Monday, January 28, 2013

Economic Answer for America and Third-World

Issues with MPE:

1. If you dont retire money out of the economy fast enough, it circulates and causes inflation. This is caused by the VELOCITY of money.
2. If everyone is paying off their house at the rate of deflation, people don't own anything. Everything is leased and comes with lease-use regulations just like leasing a car.
3. Freedom problem. The system requires centralized deciderers.

The answer to this is the Safety Society System:
1. US Constitution says Congress shall "coin" or create money and regulate its value.
2. Money is created at loan approval based on real value of labor and materials.
3. Loan approval administered on the local level by local Safety Society Bank based on income/debt.
4. Money is lent with no interest and a fee only.
5. Loan-origination fees and service fees cover local bank overhead as they do now.
6. Federal Government also charges fee/tax at origination which can regulate borrowing, value of money.
7. Loan is paid back monthly, and equity is earned immediately
8. Late payments are deducted from equity. Loan can become reverse motgage and protect borrower from default until equity is exhausted.
9. Repaid money is returned to Congress/Treasury and retired.
10. Potentially limitless new money is availible on-damand when borrower is credit worthy to purchase real asset with intrinsic/repossessible value.
11. Local Bank protected by loan defaults by instant reverse mortgage mechanism, and repossessed item has intrinsic value and can be re-sold.
12. SSS is full reserve lending. Deposited money never used for loans. Depositors protected from risk-taking of lenders.
13. SSS is immune from failure.
14. Homes are paid off quickly and repaid money is retired so as to not cause inflation due to velocity (circulating money).
15. Economy is inflation and deflation proof because new money is availible at the immediate time it is needed and qualified for, and old money is retired out of circulation quickly.
16. Any country, rich or poor, can institute this economic system and have immediate credit and monetary freedom based on the value of labor and natural resources/materials.
17. The backing for the currency is the item being purchased (so the item has to be real and not a piece of paper)
18. Mitt Romney and other "venture investors" still have their place independent and apart of SSS

If it takes 50 years to retire $100,000 and the bank issues 10 x $100,000 loans per month. The bank is creating $12,000,000/yr and only retiring $240,000/yr (1/50th) out of circulation. That is a net creation of cash into the economy of $588,000,000 excess cash over 50 years. And this is for only 10 modest house loans per month at one bank. That is runaway inflation. That isnt even talking about velocity. This is just money creation vs money retirement.

The deal with SSS is for people to pay off their their loans and retire money out of circulation as fast as possible.
retiring money quickly is good because if new money is needed, it can be created instantly based on the credit worthiness of the borrower(s). In SSS money also is backed by the item it purchases 1:1:1.

MPE does not retire money out of circulation fast enough. In an account is still in circulation

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