This came out from Denninger today. It is not all directly associated to where our money comes from, but it indicates the source of the problem about mid way through the short article.

Oh Please

A couple of quotes to get the highlights:

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The entire reason we have a bubble machine -- a serial one at that -- in all the advanced economies is because that structure is necessary in order to run fiscal deficits.  This is an act of fraud upon the public; the claim that one can have that which one cannot or will not pay for with current income (in this case, taxes.)

This would be ok if the spending was merely pulled forward and then not undertaken later -- in other words, if you borrowed say, $100 billion and then paid it off.

However, that never happens.  It has never happened in the history of the United States in over 100 years.  It has not happened here, it has not happened in Japan, and it has not happened in Europe.  That's the developed, industrial world.

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Federal Reserve policies, and commercial bank credit emission (which incidentally is how we get bubbles, NOT The Fed) all come from the fact that the government demands the right to emit credit whenever they want in whatever quantity they want.  This is done through the banks since they buy the Treasuries; ergo, the structure must be in place to emit unbacked credit!

Stop that, and there is no need to allow the banks to have that structure.  Stop that, and there is no inflation.  Stop that, and there are no more bubbles.  There are still good ideas and bad, but there is no more government of whatever you want to "give", there is only government that the people will consent to pay for via taxation.

One Dollar of Capital resolves all of this.  But that's an impossible mandate so long as the government demands the ability to cheat.

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Why do I bother posting all this? Because until we understand the problems with our money and how it is created and who benefits, we will never understand the source of our national money problems. And until we understand the source of the problem, all the "fixes" are nothing but Band-Aid's to patch up a failing system that has reached the limit of its debt carrying capacity. It is easy for the powers that be to keep the wool pulled over our eyes until we understand the truth. Once we understand the light of truth, they will no longer be able to keep us in the dark. And the dark is exactly where they want us. So they can "save" (sarcasm) us when we have the next crisis. And there WILL be a next crisis. Math dictates it.

John