mathematically perfected economy™ (MPE™)    1  :   the singular integral solution of  1) inflation and deflation,  2) systemic manipulation of the cost or value of money or property, and  3) inherent, artificial multiplication of debt into terminal systemic failure;    2  :  every prospective debtor's right to issue legitimate promises to pay, free of extrinsic manipulation, adulteration, or exploitation of those promises, or the natural opportunity to make good on them;    3  :  our right to certify, to enforce, and to monetize industry and commerce by this one sustaining and truly economic process.

MORPHALLAXIS, January 14, 1979.

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The very reason you did not present any solution courtesy of Zarlenga or Brown is because neither author has one.

You asked that “if my main points are in error lay out the reasons why the logic is faulty.”

There it is.

Jim Eldon, responding to Jere Hough in regard to Hough’s article, “What We Must Do to Fix the Economic Crisis”


This article responds to Jere Hough’s OpEd News article, “What We Must Do to Fix the Economic Crisis,” in which Mr. Hough re-raises Ellen Hodgson Brown’s “Ponzi Scheme” metaphor, pleading, “A oppressive [sic] and destructive totalitarian world government run by the “Ponzi-Schemers” of our world awaits our failure to act swiftly and properly.” Advise Mr. Hough that no one more effectively impedes that than the authors he promotes.

I respond to Mr. Hough’s defense of Brown and Zarlenga to Jim Eldon, who defended himself perfectly well without my jumping into the fray. The reason is plain. Mr. Hough has obviously written me in the past; and if solution is to emerge from the perpetual stream of eleventh hour pretenders, of course we’re going to have to engage in all the battles, as follows.

Quotes of Mr. Hough’s response to Mr. Eldon are enclosed in the colored regions. The frame of reference is the original relationship as responded to Mr. Hough’s article at OpEd News.

Jere Hough wrote:

Andrew [sic (Jim?)],

Thanks for the comment, although I fail to see how contradicting my likening of our economy to a Ponzi Scheme contributes to an understanding of our most fundamental economic problem - our money.

Mr. Hough,

As we know each other well enough from your April 13 thru May 6, 2008 emails (which of course I am prepared to re-present here), and as you claim even here to be familiar with my work (only since then), I find it quite audacious that you claim further in your first of these emails to me, to have had many of the quotes from our quotes page on your computer for many years, while a prominent quote beneath your signature is an adulteration of a disputed Jefferson quote which originates from my pages (and 1979 work) and would concur in its most important observation with my 1979 thesis that any purported economy subject to interest ultimately terminates itself under insoluble debt. The very quote you borrow unknowingly from me then, itself implicitly disputes the unqualified assertions of your recommended authors.

Jefferson of course did not even loosely allude to any aspect of inevitable failure as a consequence of a purported necessity to “invest” in the economy. Nor did any of the founders but Hamilton advocate that “money” should be obfuscated into such a thing as would obviously make it a vehicle to exploit the whole of industry to its inevitable demise; and of course, the very quote under your signature was offered as an explicit invalidation of Hamilton’s proposal, which Jefferson recognized would dispossess the country just so.

Furthermore of course, you don’t have an original source for that quote (which comes from my pages and 1979 work), do you Mr. Hough? Well, would it be you acquired it from your friend Zarlenga then, who like Jaikaran, Brown, and so on, curiously pays no credit to my work whatever, but follows the very course of my same research without even turning up a further key fact or instance of logic resolving the problems at hand beyond what I did so long ago, and all this to raise a purported solution Zarlenga himself confesses does not solve all the involved matters (is not a solution)? Ms. Brown will not even answer vital questions of her purported solution; and she disqualifies the very essential process (like you?) by denying (outright in her case, on these very pages) that interest is the problem — while of course, it is the very one and only feature of the subject currency which distinguishes it from a neutral, inert token of value (as most of us would intend of it); and while of course it is this very feature of the currency which Jefferson meant to identify by accusing this property in its inherent association with banks, and therefore even as something he distinguished would not at all be in the interest of just government to do. Is it not incredibly odd in fact then, that if Zarlenga implicitly or explicitly denies my thesis of inherent failure, and that as you concur, you yet brandish the very words of Jefferson which sustain my thesis?

I find your copy of this disputed Jefferson quote a bit curious then in regard to your recommendation for further reading, and particularly in your implicit denial yet that my work demonstrates the fact of singular solution it has claimed for 30 years. As we both know, you have a personal problem with my rejection of your appeal to recognize these late comers, who saw opportunity in raising the issue for the sake of solution, even as none of them have invalidated the proposition of *singular* solution set forth 30 years ago. How many solutions to inflation and deflation are there, Mr. Hough? More than 1? How many solutions are there to inherent, irreversible, and terminal multiplication of debt by interest, Mr. Hough? More than 1? How many integral solutions are there then, Mr. Hough? More than 1? If you are familiar with my work, which you have never invalidated either, how yet is it you dispute the one and one only solution that work has, for 40 years, been all about?

Of course, the prophesy of today attributed to Mr. Jefferson and deriving from my work, has spread all across the internet for many years. But the first instances of it practically anyone can find is my 1979 work, and pre-web bulletin board documentation to the computer models I provided the Reagan Administration. Do you have an earlier source, Mr. Hough? No. The *disputed* quote then has only so circulated by so many others, who have likewise tweaked a word or two here or there to pretend originality (likewise without source of course), to claim the words without attribution likewise, and only to raise yet another half baked idea that derivatives or some other manifestation far downstream of fundamental cause is the underlying problem. Does “It’s the derivatives, stupid,” ring familiar in your recommended reading? Is it not even curious that title plays further from my far older article, “It’s the interest, stupid”?

You realize nonetheless Mr. Hough, that the integrity of your mere appeal on behalf of the unqualified and differing purported solutions of your eleventh hour author friends, hangs on whether your likening of the nature of the money to a Ponzi Scheme (like theirs) endows anyone with any capability to recognize (or understand) anything.

The first thing that smells about this proposition of a Ponzi Scheme (to anyone mindful of the vital differences), is that a person who deciphers the simple causes of the circumstances we now suffer is hardly disposed to use such careless terminology. On the contrary, a characteristic of revealing analysis is unwavering dedication to exacting terms which represent everything that is to be understood. People who seek to understand obscured, ambiguous things Mr. Hough, give every element and every process vital names, evoking exactly what must be understood about their role in what we are seeking to solve. The only adequate names of discovery are full, accountable expressions themselves. Upon realizing that a circulation subject to interest compels perpetual borrowing merely to maintain a vital circulation; and upon realizing that so much as we must re-borrow principal and interest paid out of the general circulation in servicing debt, this will inherently and irreversibly increase the sum of debt so much as ever greater periodic sums of interest on an ever greater sum of debt; and upon realizing that this inherent process therefore is terminal, the last thing the perceiver of the problem is going to do, Mr. Hough, is jump from their seat and shout, “Ponzi Scheme!”

Nor, understanding the process Jefferson was reaching for, would the perceiver or solver of the problem think to argue for their purported solution by dismissing the vital arguments. They wouldn’t dream they’ve done the world a favor by rejecting their own diligent ascertainment of the nuances which compel this manifestation of failure, by obfuscating prose. They wouldn’t dream furthermore that the prose for the described terminal process, which can only be understood in said terms, is your (and their) eleventh hour expression, “Ponzi Scheme.” The person who has carefully unraveled these things wouldn’t dream anyone at all could construct in their mind an actual understanding of the cause of failure from this extremely compromising obfuscation of their vital perceptions. Most prominently of all, they would know full well that no one but no one but no one could possibly understand or develop solution from this remarkably improbable expression, “Ponzi Scheme,” because in the least, the student of the idea of solution would have to re-construct the whole cause and in fact too invent the actual solution from a term which doesn’t even provide the first clue how to do so. Can you show us how to re-construct the cause and solution from your term, Ponzi Scheme, Mr. Hough?

Now, because you can cite some further pretender who cannot cite the real problem who also advocates such a futile description (and has no interest in solution), does that make your bankrupt expression right? Of course not. But that’s the only argument you offer, because there is nothing else to offer in defense of your eleventh hour term which no one is recognizing solution from.

Of course still, it would be plagiarism if your eleventh hour friends pretended to author an explanation that to maintain a vital circulation inevitably requires re-borrowing principal and interest as subsequent sums of debt, perpetually increased by so much as periodic interest on an ever greater sum of debt, until the system succumbed to a terminal sum of debt which it could no longer afford to service, and which inability to service rendered it incapable of qualifying to assume further debt, as is necessary yet to continue replenishing the circulation. You say in your first email, that “Some of your [my] ideas seem pretty complex.” But tell me, does the sentence you just read not reduce the whole 600 pages Ms. Brown claims and whatever Zarlenga has ever written, to the fundamental cause of failure (in far less)? Is there some more simple explanation? Or is it that your friends can’t put that explanation into fewer, equally accurate and accountable terms, even after knowing my explanation, as they surely do?

I assert it’s yet another thing; and that their real goals (particularly as they dismiss my proposition of singular solution) are sufficiently obvious that I don’t even need to tell anyone here what makes these adversaries of solution tick, while they haven’t raised a further relevant issue, and refuse even to defend their eleventh hour propositions.

Nonetheless, the extinguishability/discountability of the vital terms/expressions you exalt is impermissible in any genuine discipline. Certainly neither I or any other person reads the essential meat of the matter from the definition of a Ponzi Scheme. As I wrote to Ellen in this ongoing controversy, “Ponzi Scheme” is no more useful than to call “bankers,” “bad men.” So I never called this inherently terminal process a Ponzi Scheme, not once since I authored the present explanation 30 years before your friends arrived to offer compromised adulterations and pretended solutions which neither you nor they have ever qualified.

How sloppy is all this? I note in your adulterated version of my quote of Jefferson that you capitalize your attribution, “THOMAS JEFFERSON.” What does that mean, Jere? That we should respect what Jefferson tells us? That you understand what he’s telling us, that a form of money multiplies indebtedness to complete dispossession? Or it is instead the right of government to issue that form of money, as you later assert in your article? Will that form produce a different consequence, if it is issued by the government? Absolutely not! Neither then was that what Jefferson was trying to tell us. So you accentuate the author, while academics attribute the quote to me, and while the whole of its content points not to who issues the currency, but the nature of the currency, which produces in those same words, an inevitable outcome: “first by inflation and then by deflation [by having to maintain a vital circulation by perpetually re-borrowing principal and interest as subsequent sums of debt, increased perpetually so much as periodic interest], the banks and [bank owned] corporations which will grow up around them will deprive the people of all property, until their children wake homeless on the continent their fathers conquered.”

Here is a perfect example of demeaning the vital issues:

Jere Hough wrote:

This money-monopoly essentially loans money into existence at usurious interest rates, usurping the money-creation powers granted to congress by our US Constitution: Article 1, Section 8.

As you know if you are really familiar with my work, I explained 30 years ago how there is no valid claim to alternate usurious or non-usurious rates of interest rates. Any practical rate of interest inherently and irreversibly multiplies debt in proportion to the vital circulation. By contemporary definition then (unless you agree with my work), rates currently being charged are explicitly non-usurious!. No ifs ands or buts about it!

Nor then is the problem your purportedly usurious rates (according to the conventional definition, or mine?). You, Zarlenga, and Brown of course advocate lower rates, which only multiply debt at a more moderate but equally terminal rate. Look around you. We’re suffering failure under “non-usurious” interest rates right now, and the reason is those rates multiply debt in proportion to a vital circulation.

Jere Hough wrote:

This corrupt system works exactly like an enormous “Ponzi Scheme”. If you have been following, or learning from, the current new stories of the Bernie Madoff “scandals”, you should be familiar with the term, Ponzi Scheme. Still, few people actually understand the mechanic’s of a “Ponzi Scheme” or fully comprehend what separates that form of complex fraud from a legitimate investment. In short, a Ponzi Scheme is a kind of “pyramid scheme” designed to enrich the early investors, those at the top of the pyramid, from the funds coming into the pyramid from new “investors” (victims) later. Little or no real product or valuable service is produced. Money is only transferred from new investors (victims) to earlier ones, so as to give the appearances of profitability.

“Exactly like.” Is that right?

If there were no Bernie Madoff at all, Mr. Hough, the purported economy would fail under a terminal sum of debt. The only parallel to a Ponzi Scheme you even draw here is a metaphorical position in a metaphorical pyramid. Oh sure, the scheme is designed to enrich the people in your metaphorical position. But actually, the whole vehicle of exploitation depends on an implicit and unavoidable obligation to maintain a vital circulation, sufficient to service original obligations comprised of principal and interest from a circulation comprised only of the principal. The exploiters however are not investors; and the method of exploitation is certainly not investment.

The method of the usurers is only to publish our promises to pay each other, at virtually no cost to themselves. Is that “exactly” how a Ponzi Scheme works, Mr. Hough?

Indeed they eventually “invest” some of our promises to pay which they multiply by interest — a thing in fact wholly absent from a Ponzi Scheme. But that isn’t the cause of the failure, is it Mr. Hough? Are we failing because “investors” own industry? Are the purported monetary systems of the world failing because the people have invested in the government when they borrow money? Hah! The systems of exploitation which have been imposed upon the world are failing Mr. Hough, because you have to borrow this form of money if you are denied mathematically perfected economy™; and because if you do borrow your own promise to pay from the usurer, you can only borrow more, and more, and more, and more, merely to maintain a circulation which will permit you to service the accumulating sum of debt until you suffer a terminal sum of debt. That’s the scheme, Mr. Hough. And sorry, Ponzi didn’t invent it. It existed for thousands of years before Ponzi.

And so the real problem here is the eleventh hour advocates who deny solution, or continue to raise false ones. Your eleventh hour literary champions haven’t even advocated that an economy allow us to pay for our production in every case, with an equal measure of our own production. Why not, Mr. Hough? Why not provide for the people to trade their production as they would otherwise see fit? Is it to any benefit at all that we let someone here or there take from them? Or is it a human right to issue our own promises to pay, free of extrinsic manipulation, adulteration, or exploitation of those promises, or the natural opportunity to make good on them?

If we take your paper at face value Mr. Hough, there is no solution. It would seem to me that if you can defend that implicit or explicit message, you are well prepared to invalidate that mathematically perfected economy™ is the singular (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 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.

Which means inevitably that you can prove there is a better solution, and that it will be to our disadvantage, if we enable ourselves to pay for instance for a $100,000 home with a hundred year lifespan, at the overall rate of $1,000 per year, or $83.33 per month. Essentially then Mr. Hough, the arguments we are waiting for from you sustain 10,000-plus homes a day going into foreclosure, for the sake of reading Stephen Zarlenga or Ellen Brown, who have never produced a monetary model in their lives capable of projecting or solving the present issues. Much less were the models they never produced accurately projecting an inevitable collapse as explained in the aforesaid terms, to transpire (conservatively) at approximately 2010 AD. You can still download those models and run that projection from the pages you deny offer solution, Mr. Hough.


“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)

© COPYRIGHT 2008, by mike montagne and PEOPLE For Mathematically Perfected Economy™.

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mike montagne — PEOPLE For Mathematically Perfected Economy™.

"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 — PEOPLE For Mathematically Perfected Economy™

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 1979-2009 by mike montagne and PEOPLE For Mathematically Perfected Economy™. ALL RIGHTS RESERVED.COPYRIGHT 1979-2009 by mike montagne and PEOPLE For Mathematically Perfected Economy™. ALL RIGHTS RESERVED. TRADEMARKS: PEOPLE For Mathematically Perfected Economy™, Mathematically Perfected Economy™, Mathematically Perfected Currency™, MPE™, and PFMPE™ are trademarks of mike montagne and PEOPLE For Mathematically Perfected Economy™, perfecteconomy.com. ALL RIGHTS RESERVED.


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