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Turning Around What Is Upside Down ...
"there is no money, only a system of debt. " (BG)
Benjamin Gisin is a veteran banker and former senior agricultural
approval officer for one of the nation's largest agricultural banks.
Since 1998, he has consulted (with) businesses and agricultural
producers facing credit challenges. He writes and lectures extensively
on the evolution of money, economics and food security.
Criticisms of irresponsible use of credit, poor character and bad
business sense are directed at people who participated in
shouldering the risk of creating and distributing what the world
uses as money -- bank credit.
Bank credit is what a bank owes its depositors. The use of checks
and debit cards is simply a process where what one bank owes
you is transferred to what another bank owes the person you wrote
the check to. Banks have no money to lend and there is nothing on
deposit.
Every dollar banks owe depositors is invoked by someone get-
ting into debt at a bank. Banks do not invoke checkbook money,
the Federal Reserve does not invoke currency and private in-
vestors do not re-lend bank credit until someone first gets into
debt to them. And to not just pick on banks, of the $52.6 trillion
of debt sloshing around in the economy, only $7.9 trillion is
debt to banks - the rest is to private and institutional investors
(source: Federal Reserve Bank and FDIC).
The financial system and government expects everyone to
use credit exclusively to run the economy. In an economy that
runs on credit and is devoid of money, the only choice we have
is to get into debt. And if we don't get into debt personally,
someone else does for us, enabling us to have a paycheck.
Debtors are never honored for their suffering while enabling
banks to issue bank credit as the primary instrument of what the
nation uses as money. Every dollar in a savings account origi-
nated with someone getting into debt at a bank. As such, every
dollar in a savings account is a dollar that should be re-cycling
back to the debtor to pay his debt, if the goal is to keep the bank-
ing system sustainable.
Our financial system is not designed to provide a sustainable
means of exchange, it is designed for investment schemes.
It is individuals, businesses and governments that, for want
of a means of exchange, enter the portals of debt to participate
with banks and investors in creating and distributing what the
nation uses as money. As such, the economy suffers when we do
the right thing -- stop borrowing and paying back. The economy
suffers when we do the wrong thing -- borrowing what can't be
repaid. The emerging hope is the human race will devise a more
intelligent system than that which it has been operating under.
While there is much sentiment to regulate and/or punish un-
scrupulous lenders and borrowers, this sentiment fails to recog-
nize the underlying problem -- there is no money, only a system
of debt. And regulating debt will not solve the ongoing dilemma
of throwing more debt at a nation with already too much debt.
With banks and investment bankers unable to qualify
enough people to get into debt, private debt is failing to sus-
tain the physical economy without ongoing government deficit
spending. Criticism should be less pointed at people in debt but
towards an economy that requires debt to function.
Ironically, under the current system, there is a danger in limiting
the government' debt in bailing out the physical economy
(provided it is for sustainable and environmentally responsible
jobs and household debt relief). It is like cutting off the fuel to
the jet engines while in flight and before we create an airplane
(economy) that does not run on debt.
The answer lies not in pointing fingers at people in debt,
but in asking how we can start creating alternatives to the debt
system. In the interim it makes sense to judiciously, and within
the confines of law, to use the debt system as a bridge to a non-
debt system.
Alternative economic exchanges, like the new Dibspace
www.dibspace.com from Seattle, Wash., are growing in num-
ber. Dibspace matches up local talents and products with local
needs using what they call "Dibitsâ" as the clearing mechanism.
It is not inconceivable that in the next few years most of us
will be members of some kind of local exchange system that
does not use bank credit (popularly perceived as money).
In the long run, emerging experiments with local currencies,
reciprocal trade exchanges and debt-free money will evolve and
become more refined. These experiments are the hope of
beginning to turn around what is now upside down.
Response by Martin R, Carbone. Why do so many people miss
the obvious truth that wealth exists in nature but money must be
created by Sovereign powers and introduced to the national
economy by lending or spending that money into the economy?
That lending (debt) is a device that means our nation's wealth
can be accessed and utilized fully. Debt and loans are not sins --
they are blessings that enable people who do not have money
to borrow money and create new wealth with that money. I once
corresponded at length with Mr. Gisin and explained to him that,
in my view, debts were always good -- because when they were
paid back -- the debt disappears -- but the wealth created with the
money remains in the economy for the benefit of us all. I thought
he agreed.
Martin R. Carbone