"John Smith" wrote in message
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On 7/2/2011 3:23 PM, Ed Huntress wrote:
"John wrote in message
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On 7/2/2011 12:22 PM, Ed Huntress wrote:

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We don't even have a money system, we have a system based on debt. You
need to learn the difference between the two.

I'm not sure how you decide it's a "system based on debt." In regards to
our
national accounts, since 1980, we've accumulated about a year's worth of
GDP
in debt. So it's mostly not debt.

Do you have a better explanation for what you mean?


Here is a spoon feeding, it seems there is bunch of you guys who were
sleeping or lack the where-with-all to get a grip on it:

http://www.gold-eagle.com/editorials...rom082307.html

Eh, I should have remembered: the Grignon pitch. This Nystrom guy appears to
be a small fry who's parroting Grignon's economic theories, which are
re-writes of Murray Rothbard, Lew Rockwell, snd some others in the Austrian
School clan.

The short take is that it doesn't matter that the debt is greater than the
amount of money in circulation. The proof is that debt does not expand
exponentially with the creation of new money, as Grignon says it must. The
reasons are that there are many monetary actions that central banks use to
control money supply; the money multiplier inherent in fractional-reserve
banking is just one of them. It wouldn't take many cycles of multiplication
through the fractional-reserve system before interest rates would be through
the roof, if Grignon et al. were right.

You're talking about heterodox theories that require book-length arguments.
We've been using fractional reserves for over 200 years, which, again, if
Grignon were right, would have bankrupted the economy and frozen credit into
an immovable mass at least a century ago.

So the evidence isn't there. If you believe it, so be it.

--
Ed Huntress