Current Crisis Just More Deja Vue

As discussed in a series of articles from 2008-2009 titled The World According to Derivatives, history clearly reveals that the ongoing economic crisis begun in 2008 was both predicted and predictable. The fault line rests squarely on our current, mathematically impossible monetary system which relies on bank credit serving as money.

Unfortunately, the proper and necessary solution is seriously impeded by the popular misconception that paper money is by nature inflationary despite the best efforts of legions of researchers and even some government officials and economists to educate us.

For example and in relating the 1914 bank collapse and the "credit as money" problem in England at the time of The Great War (WWI), author Arthur Kitson discusses the predictable role that bank credit serving as money plays in economic crises. The following are relevant excerpts from Kitson's 1917 book Trade Fallacies, pp30-34:

A simple arithmetical calculation will show that production does not keep pace with the demands of interest charges [when money is created as bank credit or debt]. . .
Some twenty years ago [1897] I showed that even in a country as rich in natural resources as the United States, the claims of capital outran the capacity of production, and hence periodically wholesale bankruptcy and starvation of the factors themselves was inevitable. . . . . .
Although the public received the news [of the English bank collapse in 1914] with astonishment, those who, like myself, have known and have striven for years to open the eyes of the public to the imminent danger of the confidence-basis upon which the business of our Joint Stock banks has been conducted, fully expected this catastrophe.

It might be recalled that the same thing occurred not twenty years later in the United States in 1929 when banks began collapsing due to the fact that loans exceeded the actual money in the banks by a factor of 10:1. The economic downturn resulting from the bank collapse in the United States then spread round the world.

Similarly, in England as in the United States - and now around the world - government has always come to the rescue of the banking system - AT THE EXPENSE OF THE PUBLIC AND INDIVIDUALS ALIKE. This unhappy, inhuman situation has for far too long been due to widespread, erroneous assumptions about money.

Again as per Kitson:

. . .The generosity of the Government saved the banks, as usual, at the public expense. The entire credit of the nation was placed at the banks' disposal, which enabled them to open their doors, resume business, and avoid a receivership.
The nation was compelled by a complacent Chancellor to take all the risks whilst the bankers took all the profits. If at that time the Government had seized the golden opportunity of nationalizing our entire banking business, instead of catering to the private interests of bank shareholders, they could have effected one of the greatest and most valuable economic achievements of modern times, and gained for the nation incalculable advantages.
Unfortunately for this nation, neither the Government nor the Chancellor seemed to realize the advantages to be gained for the nation, or the opportunity which the banking collapse offered.

THE QUESTION BEFORE US ALL: WILL WE SEIZE THE MOMENT OR WILL WE CONTINUE TO MAKE THE SAME MISTAKES WE ALWAYS HAVE, SENDING INCREASING NUMBERS TO EARLY GRAVES AND A LIFE OF UNIMAGINABLE MISERY AND WANT - SIMPLY BECAUSE OF OUR COLLECTIVE FAILURE TO GRASP NOT ONLY THE EXTREME IMPORTANCE OF THIS ISSUE, BUT ITS TRUE SOLUTION?