Check out this extremely relevant and important article from Washington’s Blog: 9 Mind-Blowing Facts About Money.    It is a great primer for those not familiar with fiat currency and the fact that modern currency is, without question, created out of thin air (i.e., we are on the Air Standard as opposed to the gold standard).  Fiat currency is, in short, the most important financial invention ever because of the fact that–as the article states–it “is not backed by any tangible commodities.”  Fiat currency is the perfect form of money because it is admittedly and openly fictional, as all forms of money are (yes, even precious metals).  The problems with fiat only arise when: 1) it is treated as non-fictional and as the primary obligation of a person, taking precedence over life, liberty, and the pursuit of happiness, and 2) when the issuance of it is monopolized, which inevitably leads to the first problem.

Self-Issued Currency

The solution to these problems, then, is self-issued currency.  That is, every citizen in a fiat system ought to have the ability to issue his or her own money, up to any amount needed.  [NOTE 8-5-15: By “his or her own money”, I mean money denominated in the national currency, i.e., dollars, euro, etc.  I do not mean that each person would issue his or own personal currency named after him or herself, as some critics of this idea apparently misunderstood.]  This will solve both of the problems above, because when self-issued currency becomes the norm, paying money will be as easy and as painless and as much as an afterthought as saying “Thank you” is now.  Problem one solved.  And obviously problem two is solved because there would be no monopoly on the issuance of currency, hence no unnecessary control over anyone or anything, either by the state or by the issuer of the state’s currency.

For those that might recoil in horror at such an idea, keep in mind that all money is fictional.  In fact, all money is already self-issued, as will be shown below.  Money must be created by someone, somewhere, because money does not exist in nature–except to the extent that a natural item like gold or salt might be assigned the properties of money.  Despite what the typical Western economics professor might say, money does not just naturally come into being as a consequence of people needing to exchange things.  Indeed, as Bartolome de las Casas observed of the native Cubans in the 16th century:

“…[the natives] put no value on gold and other precious things. They lack all manner of commerce, neither buying nor selling, and rely exclusively on their natural environment for maintenance. They are extremely generous with their possessions and by the same token covet the possessions of their friends and expect the same degree of liberality.”

That is to say, money is a creation of man, and as such, it should serve man, not enslave him.  Can it be that the “uneducated,” “pagan,” and “savage” natives of Cuba from centuries ago were more civilized and wiser about economics than we are today?  It certainly would seem so.

Anything can be, and has been, money

It is beyond dispute that money can be–and has been–anything: gold, paper, shells, sticks, salt, binary code, cigarettes, fabric, etc., etc.  So it stands to reason that money can (and arguably ought to) be the following:  a check written by a buyer for any amount [NOTE 8-5-15: any amount denominated in the national currency, depending on one’s location] requested by a seller and drawn on a fictional, non-existent account.   In other words, self-issued currency.  And everyone would have this same check-writing power.  The only problem with this scenario?  No more poverty, no more control of the masses, no more larceny, no more want, no more war, no more prostitution, no more slavery, no more debt.  Oh wait, those aren’t problems at all–unless you’re one of the few people benefiting from the present system of rapaciously fraudulent currency.

How is modern currency “fraudulent?”

To get right to the point, modern currency is fraudulent for the following reason:  all modern currency is actually created by the participants in a currency system but it is legally treated as though it is created by, and therefore owed to, banks.  That’s it in a nutshell.  That’s the entire problem.

Let me try to explain what I mean as clearly as possible.  The Federal Reserve itself tells us that “banks actually create money when they lend it.”  The emphasis in that little nugget is on the role of the bank in the money-creation process, but that emphasis is completely misplaced.  That’s because what is implied in that statement is that for a bank to “create money,” someone first has to come to the bank and ask to be lent money.  In other words, a bank is powerless to “create money” unless a “borrower” comes along.

Now, how does the all-important “borrower” get money from the bank?  The borrower writes a check for the amount requested, signs his name, and presents it to the bank.  This check (which is one form of a “note”) is called a “promissory note” in modern parlance (and, to be sure, in less-than-modern parlance), but in reality, the “borrower” is self-issuing the currency he needs, yet he is being forced by law to treat his self-issued currency as though it were issued by the bank (and then having to “pay back” the bank with interest)!  In fact, when you think about it, the ramifications of this completely typical scenario are absolutely insane: the bank doesn’t have the money to lend the borrower until the borrower–who also “doesn’t have the money”–writes the check (i.e., the “promissory note”) to the bank to create the money, which is then called a “loan” from the bank to the borrower.

So who needs the bank?

The obvious question then, is, why is a bank necessary given this state of affairs?  Short answer: the bank is completely unnecessary, because the bank only deals in credit–as opposed to tangible assets or commodities–and credit can easily be created between individuals via self-issued currency.  And that kind of person-to-person credit creation and destruction is no less than the only hope of salvation for humanity.  Because if every person can create money equally and without restriction (which already happens as discussed previously, it’s just not acknowledged to be the case and is instead treated as though money is created by banks), there can be no advantage gained by holding someone hostage over a debt of money or by trying to take someone’s money–there’d be no point to such behavior.

NOTE:  Some of the assertions above about how money is created and how banking works are made on the basis of research that is not linked, quoted, or otherwise notated in the foregoing article.  This is done in the interest of clarity and brevity and the absence of such links, quotations, or notations is not in any way an indication that the aforementioned assertions are made without evidence, not based on research, or have no basis in fact.  Indeed, there is no shortage of official admissions of–and academic (and non-academic) commentary attesting to the basic premises of–these assertions, as any cursory search of both online and offline sources will reveal.

Note: This article originally appeared at The Air Standard, my other blog, on 10-16-13.

About eggsistense

Writer, musician, cartoonist, human being
This entry was posted in Crap-italism, Debt, Debt Slavery, Everything Is Rigged, Federal Reserve, fiat currency, Financialization, Nixon Shock, Redistribution, Rent-seeking, Rentier, Reverse socialism, self-issued currency, Wage slavery, Wages and tagged , , , , , , , , , , . Bookmark the permalink.




Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s