, after that miracles, then gifts of hearings, helps, governments, diversities of tongues.”

                    The Biblical prohibition of all usury is now well established since the writing of Michael Hoffman’s “Usury in Christendom: The Mortal Sin that Was and Now is Not” in 2013. It has been the violation of this prohibition that has upended civilization’s control of government. They would never have had this ability to oppress the people if the people had not given them the power through usury. What we are experiencing today is simply the natural outcome of allowing usury. Outlawing usury must be our primary goal. Can we do this without divine intervention? Do you remember what the people of ancient Israel told Moses at Mt. Sinai? “All that the Lord has spoken we will do”.

                    Matthew 19:17
                    Appendix D
                    “The New Testament Commandments”
                    And he said unto him, Why callest thou me good? there is none good but one, that is, God: but if thou wilt enter into life, keep the commandments.
                    Mark 12:29
                    And Jesus answered him, The first of all the commandments is, Hear, O Israel; The Lord our God is one Lord:
                    Luke 1:6
                    And they were both righteous before God, walking in all the commandments and ordinances of the Lord blameless.
                    Luke 18:20
                    Thou knowest the commandments, Do not commit adultery, Do not kill, Do not steal, Do not bear false witness, Honour thy father and thy mother.
                    John 14:15
                    If ye love me, keep my commandments.
                    John 14:21
                    He that hath my commandments, and keepeth them, he it is that loveth me: and he that loveth me shall be loved of my Father, and I will love him, and will manifest myself to him. John 15:10
                    If ye keep my commandments, ye shall abide in my love; even as I have kept my Father’s commandments, and abide in his love.
                    Acts 1:2
                    Until the day in which he was taken up, after that he through the Holy Ghost had given commandments unto the apostles whom he had chosen:
                    1 Corinthians 7:19
                    Circumcision is nothing, and uncircumcision is nothing, but the keeping of the commandments of God.
                    1 Corinthians 14:37
                    If any man think himself to be a prophet, or spiritual, let him acknowledge that the things that I write unto you are the commandments of the Lord.
                    Colossians 4:10
                    Aristarchus my fellow prisoner saluteth you, and Marcus, sister’s son to Barnabas, (touching whom ye received commandments: if he come unto you, receive him;)
                    1 Thessalonians 4:2
                    For ye know what commandments we gave you by the Lord Jesus.
                    1 John 2:3
                    And hereby we do know that we know him, if we keep his commandments.
                    1 John 2:4
                    He that saith, I know him, and keepeth not his commandments, is a liar, and the truth is not in him.
                    1 John 3:22
                    And whatsoever we ask, we receive of him, because we keep his commandments, and do those things that are pleasing in his sight.
                    1 John 3:24
                    And he that keepeth his commandments dwelleth in him, and he in him. And hereby we know that he abideth in us, by the Spirit which he hath given us.
                    1 John 5:2
                    By this we know that we love the children of God, when we love God, and keep his commandments.
                    1 John 5:3
                    For this is the love of God, that we keep his commandments: and his commandments are not grievous.
                    2 John 1:6
                    And this is love, that we walk after his commandments. This is the commandment, That, as ye have heard from the beginning, ye should walk in it.
                    Revelation 12:17
                    And the dragon was wroth with the woman, and went to make war with the remnant of her seed, which keep the commandments of God, and have the testimony of Jesus Christ. Revelation 14:12
                    Here is the patience of the saints: here are they that keep the commandments of God, and the faith of Jesus.
                    Revelation 22:14
                    Blessed are they that do his commandments, that they may have right to the tree of life, and may enter in through the gates into the city.
                    Matthew 15:9
                    But in vain they do worship me, teaching for doctrines the commandments of men. Matthew 22:40
                    On these two commandments hang all the law and the prophets.
                    Mark 7:7
                    Howbeit in vain do they worship me, teaching for doctrines the commandments of men. Mark 10:19
                    Thou knowest the commandments, Do not commit adultery, Do not kill, Do not steal, Do not bear false witness, Defraud not, Honour thy father and mother.
                    Matthew 8:12
                    But the children of the kingdom shall be cast out into outer darkness: there shall be weeping and gnashing of teeth.

              • Here was Social Credit authority Wallace Klinck’s answer to the “Christian foundation” of social credit and I agree:

                A correspondent has responded to my recent comments relating to Social Credit philosophy and policy by opining that neither the Catholic nor Protestant churches have defined their positions very clearly regarding these matters. I have replied accordingly:

                Precisely, …….—not well-defined at all. This why C. H. Douglas expressed the belief that the Incarnation is probably the greatest issue which confronts Social Crediters and Christians. How often do you hear “Christian” priests and/or pastors mention the Kingdom as being “within us”, the parable of the “lilies of the field”, “the beasts of the field”, “the fowl of the air”, “the fish of the sea”, etc.?—how they toil not yet God provides for them. Or, “the rain falls upon the just and the unjust?” Or, the instruction to “toil not, ye of little faith, for God knows you have need”, etc.? I feel that the Christian Church has failed the flock by rendering the Christian message so as to be of spiritual content only—by separating the soul from the body and designating or implying that the former is good and the latter is evil—as per the” Manichaean Heresy”. Douglas seemed to sense profoundly this failure to apprehend the nature of the fulness of Life—indeed this actual denial of the fulness of Life. “I came that ye might have Life—and Life more Abundant.” Is it any surprise that there has been a great “falling away” from the Faith?

                On the theory of Rewards and Punishments, Douglas wrote: (Social Credit, Rev. Ed. 1933)

                “Closely interwoven with the classical and moral theory of society, is the theory of rewards and punishments. So familiar is this idea, through education and experience, to most people, that it is only with some difficulty that they are brought to realise that it is an artificial theory and not inherent in the nature of things; that the statement “be good and you will be happy” does not rely for any truth it may possess on any fixed relation between the abstract qualities of goodness and happiness, but upon the fixed relation of cause and effect between certain actions to which the title “goodness” may arbitrarily be applied, and their reactions which we term “happiness.” This may appear (10) to be word splitting, but when we realise that the whole of the industrial, legal, and social system of the world rests for its sanctions on this theory of rewards and punishments, it is difficult to deny the importance of an exact comprehension of it.
                “For instance, the industrial unrest which is disrupting the world at the present time, can be traced without difficulty to an increasing dissatisfaction with the results of the productive and distributing systems. Not only do people want more goods and more leisure, and less regimentation, but they are increasingly convinced that it is not anything inherent in the physical world which prevents them from attaining their desires; yet captains of industry favourably situated for the purpose of estimating the facts, are almost unanimous in demanding a moral basis for the claim put forward. That is to say, those persons whose activities at the present time are chiefly concerned with restricting the output of the economic machine to its lowest limit, while yet asking each individual to produce more, are determined that not even the over-spill of production shall get into the hands of a semi-indigent population, without some equivalent of what is called work, even though the work may still further complicate (11) the problem with which these industrial leaders are concerned. Nor is it fair to say that this attitude is confined to the employing classes. Labour leaders are eloquent on the subject, and with reason. The theory of rewards and punishments is the foundation stone of the Labour leaders’ platform, just as it is of the employer whom he claims to oppose. The only difference is in respect of the magnitude and award of the prizes and as to the rules of the competition for them. To any one who will examine the subject carefully and dispassionately it must be evident that Marxian Socialism is an extension to its logical conclusion, of the theory of modern business.” (12)
                Wally Klinck

        • The simple answer to your question, pipefighter2, is that your basic premise is false: there is not, thanks to technological developments, sufficient meaningful work in the formal economy to provide everyone with a job. You want, on account of some puritanical obsession or OT philosophy (so-called), to control human purpose. Social Credit believes in freedom, not control. Social Credit recognizes, in line with the NT, that work or moral discipline is not the purpose of the economy. The purpose of the economy is to provide goods and services, as, when, and where required, with the least amount of resource consumption and human labour. When you confuse a means (work) with ends (provision of goods and services), you have embraced the very essence of sin.

          Yes, under SC people may not make the best or a wise use of their dividends. Some people may be slothful or spend their lives in a drunken stupor. But they are responsible for their free choices, just like everybody else and they will have to face the natural consequences of their actions. The difference between the present situation and SC is that while we currently pay in taxes and public debts to provide many such people with employment insurance and welfare, etc., we would no longer be burdened with supporting them. The Social Credit dividend is financed by the creation of debt-free credit and would replace such redistributive social programmes.

          • The two most pressing needs in our present world are 1) the outlawing of usury and 2) honest government.
            Number two is unobtainable as long as all money is created as debt because the money creators, who operate the biggest Ponzi Scheme the world has ever witnessed, also own our elected officials. It appears to me that social credit attempts to solve these wrongs in the world without striking the axe to the root.

            Moses presented us with a very simple economic model as a part of the institution of ancient Israel’s national laws which, if followed, would have avioded our present state of misrule which results from objectifying money. There was only one tax with usury outlawed. There was no oppression of labor under Mosaic Law. In America and in Europe the oppression of high taxes on the individual’s property and labor would not exist if the social agenda and government expenditures were financed with direct legal tender emissions.

            Since we already have much federal social financing going on here in America for those less fortunate, we should concentrate on abuse of the system before embarking on some innovations that have numerous Biblical precedents discouraging them. The world is presently rife with criminal activity. We can now include the lying political class among the criminal pathology.

            As a further sense of right thinking, many of us whose lives consisted of working at a career and raising a family will consider that it wasn’t easy pickings. Those with whom I worked would disagree with giving handouts to the slothful or criminals.

            1 Timothy 5:8, 18
            “But if any provide not for his own, and specially for those of his own house, he hath denied the faith, and is worse than an infidel.
            For the scripture saith, Thou shalt not muzzle the ox that treadeth out the corn. And, The labourer is worthy of his reward.”
            2 Timothy 2:6 “The husbandman that laboureth must be first partaker of the fruits.”

            • On the contrary, Social Credit (both the economic and the political theory) is the only way of resolving the world’s problems from the root. But so few people have ever heard of Social Credit and for some strange reason many of those who have heard of it consistently misunderstand it.

              If you fill the price-income gap with debt-free credit (and that gap is not primarily due to usury but to cost accountancy conventions as these apply to real capital), then there is no need for compensatory public, corporate, and consumer debts that are chronic and ever-increasing …. hence there is no interest that can be charged on any of that debt and the greater bulk of what you call usury is eliminated as a natural by-product of dealing properly with the price-income gap.

              Yes, the monopoly of credit is the basis for a political monopoly or the centralization of power in fewer and fewer hands leading to world government – Douglas was well aware of this and condemned it over and over again as anyone with any exposure to his writings would be aware. But here again, Social Credit breaks the monopoly of credit and by decentralizing credit and hence economic power to individuals, the monetary reform proposals of SC would, all by itself, do much to neutralize the NWO project. Combine this with the political reforms Douglas suggested and we will have the thing beat.

              As for your other observations, Social Credit would result in the elimination of income tax, property tax, and many other taxes. The tax load would be reduced considerably. Social agenda and government expenditures (which would be less needed under SC) should not be funded by direct government spending because this gives the government control over the projects and purposes for which public money will be spent. Government should only do what the people agree to pay the government to do.

              Secondly, it is at times like this that I am very grateful that I am neither an American nor a Protestant. Heavens above! If you give people dividends, which are very much supported by the New Testament (the multiplication of the loaves and the fishes, the injunction to toil not, salvation by the unearned gift of grace, not by works as ends in themselves, the rain falling on the just and the unjust), you do not need to rely on government funding of social programmes for the “less fortunate”.

              The dividend is not a handout. It is what it says it is … a ‘dividend’. It is a share in the profit of society justified by the fact that each individual is rightly regarded as a shareholder in his economic association and as an heir to society’s cultural heritage. Don’t throw away the cultural heritage, like an Esau, because you had it hard working at a career and raising a family and which forces you to ask why should anyone else have it easier? Talk about envy and small-mindedness. “Yes, instead of raising everyone up, by all means let’s make everyone equally oppressed.” It is thinking like this which holds back the progress of civilization.

              If someone is a criminal he would be in prison and he could be charged by the state with the costs of his upkeep, which he could pay using his dividend. This would certainly be an improvement over charging you and me to pay for his incarceration in our taxes.

              As for the slothful, we have people who are slothful right now (both working and not working), so what? The dividend isn’t given to people for being slothful, it is given to them because they are owed it in strict justice. What they do with it can be good or bad like every other talent and gift we have received. God does not refuse to give gifts, such as the gift of life, simply because people may make a bad use of it.

              • You have made some very good points here. They should be examined carefully and perhaps revisited if and when the time is ever right. If this SC is eventually approved by the Lord Himself, who would any of us be to object.

                But I presently have a couple of objections to make on the basis of what has been revealed in the existing Bible.

                It is not acceptable that anyone should use some Bible precepts to prove an innovation acceptable without referencing the remainder of precepts. You have cited the two precepts of mercy and grace in some of your analogies. There is a third pillar of justice that you omit. It is not small-mindedness that impels a Bible believing Christian to shrink away from SC; it is rather the desire for justice. Micah wrote about 2,850 years ago, “He hath shewed thee, O man, what is good; and what doth the LORD require of thee, but to do justly, and to love mercy, and to walk humbly with thy God?” You have loved mercy. But you omitted the justice, and therefore have not walked humbly. The justice first demands elimination of the criminal Ponzi. Humility will impel one to embrace the whole of the Bible.

                God gave Moses a system of national laws that were designed to administer all three pillars of Micah’s one short verse. It’s in there; and one cannot pick and choose only those that support CH Douglas’s monetary innovation. We know for sure that all domestic usury was prohibited in the Mosaic Law. It is here where we must begin.

                Look at the Jubile reformers out in Colorado. Every Friday they are presenting live webinars for Jubile Reform without really knowing that they are yet subject to the laws of this land. They will no doubt lead many to renege on their debts and thus open themselves up to forfeitures and foreclosures of property. Peter and Paul both admonished followers of Christ to observe the laws in force whereever they lived.

                The Christian Bible is a very large compendium comprised of sixty-six books (over 1,100 pages). Modern Bible scholars agree that its contents are consistent throughout. Should we ignore the parts you want us to ignore?

                But at least you are at least purposefully attempting to change the monetary laws, knowing they are unfair, unjust and wicked,. While the Jubile Webinar reformers in Colorado are perhaps leading many down an irresponsible path rebelling against the laws of the land.

                If you would set your sights first on battling against the money power’s evil system of usury capitalism, we could then find more common ground.

                • Thank you for your reply and for your consideration of Social Credit. Yes, indeed, if SC is approved by the Lord Himself, who would any of us be to object?

                  A few observations: the complete Christian Bible is made up of 73 books, not 66 and there are plenty of things that were taught or practised in the Old Testament that were repudiated in the New (such as circumcision, stoning for adultery, ritual laws of various types), and thus its contents are not as consistent as you seem to think. This means that Christians should always read the Old Testament in light of the New, rather than doing the opposite (which is what a lot of Prots, so-called ‘Bible-believing’ Christians tend to do). Careful, Daniel, a little knowledge can be a very dangerous thing … yet another reason why the Bible needs an authoritative interpreter and should not be treated as a stand alone document that somehow dropped down from heaven one fine day (it didn’t). Otherwise every reader, aka ‘Bible-believing’ Christian, will believe himself entitled to take his own private interpretation as the correct interpretation of the divine Word …. there is a reason why Protestant sects, are, like the demons in the Gospel, legion and multiplying year by year, with each one taking on itself the authority to interpret the Bible in the way it would like and confusing its own voice with the voice of God.

                  In citing precepts of mercy and grace, I have not, ipso facto, rejected justice (and it is rather unjust and indeed uncharitable to accuse me of that). Quite the contrary, I would argue that justice also requires Social Credit. The financial system should, in strict justice, allow us to consume in full whatever we produce. The problem, at present, is that the financial system is not a honest system, it does not accurately reflect or register the physical economic facts. It does not monetize in full, in the form of consumer buying power, the volumes necessary to balance the price-values that are simultaneously generated by the industrial system. In its failing to correspond to the facts, we are all being cheated, we are all being treated unjustly by the financial system, and this, quite apart from any question of usury. Surely, you do not defend lies or systems that incorporate lies …

                  In any case, as I have already explained at length, dealing correctly with this first problem of injustice in the existing financial system, is likely, all by itself, to do away with the problem of usury. If any residual problems remain, they can be resolved along the lines I suggested here:

                  Regarding laws, unjust laws are no laws at all and have no authority. Truth is authority; authority is not truth. While it may be imprudent to disobey an unjust law, it is not immoral. In some cases, it may even be obligatory to disobey. If, for example, the law obliges you to worship the Emperor as a God, you, as a Christian, must refuse.

      • Hi Anthony,

        I read your piece on Mutual Credit and I think it is pretty good. I have two areas of concern though.

        The main area of concern is how this system can work to the benefit of all in a world that will likely need only 10% of the workforce to meet 100% of its production needs. Your proposal is fundamentally the same as proposed by Professor Frederick Soddy a century ago. Loans create money and repayment cancels it. If I have no income under your proposal, then I won’t get much money from loans. Under your proposals, there will still be a chronic shortage of money.

        The second area of concern is related to the blind spot that results from your obstinate refusal to recognize that even if all interest from loans is eliminated, then there is still a gap. For a simple example, let us suppose that only 10% of the workforce is working and that only 10% of the cost of production is comprised of wages, earnings and dividends and that this condition persists across many cycles of production. It is a mathematical certainty that 10% will not meet a 100% price. Under your proposals, these loans will be unpayable.

        This is where social credit comes in. It would simply give the 90% equally – not equitably – to ALL CITIZENS and let them vote with their purchasing power as to what will be purchased. This mechanism has some caveats though. You can’t print this money into existence without taking it our of existence at the same rate as production is consumed or you will have inflation. The answer to that is very simple. It is PRODUCERS who will do the borrowing of at least 90% of their costs of production – the part that the gap is comprised of – and as consumers buy up their merchandise, they use the sales revenue to pay off the debt to CANCEL this purchasing power.

        This is very close to what you have proposed but it deals with the problem that I don’t believe that – up until now – you have truly grasped.

        What do you think?


        • I don’t at all believe in any way that there will ever be a shortage of work Liam.

          Robotization is great, what is not so great is that the Robots are owned by a couple of clowns, who happen to own everything else too, and who consider people whose work is being replaced by Robots ‘useless eaters’.

          But, as we know, that’s only true because people consider it ‘reasonable’ the 90% are paying $10 Trillion in Usury per year globally on a $200 Trillion ‘debt’ that never should have existed in the first place.

          Should we have a well financed modern economy, all that would happen is that a lot of the dirty, boring and dangerous work can be done by the machines, while human beings will focus on more specialized, more artisanal, more creative work.

          There is so, so much work that is simply not being done, not because there are no people, or because there are no people that want the work done, but because the money lenders do allow it to be done, because they are the ones allocating credit in the economy.

          • Anthony, it all depends on what you mean by ‘work’. In the sense that most people use the term in the English-speaking world, ‘work’ is work in the formal economy or paid employment. There is most definitely a shortage of work of this kind as it stands (as per unemployment statistics), and this situation is only going to get worse as the economy becomes increasingly capital-intensive. Right now, many are predicting that within 20 years 50% of American jobs will be replaced by automation and artificial intelligence. Even now, I would venture that the greater number of existing jobs are either replaceable in this way or that they are useless, witless, redundant, and/or destructive and only exist because we need to distribute purchasing power to people so that they can have an income and the price-income gap can be filled. Most currently ’employed’ people should be unemployed and would be better off tending their gardens because what they do contributes little or nothing to the physical provision of needed goods and services. Their jobs are just a manifestation of the colossal economic waste and sabotage that is imposed on our economies because of the chronic deficiency of proper consumer purchasing power.

            Anthony, the economy does not exist for the purpose of providing people with employment. Employment is a means and not an end. If, thanks to technological development, we can provide ourselves with all of the necessary goods and services with fewer and fewer people employed in the formal economy, that is a sign of authentic economic progress and it requires an adaptation of the financial system so the chief benefit of that progress, i.e., increased leisure, can be distributed to the people as a reward (paid leisure) rather than as a punishment (unpaid unemployment). Social Credit’s National Dividend would allow for those individuals whose labour is no longer required by the formal economy to retain access to goods and services while simultaneously contributing something to the bridging of the recurring price-income gap. Note, the phenomenon that is responsible for throwing people out of work, i.e., the replacement of human labour by machine labour or real capital, is the same phenomenon which is chiefly responsible for the increasing gap between prices and incomes (unlike wage or salary charges, which withdraw from the economy just as much money as they inject into the economy as incomes, capital charges withdraw more money than they inject into the economy in the form of consumer incomes).

            Now, there is certainly all kinds of ‘work’ that can be done outside of the formal economy, much of it not connected with the production of goods and services in any conventional sense. By way of example, is studying another language for personal enrichment ‘production’? It is a form of work. In any case, under Social Credit people would be increasingly free to decide how to spend their time and some may CHOOSE to spend it in organic farming, or in craftsmanship, or in providing personal services outside of the formal economy to satisfy their own interests and/or as a way of supplementing their dividend earnings. Others may choose to spend their time in ways that have no possibility of being financially remunerative. In comparison with the type of monetary reform you have been promoting, Social Credit would therefore allow us to stop treating economic activities as if they were or should be the main focus of our lives (i.e., we don’t all have to work all the time). Economics could finally retreat and be replaced with cultural activities (I use this word in the broadest sense of the term) and spiritual practice as the main occupation of human beings. As Douglas said, Social Credit would enable us to set out of one type of civilization into a qualitatively different type of civilization …. hopefully the required metamorphosis will take place before it is too late.

          • As usual, you avoided addressing the point – the gap that remains. Oliver hit it square on point and you dismiss him too. Let me dumb it down for you. For everything offered for sale – goods or services, there are fundamentally 2 cost components – wages and everything else. Of everything else, they are fundamentally broken down into two components – raw materials and depreciable capital expenditure to support production. Let’s say it costs 100 to produce and of that 20 is paid out in wages. Let’s say that this price of 100 is the average cost of everything that is produced. It really doesn’t matter where the line is drawn. The fact is that there is a mathematically certain dividing line and NONE of the 3 cost components is zero.

            Let us also presume that in your perfect world, NO INTEREST is paid or charged at any point in the entire production or consumption cycles.

            Are you with me so far? OK, tell me. How will 20 pay for 100? Where will the other 80 come from in your Mutual Credit economy? If there is so little EFFECTIVE DEMAND purchasing power with with to buy the production, how will the huge mass of people doing unpaid work (i.e. all the things that are presently not getting done as you correctly pointed out but that nobody is willing to pay for) be able to buy what is being produced? How will those selling what is being produced be able to sell it and not go tits-up? You are assuming 100% employment and that is an easily proved false assumption. Technology is a LEVER that eliminates the need for human work. We call it automation and it is ACCEL=LERATING and indeed has been continuously accelerating for a few centuries now.

            Please answer just this ONE POINT. Don’t drag me into the weeds.🙂

            • If enough legal tender is emitted usury free continuously into the currency stream to pay for the expenditures of government and public infrastructure, and none is removed through taxation, it will continue to grow infinitely until a dime is extracted through taxation. Where then would be a gap?

              These people and contractors who get paid in US Notes will continuously cycle in new legal tender currency that stays in circulation unless it is taxed out of existence. Eliminate all taxation until it becomes necessary to balance the money supply with the economy.

  4. To Economists Everywhere,

    If Treasury Department issued US Notes (legal tender currency) to directly pay for government operations, public infrastructure and a multitude of social programs this currency would remain in the money supply unless it is taxed out of existence. If Treasury issues notes in this way, what need is there for taxation of any kind except to balance the money with the economy. Enough money and credit available usury free directly to the people and business would surely provide for a robust economy.

    Douglas wrote about a gap. Well a gap can be caused by the confluence of at least two or several factors. In conjunction with usury, taxation must also be taken into consideration as a factor for a gap. If sufficient currency and credit remained in the money supply without removing it through taxation, where then is a gap?

    Not one of them ever considered the simplest of all models codified 35 centuries ago by Moses that was to be used in ancient Israel. I suspect even the ancient Israelites failed to administer their laws according to the code. There would have been no need for the Master to overturn the tables of the moneychangers if they had kept it.

    Yet many write hundreds of pages with ideas of their own that completely ignore the Mosaic model that allowed for only one tax on increase and with usury outlawed. When we spend the currency into existence to pay for government, what need is there for taxes to pay for it?

    Another economist (quack) I have recently discovered at Facebook – The Real Occupy Wall Street went by the name of Henry George. I found the same idiotic rambling on by him in a long letter he wrote to Pope Leo XIII in Sept 1891. There is some good in this 107 page jeremiad, but not much.

    How is it that everyone keeps arguing about a gap that requires free money to all without ever addressing the basic need to pay for the high costs of criminal justice. When police and prosecutorial departments have a hard time funding their operations to apprehend and prosecute for the rampant crime, how can we not think of solving our more basic needs of security and good government first? Behind all this is the real problem of who creates our money at interest and the need for excessive taxation to finance our basic national needs?

    Note: A free PDF of Henry George’s 107 page letter to Pope Leo III is available at Its title is “The Condition of Labor”. It can easily be found by following Econ essays uploaded by Daniel Krynicki.

    • Does any of those refugee invaders care under what sort of banking and currency sytem they live? are they muslim enough to oppose credit system, bank notes ?

  5. It’s look interesting.But still i m confusing with the social credit can u please explain me little bit more.Thanks in advance

  6. How do you propose to democratize the allocation of credit? That question is to me the key unresolved question. Social credit equally to every citizen seems fair. I would add an allocation to every ethnoracial group if we are to tackle the so-called racial problem which is in reality an Anglo-Saxon ethnoracial problem and is much more than simply a Blackskin versus Whiteskin problem as the Black/White power-hungry cultural duopoly postulates and enforces via the controlled media.

    Behind the rising racial tensions and divisions there is an oligarchical “unseen” hand capitalizing on and promoting the turmoil for “divide and conquer” purposes.

  7. TO ALL GREEKS — Time for Bold Action — the EUB and EU are out to kill YOU with money sanctions in order to regain slavish debtor submission — here is how you will beat them

    The Greek people voted against austerity and the debt structure the European Central Bank, the International Monetary Fund, Greece’s International Creditors and the European Union governments were imposing. In retaliation these interests have inflicted upon Greece a policy of near total deflation, allowing only bare subsistence incomes at present prices and availability of goods foreign and domestic, prices which of course will not remain obtainable as producers no longer have the revenue to pay employees or to order new factor inputs. Make no mistake, Global Finance has declared total war against the people of Greece and the weapon they are using is as terrible and sure a mass killer and destroyer as any you can name outside of all out bombing of cities and villages. The Greeks must face this fact, maintain their resolve not to give in and, most important, respond with force that simultaneously will be a sufficiently aversive counter response that will make the EU aristocracy sorry that it chose to resort the economic terrorism of money sanctions yet also completely just and measured in the eyes of the world as an appropriate response to what the EUB and EU governments in the service of global creditors have done.

    Here is what Greeks must do — with the Tisparis government or a better one:

    1. To alleviate the immediate cash shortage in the household and business sectors, declare, in this national emergency, that all mortage payments, business loan payments to lending banks or international lenders be suspended for the duration of the crisis. And as part of that move the payments that are suspended will be either delayed with no additional interest or they will be payments that are forgiven and forgotten in they eyes of the Greek government depending on the duration of the money sanctions against Greeks.

    2. The government will, for the duration of this emergency (and perhaps permanently), stop taxing the people in Euros but will begin taxing the people with a money-like device called a “tax-payment coupon” or more precisely “a negotiable tax-paying coupon”. These coupons will resemble money and will have the value of one Euro in the payment of taxes according to the already existing tax rate that is already denominated in Euros. The government will allow these coupons — which will be called “Apollos” after the well known figure of ancient Greek beliefs. The government will provide to every citizen on their tax rolls an amount of the Apollo which people can spend into circulation exactly as they would a dividend of Euros that they had received. The government during the emergency will allow the Apollo the status of “legal tender” — which Greeks may spend at stores or in their transactions with each other — and to their employees and churches and charities. This substitute money, this negotiable (spendable, transferable) Apollo Coupon, will circulate freely and, because all Greeks will accept it because it allows them to buy things and to pay taxes, even dealers in foreign goods will accept them, because they can be used to buy Greek goods for which foreigners still have demand.

    3. Greeks must propose to Iran and Russia that these countries send their own currencies to Greece for free circulation as the international money of Greece. Iceland may also wish to join in such arrangements with Greece.

    Through these devices, especially through introduction of the Apollo Coupon, the Greek economy will be able to continue its market system.

    Let it be understood by all that the EUB and the EU governments are attempting to inflict mass privation, even death on large numbers of the Greek population through deflation. By doing this they have forfeited all right to consideration of prior contract. They have imposed a system on Greece –their money bought the media and the salesmen who sold the EU system and their money bought the legislators and bankers who set it up and made the decisions. Now that the system has hurt the Greeks they are now awake and paying attention and are ready to take back control of their own country and its systems of money and lending. It is a matter of survival now that they do so.

    No one in the present Greek govenment is thinking like this — but the Greek people are thinking like this. They understand what is at stake. They now feel the pinch of hunger and fear from an economy intentionally ground to a halt by international finance because international finance has been frustrated in its plan for the continued plundering of Greece and the debt slavery of almost all Greeks.

    And these measures, the suspension of all debt payments to banks, the providing of the Apollo coupon that is declared legal tender throughout the emergency, that can be used to pay taxes and that is completely negotiable so that hiring and food buying and rent paying can continue.

    The odds are that the the EUB and the other EU governments will not consent to revision of their system to the satisfaction of Greek debtors. That will only mean that the swindlers are not willing to undo their swindle and launch more honest understandings. In that case, Greece will be free to repudiate all debts to international lenders — on the grounds that the contracts were entered into were fraudulent, that the impoverishment of Greece, the transfer of Greek wealth to international bankers and investors was the heart of the EU plan. That is legal justification for repudiation of all such debt.

    When any one loans money it must always be at the lenders risk. The lender was an equal member of the contract and it was his duty as well as the borrowers to make sure that the venture being undertaken was a viable one — that there was a reasonable chance that the borrower could use the money to create goods profitable so that repayment could be made. But of course the fraud of the system was that the only money allowed was the EU and all EUs were borrowed into existence so that every euro of loan was co-created with a debt of principal equal to one euro and interest payments over time that often total more than a euro — so that there was never really enough money in the system to allow debts to be repaid while still having money continuing in circulation sufficient sustain a market economy where businesses succeed in providing goods, paying employees and suppliers and having a good income for the entrepreneur and his management to take home. The EU’s system was rigged so that the peoples of each EU nation would be forced into default one way or another sooner or later, drained by their own debt payments, by high prices which contain the interest burden of producers and suppliers of producers, plus the tax burden of government that must pay taxes in its own ever worsening debt. It is all together right and proper that debts incurred under such a system, debts to the bankers responsible for the existence of exactly that system, should be repudiated with no penalty.

    The Greek economy, if faced with an EU that refuses to reform its criminal system, will be justified in creating a far better system — simply by converting the Apollo coupons into the new Greek money. The government will simply continue sending a healthy ration of new money to each citizen for the citizen to freely spend into circulation. The result will be that there will be strong demand for goods, that stores will fill — that Greeks will be employed so that Greece can use its own resources to provide for itself. And there is another benefit — a social benefit that may be the best benefit of all of the new system.

    The new demand caused by abundant Apollo coupons (functioning as money in every sense) will cause Greeks to hire other Greeks to find way for Greece to provide more for itself. Suddenly all of the foreigners will be welcomed workers — because all Greeks and all foreigners will be put to work providing for each other and paid by the best money in the world — money made by an honest government for the good of the people and which the people themselves are the first to spend this money into existence to raise the standard of living of all Greeks at once.

    In that way, Greece can initiate a new Golden Age.

    And as for the rest of the world — and especially those in the English-speaking world where this message is originating and can be understood — we must get this message to the Greeks and to all true friends of the Greeks and of humanity. This advice must be received and digested and applied very quickly — because the strangulation of Greece by the EUB’s money sanctions, by that economic warfare — must be responded to quickly. Soon the Greeks will be too hungry, afraid and weak to do what is recommended here. The author has no means of disseminating this solution. You must help or it will not get done. I know you understand the remedy proposed and that you see how adequate it is and how necessary. Send it on — and we will both at least have the satisfaction of knowing that we did all we could for the people of Greece.

    Dick Eastman
    Yakima, Washington
    Every man is responsible to every other man.

    • Communist Syriza, after the Greek people voted NO in a referendum against austerity, capitulated as they always have to the private banker’s demands to impose austerity. They did not change the usurious banking system as they promised, but only refinanced their debt slavery payments. When will people ever learn not to trust these people?

      Fascism is constantly derided and falsely blamed for tyrannical financial control of the economy, yet it was only the NSDAP in the 20th century that fought and usurped usury banking. Hitler and Feder through Jewish finance out of and brought Germany economic independence and dignity. For this they know they would be punished. Unlike communist Syriza, the so called evil Fascists forced the banks to work for the people anyway.

      • edit: “…Hitler and Feder threw Jewish finance out of their country and…” (I shouldn’t post in morning until I’ve had my coffee)

  8. “Major Douglas was the one to point at this phenomenon. He proposed printing debt free money by the Government and allowing the people to spend the new money into circulation. If you print only as much money as is necessary to buy up ‘excess’ production, no ‘inflation’ (rising prices) will ensue, Douglas claimed.”

    There is no way to know “excess production”.

    The key is knowing what money is. Money is “a promise to complete a trade”. It is created by traders who wish to extend simple barter beyond immediate time and space.

    The proper management of any MOE allows traders to create money at will. Once created, there is a perfect balance between supply and demand for money … it’s the nature of a trade. When the trader delivers on his promise, he returns the money he created and it is extinguished.

    But what if he doesn’t complete his trade as promised? Well, that’s DEFAULT. The default must by recovered through INTEREST collections of equal amount. The operative relation is: INFLATION = DEFAULT – INTEREST. And the proper (and only knowable level of) INFLATION is zero.

    INTEREST is “not” what the market will bear … it is always equal to DEFAULT experience.

    The key to proper management is through actuarial techniques. When a trade is “underwritten” the risk of DEFAULT must be estimated and appropriate INTEREST assessed. Reliable traders enjoy zero INTEREST. Deadbeats must resort to pay day loans.

    And the biggest dead beats of all? Governments. They never deliver on their trades … they just roll them over … and that’s DEFAULT. Worse, the pay the lowest rate of INTEREST of any trader. They “cause” INFLATION.

    • Well said, Todd. Actually, the metrics for this are far simpler than one might imagine. I did a spreadsheet on this and I know Jim Schroeder also did one and the model works. Here’s what you measure:

      1. All businesses account for and report their A and B costs for the last fiscal quarter to a central statistical body.
      2. All businesses report their gross sales for the same fiscal period for the same period.
      3. All goods exported and their country of destination are accounted for and reported too.
      4. Our ports of entry measure all imported goods and the costs of same and the country of origin.

      This is all that is needed by a statistical body to reduce this to simple numbers – basic math. You need to consider two things:

      1. The ratio of sales to A costs is managed by the Just Price mechanism expounded on by CH Douglas so I won’t repeat it. A discount or increase in the percentage of the national compensated price will be applied for the next fiscal quarter to balance what happened in the last quarter. It is like a steam engine letting off steam when the gauge shows it is too hot or stoking the fire if too cold.
      2. Imports and exports skew all the numbers. We look at the balance of trade with each nation in isolation. If we export too much, we charge an export tariff on the exports to cool off their demand. If we import too much from them, we charge an import tax on their goods to spur production domestically.

      That is about all that is necessary.

      Your points about interest are quite well said too. If there is no demand for loans because there is sufficient EFFECTIVE demand, then rate of interest becomes a moot point. If governments are issued the money they need based on a legislative budgeting process, then there will be no need to default on debt. The dividend and discount for all will be lower but that is an option.

      • jim koconis permalink

        ‘the gap theory’ would be a very elegant description of the malady of the current monetary system if its adherent were not guilty of buying into the most egregious error, all too common with most flawed theories – the mistaken assumption that ‘money’ itself represents the value of production or labor – the more goods produced, the more money needed to represent them and purchase them.

        douglas was correct to notice that there is always a mismatch between the goods produced and the currency in circulation to purchase those very same goods. but, he exhibits a fundament miscalculation in asserting that the shortfall could be bridged by the insertion of additional units of money via a national dividend or, for that matter, any other mechanism.

        the fact that there is a gap is the result of over production – not a lack of units of currency. after all, in any economy there is never a lack of money regardless of size of the money supply. any amount of units of money will do just fine because money is only a RELATIONSHIP between goods produced for willing buyers and the volume of units available to represent them.

        obviously, 1/2 represents the very same value as 4/8. yes, the cardinal number 1 is larger than the cardinal number 2 and 4 is larger than 8, but in a monetary economy the symbol used to intermediate exchanges does not, and never can, signify an absolute value but, rather, a ratio, a percentage, a relationship.

        and the relationship IS NOT one between the cardinal number of produced goods and the cardinal number of unit of currency available to purchase those goods.

        the relationship is between the cardinal number of goods that people are actually free and willing to purchase and the total cardinal units of currency in the money supply. this relationship demands a fixed number of both non-coerced exchanges and a stable volume of units to represent those exchanges.

        if a factory produces a product it is not simply and automatically entitled to assume that a portion of the money supply be allocated to represent it. just because technology allows us to produce things in abundance does not mean there are willing buyers. buyers themselves, typically, have to be produced just as the product they consume is produced. of course, this is what sustains the advertising, marketing and entertainment vocations. regrettable, most all consumption is nothing more than a manufactured experience. we need very little of what goes by the name of progress.

        but even if all the goods produced in the economy were necessary and in demand there still would be no requirement to augment the money supply via a national dividend. any volume or money in the money supply would be sufficient – each unit would simply have a greater purchasing power. the value of money is a RELATIONSHIP NOT A FIXED CARDINAL AMOUNT.

        and, of course, in our economic and monetary world the currency we use cannot function naturally as this RATIO MEASUREMENT OR RELATIONSHIP because the money supply is in a constant state of flux. all ratios need fixed upper and lower boundaries to make sense. the values on a grey scale are useful and meaningful because we have the absolutes of white and black as reference points. money, to be useful, meaningful and just, requires the very same constraints. we have the lower constraint (zero – no money at all) but lack the upper boundary.

        why? usury demands an ever increasing volume to satisfy its rapacious appetite.

        simply put…..usury damns the economy in two ways. first it demands a constantly increasing volume in the money supply, thereby, polluting the nature of money as an honest and just RELATIONSHIP for willing exchanges and, second, it forces us all to produce in excess of what we really need to satisfy our god given requirements in this cruel economy.

        the gap must exist as long as usury exist. to eliminate the gap we need to eliminate usury – not institute a national dividend.

        • This is the “money is a veil over barter” Dynamic Stochastic General Equilibrium theory assumption….and it is a false one. Steve Keen the Australian economist has de-bunked most of the assumptions behind DSGE, the most basic of which is Equilibrium itself. We live in a monetary economy. Both cost push and monetary inflation exist, and the economy does not tend toward equilibrium, but rather, as Keen has recently re-discovered and Douglas realized over 90 years ago, it is in a continual state of disequilibrium. DSGE theorists like the libertarians in America are actually market idolaters who think that the market is all powerful and you can just let it righteously decide things. What we actually need is to take adult, responsible and gracious control of both cost push and monetary inflation via the policy mechanisms of a universal dividend and a compensated retail discount whose plus (dividend) and minus (discount) are in fact the anatomy of macro-economic equilibrium. People are not entirely rational and businesses aren’t either, but in most affairs they tend in that direction…especially if they are informed by an ethic of Grace. One of the major aspects of Grace is balance as in balanced thinking and acting, i.e. rationality. An ethic of Grace, precisely what we need…in every way.

        • WRONG! This is a completely fallacious dissertation that is in keeping with the spirit of “How many angels can dance on the head of a pin” and “What has this got to do with the price of potatoes?” It is all very basic math. You can’t charge a dollar and only pay out 50 cents in wages and expect to sell all your merchandise. This math is true for every single good and service offered in every fiscal period and at all times (except bankruptcy liquidation) and therefore it is ALWAYS TRUE. A cannot pay for A + B. SIMPLE! All these assertions are based on false premises ant therefore I say again WRONG! Interest is just another cost that is NOT wages. Get rid of all interest and you still have the same problem. Proof? Jefferson got rid of the first central bank and yet the economy still failed. Jackson got rid of the 2nd central bank and the economy still failed. Why? IT’S THE GAP STUPID! Not you Jim, but everyone who is mesmerized by the false doctrines they have come to blindly accept as truth. STUPID: not intelligent : having or showing a lack of ability to learn and understand things : not sensible or logical

          • jim koconis permalink

            liam – your point that ‘you cant charge a dollar, pay out 50 cents in wages, and still expect to sell all your merchandise’ is certainly true and will be for all time.

            my point, however, was this – just what entitles anyone to expect to sell all their merchandise? is the fruit of profit oriented businesses so very sacred that we must purchase their entire output?? and if we lack the currency to do so we may rightfully petition the government to grant us a dividend to facilitate the purchase?

            and your history lesson about jefferson and jackson proves what? eliminating a particular bank or two has no impact on the effects of usury. usury exists at many levels in the economy, not just in the workings of central banks. correctly understood, usury is any art form that profits from the exchange of money for money.

            any business that seeks ‘profit’ is engaging in usury because the profit can only exist by artfully and intentionally misconstruing the value their employees labor. that, IN FACT, is the gap.

            • It is true that some businesses won’t sell all that they produce. That will be waste. A well-managed economy that measures both wages and what is sold will readily detect this and can compensate for it. However the profit motive is and always will be what motivates people to run businesses and if they don’t sell all or most of their goods they won’t be in business for long. That is actually a good thing because only businesses that make what people want should remain in business.

              I disagree with your definition of usury. No dictionary supports it either. Here’s what I found:

              1. the lending or practice of lending money at an exorbitant interest.
              2. an exorbitant amount or rate of interest, especially in excess of the legal rate.

              Any business that lends money will want to make a profit on it – like any other business. That in itself is not bad. It is EXORBITANT profits that are the problem, wouldn’t you agree? I am of the opinion that if you eliminate the shortage of money (i.e. what you already agreed with) that the GAP causes, the demand for loans will plummet and businesses that lend money will fail in droves. GOOD! This goes right back to my first paragraph. Supply and demand, baby!

              Finally, you start off by agreeing with me that my definition of the gap is “certainly true and will be for all time” and then you contradict yourself in your last paragraph. You are being as hard-headed as I once was for over a year so I don’t fault you for it. You don’t want to acknowledge that interest is just a B cost that contributes to the gap. This is your “truth” that you are emotionally invested in – as I once was also. You hold it in some special esteem – or infamy. Interest is not the problem. Why is it that money can only be issued as debt? It shouldn’t! The control of the issue of money at a price in the hands of a few parasites is the problem. Because they do what all monopolies do – create shortages to drive up profits – they are indeed in a position to charge “exorbitant interest.” Here’s a thought. If there was no shortage of money, would they be in a position to do so? If there is an adequate supply of money to liquidate production costs, will there be a need (i.e. demand) for loans? Obviously not. That is MY point.

              • jim koconis permalink

                liam –

                1. i’ve been ‘in business’ for 40 years and have never made a profit. i didn’t go into business to ‘make a profit’. i earn less than the people who work for/with me.

                2. people who establish businesses with the intent of making a profit are not providing a social benefit. in the short term it may appear that they are but ultimately they are sucking benefits to themselves at the expense of their employees. (that’s usury – regardless of how any dictionary might define the word)

                3. yes, the ‘gap’ exists. your solution is to issue additional money to cover it. my solution is to outlaw usury.

                4. your solution is, for the most part, already in place – it’s called the welfare state, bank bail-outs, quantitative easing, minimum wage laws, capital gains tax breaks. etc. etc.

                5. my solution, of course, will never happen. i only offer it as a principal upon which one might organize their personal affairs.

                • It will never happen if you expect the politicians in Washington DC to adopt the idea.

                  However, if the people charter public banks in their local communities, cities and states, then then it can happen piecemeal over time. You do not need the permission of the federal government to charter a public bank. So this is a viable strategy and it is being considered and implemented in many cities.

                  • I think public banks are a lesser of two evils because their profits return to the public but it is not a solution because it does not solve the gap. The only thing that will fix the gap is debt-free money equitably distributed by apportionment to all in the correct quantity that can be computed to a mathematically certain amount. That is what social credit achieves. The only alternative solution I believe could also work is Frederick Soddy’s National Economy proposals but it is less equitable and tends to keep control in the hands of governments. At least it deals with the gap.

                    • the issue I have with you plan, which sounds like a monetary version of basic income, is that it palliates the symptoms and doesn’t address the root cause of the GAP. the root cause of the GAP, once usury & sundry fraud instruments are removed from the equation, is in my opinion the unequal hording of wealth by profit seeking entities.

                      Prior to 1500 when usury was outlawed this GAP was redressed by a catholic edict called Jus Pauperum, a moral injunction demanding that all wealth accumulated above what was necessary to adequately take care on one’s family be given to those in need.

                      Also in free markets, wherein enlightened egoism is presumed but rarely practiced, the price goods & services are not restricted to actual costs of production. The putative economic rule is to get highest price, regardless of true value.

                      We live in a satanic secular culture today so any talk of giving excess to the needy and just price sounds crazy. The very notion will make People will rise up indignation to denounce a moral system of commerce that benefits everyone equally. yet, be that as it may, this accounts for the GAP in my view and how it was solve once upon a time.

                    • PM, I think we will have to agree to disagree. I think you are absolutely incorrect that the gap is caused by “the unequal hording of wealth by profit seeking entities.” You do yourself credit by acknowledging this is an opinion because the facts certainly don’t bear it out.

                      I thank you for the exchange though. It has surely caused others to rethink their positions and if I have swayed even one person away from believing that interest is the root cause of our economic misery and lead them to the truth that a fundamental shortage of purchasing power by consumers is at the heart of the matter, then it has been worth the effort.

                      We are in the ballpark of agreement on your last paragraph though. It is not money that is the root of all evil, it is the LOVE of it. The only reason it is loved is because there is a shortage of it. Do people love sand like they love money? Ask yourself why not. As with any other disease, get to the root cause and you will solve the problem. The root cause was perfectly deduced a century ago as a lack of EFFECTIVE demand. Those of humanity that have apprehended this truth – and there are tens of thousands – have been waiting for humanity to catch up.

                    • Bank of England admission that supports my assertions about how money is created as debt when it should be created debt-free in quantities sufficient to fill the gap:

                      The key contribution of this paper is therefore the development of the essential ingredients of DSGE (dynamic stochastic general equilibrium) models with FMC (financing through money creation) banks, and a comparison of their predictions with those of otherwise identical DSGE models with ILF (intermediation of loanable funds) banks. The result of our model comparison exercise is that, compared to ILF models, and following identical shocks to financial conditions that affect the creditworthiness of bank borrowers, FMC models predict changes in the size of bank balance sheets that are far larger, happen much faster, and have much greater effects on the real economy, while the adjustment process depends far less on changes in lending spreads, the dominant adjustment channel in ILF models. Compared to ILF models, FMC models also predict pro-cyclical rather than countercyclical bank leverage, and a significant role for quantity rationing of credit rather than price rationing during downturns. We show that these predictions of FMC models are much more in line with the stylised facts than those of ILF models.

                      The fundamental reason for these differences is that savings in the ILF model of banking need to be
                      accumulated through a process of either producing additional goods or foregoing consumption of
                      existing goods, a physical process that by its very nature is slow and continuous. On the other hand, FMC banks that create purchasing power can technically do so instantaneously and discontinuously, because the process does not involve physical goods, but rather the creation of money through the simultaneous expansion of both sides of banks’ balance sheets. While money is essential to facilitating purchases and sales of real resources outside the banking system, it is not itself a physical resource, and can be created at near zero cost. In other words, the ILF model is fundamentally a model of banks as barter institutions, while the FMC model is fundamentally a model of banks as monetary institutions.

                      The fact that banks technically face no limits to increasing the stocks of loans and deposits instantaneously and discontinuously does not, of course, mean that they do not face other limits to doing so. But the most important limit, especially during the boom periods of financial cycles when all banks simultaneously decide to lend more, is their own assessment of the implications of new lending for their profitability and solvency, rather than external constraints such as loanable funds, or the availability of central bank reserves.

                      Stated here:

                • Wow! I’m astounded at how I say something and you hear something completely different. First, why does a business motivation need to be either/or? Are you familiar with the concept of enlightened self interest? Why does making a profit AND operating a business that offers a public good need to be “bad?” Nature provides many examples. Bees take plant nectar and in return, they pollinate plants. It’s called give and take. All of creation operates on that basis – starting with breathing.

                  Outlawing usury will NOT eliminate the gap. You can’t charge A+B and pay for it with A. 2 + 3 = 5. 2 will not pay for 5.

                  My solution is not an never has been in place. Welfare is borrowing today and demanding repayment tomorrow. My solution is creating the money out of thin air today and never paying it back. This new money gets cancelled out by the B costs of the next round of production. My friend would call this GRACE.

                  Your solution will simply never work because it doesn’t deal with the gap.

              • No Liam, closer scrutiny will show you that Usury was always considered interest on loans of money. Any interest.

                If you look in a 100 year old Webster dictionary, you will still find this definition. But it has been slyly altered by the Money Power over the last 5 centuries or so.

                The battle for power always begins with the battle to impose vocabulary.

          • Jefferson did not abolish the First Bank of the United States. The Bank Bill of 1791 advocated and defended by Hamilton, establishing the Charter for this private usurious bank, was passed by congress and signed by President Washington over the objections of Jefferson.

            In 1811 when the 20 year Charter for the First Bank of the United States ended, a congressional vote to renew was defeated by a tie breaking vote from Vice President Clinton.


            • I may be fuzzy on the details but the fact is that this first bank’s charter expired and was not renewed. I believe it happened under Jefferson’s presidency. The consequence was the war of 1812. I confess I did not look it up and am going from likely faulty memory. One fact is certain though. That first central bank had a finite life, came to an end because it was perceived as causing public harm (booms and busts) and its demise did not solve the economic prosperity problem because it did not address the gap.

    • Well, I agree to some extent, but not at all with the idea that Usury covers defaults. Collateral covers defaults.

      Furthermore, you cannot allow endless money creation by traders. It will simply inflate prices.

      Where I agree is that, to some extent, the money creation (through credit), should be available to traders (and other players in the economy), within the boundaries of what the money supply can take without raising prices.

  9. Dark Dirk permalink

    Pank =

    That is already invented and running.


    Wisdomics: Knowing What to Avoid, and What, Where, When and to Whom to Apply Economic Policy

    The economic/commercial system itself creates the problems that economics is attempting to fix. Hence there is no solution to micro-economic problems by applying inputs into the system first, or of dealing with aggregate/macro-economic statistics without waiting until after a period of time has elapsed in order to perceive the policy necessary, and only then applying them directly to those aggregations which are the actual and operative problems.

    The two most significant and chronic problems of modern economies are a scarcity of actually available money to spend by the individual and the continuous condition of inflation. Given these two metrics and the above fact of the system itself being the problem it follows that an input of money, a dividend, must go directly to the individual without it going through commerce/the economy first, otherwise it will initiate/re-initiate the disequilibrium of the system. This is the essence of Direct Distributism. Likewise and macro-economically, an attempt to regulate only a specific aggregate or one that is not systemically significant will never encompass the entire macro-economy including as per above the element of time. That is why a discount based on a ratio of aggregate statistics and applied to retail sales to the individual which is the sum point of costs for that item, is the macro-economic policy that will maintain and continue through time, the virtual equilibrium created by the dividend.

    The essential goal to always keep in mind is the freedom of the individual. In a monetary economy such as ours freeing the individual monetarily and economically also frees the system, and then adjusting the system in aggregate, in order to keep its costs and abilities to clear them as equal as possible, maintains that freedom for all entities individual, commercial and national within the economy. This is the adult, concrete, responsible and most importantly individually ethical thing to do as opposed to declaring that the market, like some conscious and rational entity, will automatically clear itself despite its incredible complexity of form and individual decision making.

    • Now there is someone talking sense!

  11. … To them it’s the Gap, the difference between purchasing power of the consumer base and output of the productive sector.

    “However, the Gap is mostly caused by Usury and it’s becoming more and more difficult to understand why the Social Creditors are not willing to admit to this.

    Fortunately, we have the non-ambiguous clarity and precision of mathematics to identify the problem and if the political will existed; solutions would become evident. There is indeed a critical “gap” but instead of attempting to see it’s footprints or effects (inflation-deflation), we can simply calculate it as a real number.

    The “gap” is the difference between money created as principal debt and the interest owed – much of which is continuously rolled over (e.g. National Debt). Currently, in the U.S. for example, the combined private and public debt now totals almost $62 TrillionNOT including INTEREST or unfunded liabilities.

    The total amount of money measured as the M2 aggregate is only $12 trillion and unofficially, the broadest money aggregate; M3, appears to be slightly more than $15 Trillion.

    In general terms, the “gap” (difference between money available and money owed) is around $47 Trillion – NOT including INTEREST or unfunded liabilities. Houston… we have a problem.

    The “gap” cannot be sustained as there MUST be massive defaults and bankruptcies to write off much of the debt. In the process, real assets held as collateral, will be transferred from the borrowers to the lenders in a cruel reset process. The reset is not the result of dead-beats or slackers, but a function of the inevitable math.

    The social creditors miss the real reason for the “gap” as they focus on effect rather than cause. And they miss another critical point… usury (interest on loans) will always compound and we should know, by definition, that compounding debt grows exponentially which is utterly impossible to sustain in a finite world.

    Two Tier Solution

    First, there must be some amount of debt free money spent into the economy in order to bridge the gap. If you are worried about inflation, then simply spend the money on infrastructure projects that endow the debt free money with value and limit it by utilizing human and natural resources in the process.

    Social credit is arbitrary and the creation would be left to bureaucrats and new agencies to determine without any real barriers. While I welcome debt free money as the elixir to right the economy, I don’t think social credit is the answer. That said, a trillion or so spent every year on social credit would probably help.

    Second, usury must stop. There is no reason to charge interest on the creation of new money. I favor private banks, along with state charters, to continue creating new money as loans but they should and can be profitably compensated through fees and service charges.

    Instead of trying to bridge the current “gap” ($47 trillion) with debt free money created through social credit, we should begin rolling over the existing loans into 0% instruments. For example, the $14 Trillion in mortgage debt, should be quickly rolled over into 0% loans.

    • Actually Larry, we don’t miss it at all. We see exactly the same problem you do. What we don’t agree on is it’s fundamental root cause. You say interest, we say B costs of which interest is only one of the components. Read more carefully my post that cuts to the very heart of this and then tell me – if you can – exactly where I am wrong. I have told you clearly, exactly why it is NOT interest at the heart of the matter. I’m teachable. Teach me where my thinking is wrong. You just might become the student as you struggle with overcoming my logic and find that you can’t.

      • Liam – after reading some of the info in your interesting book; Economic Cures They Don’t Want You To Know About, I think we agree on much. I look forward to getting a copy so I can better understand your logic.

        You say

        “If we call the wages the A component and the other costs the B component, then PRICE = A + B.”

        and that It is MATHEMATICALLY IMPOSSIBLE for A to meet the price of all goods in a healthy and prospering economy – The shortage is the GAP.

        You have included interest charges in “B” (other costs) which makes sense and acknowledge that interest is a problem into itself:

        “The problem is that interest must be paid on this debt; however, the money to cover that interest is never issued. Thus the pool of loan money is like musical chairs where somebody will eventually come up short. One cannot issue a dollar and demand repayment of two without also creating and issuing the second dollar. This is the primary cause of bankruptcy.”

        You go on to say:

        “It is critical to understand that the first problem, The Gap, is the real problem with our economy; however, it is this second and apparent problem (which is really debt slavery) that everyone can see.”

        I’m not sure what you mean when you say “the real problem” which I take to mean that it is more important or relevant in some way, I think interest IS the biggest problem though I’m not ready to dismiss or minimize your assertion.

        • Hi Larry,

          Your interpretations are right. I want to see if I can persuade you to change your last-paragraph position though where you say “I think interest IS the biggest problem though I’m not ready to dismiss or minimize your assertion.” If you follow all my reasoning, you will see that if we get rid of all vestiges of interest the economy would still fail because of the GAP. However, if the gap is entirely filled with dividends and/or sales credits – even if the rate of interest is ridiculously high – there will be enough money to cover it. Why? Because interest is just a B cost and if you cover it, it’s covered. End of story. There will be no booms or busts. There will be no HARM caused by it.

          Interest is like guns. They can kill people or they can be used to hunt food. It’s all in how it is used and the full context of use is needed to make a value judgment of whether it is good or bad.

          Now what is it about interest that we hate? It is that it causes booms and busts, sweeps our hard-earned money into the hands of bankers and in a nutshell, allows bankers to own us all and control us as debt-wage slaves. I hate it as much as you do. But I DON’T want to make the mistake of diagnosing the wrong thing because then I am in danger of accepting a proposed solution that is not in my best interests. I could live with a solution that has interest IF AND ONLY IF there is money issued to completely fill the gap that it and all other B costs cause. I could not live with a solution that has no interest but does continue to have a gap. Bankers will gladly offer the latter, knowing full well that in a few years when nothing is solved, everyone will want loans again. It happened to Jefferson when he got rid of the first central bank and it happened again when Jackson got rid of the 2nd one. It will happen again if we fail to grasp what I call the REAL PROBLEM.

  12. I see, the dumb and dumber who couldn’t run a lemonade stand, are still solving the planet’s financial problems

    bank-lawyers gave ye the best money you never had:
    destroying the credibility of even the good greenback books of the past 150 years

  13. Greenbacker84 permalink

    Anthony, what amazes me is how each year your lingo merges more and more with MPE, yet the one time you addressed it you slated the entire movement as a ‘cult’ (while at the same time stating you thought it was ‘quite brilliant’ in the comments). You talk about self issued ‘credit’ when Mikes been addressing this for 40 years now. Every article you do, you say we need to restore the issuance to the people, and then lo and behold point us back to JAK Bank, its kind of predictable or you’e own regional currency.

    I’m familiar with Dick, nice guy, great vids online which I’ve listened to for years now. His grasp of history is fascinating I’ve learned alot there. Although it seems his channels been taken down. I asked him if he was familiar with MPE few years back, no reply as yet.

    • Greenbacker, I”ve learned interest-free credit in Europe, from other people, long before I ever heard of Mike Montagne. Lest we forget, the Swiss WIR has been printing their own credit based unit for 80 years now.

      I have been promoting Mutual Credit for as long as I’ve been writing. It’s not Mike’s invention. MPE is an interesting implementation, with many strong points. But unfortunately, as we have been discussing, MPE’s take on inflation is bogus and MPE would see terrible asset bubbles.

      They simply don’t understand that the value of money is not the underlying asset, but a function of the volume of money (and thus credit).

      I’m also not hung op on interest-free credit, because I suspect a demurrage might be even better.

      The main thing is we end Usury, the boom-bust cycle and democratize credit allocation. MPE solves the first and the third issue, not the second.

      I settle only for three out of three.

  14. Hello Anthony,

    The Social Credit position as outlined by Douglas is that the gap between prices and incomes is caused primarily by the ways in which real capital (factories, machines, equipment, etc.) are financed and the ways in which their costs are then accounted for under current financial (i.e., banking and cost accountancy) conventions. This means that even if you were to eliminate the charging of interest, a significant gap between prices and incomes would remain. N.B. Douglas never denied that profits derived from interest (like any other type of profit-making) can intensify or exacerbate the gap.

    There are many processes which are responsible for the “accountancy problem” related to real capital. Here is just one concrete example. A company borrows 1,000,000 (and let’s make it interest-free) from a bank (which creates the credit out of nothing) and uses it to erect a factory (including machines). Let’s further assume, for the sake of simplicity, that all of that money is used to pay workers and so the whole of the one million is transformed into wages and salaries. The company then issues shares in an “Initial Public Offering”. The workers buy those shares, which are collectively worth 1 million, with the 1 million they were paid. The company then uses the money to pay off its capital loan. The money and the debt cancel each other out of existence (every repayment of a loan destroys a deposit). At this point, however, the company will try to recover the price-value of the factory (one million) in the form of depreciation charges over the life of the industrial assets in question – these are some of the company’s overheads or operating costs. This will allow the factory to be replaced. But, no money has been issued with which these charges might be met. All of the money created and issued in the name or in virtue of the factory during its construction period has been prematurely cancelled, i.e., it is not available to offset the costs associated with the consumption of the factory. There is therefore an imbalance between what the company is trying to recover in costs and the income available to meet those costs. Notice that this particular imbalance has nothing to do with the charging of interest since we’ve assumed interest-free credit at the beginning of the thought experiment.

    If the financial system were properly designed, i.e., if it were constructed in such a way that it adequately reflected reality, it would automatically re-create sufficient money free of any debt in order to allow for the depreciation charges to be met as the company is consuming its real capital. It would distribute this directly to consumers as income because only consumers can liquidate final costs. This is what SC proposes to do via the dividend. The present financial system does not automatically register the real capital by representing it in terms of purchasing power because it is not designed to accurately represent the physical economic reality. Right now, we rely on increases in consumer debt (credit cards, mortgages, lines of credit, overdrafts, installment plans, etc.) to compensate for the lack of purchasing power, or on increases in government debt (to distribute incomes to government workers on government projects, esp. public works, while not simultaneously adding to the costs of goods that consumers must pay for, on an excess of exports over imports, or on business expansion (esp. in relation to capital goods). If the compensatory debt money cannot be raised, the company will have to take a hit in its prices and risk bankruptcy. This is all wasted effort from the point of view of the true purpose of economic association: the delivery of desired goods and services, as, when, and where required with the least amount of trouble to everyone. As an added bonus, fill the gap the Social Credit way and all of the interest that is charged on the compensatory debt would be completely eliminated as by-product.

    All of the details re: the accountancy problem have been worked out by Douglas and Social Credit authors such as A.W. Joseph, J.D. Malan, H.M. Murray, and R.L. Northridge. These books and articles can be found in electronic form here: and here: I have also published a 548 paged book; Social Credit Economics:

    Anthony, if you will forward your mailing address I will be glad to send you a copy of SCE.

  15. You worry about giving government the power to issue interest free loans based upon the fear that it will be used by politicians to their personal advantage. I would ask, wherein the history of mankind when public banking was fully implemented by a nation, has this lead to the sort of corruption, tyranny and debt peonage we now experience under the private central banking system? In times predating Jesus Christ this was used as a check on government power Tally Sticks in England didn’t cause 600 years of Tyranny. In the revolution in US issuance of colonial script was what free us, albeit briefly, from the city of London banking system. Greenbacks in the Lincoln administration, financed civil war without indebting the people as well.
    Even in NSDAP Germany, prior to the war, the lending power of the banks were used exclusively for the economic betterment of the people in every aspect of life. The people admired and were loyal to Adolf Hitler to the very end.

    I don’t understand how you can use public banking against the people when money ceases to be an instrument of unrepayable debt. Money can only exist when something is produced. The people never pay more than principle. It can only have value in lieu of commensurate production or services. How can politicians ever issue more money that people are explicitly willing to work for. Excess money will have no value.

    So beyond the theoretical fretting, where is the actual downside of decentralizing economic power via public banking?

    • How do you mean pm? NSDAP State banking inexorably led to the destruction of Germany and more than 20 million Russian dead.

      Private vs. State is wrong, they’re both collectivist. The State is not the solution.

      The people are the owners of the credit, not the State and Public Banking does not end Usury and didn’t end Usury in Germany.

      It’s the people who need interest-free credit, not the State. The State must finance itself through taxation and although I can go along with some self liquidating credit for the State if needs be, national debts should be a thing of the past.

      The people will finance with their own credit a flourishing economy of small and medium business, self employment.

      State controlled banks will just finance massive behemoths as was also the case in Hitler’s Germany.

      National Socialism was pure collectivism and a text book implementation of all the recommendations of the Protocols for when they achieve their own ‘unassailable Despotism’.

      Individual rights for common people meant nothing in NS Germany.

  16. I want to add one more thought to my last post. You paint a picture that Social Creditors somehow support and advocate for international banking. Nothing could be further from the truth. In point of fact, if true social credit was put into effect, it would decimate the banking industry AND THEY KNOW IT! That is why they resist and work to discredit social credit with every ounce of effort available to them. WHY would it decimate banking? Simple. If there is enough purchasing power, who needs loans anyway? On the contrary, social creditors think arguing about the evils of usury is a complete waste of time because it is inevitable that the need for loans is going to go into a tailspin and the “power” that bankers wield over society will completely evaporate in a matter of months, if not days. Why would you worry about a banker charging interest (i.e. their form of fee profit) on a loan when there is unquestionably enough money in circulation to meet that cost? Arguing about usury is a tempest in a teapot. When you understand not how money works now but how money COULD be made to work, you realize that you’re boxing with your own shadow when you point at interest as the root cause. It’s like demanding the outlaw of hammers because your foot is killing you when all you need to do is stop hitting it with YOUR hammer!

  17. Sorry Anthony, on this one you are incorrect. I answered thusly to Dick’s not so “convincing” arguments on the socialcredit google group:

    Once again Dick, you have COMPLETELY missed the point. Let me dumb it sown a bit more for you. Let us imagine a world where there is NO interest and there are NO loans. We all pay as we play. Let’s see if there is still a problem. To do this, we need to do a little deductive reasoning. We need to set some basic foundations so let’s do that:

    1. Prices are set so that a business can derive a profit an recover costs. Let’s break those costs down into 2 classes:
    a. Wages for employees, earnings for sole proprietors and dividends for shareholders make up what we call the A costs.
    b. All other business expenses without exception make up what we call the B costs.
    2. Can you name a single good or service on planet earth comprised of only A costs? There is NOT ONE.
    3. Can you name a good or service that is comprised entirely of only B costs? Again, there is NOT ONE.
    4. Therefore we must conclude a number of mathematically irrefutable deductions:
    a. The price of all goods and services in existence can of a certainty be factored to a specific ratio of A to B costs in comprising the price.
    b. It is IMPOSSIBLE in the aggregate for all the goods and services of the world to be purchased by JUST wages, earnings and dividends.
    c. Social credit mathematically expresses it thus:
    i. Let A be some value greater than zero (see point 2)
    ii. Let B be some value greater than zero (see point 3)
    iii. Let price be A + B (see point 1)
    iv. It is MATHEMATICALLY IMPOSSIBLE for A to meet the price of all goods in a healthy and prospering economy.
    v. The shortage is the GAP.

    You see. I have just demonstrated for an absolute certainty that interest ALONE is not the root cause of all our woes and if you are honest with yourself, on this basis alone you must re-evaluate all your THEORIES in this new light. Since I have already pointed this out to you several times, I am certain that you will just blindly continue to ignore the evidence and plow on with your false assumptions. It is sad really, because there are so many things you have correctly assessed – 911, the Marathon bombing and others. BUT THIS ONE AND VERY IMPORTANT THING you continue to ignore.

    Hey there is still hope. Maybe this time WILL be different. Here’s hoping you finally “get it.” Getting rid of loans and interest will not solve our economic woes because it is not the root cause. The root cause is the GAP – period – end of story. It took me a while to realize this so I don’t fault you for missing it. But here is the seminal truth. Interest on a loan in the final analysis is JUST ANOTHER B COST. The fact that bankers don’t issue the interest to pay a loan when a loan is extended is just another evidence that B costs in general need to be issued in order for prices to be met. If a picture is worth a thousand words, here’s the one I would offer to illustrate the point. Now, prove me wrong with SOUND REASONING PLEASE! Now follow and think about each of these 6 steps:

    (see and study the first figure)

    Now let’s say a bit more about the cost accounting flaw itself by illustrating as follows:

    1. Let’s suppose a car manufacturer needs $2M to pay for this week’s production run.
    2. Let’s suppose the price of the cars is set at $3M.
    3. There is no money in the bank because accounts-receivable are pending from previous runs.
    4. The business draws down on its line of credit. It just created $2M out of thin air!
    5. Of that money, $1M is paid out In wages, earnings and dividends. This provides EFFECTIVE DEMAND with which to liquidate half the cost of the production run.
    6. So now we have a $3M price on merchandise and $1M and we just created another $2M so now the economy has enough money to meet the price!
    7. Let’s say there is a buyer who steps up to buy a third of the production run for $1M. What is the business going to do with that money? The responsible thing to do is to pay down the line of credit. As soon as it is deposited, that is exactly what happens.
    8. We just took $1M in EFFECTIVE demand out of the economy by destroying the money. Paying off debt cancels money as surely as issuing loans creates it.
    9. So now there is $2M in inventory to sell but only $1M in the economy left to meet the price.
    10. When the 2nd million in sales is deposited, now there is NO MONEY LEFT to meet the $1M price of the remaining inventory.

    That is the essence of the accounting flaw. Do you finally GET IT?

    So Anthony, by this reasoning how is it even POSSIBLE that “that Douglas’ ‘Gap’ is basically the interest on loans of money?” By this example, it clearly is NOT. Eliminate all debt, loans and usury and you STILL HAVE THE GAP! Therefore the assertion is patently WRONG!

    • What? No Comment? No counters?

    • In the middle ages, when usury was outlawed in Christian nations, serfs needed only 14 weeks of labor to provide adequately for their families for an entire year. Where was the Gap back then — or is this merely an modern phenomena? Today we possess technology that infinitely exceeds what they had back then; we can mass produce food, goods and services much more cheaply and efficiently. So why are we in debt instead of in a state of even more surplus?

      The difference between us and the serfs of the middle ages can only be Usury. It is the GAP, especially today wherein production costs are so low that — were it not for usury — there would be enough production surplus wherein no one would have to fret about doing without basic necessities: food, shelter or medical care. Anthony wrote an excellent article explaining Basic Income, I highly recommend it.

      • The big physical difference between the middle ages and the modern world is the great increase in real capital (machines, equipment, etc.) as you have noted. Production in the middle ages was largely hand production. Today production is largely a matter of tools, including machines, computers, and robotics.

        Social Credit claims that apart from any question of interest, there is a chronic shortage of consumer purchasing power in the form of incomes distributed in the course of production to defray the costs of production because, under existing banking and accountancy conventions – again, quite apart from the question of interest – real capital involves the addition of overhead costs (to cover capital loan repayments and operating costs) for which no or an insufficient volume of consumer incomes is distributed.

        The basic problem is that the existing financial system does not reflect or represent the physical economic reality. Money should be issued at the rate of production and cancelled at the rate of consumption. Under the present system, the money that is issued in production is often cancelled before the item produced has been consumed. Thus there is no money to meet the price-value of that item. This is all explained in my book Social Credit Economics. Visit:

      • It is most definitely a modern phenomenon. In the middle ages, there was no credit money issued out of thin air and thus no money to “retire” so there could not possibly be a gap. Back then, usury was worse because you couldn’t “make up” the money to pay it out of thin air. You had to put yourself into indentured servitude or get very lucky at making more than you borrowed with that loan money.

        Go read my response to Dick again. Your remarks tell me you didn’t fully understand what I said. Interest is just another B cost. The problem is not interest, it is the lack of money to meet the B costs.

        • I have read your critique and i don’t accept your bogus model of economic reality — and that’s all it is a model. I gave you historical facts that are beyond dispute. You assume all sorts of things that are not true: that money without interest is somehow different today than in the middle ages and that without interest charged on money there would be a GAP or debt burden on society.

          The only other factor that could account for this GAP would be unearned rents and speculation (e.g., derivatives, high frequency trading, liar loans); but these criminal activities are derived from usury banking practices and would be not be tolerated once usury was eliminated.

          • Facts? What facts? You gave opinions. I gave math. They are facts acknowledged by people like Keynes who said “Consumption is satisfied partly by objects produced currently, and partly by objects produced previously, i.e., by disinvestment. To the extent that consumption is satisfied by the latter there is a contraction of current demand, since to that extent a part of current expenditures fails to find its way back as a part of net income. Contrariwise, whenever an article is produced within the period with a view to satisfying consumption subsequently, an expansion of current demand is set up. Now all capital investment is destined to result, sooner or later, in capital disinvestment. Thus the problem of providing that new capital investment shall always outrun capital disinvestment sufficiently to fill the gap between net income and consumption, presents a problem which is increasingly difficult as capital increases. New capital investment can only take place in excess of current capital disinvestment if future expenditure on consumption is expected to increase. Each time we secure today’s equilibrium by increased investment we are aggravating the difficulty of securing equilibrium tomorrow.”

            Now that is a FACT.

            Beyond dispute? That is laughable. People used to think Scurvy was a plague. Turned out to be a vitamin C deficiency. You ascribe the damage done by usury to interest when the cause is the gap. It was back then and it still is now. Only now it is worse because there is a logarithmic increase in debt compared to back then.

            Now a point of clarification. You said “You assume all sorts of things that are not true: that money without interest is somehow different today than in the middle ages and that without interest charged on money there would be a GAP or debt burden on society.” That is not what I said. I said that IF the gap was filled, interest would not be a burden and I said that if interest was eliminated, there would still be a big problem. The way things work now, interest most definitely IS a burden. So is the phenomenon of having to pay for capital twice – which is actually the SAME burden. I call it the gap. Keynes said as much (i.e. disinvestment) in the quote above. You’ll need to study social credit a bit deeper to grasp that concept though. You not understanding does not make it untrue. It just makes you ignorant of the facts.

          • There is one good point you made though and I just realized that I must back-pedal. I said earlier that the gap was not a problem in the middle ages. That is not quite true. Usury fed the gap. The fact that real money was loaned and paid back, and thus was not destroyed, was what I was referring to as not causing a gap. We know that the Rothschilds and gold smiths of the 16-18th centuries issued receipts for gold in excess of what they really had on hand. The money loaned on this basis most definitely did contribute to the gap because it was created when it was loaned out and it was destroyed when it was repaid – exactly like today. If I borrow $100 to make a $200 item to sell and pay out $100 in wages, there is $200 available to meet the price at the instant I put it up for sale. As soon as I am paid $100 for the first half of the goods, I retire the loan and now there is no money left in the economy to sell the last half of my inventory because it got RETIRED from circulation the instant I repaid the loan. This whole discussion assumes the money was created out of thin air when loaned and is retired to hide the scam when repaid. It does not assume this is gold coins loaned and repaid. When is the last time you bought something with gold?

            • The period in history to which I referred was the first 1500 years of christedom , wherein usury was outlawed. Medici, Fugger and Rothchild private banking dynasties did not exist then. There was no GAP: no debt private or national that burdened society. A mere serf could work 14 weeks to pay his expenses for an entire year. Great Cathedrals were financed with interest free money and built without engendering all monetary inequalities you bloviate about. Conjure all the theoretical mathematical mumbo jumbo you want, that usury did not exist then explains everything.

              • There are none so blind as those who will not see. There is no one more enslaved than the one who can’t see his chains. Carry on sir. Even the hard of thinking are entitled to be wrong. As William Aberhardt once said, “If they have not suffered enough, it is their God-given right to suffer some more.”

                • Wallace Klinck permalink

                  Social Credit reveals that the consumer is rightly charged with capital depreciation but wrongly not credited with capital appreciation. In the primitive economy labour charges constituted the major proportion of costs and so more nearly approximated total costs and prices.

                  C. H. Douglas proceeded from the standpoint of cost accountancy and made quite clear the fact that the inherent deficiency of effective consumer purchasing-power becomes increasingly burdensome as modern technology increases the capital component of cost in prices. Thus, Social Credit becomes increasingly relevant as the economy becomes more efficient by replacing labour as a factor of production with modern real capital, i.e., tools, plant, technique, automation, robotization and artificial intelligence.

                  Douglas’s “A + B Theorem” is simply a statement of observable fact. All businesses make internal (A) and external (B) payments. “A” payments are wages, salaries and dividends and are effective consumer purchasing-power. “B” payments are all payments made to other organizations and are not purchasing-power to the personnel of the business making these payments. Although “B” payments originated as “A” payments, they are spent “A” payments. They are not and can never again be effective purchasing-power in the possession of consumers. They have gone back through the production system to be cancelled as purchasing-power when a producer loan is repaid to the bank, or when used to replace capital reserves–from whence they can only be issued to create new production which incurs entirely new and additional financial costs. Because of increasing non-labour factors of production, “B” costs are, of course, always growing in relation to “A” costs.

                  “A” payments cannot liquidate “A + B” costs, for individual businesses or in the aggregate nationally. The only way total costs can be “liquidated” is through further credit issues to finance new production or to mortgage future incomes. Governments increasingly accrue debt in order to compensate the shortage of purchasing-power in the overall economy. The point is, that payments financed by debt do not finally liquidate financial costs but merely transfer such charges as a claim against future incomes–which is no liquidation whatsoever.

                  When banks make loans they not only create this very necessary credit but wrongly claim ownership of it. They monetize the community’s real assets but do not create these assets–upon which they will foreclose in the case of loan default. They do not return such foreclosed assets to the community. By claiming ownership of the credits they issue by monopoly privilege they effectively appropriate the communal credit and acquire control over the Cultural Heritage. Monetary theorists who ascribe our economic problems to “usury” as such reveal themselves as captives of religious obsession, seemingly incapable of rational scientific analysis of the comprehensive role of money and credit. As such they seem willing to overlook the theft of our rightful inheritance in the communal capital while engaging themselves in shadow-boxing with a result rather than a cause of economic evil. Their are willing to sacrifice our very inheritance for a “mess of potage.”

                  Growing and accumulating debts, private and public represent the extent to which the banking fraternity assert their bogus claim to the community’s assets. They represent wrongfully appropriated purchasing-power of the community and should reside on the credit rather than the debit side of the national accounts. Douglas very appropriately recommended new consumer credits as an extraneous injection of purchasing-power so as to properly balance the price-system with sufficient unattached income capable of defraying all production costs, dynamically, as the occur. Such credits would be drawn from a properly constructed National Credit Account representing the estimated value of the nation’s real credit or ability to create and deliver goods and services. They would be paid equally to all citizens in the form of National or Consumer Dividends and to all retailers at point of sale on condition that they lower or “Compensate” their prices in accord with the varying current ratio of overall national consumption to production. As items representing consumption they would be debited to the National Credit Account–which latter nevertheless would always be increasing due to addition of new real capital assets. All things physically and psychologically possible would be made financially possible.

                  The critics of Social Credit almost always totally ignore and seem entirely oblivious to Douglas’ analysis of financial cost as this relates to actual physical cost–which he demonstrated is increasingly becoming much lower than computed financial cost. Social Credit demands falling prices but in the context of industrial financial liquidity–unlike deflation in the orthodox sense which is caused by credit restriction resulting in widespread bankruptcy.

                  Money in the modern economy is mere accountancy, which should simply represent our commercial activity but never restrict it. Being mere accountancy, “money” must be made the servant and not the master of mankind.

                  • Finally! A voice of reason and logic.

                  • Douglas ignored the cost of usury as a unearned rent charged for a medium of exchange (money) in his analysis and proposed a palliative economic solution in social credit. He merely lumped this ubiquitous tax on all labor goods and services with labor compensation shortfalls and offset it with social credit payments. If you want to reduce this fact to religious sentiment then you are the one that is being neither logical nor empirical.

                    • jim koconis permalink

                      Finally! A voice of reason and logic.🙂 thank you pm

                      it seems that usury is such a powerfully embedded reality that few can even countenance a world without it. this speaks volumes about the depreciating moral imagination of our society.

                    • Agreed pm…..

                  • An exact, comprehensive and complete analysis. Thank you very much Wally. If one actually looks at and understands the productive/economic system, the accounting rules that enforce the original problem and the Financial system’s dominating monopoly powers in this affair…the debate ends and the only question is…how do we best band together and make it clear to the politicians and financial authorities that we DEMAND our immanent and un-extortable economic freedom from this non-functioning system with the means of economic freedom in a monetary economy….the policies of an ongoing universal dividend and retail discount!

                  • jim koconis permalink

                    the goal of monetary reform should not be to simply invent a counterweight to the drain imposed by usury (national dividend) – it should be to target the problem and kill it (usury).

                    • That would be true if your premise that usury is the root cause was true. It isn’t. The blind lead the blind and together they fall into the ditch.

                    • Quite the contrary creating a counterweight , especially on the level of idea/paradigm is precisely what is necessary to correct the problem in the temporal universe. Then if the counter weighting idea (in this case Gifting) is also the only way to validly and comprehensively resolve the problem in an economic sense (that is, costlessly) and also the counterweighting idea is an aspect of consciousness itself (in this case Grace which is balance, flow, equilibrium, pervasion [of the system] and direct effect [for every individual in the system] then its integration into the system results in a completion and transformation of it as well..

                      This is a an integrative system I’ve been thinking and writing about that I call Duality Within Trinity where Duality is the signature and mindset of the physical universe and Trinity is the signature and mindset of Spirit/Consciousness. Social Credit as per above fits perfectly within it and has the transformational economic effects that result from the integration of Duality with Trinity.

                    • jim koconis permalink

                      hmmm, interesting…..

                      and i always thought that a gift was something precious that came from the human heart. i never realized till now that it could also be extended by a government after being created ex nihlo. what an expansive concept.

                    • As a society, we can make a decision to gift ourselves a dividend and this is indeed a societal act of love towards itself. You can’t love anyone else if you can’t love yourself. Generosity comes from a full heart. We live in a land of plenty and our economic framework should reflect that reality. That would be a GRACEful economic model.

                    • jim koconis permalink

                      grace is the aura surrounding forgiveness. you cannot give that which doesn’t exist. in your own words …’money is pure accountancy’. its a hodgepodge of vacuous symbols claiming to to be the very thing they can only represent. anyone who refuses to understand this mystery will never unravel the fraud of usury or comprehend all the tangential misery it brings in its wake.

                    • Are you serious? How many angels can dance on the head of a needle? Websters: : a way of moving that is smooth and attractive and that is not stiff or awkward

                      : a controlled, polite, and pleasant way of behaving

                      Be more graceful. Let’s create a more graceful economic system.

                  • Wallace Klinck permalink

                    Resubmitted with shorter lines. Text was cut off at the ends of lines. (?)

                    Social Credit reveals that the consumer is rightly charged with capital depreciation
                    but wrongly not credited with capital appreciation. In the primitive economy labour
                    charges constituted the major proportion of costs and so more nearly approximated
                    total costs and prices.

                    C. H. Douglas proceeded from the standpoint of cost accountancy and made
                    quite clear the fact that the inherent deficiency of effective consumer purchasing-
                    power becomes increasingly burdensome as modern technology increases the
                    capital component of cost in prices. Thus, Social Credit becomes increasingly
                    relevant as the economy becomes more efficient by replacing labour as a factor
                    of production with modern real capital, i.e., tools, plant, technique, automation,
                    robotization and artificial intelligence.

                    Douglas’s “A + B Theorem” is simply a statement of observable fact. All
                    businesses make internal (A) and external (B) payments. “A” payments are
                    wages, salaries and dividends and are effective consumer purchasing-power.
                    “B” payments are all payments made to other organizations and are not
                    purchasing-power to the personnel of the business making these payments.
                    Although “B” payments originated as “A” payments, they are spent “A” payments.
                    They are not and can never again be effective purchasing-power in the
                    possession of consumers. They have gone back through the production system
                    to be cancelled as purchasing-power when a producer loan is repaid to the bank,
                    or when used to replace capital reserves–from whence they can only be issued
                    to create new production which incurs entirely new and additional financial costs.
                    Because of increasing non-labour factors of production, “B” costs are, of course,
                    always growing in relation to “A” costs.

                    “A” payments cannot liquidate “A + B” costs, for individual businesses or in the
                    aggregate nationally. The only way total costs can be “liquidated” is through
                    further credit issues to finance new production or to mortgage future incomes.
                    Governments increasingly accrue debt in order to compensate the shortage of
                    purchasing-power in the overall economy. The essential point is, that payments
                    financed by debt do not finally liquidate financial costs but merely transfer such
                    charges as a claim against future incomes–which is no liquidation whatsoever.

                    When banks make loans they not only create this very necessary credit but
                    wrongly claim ownership of it. They monetize the community’s real assets but do
                    not create these assets–upon which they will foreclose in the case of loan default.
                    They do not return such foreclosed assets to the community. By claiming
                    ownership of the credits which they issue by monopoly privilege they effectively
                    appropriate the communal credit and acquire control over the Cultural Heritage.
                    Monetary theorists who ascribe our economic problems to “usury” as such reveal
                    themselves as captives of religious obsession, seemingly incapable of rational
                    scientific analysis of the comprehensive role of money and credit. As such they
                    seem willing to overlook the theft of our rightful inheritance in the communal
                    capital while engaging themselves in shadow-boxing with a result rather than
                    a cause of economic evil. Their are willing to sacrifice our very inheritance for
                    a “mess of potage.”

                    Growing and accumulating debts, private and public represent the extent to which
                    the banking fraternity assert their bogus claim to the community’s assets. They
                    represent wrongfully appropriated purchasing-power of the community and should
                    reside on the credit rather than the debit side of the national accounts. Douglas
                    very appropriately recommended new consumer credits as an extraneous injection
                    of purchasing-power so as to properly balance the price-system with sufficient
                    unattached income capable of defraying all production costs, dynamically, as they
                    occur. Such credits would be drawn from a properly constructed National Credit
                    Account representing the estimated value of the nation’s real credit or ability to
                    create and deliver goods and services. They would be paid equally to all citizens
                    in the form of National or Consumer Dividends and to all retailers at point of sale
                    on condition that they lower or “Compensate” their prices in accord with the varying
                    current ratio of overall national consumption to production. As items representing
                    consumption they would be debited to the National Credit Account–which latter
                    nevertheless would always be increasing due to addition of new real capital assets.
                    All things physically and psychologically possible would be made financially possible.

                    The critics of Social Credit almost always totally ignore and seem entirely oblivious
                    to Douglas’s analysis of financial cost as this relates to actual physical cost–which
                    he demonstrated is increasingly becoming much lower than computed financial
                    cost. Social Credit demands falling prices but in the context of industrial financial
                    liquidity–unlike deflation in the orthodox sense which is caused by credit
                    restriction resulting in widespread bankruptcy.

                    Money in the modern economy is mere accountancy, which should simply
                    represent our commercial activity but never restrict it. Being mere accountancy,
                    “money” must be made the servant and not the master of mankind.

                    • Wallace Klinck permalink

                      something is wrong–lines are cut off

                    • Click on the reply button below the post. The full text shoud appear then.

                • Wallace Klinck permalink

                  Trying once again with compressed margins:

                  Social Credit reveals that the consumer is rightly charged with capital depreciation but wrongly not credited with capital appreciation. In the primitive economy labour charges constituted the major proportion of costs and so more nearly approximated total costs and prices.

                  C. H. Douglas proceeded from the standpoint of cost accountancy and made quite clear the fact that the inherent deficiency of effective consumer purchasing-power becomes increasingly burdensome as modern technology increases the capital component of cost in prices. Thus, Social Credit becomes increasingly relevant as the economy becomes more efficient by replacing labour as a factor of production with modern real capital, i.e., tools, plant, technique, automation, robotization and artificial intelligence.

                  Douglas’s “A + B Theorem” is simply a statement of observable fact. All businesses make internal (A) and external (B) payments. “A” payments are wages, salaries and dividends and are effective consumer purchasing-power. “B” payments are all payments made to other organizations and are not purchasing-power to the personnel of the business making these payments. Although “B” payments originated as “A” payments, they are spent “A” payments. They are not and can never again be effective purchasing-power in the possession of consumers. They have gone back through the production system to be cancelled as purchasing-power when a producer loan is repaid to the bank, or when used to replace capital reserves–from whence they can only be issued to create new production which incurs entirely new and additional financial costs. Because of increasing non-labour factors of production, “B” costs are, of course, always growing in relation to “A” costs.

                  “A” payments cannot liquidate “A + B” costs, for individual businesses or in the aggregate nationally. The only way total costs can be “liquidated” is through further credit issues to finance new production or to mortgage future incomes. Governments increasingly accrue debt in order to compensate the shortage of purchasing-power in the overall economy. The point is, that payments financed by debt do not finally liquidate financial costs but merely transfer such charges as a claim against future incomes–which is no liquidation whatsoever.

                  When banks make loans they not only create this very necessary credit but wrongly claim ownership of it. They monetize the community’s real assets but do not create these assets–upon which they will foreclose in the case of loan default. They do not return such foreclosed assets to the community. By claiming ownership of the credits they issue by monopoly privilege they effectively appropriate the communal credit and acquire control over the Cultural Heritage. Monetary theorists who ascribe our economic problems to “usury” as such reveal themselves as captives of religious obsession, seemingly incapable of rational scientific analysis of the comprehensive role of money and credit. As such they seem willing to overlook the theft of our rightful inheritance in the communal capital while engaging themselves in shadow-boxing with a result rather than a cause of economic evil. Their are willing to sacrifice our very inheritance for a “mess of potage.”

                  Growing and accumulating debts, private and public represent the extent to which the banking fraternity assert their bogus claim to the community’s assets. They represent wrongfully appropriated purchasing-power of the community and should reside on the credit rather than the debit side of the national accounts. Douglas very appropriately recommended new consumer credits as an extraneous injection of purchasing-power so as to properly balance the price-system with sufficient unattached income capable of defraying all production costs, dynamically, as they occur. Such credits would be drawn from a properly constructed National Credit Account representing the estimated value of the nation’s real credit or ability to create and deliver goods and services. They would be paid equally to all citizens in the form of National or Consumer Dividends and to all retailers at point of sale on condition that they lower or “Compensate” their prices in accord with the varying current ratio of overall national consumption to production. As items representing consumption they would be debited to the National Credit Account–which latter nevertheless would always be increasing due to addition of new real capital assets. All things physically and psychologically possible would be made financially possible.

                  The critics of Social Credit almost always totally ignore and seem entirely oblivious to Douglas’s analysis of financial cost as this relates to actual physical cost–which he demonstrated is increasingly becoming much lower than computed financial cost. Social Credit demands falling prices but in the context of industrial financial liquidity–unlike deflation in the orthodox sense which is caused by credit restriction resulting in widespread bankruptcy.

                  Money in the modern economy is mere accountancy, which should simply represent our commercial activity but never restrict it. Being mere accountancy, “money” must be made the servant and not the master of mankind.

  18. Ross N. permalink

    Who holds the debt instrument? Let’s say I loan out my lawnmower to somebody. A credit/debt contract has formed. When lawnmower is returned, debtor has extinguished his debt obligation to me. When credits and debts get together, they extinguish. In the case of this “lawnmower goods” credit/debt relation, it is man to man or “two party.” This is our evolutionary history, where we had credits and debts on each other, and we simply remembered who owed who what.

    Talley’s are marks that may describe the good owed. In this case a private tally would be evidence of a debt relation. This adds an element of law, as the tally is a contract, but it’s a private contract between two people.

    When the king issues tallies then it becomes money (not credit), because said money has the backing of law/force and is good for taxes. These tallies circulate in the commons and have high acceptance and are good for settling contracts. Money, then settles the difference in a goods exchange, or may trade completely for a good. The Kings tally isn’t really evidence of debt, as it is taken up in taxes and refluxed over and over. The first issuance was seigniorage against money supply.

    With Bank of England, BOE model, who holds the debt instrument and what is the nature of this banker money? It has become a three party agreement, where debtor becomes hypothecated by banker. This type of money is credit that returns to ledger for destruction, similar to returning a good that cancels a debt/credit contract. However, new debtor spends this bank credit into money supply where it spins for a time period, to then be recalled. Banker is one party, debtor is the other party, and users in money supply are the third party. In this way, BOE type bank credit has short circuited our natural evolution. Banker holds the debt instrument on the population, and hence collects the usury. This banker third party injected into our relations is similar to a parasite injecting itself into a host. The interest/usury drains toward banker. In a two party arrangement, usury drains to saver/creditor in lower loop where it is likely to be recycled; hence it is less usurious. Usury drains toward the saver. (Yes, a saver could have made gains through rent-seeking and if so, should be taxed.) Channeling or path of money matters. A monetary system may constrain paths by changing money types; MEFO bills are a good example, where the bill channeled purchasing power into military goods – an example of the action, not the morality.

    Also, bank usury is front loaded on credit loans, and passes thru debtor’s double entry ledger and onto bankers. Usury money, formerly credit, then becomes floating money as it has no mirror in a debt instrument. Like Gold, banker may choose not to spend and this forces desperate labor to sell their wares for cheap. Banker gets first use of the ‘credit’ now floating usury, and thus gains purchasing power relative to later price debased credit.

    Floating money only has taxes to recall it. I’ve searched Douglas in vain for an admission to this reality. I have the Douglas manual, so maybe he admits it elsewhere? This is a huge oversight. Fiscal policy is important when money supply has a large component of floating money.

    Bidding up of land, due to its fixed supply, is a form of rents borne by the community. What is not taken up in taxes is pledged to BOE private credit banker. One only needs to observe today’s credit mechanics to see this in action, especially housing bubble. A floating money supply of debt free, allows people to save, and this money type exactly matches goods and services. In the past, private credit was kept from bubbling by forcing new owners to use their savings, hence large down payments on land. Bubbling on financial assets like stocks are another example of a credit bubble not contained with savings. Coins and bills were emitted as treasury seigniorage, so money supply was mixed, and hence some treasury money would become savings in labor’s lower loop.

    Credit, if issued, needs to match goods and services, and said credit may be used to front load supply chains, and also be used as a drain knob to prevent inflation. So, Credit can be useful if used properly. Credit should not chase after land as it will bid up prices. If credit is issued against land, it should at least be volume restricted. Private bank credit chases after gains of any type, as only motive is profit; therefore it is inappropriate type in any money supply.

    Let’s admit it; man is controlled by prices and money. Money and prices are a control and distribution scheme, so morality has to be encoded in law (or bylaws). Also there are different attributes to money, especially these three, which in my opinion cannot be ignored: 1) volume 2) channeling, and 3) type.

    These attributes imply that some sort of monetary authority or moral institution must issue money in accordance with needs of industry and service, as well as improving the commons. This can be done by using legal targets, agreed to in advance. Law done in advance has the opportunity to encode for morality. Since floating money must be in the supply, then fiscal policy has to be a component. Ideally, and also in my opinion, taxes should land on rents; as man will always come up with new rent schemes. Government should also take fees for their activity in inelastic markets, where they are the lowest cost producer. This then lowers the overall tax burden and helps man become economically free.

    Who holds the debt instrument? In the case of private banker credit, the banker holds it, and may even on-sell instrument into markets. Mortgage backed securities are evidence of this in action. In this way, man is enslaved as he has to labor to make prices to attract vanishing bank credit (from lower loop). Usury passes thru to upper loop as Dick so elegantly shows. Upper loop is floating money, and hence should be taxed. When taxes are refluxed, that is a pump, and if spent properly into productivity channels, like the commons it creates outsized wealth. Social creditors would spend into households rather than commons, which is insurance against government gone crazy. Households are voters and would protect their money power. I’m not the enemy of the good and labor needs injections to overcome gaps related to waste in supply chain.

    In a sovereign system, or in Social Credit, debt free is issued. In Canada’s quasi sovereign system 1938-74, some of their debt free money went on to pay down private debts at credit issuing banks. These private banks were limited to four year loans at 6%, so loan usury was funded exogenously (via debt free money). Canada then had a drain knob, whereby loan is always recalling its credit for destruction. Ultimately, of course, the private bankers used their usury money power to usurp Bank of Canada in 74, with an attack led by Bank of International Settlements. It’s also interesting that 74 was same time frame as Kissinger agreement with Saudi, and Western private banks and capital markets were becoming flush with recycled petrodollars.

    (As an aside, Canada also injected social credit style during period mentioned, with injections into households for Children younger than 16yrs old @ $5/month, and another injection for retirees.)

    IMHO money power must be contained in its own special fireproof box. Rentiers, who gain private money power, become morally compromised Oligarchs, and want outsized gains at the expense of society. This is the verdict of history as well. I wouldn’t design any money supply with private for profit bank credit as a component. Profits especially should not be yoked to capricious debt instruments which use exponential interest instead of fees; and further – rentier gains are made by these banking corporations, usually by canceling said debts through the magick of swaps. The swap is always uneven as real wealth is transferred to banker creditor, witness austerity asset stripping of PIIGs. History has proven BOE style credit to be a giant rent scheme, a mismatch of money type out of alignment with our evolution; and if we don’t overturn this flawed money system, it may ultimately lead to our destruction.

    • “Floating money only has taxes to recall it. I’ve searched Douglas in vain for an admission to this reality. I have the Douglas manual, so maybe he admits it elsewhere? This is a huge oversight. Fiscal policy is important when money supply has a large component of floating money.”

      Agreed: Social Credit will see rising prices as a result of this. It’s simply not true that the Plutocrats will hang on to all the new money they acquire by controlling industry. They will at some point either spend or lend it back into circulation and this will definitely lead to higher prices.

      And very much agreed with your conclusion. It really makes no sense to keep bankers or Usury after all we’ve been going through. We need to harnass money/credit creation for the people and end all rents and unearned income.

      If there is no money in money/credit creation, incentives for abuse will drastically lower too. All that remains to be solved is rational allocation.

      I think rights based allocation goes a long way, but I’m very much open to other/additional ideas.

      As a side note: if Government is to recall floating money through taxation, than it does have both power and incentive for abuse. How would you manage this?

      • Ross N. permalink

        There is always incentive for abuse where man is involved. Many of us are fallen creatures, who are morally compromised, primarily due to our pride defect.

        From 38 to 69 Canada had no price inflation, despite spending debt free into the economy. They had built a trans-continental railroad without forming Oligarchy as contrasted to U.S. experience. 4000 miles of Trans Canada highway to cross continent was built. There was Free Education, Universal Health Care, and land grants for returning veterans. This was a period of good government operating a low cost money system to benefit its people. There was no real price inflation except late in the 60’s due to cost push, not excess money.

        St Lawrence Seaway was dredged and locks added an engineering feat similar to Panama Canal. Welland Canal between Lake Ontario and Lake Erie was also built, it was eight locks and lifts ships 326ft over Niagra escarpment.

        Private Banks were restricted to four year loans at 6%, so usury did not have a time base to go exponential. Mortgages were provided by trusts, similar to Savings and Loans in U.S., where existing money was used (not credit). This formed proper two party arrangements as discussed earlier, and said trusts earned fees and/or low interest rates for their service.
        In the modern era, it seems always to be money power that sneaks in through the backdoor, thus breaking down civil society. In Canada’s case, BOC was turned into a Crown Corporation in ‘38 and its stocks were then held in trust. Trustee was Minister of Finance (MOF).

        Automatically, one can see system weakness: MOF is just one person, who is arrayed against the remaining government superstructure. That remaining superstructure must operate using taxes. Having MOF spend rather than going to voters for taxes is weakness, and that is where Rothschild’s also stepped in. MOF and Treasury were housed under same umbrella, without good separation.

        There are two ways out IMHO: 1) Codify the monetary authority MA as a separate branch of government with constitutional law. Had Canada done this they would be a very different country now.

        Effectively, this is a Sovereign system, which is very close to Social Credit. Give MA to the states, or ideally households, to further separate it from fiscal side of government. Now, the fiscal side (taxing side) must make their case to the people when it taxes. It is a fairly good argument for politicians to then allow taxes to fall on rents and unearned income. Monetary side is now controlled and owned by the States, or the people. There must be a strong separation between monetary and fiscal. This separation forces proper taxation and helps keep government in check, hence government is subordinate to the people it serves. I think this is a partial answer to your question, how to keep the taxing government in check.

        The other way out (2) is regional currencies, such as Talent system. Talent systems can be linked up with Keynes style Bancors (to mark goods exchanges between systems) to thus grow regional systems quickly and get high acceptance. Use good contract law with morality encoded so the commons accepts it. Contract law is acceptance when one enters the contract, as opposed to constitutional law which should relate to natural law.

        Audits and visibility will help perpetuate morality and good governance. Get government, especially local government to issue Talents as percentage of payroll, this to have local power means to shield against vertical pyramid attack. The local taxation body (local government) should be trained to tax properly in a Talent system. (Tax rents and unearned income.)

        A sovereign system or a social credit system is not a vertical pyramid. This money is of floating type (FM) and is first injected into households as seigniorage, and beside when money floats government has lost control of it. It can cycle in money supply forever at low cost. 2500 years of coin history proves this to be the case. FM can only be recalled with taxes, or if private credit is also operating – debt instruments will also call in FM during depressions. (This is how bankers grab gold.)

        A hidden money power pyramid, using banker credit is what operates today and is our control system.

        Communism and fascism are visible power pyramids where both money power and state power are centralized.

        A talent system is regional money for local economies thus the pyramids are many, and hence are Federal in structure i.e. small pyramids with few steps in their hierarchy and thus feedback nodes are small and quick. It is also fee based, with just enough income to operate the superstructure. Said fees flux back out via payroll and re-enter local economy.

        A state bank like that of Benjamin Franklin’s reduced taxes by having usury re-spent into the commons. This system was overturned by BOE. How? By forcing Colonials to accept BOE banknotes, and stop using Colonial script. Like BOC, Franklin’s state bank was shut down by private money powers; these money powers were a hidden vertical pyramid structure. BOE had debts on their government and the people, and hence controlled the English state.

        The answer is really Logos. Any system must adhere to Logos and be defended against those elements who would destroy the higher natural order of man. Man’s pride defect cannot be allowed to have its way, and hence private money power (private profits via usury) should be thrown onto trash heap of history.

        It should be a two pronged attack: Proper local money from down low, and Sovereign money from on high. Decapitate anti-logos hidden money power pyramid (or blind its all seeing eye), and also dig out from under its base.

      • I’m going to do to you what Jim Schroeder did to another who was hard-headed on this point. In the end, that hard-head finally had a light bulb go off in his head. I agreed with the hard-head so I was thrilled by his sensible answers – until I watched Jim dismantle them with reason and common sense. If you are completely honest with yourself and care about the truth first and foremost, you will come to the same conclusion. It’s OK to be wrong. It is not OK to stubbornly hold onto wrong out of pride.

        Jim asked two questions. 1) Does a bank offer services that are of value to society? 2) If a bank offers a valuable service, is it not entitled – like other businesses – to make a profit?

        Let’s just start there. Don’t go off in the weeds on me. Stay on point and answer just these two questions. The next question is where this will get interesting.

        • No.

          Usury is unearned income and the lender does not do a service, as he produces nothing.

          • That surprises me. So you don’t value having the service of a bank account that keeps track of all your spendings? You don’t value the convenience of a debit or credit card? You see no need to borrow a money so you can buy a house now instead of saving a decade or so? You see no value in getting a car loan so you can buy a car without having to save for a year? You could see no situation where disaster could strike and you would need to borrow money to meet an emergency? You are rare indeed. I rather think you are either lying or playing with me because EVERYONE who needs to operate in the modern society values these things. If that is true then none of us expects this or ANY business to offer services for FREE. People need to be paid. Expenses need to be met. Businesses are entitled to make a reasonable profit.

            Tell me you’re just playing with me or explain just how you expect people to make payments and disbursements of their money – be that wages or dividends or compensated price rebates.

            • I believe in free market competition. Let private banks that charge interest on loans compete for the same customers with public banks charging nearly zero interest. Bank of North Dakota has been issuing very low interest loans since 1919. A true public government bank could do much better — and has done so for varying periods throughout history of mankind.

              • Public Banking indeed can be an additional competitive bulwark against the monopoly on credit that private finance currently enjoys. However, such a structural change does not effectively get at the idea/paradigm of debt only. Only an idea/paradigm of monetary grace the free gift/Gifting in the area of consumer finance…is capable of balancing their debt ONLY paradigm. Ideas/paradigms are forces that are pervasive in their reach and effect….and that is why the idea/paradigm of Gifting is the true and complete solution to the problem.

              • Agreed.

            • Liam, Usury has nothing to do with real costs. Real costs can be passed on to the consumer.

              Loaning money at interest constitutes unearned income. This is the key reason why Usury is condemned by all major religions.

              Obviously, 300k interest over a 200k mortgage over 30 years has nothing to do with ‘costs’ of any kind. Nor does paying trillions on the National Debt in debt service, without every repaying principal. It’s all just a really a very transparent wealth transfer to the ultra rich.

              Money and Credit are a commons in my view and they should be exploited in such a fashion that people have access at cost price to their fair share in both.

              • Hi Anthony,

                I think that you are making some valid points here. This is why I prefer to define usury as “dishonest profit” rather than as l”ending money at interest”. If the interest charged were so low that it just covered the bank’s legitimate business costs, I don’t think anyone would or should complain. I also don’t think anyone should complain if the banks, by treating their loans as investments, were able to share equitably in the profits of the businesses they lend to (provided that there are profits). But in any case, 300 k over a 200k mortgage or trillions on a National debt are exorbitant quantities to pay for in exchange for access to credit. C.H. Douglas did make it clear that, in his view, interest was often exorbitant under the existing system, even if he did not think that this wealth transfer was the core problem with the existing financial (banking and cost accountacy) system. Fix that particular problem (the inherent lack of consumer purchasing power) with injections of debt-free credit and all of the interest currently charged on long-term chronic public and private debts would be eliminated as the compensatory debt (to fill the gap between prices and incomes) would no longer be required either.

    • The compensated retail discount mechanism in Social Credit would deal with any inflationary tendency of the economy. Rarely do asset or commodity prices inflate more than 3-4% per month so a retail discount of 10% which is a realistic and perhaps conservative estimate of the discount percentage as the formula for such discount is the difference between the actual total costs of consumption/what individuals bought and the total costs/prices of what was produced in the same period of time. The discount mechanism in Social Credit actually enables prices to go down as innovation and increased production reduces costs.

  19. satis5d permalink

    I appreciate Dick Eastman and his efforts to make changes in the monetary system, but I agree with you, Anthony on your excellent rebuttal. The real solution is to put the power of money in the hands of the people, and not of the elites.

    • Couldn’t agree more. Now the question is how best to do this.

      • luismagno2010 permalink

        With a collective US “grass-roots” Presidential run, a gathering of all Americans with even vague Presidential ambitions, hopes and aspirations. From the process of organizing a collective Presidential campaign and kitchen cabinet would arise a collective Presidential leadership group culminating with the natural emergence of a true leader, our next President.

        If I were running for the Collective Presidency my first need would be for a multi-talented chief of staff capable of navigating the intricacies and pitfalls of the internet or of directing someone else to do so. My chief of staff would, of course, ideally also aspire to the Presidency.

        I would turn to Anthony for advice and direction on the Money Issue, an issue second in importance only to the Human Issue while we worked to get our domestic houses in order as Humanity prepares in the coming years for a transition, not to a cashless society controlled by the Money Power, but to a Moneyless Society controlled by our grounded grass-roots collective mutual trust and social credit society. Amen.

        • These are sentiments I resonate with. I do think there is one problem here though. This is generally a sentiment that is looking for a “Savior.” I don’t believe that is our path. What I do think is needed is for every man and woman to take personal responsibility to learn what is wrong with our present system, find others of the same mind and only lend support to those candidate who put themselves up for office. In every case that there are only candidates who stand for the old guard, I would play the role of conscientious objector by going to the polling booth, deliberately spoiling my ballot so as to say “none of the above” and then go outside and yell out what I did and why I did it.

          Can you imagine if the entire country did this? It would lead to either the election of people worthy of our vote or would send a clear message that those in power have no legitimacy. The days of blindly putting our faith in someone else because we are too lazy to take control of our own destinies must come to an end or nothing will change. I have heard all the arguments. You will never get a candidate who stands for all the things you do. That is true. However, if I get a candidate that stands for the correct economic policies that will lead us all out of debt slavery, I don’t care about the rest because they are far less important and can be fixed later. If people don’t have prosperous lives, they will never be happy.

          Is prosperity being rich? I don’t think so. It is being able to meet all of their basic needs in a dignified way and then to pour their lives into something they find fulfilling. They can drink their own wine and eat their own food under their own tree on the home they have built for themselves and enjoy their children and grandchildren in peace and contentment. In summary, they can live joyous and fulfilling lives. With the advanced technologies man has harnessed to date, that is entirely possible. Only greed, selfishness and stupidity separate us all from it. We were made in the image of our Creator. We need to start acting like Him. Do we think He just leaves His Creation to fate and the responsibility of others? I don’t think so.

          • “Only greed, selfishness and stupidity separate us all from it. We were made in the image of our Creator. We need to start acting like Him.”

            We are Presidential candidates in a “grassroots” Collective Presidential Campaign. We are sovereign individuals and correspondingly subordinate to the sovereign multilateral national or regional collectives of which we are a part. We are the leaders. We are the indispensable ones not just the chosen ones.

  20. E M Jones
    there’s a much deeper layer of the concept ‘usury’ he, nor any americans (or ‘jews’ for that matter), with the exception of those who grok John D Hamaker, can grasp and grapple with, the grounded version. rockdust as money proliferates wealth like nothing else, perfectly desirable ….

    • It’s fascinating stuff and Michael Jones is an intellectual powerhouse.

      But I think it’s time to consider that the Vatican and the Jews are manifestations of the same force.

      The Vatican resulted from the centralization of wealth through Usury in Rome.

      My hunch is it was actually the Usurers from Rome that later became the landed aristocracy.

      • KSS permalink

        Legacy and future of Christianity in the West – A Debate

      • Dublinsmick permalink

        And how long have I been saying that Anthony?

        Stalin was trained by Jesuits while in the Tiflis Orthodox Seminary in Georgia—openly admitted by “Koba” himself to journalist and Masonic Jew Emil Ludwig (Cohen).

        Hitler’s relatives in Ireland state that he played chess with Stalin at the Tavistock Institute.

        4. Of publishing a false statement for the purpose of concealment of status: (1900 to present day) That the Catholic Church, more specifically the Jesuit Order has maintained countless false statements and documents pertaining to the status of Joseph Stalin. That Fr. Joseph Stalin S.J. was a trained, dedicated and fully ordained Catholic priest of the Jesuit order, who was recruited for a historic mission in his final year at the seminary in 1899. That in addition to failing to recognize Fr Joseph Stalin S. J. Furthermore, that the Jesuit Order did permit Fr Stalin to marry not once but twice, while remaining a fully ordained priest. That for his entire life until his death, there is no indication that Fr Joseph Stalin S. J. was ever defrocked as a priest.

        Newly released FBI documents now say Hitler was not in the bunker. The book on his escape to Argentina are looking better all the time. (Grey Wolf)

        Castro was trained by the jesuits.

        Fidel Castro was born in the village of Brian in Cuba on August 13, 1926 into a rich family, the son of Angel Castro, who was a Spanish immigrant, and his cook Lina Ruz Gonzalez. In his early life Fidel Castro went to Jesuit schools and from there he attended the Jesuit preparatory school Colegio Belen in Havana.

        Jesuit-Trained Movers and Shakers – Philippine Resistance Movement
        Communist Dictator Castro shaking hands with his boss, Grandmaster and Prince of the Sovereign Military Order of Malta, Andrew Willoughby Ninian Bertie
        Controlled Opposition. Fidel Castro was trained in Jesuit schools for seven years, put in power by the Jesuit’s Knights of Malta-controlled Skull and Bones CIA, and advised by a Jesuit, Fr. Armando Llorente during the revolution. Today, Castro continues to be subservient to 78th Grandmaster and Prince of the Sovereign Military Order of Malta Andrew Willoughby Ninian Bertie, cousin of Queen Elizabeth.–ha…university.html
        The life of Fidel Castro has always been bound up with prophesies, some of them strangely accurate. Probably the most known is the one made by [Jesuit] Father Antonio Llorente, Castro’s teacher and spiritual adviser at the [Jesuit] Colegio de Belén. “Fidel Castro is a man of destiny,” prophesied Llorente. “Behind him is the hand of God. He has a mission to fulfill and he will fulfill it against all obstacles.”[1] In this particular case, however, I have the feeling that Father Llorente was slightly confused about whose hand was behind Fidel Castro.

        Apparently, Fidel Castro is gay, Jewish, very wealthy and has been an agent of the CIA.

        Pope Francis makes the list of top 50 most prominent jews world wide!

    • I posted this on Facebook:
      “This is an interesting exposition by E. Michael Jones concerning Jewish Usury throughout the ages.
      Jones is a Catholic and he frames the issue as one of the Vatican against the Jews.

      And while this is of course in itself an undeniable part of history, I think it was actually an old dialectic.

      The Vatican always was a Babylonian institution and many in the conspiracy scene actually see it as the core of the NWO. I don’t agree with that, the Vatican has been fading dramatically over the last few centuries. They were just a vehicle for the Hidden Hand, just as Jewish Supremacism is.

      My hunch is that the Usurers who centralized all wealth in the Roman Empire later became the Landed Aristocracy. The Roman Empire itself continued in the Vatican.

      The Vatican usurped Jesus to control the opposition he so magnificently fired off and the first thing they did was destroy all the authentic Christian sects throughout the Mediterranean. They destroyed all their sacred texts, some of which have resurfaced in the Dead Sea Scrolls and the Nag Hammadis.

      These texts focus on an inner Christ, not Jezus of Nazareth himself, who was the prophet of the Logos and who incarnated it (John 1:14).

      To rid ourselves of Jewish Usury does not mean degenerating back into ‘aristocracy’, landlordism and spiritual tyranny.”

      • I am almost finished reading Jack London’s “The Iron Heel” and it is astounding how closely it fits to today. He never quite grasped the full implications of the gap but he definitely saw it. If he had lived a little longer (died 1916), he would have loved what CH Douglas had to say. I share London’s optimism though that in the final analysis, we will win. 1% can’t control 99% forever. To date, the actors have changed but the game stayed the same. People are becoming more enlightened now and seeing through the false-flag bullshit. Look at France and the skepticism about the so-called terrorist attack of a few months ago. Much as I disagree with Dick on the economic issues, he has it right about the Boston bombings and you don’t need to look hard to find many people remarking about the white backpack that suddenly became black. He points out that the key is withdrawing our support and not falling for the pennies payoff like politicians do.

      • Dublinsmick permalink

        “But I think it’s time to consider that the Vatican and the Jews are manifestations of the same force.”

        Yes it did

  21. Be sure and include Direct Credit eg Lawsonomics of the 1930s discussion of money and incomes in your Social Credit inquiry. Just a suggestion.

    • Tell us more. What would you include?

  22. Hallo Anthony Migchels,

    Steun je al?

    Groet, Herry Neijenhuis.

    Of ?

    • TuurlijK!

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