The Critical Mathematical Flaw
conomists and bankers choose
not to discuss a very significant flaw in the present banking system. In the process of
loaning money into circulation only the principal is created--never the interest.. When
the interest comes due, the debt is always greater than the money supply! This 'SHORTFALL'
creates a growing spread between the prices of raw products and the prices of finished
products. This shortfall is the actual reason that prices, taxes and debt increase Without
limit (so far) for the Federal government (national debt), local, county, state
governments, business and individuals!
This shortfall is not a sign of bad management. It simply is mathmatically impossible to
pay off all the debt, both principal and interest, because the interest is never brought
into existence! The interest can only be paid in bankruptcy with property.
What does this do to your life?
1.You get a constantly rising cost-of-living, ever rising taxes and government debt.
2.You get constantly rising prices and a lowering standard of living.
3.You get constantly increasing levels of unpayable public and private debt that must
inevitably be repudiated in a depression greater than that of the 1930's!
A debt driven money system ensures that our cost-of-living will rise to unmanageable
levels for more and more people and that all or most businesses will, in time, fail or be
forced to restructure.
Debt-credit money created as a loan only produces the principal. The principal is a
debt and it is (money). The interest debt created because of the loan is not (money) . It
is only debt - a debt expected to be paid with additional (money) . This makes the
interest debt unpayable without forcing another deeper into principal debt.
The debt interest costs must be added to the costs of goods and services. As this
unpayable cost (the interest) is transferred from one party to another, it compounds and
the prices (the cost-of-living) constantly rise. However, simply increasing prices does
not mean that the money to pay the higher prices automatically exists in the economy. This
is evidenced by our year-end Total Public and Private debt of $26 Trillion and our Total
Money Supply-the total amount of available money to pay these debts is only $5 trillion.
This difference of debt/supply is why we are having more and more economic stress. When
prices are marked up to cover the cost of debt interest, volume purchasing must drop if
the available money supply does not increase by the same amount.
For example: Your 100 dollar paycheck buys 10 items at $10. When the price of those items
increases to $11 you can only buy 9 items. Your standard of living has dropped. Demand and
sales drop. Demand for workers drop. The economy jumps up and down. Over the long haul the
debt constantly grows. Employment at livable wages declines. The purchasing power of the
credit money declines. This causes more and more people to have a difficult time making
ends meet. Growing money shortages increase the demand for new, costly social programs.
These are paid for by taxing the ever shrinking numbers of 'haves' to pay for the growing
number of 'have-nots'. This fact is expressed daily in our growing concern over two
questions: Why is everything getting so expensive? Where will we get the money to pay for
all the things needed and the programs demanded?
Working harder, faster, smarter, leaner, more efficiently and 'creating lower paying
jobs' only shuffles existing money, it does not increase the money supply. What is
desperately needed is to increase the money supply without increasing the debt. If the
number of jobs increases without increasing money available to pay the additional wages,
workers must earn less. Under the present system, money to pay wages can only come from
savings, newly created borrowed money or from increased export sales to other countries.
However, increased export sales only captures another country's debt-credit money
principal forcing them deeper into debt. This creates a money shortage to them. We 'Fix'
their problem with Foreign Aid through greater taxation which again increases our
cost-of-living.
In a debt-driven economy it is a mathematical law that many must fail so a few can
succeed. As the system matures more citizens suffer economic shortfalls and hardships
while fewer and fewer amass the property and power. This results in loss of representative
government, freedom and rights, increasing debt and a constantly rising cost-of-living for
the masses.
No one, no matter how much they earn can run nor hide from the ever increasing
cost-of-living caused by a debt-credit monetary system. Everyone must deal with constantly
rising costs that are getting harder and harder to meet. The only solution is to return to
a wealth based money system. Money exchanged into circulation without debt to anyone based
on present production, that benefits all Americans.
"The refusal of King George to operate an HONEST colonial MONEY
SYSTEM which freed the ordinary man from the clutches of the manipulators was probably the
prime cause of the Revolution." Benjamin Franklin
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Last Updated on 04/21/98 by Darren Perkins 