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Charlemagne (r. 768–814), crowned Emperor of the Romans on Christmas 800 AD, did not come out of nowhere. His family, the Arnulfing clan, had been the real power among the Franks for a century; and the Franks had ruled the better part of Gallia and Germania Minor since the early 500s.I do not mean to understate his influence, which was tremendous: spending almost his entire reign in the saddle, he pushed the frontiers of his realm to their farthest realistic extent, eliminated the formidable Avars and Saxons, converted half the Slavs, and gave the Franks a firm hold on the wealthy Mediterranean lands to the south. It has been said that Augustus’ conquest of the East received Rome a city of brick, and returned it a city of marble: Charles’ dilation of the Frankish realm took a Europe of forests and returned it a land of palaces, abbeys, and churches. Though in the long 10th century the Franks would relive the age of internecine strife and Magyar, Viking, and Saracen incursions deep into their heartland, he gave them some generations’ reprieve, and it did not go to waste.But to say his empire lasted 1,000 years is to stretch fact into fancy. There are two dates plausibly given for the end of Charles’ realm: AD 843, when the Treaty of Verdun divided it between competing kings under a senior Emperor; and AD 888, when Charles the Fat, the last Carolingian Emperor to (re-)unite them by inheritance, was deposed by his own magnates for showing cowardice before the Vikings, dividing the empire into five separate kingdoms without even the pretence of an authority over them. Only in AD 962 would Otto of Saxony, from another dynasty, again impose a tentative unity on these divided realms.On the occassion of Verdun in 843, Nithard, illegitimate grandson of Charlemagne, lay abbot of St. Riquier and knight in the service Charles the Bald, king of the western Franks, wrote:In the time of Charles the Great of blessed memory, who died almost thirty years ago, peace and concord ruled everywhere because our people were treading the proper way, the way of the common welfare and thus the way of God. But now since each goes his own separate way, dissension and struggle abound.Once there was abundance and happiness everywhere, now everywhere there is want and sadness. Once even the elements smiled on everything, and now they threaten, as Scripture, which was left to us as the gift of God, testifies: and the world will wage war against the mad.Below, see the division made at Verdun, beginning with Emperor Lothair of the Middle Kingdom (“Lotharingia”), largely synonymous with the old regnum of Austrasia. His brothers Charles the Bald and Louis the German received the western and eastern Franks, respectively. Lothair’s own son became king of Italy under his father; Charles the Bald’ son became king of the Aquitainians; Louis the German’s son became King of the Bavarians, each also under the suzerainty of their father. Six regna in total, not counting the indigenous principalities of Saxons, Gascons, and Burgundians also (re-)emerging at the time:From their perspective, we might now ask the better question: how had Charles brought all these together, and kept the internal peace? Of the two kingdoms in the east and west, neither seems an easy unity. Both include diverse races (gentes), each of which has its own customary law governing its affairs and with its own local rulers, tribal assemblies and armed forces.In the eastern kingdom:Saxons, Franconians… Swabians (or Alemanni), and Bavarians… Raetians and Carinthians inhabiting the Alpine valleys… the coastal Frisians and, inland, the Thuringians, (both) neighbours of the Saxons… their history influenced by Saxon domination. These divisions into gentes or peoples are essential for understanding the (kingdom’s) social, legal, and political structure…(Benjamin Arnold, Medieval Germany)In the western kingdom:(After the 840s, no king) could assert authority among the Gascons (or Basques), who dominated a surviving Germanic and Gallo-Roman population (in the south); nor among the Celtic-speaking peoples of the Breton peninsula… who, under their renowned leaders Nominoe, Erispoe, and Salamon, terrorized the inhabitants of the Loire region… (even) within lands where their rule was recognized, the kings had to cope with deep-seated (regional gentes)… the Visigoths of Septimania (Gothia) and the Spanish March, the Burgundians of Burgundy, the Franks of Austrasia and Neustria, all differentiated from the Gallo-Romans of Aquitaine…(Jean Dunbabin, France in the Making 843–1180)The answer, then, might lie with the middle kingdom of Lotharingia/Austrasia, later called Lorraine, usually (but only roughly) defined by the rivers Meuse and Rhine. This region had been the original seat of the Arnulfings or Carolingians:…while Lotharingia was relatively small by Carolingian standards, it did have a spectacular concentration of political resources which its rulers sought to manipulate, including two archbishoprics, eight bishoprics and numerous imperial monasteries that served as centres of wealth, commemoration and elite socialisation. Among them were several archetypal dynastic centres like Aachen (Charlemagne’s most famous palace) and Metz, the final resting place of Bishop Arnulf, the numinous progenitor of the Carolingians. Little wonder that in the 13th century Lotharingia could be referred to as patria regum (homeland of kings).Dorestad, near the mouth of the Rhine, was a major trading node of the Carolingian period… (contemporary hubs arose) further inland (such as) Verdun on the Meuse, a commercial centre which contemporary observers associated with long-distance slave trading to the Mediterranean littoral… regional circulation of goods was an increasingly important feature of Lotharingian life in the later ninth and tenth centuries. Local ruling families certainly benefited from such activity, as illustrated by the appearance in the tenth century of aristocratic strongholds built in stone… such fortresses (demonstrate) that economic vitality did not necessarily lead to political stability – material resources were a focus of conflict as well as a source of wealth.None of the kings who ruled after (AD 888), even those descended from the ninth-century Carolingians, could expect to have their legitimacy accepted as a matter of course. They had to compete not just to dominate their rivals but even to establish the very notion of their own regality… In this struggle for legitimacy, attempts to appropriate the symbolic capital of Lotharingia’s Carolingian past played an important role. (Yet) the heartlands of the tenth-century dynasties were far from the core territories (of the 9th-century empire).This paradox fuelled conflict over the kingdom, its physical unattainability making it hard to definitively control and causing its symbolic significance to inflate… The intensity of the struggle for Lotharingia between its neighbours, each operating at the fingertips of their reach, was what burned its shadow onto the map of Europe.(Simon MacLean, Shadow Kingdom: Lotharingia and the Frankish world)In other words, 10th c. kings suffered from a protracted crisis of legitimacy in the eyes of their people; they were not “kingworthy.” The key to Charlemagne’s kingship lay with the network of institutions we just saw radiating outwards from the nerve-centre of the Frankish realm, bishoprics and abbeys, gradually embellished and endowed by generations of his family. The forefather of the Arnulfings, Arnulf of Metz, had been both bishop and abbot. The seat of Charlemagne at Aachen, or Aix-la-Chapelle, was the greatest of a network of palaces throughout the Frankish kingdoms. These were centres for the dissemination of religion: at his court, the Carolingian king would assemble and consult with the three “orders” of magnates, the bishops, the abbots, and the nobility.Two institutions underpinned the king’s authority: the call to arms, and the call to prayer. I call your attention to Nithard’s comment, “(in the 800s-830s) even the elements smiled on everything, and now they threaten… the world will wage war against the mad.” The tissue of the state was based on collective prayer as a form of penance, expiation for the Christians’ collective sins. From the court in Aix, the king would sent calls for specific prayers to specific provinces: when famine and disaster threatened, the notables of the provinces down to the level of pagi or local communities would gather up the people and direct them to beg God to stay His wrath, and for forgiveness of their sins.From Charlemagne’s reign onwards, such moral warning, or admonitio, as it was usually called, pervaded public discourse. ‘We admonish you now to re-read your capitularies, to recall the duties with which you have been charged orally and to strive to be so zealous with regard to these that you may receive both reward from God and fitting recompense from that great lord of ours.’ Thus wrote a commission of four of Charlemagne’s missi, clerics and laymen, to the counts within their jurisdiction. In a similar vein, the issues in the political dissension of the late 820s and early 830s were phrased in terms of sin; the most hotly debated questions revolved around the question of who had sinned and why, and how the offended deity could be placated.Mayke de Jong, The Penitential State: Authority and Atonement in the Age of Louis the Pious, 814–840One writer from 828 wrote, in the Epistola Generalis,Who does not realise that God has been offended by our depraved acts and provoked to fury, when he sees His anger savage the realm committed to us by him for so many years with manifold scourges, for example by constant hunger, by the death of animals, by plagues among men, by the sterility of almost all fruit trees? (All this and more) should be ascribed to our sins, that the enemies of Christ’s name, who entered this kingdom, have committed robberies, set fire to churches, captured Christians and killed the servants of God, boldly and with impunity – indeed, most cruelly. It is therefore through a just judgement of God that we, who have sinned in all respects, are scourged inside and outside. We are obviously ungrateful for God’s kindnesses, for we are found to use these not for God’s will, but for our carnal pleasure. And therefore the creatures of God, divinely committed to us, rightly fight for God against us ungrateful ones, as it is written: “and the world will wage war against the mad.”I trust the pattern is obvious. Monasteries, for example, served just this purpose: their monks were state servants, engaging in continuous prayer for purposes commanded them by the king. The priest-king, who presided over councils of the Church, commanded the service of the milites Christi (soldiers of Christ) both in this world and the other.This resolved into an ideology of kingship comparable to what is popularly understood as the “mandate of heaven”, but I would encourage the reader to view in terms of the Germanic tribal “trial by combat.” The Franks sincerely believed that victory in battle was the sine qua non of divine favour: their conversion to Christianity had been phrased in just these terms. There was no question that it was God who decided the victor in all contests of armed strength — consider the deposition of Charles III in AD 888, for avoiding battle, in this light. The flip-side of this idea was that kings faced with rebellion and invasion had their problems compounded: they held personal responsibility for their realm’s moral conduct, whose breach angered God into “scourging them from within and without.” Among Charlemagne’s successors, the increasing absence of victory and prosperity led to paroxysms of public piety, attempts to find scapegoats, and breakdown of loyalty to kings who were seen as less than righteous.For Charles, of course, success on the field meant legitimacy at home. The assumption of responsibility for the moral failings of the world gave the authority, spiritual rather than profane, to correct them: a king victorious in war became the corrective rod of God to His children. His dilation of his realm over the barbarians brought them under the tutelage of the Church: his victory over the barbarians gave him moral authority to subject the Church to his royal “reform programme” (to use a highly anachronistic term). The Church here is not a separate institution, it is the Ecclesia or congregation of the Franks: the king corrected the failings of his people like a father or teacher his children, earning the title of pater patriae (“father of the fatherland”). When in AD 955 Otto of Saxony, future Holy Roman Emperor, defeated the Magyars at the battle of Lechfeld, he created the conditions for the restoration of the Christian Empire: long before the Pope did so, his soldiers saluted him as Imperator and pater patriae. By defeating the enemies of the Christians, he became a sign sent by God to correct us, the mediating teacher/disciplinarian between the congregation and its Lord.The 11th c. Song of Roland gives us a very colourful picture of Charlemagne as the wise, wonder-working king:(Charles) was wearing his fine white coat of mail and his helmet with gold-studded stones; by his side hung Joyeuse, and never was there a sword to match it; its colour changed thirty times a day.A very different picture is given by a contemporary chronicler, Notker of St. Gall, describing Charles’ triumphant entry to Pavia, chief city of the Lombard kingdom, on his way to Rome in 773 AD:Then appeared the Iron King, crowned with his iron helmet, with sleeves of iron mail on his arms, his breast protected by an iron byrnie, an iron lance in his left hand, his right hand free to grasp his invincible sword. His thighs were girt with iron mail, which other men were wont to leave unprotected so that they might spring more lightly on their steeds. And his legs, like all his host, were protected by iron greaves. His shield was plain iron without device or colour.Around him, before him, and behind him rode all his men armed as nearly as like himself as they could fashion themselves. So iron filled the fields and roads, and the sun’s rays were on every side reflected from iron. “Iron, iron, everywhere!” cried the terrified people of Pavia.This dream-like vision of iron is largely symbolic; a “plain iron shield without device or colour” is not plausible. The monk of St. Gall is rather trying to make a laudatory account of the Franks as an unstoppable natural force, with Charles embodying the alchemical-astrological properties of iron, the metal of Mars.But the image reflects a reality. The 9th century was the last time Europe saw effective use of the universal call to arms of all free men, which was liberally used by Charles: every man in his empire, even and especially the recently conquered, had either to fight or provide provisions for the army at the king’s call. The immense popular mobilization the Franks were capable of was, for economic reasons, never fully deployed, but serves to illustrate the immense organisational power of the monarchy. The Carolingian supply system was far in advance of later medieval kingdoms, keeping large armies supplied over transcontinental campaigns in pagan lands.Yet it was the changes wrought by Charles himself that made the system obsolete. In prior centuries, Greek-Roman authors had remarked the Franks seemed to lack horses, fighting only with infantry. They did have cavalry, in truth, but they did not use the stirrup (which had been introduced by the Parthians some time earlier), and had little armour: the Frankish army of Charles Martel was probably almost entirely light infantry, aided by light cavalry auxiliaries for raiding and reconnaissance.It was roughly in Charles’ reign that the oriental model of heavy cavalry, the cataphract or armoured knight, was imported: awe of the “Iron King” by the monk of St. Gall reflects the shock value of an army centred on an “invincible” core of heavy cavalry. At the same time, this made old tribal levies increasingly obsolete: over the course of the 9th century, military value would be confined to the wealthy men who could purchase a suit of iron.The late 6th-early 7th c. Isola Rizza Dish, showing a heavily armed cavalryman with Asiatic dress, of Roman-Italian origin. The Romans themselves had adopted Parthian cavalry styles with great success against the Germans since the mid-3rd century.Charlemagne’s campaigns coincided with the reopening of trade between the south Mediterranean rim and the former Roman west, and their purpose economic as well as political.“…slaves were in demand on the southern rim… After centuries as the main theatre of war between the empires of Rome and Persia, the economic of gravity around the 'Fertile Crescent' returned to peace, just as a new world system coalesced from the Atlantic and the Pyrenees to the gates of India… The new economic geography fostered an Arab agrarian revolution, spreading the intensively irrigated and cultivated plants of India across this new world and boosting the productivity of old lands…Slaves were crucial to the Muslim economy… (from) black Africans enslaved in the land reclamation projects of 9th century Mesopotamia… (to) domestic and military slavery, no less vital to the economy and state. The Muslim conquests had produced hordes of war slaves… (yet) the end of the Umayyad dynasty and its vast victories forced the Abbasids to turn to large-scale purchasing of slaves… What is more, the end of military expansion and the need to begin buying slaves coincided with the final Justinianic pandemic (of bubonic plague). It is no coincidence that Venetian merchants in the historical record were in the business of exporting enslaved European Christians to Africa around 750, just as the caliphate was emerging from the last bubonic plague of the early Middle Ages. As in earlier and later epidemics, the demand for labour surely spiked just then.“The best thing is to consider the slave trade of early Europe in simple terms, for instance of comparative value. What evidence there is suggests that slaves doubled or tripled in value, once they were transported to the opposite shore of the Mediterranean… Compared to other forms of commerce, indications of Frankish slave trading are not hard to come by. Slave markets marked the frontiers of the Carolingian empire: at Utrecht; along the Alpine route to Italy; and on the banks of the Danube (…) the booming trading currents of the North Sea (did not come) to a halt in the Carolingian land mass, whose great Rhenish artery flowed from Italy's Alpine border to the trading docks of Dorestad in the Dutch delta… slave traders (would have travelled along the) eastern Alpine corridors where the Arab and Byzantine coins cluster, and where archaeologists have recently noticed the enigmatic presence of glass beads, a commercial ware imported from the Islamic world.(…) For instance, in the 770s or 780s, Paul the Deacon wove contemporary concerns through the whole texture of his unfinished masterpiece, the History of the Lombards. He began with a 'scientific' description of the salubrious weather of northern Europe, founded on the ancient climatic theories of health. This, Paul explains, is why the north produces people so prolifically. This vast land mass (in which he explicitly includes eastern Europe) deserves the name 'Germania', because of the teeming masses its healthy climate 'germinates'. Europe's high fertility explains the slave trade and invasions of Paul's own time: 'This is why the countless troops of captured slaves (captivorum) are frequently driven away from this populous "Germania" and sold to the southern peoples.’(Michael McCormick, New Light on the 'Dark Ages': How the Slave Trade Fuelled the Carolingian Economy)To put it another way: global economies generally show signs of a centre, which produces skilled labour and luxury goods, and a periphery, which produces raw resources and immigrant labour. The ancient Greeks bought Gaulish slaves for wine and ornate pottery; the medieval Arabs bought Saxon, Magyar, and Slavonic slaves from the Frankish conquerors of Germania in return for silks, spices, and jewelry. For example, over a seven-year period in the 770s Pope Hadrian I - who had himself been accused of selling Christians to slavery in Africa - gave away hundreds of silk hangings to allies and political supporters, totalling an estimated 3,000 sq/m of silk. The sheer value of this fabric, in which Papal and Imperial courts dressed, would have been worth a king’s ransom: the scale of wealth that flowed into the Carolingian realm through Italy was quite unlike anything those lands had seen before, and was contemporary to the creation of the saqaliba (“white slave”) armies in the courts of Africa and, later, Egypt and Syria. Much as economic systems are wont to do, the 9th century exported the wars necessary to sustain the way of life of the heartland to the periphery.But, not to end on this drab economic note, I will underline the ideological connections between one and the other. The status of slave was no accident: it represented a form of (forced) guidance, common to slave and conquered heathen, which the emergence of a divinely sanctioned order reinforced. The common thread running through emerging medieval institutions was order, rationality, and control: the imposition of a public, masculine ordering force (the res publica, then identified with the life of knighthood) to tame a pagan world that seemed to the Franks a dark place divided between effeminate weakness and animal barbarism, a world which seemed to easily spin out of control. The ongoing religious war was waged internally as well as externally, giving the entire society the promise of liberation from the chaotic forces of the Other and the erosion of its strength. The kingship, personified in the pater patriae, provided the living and active embodiment of this cosmic order, and was seen as right and lawful so long as it could victoriously impose order in the field and in the expanding congregation-ecclesia of the Christians.

OH SHIT.We are fucked. Royally fucked. Fucked up the ass, down the ass, and in all directions an ass can possibly be. Worse than Donald Trump. Worse than Hillary Clinton and Donald Trump. Worse than those two if they had a child who was raised beaten by an abusive babysitter with no parents around at all.I found someone worse than Trevor Phillips. Meet:The Postal Dude.The last game I played was Postal 2. Here’s why America is fucked, why he’s worse than Trump, why America should be genuinely hated, and why us Second Amendment fans should take the opportunity to rise up against tyrannical government.This guy brutally murders a ton of protesters outside his place of work (in fairness they did attack his workplace as well).He goes around looking for signatures for is petition that legit says, “Make whiney congressmen play violent video games”He goes to the cemetery to piss on his dad’s grave.He trespasses on Redneck’s property to get a Christmas tree (despite it being the middle of summer).He has the opportunity to either kill the dry cleaner or pay the fee.He buys a ton of napalm just to clean up some dead bushes.He participates in the Waco shootout cause his “uncle Dave” is working there. When getting him a birthday present he runs into the ATF and murders many of them.He uses a nuclear bomb stolen from a US Military base (also he murdered a bunch of US Soldiers who, unlike a lot of the others, were legitimately trying to protect the base from a dangerous psycho) to destroy a rival game company.Not to mention, he has the worst luck ever.When he was depositing his check bank robbers attacked it.When he’s confessing his sins at a church fucking Al Quaeda attack the church.When he’s returning his library book its attacked by book burners.When he’s getting a book signed by an author the SWAT arrive and it turns out the author is a criminal.When he’s pissing on his dad there’s a zombie apocalypse. Hands shoot out the Earth and bodies claw their way to the surface. Frankly pissing on anyone's grave is bad but you don’t really deserve a zombie apocalypse for that…His dry cleaning would have cost $100. But his clothes aren’t even that nice, so doesn’t really make sense to charge that much.The napalm factory sucks when it comes to safety. Some worker vomits on an electrical panel and causes a massive shortout that blows up the whole plant.When buying some steaks it turns out the meat is humans. When looking in the back room he discovers this.Junkyard guards lose control and attack him when he’s getting a new part for his car.The apocalypse happens under his watch.Well, he brutally murders the CEO of another game developer company and blows up their HQ with a nuke. That he stole from a military base. How do you think he’s going to handle terrorism, overseas and domestic? Riots? Crime? Violence? Heck, other nations?And you people thought Trump was bad when it came to international policy.He has the absolute worst luck. Do you want someone this unlucky as our President? With his luck, not to mention his “policy” fucking Canada would attack us.His use of napalm for simple weeds is concerning. What about bigger emergencies? Mass rioting? Crap like that?Having him as President of the United States scares me.#neverPostalDude.

You will.After the 2008–09 bailout debacle, the Dodd-Frank legislation vowed “no more taxpayer bailouts”. G20 monetary authorities have signed on. So next time the banks fail, creditors will be bailed in to bailout their failed banks.You — the deposit account customer — are your bank’s creditor. Your bank owes you base money — cash and reserves, the bank’s “liquidity” — in the amount of your deposit account balance, which is the bank’s balance sheet deposit liability. But failed banks can’t pay the deposit liabilities they owe. So your deposit account balance is going to be bailed in, as an alternative to letting your bank collapse in bankruptcy, in which case your deposit account balance would be simply written off as the unpayable debt of a bankrupt debtor.Commercial banks — depository institutions — are not actually in the money-lending business. Banks create the money they lend. It’s not “money”, exactly. It is a deposit account customer’s money asset and the bank’s money liability, that is payable in base money (cash and reserves) by the bank to the customer.Banks are in the credit creation and debt monetization business. Government debtors issue interest-bearing bills, notes, bonds: “bond” debt. Private debtors issue interest-bearing mortgage debt, student loan debt, car loan debt, credit card debt, line of credit and overdraft debt, small business debt, corporate debt, institutional debt: and commercial banks issue new deposit account credit to “pay for” their purchases of the debtors’ new interest-bearing loan account balances and bond debts.“Banking” is a balance sheet accounting business. It just happens that the liabilities issued by banks “are money”. Sellers of stuff accept payment in bank deposits, so the deposits (electronic digits in banking system accounting software) “are money”.Banks issue deposit liabilities (money) to purchase earning assets (debts).To make a $1000 loan, the debtor signs a $1000 promissory note, promising to repay the $1000 and to pay the interest. The bank purchases that note, which it holds as its interest-earning balance sheet debt-asset. To pay for its asset purchase, the bank types a $1000 credit into the borrower’s deposit account.The credit adds $1000 of spendable, investible credit-money into the debtor’s deposit account. The promissory note adds $1000 to the debtor’s loan account balance. The bank types +$1000 into the debtor’s deposit account, and -$1000 into the debtor’s loan account, which creates $1000 of new money and $1000 of new devbt.The debtor’s new deposit account balance is the bank’s new balance sheet deposit liability. The debtor’s new loan account balance is the bank’s new balance sheet earning asset. Debtors and their creditor-banks create new deposit account money and new loan account debt by “expanding bank balance sheets” with new deposit liabilities (money liabilities; payable in government-printed cash money, and in central bank-created reserve account balances) and = new debt-assets.Debtors spend the deposit account money and owe the loan account debt and bond debt. Payees — recipients of the debtors’ spending of the new money — earn the new money as “their” deposit account balances. So borrowers/spenders “owe” all the loan account and bond debt, and payees/earners “own” all the deposit account money supply.Debtors need to earn all of the deposit account money supply “back”, to repay their bank loans. But most of the money supply ends up being earned by “savers” who “keep” rather than “spend” their deposit account balances. So debtors “can’t” earn back the money, and debtors can’t repay their bank loans: because the people who earned and now have all the deposit account money are “saving it”.The commercial bank balance sheet money supply system “can’t work”. Which is why it doesn’t work. It collapses, and has to be bailed out.About 3–5% of the economy’s total spendable, investible and earnable, savable money supply exists in the form of government-printed banknotes and government-minted coins. 95–97% of all “money” is commercial bank-created credit/debt, not government-issued “money”.Almost all of the cash part of the economy’s money supply exists in peoples wallets and in businesses’ cash drawers and safes. This money is continuously spent-earned in the producer-consumer economy’s buy-sell, spend-earn stream.Cash money in banks is not part of “the economy’s” money supply. Cash in a bank’s vault, cash drawers and ATMs (along with the bank’s reserve account balance in its central bank reserve account) is the bank’s money assets: the bank’s “liquidity”.About 20% of the total deposit account money supply exists in people’s and businesses’ commercial bank checking accounts. This is also money that is continously spent-earned in the producer-consumer economy’s buy-sell, spend-earn stream.So about 23–25% of the total money supply is being “spent-earned”, so debtors could theoretically earn all that money, and use it to paydown their bank loans. Banks’ expanded balance sheets would be “reduced” by about 20%: the deposit account money and loan account debt cancel each other out — are “extinguished” — when debtors repay their bank loans. Banks’ deposit liabilities and earning assets are reduced by bank loan repayments.But the producer-consumer economy would have no “money” to conduct its buy-sell, spend-earn, payer-payee transactions. The only money left would be household and corporate “savings”. If savers spent down their savings, then the producer-consumer economy could go to work again, to pay-earn the newly re-circulated savings.DEposit account balances comprise almost all money. You spend deposit account money by debit card, online banking, check, wire transfer, etc. And you earn deposit account money by check or direct deposit into your commercial bank deposit account.{Savers have collectively transferred about 17% of the deposit account money supply out of their commercial bank accounts, into their brokerage accounts in the savings-funded capital markets financial system where the savings become “capital” and savers become capitalist “investors” who buy bonds and stocks to earn the interest and dividend payments. This is the “money markets” money supply, which is spent buying investment assets. It is not spent in the producer-consumer economy, buying stuff that people and businesses work at producing “for sale”.}The central bank and the commercial banks operate the account money “payments system”. When you pay a bill by online banking, you authorize your bank to debit your deposit account balance; and you authorize the payee’s bank to credit the payee’s deposit account balance, in the amount of your payment. Nothing “moves”. Your spendable deposit account balance is reduced by the debit, and the payee’s spendable deposit account balance is increased by the credit. The whole process is accomplished by typing debits and credits into customers’ deposit accounts. Look at your bank statement, and you will see the debits column (your money-spending) and credits column (your money-receiving); and you deposit account “balance” at the bottom of the page. Your balance is your personal deposit account “money supply”.When deposits are paid from a customer of one bank to a customer of a different bank, an equal amount of reserves is paid from the payer bank’s reserve account into the payee bank’s reserve account. The central bank debits payer banks’ accounts and credits payee banks’ accounts. Many back and forth payments cancel each other out, so reserve account payments are lagged and aggregated, rather than done at the same time as deposit account payments.If your deposit account has an insufficient balance to debit, your attempt at payment out of your deposit account fails to “clear”. The payee is not paid. If your bank’s reserve account has an insufficient balance to debit (and if your bank can’t borrow excess reserves from other banks in the overnight market, or from the central bank’s lending facilities), then the bank-to-bank reserve payment fails to “settle”. In both cases, the payment is not made. Your deposit account balance no longer “works” as spendable “money”.“Illiquid” banks have no “base money” (reserves) in their central bank reserve account, to settle their customers’ deposit account payments. In 2008, due to massive mortgage loan defaults, and commercial banks’ derivative counterparty exposure (in the post Glass-Steagall deregulated banking environment): US and European banks suffered systemic liquidity failure.Banks’ earning assets — the defaulting mortgage loans — were not “earning”. They were delinquent, non-performing, defaulting, already defaulted. The millions of recently unemployed debtors had no money (income or savings) to pay their debts, so the banks couldn’t collect the credits they were “owed”. Banks found themselves holding literally 10s of trillions of uncollectable balance sheet assets.But the payees — real estate sellers who earned and now owned all the new deposit account money banks had created as “mortgage loans”, and debtors had borrowed and spent buying price-inflated real estate — still had all of their deposit account balances, which are their banks’ balance sheet deposit liabilities, payable with their bank’s “liquidity” (vault cash and reserve account balances).The banks needed liquidity. They couldn’t borrow it from other banks who still had sufficient liquidity, because nobody trusted each other’s solvency. Who will buy your portfolio of defaulting earning assets, and pay you enough base money to resolve your illiquidty?Central banks will. Just as commercial banks create deposits to purchase debt-assets; so central banks create reserves to purchase debt-assets. Central banks bought trillions of Treasury debt (bonds) and mortgage-backed securities (MBS) from the banks, and paid with newly created credits to the commercial banks’ reserve account balances. Central banks reliquified the commercial banking system. But restoring liquidity does not address the underlying insolvency problem.If a bank makes a $500,000 mortgage loan, based on an assessed real estate value of $550,000, the bank has $550,000 of “collateral assets” to back the new $500,000 debt-asset it purchased, and the new $500,000 deposit liability it created to pay for its asset purchase. If the debtor fails to repay the money (defaults), the bank can foreclose on the house and sell it, to get the money to writedown its balance sheet. But if bubble real estate prices have crashed and the sellable price of the collateral asset is now only $200,000, the bank has lost $300,000 and has to pay out of its loan loss reserves, then out of its capital reserves. Banks rapidly ran out of “their own money” (capital), and couldn’t cover all their bad loans.Mortgaged real estate lost 10s of trillions of ‘value’ (realistic sellable price) after the 2000s mortgage-inflated real estate price bubble burst. Millions of mortgage-debtors defaulted, and the “collectable” asset side of bank balance sheets collapsed by 10s of trillions. But the “payable” deposit liability side has not collapsed. Banks still “owe” their liquidty to their deposit account customers, who are holding 10s of trillions of deposit account balances.The banks owe trillions more payable deposit liabilities, than they have collectable earning assets. The banks are still trillions below $0 “insolvent”.To resolve 1930s banking system insolvency, 1000s of insolvent banks were taken into receivership. Their assets were sold, and the bankruptcy auction proceeds were paid out to the banks’ creditors. Deposit account customers are a bank’s largest class of “unsecured” creditors. Unsecured means you get paid “last” from the bankruptcy auctions, if there is any money left to pay you at all, after “senior” creditors get paid. Which there won’t be, because a 2000s law made derivatives counterparties “supersenior” creditors to commercial banks. And the banks owe far more trillions of derivative liabilities than they have sellable assets.In the 1930s, depositors’ account balances in bankrupt banks were simply written off, as the unpayable money liabilities of bankrupt banks. Depositors were dismayed to discover that their “money in the bank” is not actually “money”. It is the depositor’s money asset that is owed as the bank’s money liability. Banks couldn’t pay their money liabilities, so depositors lost all their “money in the bank”.But this time is different.Instead of letting insolvent banks fail, regulators will bail-in your deposit account balance, to reduce your bank’s unpayable deposit liabilities, and increase your bank’s paid-in capital. Banks will issue millions of new ownership shares, and regulators will use your deposit account balance to purchase those shares on your behalf. The bank gets your money as its capital; and you get shares in your (deeply insolvent) bank.Instead of “having money in the bank”, you will “own shares in the bank”. The bank’s money-debt to you (deposit liability) will be reduced when regulators pay (some or most of) your deposit account money to the bank to buy its new equity shares for you.This is the greatest risk still facing the world: systemic insolvency of the commercial banking system that creates virtually all of the world’s money supply as loans of bank credit, all of which is owed back to banks as debtors’ loan repayment debts and bond debts. When debtors can’t pay their creditor-banks, debtor-banks can’t pay their creditor-depositors. Game over, for the commercial bank balance sheet money supply system.Government-issued debt-free fiat money could solve the problem, but that’s heresy against the conventional (false) wisdom; and a direct threat to the bankers’ monopoly control of the global money-issuing system.