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OpEdNews Op Eds    H2'ed 7/23/15

The Great Unbinding Part 3.3

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Derryl Hermanutz
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Friedman advocated high taxes on high incomes to prevent large "hoarding" of money. But a big rich industry is now devoted to hiding income from the Rev'noors. You can "charge" high taxes. But you can't "collect" them. Liberty has its costs. Gaming the system is one of them. I think it's a price worth paying.

Ongoing money supply inflation acts as an ongoing automatic tax on money savings, no matter how carefully the money has been hidden away. If you save $100 for 100 years, it won't be "worth" $100 anymore.

The Federal Reserve credit/debt dollar has lost 98% of its purchasing power over the 102 years of its operation. A 1913 dollar is now "worth" 2 cents of stuff. Or conversely, it now costs almost 100 times more "money" to buy the same amount of stuff. So it's not as if money supply inflation and purchasing power devaluation is a unique drawback to overt money funding of government deficit spending.

If saving money is "allowed", then we need ongoing expansion of the total "supply" of money to use as a payments medium to conduct our buying, selling, earning and debt paydowns. Money supply expansion is "inflationary".

This is unavoidable, without a totalitarian assault on the whole idea of "saving" some of the money you earn for your personal financial security. In the present system saving money crashes the system, a classic fallacy of composition where what is good for individuals is catastrophic for the system as a whole.

Monetary reform resolves the fallacy, by adding overt positive money into the income-spending and income-debt paydown streams to compensate for the credit-money that is removed from circulation by "saving it". Friedman estimated the money supply should increase by 2% per year. For rapid debt paydown and economic recovery from our present position it could be higher the first few years, then revert to a steady-state 2% per year once the financial system and economy have been stabilized.

G20 banking regulators have already agreed to bail in your savings (like Cyprus) next time the banks collapse -- which is coming -- so don't think your savings are "safe" under the present regime.

Wall St is presently agitating for the total elimination of cash money, so that ALL money will exist only as commercial bank-issued credit/debt and central bank-issued reserves. This move would eliminate one of the last possible escapes from the bankers' money monopoly. You would no longer be able to take your money "out" of the banking system. This is the kind of monetary totalitarianism that we want to avoid.

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I spent my working life as an independent small business owner/operator. My academic background is in philosophy and political economy. I began studying monetary systems and monetary history after the 1982 banking crash that was precipitated by (more...)
 

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