Austrian Economics is not the answer. Gold is not the answer. Ron Paul´s idea´s are not the answer.

[jack]

Here´s my reply back to www.mises.org on when they asked me why i un-subscribed from their website. Dear Chad, I have been looking around on your website (www.mises.org) but i wasn´t able to find mathematically proof of presenting a sustainable solution for a sound monetary system en therefore economy. Even more worrying is the fact that your organisation also promotes interest as a tool to use. Interest in itself will make any monetary model terminal by default by further multiplication of debt. On top of that you promote a return to the gold standard. While the gold standard can neither save us from further multiplication of debt or rectify the other issues before us, simply re-invoking the gold standard would pave the way for immediate loss of "our" monetary gold, for already twenty years ago, the perpetual process of multiplying debt had plunged us from the greatest creditor nation in the world to its lowliest debtor nation. For the very purposes of the lie, "our" currency is now held in immense quantities across the world; and thus even if "we" held gold for money instead of paper, our inevitable collapse under perpetually multiplying indebtedness therefore will mean giving up the last of our former gold, rather than the last of a mere paper, as we tolerate the imposition of a Second Great Depression. I am now even more worried about our financial future, unless we advocate Mathematically Perfected Economy (MPE) in which we mathematically have proven the above, but are also offering a real immediate solution to the current terminal system. For more information you can visit the following links: www.perfecteconomy.com http://endtheecb.ning.com/video/mathematically-perfected Kind regards, Jack http://endtheecb.ning.com

[Todd Marshall]

Volume of circulation must likewise equal remaining volume of all represented property.

This statement is wrong. Money has nothing to do with property. It has to do with trading. If no one wants to trade, no money need circulate. Some trades involve property ... but certainly not all of them.

[jack]

That´s where you go wrong. (paper/electronic) money as medium of exchange should not be seen as a product.

Most people can't give you a good definition of money — a definition which holds; and a definition which serves them.

Yet if we ask the questions which develop a fully accountable answer, we readily arrive at a fact that the only definition of money which can inflict no offense whatever, is a currency which comprises immutable tokens of value.

In fact likewise, most people do intuit that money IS a relatively immutable token of value — not understanding how the exceptions are engendered, or how the exceptions offend them. In other words, they recognize that immutability is a vital object; they likewise recognize that immutability of a promissory note is even vital to its facts of contractual obligation; but they do not recognize that one and one only monetary prescription makes good on this indispensable object of immutable tokenization of value.

Both to tokenize value and to immutably tokenize value nonetheless are only TO REPRESENT not only however many different products, but necessarily, to likewise represent the volumes of such products, or we fail to keep the ostensible 1:1 relationship between circulatory volume and remaining value of all products, which is necessary to immutable value.

The only way to immutably tokenize value therefore is if the units of value of the circulation are immutably linked to the remaining value of ALL represented property (not just to one or several of MANY products); and thus likewise, the remaining volume of units of circulation must at all times equal the volume of remaining value of the ALL the products which the circulation is intended to represent, or we fail to keep these principles. In fact then, the only way to maintain these equal volumes is to pay the value of the represented property out of circulation as the value of the property is perceived to be consumed, or to depreciate. The only way you can do this of course, is if we pay monetary obligations comprised only of principal, at the rate of depreciation or consumption of all represented properties.

Volume of circulation must likewise equal remaining volume of all represented property. Franklin observed in his "Modest Inquiry into the Nature and Necessity of a Paper Currency," that the colonists prospered substantially more when they supplemented their circulation of precious metal with paper currency (certain implementations of which were debatably subject to interest). He postulated that some prospective extent of such supplementation might be excessive; and that it might have negative consequences. But nonetheless he noted (evidently then because they never reached such a limit) that the additional circulation of paper currency sustained substantially greater prosperity.

Why?

They must therefore have suffered previously from an effectively deflated circulation. But simple questions thus resolve Franklin's curiosity:

If the circulation is to represent (tokenize) value, then if the circulation were ever to exceed the volume of the remaining value of all property, then someone would have received circulation for nothing. Such an excessive, "inflated" circulation however would be impossible, if in fact all promissory notes (of principal only) are legitimately collateralized.

Likewise however, if the effective volume of circulation is ever less than the volume of represented property, then it is impossible to trade all property all at once; and someone will not have received and persisted in just reward for their production.

So, an "effective," just circulation must at all times equal the remaining value of ALL production ("products").


A further malady exists in the present disposition of currencies subject to interest. That is, ever more of a circulation is perpetually dedicated to sustaining ever greater sums of artificial debt, leaving ever less of the same circulation to represent/tokenize the value of property. Thus interest makes abiding by our necessary principles of immutable tokenization impossible.


1. The only circulation which sustains all these necessary objects therefore is a volume of circulation which is at all times equal to the remaining value of all property.

2. The only way to maintain such a circulation is to pay principal out of circulation at the rate of consumption or depreciation of related property.

3. Thus as a circulation comprised of promissory notes only represents FINANCED property (subject to promissory obligations), the only way to sustain a circulation which necessarily represents the remaining value of all property is to further accommodate immediate conversion of equity into currency.

These in fact then are the principles of mathematically perfected economy™; and this is a vital path of the logic of overall solution.


But our question asks if money is a product? Essentially, this is to ask if it MUST be a product in order to serve these vital purposes of a just currency, which of course must eradicate all potential for systemic offense.


We can see however, even on an abstract level, that the concept of tokenization can only go awry if the need for tokenization must account for all products, and the concept of tokenization requires A product or a few products to do so. Yet even according to the concept of tokenization itself, the token is distinct from the product itself — unless to be an immutable token of value, "money" must actually exist in the physical form or instances of some such "product." In other words, if just/"honest" money IS a product; how then and why would argue this restrictive concept of A product or products? How can either case serve the objects of volume equaling the volume of ALL products, if money "must" be A product or products; and if the volume of THE product or products must yet equate to the volume of ALL products?

In fact, given the aforesaid observations, we readily recognize that nothing but ALL products CAN so represent all products; and the only reason folks like the Austrian "economists" are trying to insist on A product (or products) for their obfuscated claim to tokenization, is they refuse to acknowledge the very principles they pretend their ONE or few products somehow uphold — and yet are proven not to uphold.

As Franklin likewise observes, never did their precious metal monetary standards result in actual consistent values of money; and the reasons are evident in these principles: There is no perpetual 1:1:1 relationship between remaining circulation: remaining value of represented property: and obligation, because the Austrians refuse to recognize that the only mathematic course to this perpetual relationship is to pay off promissory notes comprising obligations of principal only, at the rate of consumption or depreciation of the related property — with the payments thus retiring the circulation as the value of the property itself is consumed. In fact, only promissory notes of principal, paid at this obligatory schedule of payment CAN accomplish these purposes; and do so even without regulation.

Thus we readily understand the problems of gold, which itself in fact perpetually violates our necessarily perpetual 1:1:1 relationship; and which further violates these principles when it coexists with interest, which perpetually disposes ever more of the circulation to servicing a perpetually multiplying sum of artificial debt — leaving ever less of the same circulation to sustain commerce.


Thus the answer to the original question is that money CANNOT BE A product, if it is to be an immutable token of value, because A product, in which the resultant circulation would ostensibly be redeemable, ITSELF cannot represent All products! Thus it cannot provide a perpetual 1:1 relationship between volume of circulation and redeemability which purportedly eliminates subversion of value. Effectively, the Austrians (and others) claim virtues of gold which do not exist, while the principles they exalt instead would endorse only mathematically perfected economy™, because the only currency which CAN accomplish this purpose of making the circulation effectively not A product, but in fact at all times ACTUALLY REDEEMABLE in ALL products, is mathematically perfected economy™ — which alone therefore, immutably tokenizes all products represented by the circulation, and in such a way that the circulation is always redeemable in the very scope and volume of products it was from the beginning, intended to represent.

[Steven Jensen]

Your arguments are flawed. You made points about interest but never mentioned fractional reserve banking and how it expands the money supply far further than a reasonable payment for a loan. Just what are your credentials? First you claim only a mathematical model will save us now you deny that? Do you even have a degree in mathematics? Even if you did that does not answer the questions here. Don't bother with another long diatribe if you can't answer directly. You remind me of a politician.

[jack]

No i do not have a degree in math's. I do not think you need one to see the real problem. Even my 10 year old son understands the terminal nature of this beast.

Under MPE there will be no fractional reserve banking possible.

Again the answer is the link below, but you need to take the time to let it sink in.

http://www.perfecteconomy.org/pg-amendment.html

[mike montagne — founder, PFMPE™]

No, no, no, no, no. Intelligent people, capable of determining and deserving solution, do not just say, "Your arguments are flawed"; then call names, "You remind me of a politician."

Fractional reserve banking is a consequence of the flaws of the gold standard; and if you think Ron Paul is right about that — that there is no legitimate contest to Mr. Paul's mere perpetual assertion that a return to gold (which he hasn't even prescribed a way to do) will stabilize and rectify your every whim, then it's obvious why you can only say "Your arguments are flawed."

You ought to read Benjamin Franklin's "Nature and Necessity of a Paper Currency," if you think Ron Paul stands without challenge. You'll find that contrary to Mr. Paul's unqualified assertions, Franklin instead observes how the colonial economy benefited from issuing paper currency above the circulations restricted by finite quantities of precious metal monetary standards. Contrary to Mr. Paul likewise, it isn't the material of fiat which engenders the know problems of currencies subject to interest — quite obviously instead, it's the process which in every case has been attached to that paper currency — a process which in fact Mr. Paul not only advocates, but advocates increasing the rates of!

There is no prevailing argument for interest; in fact it is the one example in which we allow our contracts to be subverted by extrinsic parties with no interest or principle or just compensation. Strictly for unearned and unjustified taking. And you ought to be pissed about that — not defending it. How does interest benefit you? How have the Austrians proven it isn't terminal? If it isn't terminal, how have the Austrians possibly projected the present failure? There isn't a grain of truth to any of this!

The reason the money supply has to be expanded (thus violating our first necessary principle of an immutable currency), is that as interest inherently and irreversibly multiplies debt in proportion to a vital circulation, ever less of the circulation remains to sustain industry; and so, industry has to borrow further.

But the Paul camp of pseudo economists claims the money supply is expanding. How exactly so? Just because more is being introduced to circulation than ever? That comprises, and even qualifies a fact of "expansion"?

Where is all the money then?

If we're rolling in money, where is it? Why aren't the banks loaning, even after the rescue plan?


It's pretty simple, actually. A second grader can do the math:

As the sum of debt escalates to preposterous proportions, this has dedicated practically the whole circulation to servicing debt. Thus this comprises a deflationary aspect of the circulation. It's like pouring water into a tub with an ever enlargening hole in it. Pretty soon, no matter the fastest you can pour, it's running out faster than you can fill it.

And the reason it runs out faster than you can fill it is, that once a terminal sum of debt compromises our credit-worthiness to borrow further, we can no longer afford to maintain a vital circulation by further borrowing — and so, you lose your capability to pour.


Now, all that you're pouring in faster than ever before at that moment just before you can pour no more... DOES NOT mean the tub is gettin fuller.


And speaking of credentials then, what explanation is so credible as to account for that credential of credibility?

Something we all need to understand about "economists" then: First of all, there isn't a single formal proof and theorem in the whole pseudo science. Secondly, the whole pseudo science only multiplies cost — it's no economy at all.

[mike montagne — founder, PFMPE™]

I have been asked on the side to answer the question, "Can we identify where the water coming out of the ever enlargening hole is going to?"

Of course, right into the belly of the Fed.

On the way, it passes the intermediate banks, who — by fact of having loaned it into circulation on behalf of the Fed — are obligated to collect it.

This is why "banks" fail. Not of course, central banks — unless they have hugely miscalculated the sanctity of their misdoings, because it is theoretically impossible for them to fail -- they don't owe anybody when their music stops. On the contrary, only all the peripheral banks, which interface with us.

So these peripheral banks fail when we reach a terminal sum of indebtedness, because they can no longer collect what they have to pay to the central bank. While still they are collecting from us whatever insufficient debt service we remain capable of paying in the end, these payments (the "pouring") passes right through to the central bank from which it originates, and from which the peripheral banks have borrowed it.

The hole thus reaches its maximum size when a terminal sum of indebtedness has been reached; and, at the same time, suddenly we can pour only less back into the hole, as our credit worthiness has been compromised by this sum of debt; and we can no longer borrow sufficiently to replenish what is escaping through the hole.


Likewise then, this is why the pretended stimulus plans will only fail. As they are merely attempts to artificially extend the lifespan of the system of exploitation; and as the "stimulus" only increases our debt all the further — then as soon as the perpetrators run out of bogus expenditures, funded only by exceeding illegitimate credit worthiness; and as soon as the funds which only stay in circulation a while longer than they would otherwise, because we are not servicing the debt of the stimulus (but are hoped yet to continue servicing so much as of the already terminal sum of debt as remains possible — and thus which still remains terminal)... as soon as the stimulus funds thus disappear in the regular process of servicing the terminal sum of debt; and as soon as further stimulus cannot reach some vital sector of the failing system, the deficiency of which can bring down the rest of the system... then there you go.

And pray tell, how can the perpetrators have all those bases covered?

[jack]

Amen to that Mike, very well explained! Could you describe how Fractional Reserve Banking leverages this process, and how the FED profits from the leveraged money created on top of the fractional reserves.

[mike montagne — founder, PFMPE™]

Yes, and thank you.

As I have explained (but perhaps can make clearer), "Fractional Reserve Banking" is A CONSEQUENCE of the gold standard. It always has been; and it always will be. Here is why:

As Benjamin Franklin notes in his "Modest Enquiry into the Nature and Necessity of a Paper-Currency (..., the colonial economy flourished when the limited circulation under the restrictions of a precious metal monetary standard was increased with further issues of paper currency.

Why?


If you have $10 in gold and $10 worth of commerce to trade, you can convey the whole of your production all at once. If your industry or production increases to $20, you cannot sustain a circulation which can sustain all possible commerce in abiding by the gold standard: YOU ARE OPERATING ON A DEFLATED CIRCULATION; and you have suffered this effective deflation because you have failed to increase the circulation commensurate with the additional industry/commerce which you mean and need to sustain: the gold standard itself prevents you from doing so.


Worse yet, if you have some folks "loaning money" within that "economy," then you have local cells which become dependent on the additional circulation. Although ALL the "money" does not come into circulation as debt subject to interest; what money within the origins of the purported gold standard is loaned at interest, inherently multiplies indebtedness in proportion to the involved portions of the circulation until of course we suffer a terminal sum of indebtedness, just as if "the money" originated as debt, subject to interest.

On the way to that terminal sum of indebtedness, the multiplier of debt becomes the artificial owner of all property. Historically, the extent of this dispossession of course ultimately includes even the monetary gold.


So in the first case, inability to expand the circulation to sustain further industry compels the subjects to recognize they require further circulation. In the second, where even some of the currency *becomes* subject to interest, this disposes ever more of the units of circulation to be dedicated to servicing debt, whereas this leaves ever less of the same units to be available to sustain the industry which is compelled to do so.

How does either the first case of effective deflation, or the latter case of transformational disposition of the circulation thus compel the subjects to increase the circulation — thus abandoning or violating the gold standard, and inherently transitioning to a fractional reserve policy of issuance?


Either case may be understood from a simple example. Suppose there are ten thousand of us arranged in a circle, all facing the center of the circle. Each of us have $10; and every so often (in a given "period"), we produce $10 worth of production; needing $10 worth of income to produce our next $10 worth of production; with the fellow to our left being the fellow who needs our production; and with the fellow to our right being the supplier of the production we need.

So, at the end of every period, we turn to our right with our $10, purchasing the production of the fellow to our right; then immediately turning to our left, receive $10 for our own production. Across the whole system, it is possible to trade all of our production at once; and everyone has received and maintained compensation for their production — the whole of which, furthermore, can be disposed to sustaining industry, as opposed to servicing artificial multiplication of indebtedness.


Now, in the first case of deflation, we may have a consequence which equates to every participant only having $5 instead of $10; and in the second case of interest having multiplied artificial indebtedness, at some stage of the finite lifespan of the system we have so much as the same consequence: we might have $10, but only $5 of it can be dedicated to commerce, as the other five is dedicated to servicing the escalated sum of artificial debt.

So, let's illustrate this consequence to "the economy." Now everyone has $5, but still they have $10 of production, which in the same period, they need to deliver, and which in the same period, they also need to procure the $10 of further production from their other immediate neighbor, altogether to sustain their former industry.


Can they just decrease their prices like the "Austrian economists" always tell us?

Absolutely not, in the second circumstances, because this would effectively multiply their indebtedness; and still provides no way to afford industry, because actually, if they did decrease their prices to half, still the costs of servicing debt leave them not enough to meet the costs of their obligations. Even if such a reduction did, further multiplication of artificial indebtedness makes this yet more impossible/impractical. Nor can they do so in the first circumstance, unless they can truly afford to forfeit the costs of raw/rendered materials, which otherwise, any continuation of their venture requires recouping. But there will almost certainly be the second case of debt subject to interest, because of the resultant experience of either case of "effective deflation."

Here's why:

Now under either form of effective deflation, we can turn to our right to deliver our $10 of production to a market which can only spend $5 toward that purpose. They scurry about to earn another $5, which can only deprive someone else of their $5 to spend on immediate necessary commerce; all the while, while our transaction waits for them to succeed; and so, unless they borrow further, to their great further indebtedness, or unless they work further to receive from a market which cannot bear to support the further work, as each of us means to turn each way to accomplish the previous transaction of all commerce which was carried on at once in a circulation suffering no form of inflation or deflation whatever... thus the same transaction takes forever; and, thus we cannot meet other bills/expenses as we would otherwise; we fall behind; and we can do little but borrow further to make up a difference which can never be made up, as we borrow ever more, just to maintain a vital circulation which can be dedicated to sustaining commerce so long as the resultant escalation of artificial indebtedness is not terminal.


So it is the shortcomings of the gold standard which inherently precipitate in fractional reserve lending, as an inevitable consequence of a deficient ("deflated") circulation.

There's no way around that with a gold standard; and interest only exacerbates the faults of a gold standard. Thus mathematically perfected economy™ is vital, and the only solution.

[Robert M]

Well, since the Chinese are buying up all our gold and hoarding it, it would behoove us to deflate the price (it is ridiculous that people are paying 1100 dollars an ounce, anyway) and get things back on a common level, get rid of the "lending institutions" and the IRS, and government "business ventures, because we never needed those vultures back in the days when we USED TO BE the richest nation on Earth.

The "Gold Standard" STILL had "paper money" and we did fine until Nixon quashed all that, now all we have are FRNs, which amount to IOUs that aren't worth the paper they're written on. Just like the SSA, which the lawyers in CONgress have continually raped, in violation of the FDR laws against ever looting it. So much for honesty in guvmint, eh?

I'm with Walter, you so-called economist "intellects" haven't a clue, because you won't listen to the facts and would like to be your own little czars of commerce. That's the trouble with America, today, greed, greed and MORE greed.

Bring back the gold and silver certificates and put people like the lawyers and IRS (also mostly lawyers) out of business... and give the government back to the People, as it was intended. Bring back the Republic.

I've worked for barter and money and see no hassle with either... UNTIL THE GUMMINT GETS INVOLVED, then it's all down the tubes, with the crooks taking half of what we earn... PLUS. Absolutely everything we do, eat, buy, etc., is taxed, so we are, in reality, paying out around 68% of our earnings in taxes, which is also taxed on top of taxes.

Also, loot the CAFR funds and disperse them to the People, from whom they were stolen in the first place. These funds would pay off ALL the American debt and put the thieves out of business, including the big banks, who are nothing but fronts for Big Government.

[mike montagne — founder, PFMPE™]

Robert M. wrote:

I'm with Walter, you so-called economist "intellects" haven't a clue, because you won't listen to the facts and would like to be your own little czars of commerce. That's the trouble with America, today, greed, greed and MORE greed.

-----

By no more than superstition and continued ad hominem yet, you pretend to find fault with solution. You assert even that I have some monetary interest in a solution which in fact eradicates every opportunity for exploitation, much as you yourself plea for in your own appeal!

What is wrong with you, that you pretend to find fault in the only prescription which DOES eradicate exploitation.

What is wrong with you, that you pretend a circulation of gold/silver could sustain all our industry?

What is wrong with this forum, that solution is rejected by the most vocal and obscene, whereas the purported overall purpose is to "end the Fed," and whereas division FROM one and one only possible solution for inflation and deflation (impossible to a return to the gold/silver standard); FROM one and one only possible solution for systemic manipulation of the cost or value of money or property (impossible to a return to the gold/silver standard); and FROM one and one only possible solution for inherent, irreversible, and therefore terminal multiplication of artificial indebtedness by interest (which the gold/silver standard has no power whatever to arrest).

So Ron Paul has persistently argued that higher interest rates would have prevented the present accumulation of terminal indebtedness -- while it would only multiply debt at faster rates. And he advocates that gold/silver solve the further issues, while this too is impossible.

And you pretend anyone who advocates solution must be wrong, even as you haven't proven so; and certainly haven't provided us a reason to think you've done a better job of resolving these issues.

The math is plain. YOU are the problem, Robert. YOU are why our country is going down the tubes. And you want a hooray for it.

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Most men have bound their eyes with one or another handkerchief, and attached themselves to some one of these communities of opinion. This conformity makes them not false in a few particulars, authors of a few lies, but false in all particulars. Their every truth is not quite true. Their two is not the real two, their four not the real four; so that every word they say chagrins us, and we know not where to begin to set them right"

Ralph Waldo Emerson - Self Reliance - 1841

[jack]

Can we identify where the water coming out of the ever enlargening hole is going to

[Robert M]

Methinks "jack" has been hitting the bottle, all the while nodding agreement to the gummint!! Half his post was non-understandable. I guess the DemoCraps have that effect on their lib-nutz.