Aljazeera: Debt-free Money May Well Be the Solution

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What’s all the fuzz about money?, asks Aljazeera in its article on 5th April

Debt-free money may well be the solution to restoring a sane monetary system.

What if money itself needed to be changed? This is not a debate about the financial system per se, but actually an argument about the intrinsic “design” of money.

But, isn’t money just money? No, it isn’t, and paradoxically, though the debates precedes its emergence, the internet played a big role in teaching us a new truth: Money is designed, and that design matters.

Today though, money creation has become a largely private affair. Not only is government money created through debt, but most money in circulation is also created through the leveraging of banks. Most of the money is lent into existence and thus essentially created by private banks in a system of generalised compound interest.

You can read the whole article here.

 

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  • http://twitter.com/granchinhojp João Granchinho

    Nice article. I just disagree with the author on Bitcoin being a solution. Allocating computational power to search for a given pattern to create new currency is simply wasting resources. To anyone interested here’s a nice post explaining why: http://www.colorfulwolf.com/blog/2011/05/31/resources-are-being-utterly-and-completely-wasted-on-mining-bitcoins/

    • JohnMorrison

      The fundamental problem with Bitcoin is that it is peer to peer and controlled by an algorithm. Once established it is beyond the control of any human agreements. The algorithm becomes an immutable god and humans merely play for their own self interest under its reign with disastrous consequences.

      I dislike it because it puts us the the hands of a god algorithm and I dislike it because it concentrates seigniorage in the hands of those with access to computing power. 

      Money works best as a social agreement and if we don’t trust our leaders to manage our social agreements then we urgently need to improve how we choose them.

      • Ignacio de Torres

         You are right, and it may well be added: Computation is NOTHING. You may instruct a cow, a monkey, a slave or a machine to do this or that.

        And you and others may accept the play because there is a previou agreement on it – or the imperative order of a powerful despot.

        Legal, juridical relationships are everything. Numbers are NOTHING in itself, mere practical and accepted SIGNS – which, by virtue of such acceptance become exigible on a Justice Court-and hence become able to distribute the outcome – i.e., PROPERTY-, of a social play, AKA “society”.

        Rules of Black Jack or Monopoly are the only important thing, since by themselves create the play and any and all “values”-valuable things- generated by the play.

    • Felix Manchowder

      So, from what I understood of bit-coin is that it is using electricity to generate money. It doesnt change the fact that the majority of the electricity generated in this country still comes from fossil fuels which are finite. Moreover, bit coin is getting harder and harder to mine which means more and more electricity and money on buying computer equipment is being spent, which means more and more of our finitie resources are being used. So, even though it is debt free money it is currently relying on current fossil fuels to be generated.
      Moreover, it seems that it doesnt solve the problem of inquality. The fact the people with more powerful computers get more bit-coins than others therefore giving them more financial power than others.

    • simon

      The computation power used for bitcoin mining is not completely waste-full because it reinforces the integrity of bitcoin transactions in a public ledger called the blockchain. for more info, see: https://en.bitcoin.it/wiki/Introduction

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