‘The economy is going to collapse,’ says Wall Street veteran Novogratz.

Any money system is largely imaginary and is at best a mirror image of the physical economy. A monetary system builds a systematic allocation and ownership of the various commodities, human effort, and the finished products of human energy and ingenuity. If the model fails, the allocation and distribution temporally stops until a repair is made or a different model is developed.

This system in use actually dates back thousands of years to ancient Babylon, and has waxed and waned with vagaries of administration.

Economists attracted to and using so-called “Austrian Economics” fail to recognize that memeplexes embedded within the Austrian model support the Babylonian model. The same economists have failed to recognize the errors Silvio Gesell identified one hundred years ago.

A simple return to specie coinage (gold and/or silver coin) also fails on the same basis; I.E. a failure to recognize the demurrage principle Gesell recommended be amended to monetary systems.

A basic recognition of natures law includes a recognition that the various commodities, human effort, and finished products carry a loss of value over time. Gesell pointed out that coins as money (especially gold coins) impose the carry cost (lost value) upon the holder (the warehouse).

You know what the secret of Scottish banking was? Rothbard knew, but I only found out after a six week effort/fiasco. The banks had gotten a law passed that said they WERE NOT REQUIRED TO FULLY BACK THEIR “GOLD BACKED BONDS” WITH ACTUAL GOLD.

The backing varied from about twenty percent to as high as sixty five percent, but no Scottish bank ever backed their bond issue one hundred percent. Rothbard knew.
[link to duckduckgo.com (secure)]

So, rethink everything. Read Gesell's NATURAL ECONOMIC ORDER which always makes all the specie currency advocates mad.

So, is a warehouse bearer note that reads “payable to bearer” a valid exchange of a commodity in a warehouse? If somebody is storing something valuable – then how much is the monthly storage fee?

Because all of you who believe somebody should store something for you for free are DISHONEST. You think that you should put a gold coin in a bank and the bank should give you a “pay on demand” warehouse receipt and get the full 100% coin back at any time... Well, you never grasped what Gesell was trying to tell everyone one hundred years ago.

AND THAT FAILURE OF COMPREHENSION IS THE AXIOMATIC ERROR OF ECONOMICS THAT PREVAILS YET TODAY.

All of the books and the financial calculator charts that discuss “the time value of money” are wrong. Because they are based on positive interest on hypothecated promissory notes (debt as money).

And damned near every commodity or finished product can be traded in proxy by warehouse receipts. Human intellectual and physical effort can also be traded in proxy by such warehouse receipts exampled by the Ithaca Hour notes. And if a storage fee is charged in time, then the (demurrage) fee should be rebated to the human who is backing that note after costs of administration are deducted.

Here, from the US Library of Congress, is a sentence about the Great Depression of the 1930s:
“In a country with abundant resources, the largest force of skilled labor, and the most productive industry in the world, many found it hard to understand why the depression had occurred and why it could not be resolved.”

You see, failure is guaranteed when you use for money interest bearing hypothcated debt as your base model. The total debt grows in an exponential manner until finally the underlying physical economy can no longer make the interest payments – much less pay down any principle.

The problem is with the model.

Would you enjoy having a vested position in a bank owned by the local community?

Please enjoy the results of this search:

[link to duckduckgo.com (secure)]

(*) through a Critical Lens by Jill Bamburg

(*) = banned word; somebody does not want you to learn about that system

Thank you for your many insightful and well-reasoned posts on this thread! I think that I may have learned more about how money truly functions in the half-hour spent digesting your thoughts, than I did in all my time at university.

Again, greatly appreciated!

To add: In all my years of study, I had never heard of the worker’s cooperative and corporation described in the book you referenced. How strange that it’s mention should be outlawed here; then again, perhaps not so strange after all, given , well... you know.