If this information is correct, then the US economy could soon be in a "state of bankruptcy". This book is currently being taken very seriously in the US and is causing a great deal of concern about the serious impact it would have, not only on the US, but for the rest of the world. It would cause a collapse of the world economy by the "domino effect". In a nutshell, it seems, the old economic system, that has been operating for several centuries, has served its purpose and is fast becoming totally dysfunctional. What is meant by this is that the current economic system has become unworkable because of the creation of DEBTS THAT CAN NEVER BE REPAID.
If one looks at the current situation carefully, they will find that just about every country in the
world is in DEBT. Not just small debts, but debts that are so incredibly large that they cannot be
repaid. For example, did you know that the United States debt is currently over $5 Trillion
($5,000,000,000,000). This is equivalent to every man, woman and child owing over $20,000
over and above the debt they already have in the way of mortgages and/or hire purchases etc.
So a family of four effectively owes an additional $80,000 a year over and above what they
already owe. What's more, this debt is increasing, at a run-away-rate that cannot be stopped,
because the interest is accruing more and more interest and, these payments cannot be met
because there is not enough money in existence to pay it. The system is completely out of
control. The same situation is true for every other country in the world, with only two or three
small exceptions and these are the countries who have not chosen to go down the path of debt,
by not borrowing.
If this is the case, one may ask "who are all these countries in debt to?" And the answer to that
is, the WORLD BANKING SYSTEM. The countries are not in debt to each other, otherwise
some would be in credit to an equal value as others are in debt, but that is not the case. So how
has this come about?
There are two primary reasons:
Interest
One of the fundamental causes of the impending economic collapse is because of the
introduction of the concept we know as interest. Paying interest on money is something we
have assume is 'natural and necessary'. But it is not natural and necessary. If one examines
the origin of money to find out why it was created they will discover how this concept is not a
necessary component of a financial system. In fact, quite the opposite is true.
An explanation can be found in the original definition of money.
Definition MONEY IS A MEDIUM OF EXCHANGE (for goods and\or services).
When the idea of interest was created it automatically re-defined what money was into a medium of exchange and a commodity. So money became something you could buy as well as being used as an exchange medium. With this new definition one could actually buy money with money but pay more for it than it was actually worth. How crazy! And that was the basic, basic, fundamental cause of ALL economic problems.
Without interest an economy can thrive and grow. Real wealth creation comes from VALUE
ADDING. Value adding is the action of taking a resource or commodity and improving it, or
processing it into another commodity that society places a higher value upon.
Value adding serves society, interest payments do not.
Interest is a parasitic activity that has to be phased out if we are to avoid economic disaster and
we need to act in that direction now. If we don't, we will end up being forced to, by the fact that
the current system will become useless.
Expansion Generated Economy.
The reason interest worked in the past was because the world economy was continually
expanding into new areas, for example the Third World (developing) countries. This expansion
was being used as fuel for the economy - like adding wood to a fire. ThatĘs okay, but what
happens when you run out of wood? The fire gradually fades and dies out. Our economy is
going through that fading and dying out phase right now because there is nowhere else to
expand into. It is like the proverbial snake eating its own tail - the system will eventually devour
itself.
Another point that nobody ever seems to address is the fact that because money is being taken
out of the system through the ever increasing interest payments, THERE IS NOT ENOUGH
MONEY IN CIRCULATION TO EVER PAY OFF THE DEBTS. This is happening all the way
through the system from world economics, national economics, corporate economics and
through to our personal struggle to keep our heads above water. It is a case of musical money,
just like musical chairs where everyone tries to get what little money there is, but there is never
enough to go around, so someone has to go without and be the looser. It will be like the game
of Monopoly when one person has all the property and money and the other players have
nothing, the game comes to an end. like monopoly our financial system is a Win-Lose system.
It has got to a point that we have no other alternative but to evolve a new system, a Win-Win
system that will function to serve all communities and countries in a way that does not impose
the limitations and restrictions that our current dysfunctional system does.
Potentially, the LETSystem can fulfil that role.
LETS stands for Local Exchange Trading System.
LETS was originated in Canada but never flourished there or in the US, because legislation was created in both countries to stop it becoming viable. That has not been the case in Australia and New Zealand where they work within quite well within their current confined. In 1992 it was reported there were over 50 groups in N.Z. and over 150 in Australia. This demonstrates the need for such a system and also it shows that they can, and do work.
Until now, all of these groups have been operating autonomously, and all using different
terminology for their "unit of exchange" and as such, couldn't interchange with each other.
The value of a LETS unit of exchange (their currency alternative) is usually based on the
prevailing national currency eg. the Dollar. LETS groups are all based on much the same
system of having a central computer that records transactions, in terms of debits and credits, in
exactly the same way that a cheque account works but without interest being charged. Each
new member is given a credit balance of about 2000 units of exchange (equivalent to $2000).
There is a small fee charged for their service which includes free advertising in the LETS Trading
Directories. A Trading Directory lists goods, skills and/or services that are being offered by
LETS members rather like the Yellow Pages do. The system is not a barter system as many
people think. A barter system does not have flexibility, a LETSystem does. For example, it
allows a transaction to be paid for with a combination of currencies.
The writer was told of a story about a carpenter, who we will call Joe that lived in Maleny in
Queensland several years ago. Joe was unemployed at the time so he decided he was going to
build a house using LETS. In the process of doing so he recruited an electrician and a plumber
to join LETS. Joe bought both second hand and new materials with Australian dollars and LETS
currency. About two months after starting, he had a visit from the LETS organisers because he
had gone well over his 2000 credit limit. He explained what he was doing and asked that they
support him as he fully intended to work in what ever way he could to repay the LETS loan.
They agreed to go along with the experiment. Within six months Joe had his house built which
was later valued at $50,000. Adding what he had spent it came to 8000 Australian dollars and
22,000 LETS units... a combined total of 30,000 units. Following this, Joe diligently worked to
repay his LETS debt... he walked dogs for the sick and elderly, he did carpentry work, he baby
sat, you name it, he did it. But within six months Joe had paid his debt in full. The result was
that he now had a $50,000 house that had only cost him $8000 cash and the balance came
through his LETS activities... a very beneficial transaction.
Since that time many other people in Maleny had acquired their homes in a similar way. So, it
seems, LETS, potentially, can provide the means for large or small transactions to take place at
a fraction of what it used to cost. With a little imagination one could see how this system could
be expanded throughout society. And using the LETS medium of exchange, worldwide trading
could occur without the expense or need for currency exchange. Eventually, the old form of
currency, money, could become obsolete... who knows?
