Topic: Money As Debt - documentary (Read 8705 times)

The Secret of Oz is a good one and Bill Still is on Bitcoin and Quark.

The article concludes that "What gives bitcoin its value is that it is accepted as having value."

The word value refers to two things in the context of the statement

1. Bitcoin's current 'price tag', or market valuation.
2. Bitcoin's 'utility', or value proposition to users.

If we write "What gives bitcoin its price tag is that it is accepted as offering utility." then it makes more sense.

We can then conclude that bitcoin is not backed by bitcoiners who simply believe it has value and therefore it does, rather it is backed by an acknowledgement from users that it offers utility.

The valuation of bitcoin is not it's 'value', it is a price tag that reflects it's perceived value.

This is a nice article that I found in another thread:
https://bitscan.com/articles/what-is-bitcoin-backed-by

Cheers.

Nice to see that you're being educated about how broken and messed up the system is that you're inheritting.

Been watching this, interesting video's 

this documentary bring me to bitcoin

http://youtu.be/XcGh1Dex4Yo

not only banks, but also credit card companies do it.

Credit definition: the ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future.

Using a credit card you 'pay' with money you don't have, and the credit card company pays the shop with money they don't have and then demand it 'back' from you when you eventually have it. (note how they demand money from you even though they never had money to start with)

funny    these are the exact videos that gave me my "wake up call" a few years ago. 
While talking to people about it the older people are the hardest to wake up- they have been living in
this system  for 50+  years and can't imagine anything else or that the governing bodies can be wrong.

Yeah and 3 completely side tracks but very informative movies all the same.

Nice video and comment according

The Venus Project.

aka Logan's Run. 

yeah, whats tvp?
If i remember correctly zeitgeist 1 was pretty good, but zeitgeist 2 had some kind of weird futuristic global robot economy idea which kind of weirded me out.

TVP?

Oh good lord... Not TVP...

https://www.youtube.com/watch?v=HfpO-WBz_mw
https://www.youtube.com/watch?v=7qIhDdST27g
https://www.youtube.com/watch?v=eF0-Pm1Q-nM

bill still and g edward griffin

Zeitgeist 1 - https://www.youtube.com/watch?v=OrHeg77LF4Y
Zeitgeist 2 - https://www.youtube.com/watch?v=4Z9WVZddH9w

Two documentaries along the same lines as Money as Debt. This is the kind of information everyone should know.

also cool vid:

Debt Collapse - Mike Maloney

http://www.youtube.com/watch?v=tj2s6vzErqY

Great comment, "starting to wake up"

Gold comes into existence not as debt, but notes issued on gold does, because they fractional reserve lent gold notes. That's where the whole concept came from. It's the notes people use as money, because safekeeping and carrying around actual gold is a pain in the ass for regular people. This made it easy for the bankers to issue notes on gold that didn't exist in their vaults.

We bailed out the banks is how we got off the gold standard.

The banks issued at low interest too many notes on gold (as loans) in the 20's. People used this cheap money to buy stocks with. This created a giant bubble, much like the recent real estate bubble. Cheap money for no reason generally causes artificial asset bubbles. Anyway, the stock market crashed and debts couldn't be paid back, leaving all the notes out in the wild where they could put the gold reserves at risk, so FDR confiscated gold, and then repegged the price of gold at a higher dollar rate. This is a bank bailout. Google for "FDR gold confiscation" or something along those lines.

The next step was Bretton Woods 1944, which made the reserve currency of the world not gold anymore, but dollars, which was backed by gold still, but this didn't really matter since countries were to settle their trading deficits with dollars from here on out.

Lastly, I guess because probably too many notes were floating around again for the vietnam war maybe like you said, and Ft Knox was probably empty by then anyway, Nixon in 1971 pretty much just said "fuggit, no more gold for your dollars anymore. We're done". This is a bank bailout.

What we are left with as "reserves" instead of gold is "monetized government debt". There is no way this is sane. This is a shit reserve. Gold was relatively sane until the first bailout, but it still sucked because of the unpreventable fractional reserve lending ability it affords.

They kept the fractional reserve part going though, using government "promise to pay" as reserves for commercial bank money creation in the form of loans to you and me. And it's pretty much the same private banking corporations now creating our base money supply as back when we were on the gold standard, and since even before the FED was created in 1913. It's not the government in case anybody still thinks the government creates our money supply. The FED is accountable to these banking corporations, not to the government. The FED is these private banking corporations, essentially.

alan greenspan on gold (before he went over to the dark side)

http://www.constitution.org/mon/greenspan_gold.htm

"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves."

degaulle saw this clearly and demanded exchange of gold for paper. the printing of the paper in the 60's to fund not only the vietnam war but johnson's great society programs was destroying the value of the dollar due to inflation.

the only thing keeping this house of cards standing is our status as the world's reserve currency. the real reason for wanting to invade iran has nothing to do with nukes, it is that they have created an oil bourse which trades in other currencies and GOLD. the boys at nymex and ice take personal offense at this.....ah but i digress that is a story for another thread

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 :-)

Good videos! You can also check this one:

http://www.youtube.com/watch?v=k6zpfE7WjHI

Much funnier 

Read this if you want to know what is really what.

Debunking economics by Steve Keen, and look at his Minsky debt based modeling systems

The new great depression by Richard duncan

 http://www.youtube.com/watch?v=iquemUNNYY8

I'd love to see that "empirically observed" information. The closest you're going to get to that, though, is in showing when banks deplete their reserves too much that they're "forced" to go to the Fed as a lender of last resort when they're hitting their legal limits. If the issues of moral hazard (FDIC, repeated Fed and congressional action bailing banks out, etc.) were addressed then this wouldn't occur... But to say that the banks create the money themselves is disingenuous.

Technically it is true banks create money, because the FED is a privatized bank that loans money to the government with interest as well as next level major banks.

Look at your chart again.  They money that you are talking about is not used as money.  It is checking accounts in the fed's computer, which is only useful when a bank writes a check to another bank.  A bank can't go to the fed and ask the teller for a cash withdrawal from your reserve account.*  If you took away everything else, there would be nothing.  Literally every dollar actually used for commerce is outside of that box.

I don't know how much more plainly I can say it.  The stuff that you consider to be money is not, in reality, used as money.

Also, you are still clinging to the mistaken notion that the fed needs to make money first, so that commercial banks can multiply it.  That is still nonsense.  Banks makes loans first, and then buy or borrow reserves from the fed.  Not only is this obvious once you understand how the system works, it has also been observed empirically.

*  Yes, I know, trucks full of cash actually do drive around the country dropping off and picking up.  First, that is a pittance, relatively speaking.  And second, cash is just a token used to transfer the real money around.  (If you took away the cash, the system would be fine, but if you took away the system, the cash would be worthless.)

I definitely can't defend all of what johnyj has said here, but he is correct about the issue of money creation by banks.

The documentary is correct, up until the point where it talks about the banks themselves issuing credit that isn't backed by deposits. At least, this is if the banks aren't issuing their own currency units which they eventually hold on fractional reserves themselves, but that would essentially be saying that the bank is the Fed or ECB, and these days that's not how people generally think of banks.

Here's how fractional reserve banking really expands the money supply in today's economies.

The central bank (ECB, the Fed, etc.) creates the base money supply. In the case of gold backed specie, this is where the amount of available gold applied towards exchange rather than jewelry or other uses comes in.

This base money supply is "borrowed" from the Fed by anyone from commercial banks to the US Treasury. This is why the "debt as money" phrase came about, since all money is traced back to debt to the Fed. Once these institutions have the money on their books, it is essentially works like any other deposit or form of income since it is a radically rare case that the Fed asks for that money back, except in cases of acting as the lender of last resort (though that serves a different function entirely.)

From this point, the new money is lent out from commercial banks, or it is spent by the US Treasury. The money is now in circulation, and can be spent for any purpose by whoever else holds the funds.

These funds in circulation can either remain physically held, or they can be deposited into another (or the same) bank.

The banks in today's system lends a portion of these deposits out while still holding the original deposits on account. This is now a fractional reserve system, and it has resulted in the expansion of some measures of the money supply. The depositors still have complete access to their money in the bank, while the borrowers have access to all of the funds that they borrowed. This works because depositors in a trusted banking system do not withdraw their funds at a high enough rate to deplete the bank's reserves -- however, under certain crisis circumstances, depositors will withdraw their funds en mass in what's called a bank run, in which case the bank's deposits will eventually be depleted and the bank will become insolvent.

This is the extent of the fractional reserve system. You could go on to include how the borrowed money, once spent, may eventually be deposited into the bank again, but it's really just a recursive function of however many times the exact same process has occurred. There is no expansion of the base money supply, even as the credit markets are expanded 10's, even 100's of times, depending on the reserve rates and the market propensity to deposit into the bank.

This is not fraud. This is not theft. This is not money creation.

This is the bank loaning money from its depositors, and lending it out to its borrowers. If you're in debt then you're running on fractional reserves as well. The bank functions in exactly the same manner, and the way the money supply is altered is also exactly the same.

I hope this helps to clarify the issue.

Thats an interesting documentary though i wouldnt take everything said at face value, theres alot of good reasons for having a central bank and fractional reserves.

Money creation is not a secret, just there are two different types. I'm more interested in the central bank money, but other people might be interested in checkbook money, check http://en.wikipedia.org/wiki/Money_creation

FRB is the practice of creating checkbook money, but if FRB is not allowed, then there will be no checkbook money, but there will still be central bank money. and if central bank money is not available, the checkbook money can not increase if commercial banks already loaned out to maximum

FED is buying 85 billion USD bonds and MBS monthly, that money is not generated by FRB, and that is the money might create 850 billion of checkbook money if loaned out by commercial banks later

The original source is here http://www.youtube.com/user/PaulLWGrignon

There are sequels to it on this channel if you enjoyed the original.

I have not actually watched these, but I do know that the links you posted are from a youtube content thief.

Except that your chart is nonsense.

In your view, the stuff that is not used as money is money, while the stuff that is used as money is not money.  If we agreed to accept your contorted view, you would be right, but then there would be no point in the discussion, because no one gives a fuck about not-money.

Your chart also suffers from the flaw that you are reading it from the top to the bottom, when reality happens from the bottom up.  Lending happens first.  Reserves are found later, usually by borrowing against the new note.

Do not be distracted by accounting tricks, they add the same money at different time/location together and says that they created money  

Check this post:

https://bitcointalksearch.org/topic/the-best-chart-i-have-seen-regarding-money-creation-129423



For each 16 dollar central bank created, only 9 loaned out eventually. The "Broad money" concept is the money creation at commercial bank level, but it is just a repeated count for the same money at different location/time

Yes they can and do. It is called double entry book keeping and it expands the money supply the fed only creates a small amount of the money supply the vast majority of money is created when banks lend money into existence,

I didn't convince you that you were wrong about this.  The quotes from central bankers and economists at the beginning of the video didn't convince you that you were wrong either.

I think we are all just going to have to accept that you are always going to be wrong about how money is created.

this is a good place to start. a lot of people I talk to in the real world have no idea how things work, an ignorance I have shared.

we watched this in my sociology class the other day! Weird to see it on here too!

This video is a good presentation, but its description of money creation is incorrect: Commercial banks do not have any right to create money, they can only sell assets to central bank in exchange for money, they can not loan out money more than they already have

The money creation only happened at central Bank, and there is no FRB at central bank

Funny, I just thought that maybe it's time to Necrobump the last thread of this Docu due to all the new guys here.

Although not a 100% correct, this Videos give you a quite good understand why many here think Bitcoin can have such a huge impact and "change the world".

IMO a must see for every Bitcoiner.

Thanks for sharing. Let me guess, you have around 55-57 years and you're starting to "wake up"  

Hello to everyone.

I found this cool documentaries on the internet,
if you already haven't watched them I sincerely suggest you do!
I hope that you will find them very instructive and that they can give you some
useful ideas how to improve bitcoin or implement alternative crypto-currencies
to make our lives better in near future.

Money As Debt I
https://www.youtube.com/watch?v=e6LWqgohO4E

Money as Debt II - Promises Unleashed
https://www.youtube.com/watch?v=28V7AI5x8jQ

Money as Debt III - Evolution Beyond Money
https://www.youtube.com/watch?v=3P7izAUe3ZM

The Biggest Scam In The History Of Mankind
https://www.youtube.com/watch?&v=iFDe5kUUyT0

Meet Your Strawman
http://www.yourstrawman.com/

EDIT:
Money has no value without people neither bitcoin has
https://bitscan.com/articles/what-is-bitcoin-backed-by