Commentary in both the mainstream press and on most websites posturing as purveyors of sound investment advice or macro-economic analysis endlessly promote the meme that ‘fiat currency,’ often conflated in the same breath with ‘money printing,’ is the crux of what ails both finance and modern economies more generally.
No distinction is made between, on the one hand, currencies that are in fact and in effect the ‘private’ issuance of financial corporate cartels masquerading as government institutions and, on the other hand, currencies that could actually be the ‘public’ issuance of a finance sector operating in the mode of a public utility.
‘Fiat money,’ as such, and ‘money printing,’ as such, are not the design flaws inherent to modern banking. The real design flaw is that modern banking is the privately owned and privately operated financial arm of an economy serving private corporate interests over the interests of the public as a whole.
To clarify my point, consider the difference between the following two scenarios:
In a privatized economy you have a privately owned ‘central bank’ that issues the only legal currency of trade and payment in that economy. To purchase goods and services in that economy, the only thing that the cartel that owns the ‘central bank’ needs to do is ‘print itself the funds it needs’ to buy those goods and services, since it has in its possession, so to speak, the press that prints that money. Everyone else living under the legal constraints of that privatized economy must offer up some good or some service in order to acquire the currency needed to buy those other goods and services that he or she cannot get but through purchasing them by means of the legal currency in the ‘free’ market. In such an economy, clearly, the cartel that both owns and controls the ‘central banking’ function of the economy gets a free lunch, by availing itself of virtually interest free capital that it then turns around and loans out at steep markups in interest, and all at the expense of everyone else who is not a member of that cartel, which is pretty much 99% of the population. (As it happens, this is precisely the kind of economy in which we live and which is in the process of being institutionalized globally. This is what all of the major wars and geopolitical confrontations are primarily about.)
In a truly ‘free’ economy you have a ‘publicly’ owned ‘central bank’ that issues the only legal currency of trade and payment in that economy. Because no private cartel exists behind the bank to avail itself of the currency without actually having to give up any goods and services for the privilege of spending that currency into the economy, no one in the economy can acquire the currency itself without actually producing something to get at that money. And the way that the money gets into circulation is precisely as in ‘Scenario I,’ through the mechanism of bank loans or credit, only without the steep markups in interest that presently plague all of us not fortunate enough to be among the privileged .001% of our population and who, by ‘owning’ the legal power to issue currency, effectively also ‘own’ the economy in its entirety.
If banking was a ‘public utility,’ loans could be issued at virtually zero interest and for the purpose, not of parasitically speculating by the trillions upon trillions of dollars in the derivative markets, but of creating small scale enterprises actually producing goods and services useful for human consumption, as well as creating employment for all.
The fiat dollar is not the problem. Money printing is not the problem. The problem is the manner in which the money being printed is entering into (or failing to enter into) the economy and, therefore, by implication, who exactly it is among us who controls the issuance of that money.
For a more thorough explication of banking and finance and what is really wrong with it, but more importantly, how it could easily be fixed, see the works of Ellen Brown and Michael Hudson.
You can find Ellen Brown here: http://ellenbrown.com/
You can find Michael Hudson here: http://michael-hudson.com/
Go forth and illuminate your mind – at least on this particular issue. It’s only a couple of mouse clicks away. Brown and Hudson are obligatory reading. Seriously. That is, if ignorance could justly be said to be, in this day and age, more than just a tad criminal. Then instruct your friends, spouses, acquaintances, and children on the issue. Because as it happens, it isn’t at all an exaggeration to say that ‘our’ future actually depends upon an understanding of this particular matter.