Bitcoin may someday allow for the separation of currency creation from debt/credit creation. Today, those two entities are one and the same. To create currency, we must create more debt. Money is debt. Today, currency is introduced into the economy as 3% base money (paper and coin) minted by the Bank of Canada, and then 97% of the rest of the money is created via LOANS generated by the **private** sector banks like RBC, TD, HSBC, etc. Banks do NOT lend out the savings of other account holders when you ask for a loan...that would be illegal. Instead, they use an accounting trick to literally turn your promissory note (the legal contract you sign) into brand new money out of thin air (based on your legally binding promise to repay). They just type in zeros on a computer terminal and poof, brand NEW money is created (and somehow this isnt considered counterfeiting because its a bank...whatever the hell that means). Since the bank got to create the money for your loan out of thin air, it in fact costed them NOTHING to lend you the money. Furthermore, they took on no actual risk because they simply willed the money into existence in the first place. As such, you can see that the **ONLY** thing of real value is the INTEREST that youve agreed to pay. Interest is being paid by someone on every single dollar in existence within the Canadian economy (even if you think you own those dollars --- someone else is paying interest on them). Thats right, 97% of the currency that is digitally minted for the Canadian economy is produced via LOANS that are given out by profit seeking entrepreneurial activities of privately run banks. And the only purpose for that 97% of currency is to support the division of labour and to steal additional wealth from you and I via interest payments. Its a racket. Do you understand now why housing prices are so high? Given the choice of giving 1) an *unsecured* business loan (which is actually a very productive investment as it contributes to our national GDP), or 2) a *secured* mortgage (which does NOT contribute to GDP), which do you think the bank will choose. Obviously the mortgage since its *secured* AND as a result, allows for even further revenue generation by the bank via lines of credit and 2nd mortgages, and it can be reclaimed with force should the borrower default. So obviously the bank will heavily favour mortgages (which add nothing to GDP). Poof, youve got a speculative bubble in housing. Poof it pops. Poof, the banks now own a ton of land after people default and they repossess. Its a risk free wealth transfer mechanism...transferring future wealth from the poor to the ruling class bureaucrats and banksters. They either get rich off the interest or get rich off the land that theyll repossess when you default. Give these revelations, we must ask ourselves if this process is truly democratic and serving the needs of the general public. The answer is: NO. This is because our current monetary system is designed such that credit and money creation are one and the same. Money only gets introduced to the economy when someone borrows money (versus bitcoin, which introduces newly minted bitcoins via productive use of the networks transaction verification processing capabilities). Likewise, money is only removed from the economy when someone pays off their loan (in bitcoin, bitcoins are only removed when they are lost) This means that if you save, you are actually hurting the economy in our currency system....CRAZY!! A new system is required that allows for the separation of lending/finance/credit from money creation. Thats why I started Grouplend.ca Bitcoin and peer-lending (e.g. Grouplend.ca) look to solve this problem by separating currency creation from credit creation. grouplend.ca
Posted on: Sun, 18 Jan 2015 21:25:02 +0000
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