To highlight the differences through these three stages of the lifecycle, I chose as terms for comparison three different types of media of exchange: the first is the certificate of ownership, the second is any kind of debt/credit, such as a bond issued by a company or a promissory note issued by an individual, the third is fiat debt money, currency without intrinsic value issued at face value plus interest.

The certificates of ownership are part of a system whereby the government does not dictate any monopoly on media of payment and runs at a fee public depositories where anyone can freely store any storable and durable commodity, the commodity is verified as complying with minimum quality requisites, and if so it is accepted and transferable certificates of ownership are issued as a receipt that can then be used as medium of payment, until their current holder presents them to the depository, which consigns the commodity and destroys the certificates.

Beginning: The purchasing power of the certificate of ownership is born when it is issued, and it is owned by the owner of the corresponding verified and stored commodity, thus no new purchasing power is created out of nothing and therefore nobody can appropriate it.

Continuation: The certificate circulates while the corresponding commodity does not, so its purchasing power circulates instead of that of the commodity, thus the amount of the existing and circulating purchasing power is not altered. Individuals can freely trade the certificate, including loaning it at interest, but the mere existence of the certificate in itself does not involve any interest owed to anyone whatsoever.

End: When the holder of the certificate redeems it, it is exchanged with the corresponding commodity and destroyed, thus, again, the amount of the existing and circulating purchasing power is not altered, and that’s all.

The debt, or credit, depending on which side one looks at it, is born the moment two or more parties agree on a commitment: some present−time purchasing power is exchanged with some promise to deliver some purchasing power in the future. The agreement takes place because the parties delivering present−time purchasing power trust the commitment of the other parties to deliver purchasing power in the future. Whatever reward for the trust and the involved risk of failure to deliver is part of the agreement. When the future becomes present and the commitment to deliver comes due, the debtor either fulfils it or not, or re−negotiates it, in full or in part. The goverment and the law usually back it all up by providing acknowledgement and enforcement.

Beginning: The purchasing power of the debt/credit is born when the creditor is willing to trust the potential debtor and accept it, even before the debt is incurred; it is owned by the debtor, and it is also called credit in that it consists of how much a potential creditor is willing to trust the debtor’s capability tu fulfil such commitment. The moment the debt is incurred, it becomes new additional purchasing power, created momentarily out of nothing in the present, appropriated by the potential debtor who then exchanges it for other purchasing power, out of the debtor’s promise and the creditor’s trust that the debtor will deliver the corresponding product to the creditor in the future. Regardless of which shape the creditor−debtor agreement takes, whether a receipt, a promissory note issued by an individual, a bond issued by a company or by a statutory corporation, or a government bond, the point is whether that debt, that commitment to deliver, is signed in a tradeable form or not. That makes a difference here: is the proof of debt a purchasing power exchangeable with third parties? If I lend you my quid on the basis of a handshake, the baker won’t accept the transfer from me to him of my assertion of your debt in exchange for a loaf of bread; if you scribble me a receipt, that has few more chances of better luck. Promissory notes, bonds and the alike, instead, are quite accepted by a plethora of negotiable instrument traders, even though with the exception of some bakers.

Continuation: The existing purchasing power received by the debtor circulates, and so does the proof of debt received by the creditor, on the proviso that it is in tradeable form, so the purchasing power of the proof of debt circulates in addition to the existing one and is backed by a commitment to deliver actual purchasing power in the future. Individuals can freely trade the proof of debt, including loaning it at interest, and that the mere existence of the certificate in itself involves any interest owed by the debtor to its bearer depends on its agreed conditions.

End: When the commitment to deliver comes due, the debtor either fulfils it or not, in all or in part; in case of fulfilment, the proof of debt and its purchasing power, based on a promise of future delivery, are replaced by the delivery of actual purchasing power that will continue to exist the way any other actual one does; in case of failure to fulfil, the proof of debt and its purchasing power somewhat continue their existence following a dwinding course according to its residual payability and the related legal provisions, while no actual additional purchasing power has been created.

Fiat debt money, at the moment the universal all the rage fashion, consists of fiat currency without intrinsic value almost magically springing into existence without much questioning who, where and how, and then of it circulating rather indefinitely from then on, perpetually generating a credit for the issuer, always without much questioning it all. Let’s set aside here who exactly is its issuer, and concentrate on the mechanism in itself abstractly. Wittingly or unwittingly, the issuer and the receiver factually agree there is a moment fiat debt money assumes its face value from zero, that is, despite it is brought into existence at zero or nearly zero cost, and therefore the first exchange of that money is as fiat money: the issuer gives absolutely nothing and receives some existing purchasing power in exchange. Then, the debt factor enters the scene: the issuer is perpetually entitled to claim not only the credit of that face value but even an interest on that face value as well, of that nil exchanged with existing purchasing power.

On the part of the issuer, the agreement to give fiat debt money out of nothing in exchange for existing purchasing power is obviously fraud and robbery; as of the party accepting to give existing purchasing power in exchange for fiat debt money out of nothing, that agreement ought be out of gullibility, ignorance, manipulation, swindle, duress, connivance to the detriment of third parties. Inspecting it more closely at this point, I intentionally call this money “fiat debt” so as to highlight and study these as two distinct features, before studying them together.

Fiat: If a fiat money without intrinsic value is issued against a promise of future delivery of purchasing power, such as in the case of a government, business, individual, committing to use the purchasing power received in exchange to produce and deliver something useful, that would assimilate it to the previous case of debt/credit: that money would be a debt for the issuer, and the issuer were committed to repay it; the face value of that money would represent that of future production the issuer committed to deliver. But we do know things are usually quite otherwise: fiat money is issued and exchanged with actual purchasing power without any commitment of any future valuable production and delivery on the part of the issuer whatsoever, not the slightest trace of it. So: if fiat money issued against a commitment of future delivery is a debt on the part of the issuer, and a credit for the other party that accepts it giving existing purchasing power in exchange, what is that fiat money when issued against nothing, without any such commitment? Exactly: a gift. The existing purchasing power exchanged with commitment free fiat money is no more a credit; it is a gift, lavished on the issuer by the party accepting that money, because the purchasing power given in exchange will never have to be paid back by the issuer.

Debt: If that weren’t already incredible enough, things get even more paradoxical when debt enters the scene. If fiat money were issued and exchanged against the issuer’s commitment of future production and delivery, and so assimilated to debt/credit, then just like with debt/credit the creditor may require the debtor to pay an interest for the duration of the credit. So the party accepting fiat money may require the issuer to pay an interest. And if the fiat money were issued without any commitment of future delivery, and the purchasing power exchanged with it were a gift, not a loan, then the party bestowing it may require its recipient, the money issuer, to pay an interest for the gift, or something like that. That may be justified; at the very least more justified than the following… Because debt money, debt added to fiat money, means that the issuer, after exchanging fiat money out of nothing with existing purchasing power, not content with this, charges an interest for that fiat money out of nothing, too. Please note: the one charging the interest is the debtor, not the creditor; the recipient, not the giver. We are confronted here with the paradox of reversing the interest: the recipient demands the giver an interest on what is given!

Fiat plus debt: Now that both components are thrashed out, we can reassemble them and appraise their combined effect. The issuer of fiat debt money creates it out of nothing, that is, at no cost, exchanges it for existing purchasing power, that is, receiving a “gift” some may fancy to call fraud, extortion, robbery and the alike, and from then on demands an interest for the gift received from the parties bestowing it, for the duration of the gift, that is, a rather perpetual duration. Kind of paradoxical crime isn’t it? A very good reason to call it exponential is the compound interest: now you owe me 10 units of purchasing power and for such debt I’ll charge you a 10 percent interest every unit of time; after the next unit of time you will owe me 10 plus 1 equalling to 11 units, on which I’ll charge you the same interest, only this time calculated on 11 units, not 10; after another unit of time you will owe me 11 plus 1.1 equalling to 12.1 units, on which I’ll charge you the same interest, only this time calculated on 12.1 units, not 11 etc. etc. Sooner or later I’m going to own and destroy everything and everyone, isn’t it?

This said, let’s now finally see fiat debt money in action through its lifecycle phases:

Beginning: Whatever the physical and legal form that fiat debt money takes, be it coin, banknote or electronic data, and regardless of when and how its physical or electronic birth takes place, that from a worthless state it becomes valuable implies there is a definite moment when its purchasing power is born, and that in turn implies – inexorably and inescapably – that its purchasing power is born in someone’s hands: the issuer’s. As we have seen, while in the case of a certificate of ownership its purchasing power is that of actually delivered production, and in the case of a bond its purchasing power is that of future promised production and delivery, in the case of fiat debt money its purchasing power is neither that of delivered production nor that of promised production: it springs into existence out of thin air, without any production at all, neither delivered nor promised. So each unit of fiat debt money newly created fraudulently enriches its issuer on its outset, to begin with.

Continuation: The issuer first exchanges fiat debt money with some existing purchasing power; that what it is exchanged with bears any interest at all or anything alike is outside the subject, the point here is the interest borne by money. Because from then on, just like a taxicab whose taxi meter never sleeps, here is the perfect tool to extort purchasing power out of anyone, covertly, automatically, effortlessly: every breathe everyone takes, they are in debt to the issuer for the very fact of breathing in the first place. Like a toll booth placed just outside the heart, with a toll exacted on every drop of blood that circulates to keep the body alive, the issuer accumulates an infinitely increasing credit by reason of each and every money unit that exists and circulates and keeps society alive, no matter from whom, to whom, and for what it flows. Remember the basic suppressive strategy to find a vital communication line and then sit on it and profit from suffocating its flow, vital because indispensable?

End: Supposing fiat debt money ever ceases to be, that is, to have its face value, such a demise implies there is a definite moment in which it occurs, and that in turn implies its purchasing power vanishes from someone’s hands. Anyone can destroy money in one’s possession, and anyone would do so against one’s own interest, but only its issuer may do so without an actual loss: if you, I or a non−sovereign government, all of us devoid of issuing power, destroy a banknote, we lose the actual purchasing power we exchanged for that banknote; if the issuer does, it only loses a tool to exchange actual purchasing power for a nothing that cost nothing to produce. When the issuer is a sovereign government, that is, equipped with issuing power, rather hypothetical occurrence these days, or much more realistically a central bank, a private monopolistic business wolf disguised in a public service sheep clothing, it would withdraw money from circulation adducing the aim of avoiding inflation caused by too much money in circulation compared with the existing exchangeable valuables. Such a circumstance raises the issue of how would such an entity put its hands on the money targeted for extinction, since it would probably be mostly in the hands of people. As to this, taxes are merely the form of extortion and robbery more disguised with justifications, nothing else than a Trojan horse; instead of plainly ripping the money from the hands of people by force or by declaring it no more legal tender, the very problem is sold as the solution: the parasite weakens the organism by drawing blood through fiat debt money, then, as the cure for the anaemia, instead of its own removal it commands blood transfusions… of blood taken from the same anaemic organism, and then re−injected in it after an appropriate deduction for interests and bribes.
As the surefire tax therapy is the prerogative of governments, governments are the primary target of infinite debt traps; it ensues why you’re going to find as the standard setup governments as mere perpetrators and the owners of fiat debt money, central banks and commercial banks as covert instigators.

Covert until the economic and legal state of things is such that they do not even need to hide behind the governments any more. When the issuer is a commercial bank – sole grantee amongst all private citizens and businesses of the incredible privilege that ought to be called with its name, either “monetary sovereignty” or “counterfeiting”, instead of understating it as “fractional reserve banking” – the idea is that that money, created out of thin air and loaned against repayment of actual principal plus interest, once repaid is merely deleted: born out of nothing, back to nothing, just keep the change. Ashes to ashes, interests to bankers; dust to dust, foreclosures to bankers, and that’s it: the mass is ended, go in peace. As the old Neapolitan saying goes, “Chi ha avuto ha avuto, chi ha dato ha dato, scurdammoce ‘o passato.” Which means, “Those who gave gave, those who had had, forget the past.” No matter how criminal this already is, there’s even more to it; in fact, the point is: how do you know that that money actually ceased to exist at all? So substantial a point that it even has a name: banking reflux. (Inspired term: reflux may occur when one engulfs too much.) In fact, it means that money – any other profit aside – once back into its issuer’s hands, simply does NOT cease to exist at all, and indefinitely so. And if fiat debt money never passes away, its purchasing power never ceases to exist with all that this implicates: if it remains in hands other than the issuer’s, it will continue to accrue interests for the issuer; but even if it remains in the issuer’s hands it won’t sleep and be harmless at all, because the issuer will end up using it one way or another… to buy us all out.

These three examples illustrate as well the three types of relationship between the purchasing power of the medium of exchange/payment and the purchasing power of the product: In the case of the certificate of ownership, the purchasing power of the medium of exchange exists and circulates instead of that of the product, held out of circulation as its guarantee; since no additional purchasing power out of nothing is created, the problem of who is entitled to it doesn’t arise.

In the case of debt/credit it exists and circulates in addition to that of the product, being the commitment of a future delivery; as to who is entitled to the additional purchasing power created out of nothing, it is implicitly agreed to grant it to the debtor out of trust, as an investment and against a commitment of a related future delivery. In the case of fiat debt money the purchasing power of the medium of exchange exists and circulates in the sheer absence of the product – of any corresponding product at all! – as there is neither any existing nor any future product behind it; as to who is entitled to the additional purchasing power created out of nothing, the problem is fraudulently concealed so it won’t be detected and arisen by the owners of the actual products whom, knowingly or unknowingly, gift the issuer with some of their purchasing power in exchange for nothing plus the privilege of being charged an interest for the gift given. No increase of purchasing power out of nothing with certificates of ownership; moderate, temporary and justified increase with debt/credit; unlimited, permanent and unjustified increase with fiat debt money.

In conclusion, in view of all that we have seen, in my humble opinion we can state an important basic principle: creating purchasing power, such as that of media of payment, out of nothing without due product is a crime; creating it without awareness, understanding and consensus on the part of others is a scam, too, and hardly others would consent to it once they know and understand. Charging an interest on it is no less than a paradoxical and exponential crime and scam. Making that interest compound is a further exponential multiplication of that paradoxical and exponential crime and scam. Even if all these crimes yielded profits too negligible to bring about infinite debt traps, there would be no reason in the world why someone ought to be the sole beneficiary granted the privilege of a flow of purchasing power stolen from others in exchange for nothing anyway, no matter how negligible the loot. Considering how these crimes are the foundations on which infinite debt traps are built, and considering the order of magnitude of their fallout, nothing else deserves to be called a crime against humanity more than these crimes do. And they factually are: in addition to be logical consequences, these are proven inescapable facts under the nose of anybody that cares to observe.