A Comparison of Creditism vs. Capitalism

Have you ever heard somebody use the term “creditism”? Well … the following is from an article I came across by Brian Maher of the Daily Reckoning that explains creditism and really puts our current monetary system in perspective:

Author Richard Duncan explained creditism and how it came to replace good old-fashioned capitalism, now dead beyond recall.

World War I forced warring nations off the classical gold standard. The Great Depression and World War II put the final stakes through capitalism. Government spending, based on the expansion of credit-backed money, was the new order of the day.

Thus, creditism was born.

Creditism scotched the Nazis. It buried the Soviet Union. It also sparked one of the great economic booms in history as it ushered in a new era of globalization. Thus, an economic backwater like China could develop into the worlds second-largest economy.

But the laws of economics will not be forever conned. Trees don’t grow to the sky. Imbalances must be righted. Debts must be paid.

Creditism has produced booms and busts and the devil and all the other disorders to which a credit-based monetary system is prone.

‘Once the Bretton Woods system broke down, the old rules went out the window,’ notes Richard. ‘The world sent America goods, but the world didn’t get American goods in return. It got paper dollars. Under the dollar standard, central banks accumulated hundreds of billions, ultimately trillions, of US dollars in this way.’

But as sure as night follows day, for many of these countries, the rapid accumulation of dollar reserves proved to be a curse, rather than a blessing. That sharp growth in reserves created a domestic investment boom, accompanied by rampant asset price inflation that eventually ended in financial disaster. The bubble economy that developed in Japan during the 80s is a perfect illustration, as is the Asian Miracle bubble that followed in the 90s.

Creditism and the Fed

Since the Federal Reserve’s creation in 1913, the world has been sold a bill of goods from the global banking cartel. Although people everywhere call the Federal Reserve Notes in our wallets “dollars,” they’re not money. Federal Reserve Notes are debt issued by a private bank with the misleading name of the “Federal Reserve.” In fact, “the Fed” that controls our national currency — and all aspects of our economy through the manipulation of interest rates — is no more “federal” than Federal Express.

It should also be remembered that debt is not money — and it can never be money — although almost everyone thinks the dollars in their wallets and retirement accounts are money because they accept those Fed dollars as money.

In truth, only gold and silver are money! But that won’t become apparent until enough people finally lose confidence in the dollar. And that day is now fast approaching.

As financial analyst Bill Holter explains: “The US (and the world) has been buried in debt of all sorts, which leads us to the phrase ‘one man’s debt is another man’s asset,’ and this is the problem. The debt burden must be lowered because it is simply too large to be paid off. But this also means that the holder of said debt will see his ‘asset’ shrink in value. That’s a huge and very basic catch-22. It’s also why no one can fix the damage without, for all intents and purposes, presiding over bankruptcy proceedings.”

Don’t be fooled folks by normalcy bias, folks. The system is mathematically doomed to failure — and time is getting short.

Unlike most people, you know what’s coming. Please, don’t get caught with your pants down. Protect yourself … while you still can.

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