Topic: Money As Debt - documentary - page 2. (Read 8696 times)

gold is not money. it is a commodity

The gold backing the currency was worth more than the currency itself, this creates a vacuum opportunity where (typically other govs) could cash in their currency holdings for the gold at a profit, when this happens en masse its bad and this is why Nixon severed the gold backing, essentially to protect the final remaining assets of gold that the u.s. had and prevent yet another economic meltdown (great systems shouldn't have nearly the amounts of problems that government sponsored fiat has had.... but this is the gov/fed we are talking about so is it really a shocker?....) lol

Gold also come into existence without debt, and these are honest money, but I just don't know under what circumstance the government abandoned the gold standard and FED started to print money for themselves

Academically there was a claim that the money supply could not keep up with the trade growth and without added money supply, a rise in currency value will hurt investment. But maybe that is just an excuse, it had something to do with the vietnam war, they were running out of money and need to finance the military spending through more fiat money

That's kind of easy to answer, without a creative solution or out from the system the government(s) are stuck in this system and dragging us all down with it.  Returning to metallic standards could dramatically slow the inevitable failure but won't stop it.  Removing fractional reserve would cause catastrophic failure due in large part to your earlier point about interest (interestingly enough is so mathematically strong that the P + I equation reliably predicts default rate within the economy), increasing debt speeds the inevitable but in the short term kicks the can down the road a bit further, cutting debt causes credit contraction which equates to cutting the money supply which causes deflation which is horrific to all those who are in debt currently which leads to catastrophic failure.  And essentially almost all proposed solutions follow one of those schools of thought.

Replacing one currency with another needs overnight implementation and the steps leading up to that will most likely not be favorable so must almost need to be postponed until catastrophic failure of the currency which needs replaced.  This is not unprecedented though, German currency did this when east/west Germany combined, the new/old Mexican peso, gold standard/off gold standard u.s. dollar (during gold crisis), freigeld in Austrian local governments during the great depression.  Each of these events had varying levels of success/failure.  As far as fiat is concerned I'm most impressed by freigeld and do hope that if the u.s./European fiat currencies fail in my lifetime (sadly likely) that they will consider that option as a replacement and as always hope crypto reaches critical mass global adoption :-)

one salient fact left out of these discussions is when money is created ( as debt) the money for the interest is not created. this leads to all kinds of interesting ramifications. primarily growth ( the ideology of the cancer cell) is baked into the system. more money has to be lent into circulation to supply the money for the interest obligations.

 unlimited growth on a finite planet is a physical impossibility. this leads to the over use and extraction of resources, and environmental degradation. it also sets each one of us against the other in competition to get the money to pay off that debt. one of the reasons the income tax was instituted at the same time as the federal reserve act was to extract the money from the serfs....sorry, taxpayers to pay off the debt incurred by the government. it now accounts for close to 25% of all income tax

the absolute beauty of bitcoin is it comes into existence without debt. ever wonder why our government does not issue its own currency without debt?

What you're overlooking here is fractional reserve, in your example what is incorrect is the loan.  If you deposit $1000 "real" cash the bank doesn't loan 5000 and put 5000 into savings, they loan $90,000 (assuming 9 to 1 fractional reserve), and turn in $10,000 to the fed as the "reserve", they only need your deposit as a tiny seed to back a MUCH larger loan.  Where did the money come from?  Basically out of thin air.  This is why monetary supply expands on credit and why it contracts when loans are paid off or defaulted.  This is also why that system cannot exist perpetually, there are only so many loans that could be made in which John Q Public can bear the burden of.  This is also why large institutions/banks fear credit contraction (the real reason some banks fail and others are "too big to fail".  This is a perpetually repeating game that has gone on for centuries, there are very few "winners" and this effect has changed the face of political power many times over.  It sunk the roman empire, it sunk the great European powers, it will likely sink the great American empire if they don't come up with a creative liberty minded out and the next targets in this games sights will likely be the emerging chinese and Russian powers if they don't decide to stop playing the game.

What's interesting about bit coin/alt coins is that they provide one such out, once they have established critical mass, value high enough to be immune to individual manipulation they provide a way to side step the game.

He's one of the best voices on the topic, so +1 for that.

i recommend g edward griffin's book "the creature from jekyll island"

i also recommend visiting chrismartenson.com and taking the "crash course"

and damon vrabel did some excellent work which appeared on max keiser

you can find it here.

http://csper.wordpress.com/

banks do not fail by lending more than their reserve requirements. they do that regularly. they fail when the people who borrow the money do not pay it back. it is economics 101

this makes no sense

gold backed specie? specie is coin and before we debased all our coins( except the nickel) they were made from gold or silver\. of course pennies were made from copper.

the banks do not lend money from their customers. they only have to have 10% of what they lend out. they therefore do create money out of thin air. this was not possible with specie which is why the founders gave this power to congress alone. they considered banks more dangerous than standing armies.

No the original gold money was not created with issuance of debt this money presently is in the system.  As said before whenever a bank makes a loan, the seller of the goods say a house will deposit the money in the bank.  The debt did not create the money, the money traded in debt did.

If there was a bank where say you deposit $10,000 in a bank and they loan it out say $5,000.  If the bank put $5,000 of savings, and $5,000 in loans on your bank account balance, then no money would be created.

You could say money is created anytime you deposit it in the bank.  When you look at your checking account balance, that is not money that is just numbers on a statement.  However, if you assume your checking account balance is money, then money is created by you when you deposited it at the bank.  Thus you as an individual are just as responsible as the bank in creating money by depositing it there.  Money in your wallet is actually called M0 or monetary base (base money).

You should really go back and read page 1.

They did not give you that money out of thin air, it came from deposits at the bank.  There is a limit to what banks can loan, generally they have reserve requirements and they usually exceed the amount required by law.  If they fail the requirments the bank fails and is taken over by another bank.

http://www.fdic.gov/bank/individual/failed/banklist.html

If the banks print money out of thin air then why did these banks fail?  The truth is the above videos were made with lack of research.  They are so confident that banks are corrupt they fail to look at the true corruption the people who took out loans with no intent on paying them back and the government who just deficit spends and thinks there is no implications to all this debt.  Yes banks are corrupt, but they go broke.  The federal reserve member banks pay far more in taxes than they receive in dividend payments of the federal reserve system.

They do actually, if you recall the slice-n-dice repackaging of loans to sell off to other investors, these "repackaging" of loans very often contained several uncredit worthy loans... banks often don't keep loans on the books, they sell them off to others at a "loss" so they can have "real" money now and keep the bank liquid.


Bank profit is almost entirely derived from packaging loans, they devise ever more creative ways to sell their products from credit cards, refinance options (scalping from competitors), mortgages, auto loans, etc. etc. etc.  Yes people want these things but that is not entirely just human nature, banks market their products very effectively the same way as say coke markets soft drinks.


Refinance is not bad for banking at all or they wouldn't do it, its 1 part marketing, 1 part competitor customer scalping but most of the time it's just straight up good for the bank as most people don't pay attention to the fine print, a lot of times banks sell this as you pay less per month but the reality is you are paying more over the lifetime of the loan in most cases.  Additionally, paying less per month frees up more of your income to be used as a basis for additional lending products that the bank could offer you.


The fed "prints" money with every single loan they make, this is fractional reserve in action, the numbers are staggering but for every "real" dollar the fed has, a great many "fictional" dollars are created through the fractional reserve policy.  Additionally, the fed merely needs to "call" the treasury and order new currency, while they may not run the printing machine the checks/balances/limitations in place for this process are so limited they might as well be running the printers directly.


I'd agree here with this statement but I don't see how this film implied otherwise as it seemed to only be talking about loans through financial institutions not between private parties.


Correct, but due to inflation, not putting your liquid assets in the bank causes you to loose even more in the long run.


There is still no auditing, and no control over the system.  Simply electing a person, based on qualifications or not, does not give you control over a private institution.


Sort of agree here.... but ultimately there is no reason the government should be paying interest on use of its own currency as it is a waste of our countries resources both human and non-human resources.


They do, it's called foreclosure in the case of real estate.  It's called repossesion in the case of auto-mobile's and other secured loans.  This is a triple whammy because, the bank which gave you that money mostly out of thin air, has not lost much if any money on the deal, they get to write off the "unpaid" balance as a loss on their profit/loss statement AND they have the property to auction off/rent/lease....


Have no idea if what Kennedy was doing was good/bad but I think this part of the movie was to have a little fun and put the conspiracy theory caps on for a moment in that Kennedy was trying to take power from the fed, he was assasinated 6 months later and the next president in office replaced the power with the fed that Kennedy tried to take away... it didn't really go into any other details of what Kennedy was really trying to implement.

Money as Debt is a fantastic series! 

Here are some articles that explain how fractional reserve banking is fraudulent:

http://cynic.me/2012/05/28/frackin-reserve-the-mechanics-of-fractional-reserve-banking-1-6

The articles have software simulators for Windows, OS X, Linux, Android, and a web version. Here's the web version:

http://cynic.me/2012/05/17/frackin-reserve-web-edition-a-fractional-reserve-banking-simulator/

If you liked MAD, here are some more really good documentaries (from article 6 in the "Frackin' Reserve" article series):


The Money Masters

URL: http://www.themoneymasters.com/
Video: http://vimeo.com/8757743 or http://www.youtube.com/watch?v=JXt1cayx0hs


The Secret of Oz

URL: http://www.secretofoz.com/
Video: http://vimeo.com/14924997 or http://www.youtube.com/watch?v=swkq2E8mswI


Lecture by G. Edward Griffin

URL: http://www.gedwardgriffin.com/
Video: http://www.youtube.com/watch?v=lu_VqX6J93k


There are a few more listed there, but those are all really good.

There are fundamental flaws with these films.  First I will critique The American Dream.  People need to really start challenging some of these films put out on youtube.

1. 3:59 Banks don't attempt to loan money to bad credit risks, that is why you have a credit score, they want to be paid back.  It is not free money.  They take collateral if you don't pay it back.  Without collateral and poor credit you can pay 100% interest at some payday loan spots.

2. 4;40 The banbks don't need more, the people want more and they lie on applications to get more loans.  They can always declare bankruptcy.

3. 5:10 refinance your home to lower interest saves you money it is actually bad for the banking system.  Many homeowners pulled money out of their homes for the sole purpose of vacation and spending on toys.

4. 8:20 the fed printing does not involve the treasury, they print money by crediting their account SOMA.

5. 13:50 Every bank loan involves fractional reserve lending.  The seller receives the money from the loan.  This money is deposited at another bank.  If you loan your relative money, your money is transferred to your relative, no new money is created, It is called full reserve lending.

6. 16:15 The people as a choice put their money in the bank.  Even though they receive less than the inflation rate in interest.

7. 21:25 Congress elects the federal reserve chairman. They elected Bernanke 70-30 with Senate vote.

8. 21:35 The interest on most of the debt the government owns is below the inflation rate.  Yes, they pay interest, but the government earns money off it.

9. 23:35 they don't take your property! A 3% loan is way below inflation.  Furthermore, you can write the interest off on your taxes.  Homes are massively subsidized by renters and the poor.  Banks do not even want to hold most mortgage debt.

10. Kennedy's plan to print money is worse.  If backed by silver maybe, but they most likely would be printed out of nothing creating pure inflation.
  



 

+1 I had seen the money as debt series long ago, and its awesome but this was a great new addition to educate with as well :-)