My Response to Jim Rogers’ Appeal to Abolish the Fed

BACKGROUND MATERIAL

1. Kurt Nimmo’s Infowars article regarding Jim Rogers’ Appeal to Abolish the Fed (TO WHICH THIS BLOG ENTRY ORIGINALLY RESPONDED)
2. Jim Rogers’ Appeal to Abolish the Fed (GOOGLE VIDEO)

Without much apology I must report that Mr. Rogers’ propositions cannot suffice as solution; and so for the benefit of all of us (however few) who may actually want to solve the underlying problems, I would like to make a few things clear:

People like Ron Paul and Mr. Rogers are jumping up and down about “inflation.” But inflation is not the issue; and we can readily prove so. They’re not even paying attention to definitions… and as a consequence they *cannot* preach solution:

Inflation is traditionally defined as an increase in circulation per goods and services. Ron Paul and Jim Rogers are telling you we have inflation; Ron Paul repeatedly asserts that federal over-spending is inflationary, that it is driving the worth of the dollar down; and in the present video piece Jim Rogers asserts similarly that issuing treasuries falsely props up the purported securities market and drives the value of the dollar down. Well he’s right about falsely propping up the securities markets, which indeed are thus bound to give up the false gain in some multiplication of loss.

Careful observers will note however that while both men may be correct in observing certain [not necessarily linked] causes and effects, there isn’t a single theorem and proof which establish that said cause engenders “inflation,” or that “inflation” comprises the threat of recession or even collapse. Of course, if we are to solve the problem (whatever it is), we must identify and solve its true cause.

What is it? How can we show that these things lead to rising prices and destruction of the value of the dollar? How can we show that in turn is a cause even of possible inevitable failure?

First of all then, do we actually have “inflation?”

Well there are two unrelated usages of the term. The first is its traditional definition; and the second is merely an unqualified interpretation for which no proof whatever exists that the second is caused by the first (even as this is the usual assumption):

1. an increase in circulation per remaining value of related production/assets;
2. price inflation — that is, increasing prices, ostensibly/purportedly *caused* by traditional inflation (a).

These are two different things; and it has always *only been theoretical* that the latter is caused by the former.

Now it is easy to assume that we have an increase in circulation per remaining value of related production/assets if we have federal overspending, because indeed money is being created and loaned into circulation to finance further production/assets. But *only* if the circulation introduced is *more* than the value of the production/assets then can we *possibly* have inflation!

How do we establish even that we have inflation then?

If money is loaned into circulation as a debt subject to interest, then if we are to understand the ramifications of money we must understand two things:

1. The resultant obligation (principal plus interest) or ultimate cost of the initial circulation (principal) is greater *in every case* of created circulation (principal);

   Some of the principal circulation then is dedicated to paying off an obligation which is often substantially greater than the circulation; and which thereafter multiplies further, as we maintain the circulation by re-borrowing interest and principal as subsequent sums of debt.

   Thus even from the outset, more circulation is dedicated to servicing debt than the cost of the original production/asset; and this may make it *impossible* if not impractical to raise prices, because so much circulation (equal to the original value of the related production/asset) is devoted instead to servicing debt.

2. *IN NO PRACTICAL CASE* is it possible then to suffer actual inflation, because *always*, we never put more currency into circulation than the value of what it is introduced for.

So let’s put this careless misunderstanding to rest, because if we do not, we will never solve our real issues; and we will therefore suffer inevitable collapse for whatever causes inevitable collapse. We never have and never will otherwise solve the cause or avoid its consequences.

If we don’t have *actual* inflation of the circulation per value of related production/assets, and particularly as ever more of the circulation is inherently devoted to servicing debt, then how nonetheless do we suffer perpetually increasing costs (which cannot concur with the assumed cause of “price inflation” as defined [b])?

The perpetually rising costs of all things subject (directly or indirectly) to debt increase as a consequence of the nature of the currency; and cannot be rectified without rectifying the nature of the currency (which in fact is terminal).

To understand all the trouble related to the nature of the currency, we must examine the lifespan of a dollar as neither Mr. Paul, InfoWars, or Mr. Rogers evidently ever have:

To say that a dollar is “created out of thin air” gives us nothing whatever to understand in terms which are vital to solution. As every dollar is loaned into circulation as a debt subject to interest, *thus to keep every dollar in circulation*, we must perpetually re-borrow whatever principal and interest we pay out of the general circulation. Thus it is impossible to pay down the sum of debt, because all the principal we pay off against former debt must be re-borrowed as new principal/debt, equal to the old.

But as we must re-borrow interest too to replenish the circulation, and as interest counted none against the former principal, then what periodic interest we re-borrow comprises *new* debt above the previous sum of debt; and thus the sum of debt of any such currency inherently increases by so much as periodic interest on debt, until the sum of debt is so great that surviving commerce can no longer afford to service debt.

Thus Mr. Rogers and Mr. Paul are wrong in their assertion that printing money is causing the failure of the dollar. What is causing the failure of the dollar, or more properly, the monetary system, and why we have to terminate the so called Federal Reserve System, is the usurped nature of the dollar. That is, the so called Federal Reserve System, in privatizing the currency, made the dollar such a thing as irreversibly multiplies debt in proportion to the circulation until the system collapses.

I further note then in regard to this discussion that Mr. Paul has even backed off from his proposition that we terminate the Federal Reserve; and that neither Mr. Rogers or Mr. Paul advocate eradicating interest. Nor do they advocate the singular solution to inflation and deflation.

It is not possible for the propositions of either of them then to avert economic collapse as a consequence of artificially multiplied debt (for unearned profit), or to give us a currency with consistent, enduring value. In the cases of both, interest would continue to multiply debt in proportion to a circulation until we suffer near term collapse. In the cases of both, the circulation would have no consistent value, particularly as Mr. Paul’s futile hope of restoring the gold standard can only result in a further deflation of the circulation, which, in regard to the obligations to service existent debt, has no potential but to engender collapse even sooner.

Nonetheless, there is one and one only integral solution to 1) inflation and deflation; 2) systemic manipulation of the cost or value of money or property; and 3) inherent, irreversible, and terminal multiplication of debt by interest:

Of course, we can only solve inherent, irreversible, and terminal multiplication of debt by interest… by eradicating interest. We can also only solve *price inflation* by eradicating interest, because the only systemic attribute which inherently and irreversibly drives up costs and diminishes margins of solubility is multiplication of debt by interest. This is because interest inherently, terminally, and irreversibly multiplies debt in proportion to a maintained circulation, and thus ever more of such a circulation is inherently dedicated to servicing ever greater debt.

Similarly, we can *only* solve the traditional definitions of inflation and deflation by maintaining a circulation which is always equal to the remaining value of the production/asset for which the currency is issued. This means that to solve all of these things together, y) we can only incur debts/obligations *equal* to the money borrowed into circulation (principal); and that z) we *must* pay off the resultant interest free debt at the rate of depreciation or consumption of the related production/asset.

Nothing else and nothing less solve terminal multiplication of debt, and either definition of inflation and deflation.

Finally then, because the cost or value of money or property are only intrinsically manipulated by way of interest, inflation, and/or deflation, systemic manipulation of the cost or value of money or property therefore is solved only by the combination of the first and third solutions.

Thus nothing else and nothing less solves systemic manipulation of the cost or value of money or property, either; and no other monetary prescription engenders consistent value of the currency.

So how does mathematically perfected economy™ work?

If we have a $100,000 home with a 100-year lifespan, then we must pay the debt for the home off at the overall rate of $1,000 per year, or $83.33 per month.

We thus have established the only fixed linkage which perpetually preserves the value of the money by its absolute, perpetuated relationship to the very remaining value of the thing it represents. Likewise, we have the only system in which we can pay for the production of others with no more than an equal measure of our own work.

While I respect and salute Mr. Rogers for his many truthful assertions, I respectfully submit then that as in the case of Mr. Paul’s assertions, his are not quite drawn together as accounts for our probable demise, nor as can solve the causes thereof.

Respectfully,

mike montagne — Founder of PEOPLE For Mathematically Perfected Economy, and author of mathematically perfected economy (1979)

PS. I’ve been asked to ask Alex once again why he hasn’t had me on his show. Meria Heller has now beat Alex to the truth — and a huge thanks to Meria for that.

ADDENDUM

Two other things:

1. Mr. Rogers asserts that recessions are completely natural and even good. Similarly, Dr. Paul has asserted in different ways that straightening all this out will be painful. Not so at all.

   The recessions to which Mr. Rogers refers are wholly a consequence of the artificial manipulation of the cost or value of money or property which is intrinsic to usury. Eradicate all this artificial manipulation by implementing mathematically perfected economy™, and the artificial recessions and depressions will disappear like a fake rainstorm from which you’ve stolen the hose.

2. Similarly, Ron Paul asserts we must suffer to right our ship. Likewise, not so at all. We can transform a usury “economy” into mathematically perfected economy™ without any pain at all; and I showed how to do so better than 30 years ago.

   This of course would have been about the time Dr. Paul began to study “Austrian Economics,” which neither recognizes mathematics, nor that interest inherently and irreversibly multiplies debt in proportion to a circulation.

RELATED MATERIAL

1. Google Austrian School Economics in a separate tab or window
2. PROBABILITY AND TIMELINE FOR WORLD-WIDE ECONOMIC COLLAPSE AS A CONSEQUENCE OF INTEREST
3. WHAT IS Mathematically Perfected Economy™?
4. WHY AND HOW USURY HAS BEEN IMPOSED ACROSS THE WORLD
5. PARABLE OF PERFECT ECONOMY ? HOW USURY COMPELLED THE AMERICAN REVOLUTION
6. PURPOSES OF THE DECEPTION THAT INFLATION IS CONTROLLED BY INTEREST (USURY)
7. RELEVANT HISTORIC QUOTES
8. THE FALSIFIED ARGUMENT THAT RISK JUSTIFIES INTEREST (USURY)
9. WHAT IS FREE ENTERPRISE?
10. WHY PRECIOUS METAL MONETARY STANDARDS CAN ONLY FAIL
11. WHAT IS USURY?

REFUTATION OF CONTROVERSIAL MONETARY PROPOSITIONS

1. [ NEW ! ]  Why Pre-MPE™ Austrian School Dogma Can Never Solve Our Issues
2. [ NEW ! ]  A FATAL FLAW OF AUSTRIAN SCHOOL ECONOMICS ? COMPLETE REJECTION OF MATHEMATICS?
3. [ NEW ! ]  REGARDING INTEREST THEN, DOES AUSTRIAN SCHOOL ECONOMICS NOT HAVE TITLE TO LIBERTY AND RIGHT REVERSED?
4. [ NEW ! ]  William B. Ryan Kent State University Capital Ownership Group Forum Ad Hominems Disprove Mathematically Perfected Economy™?
5. [ NEW ! ]  Example Austrian School Rejections of Mathematically Perfected Economy™
6. [ NEW ! ]  What’s Wrong With Ron Paul and Milton Friedman’s Idea To Stop Expanding The Money Supply?
7. [ NEW ! ]  What’s Wrong With Social Credit and Douglas’ A + B Theorem?
8. [ NEW ! ]  The Broken Ideology: Monetary Narcissism Condemns Its Own Progeny To Destruction
9. [ NEW ! ]  Has Anyone Ever Disproven Mathematically Perfected Economy™?

This entry was posted on Monday, March 17th, 2008 at 6:39 pm and is filed under CENTRAL BANKS, WORLD BANKS, FEDERAL RESERVE, Mathematically Perfected Economy, RON PAUL, UNASSENTED GLOBALISM, events and politics, theory and implementation, usury. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.