Mathematically Perfected Economy™ "The" Solution

[TruthOrConsequences]

What really caught my interest in economics was the diminished purchasing power of the American family. I watched my parents generation living on one income and making ends meet. Everywhere in our economy we see the progress that business has had in improving the quality of living, making our lives easier in the process but despite these improvements it now takes two incomes and we still can't make it. Something doesn't make sense. Some people are apt to blame this generation for its lack of thrift but there was still something in the back of my mind that didn't quite sit right with it all. Then I ran across a video on youtube http://www.youtube.com/watch?v=akVL7QY0S8A, a study showing that this may not be true at all. That our parent's generation had more per inflation adjusted dollars to spend on luxury items than we do today. I thought this was rather odd but didn't dismiss it. I love a good mystery so I set out to find the answer to these questions.

I looked at the classical economists, Keynes, Milton Friedman, and the Austrian economists over at the Mises Institute. I kept searching for anything I could get my hands on. I viewed the "Money As Debt", Bill Still's "The Secret of Oz", G. Edward Griffin's "The Creature from Jekyll Island", etc. video's on youtube. I was hooked. Eventually I traced these to its source. Mike Montagne's "Mathematically Perfected Economy". This last endeavor was not an easy read but I persevered through it all and came through the fog to an understanding that I can only describe as a "this is it" moment. This is what I've been looking for, this explains it all. I can stop searching now and concentrate solely on this.

So what is Mathematically Perfected Economy? Here's a summary by an individual going by the handle joanofarc
Source: http://tnsradio.ning.com/group/pfmpemik ... c%3A114973

Mathematically Perfected Economy™, Mike Montagne, proposes a very simple solution which would put our economy in the hands of WE the people who actually create money and wealth. No banks, no interest and the setting up of a Common Monetary Infrastructure. This will be a truly free market where centralized governments would have no role to play in the economy.

WE, THE PEOPLE, CREATE MONEY

The central most important point about money is that it is actually WE who create it. Under the present system, money is created by taking out ‘loans’. On our loan agreements it is WE (individuals or companies) who guarantee the creation of money by OUR OWN property and labor. Only WE sign the agreement, the bank does not sign it.

The reserve bank, in our present system, has been given the right in law to then use our agreement to issue 'money' and lend it to us, however (and this is the main point of fraud), this money was not theirs to lend in the first place as it was WE who created it. That money did not exist before we ‘borrowed’ it, or to be more accurate, created it, so it is impossible to 'borrow' something that was not there before. We created that money by guaranteeing it with our property and labor on our promissory obligation or ‘loan agreement’.

So, using our ‘promissory obligation’ the bank then commits a falsified debt to themselves without it ever having existed in the first place and they give up nothing of value when they do this (lawful consideration).

So, the system of banking is, in actuality, based upon a fraudulent transaction of pretending to lend us that which WE, in reality, created in the first place and which was not there beforehand. Without the bank giving up lawful consideration, the banks have broken one of the principles of contract law which should render their ‘loan’ contracts null and void.

The bank then demands that we not only pay back this 'fraudulent' debt to them (the principle) but also pay interest on it. They argue that they must charge interest as they are taking a 'risk' by lending us the money. But they take no risk as it is not they who give up anything of value, it is WE who give up value with our guarantees.

Our government also has to ‘borrow’ money via this fraudulent scheme and repayments are levied via taxation that we, the people, have to pay, thus further increasing the theft of our assets by the banking system.

ALL ECONOMIES BASED ON INTEREST ARE DOOMED TO FAIL

In addition to the initial fraudulent debt that banks force upon us, the interest charges that they levy from this create a context within which our economies are always doomed to fail - there is never enough money in circulation to 'pay back' the principle plus interest (only principle is ever introduced into circulation and so we keep having to 'borrow' more to pay the interest back). This is the cause of inflation. Business and industry constantly have to raise prices to cover interest payments and the cost of raw materials, utilities and general running costs which are also always increasing. More money is constantly being borrowed to cover shortfalls and there is an ever-diminishing amount of liquidity in the system.

Likewise, governments, have to keep borrowing additional money to pay the interest on previous loans. Most of the taxation we pay goes to pay interest on government loans and sell offs of national assets are used as additional ‘pay back’ monies.

So, even those with no debts are paying a large cost for public and private debt through taxation and inflation.

MANIPULATION OF THE VALUE OF PROPERTY, ASSETS AND WEALTH

All the other manipulations of money and the value of property and represented wealth stem from the initial fraudulent act of the banking system which creates obfuscated ‘loans’ and then demands ‘repayment’ of the principle amount plus interest. This creates the institution of money as a commodity. This commodity is then used to manipulate all the assets of a country as a subcategory of the initial falsification of money. Money is traded as a commodity and lent out again and again to prosper those who produce nothing and contribute nothing to the real wealth of a nation.

SO, WHAT IS THE SOLUTION AND HOW DO WE ACHIEVE IT?

Under this Mathematically Perfected Economy there would be no interest, no inflation, no deflation and with the correct amount of money circulating so that new money that we create, always has value in real tangible property or represented wealth. This would be achieved by maintaining a 1:1:1 ratio between the amount of money circulating, the value of represented wealth and property/assets and the amount of remaining obligations to pay out of circulation as assets are consumed.

These would be the steps to creating a Mathematically Perfected Economy and Absolute Consensual Representation:

1.Firstly, a new constitution or constitutional amendment for those countries who already have a constitution for the country would enshrine the immutable rights of every citizen and these rights could never be subject to amendments by any government. (soon to be available the Mandate by Mike Montagne which is a legal document outlining this constitution)

1.A Common Monetary Infrastructure (CMI) would be created which would, basically, be an accounting system to maintain the accounts of the people. This structure would have nothing to do with governments or banks as they exist now. The CMI would register deposits and withdrawals in much the same way as a bank does now. The changeover to MPE would mean that all banks would transfer all accounts of their clients to this CMI and banks would cease to exist. The ownership of the CMI would be held by the people of a nation under a strict, transparent and accountable system which would not be intervened by the government or any external ‘entity’.

2.The value of all represented wealth, property and assets would be calculated using existing available data. Based on this calculation, the amount of money in circulation may have to be increased to match the value of all represented wealth, property and assets as calculated.

3.In the interest of security for those who may have lost money in the ‘crash’ of the old economy, money would be credited, via the CMI, into the accounts of all citizens who may have lost savings or who have no pension, according to a calculation of the savings that would have been accrued by each citizen for their retirement. The establishment of a 1:1:1 ratio between the value of all represented wealth, property and assets and the amount of money in circulation would be created as described above and below in more detail. This would be a requirement to ensure, from the beginning, an immutable currency which would not be subject to inflation, deflation or the manipulation of the value of property or assets.

4.Outstanding debts: all prior interest payments made on all loans would be offset against the principle amount of the loan, leaving very little outstanding debt. That debt would then be recalculated into a formula of MPE which is the following: 1.The depreciation rate of the property or asset that was originally purchased would be calculated (standard rates of depreciation for all goods, services and property would be agreed by using existing depreciation rates and new rates would need to be decided).

5.Based upon these standard rates of depreciation, a statutory ‘obligation’ would be created for each asset for which money was brought into circulation and a schedule of payment thus determined. Those with outstanding ‘debt’ or ‘obligors’ would be required to pay out of circulation

exactly the amount that equates to that rate of depreciation and the standard schedule of payment. No one would be paid this money, it would just be cancelled out of circulation.

For example, if Ms Smith had had, under the old system, an initial mortgage from a bank of $100,000 for a home payable over 10 years at 5% interest and had already paid to the bank $20,000 of the principle plus $20,000 interest, both the interest and the principle repayment would be taken off the original amount and she would be left with an obligation of $60,000. The rate of depreciation of that home may be assessed (by standardized calculations) to be 100 years. She would therefore be required to pay $600 per year or $50 per month out of circulation (i.e. cancelled from her account and cancelled out of existence) over 100 years. Under the old system, taking into account the interest payments, she would have been required to pay $1,666 per month back to the bank. So she will be $1,608 per month better off under MPE.

In other words, as the house depreciates in value, so the amount of money which corresponds to the value of that house is removed from circulation. Thus, the 1:1:1 ratio between the circulation, the value of outstanding obligations and the value of the remaining assets would always be maintained.

This obligation would be transferable to a new agreement should Ms Smith decide to sell the property, should she die or should some other factor impede her obligation. The standard insurance cover would apply to any misfortune that may occur.

6.In a similar manner, all new money that was brought into circulation by individuals, businesses or government (although all government spending would be subject to the approval of the people) would involve the creation of new obligations to pay out of circulation according to specific schedules of payment in exact ratio to the depreciation of that property or asset so the the immutable value of the currency would always be maintained.

7.Under MPE, there would be very little need for taxation as the government would not pay any interest on money it created for specific purposes (such as essential services and infrastructure). The majority of the taxation we currently pay goes to service government debt and spending on bureaucratic infrastructure for taxation, social services, unemployment benefits and military spending. Most of this would be unnecessary and undesirable under MPE, and as decided by the people within a real democratic, consensual government and would be subject to a direct vote of the people. Governments would have a very small function to serve the people and all services provided by government infrastructure would be, by law, under the necessary scrutiny and agreement of all citizens under the constitution which enshrined obligations of the government to consult the people.

8.Approximately 60% of all earnings by individuals, industry and businesses would be retained by each. It is difficult to assess exactly the amount this would be but you can make a calculation of this based upon

1.there being no interest payments on any ‘loans’ and
2.no hidden interest payments in all the products we purchase,
3.virtually no taxation,
4.no hidden taxation in all the goods we purchase i.e. VAT and business tax which is embedded in the prices of everything we buy,
5.no inflationary price pressures to cover accumulating interest payments etc…

So there would be a huge amount more money left in the hands of people and businesses to spend, reinvest and save as they wished.

[TruthOrConsequences]

How is it possible to have a monetary system that charges no interest? First we have to understand why it was necessary in the past to charge interest.

In the past, capital accumulation was the basis or the funding of loans. People or groups of people saved their earnings, forgoing immediate consumption of these funds to be used for investment purposes in expanding business or used purchasing big ticket items (items that people needed but hadn't yet accumulated the money necessary up front, but could evidently secure over a period of time). The incentive for saving was a necessity in this system so interest was charged to the borrower, this was known as the time value of money. Banks acted as a middle man, matching potential borrowers with lenders or investors and for this service they also collected an added interest charge passed on to the borrowers. This is roughly the economic model that we had in the past.

This system had a flaw in that while it worked very well in good economic times, it performed poorly in bad. In a bad economy, savings decreased and as a result a whole chain of reactions occur to slow down economic activity. The very nature of interest also had a not too subtle effect on the economy. As Interest charged does not add to the overall wealth pool of an economy, it depletes the necessary money needed to sustain economic activity (circulatory deflation). Deflation is what we now know as the major contributing factor of the great depression. Milton Friedman and Ben Bernanke have as much admitted this fact. A system of "elastic money" was needed to correct the economy in bad economic times. John Maynard Keynes advocated governments should spend money they don't have to stimulate the economy in bad economic times. This was the relief valve that introduced money back into circulation that was depleted by interest.

The elasticity of money was a very ingenious, yet simple method of simply introducing new money into the economy. This new money represented newly created wealth. For example, a home developer builds a home (new wealth) to be sold to a buyer. The buyer doesn't have the funds to purchase the home. The buyer signs a promise to pay contract, the bank confiscates this note as if it was theirs to begin with and introduces newly created money into the economy by paying the developer. He's happy. The borrower sends payments to the bank who in return retires the principle out of circulation. When all is said and done the money serves its purpose and is retired. The net effect is the same as if it never existed. The interest however, which is a phenominal sum, adds up to 1 TO 2 TIMES the original principle which goes exclusively to banks is never accounted for. If you multiply this by all home, car, and business loans you can see how money is taken out of circulation causing massive deflation. Government spending is vital under this system to reintroduce money necessary to sustain economy. Any measures to curb government spending slows the economy and we suffer a recession. This is why any attempt to pass a balanced budget ammendment to the constitutional will be DOA.

Since the time value of money is no longer an issue, the banks have a dilema. They can't justify earning enormous amounts of money simply by entering it into a computer terminal and retiring the principal. This is where MPE comes in. MPE simply says that ALL interest is unjustifiable, that it will result in ever larger sums of debt to subsequently be borrowed in ever increasing amounts due to interest charges, resulting in a terminal sum of debt that we can no longer afford to service and we experience what we see today. Mike Montagne actually put together software demonstrating to the Reagan Administration that it was inevitable that Reagan would accumulate more debt than the previous administration. He also showed them way back in the early 1980's that the economy would run its course into terminal failure around the year 2010.

So in summary, MPE would introduce money into the economy paying the seller that amount of money, backed by a promise to pay from the buyer. The buyer then pays back out of circulation at the rate of depreciation thus maintaining an equal representation between the assets true value, the money left in circulation representing that value, and remaining debt obligation. Example: A car bought at $30,000 after one years time is worth, lets say $24,000. The $6,000 gets paid out of circulation by the buyer. The result: A $24,000 car with a remaining debt of $24,000, with $24,000 left in circulation representing that car. A perfect 1 to 1 to 1 relationship, all WITHOUT INTEREST and no inflation or deflation!

[TruthOrConsequences]

Here's a quote from Mike Montagne, author of MPE™, as a quick summary of our present economic situation....

When I first spoke at this radio panel in L.A., I introduced the fact that none of the panelists would achieve their goals against the superficial ramifications of the problem until we understood and resolved the problem. When I explained that the problem was an obfuscation of the currency which could only multiply falsified debt into terminal sums of falsified debt -- that we don't borrow money from banks -- that the banking system only publishes further representations of our promissory obligations -- that we neither owe them the principal, nor interest -- that interest is *unjustifiable*... all in one breath... people came out of the isles who weren't even listening before. It got the attention of the whole building.

From Mike's website http://www.perfecteconomy.com ....

mathematically perfected economy™ (MPE™) is the singular integral solution to

1) inflation and deflation

2) systemic manipulation of the cost or value of money or property, and

3) inherent, irreversible multiplication of debt in proportion to a vital circulation, engendering inevitable systemic failure at a finite system lifespan defined by an inevitable, terminal sum of insoluble debt. Mathematically Perfected Economy™ is every prospective debtor's right to issue their promise to pay, free of extrinsic manipulation, adulteration, or exploitation of that promise, or the natural opportunity to make good on it.


The simple way to learn more about MPE is at the following site:

http://australia4mpe.wordpress.com/


A youtube video by Dave Ardron:

http://youtu.be/gZ6RXaQhZF0

[JohnnyL]

Thank you for sharing.

[ithink]

I've never seen a system like MPE, where everything is explained and pieced together and actually makes sense in every regard! I see all the questions I've had for many years ... I intend to champion this system here and try to explain, to the best of my ability, what it is, what it does, the difference between what we now have and what we can hope to achieve...a true and just economic system. Any questions about it are welcome.

Well hurrah. I have been attempting to do what you are for some time here, and have met with some limited success. I tried to persuade Brian to make this subject one of the permanent postings on the site, but I haven't heard back from him, or perhaps I was not clear in what I was asking. Unfortunately, there seems to be more interest in artificial breast size and poker / war than in these important matters which you correctly draw our attention to. But alas, to be right is not necessarily to be popular.

You are correct that what you have stumbled upon is in fact the only solution to the financial problems of the planet. So if you are reading this thread, pay attention: ToC is right on the money here, and Mr. Montagne is right on the money as well.

Welcome to the board, and good luck. I'll be with you wherever you wish to share this important and indispensable information.

[TruthOrConsequences]

Thank you for sharing.

Your welcome. Are you an advocate of MPE already? Or are you just browsing out of curiousity? I've been trying to make sense out of the economic uncertainties for quite some time now. From Adam Smith, Fisher, Keynes, Samuelson, Hayek, Von Mises, Marshall, Friedman, etc. Nothing really woke me up and gave me an "ah hah" moment than when I studied Mike Montagne's work. It's ramifications are tremendous if you look at the possibilities that exist, if implemented. Sometimes the Lord works wonders and keeps things hidden from the world. Now I can't say for certain whether MPE is inspired or not, just that it's possible it is. I do know that it promotes Liberty and brings the power structure down from a top down Oligarcy back to the people where it rightfully belongs. If you haven't done so already you can find out and judge for yourself. A good resource is http://australia4mpe.wordpress.com/" onclick="window.open(this.href);return false; . Mike's website is http://www.perfecteconomy.com" onclick="window.open(this.href);return false; but is a little hard to find your way around on.

[TruthOrConsequences]

Yeah, I noticed that as well (what unimportant topics like what you mentioned get the most hits). I find it very ironic that people will spend so many countless hours to get a good price on purchases yet will not stop and think how they are getting robbed blind every which way they look around by the banking institutions who they think is serving them. Even more ironic is when confronted with the truth you get a "deer in the headlights" reaction.Thanks for the support, I'll keep trying to reach people and share what I have found out. My only purpose is to pass on to the next generation a better world than we have today!

[TruthOrConsequences]

Got your e-mail ithink. I can't reply to it though??? odd. It says I have to be on the forum for a certain amount of time before I can....hmm

[HeirofNumenor]

I've never seen a system like MPE, where everything is explained and pieced together and actually makes sense in every regard! I see all the questions I've had for many years (ie. the problems with national debt, unexplained loss of financial purchasing power of families, political manipulations, eradication of our liberties, on and on and on). These are all explained and easily solved by MPE. I've been searching for many years and this is it, no doubt, no question whatsoever. I intend to champion this system here and try to explain, to the best of my ability, what it is, what it does, the difference between what we now have and what we can hope to achieve...a true and just economic system. Any questions about it are welcome. So what is Mathematically Perfected Economy? Here's a summary (it's well worth the read)

Mathematically Perfected Economy™, Mike Montagne, proposes a very simple solution which would put our economy in the hands of WE the people who actually create money and wealth. No banks, no interest and the setting up of a Common Monetary Infrastructure. This will be a truly free market where centralized governments would have no role to play in the economy.

WE, THE PEOPLE, CREATE MONEY

This was a great read... I hope this sort of system can /will work.... which probably means a whole lot of powerful and/or selfish people will have to be removed from mortality first...

[SempiternalHarbinger]

Ithink has really opened my eyes to Mike Montagne and has done an incredible job bringing this to light. Good to see more supporters of Mikes perfect economy. It is by far IMO the best solution. (BY A LONG SHOT) @TruthOrConsequences, watch out and be careful around the hard core Austrians on LDSFF.

[davedan]

Here is the equation:

dM/dt + dV/dt = dI/dt + dR/dt

M = money supply
V = velocity
I = inflation
R = Real economic output

The key to a booming economy without inflation is to create money (on demand) as the economy requires it. How do you create Constitutional money (on demand)?

What you do is you create a non-profit banking system that offers simple interest-fee/fee based loans only for REAL assets. The money is "coined" by the US Treasury so there is only 1 currency. Loans are the point of money creation. However, to create money "on demand" the local Safety Society bank would administer the loans to the credit worthy who qualify and only for REAL assets that can be repossessed and retain value. Borrowers would begin paying off principle immediately from the first payment. If the the borrower fell into hard times, missed payments are deducted from a persons equity. Loans are never made to purchase speculative securities. Thusu there still would be a need for other types of venture capital.

Safety Society Banks could offer loans for mining, real estate, building projects, etc

[ithink]

Ithink has really opened my eyes to Mike Montagne and has done an incredible job bringing this to light. Good to see more supporters of Mikes perfect economy. It is by far IMO the best solution. (BY A LONG SHOT) @TruthOrConsequences, watch out and be careful around the hard core Austrians on LDSFF.

That is awesome!

For the Austrians, I have a question: where does the money come from to pay back the interest that accrues on the loan the bankster gave you? The answer of course is that it comes from someone else's principle, keeping you solvent, but shorting them. If the entire system consisted of only one loan to one person, the day after the loan was issued that system would be insolvent. Getting this into the heads of this generation has proved to be nearly impossible, so kudos to you sir for coming on board. As for the rest of you, your complete and total failure to understand this simple (and toxic) concept calls into question everything else you write whether it be church related or not.

A little Daniel is appropriate here:

1 And at that time shall Mike stand up, the great prince which standeth for the children of thy people: and there shall be a time of trouble, such as never was since there was a nation even to that same time: and at that time thy people shall be delivered, every one that shall be found written in the book.

2 And many of them that asleep in the dust of the earth shall awake, some to everlasting life, and some to shame and everlasting contempt.

3 And they that be wise shall shine as the brightness of the firmament; and they that turn many to righteousness as the stars for ever and ever.

There are two kinds of people: those that turn many to righteousness, and those that do not. Touting compound interest is WICKEDNESS. I don't care who does it: it is WICKED. Those in favor of it, I welcome you to join the discussion over at http://www.LDSbondageforum.com" onclick="window.open(this.href);return false;. They have a real hot discussion going on about all the benefits to the people at the top of their compound interest system. Check it out.

Many shall be purified, and made white, and tried; but the wicked shall do wickedly: and none of the wicked shall understand; but the wise shall understand.

Amen to that.

[ithink]

Here is the equation:

dM/dt + dV/dt = dI/dt + dR/dt

M = money supply
V = velocity
I = inflation
R = Real economic output

The key to a booming economy without inflation is to create money (on demand) as the economy requires it. How do you create Constitutional money (on demand)?

What you do is you create a non-profit banking system that offers simple interest-fee/fee based loans only for REAL assets. The money is "coined" by the US Treasury so there is only 1 currency. Loans are the point of money creation. However, to create money "on demand" the local Safety Society bank would administer the loans to the credit worthy who qualify and only for REAL assets that can be repossessed and retain value. Borrowers would begin paying off principle immediately from the first payment. If the the borrower fell into hard times, missed payments are deducted from a persons equity. Loans are never made to purchase speculative securities. Thusu there still would be a need for other types of venture capital.

Safety Society Banks could offer loans for mining, real estate, building projects, etc

Money, or currency, needs to be created for all societies needs, not just what you call real assets. There must be no restriction. I must be able to buy a chiropractic adjustment as well as a can of beans, and a wrench. The only criteria should be whether I agree that a manipulation is worth $40, a can of beans $1, and a wrench $17. At that point, I need to be able to buy what I need, which comes from my account, maintained by whatever institution the people choose. I know Mike at MPE is very particular on this point, but I like to keep it general at this point. So Davedan, I like what you are saying, but your restriction on REAL assets and your mention of a safety society is OK, but if you think globally with all the different governments in place, you might agree with me that the only pertinent points are these:

1. Eliminate interest of any kind.
2. Issue currency based on whatever the buyer and seller agree on
3. Repay the "loan" back at the same rate the item depreciates. This insures that there can be nothing other than zero price inflation at the point of introduction or destruction of currency into the economy.

[davedan]

I think we agree, that the people should be incharge of money creation. SSS does this. However, are you saying you'd take out a loan for a can of beans?

With SSS, you take out a home loan, the money created to purchase the land and the home is used to pay for labor and materials. The laborers use the money to buy beans. The company producing the beans got a loan for the machinery to process and can the beans, and for the land and the production facility. The Farm growing the beans can also qualify for a very low simple interest/fee-based loan to plant the beans based on their projected future value.

SSS interest works like this. The Federal Government does charge a simple interest rate. Becasue of inefficiencies in the system, there needs to be a mechanism for the government to decrease the money supply. This simple interest rate also becomes a voluntary tax/fee to generate revenue. The SSS Bank does not charge interest. SSS Banks that issue and service the loans only charge a loan origination fee. Don't go back to absolutely no-interest loans. The Catholic Church tried this in the middle ages. Banking has some overhead. Bankers should be able to make an honest living.

[ithink]

I think we agree, that the people should be incharge of money creation. SSS does this. However, are you saying you'd take out a loan for a can of beans?

With SSS, you take out a home loan, the money created to purchase the land and the home is used to pay for labor and materials. The laborers use the money to buy beans. The company producing the beans got a loan for the machinery to process and can the beans, and for the land and the production facility. The Farm growing the beans can also qualify for a very low simple interest/fee-based loan to plant the beans based on their projected future value.

SSS interest works like this. The Federal Government does charge a simple interest rate. Becasue of inefficiencies in the system, there needs to be a mechanism for the government to decrease the money supply. This simple interest rate also becomes a voluntary tax/fee to generate revenue. The SSS Bank does not charge interest. SSS Banks that issue and service the loans only charge a loan origination fee. Don't go back to absolutely no-interest loans. The Catholic Church tried this in the middle ages. Banking has some overhead. Bankers should be able to make an honest living.

We are in mutual agreement on many things here. However, after many long discussions with Mike, I must point out a few things, if you may.

First of all, I highly respect your time and your SSS system that you are describing. However, it still allows for interest and government intervention. Both of those are serious problems. The government must have absolutely no control over the financial system. It works best when left alone unless the system is flawed, then it will need no end of attention. And if you permit a system like MPE to eliminate interest in any way, shape, or form, then you also eliminate the need for government intervention.

As for the can of beans: you will have only one account. Buying a house would draw down the balance, perhaps to the point you owe, and buying a can of beans would do the same thing, to a lesser extent. But just as today you don't really take out a loan to buy beans, you actually do even though that is more commonly thought to be built into the wage you charge for your services in whatever you do. It's there, but it's invisible, and as long as you can repay on a monthly basis what needs to be repaid, you are OK. Make sense?

[davedan]

The Basis for SSS (Safety Society System) is the Constitution that says the Federal Government should be given some power to 1. Coin a national currency. 2. regulate it's value. I am not intersted in Looking for a non-constitutional system.

With all the abuses of Federal Power, we should take care not to make the mistake of swinging the pendulum too far to the other side. Remember Aristotles "golden mean".

That said, I do think the failure of Milton Friedman's monetarist theory is that he says the Federal Government should have the power to control the money supply. I agree with you that the power over money supply be locally controlled. Loan approval should be local. Loan approval is the point at which new money is created in the supply. There can be national standards set so everyone plays by the same loan qualification rules. But our local banks should administer and service the loans.

That said, there has to be a mechanism to correct for inefficiencies in the system. No system is truely ideal. So, the simple federal interest rate takes excess money out of the system. Inflation must be prevented.

Why is some simple interest is necessary and benificial? Savers should always have the economic advantage over borrowers. Federal prime rate become a constitutional voluntary money borrowing fee that reduces the money supply.

Money created must be backed by something real. In SSS, all money is backed by a real, redeemable good, commodity, or asset. This saves the bank if there is a default. This protects the savers from the borrowers. Too long the savers have fallen victim to the risk taking of lenders and borrowers. SSS is Full Reserve. Deposited money is never used to make new loans.

The focus of SSS is preserving value. But we agree that the economy must be inflation-less.

[davedan]

The purpose of federal simple interest is not to devalue the currency but to control and prevent inflation.

So, knowing this, some simple interest is a benefit.

Also, again, savers must have an advantage over borrowers.

If saving money is advantageous over borrowing, the people in the system will govern themselves. People who have money will use what money they have to make a purchase instead of borrowing and creating new money.

DM/dt (money supply) must never exceed or lag behind DR/dt (Real Output) or the result is inflation or deflation.

[ithink]

The Basis for SSS (Safety Society System) is the Constitution that says the Federal Government should be given some power to 1. Coin a national currency. 2. regulate it's value. I am not intersted in Looking for a non-constitutional system.

With all the abuses of Federal Power, we should take care not to make the mistake of swinging the pendulum too far to the other side. Remember Aristotles "golden mean".

That said, I do think the failure of Milton Friedman's monetarist theory is that he says the Federal Government should have the power to control the money supply. I agree with you that the power over money supply be locally controlled. Loan approval should be local. Loan approval is the point at which new money is created in the supply. There can be national standards set so everyone plays by the same loan qualification rules. But our local banks should administer and service the loans.

That said, there has to be a mechanism to correct for inefficiencies in the system. No system is truely ideal. So, the simple federal interest rate takes excess money out of the system. Inflation must be prevented.

Why is some simple interest is necessary and benificial? Savers should always have the economic advantage over borrowers. Federal prime rate become a constitutional voluntary money borrowing fee that reduces the money supply.

Money created must be backed by something real. In SSS, all money is backed by a real, redeemable good, commodity, or asset. This saves the bank if there is a default. This protects the savers from the borrowers. Too long the savers have fallen victim to the risk taking of lenders and borrowers. SSS is Full Reserve. Deposited money is never used to make new loans.

The focus of SSS is preserving value. But we agree that the economy must be inflation-less.

You reveal some things I had not know were part of the SSS. Remember, this thread is not about SSS, but MPE. So I will proceed from the MPE point of view, not SSS.

First off, I would say look not just at your country's problems, but beyond it's borders. I appreciate what your constitution says, but that is not our constitution, nor Englands, nor Australia's, nor Swedens. Each have their own. Yet each country is suffering with the same symptoms as yours. That is because they all use the same monetary system, to a point. The solution I am after, is not to force everyone to acknowledge your interpretation of your constitution, but to offer a solution that can be employed in ANY country right now. That would be my first point.

Secondly, interest in any way, shape, or form just has to go. MPE is Mathematically Perfected Economy. What that means is that the MATH demands that there be no interest whatsoever. Period. Full stop. Final word. Why? Not because I say so or because MIke Montagne the mathematician says so, but because if it is not eliminated, it WILL cause problems. This can and has been proven. It's being proven right now, as interest rates are near zero, yet the collapse accelerates. I even read that interest rates are about to GO NEGATIVE! But that will not help. It's too late for that.

Thirdly, you still have the paradigm of savers vs. borrowers in your head. With MPE, there is actually no "borrowing". I sometimes use the terms loosely or people get lost. But in reality, there is only two things going on with the currency in MPE: the CREATION of the currency, and it's DESTRUCTION. Note that there is also not "CIRCULATION" either. Money may appear to circulate, but it is actually constantly being created and destroyed, much as it is today. So to pit the saver vs. the borrower is a moot point: since you can create as much as you can afford to pay back incrementally at any time, what is the point of saving? The only point would be for rainy day or retirement, when your earning ability is diminished, or accidents as well. But there would be no point in saving money to earn interest, because there isn't any. You would just save to hedge against catastrophe large or small.

Fourth. The notion that money must be backed by something is a poor one that I thought you would be past by now.

Lastly, you say "we agree that the economy must be inflation-less". But davedan, there is no inflation if there is no interest AND the loan is amortized over the expected depreciating life of the asset. I thought you understood this as well.

SSS is a great kick at the cat, but it is a disaster waiting to happen. The MPE ship is gaining speed and it's cabins are filling up as folks realize it is the only viable solution whatsoever: and why? Because it's the only straight MATHEMATICAL answer to the pseudo science called economics (and a degree there is just BSc) that's been surfeited upon us by the banksters.

I recommend you pop on over to perfecteconomy.com and do a bit of reading, it will be well worth your while. The SSS you are offering seems to be getting worse as you reveal more of it. Try MPE, see if you can debunk it. See if it answers all your demands: I suggest it will.

[ithink]

DM/dt (money supply) must never exceed or lag behind DR/dt (Real Output) or the result is inflation or deflation.

But as soon as you permit interest, the supply of money immediately and permanently lags behind what you call real output. How do you reconcile that?

[davedan]

DM/dt (money supply) must never exceed or lag behind DR/dt (Real Output) or the result is inflation or deflation.

But as soon as you permit interest, the supply of money immediately and permanently lags behind what you call real output. How do you reconcile that?

I can appreciate that we all agree that sin and economics is at the root of much of our problems in this world.

I am sorry that I'm discussing SSS in your MPE thread, but I much prefer people who give alternatives over just negative (that wont work) criticism. If you want to know more about SSS, ive written several threads on the subject.

In SSS, The Federal Government is the only institution which charges a simple Interest rate. But the Federal Government charges this interest for the same purpose as MPE. As I said, the interest is not for the purpose of increasing the money supply (creates inflation due to more money for same asset dM>dR). The Fed uses interest rate to destroy money.

SSS is very similar to MPE. SSS is mathematically perfect according to the Friedman Equation.

[davedan]

Hear is a synopsis of SSS:

Why do banks fail? Fractional reserve banking b. fractional reserves are invested in stock to keep pace with inflation c. Banks invest in securities with no real value d. Stock market crashes, banks investments tank, bank is insolvent, bank goes bust. E. Depositors and savers are exposed to risk taking of lenders and borrowers.

1. Fed Gov creates 1 common currency.
2. Fed Gov creates uniform loan eligabity standards.
3. Local SSS banks determine loan eligibility, administers and services loans.
4. If you qualify for a loan; money is created for the loan "on demand."
5. Money created by Fed Treasury is transferred to SSS Bank to Borrower.
5. Only real bank-redeemable assets qualify for a loan.
6. Money is backed by the real asset it was created to purchase or produce or mine.
7. Loan is repaid in monthly installments.
8. Non-profit SSS Bank charges loan origination fee and monthly service charge to cover overhead only.
9. Monthly service fee encourages early payment of loan by borrower.
10. Fed Gov charges a prime simple interst rate to raise revenue for Fed Gov and to also decrease the money supply if necessary.
11. Other than tariffs, the Fed Gov would likely not need any other form of taxation if it could charge 1% simple interest on all new money creation.
12. Borrower builds equity in asset from the 1st payment
13. If difficult times arrive, SSS loans turn into a reverse mortgage and monthly payments are deducted from borrowers equity minus depreciation.
14. Default occurs when borrower loses all equity in asset.
16. Bank repossesses and re-sells asset
17. Bank repays Fed Gov with the simple interest
18. Fed Gov destroys returned money and spends interest revenue.
19. Depositors money never used to make loans or invest
20. Bank holds deposits as cash (electronic).
21. Inflation-less economy does not pressure banks to invest deposits to keep pace with inflation
22. SSS is full reserve, thus Depositors are protected from the lending side of banking .
23. Fees and interests result in a system where Savers have an advantage over borrowers.
24. The savers advantage is important not because money is a limiting resource but because there may be 2 bidders on the same property.


Banks are called Safety Societies, because the deposits are secure, The banks lending practices are sound. and the bank is immunized from the major causes of bank failure.

If Alanta wants an Aquarium. They don't need a rich unelected capitalist CEO of Home Depot to donate it. The city can pass a ballot initiative approving a 0.5% sales tax. Projected revenue qualifies for the loan and money creation. Construction begins on Atlanta aquarium. Sales Tax is collected and money is returned to Fed Gov and destroyed. dM/dt = dR/dt

[SempiternalHarbinger]

DM/dt (money supply) must never exceed or lag behind DR/dt (Real Output) or the result is inflation or deflation.

But as soon as you permit interest, the supply of money immediately and permanently lags behind what you call real output. How do you reconcile that?

Ah, yes... Compound interest. This topic alone is what gravitated me to MPE.

“The most powerful force in the universe is compound interest”- Albert Einstein

Might be the only time in my life I will ever quote Einstein. Sad thing is this statement might be more correct than anything he ever taught! Bending space and time? Come on now.

This comes from one of the greatest poets of all time Ezra Pound on the topic of interest/usury ...Canto XLV - With Usura



Canto XLV
With Usura
by Ezra Pound (1885-1972)

With usura hath no man a house of good stone
each block cut smooth and well fitting
that design might cover their face,
with usura
hath no man a painted paradise on his church wall
harpes et luz
or where virgin receiveth message
and halo projects from incision,
with usura
seeth no man Gonzaga his heirs and his concubines
no picture is made to endure nor to live with
but it is made to sell and sell quickly
with usura, sin against nature,
is thy bread ever more stale rags
is thy bread dry as paper,
no mountain wheat, no strong flour
With usura the line grows thick
with usura is no clear demarcation
and no man can find site for his dwelling.
Stonecutter is kept from his stone
weaver is kept from his loom
WITH USURA
wool comes not to market
sheep bringeth no gain with usura
Usura is a murrain, usura
blunteth the needle in the maid's hand
and stoppeth the spinner's cunning.
Pietro Lombardo came not by usura
Duccio came not by usura
nor Pier della Francesca; Zuan Bellin' not by usura
nor was "La Calunnia" painted.
Came not by usura Angelico; came not Ambrogio Praedis,
Came no church of cut stone signed: Adamo me fecit.
Not by usura Saint Trophime
Not by usura Saint Hilaire,
Usura rusteth the chisel
It rusteth the craft and the craftsman
It gnaweth the thread in the loom
None learneth to weave gold in her pattern;
Azure hath a canker by usura; cramoisi is unbroidered
Emerald findeth no Memling.
Usura slayeth the child in the womb
It stayeth the young man's courting
It hath brought palsy to bed, lyeth
between the young bride and her bridegroom.
CONTRA NATURAM
They have brought whores for Eleusis
Corpses are set to banquet
at behest of usura.

)

[TruthOrConsequences]

Thanks for your input guys, very informative indeed. Do you have a website that for SSS? I'd be willing to try to understand it and throw the dice and see what comes up. /:)

I think some points may be in order here. Under MPE™ there is no deflation or inflation which is illustrated in a post I made previously. Here it is again if you will..... A car bought at $30,000 after one years time is worth, lets say $24,000. The $6,000 gets paid out of circulation by the buyer. The result: A $24,000 car with a remaining debt of $24,000, with $24,000 left in circulation representing that car. A perfect 1 to 1 to 1 relationship, all WITHOUT INTEREST and no inflation or deflation!

Now lets look at that more closely. The $6,000 is according to a depreciation schedule, not an arbitrary value someone picks, thus the value at any given time throughout the assets lifespan is "worth" what is owed on the asset. This money paid back is effectively destroyed (taken out of circulation).This means you've just eliminated deflation and inflation. A person can walk away from it if he wants at any given time, we don't care! why? because it can be sold at a price equal to that which is still owed on the asset. If that does happen, the money paid by the new owner pays off the remaining obligation and that money is taken out of circulation. We're back to square one, the new owner is now in a position to do likewise. No intervention needed!

Let me "try" to find the common ideas and differences between MPE and SSS. Mind you this is not a criticism of one or the other, just trying to give you food for thought. I appreciate the time you put into this my friend!

1. Fed Gov creates 1 common currency

(Under MPE, the people create the common currency, backed by their promissory obligations. Bottom up, not top down. We want the government out of the picture. People create wealth)

2. Fed Gov creates uniform loan eligabity standards.

(The local community via a common monetary foundation, a non-profit entity sets the eligability of potential borrowers. It's second purpose is to issue into and take money out of circulation. The CMF members are elected for a term and elections held periodically)

3. Local SSS banks determine loan eligibility, administers and services loans.

(Addressed above)

4. If you qualify for a loan; money is created for the loan "on demand."

(ditto)

5. Money created by Fed Treasury is transferred to SSS Bank to Borrower.

(MPE would be separate from the Treasury Dept. Money creation done locally between CMF and each individual. You can think of the CMF as a bank loaning at 0% interest done at the local level)

5. Only real bank-redeemable assets qualify for a loan.

(All assets needed by individuals qualify as long as it is paid back at the rate of depreciation thus avoiding deflation/inflation)

6. Money is backed by the real asset it was created to purchase or produce or mine.

(same)

7. Loan is repaid in monthly installments.

(same, and could be paid sooner if desired)

8. Non-profit SSS Bank charges loan origination fee and monthly service charge to cover overhead only.

(I believe MPE would charge a low fee since the bulk of it is software driven. Mike Montagne is a Software Engineer by trade)

9. Monthly service fee encourages early payment of loan by borrower.

(Not needed under MPE since no interest is charged and the minimum payment is paid back at the rate of depreciation. There is no need for incentive of early payment)

10. Fed Gov charges a prime simple interst rate to raise revenue for Fed Gov and to also decrease the money supply if necessary.

(Any interest under MPE would not exist. If infrastructure is needed, then the CMF would issue the money, done by the common consent of the people, interest free, paid back at the rate of depreciation. Paid for by those individuals who actually use this infrastructure, maintaining the link between those who would benefit and paid by those who would benefit)

11. Other than tariffs, the Fed Gov would likely not need any other form of taxation if it could charge 1% simple interest on all new money creation.

(Maybe the correct question to ask would be, who consented to the current size of our Federal government? If the people had the control back in their hands to resist government spending which is outside of duly authorized constitutional bounds you would see real change in Washington. Constitutional spending is OK. I'm not sure where MPE stands here exactly but I'll get more info)

12. Borrower builds equity in asset from the 1st payment

(No equity really should exist in a depreciating asset. Is a 5 year home better than a new home? Why does it go up in value then? Due to the catagoric faults that MPE corrects...charging of interest, paying down out of circulation at the rate of depreciation, and of course government intervention, the interest deduction but then there will be no interest to deduct! Also, as a side note for investors, why would an investor buy a home as an investment that under MPE would not increase in value?

13. If difficult times arrive, SSS loans turn into a reverse mortgage and monthly payments are deducted from borrowers equity minus depreciation.

(difficult times happen when banks confiscate our promises to pay as if it was there's, laundering the principal into their hands and charging us interest on that principal, thus stealing principal and interest out of circulation thereby causing circulatory deflation. Subsequent loans then need to be made to reintroduce a vital circulation which only ever consisted of principal in the first place. Ever greater sums of debt are required until we can no longer afford to service it and our economy collapses under a terminal sum of debt. Price inflation results as a direct correlation between interest charged on business loans + taxes, passed onto the consumer in the form of higher prices. Of course as you probably have gathered, MPE erradicates interest and deflation/inflation.)

14. Default occurs when borrower loses all equity in asset.

(not sure what that means my friend)

16. Bank repossesses and re-sells asset

(yes, CMF sells it and retires that money)

17. Bank repays Fed Gov with the simple interest

18. Fed Gov destroys returned money and spends interest revenue.

19. Depositors money never used to make loans or invest

20. Bank holds deposits as cash (electronic).

21. Inflation-less economy does not pressure banks to invest deposits to keep pace with inflation

(no deflation/inflation)

22. SSS is full reserve, thus Depositors are protected from the lending side of banking .

(Under MPE, is unneccesary. Banks can still exist but they can't compete so they will have to provide a real service or go out of business)

23. Fees and interests result in a system where Savers have an advantage over borrowers.

24. The savers advantage is important not because money is a limiting resource but because there may be 2 bidders on the same property.

[TruthOrConsequences]

I recommend you pop on over to perfecteconomy.com and do a bit of reading, it will be well worth your while. The SSS you are offering seems to be getting worse as you reveal more of it. Try MPE, see if you can debunk it. See if it answers all your demands: I suggest it will.

FYI There is a new MPE website up and running that is tailored more for the layman. It's easy to understand and has the major points of the system covered very well. It's at http://australia4mpe.wordpress.com/" onclick="window.open(this.href);return false; Good on ya M8

[ithink]

The Basis for SSS (Safety Society System) is the Constitution that says the Federal Government should be given some power to 1. Coin a national currency. 2. regulate it's value. I am not intersted in Looking for a non-constitutional system.

With all the abuses of Federal Power, we should take care not to make the mistake of swinging the pendulum too far to the other side. Remember Aristotles "golden mean".

That said, I do think the failure of Milton Friedman's monetarist theory is that he says the Federal Government should have the power to control the money supply. I agree with you that the power over money supply be locally controlled. Loan approval should be local. Loan approval is the point at which new money is created in the supply. There can be national standards set so everyone plays by the same loan qualification rules. But our local banks should administer and service the loans.

That said, there has to be a mechanism to correct for inefficiencies in the system. No system is truely ideal. So, the simple federal interest rate takes excess money out of the system. Inflation must be prevented.

Why is some simple interest is necessary and benificial? Savers should always have the economic advantage over borrowers. Federal prime rate become a constitutional voluntary money borrowing fee that reduces the money supply.

Money created must be backed by something real. In SSS, all money is backed by a real, redeemable good, commodity, or asset. This saves the bank if there is a default. This protects the savers from the borrowers. Too long the savers have fallen victim to the risk taking of lenders and borrowers. SSS is Full Reserve. Deposited money is never used to make new loans.

The focus of SSS is preserving value. But we agree that the economy must be inflation-less.

I'm from Canada (Australia, England, Greece, etc) and don't care about your constitution. I am looking for a solution that fits everyone. 1+1=2 is a universally correct statement. If you wish 1+1=3, and you do if you insist on allowing compound interest, then regardless of what your constitution says, your system will fail.

Our current economic system is actually largely hands off at the local level. The fact the system has endured as long as it has PROVES that government intervention is not necessary.

You keep talking about inflation, preventing inflation: but what do you think inflation is?

And again, no, money need not be backed by anything, and it quite frankly is better if it is not.