Sovereign Debt Crisis
[courtesy Google Images] This article is conjectural. The conjecture flows from the idea that a monetary system that’s based on debt (mere promises to repay) rather than on assets (actual payments denominated in physical gold or silver) and leads us to some very strange economic implications.
For example, in a debt-based monetary system:
1) Debt is our measure of wealth. I.e., the more debt you have, the wealthier you become (or at least, appear). Could you enjoy the apparent “wealth” of living in a $250,000 home, if you hadn’t first been able to go into debt for a mortgage? Could you enjoy the apparent “wealth” of driving a new car, if you couldn’t first go into debt for an auto loan at the bank? Our apparent wealth is a function of each debtor’s capacity to make promises rather than engage in productive work. As an extreme example…
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