MONEY AND DEBT LOOP
Love and Ego (Money) make the world go round!MONEY IS ENERGY Let it be clear from the beginning: I have nothing against money, wealth and any form of honest and ethical commercial practices. I see money as a form of energy and just like all other forms of energy it can have constructive or destructive effects. Here are the main points of the philosophy of money I completely embrace: 1. I believe that the Creator wants us all to be prosperous--especially those people who are spiritual and unselfish. Ask yourself this question: "If you had the power to bestow immense wealth to one single person, who would you give it to? A spiritually minded and unselfish individual or a greedy, selfish and evil minded person?" 2. The fact is that there is no spiritual benefit whatsoever in being poor and miserable. Even Saints, such as the wonderful Mother Theresa, could not have achieved anything of value on this planet had it not been for the donations of millions of dollars that supported her miraculous work here on earth. To this day her organization is successfully raising millions of dollars to help the poor and the orphans that have been abandoned. 3. I believe that money is good and powerful and creative. I also believe that the love of money and greed are evil and destructive. 4. In all honesty, I believe that those who choose to sell God's gifts, short-change themselves greatly. I thank Mr. Alexander Wilon for this invaluable wisdom and the gifts from the Creator offered on his wonderful website!
The subject of money is surrounded by a lot of prejudices and misunderstandings. Some of the brightest minds of humanity have tried throughout history or are still trying today to preempt or reform the system of value exchange and debt management based on money. Others are trying to improve the existing system by replacing one kind of money (currency - the US dollar, for instance) with another, while others are simply... making more money. Very few people have or can acquire enough professional knowledge about financial matters and money. What they usually do in difficult times is to blame the Government, their neighbor or ...the Jews. "It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." Henry Ford
The world financial system has collapsed. First banks, now states and even giants like the European Union are falling apart. Companies are drowned in debts. Inflation rates are soaring. Unemployment is reaching the sky. Politicians are running around like headless chickens. Another scourge has hit the planet - natural disasters. Earthquakes and volcanoes, tornadoes and floods are on the rise. Nature is obviously punishing us! And no end to this is in sight. People are getting scared to death. Americans are stressed out as never before. Gloom and despair are spreading like wild fire. No one believes in hype lectures and success stories anymore! People are focusing on dark predictions for 2012 thus further strengthening their negative feelings and thoughts… However, there is some light at the end of the tunnel. Here is one of the optimistic views on the beginning of a new Golden Age. Changes in Time Our perception of time, unknowingly to those who are not in tune to this anomaly, is being dissolved at a rapid pace. 100 years ago, our civilization was traveling by horse and buggy. We are currently at the saturation point of where technology is surpassing its convenience. The unprecedented amount of change in technology is evidence of how time has gradually broken down and reflected in the significant amount of change through the speeding up of our vibrational patterns. In the past thirty years, alone, technology has outpaced the cumulative effort of the thousands of years of technology in our civilization. Changes in Money Our need for money is also collapsing within this paradigm. Currency had value at one point in time, where it could be measured and paid in silver. Now, money is represented by a piece of paper with incremental numbers on it and essentially only worth the paper it's printed on. How many trees need to be cut to maintain this facade of money?
Now What? We have two basic emotions: fear and love. Unfortunately, many people will fear losing their ink paper but now is the time to embrace the change that is occurring. Think of it this way: Each time a bank closes or is taken over by the Federal Reserve, means we're one step closer to the full implementation of the Golden Age! The game is over, my friends. They lost and we won so don't let the illusion of money, time or fear-based politics get to you. All of our souls chose to be here RIGHT NOW to make a difference in this world and to witness the start of the Golden Age. All of our souls, without exception, thought we could overcome the fear-based mentality to make a difference in this world. The powers that be knew this and developed a structure system that kept us locked inside-the-box through the media and what we learned in school, essentially cultivating our minds to THEIR agenda. As our minds are opening up to the truth, we see through their illusion and we're opening up our potential to the unlimited possibilities that exist outside-the-box. The Best Time to be Alive This is the most exciting time to be alive! How many people can say they personally witnessed the end of time and money? This is why we're here, because we wanted to be one of those witnesses. There may never be another opportunity to be alive in such a trying, yet wonderful time in which we're experiencing. Please remember, each time we buy into their fear, we continue to empower their illusion. Conversely, each time we see this moment as a rare time to be alive and appreciate the reasons WHY we're here, we'll continue to collapse the current paradigm as we enter into our Golden Age debut. Source: http://maya12-21-2012.com/2012forum/index.php?topic=108.0 Another even more incredible view of the reasons for human slavery and the path to transformation has been produced by D. Icke in his new book "The Moon Matrix - Human Race Get off Your Knees".In order to save you the time for reading it, I have included below a short comment on it from ABOVETOPSECRET. "David Icke marks his 20th year of uncovering astounding secrets and suppressed information with the publication of his most amazing book yet. He takes the manipulation of the human race and the nature of reality to still new levels of understanding and he calls for humanity to rise from its knees and take back the world from the sinister network of families and non-human entities that covertly control us from cradle to grave... His most staggering revelation is that the Earth and the collective human mind is manipulated from the Moon, which, he says, is not a "heavenly body", but an artificial construct – a gigantic "spacecraft" (probably a hollowed-out "planetoid") – which is home to the extraterrestrial group that has been manipulating humanity for aeons (eternity). He describes what he calls the "Moon Matrix", a fake reality broadcast from the Moon which is decoded by the human body/mind in much the same way as portrayed in the Matrix movie trilogy. The Moon Matrix has "hacked" into the human "body-computer" system, he says, and it is feeding us a manipulated sense of self and the world 24/7." Another adherent to this "conspiracy theory" - Jordan Maxwelll has also confirmed his belief that the Moon is artificial and probably was towed here. Finally, one more unorthodox concept or rather a program that is spreading like wild fire and may usher in a new world financial system within a short time. The author is Lynden LaRouche and he is convinced that the USA, Russia, China and India should act together to close down the present financial system and setup a new one. If interested, watch the video below. The present system There may be other reformist concepts and programs but we are still living within the current financial system and the information below is based on this fact. It is not intended to offer magic solutions or professional advice. My modest purpose is to help fill in the gap between public awareness and complex financial matters, without difficult academic arguments or long explanations.
This is the first thing to avoid when discussing money. A few words about its form. Throughout history different physical objects with specific properties, including salt, bronze, gold, paper banknotes, plastic cards (electronic money), etc. have been used to fulfill the functions of money. They have played the role of generally accepted means of payment, exchange of goods and services, hoarding, etc. They have represented and represent relations among people with different interests, mainly debt relations. Of course, physical (even non-physical like "electronic") money forms come and go, and change constantly in accordance with economic and social conditions but the substance - role or function stay the same. Not only the form of money gives rise to misunderstandings. The substantial point of view has also given rise to opposing attitudes. Some people say that money has become "the root of all evil" due to the interest rate related to lending. For instance, Margrit Kennedy - a follower of Silvio Gesel - is convinced that we would have no problems with money, if the interest rate (and property rent) were abolished. This has been done in practice during the Great depression in Austria and is done even today in Canada and parts of the USA (search for "go-go" money). It is also worth reminding that both the Jewish and Muslim religious traditions expressly prohibit lending money with interest among relatives or persons of the same faith! The interest rate is an unproductive function of money. There is no doubt about this. The interest rate is enslaving and should be abolished. How about debt? Debt has a much broader and deeper meaning. Mortgage (debt pledge) means a "death promise" in Latin which is to say a loop around the neck of the receiver! Is this kind of relationship also determined by human (social) factors or not? I believe it is and can be abolished too. From a wider spiritual point of view the closest comparison of the debt loop is that with Karma. Both debt and karma are subject to the law of Cause and Effect and the law of the preservation of energy. There is nothing accidental, everything has a cause and every cause brings an effect. Nothing is ever lost in Nature - energy only changes its form but never disappears! This notion of debt is behind the debt loop and what we call today "the debt market" - a much wider concept than just money. Throughout modern history this knowledge has been misused for egoistic purposes. Both the debt loop and karma are self-indulged notions, no more than incorrect desires that can and should be re-programmed. But how? The reply is simple - by the abolition of money!
As already mentioned above, all information related to money and debt is meant to help with an overall understanding of what money is, how it is related to energy, what knowledge and skills are needed to manage it wisely and, eventually, overcome a lot of widespread prejudices. Credit is due to Mr. F. Hummel and some other experts on the subject - all duly referenced as appropriate. Two Kinds of Money Money is a token that is widely accepted as a medium of exchange. The token can be tangible like a coin or note, or intangible like a bank deposit. If the token is convertible on demand into a valuable commodity like gold, the token is known as commodity money. The exchange value of commodity money varies, but is normally greater than its value as a commodity. A precious metal coin is simply a token potentially convertible into the bullion that comprises it. If the tokens are intrinsically worthless and inconvertible, the government must endow them with a special status to make them viable as money. Such tokens are known as fiat money. Except for collector’s items, all government-issued tokens today are fiat money. One must therefore avoid thinking in terms of commodity money to understand modern money. In the era of commodity money, the issuer was constrained by the need to hold a sufficient supply of the underlying commodity. There is no such constraint in the case of fiat money. The value of fiat money therefore depends on the policies and actions of the issuer, normally the central bank of a country. The remainder of this essay applies to the monetary system of the U.S. and not necessarily to other countries. Fiat Money as a Tax Credit The general acceptance of the government’s fiat money derives from its status as legal tender and from the fact that it is required in payment of federal taxes. Those who have no tax liability have reason to acquire fiat money because it is of value to those who do. Thus fiat money can be viewed as a tax credit, which will be used as a medium of exchange as long as the government widely enforces tax collection. Base Money Fiat money held by the private sector is known as the monetary base, which we will refer to as base money. The Fed issues base money when it buys securities from the public for its own portfolio, mainly Treasury debt. It pays by simply creating a deposit at the Federal Reserve Bank for the seller’s own bank. This is known as monetizing the debt. Bank Money Banks create deposits, known as bank money, when they issue loans by simply crediting the borrower’s account with a new deposit. The total amount of bank money increases when a bank issues a loan. When a loan is paid off, that amount of bank money vanishes. The value of bank money is based on the promise that it can be converted on demand into base money at par. Current rules require a bank to hold reserves of base money equal to at least 10% of its transaction deposits. Reserves can be held in any combination of vault cash and deposit at the Fed. There is no required reserve for other bank liabilities, such as savings accounts or certificates of deposit. Controlling the Price of Reserves Even if there were no reserve requirement, a bank would have to hold enough reserves at the Fed to cover its depositors' checks, and enough vault cash to meet the demand for withdrawals by depositors. The need for reserves thus creates an active interbank market in which banks lend or borrow reserves among themselves. The interest rate on these short-term transactions is called the Fed funds rate. The Fed (Federal Reserve - USA Central bank) steers the Fed funds rate toward its target through its open market operations. These involve buying or selling securities in the open market to add or drain system reserves as needed to balance the supply and demand at its target for the Fed funds rate. Any bank in good standing and with adequate collateral can borrow on a short-term basis at the Fed’s discount window. The interest rate the Fed charges is 100 basis points above its target rate for Fed funds. With that large a spread, the discount window is used by banks to cover temporary liquidity problems rather than as a source of reserves to back further lending. Note: During the subprime mortgage crisis of 2007-2008, the Fed reduced the discount rate to 25 basis points above the target Fed funds rate to improve liquidity in the banking system. This is expected to be a temporary measure. The Fed's Reactive Role Why does the Fed control the price of reserves rather than the quantity? The answer is that targeting the quantity risks endangering the liquidity of the banking system. For example, an increase in cash holdings by the public drains vault cash from the banking system. Unless the Fed responded by injecting reserves, one or more banks might be unable to meet either the reserve requirements or the withdrawal demands of its depositors. Targeting the price of reserves is also more effective in controlling the volatility in the Fed funds rate, and thus the interest rate banks must charge on their loans. Firms cannot plan efficiently when the price of credit is subject to large and unpredictable variations. As a result of the Fed’s focus on price, the supply of bank money will vary with demand. It expands or contracts according to whatever factors influence private sector borrowing. Thus the Fed plays an essentially reactive role, adding or draining reserves as needed for bank liquidity and to hold the Fed funds rate on target. Limiting Bank Lending Since the reserve ratio requirement doesn’t really impede bank lending, what prevents a bank from responding to any and all loan demands? The answer is that every bank must also comply with an equity capital requirement. This is a complex formula that rates a bank’s assets by risk, and requires that its capital exceed a certain fraction of its risk-weighted assets. A bank can get into trouble by creating too many assets through lending. A bank with insufficient capital relative to its assets will be placed under supervision by its regulator who may then demand to approve any new lending. Limiting Money Supply Growth Another important question is what limits the supply of bank money from growing excessively? Banks are in the business of selling credit. If a creditworthy borrower is willing to pay the bank’s rate, the bank will normally make the loan even if it must borrow the required reserves after the fact. The only defense against the creation of an excessive supply of bank money is for the Fed to increase the price of reserves to the point that it slows net demand.The Fed’s basic monetary policy challenge is to keep the supply of bank money in reasonable balance with the needs of producers and the availability of goods and services. That calls for a great deal of knowledge about the economy as well as skill in interpreting the data. Mismanagement of the price of reserves can readily drive the economy off track towards inflation or recession. This is a difficult task, and the Fed has made its share of mistakes over the years that are usually obvious only in retrospect.
What is meant by the money supply? The term itself implies that a certain amount of money exists at any given time, even though the quantity may be unknown. In truth there can be no meaningful measure of the quantity because it is continually varying as a function of demand. The Fed has its own arbitrary measures of the money supply which it once used to help guide its monetary policy decisions. It defines money as the total of cash in circulation and deposit liabilities of banks and thrifts. At one time it set targets for the growth of the money supply. Now it largely ignores its own measures because it has found little correlation between them and its major policy objectives – limiting inflation and unemployment. Monetary Aggregates The Fed has defined three monetary aggregates M1, M2, and M3. The narrowest definition, M1, includes the transaction deposits of banks and cash in circulation. M2 adds savings accounts, small time deposits at banks, and retail money market funds. M3 adds large time deposits, repurchase agreements, Eurodollars, and institutional money market funds. In March 2006 the Fed discontinued tracking M3 because it does not convey information about economic activity that is not already embodied in M2. Note that the Fed's definition of the money supply includes only what the non-bank sector holds. Thus the reserves of banks, i.e. vault cash and deposits at the Fed, though a part of the monetary base, are not included in the monetary aggregates. That means when a bank spends for itself, it increases the money supply. When it receives payments from the public such as interest on loans, the money supply decreases. Bank Lines of Credit as a Money Equivalent An important shortcoming of the Fed's definition is that it ignores lines of credit which can be exercised at the discretion of the borrower. Firms often hold substantial lines of credit from their banks, which they can use on short notice. Likewise consumers hold lines of credit in their credit card accounts that are just as useful for purchases as checking accounts or the currency in their wallets. Lines of credit increase liquidity, which is ultimately what counts in terms of enhancing aggregate demand. When someone uses a credit card in a purchase, he automatically expands the money supply. The seller receives a new deposit in his account, which increases the total of demand deposits in the banking system -- until the buyer pays off the loan. The result is that consumers who roll over their credit card loans rather than paying them off have increased the money supply on their own initiative by hundreds of billions of dollars. In effect, the money supply is substantially larger and less measurable than the Fed's definition. The Quantity Theory of Money Economists regularly use the term money supply without defining it. A notable example is the equation of exchange in the quantity theory of money.
Money does not exist in a pure barter system. Trades are negotiated by the participants as a fair exchange of goods and services. If someone agrees to receive equivalent value later in exchange for his goods, he has accepted an IOU. An IOU is a credit for the seller and a debt for the buyer. If the IOU becomes negotiable, meaning others will accept it in exchange for goods and services, the IOU is money. In essence, money is credit that is widely accepted as a medium of exchange. The Basic Properties of Money An IOU will be accepted in exchange for goods and services only if it is seen as a store of value. However it does not have to store value indefinitely to qualify as money. It is money if it retains value long enough to be generally accepted as a medium of exchange. Money is always a store of value, but a store of value is not always money. For example, a bond is a store of value, but bonds are seldom accepted as a medium of exchange, and therefore are not money. Most of the money we use is denominated in the unit of account established by the government. That enables us to measure the value of a good or service against another, based on what each sells for in the market. How many quarts of milk are equivalent in value to a barber shop haircut can only be determined in the market place. IOUs as Money Money is the credit side of a balance sheet relation. Every dollar of credit is matched by an equal amount of debt. A bank loan creates a credit for the borrower in the form of a negotiable IOU (the deposit) and a matching debt (the obligation to repay the loan). For the bank, it creates an often illiquid asset (the loan contract) and an equal liability (the negotiable IOU). The term money is sometimes used in reference to high quality debt instruments nearing maturity. However such near-money is seldom acceptable as a medium of exchange. Besides being inconvenient to the seller, the monetary value of near-money is not really known until sold in the marketplace. The more restrictive definition of money will be adopted here. Fed Funds and Bank Money When the Fed purchases a financial asset from the public, it credits the seller's bank with a deposit at the Fed, known as Fed funds. Banks can exchange Fed funds for Federal Reserve notes, and vice versa, on demand. In either form, these Fed IOUs are the most negotiable in the economy. This is because the private sector must surrender Fed funds in paying Federal taxes. Conversely the government pays in Fed funds when it spends. Individuals usually pay taxes with bank money, i.e. a check against a bank deposit. However the bank must cover the check with its own Fed funds. It cannot issue an IOU to cover the check. The Fed accepts bank money at par with its own IOUs. Thus bank deposits are nearly as negotiable in the private sector as Fed funds. Private party IOUs may be legally binding, but they are of uncertain monetary value and seldom negotiable. They are simply private debt rather than money. Non-Bank Money Money market mutual funds offer accounts similar to checking accounts at banks. They are actually shares in the ownership of short-term debt. When one pays with a draft on a money market fund, he is in fact selling shares in exchange for bank money that the fund must deliver. That means the fund must have sufficient bank money on hand, or acquire it through borrowing or sale of its own assets. Although money market mutual funds are not insured or guaranteed to trade at par with Fed money, their acceptance is now so widespread that they have become de facto money. Thus non-bank financial institutions (NBFIs) can create money by selling an interest in short-term paper, and providing checking facilities against that paper. Banks as Intermediaries Like other intermediaries, banks borrow to lend at a profit. However banks are a special kind of intermediary because of their role as depositories. When a bank lends, it creates a new deposit to fund the loan and thus expands the money supply. It may issue loans only up to a prescribed multiple of its capital, and it must hold reserves of base money sufficient to cover net daily withdrawals of its depositors. Reserves refer to a bank's vault cash and its Fed funds. Under present rules, a bank must hold 10% in reserves against its demand deposits, averaged over successive two-week periods. Averaging allows a bank to run below its required reserves on any given day. Interbank lending serves to redistribute reserves lost to other banks due to ordinary checking activities. A bank can acquire Fed funds by borrowing in the money market, but it cannot increase its capital (assets minus liabilities) through borrowing. Banks with sufficient capital sometimes create new deposits without adequate reserves, and count on borrowing to meet the reserve requirement. That may leave the banking system short of reserves, and thus apply upward pressure on the interest rate in the Fed funds market. In order to defend its target interest rate, the Fed will supply the required reserves on its own initiative. Thus a net increase in credit issued by the banking system normally brings forth new base money. Non-Banks as Intermediaries Banks were once the main source of credit. Today NBFIs such as mutual funds, pension funds, finance companies, and insurance companies issue far more credit in total than do banks. Indeed, deposits created by banks now comprise less than 20% of the total credit market debt. NBFIs are ordinary intermediaries that lend by transferring their own bank money to the borrowers. For example, NBFI B borrows $1 million from investor A at X%, and lends $1 million to entrepreneur C at Y%. In effect, $1 million in A’s bank account is transferred to C’s bank account. No new money is created, but the total credit market debt increases by $2 million. B expects to earn (Y-X)% on $1 million. C expects to profit from its loan, pay regular interest, and pay off its debt to B when it comes due. B will then have funds to pay off its debt to A. What matters in this scenario is cash flow. Intermediaries typically borrow short to lend long, taking advantage of the normally upward sloping term structure of the yield curve (yield versus maturity). Such an intermediary must be able to roll over short-term debt on a continuing basis at favorable interest rates. If its credit standing is suspect, it may not be able it to borrow at all. Cash flow also depends on factors over which the intermediary has no control. Suppose the Fed raised short-term rates sharply. Not only might B be in trouble due to the higher cost of rolling over its short-term debt, but C might also find its income reduced. If C were unable to service its debt, B might also fail, in which case A could lose a good part of its investment. Systemic Risks The Fed has virtually no control over the total amount of credit market debt. However the real danger to the financial system is not in how much credit is created. It is in the cascading of debt relations in which a single default can result in a system-wide reaction.NBFIs are important players in a modern entrepreneurial economy, but they are not regulated as to their capital ratios or the type of assets they may hold. There is a constant danger of an over-leveraged NBFI having to default on a large debt. While the Fed or other financial institutions would likely come to the rescue, it is by no means certain that widespread havoc could be avoided under the rules that now exist. How is money used for payments? See the next page - link at the bottom
Money is on almost everybody's mind these days. Some believe money is the root of all evil on Earth. Others accept money and wealth as part of life and seem to have no problems with it. Some people try to reform the money based value exchange system, while others are engaged in its proliferation. Is there any secret to explain such opposite views and attitudes? Why not try to think - as suggested at the very beginning of this page - about money as one of the multiple forms of energy, though a very special and universal one? After all, money - in the widest possible understanding - is a form of energy, involving also emotions, feelings and thoughts... Everything is created through energetic vibration. Sound is a vibration. Light is a vibration. Matter is a vibration. Thought is a vibration. Emotion is a vibration. Everything is vibration. The only difference is the frequency range. Anything that vibrates at a specific pattern will attract like vibrations. This works on the chemical, physical, mental, emotional and spiritual level - LIKE ATTRACTS LIKE. The process of Creation starts with a sound vibration. It attracts a light vibration and thus energy composes all life forms and recording them in human DNA... The same applies to the form of energy we call money... The famous movie The Secret demonstrated that energy can be attracted and can be be managed by the human mind, if a person realizes how The Law of Attraction works in conjunction with other laws of Nature, of course. However, reading about the Law of Attraction or even watching the movie is one thing. Understanding it is another. And proper application is a whole another thing entirely. Even if you know the ancient secret of uniting the power of your thought and the energy of your emotion, it is still a great challenge to a newbie. What a beginner does need is a dead simple set of practical tips that can be followed easily. Is there such a solution? Yes - a new life changing software called the Attractor Genie! It is meant precisely for this purpose. It helps cut the long learning curve, to develop "mental and spiritual" muscles and the discipline to remain conscious of your thoughts, feelings and desires? With the Attractor Genie Software you can cut the Law of Attraction learning curve to just 7 minutes a day!
Find out all the details by clicking on the image above. Share this thrilling experience with a couple of friends to reduce your bill! Grab 7 practical tips Go to ALL IS ENERGY Go to SPIRITUAL EVOLUTION
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Money as Credit
