Money as Debt

[ramset]

PRO thanks for the movie  Can't say it cheered me up   but I am more informed  Thanks  Chet

[Mr.Entropy]

PRO thanks for the movie  Can't say it cheered me up   but I am more informed  Thanks  Chet

Don't count on it!  There's a lot of lying and deception mixed in with the truth in that video.

The truth is that money is debt, but there's not really anything wrong with that.

When you take out a loan at the bank, you are indeed just exchanging IOUs.  The bank agrees to pay out X dollars on demand, and you agree to pay the back X+interest over time.  The interest makes up for your risk of defaulting and the reduced value of your future payments due to inflation.  It's perfectly reasonable.

The only reason you can say that money has been created here is because the bank's IOU is counted as money.  It's counted as money, because you can use it to pay for stuff.  You can use it to pay for stuff, because everyone else knows that the bank will make good on its IOU.

We can all be confident of that, because the federal bank will lend the bank dollars whenever the bank wants, as long as the bank follows the rules that are set forth to ensure that its debt position isn't too risky.  This is all good too, except that a lot of US banks have not been following all the rules lately.

The federal bank is always able to lend banks what they need (and charge them interest, too!), because an IOU from the federal bank is the base form of money.  If the fed owes you a dollar, then you already have it.  There is no more basic thing that you are owed -- cash is just a printed IOU from the federal bank, payable to the bearer.  Since there is nothing but prudence to stop the Fed from writing IOUs, there's no fixed limit on how much it can lend to banks.  It all works fine.

There is also no debt monster that grows exponentially because there's not enough money in circulation to pay back interest.  If all money is borrowed at interest, the film asks, then how could we possibly get enough money to pay back both principal and interest?  The answer is simple: The profit that the bank makes in interest is distributed to the folks who own the bank or run the bank, and they spend it to buy things of value we create.  It's no different from anyone else's profit.

[HopeForHumanity]

PRO thanks for the movie  Can't say it cheered me up   but I am more informed  Thanks  Chet

Don't count on it!  There's a lot of lying and deception mixed in with the truth in that video.

The truth is that money is debt, but there's not really anything wrong with that.

When you take out a loan at the bank, you are indeed just exchanging IOUs.  The bank agrees to pay out X dollars on demand, and you agree to pay the back X+interest over time.  The interest makes up for your risk of defaulting and the reduced value of your future payments due to inflation.  It's perfectly reasonable.

The only reason you can say that money has been created here is because the bank's IOU is counted as money.  It's counted as money, because you can use it to pay for stuff.  You can use it to pay for stuff, because everyone else knows that the bank will make good on its IOU.

We can all be confident of that, because the federal bank will lend the bank dollars whenever the bank wants, as long as the bank follows the rules that are set forth to ensure that its debt position isn't too risky.  This is all good too, except that a lot of US banks have not been following all the rules lately.

The federal bank is always able to lend banks what they need (and charge them interest, too!), because an IOU from the federal bank is the base form of money.  If the fed owes you a dollar, then you already have it.  There is no more basic thing that you are owed -- cash is just a printed IOU from the federal bank, payable to the bearer.  Since there is nothing but prudence to stop the Fed from writing IOUs, there's no fixed limit on how much it can lend to banks.  It all works fine.

There is also no debt monster that grows exponentially because there's not enough money in circulation to pay back interest.  If all money is borrowed at interest, the film asks, then how could we possibly get enough money to pay back both principal and interest?  The answer is simple: The profit that the bank makes in interest is distributed to the folks who own the bank or run the bank, and they spend it to buy things of value we create.  It's no different from anyone else's profit.

The private "federal" bank. A better way to put it.

[HopeForHumanity]

The problem with the system is it's unstable. When people are poor, it's too late. Gold provides stability because NO ONE can create gold. Thus no one has facist power over the currency.


EDIT:

Without the federal reserve, the government wouldn't be creating all this debt for a "war". When you ask someone for something, they give it to you, and you give them something back to satisfy the other person. The physical object is transmitted to the other person. What the government does is take that something, pay the interest with something (income *cough* tax). This is basical saying, "I'm going to take some IOU money, buy some tanks, and use the money from the people to pay off the debt". Welcome to taxation without representation. And this isn't small amounts of money. This is huge amounts, having chaotic affects. Barrow and pay back + interest only works good on small scales. Not 50million dollars for 3 f-22's...

[FreeEnergy]

http://www.youtube.com/watch?v=_dmPchuXIXQ - 1/5

http://www.youtube.com/watch?v=lBZne09Gf5A - 2/5

http://www.youtube.com/watch?v=SjUrib_Gh0Y - 3/5

http://www.youtube.com/watch?v=_BVNN1wqw3k - 4/5

http://www.youtube.com/watch?v=VPPFgHF9VR4 - 5/5