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DOLLARS REPRESENT DEBT
Australian dollars in reality represent nothing but debt. References to our national currency should probably use the word debtdollars, especially as dictionaries define money as a representation of wealth. In common usage then, the word produces a misunderstanding in the average person's concept of riches. Whether we see goods and services or money itself as wealth we are looking at an illusion that in reality turns out to be a burden of debt. A REAL ECONOMY The cost of curbing and cleaning up all greenhouse gas emissions and other industrial pollutants is financially impossible in the present global economy. The ability to clean up the environment, and the desire of society to do so are evident, but the scarcity of dollars means environmental care is a financial impossibility. All national currency only comes into existence as debt when banks grant loans. There is no national currency before the creation of a debt through a loan. Then, while existing as dollars circulating in the community, it remains a debt. It must be understood that this money gets created as a loan or overdraft and put into circulation mostly as wages for the production of goods and services. Industrial commerce has done the borrowing and the debt must be recovered from the purchasing power of the marketplace. When repaid, the loan and the Australian 'dollars' it 'created' cease to exist. Other loans create more currency by the same process to replace it, and so on. DEBT IMPLIES INTEREST When the capital of a loan is recovered and repaid it is canceled out, it disappears but it leaves a residual debt of interest to be paid. Money earned to pay the interest comes from the borrowings of others. By the end of the second loan, the first loan's interest has been paid off but now there is not enough left to pay off the second loan, let alone pay its interest. Again this is paid from the borrowings of others and as this cycle is repeated the overall national and global debt mounts. This system is called the Global Economy. It is this structure that all economic rationalizing must fit into and obey. Debt is a very different currency from a credit currency that is created to represent a real, existing product or service like in LETS, for example. If people traded their time with each other, instead of translating everything into debt-dollars, no debt would accumulate and the monetary wealth from the community's energy would stay, to grow in the community. INTEREST IMPLIES COMPETITION The concept of a 'free market' implies the notion that competition drives players to produce the best goods at the best price or drop out. This is the concept of market competition as sold to society. The reality of 'free market competition' however, is that players do not compete to make a better product, but rather they compete to get rid of the competitors. 'Free market competition' is a misleading term that in reality means 'economic war'. Likewise, the only meaning of cooperate, is to cooperate as a group to remove another group that is in competition with your group. Then the winning groups begin eliminating each other all over again. This type of competition requires that business and industry continually expand or be eliminated. In the current economic system, which is based upon the principle of 'not enough to go around', the players are forced to oppose each other in the scramble for the scarce dollars. The cruelest, meanest, most selfish and most dishonest players get the available money while the more decent members of society are eliminated from the competition. If you hesitate in this ruthless war you will not be successful. There is no choice in this there is just not enough money to go around. The surviving dominant players who provide products and services to the marketplace are not the 'best of the best' sorted through competition in excellence. They are merely the players that fight hardest and meanest to get those scarce dollars. Choices and quality of goods are dictated by a few monopolies not the consumer The sociological effect of the Western economy dictates that there also be competition between siblings, families, neighborhoods, classmates, workmates, employers, and businesses. Society seems to consist of a population of citizen against citizen. After a while people in a society like this would have no choice but to be convinced it was human nature to be viciously competitive. COMPETITION NEEDS CONTINUAL GROWTH By the very nature of the requirement to repay capital plus interest, the amount of money in circulation is always insufficient to meet the costs of any cycle of production. Likewise, the local consumer is financially incapable of consuming what has already been locally produced because through interest payments there are not enough actual dollars left as purchasing power to even offset the cost of production. So in order for the economy to stay viable it must continually expand its production and its market and generate more profit. The ever-increasing cost of production results in continual rising prices. It is necessary to 'develop' third world countries so that the markets and industry of the 1st world countries have somewhere to expand. At the same time 1st worlders benefit from the cheap labour and look 'green' having moved the industry offshore. Third world 'development' is simply the transferal of un-repayable debt from the first to the third world, to benefit the first world at the expense of the third. The third world is being used to generate enough borrowed currency globally, to allow the first world to pay off its debts and interest. After the 3rd world countries have been irreparably ravaged, instead of having prosperity, they are left with unmanageable debts that can never be repaid as has happened with Japan. Banks lend on the borrower's ability to service the loan. As the limit of this ability is approached, the banks restrict their lending by raising their interest rates. As the cost of wages goes up with interest rates, so does the cost of the product of the wage earner. The only way to make the global economy work is to keep creating more and more debt-dollars by borrowing, to keep ahead of the inevitable meltdown. Most of the conflict and environmental devastation in our modern world would disappear if the global economy ran a policy of making financially possible, that which is physically possible. 'DEBT ECONOMY' DESTROYS THE ENVIRONMENT The present global environmental destruction is directly related to the debt financial system. For over half a century scientists and research bodies worldwide have been warning of impending environmental disaster, and we are now beginning to suffer the effects we were warned about. During the decade of the 1990's the global economy grew faster than 4% each year. At a growth rate of just 4% per year, in 100 years the global economy would be 50 times larger than today, and Earth is already falling apart from the unsustainable present day economy. Economic rationalism is not rational. It should be called economic irrationality. EXPORTING ONLY MAKES DEBT GROW LARGER In many people's minds the key to reducing national debt is to increase exports over imports, thus making a net profit to pay off debt. On a global basis there are two flaws in this dangerous notion. Firstly, if virtually every country on Earth is in debt, as they are, then in no way can the global economy ever become balanced by trade? One nation's profit is another nation's loss. A group of bankrupts cannot balance their books by trading equitably amongst themselves. Secondly, it was not trade imbalance that caused national debt so a trade balance cannot can not be achieved without removing the cause. National debt is not created by trade imbalances but by the mathematical impossibility of recovering production costs due to interest payments causing an ongoing shortage of currency in circulation. Trade imbalances only appear to be the cause, the continual shortage of currency always ensures that nations appear to have an overall negative trade balance. This is why so much global trade produces so much global debt. Blaming national debt on balance of trade keeps society focused upon the red herring of 'salvation through exporting', and conveniently keeps society ignorant, and looking elsewhere for the real cause of social poverty and environmental destruction. As export industries borrow money to expand, they are, in reality, further strangling the very things they claim to be saving. Over 50% of global trade is reciprocal where the same goods are exchanged between countries. How can a can of tomatoes be cheaper if we unnecessarily ship it across the world before putting it on the supermarket shelf? Also, imagine how environmentally damaging it is to mine the steel for the thousands of unnecessary ships, burn coal for energy to build the ships, and then burn oil to run the ships. In the modern global economy, creating new export markets is simply a dishonest front for creating more credit. Exporting is not about making people's lives better nor balancing national debt. How can exporting; a system that creates more debt, ever be expected to get us out of debt? ECONOMIC RATIONALISM In a realistic culture the present conflict-based system of creating currency through debt would not be tolerated. This principle that drives modern economic rationalism, demands policies and responses appropriate only to the artificial scarcity produced by a flawed financial system. Western civilization has been conditioned to accept as a fact that real money exists. In the present global economy there is no longer any such thing as real money, only debt-dollars. When society understands this, people will begin demanding answers to questions like, "Why do needed resources stand idle just because there is not sufficient money to make use of them?" "With so much human endeavour and output, why have we so much scarcity and want?" "Why is the problem of national debt never seriously pursued or researched by national governments?" If Australia had a suitable and therefore beneficial financial system and closed her shores to foreign trade and finance, we would immediately have more goods available at a fraction of the price and at a fraction of the cost to the environment. IMPOTENT 'PROPER CHANNELS' A society designed around the insanity of economic rationalism must ensure that the reasons for economic rationalism are never addressed. As problems arise those in charge are forced by the debt system to maintain the appearance of dealing with the situation, while ensuring that business goes on expanding as usual. Watchdog and protest groups from local organisations right through to the international bodies such as the green movements, continually petition governments to impose restrictions on waste discharge from government and corporate industry. They appeal for a curb on greenhouse gas emissions into the atmosphere and the dumping of toxins into waterways. These misguided appeals are lodged through politicians, who, in this context are the public puppets fronting for the CEO's of the relevant industries. The appeals are as naive as requesting a 'wolf in charge of the sheep' to adopt a vegetarian diet. On a daily basis protesters fight the endless symptoms rather than investigate and address the root cause of all the problems in the global economy. Human greed is sold back to the protestors as being the underlying cause of the problems, but the illusion of economic scarcity occasioned by the actual scarcity of finance is the reality underpinning the cause of the human greed. The human species is basically cooperative and our competitiveness is but a secondary function of our primary survival mechanism, the instinct of self-preservation. When society is structured around the rule that there can never be enough to go around for everyone, its citizens live in an ongoing terror of not having enough personally. At present there is no shortage of any resource other than money, yet money is the only commodity over which we should have full and absolute control. Not only is the artificially induced conflict that results, redundant and repugnant in this age of plenty, it runs counter to most of humanity's yearning for a sustainable social and environmental world infrastructure. From this point on, human civilization cannot continue unless it switches from the artificially aggressive economy of debt-dollars, and replaces them with a currency that represents something in the real world. Now is not a time, however, for blaming, faultfinding or judgment. These are the ways of the debt-dollar mentality. The way forward from here is the way of the natural human. The way forward is honestly participating in our own life and in our community, by finding ways to replace debt-dollars for a better, environmentally friendly currency. |