The Future of Money Creation

positivemoneyuk

It is not hard for anyone to see that our current money system is experiencing difficult times. Even though interest rates are historically low, this still does not ignite the economy the way that the leaders hope. We are still in a deep recession, where youth unemployment is very high, companies are struggling, and where it is increasingly hard for anyone to create a life for themselves. Then on top of this, the situation in the middle east and Africa, is to put it mildly, catastrophic. The consequence is that refugees flood into Europe serving to destabilize the economy even further.

When investigating why our economy has become so weak, why we have so many structural flaws in our system, and why there does not seem to be in an end in sight, I have time and time again seen that these are strongly tied with how money is created in society. For those that do not know, money is created as debt. Commercial banks put out money in the economy, at an interest, when companies, and private individuals take out loans. This in turn means that there is ALWAYS a deficit of REAL money in the system, because DEBT accumulates without additional, new, debt-free money being inserted into the economy. We do not need a rocket scientist to conclude that this is bad math and also, big problems.

One clear and relevant example of how excessive debt can effectively destroy an entire country is that of the Greece sovereign debt crisis. Coerced by the financial powers of Europe to pay back its debt, Greece has now breached some of the most basic Human Rights there are. Pensions have been slashed and public jobs as well as salaries have been cut – the result is a disaster of epic proportions. And when we look at the reason for this destruction of human potential it all comes back to one thing – DEBT.

We should really ask ourselves why we structure our economy this why, because can we not find a better way? Does it not make sense to instead build our economy on debt free money, where countries are empowered using debt free grants to strengthen instead of being sucked dry of all life with the excuse that they owe money to someone, or something?

Having a money system that is based on debt creates extreme limitation, and at the end of the day, it only serves those few that are  in control of money creation, which is commercial banks. We have become so used to thinking that we must become indebted to buy houses, to receive educations, and to achieve a comfortable life, though this is ONLY a political structure – not a ACTUAL REALITY. Fact is that we could structure our money system in such a way where our governments issue debt free money that could be used to build houses, improve infrastructure and the general well-being of the public. Debt is fictional – a mirage created through laws – but in reality we all have an equal right to live a dignified life.

Investigate DEBT and the SOLUTIONS presented to this problem – the organization POSITIVE MONEY is offering a very cool solution – to implement this we require political participation – as it is through politics that laws are written and society is built.

Down below is an example of videos made by positive money that explains how banking works.

Austerity Measures, Can They Be Justified?

Human-Rights-Greece1

In the aftermath of the 2008 banking crisis that incurred a massive economic destabilization on a global level, the neoliberal concept of ‘austerity measures’ have now reached the western hemisphere, with Greece and Spain as its more notable victims. In particular, the Greece bailout, which is allegedly a saving package, has imposed a myriad of conditions and restrictive measures on the Greece economy. The purpose of these structural restrictions is apparently to empower and stabilize the Greece economy, however, the opposite has happened, as has been documented in several high profile investigations.

The concept of austerity measures ranges back to the 17th century, and have more recently been adopted by the neoliberal economic doctrine as a way of dumping market failures on the state and indirectly, on the public. That austerity measures has the capacity of causing detrimental effects for the general public has been proven in Greece, and there is a history of failures with the so-called Structural Adjustment Programs imposed by the International Monetary Fund as part of their lending to developing countries, due to the conditions of austerity that these loans impose on the debtor.

Several independent sources indicate that austerity measures, such as cuts in public spending in the health, education, and other mechanisms of social security, creates human suffering on a widespread scale. With Greece, we have been given the opportunity to closely observe the social catastrophe that is created by austerity. The Truth Committee has noted that, unemployment has gone from 7.3% in 2008 to 27.9% in 2013. Youth unemployment reached a staggering 64.9% in may 2013. Due to cuts in public health expenditure more than 2.5 million persons, or one fourth of the total population of Greece, are without health insurance. Furthermore diseases such as tuberculosis, malaria and HIV have increased, and mental health problems have ballooned. Pensions have been reduced by 40 %, which have caused 45 % of Greece pensioners to fall below the poverty line. 500,000 people lives in conditions of homelessness, insecure or inadequate housing. To put it mildly, there is a humanitarian crisis in Greece.

What have been left out from the discussion on austerity measures are human rights, primarily the economic and social rights established by the International Covenant on Economic, Social and Cultural Rights. This convention is binding on the contracting states – and Greece together with the Eurozone countries has all ratified the convention. You would hence think, that in detailing the Memorandum of Understanding between Greece and the Troika, that contains the austerity conditions imposed on Greece, there must have been a discussion on the potential impacts on Human Rights that the austerity measures could create. However, there has not been such a discussion. Instead the EU member states, the EU commission, EU central bank and the International Monetary Fund have displayed a disregard for how the austerity policies would affect the Human Rights of the people of Greece. Court rulings by the highest Greece court that have ruled the pension cuts as unconstitutional and as a breach of Human Rights, have in the 2015 Memorandum of Understanding been referred to as ‘fiscal risks’. Such a use of vocabulary when referring to the Human Rights is nothing short of remarkable.

The United Nations Human Rights Council has adopted the Guiding principles on foreign debt and human rights in July 2012. According to paragraph 56 ‘Debt relief efforts must not compromise the provision of basic services. In particular, debt relief conditions that may adversely impact the realization of human rights or undermine development in the beneficiary State must be avoided’. The UN General assembly has in September 2015 adopted a resolution (A/69/L.84), which defines nine principles on how a debt restructuring process should be directed. Among these principles is the principle of sustainability, which implies that sovereign debt restructuring should lead to a stable debt situation in the debtor state, preserving creditors’ rights while promoting economic growth and sustainable development, reducing economic and social costs, ensuring the stability of the international financial system and respecting human rights.

Not surprisingly, these principles were adopted by vote and not by consensus, with the developed countries claiming that Human Rights should not be a consideration when it comes to debt and debt relief. However this position cannot be accepted as legitimate. Obviously Human Rights is and must be an important part of economical decisions, because the very foundation of economics is Human Beings. The consequence of separating economics from Human Rights is such perversities as slavery. Possibly, this is what the new era of austerity and debt has become, a more refined form of slavery, which is free from the moral constraints of its predecessors, because it is now justified with the slick vocabulary of neoliberalism and market economy. Though, when scrutinized, austerity measures are a soulless machine working for an anonymous creditor, fueled with the accepted belief that this is the way things must be. The debt must allegedly be paid back at all costs… because… well because, the market wants it that way.

To create a heaven on earth, it is clear that all forms of commercial agreements, debt contracts accounted for, must be able to be declared null and void if they happen to breach Human Rights. This is how it should have always been, and we must ask ourselves, why this has not yet happened. The United Nations has been around for 60 years, yet still, flagrant violations of Human Rights are allowed with reference to commercial agreements. What is missing; motivation, drive, integrity or compassion? And how come we accept and allow the life of countless human beings to be reduced to numbers on a balance sheet?

Clearly, there is a rift between the reality of our world, and the principles conceptualized in our Human Rights instruments. The process of making these principles a living reality will without a doubt be a challenging venture, yet it will be through the respect for Humans on a global level, that we will be able to create a world that truly worth living in. And let us not forget that there are solutions to these problems. Even though the massive bureaucracy that is involved can make us as individuals feel as if we are small ants facing the enormous Goliath, the system is comprised of individual human beings, like you and me. By standing up, one by one, and supporting a new direction in politics and economics, we will have an impact. In democracy we each have one vote, and that is how we will be able to shift direction, through coming together and unanimously voting for a new world that is best for all.

Does a Contract That Violates Human Rights Have Any Legal Standing?

Poverty in Athens

The situation that has developed in Greece is a fascinating example of how commercial contracts, and within that MONEY, oftentimes (EVERY TIME?) takes precedence over Human Rights, even though international laws dictates that it should be the other way around. In this article I will expand on the possibilities that exist within international law to repudiate and cancel debt contracts when these makes it difficult for the debtor to fulfill its Human Rights obligations.

For starters, lets recap on the situation in Greece. What has happened is that the country, for various reasons, has accumulated a substantial amount of debt. Greece was close to defaulting on its outstanding debt and many private creditors were exposed to great risk. That is when the European Central Bank, the IMF and the European Union, otherwise known as the Troika, decided to step in. The Greece government apparently received bailout funds to handle their debts, however, these monies were only used to bailout the private creditors and transfer the risk of the debt to the Troika. As such, what happened was that the bonds switched owners – and much private debt was transformed into public debt; the winners being the private creditors, aka banks, and the losers being, the public.

For Greece to be eligible to the alleged ‘rescue packages’ it had to agree to implement structural adjustment programs, and within that enforce measures of austerity. In a less refined language, we would call that, forcibly living in dirt poor conditions to save up money, to pay of the pissed of creditor, otherwise he will hurt you. And these agreements were signed in 2010 and 2011 respectively, and in 2013, the Human Rights Council evaluated the conditions of Greece and how the adjustment programs had affected the people of Greece [1]. And then in 2015, we have a report submitted by the Truth Committee on Public Debt, a committee created by the Greece Hellenic Parliament with the purpose of investigating the debt of Greece [2]. Both these papers tell a similar story, that Greece is in the midst of a humanitarian crisis – and the reason – paying back debt. Does this make any sense?

It is no exaggeration to say that the situation in Greece has gotten completely out of hands, literally speaking, and that there has been substantial damages made to the economical and social fabric of the nation. Peoples access to housing, health, nutrition, education, freedom of expression and assembly, judicial services, and primarily WORK have diminished significantly. Greece’s GDP have lessened with 20%, and there is no bright future ahead, rather the GDP is expected to continue its downward spiral – because in trying to pay back the debt Greece have been forced to cut back on A LOT of public spending. 150 000 public sector jobs have been cut, pensions have been cut, wages have been cut, benefits have been cut, and as the economic freedom dwindles, so does the ability for the average Greece citizen to consume, which in turn affects the entrepreneurs negatively. In summary, Greece is going downhill, and with that, Greece’s ability to fulfill its international commitments on ensuring Human Rights for its citizens [3]. And here comes the interesting question: Can a contract, and more specifically a debt, be suspended or cancelled, because that very contract directly, or indirectly makes it impossible for the creditor to fulfill its obligations under international law to respect Human Rights?

According the International Law, Yes it is in-fact possible to suspend or cancel a debt with reference to Human Rights. The Independent Expert on the effects of foreign debt and other related international financial obligations of States on the full enjoyment of all human rights, particularly economic, social and cultural rights, Cephas Lumina, expressed himself this way:

It is increasingly accepted that non-State actors including international financial institutions, have obligations to ensure that their policies and activities respect international human rights standards. This obligation implies a duty to refrain from formulating, adopting, funding, promoting or implementing policies and programmes that directly or indirectly impede the enjoyment of Human Rights.

If you look at the point, it is common sense, that in order for Human Rights to be realized, commercial agreements must be subservient to Human Rights. If commercial agreements, and within that, debt contracts, are allowed to take precedence, then we will end up with situations as the one in Greece, where fundamental Human Rights are violated in the name of money. To have your debt repaid is obviously NOT a human right, and one can in-fact argue, that the creditor should always stand the risk that the debtor cannot or refuse to repay the loan, as that way, credit will not be awarded carelessly and without thorough research on the potential debtor.

Looking at Greece’s current creditors, the European Union, and the European Central Bank, we can conclude that both of these non-State actors are bound the European Charter of Fundamental Rights. And in the charter we find the Right to Work, the Right to Fair and Just Working Conditions, a Right to Health Care, which involves a high level of human health protection and that shall be pursued in all the Unions policies and activities – and as was mentioned previously – all of these rights have been severely compromised through the austerity measures imposed on Greece. Hence, it is possible to argue that the European Union and the European Central bank in-fact are obligated under EU-law to forgive the debt, or at least, stop all imposed measures of austerity.

The Human Rights are clear, however, as per usual, the fault is not with the legal instruments, but rather with those that interpret and apply them. We can write a ton of Human Rights Laws, that sound super cool on paper, yet if we do not make an effort to live by and realize these words, they are useless. Thus, for Human Rights to become a reality, they must be actively considered in all political decisions, and not just looked at as an ideal to hopefully be realized sometime in the future. In-fact, Human Rights should be the very foundational elements of our political system, the principles that determine each action and each decision – because we ALL know – that when Human Rights are compromised – People will Suffer.

And this brings me to the last point, our responsibility as ordinary citizens. Because it is interesting to notice that surveys done on Germans, as to whether Germany should forgive Greece’s debt, indicates that the general opinion is that there should be no forgiveness of the debt [4]. Many Germans, which are part of the nation that have the highest amount of outstanding debt to Greece, and thus stand to loose the most if Greece’s debt would be forgiven, feel that they have a right to their money – and that the austerity measures are just because Greece deserve it. However, what is not understood is that Human suffering can NEVER be justified on the basis of commercial principles, regardless of the amount of outstanding debt. The fact of the matter is that the moment we accept and allow ourselves to stand for what is apparently fair, and just, we disregard what is BEST for all – which might not be that which is just or fair. Look at it like this, the children born in today’s Greece, do they bear any guilt in the debt of Greece? Is it just and fair, and is it BEST, that they grow up in horrendous living conditions, only to repay a debt connected to money they have never benefited from?

Forgiveness is the way forward – forgiveness and honoring our Human Rights. That way we can create a world that is safe, were we all can feel secure in facing and waking up to a new tomorrow, as we know that regardless of what might happen, our basic needs are respected.

[1] Human Rights Council, Report of the Independent Export on the effects of foreign debt and other related international financial obligations of States on the full enjoyment of all human rights, particularly economic, social and cultural rights, Cephas Lumina, 2014 (http://cadtm.org/IMG/pdf/A_HRC_25_50_Add1_AEV.pdf)

[2] Truth Committee on Public Debt, Preliminary report, 2015 (http://cadtm.org/IMG/pdf/Report.pdf)

[3] Politaki, Alex, The Guardian, Greece is facing a humanitarian crisis, 2013 (http://www.theguardian.com/commentisfree/2013/feb/11/greece-humanitarian-crisis-eu)

[4] McHugh, Jess, International Business Times, Greek Crisis: Young Germans React With Solidarity, Anger to Greece Debt Problem, 2015 (http://www.ibtimes.com/greek-crisis-young-germans-react-solidarity-anger-greece-debt-problem-2001511)

Student Debt – A Crime Against Human Rights

StudentLoanDebtStudent Debt is one of those things in society we all tend to take for granted. Most that go to college or university are required to in-debt themselves in order to pay for tuition and living expenses. Some countries, like Sweden, do not have tuition fees – though the majority of students are still required to take out loans to cover their living costs.

Young people in this world find themselves between a rock and a hard place. Either you take out hefty loans, make it through university, and potentially land a well-paid job afterwards. Or you come to terms with maybe having a low paid job and no debt. Both of these options are completely horrendous. To be forced into debt to make a life for yourself is a crime against human rights – and yet – this is what young people are required to do.

What should be happening is that young people growing up in this world are nurtured and receive all the support and assistance they require to make the best out of their lives. Because if we cripple an entire generation with debts, imposing unto them the choice of either debt serfdom, or unemployment, we are most certainly creating immense and global consequences in the future. Not only are we creating class warfare, we are also creating generational warfare – were those that are older and have had the opportunity to build a life for themselves without debt will be the target of resentment and blame of the younger generations.

However, one of the most fascinating points that this point with the student debt shows is how we as human beings really have a major issue when it comes to caring for other people. Because how many of us are not benefiting from student debt? Do you for example know what sort of assets your pension funds have invested in? Most certainly big parts of their investment portfolio are made up out of student debt bonds – and would you be willing to give up your pension to release students from their debt? And really – at the end of the day – this is the question we as Humanity face: Are we willing to care for another as we care for our children and ourselves? Are we willing to give up our self-interest to stand for a solution that will benefit all people, youngsters as well as old people, and are we willing to give up some of our luxury to achieve that outcome?

Debt is artificial, which means that its existence is a mental abstract creation. Debt exists in databases and registers made up out of numbers and names – to remove these numbers would be very easy. We could decide today as a society to not anymore accept and allow debt to be part of our lives. Instead of debt, we could decide to give our future generations the best possible conditions to create themselves a life of fulfillment, joy and happiness. We do hold that power – so the question we should ask ourselves is: Why are we not creating the world that we want to see?

And – Why not take it even further? Money is artificial, which means that its existence is a mental abstract creation. Money exists in databases and registers, called banks, that are made up out of numbers and names – to change these numbers would be very easy. Why then not change the numbers a little, so our youths do not have to go through their lives paying debts for which they got things that should have been theirs as part their HUMAN and UNCONDITIONAL RIGHTS. See, life, this world, our monetary system, our way of doing things, it is not set in stone – there are many solutions to the problems we face – though to see them – we have to let go of our small, confined and limited world view – our self-interest – and start seeing our reality from a greater, and more expansive perspective – and ask ourselves the daring question: What is Best For All?

I am one vote for world equality, and I am one vote for a Living Income Guaranteed – because I want what is best for youths as well as elders. I want, for all those that wish to experience higher education, to be able to do that, without incurring any debts – and I want all children to be certain that when they grow up – they will be embraced into a society that cares for and tends to them – and want what is best for them. We can create this world – and it all begins with us letting go of our self-interest and developing that real and genuine care for others.

Wasting Food

food-wasteAccording to reports by United Nations Environment Programme and the World Resource institute, about one third of all food produced worldwide gets lost or wasted in food production and consumption systems. When converted to calories, it means that about 1 in 4 calories intended for consumption is never eaten. This food is wasted for several reasons. Much is lost because it does not fulfill the aesthetic requirements of shops, and hence indirectly, consumers. And of the food that is actually bought, a lot is thrown away, and some of it due to expiration dates being set too early. It is clear that food wastage is a massive problem and it reveals some interesting characteristics of the human being, and also many opportunities of self-correction, where we as humanity can change ourselves on a individual level, to as such make an impact globally.

What does food wastage show us about ourselves? It shows us that we do not value the labor and energy that has gone into creating that food – for us – food has become only a number – a cost that we buy using money. Though, fact is that food is more than a number, because to create each produce we eat, an investment of real resources had to be made. The farmer had to put in great effort to grow his crops and care for his cattle. The slaughter had to exert himself with determination and strength to slaughter and prepare the meat for consumption. And nature, the animals, and plants had to offer themselves, their lives, to nurture and support our continued existence. As such, food cannot be measured in money, food is a work of art, that has been given a attention and energy to end up in the supermarkets where we are used to seeing it.

When we take food and only eat some of it, or we buy too much, and throw away the things that we allow to go bad, what are we thus really saying? In-fact it is an act of negligence and ignorance to treat food as having no value – negligent because there is not much we need to change about ourselves to become a more considerate and effective when it comes to handling our food – and ignorant because we do not see the amount of work that has gone into the food, which we so easily make a decision to throw away.

Thus, if we wish to stop waste in this world, we must begin with ourselves, and understand that wastefulness occurs not only with food, but it is the way in which we have come to live. Our entire society is based on waste, and the false belief that there are eternal resources, eternal opportunities, and eternal energy for us to consume without consequences. Truth is that, there is no such thing as a free lunch – and for each resource we waste – there is one resource less to be used.

Though, let us take this one step further, and ask ourselves, where are we wasting ourselves? Fact is that as with all things that we create on the outside, we are also creating and living them inside of ourselves. Are we not wasteful with ourselves, and our own potential when we accept and allow ourselves to give up on our future, and what we know we can create for ourselves, because we do not feel motivated? Are we not wasteful when we decide to not do the most with ourselves, and our lives? Are we not wasteful when we decide to throw away our talents, because we do not experience ourselves as having the energy to develop them? Are we not wasteful when we throw away moments in our day to get to know ourselves, and our mind better, because we accept and allow ourselves to be afraid of self-intimacy? Are we not wasteful when we spend hours, upon hours in a emotional reaction, time that we could have instead used to LIVE and participate HERE?

There are many ways that waste come through within ourselves, in our lives, and thus, in this world. And it is important for us to investigate how we are wasting, so that we can stop this behavior, and instead live our lives within the starting point of using – and as such – being useful instead of wasteful.

How can we change ourselves to direct the waste that occurs in our daily lives into a using and usefulness? Because in answering, and living the answer to these questions, we can make a big difference for others and ourselves as well – as we stand as an example of what it means to respect the life within us and this world – where we do not accept and allow waste to exist within us.

Waste happens when we do not push ourselves to see the value in what is here, to appreciate to what is here, and be grateful for what is here. Waste happens when we take things for granted. Waste happens when we become caught in our desires, and our urge to experience things, and we miss the reality, the universe of life that is here as a part of our world. WASTE occurs when we walk through life in HASTE, thinking about only our own WAIST – and not understanding that our actions and inactions have consequences. Hence, as a first step to change the massive waste that happens daily in this world on a myriad of levels, let us change ourselves – and make sure that we are not accepting and allowing waste to take place in any form within ourselves, or our lives.

Investigate the Living Income Guaranteed.

Micro Credits – A Solution For Poverty?

After the Norwegian Nobel prize committee decided to give the United States president Barack Obama the peace price, a president that later came to continue to war in Iraq, and also fund insurgents in Syria, I seriously started to doubt the reasoning skills of the members of this Nobel price committee. And after having watched the documentary ‘The Micro Debt’ by Tom Heinemann, I have concluded that the Nobel prize committee (at least those handing out the peace prize) do not know anything about what it means to create actual peace in this world. Because when they decided to give Muhammad Yunus the peace price, for having founded the Grameen Bank, and invented the concept of micro loans, and for thereby apparently having found a solution to poverty, they were obviously not using basic mathematics to assess the outflows of such loan methods.

Professor Muhammad Yunus, Nobel Peace Prize winner visiting theThough, before we dive into the basic mathematics of Micro Debt and whether this can be a solution for poverty or not, let me share the story of Muhammad Yunus, his bank, and the stories that has begun to surface about his money lending practices. It begins in 1976 when Yunus (supposedly) found out that small loans could make a disproportionate difference in a poor person’s life. According to Wikipedia, the first loans Yunus gave, made it possible for the borrowers to profit. Yunus business expanded, and by July 2007, his bank had issued around US$6.38 billion to 7.4 million borrowers.

As mentioned above, Yunus was awarded the peace price in 2006 for his efforts to create economic and social development. However after the release of the documentary ‘The Micro Debt’ the Bangladeshi government decided to review Yunus bank, and Yunus himself was removed as Managing Director of his bank. This is not particularly strange considering the claims that are made in the documentary, and the compelling evidence that it presents, that the micro debt is not at all a solution for poverty, but rather a trap, making the large amount of borrowers worse off than before.

Though in this blog I am not going to focus on Yunus and whether the claims made against him are true or not. My focus will instead be the concept of micro credits and whether these loans makes any sense; is it really possible to remove poverty through debt? The Micro Credit concept is not unique to Bangladesh; it has also become popular in South Africa, where it has created the opposite of poverty reduction. The following quote gives a stark description of the situation that unfolded.

”The microcredit-induced problems that emerged in South Africa are two-fold. First, microcredit per se is actually an “anti-developmental” intervention. For one thing, it exists on paper to support the smallest income-generating activities, but in practice is increasingly all about supporting consumption spending. In South Africa, the microcredit movement has created an incredibly risky and expensive way to support the immediate consumption needs of the very poorest.

With few poor individuals possessing a secure income stream that might ensure full repayment of a microloan – unemployment is now higher than it was under apartheid – many of the poorest individuals have been forced to repay their microloan by selling off their household assets, borrowing from friends and family, as well as simply taking out new microloans to repay old ones. For far too many now “financially included” individuals in South Africa, using microcredit to support current spending has been a disastrous and irreversible pathway into chronic poverty.”

Milford Bateman, Microcredit has been a disaster for the poorest in South Africa, http://www.theguardian.com/global-development-professionals-network/2013/nov/19/microcredit-south-africa-loans-disaster (2015-09-25)

euro-427528_640Academics and other proponents of the Micro Credit as a way out of poverty makes the assumption that the money lent will be used by the borrower to further his business. This however, is just that, an assumption. Most poor people are just as middle class people, not entrepreneurs, and do not have a very entrepreneurial relationship with money. The loan will be used to buy goods for immediate consumption, and will only serve to put more pressure on the debtor. In worst-case scenario, this will lead the already poor person, to loose the little safety they do have, when they are forced to sell their house to meet interest and installment payments.

Further, those borrowers that are indeed entrepreneurs, and that do invest their money in a business, there is nothing that says that these businesses will be able to profit. Nine out of ten startups fail – and that number will probably be even higher when not only you, but also all of your neighbors, decide to go out on the streets and sell the same thing – which did happen in South Africa.

Then we have the big problem when it comes to Micro Credits, the interest rates. On some of the Micro Loans that interest rate will be at 100 % or more. There is no startup that yields a sufficient profit to cover such a high interest rate. Conveniently for the creditors, most of the debtors are not proficiently literate, and will thus not really understand what they are signing.

Yunus was applauded when he was able to offer loans to poor people that cannot offer any securities in case they would forfeit on their installments. However, to ensure repayment of the loans, Yunus bank have developed a system of “solidarity groups”. It is these small informal groups that together apply for loans and its members act as co-guarantors of repayment and support one another’s efforts at economic self-advancement. Hence Yunus use the psychology of group pressure to ensure that the poor people are sufficiently motivated to pay back their loans. And even though this might seem innocent, in reality it has lead to the most horrific of consequences. One woman that was unable to pay her loan was pressed by her co-guarantors to take up prostitution as a way to meet her installment payment. That woman later poured kerosene on herself, and lit herself on fire. That is the effectiveness of group pressure when survival is in the picture.

What are we then able to conclude from all of this? One thing is clear: We cannot trust academics to know what is right! Even though they have a degree in economics, and even though they have received the Nobel peace price, that does not mean they actually understand how reality operates. Academics have their nose buried in deep books and because of that they will many times miss what is right before their eyes. Hence, we have to educate ourselves, and take responsibility. We cannot rely on a small intellectual elite to know how to solve such things as poverty – this is a problem that involves, and touches all of us, and accordingly it is everyone’s responsibility.

Then, the second thing we can learn: Change cannot come through DEBT. The very reason why we are living in a world where money is increasingly more difficult to obtain is because of DEBT. We live in a debt based system, and this forces us to work more – and even still there will/must be a loser. With debt, someone always loses; someone must be that poor guy that has to pay back the interest.

Real change will come through changing the structural design of the economic system – because only through changing the rules of the game are we removing this incessant fear of survival that is currently holding the entire human race in its grip. That structural change must involve giving all human beings a dignified life, real security, real safety, and easy access to money. This cannot come from debt, as debt is the very instigator of fear, anxiety and stress.

Hence, if you are interested in solving poverty, I suggest that you investigate the Living Income Guaranteed. This is an economical system that will revolutionize the way we think about money – and that is precisely what we need. We need something new, a brand new way of looking at things – a fresh start – free from debt and the old pessimistic ideas that apparently, poverty is unable to be removed from the face of this earth.

For more reading:

http://www.marlenvargasdelrazo.com/the-micro-debt-the-nefarious-business-on-poverty/#

http://www.theguardian.com/global-development-professionals-network/2013/nov/19/microcredit-south-africa-loans-disaster

Watch the documentary ‘The Micro Debt’

https://www.youtube.com/watch?t=791&v=yoAGKFaqwjM

https://www.youtube.com/watch?v=M6KHa4omGG8

https://www.youtube.com/watch?v=FdmXLpjykNk

Where Does Money Come From?

28goodman.xlarge1We tend to take the things most visible and obvious for granted and one of these things that very few people do understand properly yet that they are still in contact with on a daily basis is money. We all need money, we all work for money, and we are all dependent on money for our survival – but what is money? Where does money come from?

Most probably know that the printing rights to money in a country tends to be allocated with a bank that is called a Central bank. This bank has the permission to print money and spread it into the economy of the country. And this is really a fascinating aspect of how money works, it is really just paper that has some numbers printed unto it and there is no actual backing behind the money. There is for example no gold backing up the money – it is just paper with numbers dictating its value. This form of banking system is called a fiat banking system.

Thus these papers we call money do not get their value as a predetermined and absolute value. Instead money gets their value from those who use money in their everyday life in order to buy commodities and services. How we – the users of money – value money will become the value of money. As such the value of money is never stable but goes up and down depending upon how much money as been printed in comparison with the amount of commodities and services in circulation in society as well as the current demand for commodities and services.

This is then the absolutely fascinating aspect of money of which not many are aware. Money is created from NOTHING – literally – and then it is sent out in society and it is given a value – and most often it reaches the population in the form of DEBT. Because here is yet another fascinating aspect of money creation – there is an interest on all money that is printed, which means that there will continuously be less money in circulation than what there is debt that must be settled. This in turn leads to a debt spiral, where more debt must be acquired to be able to pay the old debts.

The conclusion is thus that we are indebting ourselves to receive money to have no intrinsic value in themselves – we are thus indebting ourselves to a life of servitude not realizing that the money printed and spread in the form of debt is not an actual and real measure of value – it is a artificial value that is created through make belief – a make belief that we make a reality because we believe in it and act according to it as if it is a reality.

The question we should ask ourselves is why we should require paying an interest on the money that is in circulation in our countries? Should not money be a property of the people? Should not we all have the possibility to be able to acquire food, education and housing without indebting ourselves?

The answer is obvious, because we all want to live without debt. This is why we require educating ourselves on the process of how money is created and in this understand that we as the people of each and every country are able to nationalize the banks and as such take control over our own money supply.

As I said in the beginning – money is created from nothing. It is merely papers with numbers printed unto it and nothing more. Why is that we then continue to hold unto to the belief that money is a scarce resource and something that cannot be owned in plenty by all?

In nationalizing the process of money creation we will be able to issue money and bring it into circulation and in this support new investments, and we would be able to end the credit crunch currently holding the world in a tight grip, simply because the money issued would not be in the form of credit, but in the form of REAL money with no interest attached to its back.

I thus suggest we nationalize our banks and make the process or printing and issuing money something that benefits the wellbeing of all instead of as it exists today – a seemingly endless debt spiral where more and more people forfeit and have their lives ruined.

Investigate the Living Income Guaranteed – our political proposal involves the nationalization of the banks.

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