Tag Archives: jubilee

A History Of The Legal Case Against Usury

24 Feb
Schistosoma_mansoni2

Schistosoma mansoni is an endoparasite that lives in human blood vessels.

Regular readers will know that I am an ardent opponent of the practice of usury.

In the classical meaning of the word.

Indeed, it is my view that the practice of usury is The Key to the power of the money-lenders.

While many others have argued that the key to their power is their exclusive right to create money (debt) whenever they make a loan, I tend to disagree.

In the absence of the legal right to charge interest (usury) on those loans, the money-lenders’ power would be effectively nobbled.

They could be replaced by full public banking. Or by alternate, free currency solutions like my own.

This key issue of the charging of interest on “money” lending, its origins, and its legal history, is awash with myths, theories, distortions, and outright falsehoods.

There are many eloquent and brilliant advocates for the alleged “need” for the charging (and offering) of a rate of usury on money. The theory of the so-called “time-value of money” is commonly cited in justification of what is, in truth, plain and simple parasitism –

Parasitism is a non-mutual relationship between organisms of different species where one organism, the parasite, benefits at the expense of the other, the host.

First used in English 1539, the word parasite comes from the Medieval French parasite, from the Latin parasitus, the latinisation of the Greek παράσιτος (parasitos), “one who eats at the table of another” and that from παρά (para), “beside, by” + σῖτος (sitos), “wheat”. Coined in English in 1611, the word parasitism comes from the Greek παρά (para) + σιτισμός (sitismos) “feeding, fattening.”

What I hope to do in today’s post is dispel some of the banking industry’s most powerful falsehoods.  That the charging (and offering) of “interest” on money is normal. That, at worst, it is a “necessary evil”.  That it is really something natural, and good, like a law of the universe, and vital to keeping our world turning.

I also hope to encourage readers to STOP using the banksters’ language.

And instead, to “call each thing by its right name.”

The original word used for the charging of interest on money … is USURY.

Usury does not mean charging “excessive” rates of interest.

The etymology of the word “usury” shows that it originally meant the charging of any interest, at all:

usury (n.)

c.1300, from Medieval Latin usuria, from Latin usura “usury, interest,” from usus, from stem of uti (see use (v.)). Originally the practice of lending money at interest, later, at excessive rates of interest.

How very convenient for the modern day money-lenders, that we have changed our language over the centuries.

No doubt with more than a little help from our “friends”.

In researching for more information on the origins of the word “usury”, recently I happened across an article published in the American Bar Association Journal, Volume 51, September 1965. It was written by a J.L. Bernstein, NYU Law School graduate and editor-in-chief of the New York State Bar journal. Following are some extended excerpts. It really is fascinating stuff.

But if you are tempted to leave before finishing, please do me one favour. Skip to the end, and read my closing observations concerning ancient Sumeria, the true origin of debt jubilees and New Year’s Eve celebrations, and the deeper meaning behind the Biblical story of Abraham.

Now, to the history of the legal case against usury (my bold emphasis added):

Background of a Gray Area in Law: The Checkered Career of Usury

Tracing the ancient and medieval history and development of usury, Mr Bernstein shows that at first it was any charge for the use of property, but later became only the charge of excessive interest on money. With the advent of our present consumer society, various procedures and methods of conditional selling have enabled what might otherwise be usury to escape illegality. It is time, the author suggests, to delineate what is fact and what is fiction in this shadowy world.

A CASE MAY BE MADE for usury as one of the oldest professions of man, yet the complexities of modern economic life “make fundamental a review” of the problem, as the late C.S. Lewis, Oxford and Cambridge don, scholar and theologian pointed out. The checkered career of usury cum interest is too long to detail here, but this mixed question of theology and law has always been a gray area for the courts – a veritable hodgepodge of legal decision, as this Journal once put it, with “no clearcut rationale”.

Even an elementary statement in a leading New Jersey case is questionable. The Supreme Court said: “Although the common law did not prohibit usurious exactions, our statutes have done so since 1738.” This view of the common law is challenged in Mark Ord’s authoritative Essay on the Law of Usury (1809), which states: “Usury in its strict and legal sense was always considered unlawful.” Likewise, Robert Buckley Comyn says: “Usury was in England an object of hatred and legal animadversion at least as early as the time of Alfred; and Glanville, Fleta, and Bracton bear ample testimony to the abhorrence in which it was held.”

All Interest Once Was Usury

At common law a usurious contract could not be enforced, and usury appears to have been an indictable offense, the punishment for it being fines and imprisonment. The fact is that from the earliest recorded times until the later Middle Ages even interest was forbidden by both canon and civil law, for interest then was synonymous with usury. Indeed, interest had no significant usage in English law until the statute of 21 Jac. 1, c. 17 (1624), although it had been employed in commerce, having been adapted from the Justinian Code of the Roman Empire.

The Lombard merchants, the principal moneylenders of medieval times, had made it a practice to charge a penalty on default, and the custom spread. Thus interest was not a charge for the use of money, but an exaction to make the creditor “whole”. In time it came to mean permissible usury, but it is noteworthy that neither the Old nor the New Testament recognizes this concept, except for the new Catholic edition of the Holy Bible (1954) which substitutes interest for usury and banker for exchanger.

Comyn describes the gradual transformation: “Usury was an offense which having first become odious from religious prejudices, at length became the object of political consideration, and parliamentary restraint. And as at first the taking of any profit upon money was denominated usury, so afterwards, when such profit was authorized by law, the profit was termed interest, and the illegal excess alone retained the odious name.” Thus usury began as malum in se, but at least from the time of Charlemagne in the ninth century (he considered all profit as “filthy lucre”), the secular arm had sought to reinforce the spiritual, making it also malum prohibitum. Speaking of the earliest English statutes, those of Henry VII (1487-1495), Coke declared that all usury was “damned and prohibited”. According to an ancient book of the Exchequer, entitled Magister et Tiburiensis, usury was ranked with murder as an offense.

But the general detestation was diminished by 37 Hen. 8, c. 9 (1545) which, while entitled “A Bill Against Usury”, tacitly legalized it to a maximum of 10 per cent per annum. This statute inaugurated the serviceable fiction that usury no longer meant any interest, but only excessive interest. As Ord puts it, this was the first English statute to “give any connivance to the practice of lending at interest”.

The statute still called usury “a thing unlawful”; it was an attempt at moderation, following the lead of the church. Earlier attempts to ban all interest had failed ignobly, but so did this new approach, and by 5 & 6 Edward 6, c. 20 (1552), repeal made interest and usury one and the same again. But this didn’t work, as before, and 13 Eliz. 1, c. 8 (1571) repealed the Edwardian edicts and revived the statute of Henry VIII. In order, 21 Jac. 1, c. 17 (1624); 12 Car. 2, c. 13 (1660); and 12 Anne, c. 16 (1713), toyed mainly with the rates, which went from a maximum of 10, to 8, to 6 and finally to 5 per cent in the statue of Anne of 1713. This is the one followed in this country. But the most common maximum rate of 6 per cent is derived from the Justinian Code.

The statute of 12 Anne, which served as a common model here, was abrogated 110 years ago in England by 17 & 18 Vict., c. 90 (1854). Therefore, the mother country has no general usury law today and interest of 48 per cent may be quite legal – even more, if the courts can be convinced. As H. Shields Rose puts it in his book, The Churches and Usury (1908), this was “the final capitulation of the state … as regards the maintenance of a legal maximum rate of interest in England”.

Note:  The abrogation of this 183-year-old English law placing limits on the charging of interest, came just ten years after the privately-owned Bank of England was granted exclusive power to issue the nation’s banknotes (Bank Charter Act, 1844). Coincidence? I think not.

The etymology of usury is from the Latin words usa and aera, meaning “the use of money”. But both by ecclesiastical and civil law it was always held that usury could exist in nonpecuniary transactions as well. Many state statutes, following the language of 12 Anne, speak generally of “money, wares, merchandise, goods and chattels”. The Bible is more inclusive: “Thou shalt not lend upon usury to thy brother; usury of money, usury of victuals, usury of any thing that is lent upon usury.”

But courts that maintain that usury was not prohibited by the common law are on firmer ground if they mean thereby the common law as it was interpreted by the colonial judges here. Blackstone says that the common law of England consists of “That ancient collection of unwritten maxims and customs …”. Our early courts seemed to regard English authority on the subject so dubious, indifferent or contradictory that, without legislative enactment, anything by way of usury was legal. This led to such abuses that the colonists petitioned for action, and general usury statutes were adopted everywhere.

It is useless to deny that confusion abounded in the common law, for usury was no less a gray area and a hodgepodge of thinking then. Coke, for example, said that: “All usury is not only against the law of God [but] the laws of the realm, and against the law of nature.” But on another occasion he avers that what was actually forbidden was “biting usury”, i.e., unconscionable charges…

Note: It is your humble blogger’s firm opinion that, in a technological age where 97% of all “money” is no more than electronic binary code, mere digital bookkeeping entries, created at the click of a bankers’ mouse in the form of new debt, there is no question that ALL usury charges are unconscionable.

Genesis of the Problem Is of Ancient Origin

But if the common law is no less a puzzle than our decisional law, the trouble goes far back – to Holy Writ itself. Until the later Middle Ages all interest was interdicted, for it was abhorrent that money – “barren” as Aristotle and the inspired writers of the early Church had taught – should increase unnaturally while lying fallow. That a lender should profit in his own idleness and that a borrower should be charged even though he may have lost money in the transaction, both were intolerable. Indeed, the worst form of usury in medieval times is considered a most respectable practice in our own. This was the custom of paying interest from the day of the loan. Banks today not only pay interest “from the date of deposit”, but even from before, so that money deposited by the fifteenth of a month will draw interest from the first.

Note how the author first refers to “paying interest from the day of the loan”, then immediately switches gears to speak of banks paying interest “from the day of deposit”? This is a classic and oh so subtle mind trick, commonly used in justification of the practice of charging interest on lending. How so? By redirecting the focus of the argument on the fact that banks pay interest as well.  It is a clever distraction, because what is overlooked, is that banks never pay more interest than they charge. As a so-called “intermediary” in the payments system of the economy, the banks achieve the easiest of profits.  Not just because they charge more interest than they pay, which in itself would be a form of parasitism. But because they are not mere intermediaries – banks are able to create money (debt), and charge interest on it.  Contrary to popular belief, banks do not simply lend out money deposited by other customers. See The World’s Most Immoral Institution Tells You How

We have come a long way in our view of the fertility of money. But, oddly, the statute of James I, which gave the word interest its first significance in Anglo-Saxon law, contained the proviso that “… no words in this statute contained shall be construed or expounded to allow a practice [of charging interest] in point of religion or conscience”. But what did morality actually hold? That is the most vexatious of all inquiries.

The Fifteenth Psalm is clear without cavil: “Lord, who shall abide in thy tabernacle? Who shall dwell in thy holy hill … He that putteth not out his money to usury…”. Throughout the Bible the angry prophets denounce what the early theologians called “horrible and damnable sinne”. But there are also loopholes born of contradiction, and the frustrations of the moralists came to be visited upon the jurists.

Although the quoted passage from Deuteronomy forbids all usury, the next verse is most tantalizing: “Unto a stranger thou mayest lend upon usury; but unto thy brother thou shalt not lend upon usury…”. What does this mean?

Indeed. There is much that can be said, and much evidence raised, in answer to that question.  But we will leave that particular controversy for another time.

From Biblical times until the later Middle Ages, a moneylender was simply a usurer, and a banker an exchanger. The distinction of moderate usury, called interest, received no recognition in the Church until after the Reformation. In a sense, therefore, the liberalization of religious thought also marked the turn to the “Money Society”, in which the medium of exchange achieved the status of a commodity of intrinsic value and became the lifeblood of commerce. The burgeoning materialism of the age, trading on the discovery of the New World, was in a mood no longer to tolerate philosophical and religious thought treating money as “infertile” and profit from it as “unnatural”, since it was not endowed by God or nature “with genital and procreative faculties” in the words of St. Basil (fourth century). In the end, it was the lawgiver, Justinian, who prevailed, rather than the philosophers and theologians.

And there you have it. What has ultimately prevailed with respect to usury, is the code of man. The Corpus Juris Civilis of the “lawgiver”, Justinian, a ruler of the late Roman Empire (c. 529AD), are the foundational documents of the Western legal tradition. It is ancient Roman law that serves as legal justification for the resurrected, and globally-dominating practice of usury in our day.

Theory of Moderate Usury or Interest Is Approved

This same logic, that there is nothing immoral about usury, was advanced in Parliament in the last century during the debates on the proposed abolition of the general usury statute of 12 Anne. “God did not so hate it, that he utterly forbade it”, contended one member; while another stated: “He could not have desired that the ban against all usury should be of moral and universal application”, for the Bible did not so clearly provide. An economist with the United States Treasury Department even advanced the view that usury could be traced “to the Creator Himself”, who first caused “all things to grow and increase”.

Nevertheless, that the total prohibition of all interest was at the center of canonist doctrine until the later Middle Ages is clear. “Not until sixteen hundred years after Christ did interest find any defenders”, proclaimed Roger Fenton. Then it was the Church which led the way to its acceptance, and the State which followed. Two principal reasons may be advanced for it: (1) the growing power of economic forces which chafed under enforced unselfishness and (2) the equivocations of Scriptures which encouraged the casuistries of “permissible instances”. Ultimately, perhaps, it was a hopeless struggle against human cupidity, or maybe only against “progress” for it is unlikely that, no matter what position it assumed, the Church could have stemmed the tide that was running.

Assailed on either side by those who, like St. Basil, called usury “the last pitch of inhumanity” and those who found it out of harmony with the facts of life, the Church sought to steer a middle course. Since its primary object has always been to protect the weak against the economically strong, it saw justifications for exceptions in commercial transactions between sophisticated parties.

“Sophisticated” parties? Now where have we heard that justification used more recently?

Moreover, on the allegation that, after 16 centuries, the Church succumbed to the pressures of economic greed and “progress”, it behooves one to point out that, in doing so, its ecclesiastical leaders and learned theologians all managed to lose sight of the simplest teachings of their own namesake, The Christ: 

“No one can serve two masters: Either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve God and money.”

It is this blogger’s view that the vast, unfathomable wealth of “the Church” – the sheer obscenity of which induced a sense of nausea on his sole tour of the Vatican – stands as ample testimony to the identity of which “master” it has long chosen to serve.

“Interest”, laconically comments Roger Fenton, “is the brat of commerce.” By what Mark Twain would have called “theological gymnastics” the Church has been charged with acquiescing in contrivances and subterfuges; and its capitulation to usury – limited or otherwise – has been held to constitute a virtual abdication of the precept against avarice, a former “venal” sin.

The Church first approved the idea of interest as it originated in the Justinian Code, which implied a justified penalty on default, although it is likely that this in itself was a subterfuge to avoid the ban against usury. But theological approval of the dammum emergens, for actual loss incurred, was not satisfactory to business or its lawyers, who argued also for the lucrum cessans, certain gain lost. This the Church resisted for at least a century more, for it was not ready to concede that money, the love of which is “the root of all evil” in the Bible, was fertile. But in time it acceded to this, provided that the money was lent for an initial gratis period. Thus, technically, the interest was still not for the use of money, but as compensation for its nonreturn on the due date.

This attempt at charity led to an ingenious evasion. The grace period, accepted with high good humor in the market place, became a mere sham. The lenders merely fixed a due date so close that borrowers could not hope to repay by then, following which huge penalties were added. The evasion and the practice survive to this day, and the courts commonly enforce, after default, a rate of charge in excess of that permitted by general usury laws. It persists in “revolving” or “flexible” charge accounts, in which no charge is made if a bill is paid within ten days or so, after which interest (called a “service charge”) of 18 per cent is added.

But the Church never approved of lending to the poor in order to profit from their poverty, nor of such things as “consumer’s loans”, formerly called “consumptive loans”, a rather more descriptive phrase. Indeed, to lend for any but productive purposes or to engage in commerce except as a service to the community was still immoral. In 1515 the Lateran Council pronounced: “This is the proper interpretation of usury, when gain is sought to be acquired from the use of a thing not in itself fruitful, without labor, expense or risk, on the part of the lender.” The element of risk loomed larger in importance, but the Church having made distinctions, it was not long before the law of England followed suit. Within thirty years, in 1545, came 37 Hen. 8, the first statute to legalize moderate usury.

Today it is commonly argued that the charging of interest on loans simply represents a fair and reasonable “rate of return” to moneylenders, to compensate them for their “risk” in making the loan.

This is self-serving bunkum.

As we have seen previously, there is no labor or “risk” involved in the modern process of “money” creation and lending. It is simply typed into existence, as a new digital bookkeeping entry. And even when the moneylenders take their money debt-creation schemes to stratospheric levels, blowing asset bubbles that lead to the total insolvency not just of millions of common people, but of their own institutions – (eg) the predatory mortgage lending practices in the USA preceding the GFC – the government conspires with the bankers to make them “whole” again. In the modern era, it is perfectly clear and beyond refutation that the lending of money by the banking system is risk-free … for the bankers.

In closing this post on usury, there is one more piece of research I’d like to share.

Biblically-literate readers will be familiar with the story of Abraham. As the man chosen by God to be “the father of many nations”, he is a central figure in the history of three powerful world faiths and their billions of adherents. Indeed, they are named after him – the “Abrahamic” faiths of Christianity, Islam, and Judaism.

In the Genesis 11-12 account of Abraham, we learn that he lived in the region of ancient Sumeria (or Babylonia), in a place called “Ur of the Chaldees”. God told him to get out of Ur, and to go to a land that He would show him.

The Promised Land.

A metaphor for Heaven.

In David Graeber’s masterful work Debt: The First 5,000 Years, we learn a wealth of fascinating, myth-busting information on the true anthropological history of money, exchange, barter, and debt throughout recorded history. It is a “must read” book.

Many of us would be aware that the earliest written records of humankind are the clay tablet (cuneiform) writings from ancient Sumeria. The concept of a debt jubilee now being revived by Professor Steve Keen has its earliest origins in Sumeria/Babylonia, where actual “money” (eg, coins) was very little used; instead, the economy functioned almost entirely on a system of debts and credits, which (like today) were nothing more than bookkeeping entries, written originally on clay balls, later, on clay slates. The phrase “a clean slate”, meaning to have a fresh start or new beginning, has its origins here. New Year’s Eve celebrations also have their origins here – it was not uncommon practice for Sumerian kings to declare all debts annulled, to destroy all the records of debt and so begin with “a clean slate” in the new year; a cause for joyous celebration if ever there was one!

CunEnv

In chapter 7 of Graeber’s book, we also discover the meaning of the word “Ur,” from an early Sumerian dictionary:

ur (HAR): n, liver; spleen; heart; soul; bulk; main body; foundation; loan; obligation; interest; surplus; profit; interest-bearing debt; repayment; slavewoman.

I think there may well be a significance to the story of Abraham and his journey out of Ur to the Land of Promise, that is both far deeper, and far more practical, than most give it credit for.

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The People’s NWO: Every Man His Own Central Banker

7 Jul

** 7 October 2014:  The concept described in the following essay has since been developed further — visit beta website deror.org for more information.

“To radically shift regime behavior we must think clearly and boldly for if we have learned anything, it is that regimes do not want to be changed. We must think beyond those who have gone before us and discover technological changes that embolden us with ways to act in which our forebears could not.”

– Julian Assange, Conspiracy As Governance (2006)

There is nothing more dangerous than personal initiative: if it has genius behind it, such initiative can do more than can be done by millions of people among whom we have sown discord.

– Protocol V

Are you seeking profit, or protection from the storm?  This is not for you.  Are you here because misery loves company, or to impress with wit?  This is not for you.

This is written for those who have moved to a place beyond fear, and preservation.  Beyond greed, and accumulation.  This is for those who have moved beyond, to a place the Sovereign Man knows not of.

It is the place where un-selfish thoughts roam freely; where the forces of greed and fear are “not of this world”.

If you are seeking comfort in confirmation of existing ideas and beliefs, then I encourage you to look elsewhere.  Here you may be challenged to reconsider.  To research and study.  To think outside the square.  And to take uncommon action.

In the introduction to the movie V For Vendetta, we are reminded that “an idea can still change the world”.  I will share my idea to change the world with you today.  I hope you may have an even better one.

First, an apology.  The basis of my idea challenges common precepts that you may hold as gospel truth.  In the interests of brevity I cannot author a supporting thesis.  So I encourage you to simply adopt a certain mind-flex; to entertain the underlying rationale for the moment, in order to consider the main idea in context.

My idea will particularly challenge those who conflate the concept of a “currency” with a “store of value”.  We have been trained to do this.  We have been taught to identify both of these different concepts, with the singular label of “money”.  This is the first and greatest delusion to be overcome.  If “money” is ever to be made a servant of mankind, and not continue to be his master, then we must begin by taking great care to distinguish clearly between “money” as “store of value”, and “money” as “currency”.

A “store of value” can be anything real, tangible, and (in relative, human lifetime terms) lasting.  Gold, silver, some art, property, gemstones, all these and more may be considered a store of value.

A “currency”, by contrast, should serve only as oil for the wheels of the economy.  To aid the proper, efficient, and right moral function of commerce and industry, in its pivotal role within civilised human society.  To achieve this, our chosen form of currency should have no intrinsic value whatsoever.  Moreover, in the interests of true social justice, the ideal form of currency should be destroyed at a modest, fixed annual rate.  Why?

For an in-depth understanding of the answer, I encourage you to read up on the concept of Freigeld (“Free Money”), as elaborated in the Natural Economic Order by Silvio Gesell.  Before rushing to dismiss this little known genius as some kind of crackpot, you may first wish to consider carefully the profound success of Gesell’s demurrage currency concept during the Great Depression.  The Miracle of Wörgl, Austria is an excellent example.  You will also discover how this alternative monetary “experiment” was promptly shut down; tellingly, at the behest of the Austrian Central Bank.  And how American economist Irving Fisher unsuccessfully petitioned Roosevelt to implement a similar monetary system, as a solution to America’s woes in the Great Depression.

The reason why a demurrage currency is essential for true social justice is this:  The product of labour – the sweat and effort of ordinary people – is subject to the natural laws of entropy.  The farmer’s produce spoils. The manufacturer’s product too has a “shelf life”.  It deteriorates, or is superseded.  The product of labour is compelled by the natural laws of entropy to find a buyer promptly.  If it does not, the producer – who has no personal use for surplus – inevitably suffers loss.  He wears the “carrying cost” of deteriorating product if it remains unsold.

The possessor of currency, by contrast, has an unfair advantage, if his currency is not likewise subject to entropy.  Simply by means of the unspoken threat to “shut his wallet” and withdraw temporarily from the marketplace, taking his non-deteriorating currency with him, he may force the producer – compelled as he is by the law of entropy – to lower the price of his ever-deteriorating goods.

This is the inevitable – and inequitable – consequence of adopting a form of currency that can also be perceived as a “store of value”.  The Supplier of currency (the buyer) is granted an unjust and unfair power over the Demander of currency (the producer/seller).  The very form of currency itself naturally encourages its possessor to mistreat and humiliate his fellow man, by taking advantage of the relative weakness of his bargaining position.  And arguably worst of all, the one who is disadvantaged is the producer of goods.  The engine, the very heart and soul of commerce and industry.  Simply by virtue of the possessor choosing to “save” his currency – since he also perceives it as a “store of value” – the  producer is forced by necessity to continually and ever more urgently lower the asking price for his goods, until the point at which the possessor becomes willing to enter the marketplace and buy.  While many may see this as “good business” or “driving a hard bargain”, it is hardly “to love thy neighbour as thyself”.

In the people’s NWO economy, there will never be a shortage of oil for the wheels of commerce.  Neither will there be an excess.  As with your car, too little and too much oil both are highly damaging.  One starves the engine of lubricant until the mechanism seizes.  The other causes a build up of excessive pressures, until the weakest part blows.

If you will accept this basic premise concerning a “natural currency” – even just for entertainment purposes for now – then the rationale for my idea will follow.

Before introducing it however, a disclaimer for context.  I am vehemently anti debt, and anti usury.  Since early this century, a significant proportion of my own modest material net “worth” has been in physical gold and silver bullion.  Stored beyond the reach of the banking system.  Yet, this choice is predicated by external circumstance, and not by ideology.  My research leads me to conclude that gold and silver “bugs”, “sound money” advocates, and “Constitutional money” proponents, are all most subtly, yet most profoundly, deceived.  There is a very logical and ancient reason why ancient occult (secret) society symbology is a persistent feature of the founding relics of the USA, of Washington DC, and indeed, of the Federal Reserve Note.  To return to a precious metal standard would achieve nothing more than to take one small step backwards – straight into the previous stage of the monetary trap laid for humanity by “the powers that be” (TPTB) over many centuries.

I believe that the current system will collapse.  By accident, or by design.  Waiting for it, and scheming/hoping to profit during or after the collapse, is a fool’s game.  Those who pull all the monetary strings, who have this exclusive “money issuance” power over us now, will have it then too.  Only more so.  Because whatever system is suggested by the authorities to replace the present one, you may rest assured that it will be their system.  Of their design.  For their benefit.  Ordo ab chaoOrder out of Chaos.

Unless We The People beat them to it.  By introducing our own monetary system.  Not by waiting on “democracy” so-called.  By exercising our “dangerous” personal initiative.

My idea for a new monetary system, to undermine and ultimately take over from the collapsing present order, is simple.  Build a complementary currency system.  Starting right now.  One where you, me, and every participant assumes the basic human right to become their own central banker.

After all, if it’s ok for a tiny minority to create their own currency out of thin air – and then enslave us for the privilege of using it – then what is to stop all of us – the great majority – from simply going out and doing exactly the same thing … but with un-selfish intentions?

Here’s how I picture NEO – a Natural Economic Order for the digital age, and a true people’s currency.  Imagine some genius has exercised personal initiative, and created an encrypted software program that you can download.  It functions using peer-to-peer networks (thus, that much more difficult for TPTB to close down).  Let’s imagine that it is called “Jubileeus”.

The Creator.

And the Deliverer from debt slavery.

Using this program, you can create your own digital currency, right out of thin air.  Just like the central banksters.  There’s no cost.  No fees.  No interest charged.  Ever.  But (unlike the banksters’ system) there are encrypted, pre-programmed limits and conditions.  To ensure the system is functionally stable, and socially just.  And most importantly, to encourage right behaviours that are conducive to a stable, just, and equitable society.

You choose the initial amount you wish to create.  This will be your positive bank balance, denominated in “Jubileeus” currency.  When you create new currency, you will automatically have a second, linked account too – showing a negative balance, in the same amount.  That’s because you have taken up the solemn privilege – a future Human Right – of creating your own “credit” for yourself.  In other words, you “borrowed” currency out of thin air, to aid your dealings in the marketplace.  But that’s ok.  Everyone should have appropriate access to (not free “money” but) free currency.  So that everyone is empowered to contribute equally to oiling the wheels of commerce and industry.

In most respects, this currency system functions just like the familiar cash transaction (ie, positive credit) and loan accounts that you might have with your local bank.  Spending your Jubileeus to purchase goods and services will decrease your positive bank balance towards zero, just as you would expect.  When you sell something, or otherwise earn more Jubileeus, there is a subtle difference though.  You do not have a choice to not pay down your negative (“loan”) balance first.  Why?  The system designer believed it best to encourage people to learn to reduce their negatives, before giving thought to increasing their positives.  So any Jubileeus received automatically pays down your negative balance first, reducing it towards zero, rather than simply increasing your positive balance.  Having any income automatically applied in full to your “loan” account first, will create no hardship for anyone – if you are ever short of currency in your positive (“credit”) balance to pay the bills or buy groceries, you simply “borrow” (ie, create) some more currency.

I suspect that there are “sound money” advocates screaming about now, that such a system is ignorant, insane, and doomed to failure.  For many there will be an automatic negative emotive response, because even this kernel of the idea instantly evokes the spectre of free, unlimited “money” supply, and fears of hyperinflation.  Doubtless some will be recalling the many historical incidents of excessive currency issuance by spendthrift dictators and politicians, and recoiling in horror or laughing in derision.  Patience, friend.  Your fears will be addressed by the end.

Two points to consider.  First, the fact of excessive currency issuance in the past does not logically necessitate tying currency issuance to physical commodities (eg, gold/silver).  In point of fact, doing precisely this has been the first stage tactic employed by TPTB over many centuries for gaining control over kings and peoples.  Linking currency issuance to a physical commodity does not limit your ability to expand or contract the total of available currency, if you already control the stocks, and/or the supply, and/or the  public reporting of reserves of that particular commodity.  On the contrary, encouraging, coercing, and/or bribing kings and politicians to pass laws linking currency issuance to a commodity that you already control, actually increases your ability to manipulate the currency irresponsibly, fraudulently, or indeed, nefariously.  It provides another layer of deception. Another curtain behind which to hide, while you pull the levers of power.

Secondly, you are quite correct.  Excessive currency issuance is indeed a real danger to be avoided.  Too much oil in the car eventually blows up the engine. The question is, How to avoid it?  Historical precedent suggests that the real challenge lies not only in the form of currency chosen, but also in the matter of Who has power to control its issuance.

Our “people’s currency” could address this danger simply and effectively, by way of a built-in, automated Honour rating system.  Don’t laugh.  I’m serious.

Let’s imagine again.  You’ve downloaded the Jubileeus software.  You decide to create an initial “loan” to yourself of 50,000 Jubileeus.  You now have a positive “credit” balance of 50,000, and a negative “loan” balance of 50,000.  The system automatically flags your account with a publicly visible Honour rating.  Of just 50%.

Every time you conduct a peer-to-peer transaction with another participant, they can see your Honour rating before proceeding.  And just as with eBay’s feedback system, some will decline to trade with you if they have doubts about your character, integrity, and indeed, your honour, as implied by your Honour rating.  In the people’s NWO of the future, in light of our experiences of the terrible outcome of permissive attitudes to financial corruption, immorality, selfishness and fraud, I suspect that any question mark over your financial “honour” will weigh far more heavily on others’ thoughts and social consciences than we have seen in recent decades.  Having an Honour rating of xx% or worse may result in your becoming a pariah in a society that has, through great pain and suffering, come to see the value of a strong social conscience.

The automated Honour rating system therefore encourages you to carefully consider whether you really need 50,000 Jubileeus.  After all, are you really going to spend it all now?  Since you can create currency for yourself whenever you need it, perhaps it is wiser to just create an initial balance of 5,000 Jubileeus.  And have a 95% Honour rating instead.

How do you improve your Honour rating?  Go out and work.  Create something.  Build something.  Sell something.  Ask for payment in Jubileeus.  After all, every other guy can also create new Jubileeus to pay you with.  (Just as in Wörgl, Austria, how rapidly might Depression-level unemployment rates fall towards zero, if everyone had access to a free people’s currency such as this?)  As you earn more “money” currency, your negative balance is automatically reduced, ever nearer to that perfect zero point.  And your Honour rating improves accordingly.

The zero point is perfect?  Yes.  Having zero represents the perfect moral and social position on personal use of free currency.  And the only way to have a 100% Honour rating, is to have a zero bank balance.

Just because you may completely pay down your previous (interest-free) “loan” balance – or, perhaps you never needed one – this does not mean that it is ok to start hoarding currency.  It is the oil on the wheels of commerce, and is supposed to constantly circulate, remember?  By hoarding currency, you are indulging in anti-social behaviours.  You could and should be passing currency ever onwards, in exchange for the fruits of others labour, thus doing your part to provide employment and opportunity for all your fellow men.  If you truly have no need or desire for more of others products or services right now, then you could and should be investing for the longer term. Perhaps in dividend-paying shares in a sound and ethical public (or private) company.  Or, perhaps simply in a true “store of value”.

So in the same manner as a negative balance, a positive balance is also penalised automatically with a reduced Honour rating.  Should there be a difference between your positive (“credit”) balance and negative (“loan”) balance, then the Honour rating is based on the larger – thus the “worst” – of the two balances.  For example, if you have 10,000 in positive, along with a 5,000 negative balance, your Honour rating will be 90%.  Not 95%.  But pay off your 5,000 negative “loan” balance with 5,000 from your positive “credit” balance, and you will be rewarded with that 95% Honour rating.

Finally, what about the demurrage aspect?  Recall that our basic premise is that the ideal “people’s currency” should be designed to automatically deteriorate if not used to conduct transactions.  Gesell’s original innovation of applying a “carrying cost” to currency – hence Stamp Scrip – is the primary means to encourage proactive circulation of currency rather than hoarding.  (My Honour rating idea is supplemental, but importantly, it also serves to discourage greed in the initial act of creating new currency by appealing directly to our sense of public reputation, personal integrity, and self-worth).

How do you make a purely electronic currency deteriorate?  I imagine some genius out there could simply pre-programme the software to automatically reduce all account balances – positive and negative – towards zero by a fixed percentage, calculated weekly and summed since last log-on.  How much should this fixed percentage be?  Gesell advocated an annual “carrying cost” rate for currency of 5.2%, or 1/10th of 1% per week.  I have no idea if this is an appropriate figure – though it would appear that it certainly worked a treat in Austria until the banksters had it shut down.  Perhaps some free-thinking economist (oxymoron?) will read this, and be interested enough to research and offer advice.

Once again, the system encourages you to use your Jubileeus.  If you have it and don’t use it, it slowly but surely fades away.  Back towards the zero point.

Such a system not only encourages productivity (ie, hard work).  It encourages creativity and innovation (ie, what new product can I make? what new service can I offer?).

It eliminates poverty. No one need ever again have insufficient “money” to purchase the basic necessities of life, when every person is their own central banker.

It also applies natural limits to global “growth”.  And thus, to the impacts on our environment and natural resources.

Under a Jubileeus system, no longer are there cabals of greedy banksters’ creating endless “credit” – at interest – in order to finance the Ponzi scheme of “capitalist” perpetual economic growth. And enslaving humanity to debt servitude in the process.

Instead, Jubileeus means that “growth” is naturally limited by the total number of human beings on the planet, multiplied by the sum of their collective willingness to “Honour” each others’ Jubileeus. Not only are there pre-programmed rules on the amount of currency that an individual can create. There is also a natural limit on how much public “disHonour” that people are willing to take upon themselves by creating more currency than they actually need at any time. And, there is a natural limit on how much “disHonour” that people are willing to accept in others, when choosing whether or not to buy or sell with other individuals.

Jubileeus means a true declaration of individual independence from those who control each and every one of us, through their exclusive control over the creation, and issuance, of  “money”.

Jubileeus means that every day, is independents’ day.

There you have it.  That’s my Big Idea.  I hope it inspires you to think about what is really happening to us all, and what (if anything) you are going to do about it.

For my part, I look forward to reading your thoughts, constructive criticisms, and insights.  Because I’d like to do something more than just ponder all this.  I’d welcome contacts from any who may be of like mind, and wish to get involved in a real project to bring this idea – or something better – to fruition.  Truth be told, I have the time and motivation, but lack the necessary technical skills to realise this alone.

I’d also welcome feedback from anyone who may be inspired to independently try something similar.

There’s plenty of alternative currency ideas out there – the Ripple Project, and more prominently Bitcoin, are two that spring to mind.

There’s also free-spirited genius software developers such as “Jaromil“, who has developed a tool that allows you to connect your computer with your neighbours – essentially bypassing the telecomms infrastructure – using the wireless card in computers and creating an effective “new net.”

Just imagine the revolutionary power of such brilliantly simple low-technology – combined with any number of possible hardware solutions such as One Laptop Per Child, or even just reuse of abundant, “redundant”, discarded-but-functional Western consumer PC hardware – in helping every human being worldwide, especially in developing nations, to each become their own central banker too.

Imagine too, the effect of such a system on human relations and solidarity. In Jaromil’s Dyne:Bolic example, you become reliant on your neighbour to break out into the network.  Inherent in this system is the expression of “love thy neighbour” – we must share, before we can benefit. Imagine how we would all feel about our neighbours, if they were the only way we could connect to (and buy-sell with) the rest of the world.

There’s also the grassroots network of hackers at ‘digital foundry’ dyne.org, and the researchers and developers at dyndy.net. These are all doing sterling work as they “Imagine the Future of Money”.

Unfortunately, in the words of Henry David Thoreau, “There are a thousand hacking at the branches of evil for every one striking at the root”.  My research suggests to me that all the complementary currency systems currently out there are flawed in key aspects, and so represent a less-than-ideal solution if we are to have a sustainable, tamper-proof, boom-and-bust proof, truly egalitarian system of free “money” to serve the human race.  But that’s just my viewpoint, and I wish everyone the best who may have a mind to try setting up a new and better currency in competition with TPTB.

The system that I have proposed here, a “mutual company” so to speak, or a “commonwealth of stewardship”,  represents a singular threat to the #1 weapon which those who would continue to reign over us possess.

Fear.

Their current plan to address the fear of global systemic banking risk – a fear which they have created through control of the boom-and-bust “cycle”, of which the GFC is only the most recent example – is to divorce the transactional currency system from the store of wealth system.

This is precisely what my idea would achieve … without the centralised control.

Mervyn King, Governor of the Bank of England, gave a speech at the Buttonwood Gathering in New York on October 25, 2010. His speech was titled “Banking: From Bagehot to Basel, and Back Again.”

Here’s an excerpt from the speech (emphasis added)*:

Another avenue of reform is some form of functional separation. The Volcker Rule is one example. Another, more fundamental, example would be to divorce the payment system from risky lending activity – that is to prevent fractional reserve banking (for example, as proposed by Fisher, 1936, Friedman, 1960, Tobin, 1987 and more recently by Kay, 2009).

In essence these proposals recognise that if banks undertake risky activities then it is highly dangerous to allow such “gambling” to take place on the same balance sheet as is used to support the payments system, and other crucial parts of the financial infrastructure. And eliminating fractional reserve banking explicitly recognises that the pretence that risk-free deposits can be supported by risky assets is alchemy. If there is a need for genuinely safe deposits the only way they can be provided, while ensuring costs and benefits are fully aligned, is to insist such deposits do not coexist with risky assets.

Straight from the mouth of Bank of England Governor, Mervyn King. Separating the “store of value” system, from the “currency” system. In its effect, precisely what the system I propose would achieve.

But with the banksters still in control of both systems.

Unless We The People beat them to it.

But first, we need to wake up.

We need to understand the true and proper nature of “money”, and “currency”. So that we are not hoodwinked by the next stage of the global bankster scam.

Many are aware of the evils of “fractional reserve banking”. And it is these who will be the first to sing “Hallelujah!” and fall for the trap, when TPTB suggest doing away with fractional reserve banking as a “solution” to the global systemic banking crisis that they have created.

The only way that “money” can truly be rendered a servant to mankind, is with a decentralised system.

One that no one controls. And every one shares.

A “Natural Economic Order”.

With the writing on the wall ever clearer, and financial doomsday drawing nearer, I honestly reckon that we all have little to lose – and everything to gain – by trying to exercise some “dangerous” personal initiative.

Will yours be the one with genius behind it?

Our integrity sells for so little, but it is all we really have.  It is the very last inch of us, but within that inch, we are free.

Valerie

Beneath this mask there is more than flesh.  Beneath this mask there is an idea, Mr Creedy.  And ideas are bulletproof!

– V

* Acknowledgement – reference to Mervyn King speech originally cited and brought to this author’s attention by Dave Harrison http://tradewithdave.com/?p=5310

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