Outside the Debt-Money Paradigm, Coffee with Joe 12-11-11

Joe and Pete discuss Fractional reserve banking again: Paul Krugman's article from October (http://krugman.blogs.nytimes.com/2011/10/10/if-banks-are-outlawed-only-outlaws-­will-have-banks/), Bernie Sander's inquiries into the financial crisis, and finally, some 90 year old wisdom from Frederick Soddy.

Category:

News & Politics

Tags:

• Joe Bongiovanni
• monetary reform
• Bernie Sanders
• Paul Krugman
• fractional reserve banking
• Frederick Soddy
• debt-free money

[joebhed]

@tothemax01 A return to the gold standard? That's it? Maybe denationalize money? Maybe ending legal tender laws? Maybe free-bankers printing off their own dollars? We only agree on ending government 'underwriting'. Sorry, but this is MY money system. And I already said, I ain't giving it up to anybody. And I'm taking it back from the private monopolists. That's the deal here. The gold standard, deregulation and no government backstopping of banks did not go well in '29.

[tothemax01]

@joebhed My better plan is 'return to gold standard with no central bank and no government underwriting of or involvement in the banking industry'. Gold cannot be 'introduced as a debt', cannot be printed off at will, and is 'perpetual'. This system does (and did) force people to be careful which banks they put their money in, and forces bank shareholders to rein in risk taking/speculation and over expansion of credit - lest they loose their money.

[tothemax01]

@joebhed But this is blending the lending and settlement process into one thing (similar to the way purchase and settlement occur in one step in most small purchases). It has two stages: the contract is established 'A owes B $10 now, B owes A $10 in a week', then B *can* demand settlement of the immediate debt now, and A *can* demand settlement of the 1 week debt in 1 week. B could choose to leave it with A, but get A to pay someone else $10 - for convenience sake. That's a Bank.

[jeepndesert]

google roots of dismal science land and money

[joebhed]

@tothemax01

Lending and debt ARE an important part of a functioning economic society.

But NEITHER are necessary to introduce the means of exchange into that economy.

When we talk about debt-free money, we are talking about the 'issuance" of that money into existence.

BECAUSE it is not introduced as a debt, it is not cancelled any time loans are made and paid back.

It remains part of the permanent money system.

In perpetuity.

Do you have a better plan?

[joebhed]

@tothemax01 Please explain WHY you presume what my position is? Actually, my position is to make lending both legal and moral. That would happen, like if I said: "Say tothemax01, can you LEND me $10 ?" And you would have two answers possible. "No Joe, don't have it." or "Yeah Joe, pay me back next week." The option you would NOT have is to say: "Joe, I don't have the tenski but I can still loan it to you." That's the immoral part of fractional reserve banking. Thanks