Comment: I beg to differ

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Michael Nystrom's picture

I beg to differ

First, you haven't overstayed your welcome. Let me address your "okey dokey" comment first.

What Mr. Lieatar described in his parable is a simplified version of what happens all the time, every day in America, and no doubt happened thousands of times today alone. The simplification is a way of helping us understand the more complicated (and thus better hidden) version that we encounter every day: When a bank "loans" a family money to buy a house, the family is ecstatic. They now have the American dream - a new house. But the bank did not have that money in their vault. Since you are familiar with the workings of fiat money, you know that the bank created the money from thin air the moment the family signed the mortgage. Say the loan was for $300K. Depending on the rate of interest, the family will end up paying back something like three times that amount in both principal and interest over the life of the loan. That is the essence of the eleventh round. Where will that 600K come from? Just like the banker in the story who never made the 11th round, the modern bank doesn't create the interest. The family will have to scratch and claw for it out in the economy, and take the money from another family's principal.

Does the family say - "No way! You #$#!@ banker - you're a cheat and a fraud!" I don't think so. More likely, they say, "Okey Dokey. What day is the first payment due?" Happens every day because the system is so convoluted that most people don't see what is going on.

I suggest that you try a little salt with your hat :-)

Second, there is nothing wrong with wanting to improve your lot in life, but that is something entirely different from Consumerism. "To consume" means to use up and destroy, which is what we are doing with the planet. An infinitely growing economy requires infinite inputs of finite natural resources (oil, minerals, wood, clean air and water). If everyone on the planet were to live like American consumers, we'd need six more planets for all the resources! It is consumerism that causes manufacturers to incorporate planned obsolescence into their products, so "consumers" will need to throw their stuff away and get new stuff every few months or years. Or say Hollywood makes a new action movie for kids, and comes out simultaneously with action figure dolls, story books, supplementa DVDs, Happy Meal toys and cereal box prizes. As a result, your kid wants all of this crap. Has that improved your own and your kid's lot in life? I could go on, but I think you get the picture.

Where you are correct is that fiat money encourages this type of behavior: The creation of all manner of junk, simply to make a buck. Bank and fiat money ensure that 1) everyone is in debt (government, corporations, and individuals) and 2) the money required to pay back those debts is artificially scarce.

Here is a link to an excellent 45 minute video that explains this sinister relationship:

http://bullnotbull.blogspot.com/2007/07/money-as-debt.html

Again, I don't disagree with you that people want to improve their lot in life, and there is certainly nothing wrong with that. I do, and everyone I know wants that. But be clear that consumerism is not the way to that end. It is simply an illusion towards that end, fostered by the fiat money system.

Michael Nystrom