This video is based on a presentation I gave at the Economics of Peace Conference in Sonoma, California in October, 2009. My prescriptions for reclaiming the credit commons and creating a new “butterfly economy” remain completely relevant, and their implementation is becoming ever more urgent.
A PDF of the slide show can be downloaded here.
1/30/1981 President Reagan and David Stockman meeting on the economy in the Oval Office
In his current subscription pitch and announcement for his new book, PEAK TRUMP: The Undrainable Swamp And The Fantasy Of MAGA, David Stockman lays out some startling facts, provides a cogent analysis, and makes some dire predictions. As President Ronald Reagan’s Budget Director and long-time political insider, Stockman should be heeded. Here are some excerpts:
“We are in a whole new ball game. The Deep State, the House Dems, the Mueller hit squad and the mainstream media are all going in for the kill.
“They are determined to take the Donald down and preserve the rule of the bipartisan establishment in favor of Empire abroad and Big Government, massive debt and Fed-fueled Bubble Finance at home.
“At the same time, the Donald is now practically handing them his political head on a platter. That’s because he has bombastically embraced the “big, fat, ugly bubble” that he so accurately harpooned during the campaign.
“But that bubble has now reached a fatal triple-top and is fixing to implode, and to take the American economy and Trump’s presidency down with it.”
Stockman says, “We are heading for the double whammy of a political/constitutional crisis and a thundering financial breakdown at the same time.” He argues that it was the failure of “the Washington/Wall Street consensus” that led to Trump’s victory in 2016, and that actions of the Federal Reserve have caused a massive asset bubble along with huge disparities of incomes and wealth.
He goes on to say that “just because Donald Trump targeted the symptoms correctly [during his campaign] that doesn’t mean he had a plan to fix the American economy or the skills and know-how to move the turgid, essentially paralyzed machinery of the Federal government.” Stockman characterizes Trump as “a political flyweight, megalomaniacal incompetent and bile-ridden bully who stumbled into the Oval Office against all odds.” He decries the massive growth of government debt over the past four decades and boldly asserts that recession will hit the US economy before November 2020, and that “Wall Street, the US economy and the Donald’s fantasy of MAGA will come tumbling down with it.” Whether or not his timing is correct, it is clear that a political and economic shipwreck is just ahead.
Stockman decries the “bipartisan ruling class” which is “in favor of permanent war, unchained entitlements, fiscal incontinence, unsustainable debt-fueled household spending, rampant corporate financial engineering and Keynesian monetary repression and “wealth effects” based central banking that lies at the roots of our current economic malaise,” and referring to the Mueller Russiagate investigation and subsequent impeachment hearings, Stockman says, “the Donald’s fluke elevation to the Oval Office has finally caused the Deep State to come out of hiding and bare its fangs against American democracy itself.”
Stockman criticizes the Fed for “dithering” and delaying “normalization,” by which he presumably means raising interest rates and ending Fed purchases of government bonds. He also calls for “fiscal rectitude” (balanced budgets) on the part of the government, something that even his beloved Ronald Reagan was unable to pull off.
But what Stockman (and everyone else) fails to realize is that, under the interest-based debt-money regime that has prevailed throughout the modern era, it is impossible for national governments to consistently balance their budgets. Here’s why. Since money is created when banks make loans, and since interest is charged on those loans, aggregate debt increases simply with the passage of time. If growth in the money supply does not keep up with debt growth, many debtors will default and the economy will sink into recession. Thus, the banking system must find ways to keep people and corporation borrowing ever greater amounts of money. Over my lifetime I’ve seen banks roll out a succession of creative schemes. Starting with the liberalization of consumer credit following World War II (“Buy now; pay later”), then the widespread issuance of credit cards, then the introduction of “student loans,” then the easing of requirements for people to buy real estate, banks have gotten people to borrow more and more.
Then, when the private sector is all “loaned up” and cannot take on additional debt, the government must step in as “borrower of last resort.” By deficit spending, financed through the issuance of bonds, the national government, with the help of banks that buy those bonds, the money supply is expanded. (When banks buy government bonds they are making a loan to the government). And when all available funds have been sucked up, the Fed must step in as “lender of last resort” to itself buy up additional government bonds while keeping interest rates at acceptable levels. That approach, called “quantitative easing,” is what saved the global system of money and banking from total collapse in 2008 after the housing bubble burst. Thus, the government and the banking establishment are locked together in a deadly embrace and “dance of death” that is spiraling out of control.
It may very well end with a major decline and long drawn out recovery, as Stockman is predicting, but unless a new interest-free money system is implemented after the wreckage is cleared, the ultimate outcome may simply be another round of ever more extreme boom-bust cycles and political chaos.
The good news is that there are credit money innovations waiting in the wings, and now emerging, that can be rolled out, replicated, and networked together to usher in a “Butterfly Economy” and new world order of peace, justice, and human unity. For details about what the Butterfly Economy might look like, and how we might get there, see my video, The Butterfly Economy: How Communities are Building a New World From the Bottom Up, and my article, Reclaiming the Credit Commons: Towards a Butterfly Society. — t.h.g.
The long silence
It’s been a long time since I sent out my previous newsletter in mid-February. That doesn’t mean I’ve been inactive—quite the contrary, I’ve just been too busy to document all the things I’ve been doing or to compile the list of important links and resources I want you to know about. This edition is intended to remedy that.
I returned to the U.S. from Asia in mid-February for a four month stint, but am now back in Thailand for an indefinite period. While in America, much of my time and energy was taken up with preparing and delivering some new presentations, providing media interviews, and trying in vain to keep up with email and other correspondence. The first few weeks in Tucson were devoted to resting up, reconnecting with friends and colleagues, and taking care of some personal business details.
By the middle of April, I had completed a new presentation which elaborates the themes that I began expounding more than a year ago about societal metamorphosis and the “Butterfly economy,” and added more material about “new finance” to my perennial topic of alternative exchange.
The North American tour
Long-time friend and associate, Les Squires, made it possible for me to venture up to Colorado for a few days in April to conduct a series of presentations, discussions, and consultations. Highlights of that trip included my presentation titled, Money and Finance in the Emerging Butterfly Economy, which I delivered to the Highland City Club in Boulder, and another presentation on The Butterfly Economy at the Louisville Public Library. These were co-sponsored by various Transitions groups and individuals and will eventually be made available on my website http://beyondmoney.net.
I had a rewarding but exhausting trip back east in May, with family visits sandwiched in between presentations in Florida and Toronto. The first of these was a workshop that I was asked to provide for members of the Financial Planning Association at their annual retreat. I titled it, Financial Planning in the Emerging Butterfly Economy: Realities, Trends and Discontinuities. You can view the power point slide show at https://beyondmoney.files.wordpress.com/2011/07/greco-fpa-powerpointrevpost.pps. I have a recording of my narrative which I would like to combine with the slide show but I’ll need some help to do that. If anyone has the skills and the time to work with me on that, I’d greatly appreciate it.
The hardest part was the last 4 days in Toronto where I gave a lecture at the MINT film festival on the first day, two TV interviews on the second, and workshops on the third and fourth days, with a lot of consultations in between. That trip was hosted by Glen Alan who, as the new director, has put renewed vigor into the Toronto Dollar currency project. Glen, who happens to be a musician and operates a professional recording studio, is well-connected, very effective, and a fountain of energy.
All of the Toronto proceedings were professionally recorded and are in the process of being edited. Glen and Ron Elmy are putting together a DVD that will be available from The MINT Film Festival website in less than a month. Watch for it on http://mintff.org. You can download a short video teaser now at http://www.ronelmy.com/files/thg.zip.
Already posted are my interview with Frank Touby (at http://www.youtube.com/watch?v=vvCruoYcN4Q), and my interview with Hugh Reilly (at http://www.youtube.com/watch?v=s7nOYCRHjOY&feature=player_detailpage).
My particular vision, interests and expertise are, I think, fairly well expressed in these interviews.
I’m hopeful that my Toronto visit and the follow-up activities will have a far reaching positive impact.
Funding the Common Good
CREW
Sometime toward the end of last year I mentioned an exciting new project called, CREW, the purpose of which is to provide a perpetual pool of capital to finance both for-profit and non-profit enterprises that help to create resilient, sustainable communities. It is one instance of an emerging phenomenon called crowd sourcing or crowd funding. CREW is not intended to provide any direct personal gain. Money we put in is not a loan, nor is it an ownership share, but a gift that is intended to be a permanent investment in the common good.
I have great expectations for this initiative, and as a member of the CREW Founder’s Circle, I invite you to join my CREW. We will together decide how the funds in our joint stewardship account will be invested. Just go to http://www.CREWfund.org/tomg, watch the short video, and click on the orange Join Now button.
Recent Posts to my Website
For those of you who do not regularly follow my posts, I’d like to highlight a few especially important ones. You can be notified of new posts by following me (tomazgreco) on Twitter.
One aspect of that war is the ongoing shifting of the tax burden from corporations and wealthy individuals onto the backs of the poor and middle-class. Former Labor Secretary Robert Reich explains that part of it in a 2 minute video. See it at, https://beyondmoney.net/2011/06/20/the-truth-about-the-economy/.
Miscellany
I’m reassessing how I want to spend my time and energy from here on out. I’d like to be a little less busy, and direct the bulk of my attention to aspects of my work that are most creative, enjoyable, and effective. I’ll be cutting back on correspondence and lecturing, and emphasizing consultations and collaborations with groups and individuals working on projects that show promise of making major breakthroughs toward interest-free cashless trading, equitable finance, and economic democracy.
May we all find the courage to do what needs to be done, in a joyful spirit and with love in our hearts,
Thomas
Mobile phone (Thailand): +66 84 373 5645
Skype/Twitter name: tomazgreco
Posted in My activities
Tagged butterfly economy, class war, CREW, inflation, MINT film festival, the butterfly society, Toronto
As I sit sweltering here in Malaysia (and before this, in Thailand) observing the busyness, the massive amounts of construction, the noisy moving to and fro, the widening extremes of opulence and degradation, the scramble of people to earn or save a few pennies to buy a piece of the good life, I often feel despair about the human condition. But, as I’ve said in my books and presentations, it is clear that civilization is experiencing a multi-dimensional mega-crisis which must lead to a thorough social, economic, and political restructuring. I liken it to the process of metamorphosis from the caterpillar to the butterfly. My soul yearns for peace and quiet, fellowship, and positive engagement in the metamorphic process.
Where to find it? How to proceed? These are the vexing questions of the moment.
Over the past three years my nomadic lifestyle has provided numerous adventures of discovery in many parts of Asia. I think my time in Asia has given me a pretty good sense of the developmental trends and the conditions that ordinary people here must contend with. The apparent lull in the breakdown process over the past few months should not cause us to become complacent but should be taken as an opportunity to prepare ourselves and to intensify our efforts to build a better world.
The global economy, like the caterpillar must at some point stop growing. That point seems now to have been reached. If you have not seen it, the post by Darryl Schoon, Davos: The Bomb Shelter, clearly expresses my own views that the current financial crisis is unprecedented and “the crisis will end in a complete breakdown of the banker’s system of credit and debt…”
The next phase, the chrysalis phase, requires that we take the accumulated resources that are at our disposal and use them to create the new butterfly economy. It is not easy to ascertain how that process will proceed, what the specific challenges will be, or how we might best negotiate what Robert Theobald called, The Rapids of Change. Carolyn Baker’s book, Sacred Demise: Walking the Spiritual Path of Industrial Civilzation’s Collapse, may help us in that regard. Major portions of the book can be read for free at books.google.com.
Each of us now needs to ask, “Where shall I spin my personal cocoon, where is my cohort community, and how can I help the emergence of a new, sustainable, more harmonious world.
Posted in Global Economy, The Political Money System
My latest book, The End of Money and the Future of Civilization , can be ordered from Amazon.com , or your local bookstore. You can also read a preview at Google Books.
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Money: Understanding and Creating Alternatives to Legal Tender
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Beyond Money 