by Michael Bond
During the 20th century, subtle changes to global money systems turned currency from a sustainable means of exchange into one of the most destructive agents on Earth. However, most of us were so busy struggling to get some money that this mutation of currency was mostly overlooked.
The deadly aspect of our modern money system stems from the way money is now created.
Modern money is created via credit by the creation of debt. If you borrow $1,000,000 from a bank, the $1,000,000 is not transferred to your account from existing currency held at the bank. The $1,000,000 is created into existence by the loan. You get $1,000,000 to spend, but you still owe the bank a $1,000,000 debt. The money created is balanced out by the debt created. As the loan is paid back to the bank, the repayments do not go into bank coffers but cancel out the original debt owed to the bank. The repaid loan money is literally cancelled out of existence again. So where do the banks get their profit from lending? From the interest that is paid to the bank during the repayment of the loan.
The interest paid on loans is the fatal flaw in our modern currency systems. Say during the term of the above loan, there is $200,000 generated in interest. This means that while the original million is created and then cancelled out, there is an extra $200,000 that must be found somewhere. The only possible place this interest money can now be found is from circulating money generated by a different loan. This, of course, means that even the capital of the second loan cannot be paid back, as there is now a shortfall of money in circulation. The second loan amount - plus its interest - can only be repaid via money generated from yet further loans, and so on.
In short, the world is now obliged to pay back to banks more money than the banks ever create in the first place, an obviously impossible task. This is why economies must grow at between 2 – 6 % per year or they will disintegrate. Economic growth is not for the benefit of the average person as is commonly believed. Economic growth is solely to create enough currency to keep the faulty global economy treading water so it doesn't collapse.
This is also why the global economy grows at about 4%, while global debt grows at about 10% per annum. Note that the gap between economic growth and debt is getting increasingly wider every year. Politicians proudly report strong national economic growth statistics, perpetuating the illusion that this implies some kind of bonus for the average person, yet they systematically ignore ballooning national debt as though it is inconsequential.
At the current growth ratios of economies to debt, within three decades the annual global increase of debt will be larger than the gross global income. This is not conjecture, it is simple mathematics.
Clearly the global economy will collapse long before this ridiculous scenario arrives. Unless fundamental changes are made to the present economic system, in less than two decades the global economy will destroy itself. No amount of productivity, foreign trade, gold mining, hard work or anything else can change that fact.
In the pre 20th century economy, increased productivity created more money in circulation. In our present economy, money in circulation controls productivity. If money supply is scarce, then commerce seizes up. Borrowing ever larger amounts of money is now the only way to keep the economy running. However, this short-term economic fix only creates a larger currency shortage down the track, because of the problem created by interest.
The global environment is being systematically destroyed, not because of shortages of commodities, but because of shortages of currency in circulation. Our present system of money supply has killed millions more people and destroyed much more of the environment than nuclear weapons ever have.
Between now and the year 2020, unless the global economy is completely restructured, there is no other possible outcome except the greatest global disaster in known history. Over the next 10 to 20 years, environmental destruction will escalate exponentially as we race towards the meltdown of civilisation as we know it. Ironically, the harder we try to alleviate this financial shortage, the faster we create it.
What is the solution? Fundamental changes need to be made to align the global money system with reality. Money supply must be restructured into a sustainable means of exchange that serves countries rather than destroys civilizations.
During the 1970’s public opinion forced the most powerful government on Earth to stop a war. Only a massive groundswell of public opinion putting pressure on our respective governments can avert the disaster that our global currency system is driving us towards. Time is quickly running out. Each passing year sees increased destruction of the environment and the human spirit.
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