How The Monetary System Works

This blog is mainly about focussing positively on a resource based economy, how it works, and how it can be implemented. Still, there seems to be a dire need to address the workings of our present monetary system, since some people doesn’t seem to grasp how detrimental this system is to our society, our health and the wellbeing of the planet in general. I think most people reading this blog ‘gets it’. This article is overemphasized towards those who don’t.

All of the elements below are self evident and clearly present in today’s world.

Our wonderful monetary system

Banks, loans, bills, taxes, bankruptcies, corruption, products that stop working right after the guarantee runs out. Competition, profit, buying, selling, trading, shopping, fashion, TV, advertising, cars brake down. Pollution, tar sands, oil spills, wars, nuclear disasters, asthma, deformed newly borns. Grades, neurosis, pharmaceuticals, doctors paid by them, prozac, more corruption, politicians, drug abuse, drug trade, financial crisis, unemployment, ingenious inventions that never see the light of day because they are bought up and shut down or outcompeted by the big corporations so they never reach The Market. Financial crisis, scarcity, inequality, injustice, greed, prostitution, pollution, clerks, meaningless jobs, police, military, terrorism, sell, sell, sell, sell, the media, homelessness, problems and crisis making the richer richer and the middle class into poor and the poorer even poorer. Overfishing, waste, consumption, bureaucracy, red tape, accounting, fraud, depression, suicide, crime.

Don’t you just love it?

You bet I do.

And the irony of it all; 99% of the ‘99%’ doesn’t even see it.

See what?

The problem. The cause of it all.

For some time I thought that ‘there will always be wars between people’. Sometime, somewhere on the planet, there will always be a war going on. I thought that this was a part of ‘human nature’, and after all, a war served as a contrast to ‘what we didn’t want’.

Now I understand that this is complete and utter bullshit.

Human Nature is not greedy. Humans become what society and their surroundings make them. If their surroundings are 100% greed, they become greedy. When they grow up in a world where the credo is ‘You Have To Make Money!’, ‘You Have To Succeed!!’ and ‘The More Money You Have, The More Successful You Are!!!’ then it is no wonder they become greedy, rip of others in a brown collar, blue collar or white collar way, become bankers, stock brokers and robbers, or simply….take a job.

Humans, when given the chance, are helpful, caring and sharing beings. This is who we really are. And this has been proven again and again.

So, if it is not ‘human nature’ that causes all of the shit we have in the world today, then what is it?

The answer is, it is the system itself. And when I say ‘the system’, I mean both the monetary system and the system of values that comes with it.

So, what came first? The monetary system or the value system? It’s a good question, but not really necessary to answer. It doesn’t really matter. The point is that it is here, and one is reinforcing and strengthening the other.

The profit based monetary system is leading to greedy values, while greedy values again lead to the monetary system. It has been a vicious spiral that has been going on for thousand of years with a culmination in present day.

Profit Motive

The profit motive is the controlling factor in the monetary system.

Today we are all slaves to the profit motive whether we like it or not. All adults has to make a profit, to ‘earn a living’. This goes for companies and corporations too. Without profit, they go bankrupt, people loose their jobs and everything collapses.

The Profit Motive rules the world. It doesn’t matter how good intentions you have. If you can’t reach the market and make a profit, it doesn’t have any value in today’s world.

No matter how much you want to help people in need, you have to buy your own way in this world. If you want to create new sustainable and efficient technologies, you still have to make a profit. No matter how great artist, painter, dancer or singer you are, you have to earn your money. The company have to earn money. The organization have to earn money. The corporation have to earn money. The government have to earn money.

We all have to make a profit.


Thus, we have to trade with each other. No matter how much you want to simply give your services and products away, you have to get some money back. No matter how much you want to share your skills, you have to ‘make a living’.

You have to trade whatever you have with others and get money back for it to pay your bills, buy your food and all the stuff you need to simply live. So, in this system, we have to trade.

We can of course give something away, but that’s not the point. The point is that we have to trade in this world, or else we die. If we give away all that we have, we won’t have any money to buy what we need ourselves.

We could of course try to live of the land, scavenge dumpsters or rely on kind friends to feed us, maybe in return for our services. And some do this. Still, the majority have to work and use money. If everyone abandoned money, well then we would of course not have the monetary system anymore, but rather a resource based gift economy which is what this whole blog is about.

Property and Ownership

Now, here’s the kicker. In nature there’s no real ‘property’ or ‘ownership’. It doesn’t exist. What exists is usership, possession and access. But in our monetary system, we have ‘property’ and ‘ownership’. What this means is that you can get a paper that say’s that ‘you own something’, making that thing ‘your property’.

These concepts are the basic building blocks of the monetary socio-economic capitalistic system. The concept of ownership and property is what has made it possible for a few in this world to own a lot. It is what makes this whole system go around. Still, ownership is only a concept. Not a real thing.

The more you own, on paper that is (because in reality no one can own anything), the richer and more ‘wealthy’ you are. The funny thing is that if you own 5 villas, 7 cars, 3 boats and 2 farms, you can only use a very small amount of time on each thing. Most of the time, ‘your’ things will be idle. Unused.

Still, you own it. You have bought it with your own money. Or…maybe not. Maybe you bought it with OPM. Other People’s Money. Loaned money.

Money and Banking

Money is the ‘blood’ that nurtures this whole system, and makes the monetary system possible. With money we can charge each other and pay each other. We can fine each other and tax each other. We can invest and become rich, or loose and go bankrupt.

But where does all the money come from? The money comes from the banks, and it is made out of fresh air (as a Bank Of England employee called it). Yes, today money is created by The Federal Reserve and the central banks around the world when needed. And the money is given it’s value in decree, meaning that it is the government that decides the monetary value of each ‘coin’, even though 99% of all the money today is electronic. The ‘gold standard’ that once existed has been abandoned a long time ago. Now, money has no relationship to anything real.

The central banks in turn lends the money out to other banks, who then lends it out to customers. And here’s how this process happens, through fractional reserve banking: 

Bank A gets 100 million dollars from a central bank. It can then lend out up to 90% of this (this percentage varies from country to country, some can lend out up to 100% of these money) to a customer. This loan is then deposited to an account in another bank, or in the same bank (this doesn’t really matter, since most of the banks work together in a cartel anyway).

As soon as this money is deposited, the bank can then lend out 90% of these money to another customer, and on and on. So, from 100 million (which was created from fresh air), the banks can multiply this to around 1 billion dollars through repeated lending. You might ask, ‘but what if the customer want to withdraw his money, and the bank has just lent it out’??? Well, of course, that’s the problem. Here’s where the banks are gambling.

Most of the time the customers does not want or need to withdraw a lot of money. If a customer want to withdraw a reasonable amount, that is no problem. The bank then takes that money from the pool of money it has. The problem comes if many customers want to withdraw a lot of money at the same time. This doesn’t happen often, but when it does, it might threaten the life of that particular bank.


Anyway. This is how our money are created from ‘fresh air’. And of course, the loans has to be paid back, with interest. Now, this interest isn’t created in the system, which leads to a larger and larger deficit in the system, which shows up as bankruptcies around the world. And this is what we see today with even whole countries practically bankrupt. There’s simply not enough money to go around. The system is bound to collapse.

What is funny, is that the banks, in addition to interest, demand ‘security’ from the lender, while the bank obviously doesn’t have any security for the money themselves, other than the ‘fresh air’ they were made of in the first place.

If you doubt any of these claims, just Google ‘fractional reserve banking’ do your own research, and you will get it confirmed.

Now, many people are very upset about the banking system and the financial crises. Still, almost as many doesn’t see how the whole monetary system is at fault, not only some bankers or the banking system.


Now, to further elaborate on how our monetary system upholds itself, let’s see how the ingenuity of it makes some people on the planet live lives in leisure, while others have to work by the sweat of their brow, if they are ‘lucky’ enough to have a job, that is.

When the ‘common man’ takes up his much needed loan to buy his much needed home, what happens? Well, the interest he pays on the money he has loaned goes to the bank, who in turn pays another customer his interest on money he has deposited.

So, if you have 10 million dollars, and put them in a bank on 3% interest, you get 300.000 dollars each year from the bank, for doing nothing. But who pays these money? Well, that is of course the man and all the others who took up a loan at 5% interest. And the ones who are taking up loans and paying interest is of course a much larger group than the ones who have money in the bank and gets interest.

This way, the rich can live lives in leisure, while the rest have to work, paying back their loans. Pretty smart system, if you ask me. For the rich, that is.

So, capitalism is really a pyramid scheme. On the very top is a secret group of some very very few people, who effectively controls the money supply in the world, and through a conglomerate of companies, banks and corporations owns and controls most of the planet and it’s governments.

This pyramid is controlled by money and ownership and everyone tries to climb to the top, which is one of the smarts mechanisms of the system. Everyone wants better lives, and better lives is found in more money, more money is found in better jobs, more investments, more ownership and so on, so everybody steps on everybody else to get there, and on the way they pay and reinforce the system through loans and taxes. And this happens 100% voluntarily by the people in the system. They are voluntary slaves, serving the system with their jobs and investments.

On the bottom of this pyramid, we find the population at large. The ones who actually holds this pyramid up by obediently going to work, paying their loans and taxes and buying their products as good consumers.

The ones who are outside of this pyramid are the many jobless and poor who doesn’t have loans or jobs and doesn’t pay taxes, and the very few who have effectively abandoned money and property and tries to live different lifestyles. But these are disparagingly few.

Cyclical Consumption

In addition to the money and banking system, the monetary system needs us to constantly buy new stuff for it to survive. If we stop buying, the system will collapse. This is called cyclical consumption. We have to buy, buy, buy, buy and consume, consume, consume.

Notice how we are called ‘consumers’ without anyone even getting slightly insulted. That is how deep the system have indoctrinated us into believing that ‘this is the way it has to be’. Read with a robotic voice: ‘Yes, I am a consumer. I buy things. I consume. I am important because without me the whole system collapses’.

So, are you a consumer? Or are you a human being?

Planned and Perceived Obsolescence

As a result of the need for cyclical consumption, products can not be made to last as long as they could have. Thus, products are designed to break. The first nylon stockings, for instance, never broke, which made the corporations redesign the stocking to be weaker and have a shorter lifespan, so that they could sell more and make a profit.

This kind of planned obsolescence is designed into most products we buy today. The products can not be made too sturdy and long lasting, and have to be made in such a way that they become obsolete in themselves. Instead of being updated, they have to be replaced.

In addition to the planned obsolescence, we have perceived obsolescence. This is when a product is still working fine, but the customer still wants a new one, because of sentimental reasons, like fashion or perceived higher quality or style in ‘the new’ product. And these feelings and wants are of course produced by advertising and marketing in the media. And the reason for all of this is? To make a profit and uphold the monetary system.


Competition is another factor built into the monetary system.

Instead of companies collaborating to make the best, longest lasting, most efficient, smartest designed products of the highest quality, they have to compete for market share, patent their ‘intellectual property’ and keep it away from competitors. So, they are burdened with both competition to ‘stay alive’, cyclical consumption and planned obsolescence.

It is a fine balance they have to keep. They have to present a whole host of seemingly different products in different price ranges to give the so-called consumers (us) a so-called ‘choice’. All in the name of profit.

But, of course, it has to be like this, or else our whole system will collapse!

We must consume and buy stuff. We can’t have long lasting products. We must be brainwashed to buy new stuff all the time. The companies has to make a profit, or else we will be all out of jobs!!! 

Yes, of course, this is how it has to be. In the monetary system.

But, what would happen if we used much less? If we took up fewer loans? If the companies made long lasting products? If 50% of all food wasn’t thrown away? It is obvious. With lesser consumption, which is many people’s goal, the system will collapse. Then, what do we do? No jobs for anyone. No money. What shall we do???

Corruption and crime

Corruption is the result of money. Not dishonest people, not greed, not poverty. No, money, property and the need for profit are the causes of corruption.

When you have a system where the people constantly have to trade with each other, compete for jobs and resources, buy and sell to each other and earn money, corruption automatically arises.

Because in a system with money, scarcity is a needed factor. If something is too abundant it will have no value. Money itself will have no value if it is too abundant. Thus, constant competition is needed and people need to pay each other and try to get as much out of each other as possible. To me, this itself is corruption.

Anything that is not given freely, but demanded money for, is basically corruption. The monetary system itself is built upon fraudulent money designed to enslave the population on the planet, and thus the use of this currencies is itself corruption, except we don’t know it.

The monetary system also leads to crime. Since scarcity is needed and built into the system, this will automatically create big differences between haves and have nots, which leads to crime; poor people wanting to have the standard of living of the rich.

The Benefits of The Monetary System

Hm….can’t think of any. At least not any that serves all of us, and not just a few.

If I should think of one ‘benefit’, it would have to be the possibility to use money as a measurement of gratitude.

In any case, I think this one little benefit can easily be replaced in a resource based economy with true gifts instead. Gifts you have made yourself. Like a song, a dinner, a cake. I am not talking about bartering here, only gifts.

We Know

We know that the oceans are overfished. ‘They should fish less!’ We know that the rainforest is cut down to make room for soy bean plantations. ‘We should save the rainforest!!’ We know that there is a huge drug trade in the world. ‘We should stop them!!!’ We know that there is trafficking, with both children, men and women. ‘They should stop that!!!!’ We know that there are millions of hungry and homeless in the world. ‘We should give them food and shelter!!!!!’ We know that there are more than enough alternative energy sources to fuel the whole world. ‘We should use them!!!!!!’ We know billions is spent on war. ‘They should spend it on health, schools and the old!!!!!!!’

Now, why are they going to war? Why aren’t alternative energy used instead of oil? Why aren’t all the hungry and homeless fed and sheltered? Why are people suffering in trafficking? Why is there a huge drug trade in the world? Why is the rainforest cut down? Why are the oceans overfished? Why? Why?? Why???

And the answer is:   Profit.   Money.   Greed.   Property.

Do    you    get    it?

The System

It is the whole monetary system and the mindset behind it that is at cause. It isn’t the ‘bad guys’ or ‘freak coincidence’. No. It is our system.

We can’t stop these things happening within this system. Why? Because THE WORLD NEEDS TO MAKE  A PROFIT!!!

Every person, every business, every corporation and every government NEEEDS TO MAKE A PROFIT. That’s why.

Everyone needs to make a profit from what they do, and they do everything they can to make a profit. Be it going to war, overfishing, cutting down rainforest, smuggle drugs, traffic children, give irresponsible loans, trade money, trade gold, trade fish, trade, trade trade, trade and kick the ones who can not pay out or their homes. The profit incentive leads to greed which again leads to more want for profit.

We can’t avoid planned obsolescence and cyclical consumption, we can’t make products that last, we can’t feed and shelter all the hungry and homeless, we can’t stop wars, we can’t stop using oil, because these things are non profitable, and if we try to stop it, the whole system will collapse, because there would be no jobs, and no one to buy the products, big corporations would not earn money, go bankrupt and more people will be out of jobs, and so on. 

It is not ‘bad people’ who do these things. It is normal people like you and me. But, like you and me, they are infected with this thought of money, property and profit. Now, can you see the problem?

Now, can you see the solution?

Just imagine for a second, if we simply removed money, profit, trade and property.

Then we replaced it with natural sharing, giving, usership and accessibility.


Can you see the consequences? Can you reeeaaaally see it?

What would happen if we all shared? Simply shared. Shared our skills and knowledge. Shared our resources.

No competition. No profit. No money.

Instead: Collaboration. Joy. Excitement. Enthusiasm. On a global scale.

For everyone.

We could simply go out there and do what we need to do. Feed the ones who need it. And not only feed them, but build a whole new world for all of us. A world we can all live happily in together. Build up the soil. Make it thick and black and full of juicy nutrients for succulent vegetables to grow in.

Build up our knowledge about everything. And just do it! No need for patents anymore. No need for secrecy. No need for war. No need for money. No need for investors. No need to overfish the oceans. No need for trafficking. No need to drill for more oil. No need to worry about jobs and unemployment. No need to cut down the rainforest or kill the gorillas. No need to. No need to.

If we only let go of money. Property. Ownership. Profit. And greed.

What we are left with are the resources. What we can actually use. What we can actually eat, build houses with, make clothes with. All our common material and mental resources.

Resource Based Economy

What we are talking about is a resource based economy, which you can read all about on this website and on the sites of The Venus Project and The Zeitgeist Movement.

In a resource based economy, we focus on the actual needed resources to produce anything. And we abandon trade, barter, money and ownership. Instead we have giving, sharing, accessibility and usership.

On a personal level, you can call it a gift economy, because whatever you do for anyone, you have to give away for free. But of course, when everyone thinks and acts like this, you will get a tenfold of gifts back as well.

Still, you giving something is also a resource, whether you sing a song for someone, share your knowledge on a subject, program a new application, make a movie or grow delicious food.

When we all live in a giving society, we will also get much more than we give. Why? Because that’s the power of a network of giving. When our mindset shifts from thinking only of ourselves, to thinking of others just as much, everyone will get more.

You giving of your skills and knowledge can be called sharing mental resources. All the other resources would be the material resources, like food, land, houses, transport, tools, energy, etc.

Do you know what the average usage time on a power drill is in today’s world? 20 minutes. In average, every power drill produced is used only 20 minutes in it’s entire lifespan. And the same goes for many other things in our world today. Cars are only used a fraction of their time. So are private boats. Skates. Skis. Etc, etc. Not to speak of all the waste we get from producing all this stuff.

In a resource based economy, we could actually focus on producing long lasting products, and then share them, instead of hoarding them. And we could focus on producing it without waste and pollution.

And instead of ownership, we would have usership. This means that whatever you use and need, you can use as long as you need it. And when you’re done with it, it goes back into the pool of resources. Be it a power drill, a car, a house or a piece of land.

All the resources on the planet would simply be shared and used where they were needed in the most environmentally friendly way. In fact, we wouldn’t have to weigh the balance between environment, jobs and profit. We could actually focus on the environment and ’employ’ as many as needed for the task of those who wanted to contribute to that, and then some.

No need to ‘get funding’, ‘find investors’, etc. etc. As long as we provide food and shelter for everyone who want’s to participate, we are good to go.

And again, we would of course utilize and develop as much technology as needed without the ‘technological unemployment’ ghost threatening. If we were to build a new dam, we wouldn’t need thousands of workers. No, we would construct machines to do, not only the heavy lifting, but the majority of the work itself.

Not that we would have to construct any new dam at all. There are plenty of alternative energy resources today that we can do very well without any new dams on the planet.

And within the resource based economy we could actually take the technologies that work the best and utilize them for everyone, without any competition or greedy corporations trying to ruin it for us, or the market not buying it. Now, we would simply work together, globally, to invent and develop the best new solutions. Solutions that save the environment, rather than ruin it. Solutions that help people, rather than hinder them.

Then, why would anyone contribute to any of this? Because it would be in everyones interest. It would be 100% meaningful and purposeful. It would be interesting and challenging. It would be liberating and joyful. It would be work that actually meant something.

Without the need to set different price tags on everything, we could set one; Priceless.

Many people might think of this as a kind of utopia. Getting all the worlds people in on this sounds daunting. Still, I think it is already in us. Giving and sharing is normal and natural in all of the world’s cultures.

We buy friends dinner without thinking about it. We share knowledge without cost, both on- and offline. People constantly help each other all around the world. Be it doctors, nurses, aid workers, computer specialists, or someone simply helping old ladies across the street.

On Cuba you are considered a taxi driver if you have a car. And that goes for tourists too. You have to stop for hitch hikers and share your car.

On Fiji, they basically doesn’t have any private property. Usership and sharing is the norm. If you are there and comment positively on the TV of your Fiji family, they will feel compelled to give it to you.

I think our basic instinct is to share. Our human nature is not a greedy one, but a sharing one. It has only been buried under layers upon layers of money and property for millennia.

Thinking about a global resource based economy in today’s crazy money world might be a long shot.

Still, I think it is the best shot we have.