Currency as Debt: A New Theory of Money
An Introduction
Part 9 of 9
 

Recognizing the flaws with monetary policy required an historical evaluation, but more importantly, required a new monetary system model. By creating a new model, errors in the previous models were more easily recognized and proposed solutions more easily forthcoming.

The new model redefines money and currency. Although common usage treats the two terms as synonymous, the new model distinguishes between the two terms. The new definitions treat money as a concept, something existing in the world of ideas; and currency as a physical thing, existing in the real world.

The new model redefines wealth and debt. Providing new definitions eliminates the confusion that occurs when treating the term currency and wealth as synonymous. Currency and wealth are not the same. Wealth represents a physical positive quantity, and debt represents a psychological negative quantity. Currency is a symbol of debt.

The new monetary model recognizes that currency serves only one fundamental purpose: to exchange wealth today for wealth in the future. The new model recognizes that a unit of currency, by not being wealth, is in fact a symbol of debt—a claim on a specified amount but unspecified type of the future wealth of society.

The new model recognizes that because an entire economic society with a high division of labor is strongly dependent upon the concept of money, that any circulating currency is a public utility. That is, although currency—the thing used to represent the concept of money—is the physical property of each individual holder, the concept of money belongs to no single person. No single person or special interest group should receive disproportionate benefits from an ownership interest in or control of a society’s monetary system, including that society’s government operating under the guise of safeguarding the public. Any circulating currency must provide equal benefit to all people at all times, with future exchange value or purchasing power remaining stable within the aggregate.

Fundamentally then, NESARA establishes the foundations for a free market monetary system and resolves many of the centuries-old challenges of monetary policy. Its monetary definitions do not compel free markets to use any specific commodity as currency, but provide only a public standard—tied to the physical world—through which various market currencies might be compared. Buyers and sellers in the market are free to establish contracts in terms of ounces of gold or silver—or any other commodity; and if buyers and sellers choose to use the token paper currency, a known relationship links that currency to the real world of wealth and commodities. Furthermore, the token paper currency is not exchangeable with specie at a fixed exchange rate; the free market determines that exchange rate.

Lastly, although not discussed in this effort, the new monetary model incorporates a concept known as virtual wealth. This concept allows for the market to expand the currency supply only when the market requires. Government is allowed only to establish some standards for currency, but cannot itself expand the currency supply.
 

Frank McKinney “Kin” Hubbard, 1926.