Money as Debt

Have you ever stopped and wondered why it is that Wall Street and Washington D.C. siphon off all the productive capacity of the rest of the country? Have you wondered how it is that an investment can trash our whole economy? Why is it that the rich get richer and the poor get poorer, even though you are working hard, or picking up a second job, yet your financial situation scarcely improves? Why do prices keep rising so much? Why does my credit score go down when I pay off everything and have no debt, but go up when I am up to my eyeballs in debt? Why is it every time I turn on an economic program we hear constantly about the real estate market? This could perhaps be summed by: Why is it that I work hard for capitalism but it doesn't seem to work hard for me? The answer is tied up with how our monetary system works, how money is created, and how it flows, or fails to, through the economy.Apart from The Money Masters or the Secret of Oz, there are not many resources for learning about the history and use of money in an easily comprehensible format. Even in my own experience studying monetary theory, it all seems so complex one wonders how the average person, even a well-educated person, could understand all the complexity involved in the system. One series which seems to easily to cut through the nonsense and turn the complexity into a simple exercise of common sense and logic is Paul Grignon's series Money as Debt.Money as Debt, along with parts II and III, and its follow-up The Essence of Money, present for us in an animated format the hidden smoke and mirrors not just of our economic system itself, but all the way down to the level of a local bank. He first presents a normal transaction of a bank-loan. Our general understanding is that the bank checks the borrowers credit, opens the vault filled with hoards of dollars and gold, then writes a check for the loan. Or does he?What the film goes on to show, is that the bank in fact only offers credit, which is transferable to other banks within the circular central bank system. We are often led to believe the bank gives us a loan from its depositor's funds, but this is not the case. Those are set aside for government bonds and stocks. The bank in fact had no money to loan, it creates the illusion of it via bank credit. Yet it does not create money out of nothing per se. The bank creates money based upon the borrowers promise to repay. What this means is that the promise to repay becomes the asset based upon which money is created. To illustrate this, the Money as Debt trilogy goes through the evolution of the financial system. It does so in the first film by a simple tale of a true historical event, namely the medieval goldsmith. By means of this story the film demonstrates the history of banking's rise by showing the process by which goldsmiths stored money and then made loans during the middle ages. Since gold is difficult to transport, and dangerous in large quantities, it was more convenient to issue a certificate which represented the gold. The goldsmith would do this and these certificates could be traded on the market as money, redeemable with the same goldsmith. From there he gives an illustration of what would happen if the banker practiced lending at a fractional reserve as is done today, through the process which culminates in a run on the bank, when the depositors come in and demand their deposits at the same time. As the narrator notes however, this is not how banking functions today.Today, it is based upon the same process as in the example of the goldsmith, except that it is not based on any particular value but on debt. When the bank creates money, via bank credit, this is done based upon our promise to repay. It does this in two ways, as the film shows. The criticism of banking by monetary reformists tends to center on Usury (in general, Interest), and Fractional reserve lending. Money as Debt shows us how the fractional reserve system works. The bank today, must make a deposit at the central bank, which in America is the private Federal Reserve, in England is the Bank of England (which is also private), and anywhere else, which is also generally private. This deposit allows the bank to issue loans at a 9:1 ratio in a diminishing sequence downward. So for every deposit at the central bank, the bank can loan 9 times that amount which does not exist. There is some confusion about this, because of the way he presented it in the first movie which is broadly true, leads one to think it is a 90:1 ration when it is a 9:1. Grignon has a response and clarification to the misconception which can be read here.This is the same thing the goldsmith did in the medieval example, loaning claim checks against gold that did not exist, on the basis of the fact he knew from experience that depositors have need of only 10% of their money at a time on average. If too many depositors come for their money there will be a bank run, thus the central bank element can stabilize the system, temporarily, by giving infusions of capital to keep the bank afloat. This is the first way the bank gives out loans of money that it does not have. The second way, is by giving a loan (based on its reserve deposit ratio) to someone that is simply bank credit. The money does not exist. It is conjured into being based on an asset, which in the case of the loan is the borrowers promise to repay the money (which the bank never had) at interest. He goes onto show that most money today is in fact this bank credit, not cash whether by paper money or precious metals, usually created by the issuing of mortgages. Since mortgage borrowers are obliged to pay back Principal plus Interest when only the Principal has been created, the basis for the currency is established off of an inequality, P + I ≠ P. The consequent is unless 100% of the money banks take in as interest is guaranteed to be spent back into the economy in order that borrowers can earn it again, a condition of systemic bankruptcy will be created by design that is only overcome by continuous expansion of the money supply (i.e. aggregate debt). Since we live in the real world, not the phony Goldman Sachs world of finance which is based on absolutely nothing but debt, there is eventually an end to goods and services which can be produced, either regionally or everywhere. Even if both the former and the latter may not come home to roost tomorrow, the thought of it should make us stop and think. In order for the current system to survive, the cycle of mass production of goods we don't need, trashing them and creating them again must go on forever just to keep the thing going. Logic alone should tell us, even if 100% of the interest is recycled into the economy, the system is not sustainable in a real sense, since there is an end to goods and services produced in this way.Now, more importantly, there are other consequences more immediate and more immediately damaging due to the conduct of the system. This is what the second Money as Debt film illustrates, quite marvelously I might add. He goes through the process of a loan, for a car. The bank offers no money whatsoever, merely credit. How does this work? The film with an exacting examination, shows us the process from the loan, to the deposit of the check in the seller's bank, and further what happens when more loans are added on to that. Because the banks all operate under the central bank, in this case a private central bank (The Federal Reserve), all banks function as one bank. Thus all the various loan contracts can be reconciled between the banks, with only the differences being paid amongst them. Most importantly, he then examines the question: who is harmed? He gives the example, what if the man who bought the car is happy, and moreover the woman who sold it and now has spending money is happy, and the banks which get the interest are happy, who is really harmed by the whole affair? This is an excellent question, since this is what defenders of the current insanity often point to. What he shows is that it dilutes the overall money supply. Money as Debt II draws the parallel to counterfeiters, who merely print money themselves and spend it, without contributing anything in the way of goods and services. Counterfeiting dilutes the money supply, and reduces the worth and purchasing power of everyone else overall, just as bank credit. The difference, as he shows, is three-fold: bank credit in the form of loans and mortgages represents 95% of all currency in circulation, whereas counterfeiting is a much smaller percentage; and secondly that bank credit is legal, whereas counterfeiting is not, because the government allows banks to do it so long as they follow the rules of accounting. Thirdly, the losses of counterfeiting are born by the one who ends up with the counterfeit bill, whereas with the banks the loss is born by us all in a reduction of purchasing power.The consequence of this debt based money supply, is that it is dependent upon 100% of the interest being recycled into the system to be earned again and repaid. If the money should go elsewhere, such as out of the country, more loans, derivatives, the financial economy or for convenience, a secondary lender, then the process of foreclosures, job loss, etc. skyrockets. Why? The process seems complicated, but Grignon, as he does very well in these films, simplifies this process for us. The massive bank credit, the debt based currency which is the bedrock of the economic order, is made up of currency which has a scheduled appointment to be extinguished. That 200k that was loaned for a mortgage now ceases to exist, and for stability the banks must loan it again. If this does not happen, this causes a system of deflation. Prices go down, but the money available to be earned also contracts, which makes paying fixed payments, such as loans, more difficult. It kicks off a wave not only of foreclosures, but of business failures, as we have seen in the latest saga since 2007. This is why the rich need welfare, in the form of bank bailouts, because otherwise they will not be able to replace the money lost and stabilize the system, since the banks can only create money off the back of a borrowers promise to repay, they cannot create it out of nothing. Now what happens if the banks do not cycle 100% of that interest back into the economy? The flow which allows the business cycle to happen falls short, and that creates the artificial cycle of boom and bust. The interest is not there to be earned, so foreclosures happen systemically, simply as a result of the arithmetic.In this system we come to understand, since the central bank loans the government the currency in existence at interest, all money in existence whether cash or bank credit is based on debt. So if there was no debt, there would be no money. Since the interest increases with government debts over a very long period of time, the debt is essentially unpayable, just because of the math, and passed down to our future generations.Many critics of the Federal Reserve system criticize the house of cards on the basis of the FED endlessly creating money. That is one angle of the problem, but it is only a small part of it. The real cycle and the consequences of the failure to maintain it, is in the fact that any bank can create credit from nothing, and by focusing on this fact Grignon firmly pins the tail on the donkey so to speak, in identifying the problems of our economic system. Essentially he helps us to understand that there is not merely fraud in banking, banking is fraud.To conclude the second movie he takes us back to the 18th century to see how the debt money system formed by moving from Common Law to the Universal Commercial Code, and how the chartering of the Bank of England was able to take advantage of that in order to create the system we suffer under today. Common law limited the ability to transfer debts, they could only be discharged by the actual parties involved in a contract according to the norms of common law, specifically that one cannot give better title to something than one actually has. These were set aside due to the financial interest involved in the potential for making money on third party contracts.The other thing that is brilliant about these films is that Grignon identifies something that I discovered last year. While usury is bad for numerous moral and practical considerations, it is not the root of the problem, it is another part of it. Usury is not in fact unpayable, which is usually what we think. It may be, but not necessarily. Thus defenders of the current system can correctly claim all interest payments can be made if 100% of the money gained through interest was recycled back into the economy. The truth of course is that this is often not the case. He illustrates in Money as Debt III with this example, depicting the millionaire from the Monopoly Board game, and some average guy, he postulates, if there was only one dollar in existence, and it was the only dollar available, and Mr. Moneybags loaned someone that one dollar at interest, the interest is not unpayable if he offers me chances to earn it again by performing different services for that dollar, and then he pays it back so I can pay the interest. Now Mr. Moneybags gives it back to him after producing something or providing another service, now passes it on again. Now factor in the mass scale of the economy, the interest can be recycled into the economy to be earned again, but at a price, the common man is a slave to the one with the money, performing all these jobs just to pay back that interest. So the interest is not necessarily the problem viz the economy, it is a problem socially. This the critique of usury is not that it is unpayable per se, but rather it enslaves those who have to pay it.At last, Grignon does not merely identify the problem, nor chalk things up to Rothschilds (who he does not mention once in the films), rather he attempts to find a solution. After reviewing the failures of the current system, and its dependence upon exponential growth, as well as the moral and practical problems associated with Usury, he shows us three of many different options and their potential consequences. First he shows the Gold Standard solution, secondly, the Government nationalizing the money supply, thirdly his revolutionary concept of Digital Currency. A fuller exposition of the three main possibilities before us is given in Money as Debt III, where Grignon explains the three solutions to the Monetary Crisis in greater detail.

The Gold Standard

The gold standard at first is very appealing, but in reality is based on what I call a sort of natural heresy, namely the idea that gold has inherent and fixed value. The fact is gold does not have inherent value, it has relative value, because all values of matter are in fact relative. In a marketplace where gold is an accepted form of payment, gold has value relative to the goods and services it can acquire. If you are on a desert island, gold is relatively worthless if it cannot acquire food and drink. Some might argue that it doesn't matter, since the gold will still be valuable, just that it needs to find a market. It is always valuable because it is scarce. Let's grant that, now suppose enough gold could be found where it was no longer scarce? Its value goes down relative to its quantity, that is to say, its value is not inherent. Money as Debt III shows us this when they give us the example of the Spanish, who thought the gold and silver found in the new world would make them fabulously rich, when in fact, although they did in fact acquire wealth, what they found was that prices soared because the increase in the quantity of gold reduced its value, which is relative, not inherent. Moreover, gold can be faked, and has been faked in history, by mixing it with non-gold metals, or more recently gold plating Tungsten which has nearly the same density and atomic weight. Most importantly of all however, is the fact gold has historically been used by central bankers to control currency and bankrupt populations, before there was so-called fiat money. Those who have the gold make the rules in a gold based economy. If one wants to expand the money supply to make account for the increase in the production and demand for goods and services, you need to dig and find more gold, which limits its economic usefulness.Yet Grignon's most insightful point, in fact, somewhat of a paradigm shift for me that caused me to mull this over for some time, is that money is a form of Technology. This necessitates a wider understanding of technology than most modern people have. Today we think of technology as the equipment you are reading this review on, or an I-pad, cell phone, car, heavy machinery, etc. Most people do not conceive of a padded horse collar, a washboard, or a tension catapult as technology. Technology comes from the Greek word teknh, which means an art, or craft. Any device that can be devised, whether as simple as a clothesline, or as complex as a Roman bath, or in our century a cell phone, is broadly speaking "technology". This is why I marvel at those of Luddite leanings who say "I'm against all technology", but then who clothe themselves like the Amish and use what is merely an older form of technology in place of modern ones. Nevertheless, as Grignon demonstrates for us, money is a form of technology that facilitates trade. Pre-iron age peoples used necklaces and sea shells, later they used base metals and then gold and silver since these last are beautiful and have long been considered valuable. The Romans used base metals, iron or bronze which were dipped in vinegar to make them practically worthless, except in as much as they were required to pay taxes, and by that relative factor became valuable. This was essentially the first "Fiat Money", and worked very well while it was in existence. Gold is merely a type of technology, used in a broad sense, of facilitating trade by those who had production. Having amply established this concept, Money as Debt III goes to show us the two main problems, namely that gold, as a form of technology, is subject to hoarding, which increases the value of the gold and limits the ability of people to trade. Secondly, as we saw above, gold's value fluctuates not just due to artificial scarcity via hoarding, or a plenitude by finding new mines far away as the Conquistadors, but it fluctuates relative to the demand for goods and services in existence, which gold in a market economy represents. Lastly, there is not enough gold in circulation to facilitate trade, so in the end you will be right back at promises to repay, just promises to pay in gold. In short, gold is not a sure way to reform the monetary system, and is just as susceptible to fluctuation and corruption as so-called fiat money. In reality, it is the reliability of the promise that serves as the means of exchange. Is gold reliable? I would argue not, for all of the reasons above and more. The entire political scene of the late 19th century in the United States revolved around the gold issue, on the one hand people's desire to be free from the restrictions and control gold imposed, and of the banking cartel which wanted to maintain that control and assassinated presidents to make that happen.

Nationalizing the Currency

This second option, presented at the end of Money as Debt II, is explored more fully in Money as Debt III. As he does with the current debt based system, and the Gold Standard, Grignon presents the pros and the cons. On the one hand, the government nationalizing the money supply offers many advantages. In the first place, there would be no need for borrowing, the government could print debt free money and owe interest to no one, and spend it into existence by paying for goods and services, and requiring to be paid in taxes. Since the government would have no need of money, the taxes serve two purposes, incentive to use the currency, giving it value (the need to pay taxes), then it extinguishes money so that there is not too much of it, which can keep the value stable. This also solves many of our current problems by providing money that can be earned without the need for loans to get the cycle moving. There is enough money in circulation that those who can produce or offer services can trade those things for what they need without barter which is useful in the short-term for a few things, but highly inefficient in a marketplace. No one has ever successfully run an economy on barter. Governments have successfully done this in the past, and can do so again. Governments as diverse as England in the Middle Ages, the American Colonies, and Taiwan since the 1950s have done this successfully. Yet, for all the apparent benefits, there are potential problems. The government can overspend, as in the Wiemar example, and if improperly managed it can cause mass inflation or deflation which can have very negative consequences on economies. Moreover governments can misspend the money on war and destruction. Lastly the control is at the top, although, you can apply pressure on government that you cannot apply to unelected banks. Government fiat money also has the problem that gold does of being a single uniform commodity, so it does not address the root problems inherent in the arithmetic in lending. It could be done by making laws to limit lending and, the sine qua non outlawing fractional reserve lending. Yet, there is more, ancient societies with fiat money also engaged in price controls. These often went well beyond discussions of the just price in the tradition of Catholic social thought. Price controls in a market economy are not really possible, and differ from the concept of the "just price" because the latter is based on the social value of a given commodity in a limited area, whereas the former is a top down uniform price throughout a region, such as the Roman Emperor Diocletian's price controls, controlling the price of grain from his palace in Dalmatia (modern-day Balkans) to some village in Syria. While nothing is full proof, this solution does not ultimately make use of all the possibilities that modern technology offers.

The Radical Concept of Digital Currency

In order to fully unpack this concept, I need to make reference to the two follow-up films to the Money as Debt Trilogy, the 7 minute The Essence of Money, and the proposal Digital Money, which can both be viewed for free on the Money as Debt website or on YouTube. Essentially this is predicated on the concept of self issued credit, but employed on a large-scale rather than merely by a small co-op.To really understand Grignon's proposal, we need to understand more fully the concept of money and why this could work. In The Essence of Money, he has this beautiful line: saying there is not enough money amongst those with goods and services to provide, is like builders saying we can't finish the building for a want of inches. This is a remarkable insight, because money does not have inherent value, it is a symbol of value that can be attained, namely the real wealth of the world coming from forests, fields, mines and fisheries. In The Essence of Money, Grignon takes us to a medieval marketplace, where there is not enough money because the local lord is hoarding all the silver. This is not something made up, these are real events that happened in the middle ages. Europeans in the market places realized from the Arab and Byzantine practice of issuing a promise to pay in gold with a certificate, that they could simply write a certificate for their production, which the stupid gold and silver represent anyway. The film shows us Anton, a baker in a medieval town. He writes a certificate for 4 silver pennies worth of bread, and offers this as payment for goods he needs to acquire in the market. Since he is known in the town and is reputable, people take the certificate. They redeem it later for the bread, and Anton takes it out of circulation. If we recall from the thorough examination of the current system, the debt based economy we live in does this too, but the bases on which the asset is created is our debt, not our production. Anton issues his own credit, based on his production, not on money some fool promises to pay him at interest in the future, as the banker gulag system extinguishes the debt and requires new suckers to borrow into the system so they can will the asset off future payments at interest. Anton creates money based off of his production. The credit is not anonymous as it is now, and were Anton to issue certificates for production he does not have, the losses would not be socialized, it would be limited to those who had his certificates and himself. Moreover he would not be able to trade again, he could not be bailed out, as it were. Interestingly, the movie shows us another facet, commodities such as food, in this case bread, which are necessary for human existence, will change hands amongst third parties. The certificates are an asset which people unrelated to Anton can trade for the things they need, since everyone will need to buy bread. So they can exchange without the need of gold and silver, and there is prosperity in the town because the trades between producers were facilitated. The concept of sheer "profit" as in the phony financial economy does not exist. One works and acquires wealth by his production.Now such a system is limited by the technology of the time. In the Middle Ages for instance, a certificate for Anton's bread will not be something you can trade in Constantinople or Baghdad, or even in a nearby country, since removed from this small community, who in the world is Anton? The trade is limited to a mule's distance to the mill as it were. So what about the possibility of self-issued credit today? Certainly I could give credits for Translation services from Latin, or tutoring services, but if I take it to the grocery store, who am I? This is why we accept bank credit, the bank underwrites us when it gives us loans, or whoever it is they give the loans to, and the money put into circulation is accepted on the basis of the bank. Self issued credit systems that function today often are on a small-scale, with a few notable exceptions such as the LETS system, or Time Dollars, or in alternative currencies like Berkshares. If a small community issues its own credit, this becomes difficult because individuals might be fraudulent, or simply get overwhelmed by mismanaging their obligations and skip town. There might not be enough goods offered to make it work. The vision of digital coin is what if we could do this on a large-scale?Let's look at the self-issuing credit again. What if money was based on our production universally, and we underwrote our production, either personally or as part of a company and corporation? Corporations could issue certificates for their product which are based on their production. They spend the certificates into existence, both in payment to their employees (which ties them into ownership of their production) as well as buying other services. Now, how do they make money? If the issuer of the credit has to redeem all credit in product, not promises to repay, they cannot engage in predatory lending. It would seem as though they would make a profit the same way they do now, by selling it for more than it costs to make. If they spend their profit immediately, then they can realize the profit, into real wealth. Thus the profits are re-spent into the economy or else they cannot be realized. If they do not they will over-value their own credit, taking more out than what they're producing, which means the increasing credit will cause the prices to go down, and that self corrects to zero, they won't make a profit. The profit can only be realized by spending, which means there is no profit building up on profit. This is a complete paradigm shift from our current thinking where we think of hoarding up money to make money. This means that those who are wealthy will be so because they are real "go-getters" with respect to production, not because they are Goldman Sachs style parasites. This relies on governments and private entities producing these credits, and secondarily individuals could do so. Anyone cheating, would be little more than a counterfeiter, and could be punished by law, or at least by the loss of reputation. No one would accept their credits. Most importantly losses, which are inevitable in business, and no system let alone this one would solve it, would not be socialized to the entire system. There would not be debts mounting up laid up for future generations, as in the current system where our progeny is laden with the largest debt in the history of the entire world, which is simply unpayable. More interestingly brokers and financiers could actually serve a positive role. The only way they could make money by speculating would be by buying up certificates for products which have gone down in value. The certificates by law would have to be redeemable in that quantity of product, irrespective of the value. So if speculators bought up low value certificates the value would go up, then they could make a profit and the company could be saved from going under. Moreover brokers would be doing what is best for their clients, not because they impose a morality unique to religious convictions, but because doing what is best for their clients and the system, would be what was best for them, and thus the profit motive would be brought into union with the needs of society, rather than merely Scrooge like personal gain.This major paradigm shift however, would still be limited by the same problems limiting Arton. Credits for Wiget company "X" in Greeley, Colorado would not be readily trade-able in Shanghai. Thus the technology of money would need to evolve into something that can be accepted everywhere. Digital money is the next technological evolution from the ancient manner of producing base metals of no intrinsic value, and later of paper fiat money. It could accomplish the role of debt free self-issued money backed by production, while at the same time have the common credit that gold enjoyed in most places of the world in past centuries. A digital coin can be envisioned as the serial number lifted off the dollar and encrypted. It can serve the same function as a dollar, it can't be in two places at once. It overcomes the concept of money as a limited, uniform commodity into a medium for the exchange of goods. It overcomes the problems that someone with Anton's certificates might find in a market in another country. Functioning digitally it could be exchanged anywhere. It cuts out the banks, or something like PayPal. It can redeem something specific, from someone specific, and enable self-issued credit for all the goods and services in demand. A given credit coin could travel anywhere.Thus governments and industries could pay their employees in the credit coins, transferred digitally, and then they will take it and spend it in the market for the wealth they need to survive. The businesses that have just received the digital coin would then spend it likewise, and so on and so forth. Thus the currency flow would be established, just as in a system in reform option 2 where the government issues the money and taxes it back out of existence so as to establish the flow of the currency. Now this requires, according to Grignon's proposal, two refinements. The first is that the money put in circulation must be extinguished so it can be re-issued as credit for new product. To be extinguished it must be extinguished by the institution that created it. To accomplish this the institution can give a bonus on product purchased with its own credit coin, which would tend toward the institution's own digital coin returning to it. The second refinement would be determining the value of the coin. Since no one could issue credit coin without offering products in services in proven demand, there could be no counterfeiting. Since supply and demand fluctuate, the value of a credit coin will vary over time. Who will we regulate the value without intrusive big government doing so? This is where it gets interesting. Grignon postulates two coins, a "perpetual coin", which will be limited in supply and of fixed value, and the "credit coin", which is issued by productive industries and government. With an automated online market place a system could track the actual offers to sell and the offers to buy. At any given moment, a given credit coin would be worth its buy/sell ratio times one perpetual coin. Expressed as a formula, c=(b/s)1, if the buy orders exceeded sell orders, it would be worth more than the perpetual coin, if the sell order exceeded buy orders, it would be worth less than the perpetual coin. This way an excess one way or another can be planned by the business and corrected, pushing it back to parity with perpetual coin.Since the money will not be abstract or increase by scarcity, it will be virtual goods and services, backed by real goods and services, or put another way, earning power will be tied directly to production, not speculation or putting your money "to work for you" by being a parasite on the system. This is a blend of sound economic philosophy with simple arithmetic which could indeed liberate us from the debt servitude imposed on us by governments and banks.The switch to digital coin is not hard to imagine. I lived in Europe when the Euro was brought in, and the transition was relatively smooth. Two prices were posted for some time after the Euro went into effect, the price for given goods in Euro, and also in Lira, or whatever currency was in use in a given country, and people reckoned the value of 1 euro to 5,000 Lira and that sort of thing. Digital coin could first be priced in the current currency of whatever country until such a distinction became irrelevant and dropped, as the price of a Euro to Lira was dropped.For all that however, as I continue to research this question, I wonder about the role of the perpetual coin. Grignon has laid out in front of us a radical solution to our current system, which is in my view absolutely brilliant. Yet, what is this perpetual coin but, a single, uniform commodity like gold or fiat money today? Couldn't this be manipulated? Who issues it? How scarce must it be for the formulas laid out to calculate the value of the credit coin to work? This would necessitate some world body to make it happen, and that is where I become worried. Who will that world body be, and couldn't it hijack this for its own benefits? This is where Grignon's proposal gets ambiguous. He seems to be some sort of Libertarian, which doesn't detract from the usability of this system in a Distributist economy, since the concept of self-issued credit is derived from the medieval economy which was a Distributist economy. So in accordance with his libertarian principles (as it seems) he says that no one does it, rather that in a free market the perpetual coin will simply find its own value. This really brings us right back to the problems inherent in the current system. There is no hidden hand, things do no just find their value, someone has to issue this Perpetual Coin, and whoever does this controls the system just as the government would in the example of government nationalizing the money supply. Would it be different in each nation? Or would a world body do it? I don't know. It seems to me the only way to prevent outright fraud by a world body which could be influenced by powerful interests, let alone the varying industries in a given country, would be to have the perpetual coin issued by the government of a given nation, with the credit coin in use in normal circulation as a check on the system. Or, simply dispense with the perpetual coin altogether, which would require re-working the arithmetic. Yet the proposal also is based upon essentially alternative currencies, currency of the company or government producing something or offering a service, which does have value. This is a good way to check abuses in the system. This is what I have postulated for sometime in monetary reform, that alternative currency is the best security against abuse in the system.Either way, this paradigm shift would seem to work much better than the current system, which has been failing for a very long time. The Roman poet Martial coined in an epigram, dantur opes nullis, nisi nunc divitibus (these days, wealth is given to no one but the rich!), and this is true today. We the producers of goods and services are enslaved by debt to those who merely push paper. Even governments are enslaved by unpayable national debts, and few in government even know how it works. Whenever you hear a politician speak of paying off the national debt, this shows they fundamentally do not know what they are talking about. If there was not  debt, there would not be no money! That is the fundamental problem we are at odds with. The solution is to be liberated from this state of affairs. This all comes down to our notion of freedom. What is freedom? We usually think of it as freedom of speech, or freedom to bear arms, etc. I would argue that those can be taken away, but we can be truly free if we are free to engage in economic transactions to acquire the wealth we need for our family's survival. Take that away, and we are not free, no matter how much opprobrium we might be able to spew at our bought and paid for politicians. I would argue further, we cannot even begin to talk about Distributism until we have talked about how to be free from the debt based money system. We have to realize that we are in fact at war with the banks for our freedom and our survival. We need to take away the power from the banks to create money out of nothing, controlling all credit and capital in their circumlocution of paperwork, and restore the power to create money to ourselves if we ever hope to be free to establish true justice. True sustainability, not the phony sustainability that limits our resources and lets GE pay no tax while closing down our infrastructure because it benefits some lackey at Goldman and Sachs. If profits are made only by hard work and not by hoarding money in the world of vulture capital, there will be far less corruption because financial institutions would have little to gain except by benefiting the community. Whatever one thinks of digital money, frankly it can't do any worse than what we have now, and enormous credit must be given to Grignon and his team, not just for encapsulating the fraud that is the banking system in an easily understandable format which presents facts not conspiracies, but more, presenting workable solutions to the problem and seriously stepping out of the current thinking.If you have watched these videos and are confused watch them again, take notes, watch them again. Once you have done that you will come to realize we need to get out of the box which the banking system molded in its own interest hundreds of years ago and uses today in its own interest. You can blame whoever you like for the system, from the Rothschilds down to Freemasonry, it doesn't matter. What does matter is the need to reform the system, and that starts with us. Being informed, getting others informed, and demanding accountability from our politicians.