Why is this recession so Unique?

[Paul Ferguson]

The following article was published by News Beacon Ireland. It helps to explain why this recession is so unique

Why is this Recession so Unique?

Despite the efforts of politicians and central bankers, economies around the world remain stubbornly resistant to significant growth. Tracing our use of digital money could provide a reason why.

Somewhat under the radar, essentially all of today's money exists as numbers on a computer screen. While this does enable many efficient methods of payments, digital money has different properties to cash, not all of which are beneficial to the economy.

For example, cash becomes a permanent inclusion in the economy's money supply. In contrast, digital money is only a temporary addition.

The transient nature of digital money can be determined when tracking a bank loan application to its final settlement. When processing an application the bank will investigate that it meets the many necessary criteria. Once approved, the bank will increase the borrower's current account without lowering any other account.

Finally, as a loan is repaid both the debt and the borrower's account return to zero which is why there can be less money during a recession.

Apart from its impermanent nature, digital money has another property which can be
undesirable in excess. Because digital money is only ever created through the loan process every digital euro has a corresponding debt.

Today's economy, in which every unit of currency exists in parallel with a debt, behaves quite differently to the economies of previous generations in which a substantial portion of the money supply was created publicly and issued debt free.

However this change to a fully digital currency has happened largely through arbitrary advances in our electronics payments systems and not through careful consideration by economists.

Having been leapfrogged by the recent digital money phenomenon, it's no surprise the economics profession is advising traditional remedies to kick starting the economy to no avail.

Ending this recession will most likely happen through introducing a second source of digital money to compliment or replace the first.

To demonstrate how difficult our kick starting efforts might be until such a change bear in mind that every euro has a corresponding debt and lowering the debt lowers the money supply by the same amount. Any new money required for growth will also come with a matching debt. Hence the conundrum of controlling excessive debt while maintaining an adequate money supply for trading.

The soul solution with bank credit as the only source of new money would be to dwarf the existing money supply through higher collective borrowing year on year. Indeed, the money supply across Europe has doubled about every decade since the 60s. Doubling every decade, or quadrupling every twenty years, growth in the money supply has been intense in recent decades. While this explains the apparent functionality of our system during this time it should be clear that such a surge is not possible again. The main reason for this is that mortgages,
from which most of our money originates, now take two concurrent careers to repay and cannot increase further.

For the first time in history new money can only be borrowed into existence and there is no one willing or able to borrow any significant amount.

Looking forward to the resolution of a very unique recession, there are many possible ways in which we could run our economy better.

One such proposal is that of Sensible Money’s. It would involve a public organisation, most probably the Central Bank, gauging the need for money sufficient for trading within the economy.

The Central Bank would monitor signs that more money was needed to facilitate
business. Factors such as rising unemployment, inflation trends, increased credit card use, population growth, the velocity of money and so on could indicate an adjustment to the money supply was needed.

Once the required alteration was needed a new balance would be typed into the Government’s bank account whereupon the money would be indistinguishable from that collected through taxes. This money would be the modern day equivalent of the regular debt free additions of cash that previous economies required. Replacing cash with it's digital form is the easy bit.

Controlling the creation of money by banks needs a bit more thought. Perhaps the best way to do this is to define digital money as legal tender, as opposed to an
agreement to pay legal tender upon request. From then on banks could only lend existing money and would have to attract the funds they need for lending. No longer could they increase a borrower's account without lowering another.

Attracting funds for lending would be satisfied through the demographics of the country. A portion of the population would always be saving and assure the funds for would-be entrepreneurs. Inflation would be controlled through the permanency of the money supply. At present our money is regularly deleted through loan repayments. However under the proposal the money supply would rarely be lowered overall alleviating the constant pressure for new money, which can ultimately lead to inflation.

The transition would involve removing current accounts from the balance sheets of the banks. Still managed by the banks as legal tender, these accounts would have no place as liabilities of the banks. Debtors would also be removed as assets of the bank and would temporarily be accounted for at the Central Bank. As loans agreed before the transition date are settled the money would be transferred to the Central Bank whereupon it would be removed from existence as a victim of the double entry bookkeeping system which happens under the present system.

Since the vast majority of our money exists as the mortgage holders agreement to repay, we could expect the transition to last not longer than thirty years. After such a time, the entire money supply would exist debt-free overall and, if we got it right, business would be held back by things other than an inadequate medium of exchange.

For more detail on this proposal please visit www.sensiblemoney.ie.

[bobby d]

komurchu said:

bobby d said:

LMFAO.....Ben fuckin Lowrey?????? hahahahaha.....what a fuckin fraud, cant believe the likes of you are still listenin to this eejit but then again , it figures...lol.
If you pay him monthly he will even let you into his "inner circle" lolol.

All you have done here is produced an argument ad hominem. Have you got anything non fallacy related and possibly to do with the content of the video (if you even watched it)?

[Ray Soular]

Yeah I know the world may be complicated etc. but I don't think the system providing it has to be. Also I don't think we need half the stuff provided either.

Howard Crane said:

Ragnarok speaks from a place of deep wisdom and insight, I suggest that everyone goes back to page four of this thread and read what he's said and meditate upon the actual meaning. He's not using any descriptive or functional words lightly, he means each one.

Ray Soular said:

People survived and thrived for thousands of years without money and some tribes still do to this day. I always wondered why something so simple has been turned into something so complex.

Not being "smart" here, Ray, but this is what it is: it's complicated so that we can make movies, drink flavoured water, and enjoy all the world's cuisines within a half hour walk of one place. It's so that we can talk to people we never have before with the help of the global brain of the Internet, to fly over the largest wonders of the world and take it in as one complete spectacle... to do the undone
It sure is as hell complicated, and even over-complicated... it kinda ties into what my good friend Ragnarok said on page four.... we kinda need to actually sit alone with ourselves and ask what it is to be rich and what we fill our finite existence with. The actual root of our relationship to life and thus each other.

[Howard Crane]

I don't want to join the ad hominem orgy going on here, but why is anyone even reading what Komurchu is typing?! This CMI or whatever, it's peripheral. It's not going to happen, and if it does it's going to be controlled by the likes of Komurchu and the people who ran the last banking system because that's their job description - middle-man'ship, management, "protection". Always the tough bastard in the group that suggest we pool our resources, for an obvious reason. I may not have answers for everyone else, but I know to point out and avoid creatures that think like this.

Sociopaths and the confused aside, it's just us normal people going through the journeys of our own lives. We have different outlooks and ideals we want to live by. The next year or so should be a meditation upon a way of relating to and understanding each other in a way that includes all these dispositions - we wont be "getting rid of them". If we don't get this shit sorted out RIGHT NOW then this economy is going to collapse and we'll be offered a new one by the same Sociopaths and it's going to involve pushing one or more segments of our population to the fringes again. As Mark Twain said "History doesn't repeat, but it does rhyme from time to time." Ireland/Europe may not look like Soviet Russia in a year from now, but it'll certainly "rhyme with it" without our intervention.

[komurchu]

Howard Crane said:

I don't want to join the ad hominem orgy going on here, but why is anyone even reading what Komurchu is typing?! This CMI or whatever, it's peripheral. It's not going to happen, and if it does it's going to be controlled by the likes of Komurchu and the people who ran the last banking system because that's their job description - middle-man'ship, management, "protection". Always the tough bastard in the group that suggest we pool our resources, for an obvious reason. I may not have answers for everyone else, but I know to point out and avoid creatures that think like this.

Sociopaths and the confused aside, it's just us normal people going through the journeys of our own lives. We have different outlooks and ideals we want to live by. The next year or so should be a meditation upon a way of relating to and understanding each other in a way that includes all these dispositions - we wont be "getting rid of them". If we don't get this shit sorted out RIGHT NOW then this economy is going to collapse and we'll be offered a new one by the same Sociopaths and it's going to involve pushing one or more segments of our population to the fringes again. As Mark Twain said "History doesn't repeat, but it does rhyme from time to time." Ireland/Europe may not look like Soviet Russia in a year from now, but it'll certainly "rhyme with it" without our intervention.

The likes of komurchu ????

care to explain yourself Howard or , perish the thought, even offer a solution maybe?

[Howard Crane]

No, I don't "care to explain" myself. What I said is what I meant. If you care to reread what I wrote you'd see that I have no "solutions". The lack of a full and complete off-the-shelf "solution" shouldn't detract from anyone's observations - I know the false light when I see it, buddy.

[Finnegan]

Ad Hominem me bollix , Ben Lowery is a bell end . Great to read some lively debate .

[komurchu]

Howard Crane said:

No, I don't "care to explain" myself. What I said is what I meant. If you care to reread what I wrote you'd see that I have no "solutions". The lack of a full and complete off-the-shelf "solution" shouldn't detract from anyone's observations - I know the false light when I see it, buddy.

You are nothing but an ignorant little person Howard, one who lacks the ability to enter into reasoned, logical debate and so tears any and all discussion down to your level, the level of a snakes belly.

[Howard Crane]

Well done Komurchu, you just told all of us more about yourself than I.

Below is the most recent example of you doing exactly what you say I do:

komurchu said:

Your entitled to your opinion I suppose, however ridiculous it may be.
Again I say, it is the likes of you,bobby d, christopher etc that have this site where it is.....at precisely the same place twas on its inception, in fact with the likes of the aforementioned idiots and their problem making rather than problem solving it seems that this site has actually gone backwards.
Its clear for all to see that TNS radio is the place to be for finding solutions and this site has become a simple place of light enrtertainment, this is proven by the fact that of any given evening there can be upto 90 folk in the chatbox/forums of TNSradio versus what....3,maybe 4 here.
well done lads.

How do you take your words? Poached? Sunny-side-up?

[bobby d]

Reasoned debate with rational people is productive when the people involved have it's goal directed at mutual benefit and aiming toward truth and greater understanding for all those exposed to the content. People can read the above thread and make the truth from it, I am confident of that.