Thursday, January 14, 2010

Who runs the world, and why the banks had to be bailed out. Without them, there is no money...

In our fractional reserve system, less than 5% of the money is printed by the government (the stuff we usually think of as "money"). This also helps explain why the powers that be are completely committed to the unsustainable notion of perpetual growth.

'As Frederick Soddy pointed out, compound interest is the law of increase of debt, not wealth:
"Debts are subject to the laws of mathematics rather than physics. Unlike wealth which is subject to the laws of thermodynamics, debts do not rot with old age and are not consumed in the process of living. On the contrary they grow at so much percent per annum, by the well-known mathematical laws of simple and compound interest...

"As a result of this confusion between wealth and debt we are invited to contemplate a millennium where people live on the interest of their mutual indebtedness" [Soddy 1926; pp 68-9]'

(Herman Daly, Steady State Economics)

No comments: