PEOPLE For  Mathematically Perfected Economy™ (PFMPE™)  :  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.

MORPHALLAXIS, January 14, 1979.

Invalidation of G. Edward Griffin's Creature From Jekyll Island Obfuscation

The traditional definitions of "inflation" and "deflation" respectively are increases or decreases in circulation per the assets the circulation is otherwise intended to represent.

Obviously then, the only way to solve inflation and deflation as defined is to maintain a circulation which is always equal to the current/remaining value of the assets it is to represent; and the only way to do that is to introduce so much circulation as the value of the asset, and to pay the resultant obligation off at the rate of depreciation or consumption (which are to be understood to be equal).

You can't do that if the obligation is subject to interest, because *for all cases*, more has to be paid out of the circulation than circulation exists: For each and every case, debt or circulation plus interest to be paid out of the circulation in servicing interest is greater than the debt or circulation which must be paid out of the circulation to solve inflation and deflation.

Besides making it impossible to solve inflation and deflation then, interest makes it impossible to pay for the work of others with an equal measure of our own work, because all the while that debt is multiplied in proportion to the circulation, ever more of the units of circulation is dedicated to servicing debt, with ever less therefore remaining for the intended purpose of sustaining commerce.

Furthermore then, interest makes it impossible to maintain a circulation which across its whole is at all times redeemable in and representative of the very things of value we the people intend for it to represent.

mike montagne

Saturday, May 31, 2008

Invalidation of G. Edward Griffin's Creature From Jekyll Island Obfuscation Of The Need To Re-borrow Interest To Maintain A Circulation

After tracing site traffic yesterday to a DailyPaul Forum thread started by the good Mr. Shovelhead, the kind of misunderstandings on which a republic will perish begged response to G. Edward Griffin's Creature From Jekyll Island obfuscation of the need to re-borrow interest to maintain a circulation.

From Griffin's suspicious twist, and even as debt continues to multiply in proportion to the circulation or our capacity to service debt, forum participants had drawn faulty conclusions either that it is impossible to perfect economy, or that it is not even necessary to solve inherent multiplication of debt by interest.

To Mr. Shovelhead's exemplary credit, he could not concur in the other reader's unqualifiable deductions. But the obvious expense of Griffin's resultant confusion therefore is collapse under untended further multiplication of insoluble debt, unless Mr. Griffin's reassurance that no such problem exists holds water.

Even if Giffin's intended point were true however, it provides no foundation whatever to rightly deduce that it is impossible to perfect economy, or that mathematically perfected economy™ does not solve the breadth of monetary improprieties observed by others, and assumably, even by Mr. Griffin himself (for he wrote a book ostensibly against an entity, the only imposed process of which is "interest"). But it is in fact impossible for Griffin's irresponsible obfuscation to represent the whole quantified cycle of interest, as it would have to, if his deception were to certify the impression he wants you to take from it.

Griffin's obfuscation instead is limited to the mere idea that one of the issues solved by mathematically perfected economy™ does not exist. The promise Griffin hopes an unthinking readership to assimilate, is that it is not even necessary or right to perfect an economy of multiplication of debt by interest, even as every debt subject to interest is multiplied even in its initial case by interest; and as perpetual multiplication, suffered merely in maintaining a circulation, certainly would result in collapse, and even the terminal conditions mounting everywhere around us.

We of course then cannot afford to underestimate or misunderstand the latter potential issue of inherent, irreversible and terminal multiplication of debt in proportion to a circulation, by interest.

But Griffin attempts to refute just this proposition only, by providing an example which cannot possibly account for multiplication of debt across a whole system subject to interest. In fact, to accomplish the purpose of invalidation, all those who deny the proposition of this terminal imperfection must demonstrate that no interest whatever is re-borrowed as would inherently increase the sum of debt in proportion to a circulation. Thus Griffin's obfuscation must account for every cent of interest paid out of the general circulation — something which we shall soon see is obviously impossible.

RELATED EXTERNAL MATERIAL

The Pledge of G. Edward Griffin's Creature From Jekyll Island

Rather than answering the issues raised in the principles of mathematically perfected economy™, Griffin simply invents and answers his own questions, ostensibly intending to invalidate the fact of inherent, perpetual, irreversible, and terminal multiplication of debt in proportion to a circulation, which obviously would be solved by the third aspect of mathematically perfected economy™. Even rather than to attack the obvious solution, he purposely further refrains from answering for the whole quantities by which interest multiplies debt in proportion to a circulation:

'One of the most perplexing questions associated with this process is "[1] Where does the money come from to pay the interest?" If you borrow $10,000 from a bank at 9%, you owe $10,900. But the bank only manufactures $10,000 for the loan. [2] It would seem, therefore, that there is no way that you - and all others with similar loans - can possibly pay off your indebtedness. The amount of money put into circulation just isn't enough to cover the total debt, including interest. [3] This has led some to the conclusion that it is necessary for you to borrow the $900 for the interest, and that, in turn, leads to still more interest. The assumption is that, the more we borrow, the more we have to borrow, [4] and that debt based on fiat money is a never-ending spiral leading inexorably to more and more debt.

This is a partial truth. It is true that there is not enough money created to include the interest, [5] but it is a fallacy that the only way to pay it back is to borrow still more. [6] The assumption fails to take into account the exchange value of labor. Let us assume that you pay back your $10,000 loan at the rate of approximately $900 per month and that about $80 of that represents interest. You realize you are hard pressed to make your payments so you decide to take on a part-time job. The bank, on the other hand, is now making $80 profit each month on your loan. Since this amount is classified as "interest," it is not extinguished as is the larger portion which is a return of the loan itself. So this remains as spendable money in the account of the bank. The decision then is made to have the bank's floors waxed once a week. You respond to the ad in the paper and are hired at $80 per month to do the job. The result is that you earn the money to pay the interest on your loan, and - this is the point -the money you receive is the same money that you previously had paid. As long as you perform labor for the bank each month, the same dollars go into the bank as interest, then out the revolving door as your wages, and then back into the bank as loan repayment.'

G. Edward Griffin — RECENT author of "The Creature of Jekyll Island"

ASSERTED QUESTION

"[1] Where does the money come from to pay the interest?"

mike montagne — 35-year advocate of singular solution

ACTUAL QUESTION

Griffin carefully re-paraphrases the real question to fit his answer and to avoid addressing the practical extent to which his obfuscation must occur to accomplish its purported result; and so, all the care he takes to avoid the relevant issues instead poses the question of whether all this prejudicial and such transparent design is mere gross mistake.

Mr. Griffin pretends to introduce a question as if it were never answered by other work existing long before his.

Certainly no one else was projecting from the early 1970s that we would suffer "economic" failure as a consequence of multiplication of debt by interest; and so I will answer for my own work in particular, which of course is the probable root source of the matter Mr. Griffin hopes to invalidate (however mis-explained or modified by ever more immitators).

From its beginning 40 years ago, my work and my initial inquisition into the subject matter realized that *some* multiplication of debt by interest may or may not be nullified by processes such as bankruptcy and consumption of our production by the so called financial institutions. My work furthermore recognized that an ultimate terminal state might or might not be forestalled by "growth," inflation of the circulation, etc.

Careful accounting for the potential interactions of these processes of course then was a reason to write the models I furnished the Reagan Administration, which indeed account for bankruptcy and other processes which reduce the multiplication of debt marginally, except in latter stages where gross bankruptcy may become critical.

So not only was Mr. Griffin's obfuscation accounted for long ago; the degrees or limitations to which his obfuscation might manifest have been carefully examined clear across literally thousands of entire potential lifespans of systems subject to interest. Mr. Griffin's impertinent story has already been accounted for.

Over its whole duration, my work therefore has been so careful as to express the quantity by which debt is increased by terms such as "so much as" periodic interest on the sum of debt.

So the real question is not Mr. Griffin's, but *how much* of the resultant periodic interest on debt will not increase the sum of debt, not just as in Mr. Griffin's example, but by further undesirable processes such as bankruptcy — which Mr. Griffin curiously does not even mention as a further obvious manifestation of multiplication of debt in proportion to means.

Mr. Griffin's example therefore can only hold sway if we refrain from scrutinizing it at all, because it no more proves that all interest can be (or is) restored to the circulation without multiplying debt any moreso than drinking a thimble of water and walking ten feet into the dessert prove the whole dessert can be crossed on a thimble of water.

It would seem, therefore...

[2] It would seem, therefore, that there is no way that you - and all others with similar loans - can possibly pay off your indebtedness. The amount of money put into circulation just isn't enough to cover the total debt, including interest.

It does not just "seem, therefore"...

Mr. Griffin's purported invalidation itself attests to the fact it does not just "seem" that interest paid out of the general circulation must be restored by other processes to avoid multiplication of debt by interest and dedication of more of the circulation to servicing debt, versus sustaining commerce.

In other words, Mr. Griffin's one case demonstrates that *in the case* (and thus in every such case), to avoid multiplication of debt by re-borrowing interest as would increase the sum of debt so much as periodic interest on debt... *every cent* paid toward interest obligations must be earned back by the subjects of the system.

His one case does not answer for how this can possibly occur across the whole system. It merely answers for one $80/week case.

In other words, for Mr. Griffin's attempted invalidation to hold water, *he must answer for how it is possible across the entire system for every cent paid toward interest to be earned back from the banks to which the interest is paid.*

A single *unaccounted* cent of interest therefore on the contrary invalidates Mr. Griffin's obfuscation, because it increases the sum of debt in proportion to the circulation.

Obviously, a continuous, perpetual such process then would continue to multiply the sum of debt in proportion to the circulation; and further still, if there are in fact trillions of dollars of annual interest which Mr. Griffin's obfuscation does not account for, then obviously debt is multiplied in proportion to the circulation, to the very substantial and terminal degrees which Mr. Griffin simply denies by gross err.

GRIFFIN'S ASSUMPTION HE IS INVALIDATING NECESSITY

[3] This has led some to the conclusion that it is necessary for you to borrow the $900 for the interest, and that, in turn, leads to still more interest. The assumption is that, the more we borrow, the more we have to borrow,

INVALIDATION OF GRIFFIN'S ASSUMPTION

It is not merely an assumption that it is "necessary" to re-borrow what we pay against interest obligations to maintain a circulation. It is a fact it is necessary to re-borrow what we do re-borrow (and what thus does increase debt in proportion to the circulation), because it is impossible across the whole system to work for the bank to the required degree that would nullify multiplication of debt in the form of Mr. Griffin's obfuscation.

FURTHER OBFUSCATION OF FIAT

[4] and that debt based on fiat money is a never-ending spiral leading inexorably to more and more debt.

MULTIPLICATION HAS NO CONNECTION WHATEVER TO THE FACT OF FIAT

Obviously, the process has nothing whatever to do with what material the money is made of.

What kind of "expertise" is this?

It is simply further obfuscation hoping to leave the reader with the unqualified idea that a magic material might insulate money from the "interest" attached to it. Yet of course, a debt represented by units of *any material* subject to interest would multiply debt in proportion to the circulated units to the very degree that it is necessary to re-borrow interest paid out of the general circulation.

ANOTHER GRIFFIN FALLACY

[5] but it is a fallacy that the only way to pay it back is to borrow still more.

THE ONLY WAY TO PAY IT BACK

I never said, and my arguments never required saying, the *only* way to pay it back is to borrow still more.

But the only way to pay *all* the eventual principal exceeding the circulation *and* interest back is to re-borrow whatever is *not* *perpetually* reintroduced by the so called financial system consuming *so much* of our own production as you have not accounted for, Mr. Griffin.

A PURPORTED "EXCHANGE VALUE OF LABOR" ACCOUNTS FOR ALL THE INTEREST PAID AGAINST DEBT?

[6] The assumption fails to take into account the exchange value of labor...

WHOSE ASSUMPTION?

No, Mr. Griffin, your assumption fails to take into account how incredibly much of our production the banks must consume directly from us to nullify multiplication of debt by interest.

SUMMARY

Even Ron Paul has used my term, "insoluble debt."

What makes *any* of our debt "insoluble," if in fact it is practical to repay it as Mr. Griffin evidently asserts?

What is wrong with Griffin's mere trivialization of the perpetual costs of interest?

If we're going to be a republic which resolves its issues, we must answer these questions.

As all the propositions which conflict with mathematically perfected economy™ beg us without qualification to behold that we suffer "inflated" circulations, nonetheless the money in circulation in fact is far less than the remaining value of all related assets. This means we suffer *deflation*.

Furthermore, because interest is the only process attached to the currency, actual deflation further means that the rising costs of all things can only be driven up by the rising costs of servicing the multiplying debt everywhere around us, as opposed to the unqualified proposition of circulatory inflation [another new/unique MPE term].

Moreover then, the further unqualified proposition that having circulatory inflation, we the subjects of the system would simply charge ourselves to death, trying to increase profit without need... this proposition cannot possibly even come to play.

These ideas are plainly hideous.

But far worse; they are even terminally destructive if for any of them, we further succumb to multiplication of debt by interest.

If the advocates of these opposing and more recent propositions were right on any count, then having the circulatory inflation we do not have, and further presuming Mr. Griffin's celebrated obfuscation refutes the very existence of inherent, irreversible multiplication of debt by interest, then how is it even possible that the present sum of debt exceeds the circulation, especially since we cannot have borrowed more circulation than we have borrowed?

The very inconsistencies of these vital quantitative irregularities instead refute the pretended expertise of Griffin's invalidation.

Look around you; how many of us are actually earning money from a bank? How much of our total production is consumed by banks? How much even can be?

In order for Griffin's obfuscation to invalidate the fact debt is multiplied by interest to the degree we are forced to re-borrow interest and principal as subsequent sums of debt increased *so much as* periodic interest on the sum of debt, *every cent* of interest and principal must be earned back by subjects of the system otherwise maintaining said circulation.

In other words, the only way that can happen is that whenever *we* build a house and have to finance our production with money created without cost and yet subject to the unjustified and unjustifiable processes of interest... if the bank charges us 2 or 3 houses in interest, then every time we build such a house, we must do so much as build the bank 2 or 3 houses to avoid multiplication of debt by interest.

All across the system, if debt is not being multiplied by interest, every penny of interest is being earned back from the so called banking system. If there is no such evil then, why did Griffin write his book so many years after the same history my work raised?

Because the so called Federal Reserve is private, when the effects of interest are the same, regardless of the public/private nature of the issuing entity?

We never have and we never will nullify multiplication of debt in proportion to the circulation by interest except by eradicating interest, because it is not even possible for the so called banks to consume so much of our production.

Nor would it be to our true benefit, if they did so.

RELATED EXTERNAL MATERIAL

RELATED PRIMARY ARTICLES

RELATED REFUTATIONS/REVIEWS OF CONTROVERSIAL MONETARY PROPOSITIONS

"To find the players in all the corruption of the world, 'Follow the money.' To find the captains of world corruption, follow the money all the way."

mike montagne — founder, PEOPLE For Mathematically Perfected Economy™, author/engineer of mathematically perfected economy™ (1979)

While 12,000 homes a day continue to go into foreclosure, mathematically perfected economy™ would re-finance a $100,000 home with a hundred-year lifespan at the overall rate of $1,000 per year or $83.33 per month. Without costing us anything, we would immediately become as much as 12 times as liquid on present revenue. Transitioning to MPE™ would apply all payments already made against existent debt toward principal. Many of us would be debt free. There would be no housing crisis, no credit crisis. Unlimited funding would immediately be available to sustain all the industry we are capable of.

There is no other solution. Regulation can only temper an inherently terminal process.

If you are not promoting mathematically perfected economy™, then you condemn us to monetary failure.

© Copyright 1979-2008 by mike montagne and PEOPLE For Mathematically Perfected Economy™. ALL RIGHTS RESERVED.Copyright 1979-2008 by mike montagne and PEOPLE For Mathematically Perfected Economy™. ALL RIGHTS RESERVED.

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