I just read your article on the fraudulent nature of modern banking policy. If the world had heeded the works and advice of Clifford Hugh Douglas rather than J. M. Keynes we would have been enjoying falling prices, increasing individual disposable financial income and increasing leisure with personal freedom in the midst of abundance. Douglas’s Social Credit proposals would have resulted in a system of national accountancy reflecting the realities of production and consumption whereas Keynes’s social debt policies have brought us to ruin. The critical misunderstanding is the erroneous assumption that the price-system is intrinsically financially self-liquidating whereas the reality is that it is increasingly non-self-liquidating due to an increasing expansion of the volume of price-values relative to that of unencumbered financial incomes. The only option we are offered to carry on with producing and consuming is resort to a vast and exponentially growing volume of credit issued as consumer loans. Consumption is the final stage of the economic process and consumers should be able with total incomes not only to access dynamically the entire volume of finalized goods flowing from the production line–but they should be able to do so without any overall or “global” debt whatsoever. They do not of course earn sufficient money to obtain these goods because retailers must of necessity include in retail prices additional allocated charges in respect of physical capital, charges which in the same cycle of production do not distribute incomes although they generate price values. Unfortunately, retail prices are not credited on a macroeconomic level, as they should be credited, with capital appreciation which far exceeds capital depreciation. Consequently the consumer falls ever more into a quagmire of unsustainable financial debt with periodic deflationary collapses of the economy followed by inflationary upturns with all the instability and unjust transfers of wealth that this process entails.
Banks create billions of dollars of money as consumer loan debt and this debt is all an inflationary charge against future cycles of production with which they have physically no relationship whatsoever. The banks do not give this additional credit-money to consumers. It is all repayable from future earnings. The fact of the matter is that physically the real cost of production (the human and non-human energy and the materials) is met as production proceeds and has been fully met when any final consumer good has been completed and is ready for consumer use on the retail market. If this were not true the good could not exist. That is axiomatic. The financial system should reflect this irrefutable fact.
The vast amount of pseudo-buying power created by banking institutions as consumer debt should not be issued as debt but should be issued without obligation of repayment (i.e., “debt-free”) as a universal National (Consumer) Dividend to each citizen as a Birthright and inalienable beneficial (not direct) share in the communal capital to be realized by added automatic access to the outflow of finalized consumer goods from the production line. A portion of this new consumer credit (non-debt) should be issued to retailers at point of sale on condition that they lower their prices, the amount of Price Compensation to be determined by the national mean rate of total consumption (wealth depletion) divided by the mean rate of total production (wealth appreciation), a ratio that is always diminishing because our total production is vastly outstripping our total consumption. In this manner the new consumer purchasing power would be genuine because it would allow consumers full and immediate access to final production while providing consumer “approved” producers with a stable market and a means of recovering their costs of production. The new credits would pass back through the system for liquidation of producer loans and/or placement to capital reserve as they currently do but they would not leave an exponentially expanding trail of financial debt which ultimately, if the system, is to continue functioning must be institutionalized in permanent State Debt. Look at properly this State Debt should realistically be regarded as a National Credit from which universal National Dividends can be paid. The Real Credit of society is the ability to create goods and services as, when and where required or desired. Financial Credit is the ability to create money as, when and where required and the two should always balance.
Because the true reduction of real, i.e., physical, cost is consequent to replacement of human effort by technology, failure of the financial price system to credit consumers with this efficiency by not crediting them with capital appreciation in retail prices of final consumer goods constitutes a glaring and fatal flaw in the price system. Correction of the later omission would provide increasing opportunity for leisure. Instead of believing, pathetically, in the need for society to employ ninety or more per cent. of employable people merely to provide for its economic needs, we would then consider the reduction of the need for direct employment in the state of wage-slavery we call “jobs” to be a magnificent achievement. This happy state of affairs can never happen so long as we are evermore under necessity of treading an ascending treadmill merely to serve a rising tide of bogus and increasingly un-repayable financial debt. Nor can we ever be freed from the false need for a crescendo of phrenetic psuedo-economic activity of waste, culminating in wars of destruction, so long as nations, all suffering from a growing internal deficiency of consumer purchasing power, are driven by intensifying compulsion to attempt to export more than they import of their real wealth in a desperate attempt to capture financial credits with which to compensate their own internal deficiency of effective, cost-liquidating purchasing power.
For your possible interest, I attach several websites of relevance to this discussion.
Yours sincerely
Wallace Klinck
http://social-credit.com/index.html
http://www.mondopolitico.com/library/socialcredit/socialcredit.htm
http://social-credit.blogspot.com/
http://www.douglassocialcredit.com/
http://www.ecn.net.au/~socred/
http://en.wikipedia.org/wiki/Social_Credit
http://www.youtube.com/watch?v=sw28HmmvNNs&feature=related (Major Clifford Hugh Douglas on “The Causes of War” (B.B.C., 1934)
Banks create billions of dollars of money as consumer loan debt and this debt is all an inflationary charge against future cycles of production with which they have physically no relationship whatsoever. The banks do not give this additional credit-money to consumers. It is all repayable from future earnings. The fact of the matter is that physically the real cost of production (the human and non-human energy and the materials) is met as production proceeds and has been fully met when any final consumer good has been completed and is ready for consumer use on the retail market. If this were not true the good could not exist. That is axiomatic. The financial system should reflect this irrefutable fact.
The vast amount of pseudo-buying power created by banking institutions as consumer debt should not be issued as debt but should be issued without obligation of repayment (i.e., “debt-free”) as a universal National (Consumer) Dividend to each citizen as a Birthright and inalienable beneficial (not direct) share in the communal capital to be realized by added automatic access to the outflow of finalized consumer goods from the production line. A portion of this new consumer credit (non-debt) should be issued to retailers at point of sale on condition that they lower their prices, the amount of Price Compensation to be determined by the national mean rate of total consumption (wealth depletion) divided by the mean rate of total production (wealth appreciation), a ratio that is always diminishing because our total production is vastly outstripping our total consumption. In this manner the new consumer purchasing power would be genuine because it would allow consumers full and immediate access to final production while providing consumer “approved” producers with a stable market and a means of recovering their costs of production. The new credits would pass back through the system for liquidation of producer loans and/or placement to capital reserve as they currently do but they would not leave an exponentially expanding trail of financial debt which ultimately, if the system, is to continue functioning must be institutionalized in permanent State Debt. Look at properly this State Debt should realistically be regarded as a National Credit from which universal National Dividends can be paid. The Real Credit of society is the ability to create goods and services as, when and where required or desired. Financial Credit is the ability to create money as, when and where required and the two should always balance.
Because the true reduction of real, i.e., physical, cost is consequent to replacement of human effort by technology, failure of the financial price system to credit consumers with this efficiency by not crediting them with capital appreciation in retail prices of final consumer goods constitutes a glaring and fatal flaw in the price system. Correction of the later omission would provide increasing opportunity for leisure. Instead of believing, pathetically, in the need for society to employ ninety or more per cent. of employable people merely to provide for its economic needs, we would then consider the reduction of the need for direct employment in the state of wage-slavery we call “jobs” to be a magnificent achievement. This happy state of affairs can never happen so long as we are evermore under necessity of treading an ascending treadmill merely to serve a rising tide of bogus and increasingly un-repayable financial debt. Nor can we ever be freed from the false need for a crescendo of phrenetic psuedo-economic activity of waste, culminating in wars of destruction, so long as nations, all suffering from a growing internal deficiency of consumer purchasing power, are driven by intensifying compulsion to attempt to export more than they import of their real wealth in a desperate attempt to capture financial credits with which to compensate their own internal deficiency of effective, cost-liquidating purchasing power.
For your possible interest, I attach several websites of relevance to this discussion.
Yours sincerely
Wallace Klinck
http://social-credit.com/index.html
http://www.mondopolitico.com/library/socialcredit/socialcredit.htm
http://social-credit.blogspot.com/
http://www.douglassocialcredit.com/
http://www.ecn.net.au/~socred/
http://en.wikipedia.org/wiki/Social_Credit
http://www.youtube.com/watch?v=sw28HmmvNNs&feature=related (Major Clifford Hugh Douglas on “The Causes of War” (B.B.C., 1934)
