Book « Relative Theory of Money v2.718 » - rev. 1.3.7 (Github rev. )

“Debt-Money” Problem

If we say that X is putting himself into debt (negative balance sheet) to credit Y, who can then pays Z, who finally pays X, we have a partial solution that creates a fundamental problem regarding symmetry.

a) Spacial symmetry is not respected

If it is “X” who owns the right to get in debt in the first place, according to “Y” and “Z” there is a huge equity problem. Besides, we can say that the production of every of these values does not need to wait for a specific point of monetary emission to circulate. Value exchanges can and must start independently of any specific point, under the risk of blocking a part of the economy (here the exchanges between Y and Z).

b) Temporal symmetry is not respected

Even if imagining that X, Y and Z are initially all credited at the same time of a fixed quantity of money, what is the situation for A, B or C who will come after them in the economic system? Their respective exchanges of values being totally different from those of X, Y and Z, should not suffer either from a unique emission done in the past, and whose distribution would be excessively concentrated here or there (or could even have fled out of the local economic zone), thus blocking their exchanges without sensible reasons from their point of view.

c) Enslavement through missing interest

One algorithmic demonstration enlightens us on the fact that a debt-money with asymmetric emission is sufficient, if we respect its principle to the letter, to ensure the endless enslavement of some people by others.

B = Banking system
H = Humans

Interests owed to B by H are 5% / year. In (1) is created the emission of a new “debt” by B, constituting then the “money” credited to H. In (2) the 5% are reimbursed, then eventually spent in (3), and then it’s a infinite loop.

(1) B: -100 | +100 => H +100 | -100
(2) B: -100 | +105 => H +95 | - 100
(3) B buys for 5 to H 1 hour of work
(4) B: -100 | +100 => H +100 | - 100
(5) Go to (2)

Choice #1: infinite loop. H is infinitely enslaved by B who earns 5% per year without working, while H has to work for B to get them back. The problem here is not so the missing interest than H working eternally for B. B has then no interest (pun intended!) in H really reimbursing his debt. He will call “reimbursing” the only fact to pay him that eternal annuity.

Choice #2: if on the contrary B does not spend the 5% per year but stores it, skipping step (3) (or only spends a small fraction of it and stores most of it), then there is a real missing interest in the economy. H finds himself more and more into debt, and after 20 loops we find the following situation:

B: -100 | +200 => H +000 | -100

At that moment (H) will not be able to reimburse during the next cycle. He goes bankrupt, defaults, or a negotiation takes place. B has then a huge stock of money, he profits from a purchasing power multiplied by an economy in deflation (since during all that time the economy will have suffered from the progressive rarefaction of the circulating money). He then buys everything he believes will be the economic base of the next cycle at the best price.

Then the cycle will restart on the base of a new generation of humans. B recreates enough money for his own benefit, which he will lend, at a level of creation high enough to make the old money mass negligible. Indeed one never starts from scratch in (1), but on the base of a pre-existing monetary supply, that will for example be 1 of 100 created unilaterally on false premisses, a pseudo-contract whose terms are not given.

All of this is only possible because H ignores the mechanism that nobody tells him. If on top of that this mechanism is going on for a lifespan or more, a new human H recently born, to which nobody would have explained that mechanism, would eventually be able to only become aware of that subtle phenomenon late in his own life.

Moreover, and it’s not the least of the essential points of the phenomenon, we have to warn that we see in 2012 a confusion between the common “debt-money”, issued by the political collectivities alleged to represent the citizens, and private “debt-money”. Both wear the same name. But if we distinguished the money created exclusively under that “debt” form by the political community from the one issued by a private group, without giving them the same name, the mechanism would not only be more respectful of the logic it pretends to apply, but the rise of individual consciousness of the phenomenon would accelerate.

So it is then staggering that when it is about protecting trademarks the law would be non-negotiable while being about counterfeiting the universal exchange tool we accept the fact that a group of private enterprises call with the same monetary sign what is only it’s own “debt” emission, as if they shared the same brand, and that we use this same brand, with the same acronym, for the debt emission of the political community. Imagine once that a beverage would be called “Coca-Cola” while being produced indifferently by General Motors or Pepsi Cola and that the State itself would use that acronym to emit another beverage and would use it as reference to ensure the economical exchanges compatibility. Which political community would accept that? But it is exactly what this confusion concerning the common money has produced. One should then not be surprised by the final chaos which that false logic, that unacceptable principle, can bring humans into.


That “solution” is thus not a valid one. It needs to be banned, because it doesn’t respect the symmetry and the equity of the reference frames compared to the proposed solution.

Additionally, it just thrives on the confusion that tends to generalize the notion of “debt” to a same and single acronym, forcing the whole political community to share the losses, because it is ignorant of the emission mechanism of issued debts by diverse actors and nevertheless pretending to be called using the same accounting sign.

In conclusion, “debt-money” is a system instituting a profound asymmetry regarding monetary creation, which is not contractually acceptable inside a democracy respecting human rights. Logically the recognition of the equality of judgment of all economical value implies the symmetry regarding the creation rules of a currency that would be really common (which does not mean equality regarding possessed goods or accumulated money through exchanges).

We must understand here the distinction between the monetary creation by a “debt” toward an arbitrary center, meaning the fact that some actors located spatially or temporally have the exclusive privilege of issuing money, creating an asymmetry toward the other actors of the present and future economy and the debt contracted with one possessing pre-existing money. It is indeed the main point condemned here.