Ultimate Money Laundering 2.0

How is the monetary system going to be change from a debt based to a debt free money system?

How it is done is the ultimate money laundering challenge.  It goes in as money, it comes out as money but...... it comes out as money with a totally different attribute.

I spend laundered money, we all do.  Traces of drugs can be found on much of what we spend, especially larger denominations.  Spends the same to me.  I can't tell the difference.  However the system that the money went through and carries the evidence, if I cared to test it was "dirty" input clean output.

Laundering money from debt based to debt free would make no difference to those that spend it.  Big difference to those that finance live off finance with it like drug dealers.    Conversion to debt free money through some kind of magic wand laundering creates money that persists.  The conversion is a one way trip.  It never goes out of existence like debt based money to be created out of nothing to circulate again by the banking loan system that gives it existence.  Consequently the entire finance game of credit changes.  It puts the old system of finance and all of its dysfunction that depletes the common good like a fungus out of business.

Maybe there are two ways to launder debt money and have it come out debt free money.  One way is that when loans by the banking system are paid the payment does not extinguish the money back to the nothing it came from but places the money into an account as debt free money.  As the account grows the reserve ratio the bank is require to maintain for its loans also increases up to 100% while the bank continues to make loans by creating more debt money from nothing as they have always done.  Banks become constrained by loanable funds control.  The total amount of loans can't exceed all of their reserves once 100% reserve is reached.  Injection of new money to the economy becomes a function of government spending debt free into the economy.

Would that work?

The other way of laundering the money from debt based to debt free is to make it a matter of public decision about what kind of money system it wants.  Anyone with debt based money (all money is debt based money) could exchange it for debt free money.  Post offices might be the agent to do this.  Otherwise a private enterprise business (maybe non-profit credit unions) that does it under a monopoly granted by the government to operate a debt free monetary system.  Apple + Google?  Lowest bidder?  Whatever the entity is then it becomes a traditional savings bank.  This draws money out of the debt category into a one for one debt free category.  No net change in the total money system.   Debt based money received by the government or its agent is used to pay off the National Debt.  Is that fallacious double accounting?  Who is left holding the debt bag then if it is not bond holders to whom the government sold debt?  The government is still the entity of last resort to make good on money in the monetary system.  That obviously contradicts an essential factor.  I have to think about what it is.

I like the public choice.  It seems to be what Ecuador is doing with the conversion of paper currency US Dollars to digital dollars.  Is it any different to exchange one type of digital money (debt) for another type of digital money (debt free).

Sounds crazy.