I agree with both Dean and John here. It’s important to understand the mechanics of the money system and yet it’s even more important to see the whole system, history and the forces that guide and dominate it. Finally, it’s most important to understand the ideas underpinning the present system and how an alternative idea…would prevent the present powers from exercising their will via distraction, confusion and half truths/lies. That is, that when the self serving system of the Banks collapses the individuals of the nation are liable and responsible for its effects….and the only way out of it is the coalescence of an international financial system….rather than independent nations guided by the deepest and most ethical idea in the cosmos Grace. Grace as in the free monetary gift, as in abundance, as in individual freedom,  as in systemic free flowingness and as in subsidiarity of power, profit and control to the Wisdom and necessity of ethics.

JH: Thus, defaults on both Treasury bonds and on demand deposits will not be allowed to happen.  It would be economic and political suicide for any administration foolish enough to allow it to happen.

Me:  The threat of implosion alone would be enough to herd the non-comprehenders in economics and government toward a consolidation of the powers of Finance. Fear and ignorance have been used by the powerful repeatedly throughout history. We need alliances amongst ourselves and with the the largest constituencies whose interests it is to have more individual monetary abundance and a less onerous and price efficient economy, namely the consumer (everyone) and the small to medium sized business community (the vast majority of enterprises) .

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I completely agree with all of that. Except that despite the fact that deposits are a liability to the Banks….they won’t treat them that way when the SHTF, and as Ellen has pointed out current legislation will lawfully enable them to do so. Power does as it wishes assisted by politicians and economists…and their various orthodoxies. All the more reason to have the philosophy of Grace of Social Credit and its aligned policies implemented in the economic, monetary and political systems in as well thought out a fashion as possible and proactively trying to deal with both the moves of the powers that would oppose it  and also toward the goals that Douglas envisioned where money increasingly becomes a ticketing system for distribution of production. This is why I believe the Dividend must immediately be sufficient to free the individual from coercion by the Banks, by government or by the business community. A virtual equilibrium can be attained at multiple levels of income especially with a Discount mechanism that sufficiently reduces prices to consumers (say by an arbitrary percentage of 40+% or more) which sufficiently reduces the rate of premature cancellation of individual purchasing power and changes the entire vector of the economy toward what Douglas envisioned it would become. The Dividend and Discount mechanisms being true macro-economic tools can be used to accomplish this. They are themselves the anatomy and component parts of equilibrium and again, also the means of “getting us home” from the current system and any of its subtle orthodoxies. None of this means there couldn’t or shouldn’t also be rational and ethical regulations (aligned with a philosophy of grace as much as possible) But let us have immanent transformation….and regulation right along with it.