The US debt emergency is coming, and it is a man made Tsunami – after the erasure of an accumulation of massive fictional wealth – the complex debt structures borrowed with leverage against assumptions that have resulted in systemic deficiencies and bailouts – and may result in the collapse of one set of rules in favour of a new set.

The huge injection of funds into the US economy devalued the US Dollar, resulting in other currencies revaluing. If more and more dollars get printed the Euro may become the more stable international base currency.

Meantime we stare at the disaster unfolding after implementing short term solutions but taking too long to pass long term solutions. That aspect of human nature figures into our financial systems. There is a delay between action and payment allowed, a period of settlement when money is in transit. As though it did not exist.

The fact is that money is a self equalising sea that makes accumulation/wealth expensive, in theory. In fact poverty is made far more expensive by deceptive margin. The way in which human effort is rewarded compared with investment performance appears the basic problem.

Ruling humanity by a points system is absurd. As populations have risen, the money supply has been held back, the conservative “cure” for inflation. Economists must address symptoms or causes as a priority. President Obama ensured that the US would not drown in poverty (symptom) while figuring out what regulation would prevent any repeat of the derivative madness (cause).

Like a gambler perhaps there is a belief that another last burst of derivative action will right the problem. Regulation will stop that. An equitable financial system that serves commonly held goals and eliminates inequality through design rather than force may be a superior solution than regulating or extending instruments that base their logic on flawed theory.

The laws of supply and demand operate as clumsy filters. With online ecommerce – a standard could be reached so all markets are fully equal, so that poverty is not responded to with high interest rate traps, so that credit card companies that charge criminal rates (anything over 10% per annum is effectively slavery) are taxed harshly.

See also: Moneywatch