Two pieces of information have struck me recently, both concerning Ireland at first glance, but really concerning all of humankind when you really think about it.  Let me discuss the second piece of info first, which is summed up quite nicely by the headline to a piece in the Irish Independent:

“Banks issue legal proceedings to repossess 50,000 homes”

From the article:

“New figures provided by Central Bank Governor Patrick Honohan show that half of what is being classed as solutions for those in arrears are made up of threats to repossess homes.

Some 100,313 residential mortgage holders in default were offered a proposed solution. But 49,000 of these were issued legal letters, seeking repossession.

The Central Bank allows the lenders to count legal proceedings seeking repossession as a mortgage solution.

These letters are issued when the mortgage holder is not engaging with the bank, or the bank decides that the mortgage is unsustainable as the borrower will be unlikely to meet the repayments.”

So this is what the “end of austerity” looks like?  Half the people in “default” were offered a “solution” that was simply a threat to foreclose on them?

The reason this is so screwed up is twofold:

1) All the money that was “loaned” to these homeowners who are being threatened was made up out of thin air, a shorthand term for self-issued currency that is legally treated as being issued by a bank—in other words, the money didn’t even exist until an Irish borrower wrote the bank a check which the bank deposited into an account as if it were cash.  This is what is called a “loan” in the modern, predatory finance system.  The check written by the “borrower” to the bank is legally called a “promissory note,” but that is only to confuse the “borrowers” to make them think the bank actually loaned them money rather than the other way around.  And so the check is deposited, which means it is a “loan,” because loans are deposits.  And deposits are loans.  Not in reality, of course.  In bank-fake-fraud-debt-slavery world.

2) Ireland knows, or should know, that fake money that is known to be fake—i.e.,  what I have written about a number of times as “self-issued currency” doesn’t create problems—it solves them.  Ireland should know this because this is exactly what they did in the so-called “Irish Banking Crisis” of 1970 (the year before the Nixon Shock, interestingly enough)—used fake money that everyone knew to be fake.  That event is the first piece of information I referred to above.

Irish Banking Crisis of 1970: Self-Issued Currency proven to work

Here’s a pretty good synopsis of what happened, according to an article in the Harvard Business Review:

Once upon a time, there was a country where bankers disappeared. The bankers, fed up with regulation, dissatisfaction, and downright hostility, decided to unleash the planet-destroying superweapon in their arsenal: they went on strike, not once, but three times.

Here’s what orthodox economics would have predicted for a country without banks: A collapse in the money supply, a credit crunch, a trade implosion, mass unemployment, an atomized GDP, and the gears of industry and commerce grinding to a crashing halt. Imagine all the veins in your body suddenly shrinking and collapsing — Avada Kedavra!! — and you might begin to see how economists conceive of banking shutdowns.

This is no fairy tale, so we don’t have to imagine what happened next. And what did come next was something really, really interesting — and just a little bit awesome. Instead of Ragnarok ripping prosperity to shreds, the economy continued to grow. Though the money supply did contract sharply, neither trade, commerce, nor industry came to a grinding halt.

How? People created their own currencies, to substitute for the collapsing money supply. They kept using checks to pay one another, but then, people’s checks began trading within communities. Here’s how Antoin Murphy, one of the few scholars to have studied these strikes, which took place in the 1970s, describes it: “a highly personalized credit system without any definite time horizon for the eventual clearance of debits and credits substituted for the existing institutionalized banking system.”

Notice that last part again: people “created their own currencies” and “kept using checks to pay one another.”  This is exactly what I have prescribed as the solution in my articles on 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.  …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.

[SNIP]

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 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.”

I should point out that I came to the “self-issued currency” idea without any knowledge of the Irish Banking Crisis, where people did exactly as I have proposed above.  And I say that not to say that I am so smart or any such thing—I bring it up because if a relative economic neophyte like me can come up with a solution that not only could work but also actually has worked, that must mean that the idea of self-issued currency is a very simple, rational, obvious conclusion to reach.  I mean, what other conclusion can you really come to when you realize that money is always fictional and created out of nothing and want to solve the problem of never-ending debt slavery?  Not banning cash—that’s draconian and end-times-ish (you don’t hear many people talking in hushed tones about “the cashless society” these days).  Not repossessing 50,000 homes—that’s just theft.

And in the same way that the idea of banning cash keeps being bandied about (more seriously than ever of late), so does the idea of a basic income, or a basic guaranteed income, such as what’s described here in The Atlantic:

“Santens is 37 years old, and he’s a leader in the basic income movement—a worldwide network of thousands of advocates (26,000 on Reddit alone) who believe that governments should provide every citizen with a monthly stipend big enough to cover life’s basic necessities. The idea of a basic income has been around for decades, and it once drew support from leaders as different as Martin Luther King Jr. and Richard Nixon. But rather than waiting for governments to act, Santens has started crowdfunding his own basic income of $1,000 per month. He’s nearly halfway to his his goal.”

That’s a much better idea than banning cash, to be sure, but it’s unnecessary.  It’s like a halfway point between what we have now and self-issued currency.  But self-issued currency is not a difficult road, as demonstrated by Ireland.  In fact, it’s a very easy road because the only difference between self-issued currency and what we have now is one simple concept, i.e., that banks and not people create the currency.  Once we can accept the fact that the people (i.e., you an me) already self-issue currency (every time we take out a “loan” or use a “credit” card), we can easily agree that we ought to legally acknowledge that such is the state of things and do away with the idea that a bank creates money by accepting a check (i.e. promissory note) from a borrower that the borrower then owes to the bank.

P.S.: There’s a much better description of the Irish banking situation in the book “Money: The Unauthorized Biography” by Felix Martin, but I can’t quote from it just now because I don’t have a copy on me at the moment.