Ever wonder how money is created check out this excellent video.
http://video.google.com/videoplay?docid=-9050474362583451279
http://video.google.com/videoplay?docid=-9050474362583451279
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Money as Debt
- Thread starter WallstYouth
- Start date
good vid. the origin of debt money should be taught in public school
Quote from WallstYouth:
Ever wonder how money is created check out this excellent video.
http://video.google.com/videoplay?docid=-9050474362583451279
The material in the video is based on gross misconceptions of how the financial system works. The author is basically a crank, to say the least.
I exchanged a couple email messages with the producer of the video and I tried explain to him the basics. He is ignorant of the basics. He thinks both the loan and the deposit are liabilities. His main motivation appears to be to attack the economic system of the west. He praised the communist system in his emails to me and he insisted that its collapse was not due to its inefficiencies and corruption but due to external pressure.
John
i did notice the part you mentioned and admittedly i can't speak to the validity - but the general concept of fractional reserve lending creating an inherent wealth vacuum from ordinary people to banks seems valid enough. is there an argument that negates this?
Nice video that finally illustrates my point.
Quote from volente_00:
There you go again confusing wealth creation with wealth transfer. The stock market does not create wealth. It comes at the expense of someone else anytime you go flat on a position and make a profit. Every single dollar you pull out of the market comes from someone elses pocket. Wealth is not created just because you sold a stock $10 higher than where you bought it. Just because there is more money out there does not mean there is more wealth. The US banking system has a license to pump massive liquidity into the economy from lending due to the fractional reserve system and the FED only fuels it even more. Beyond all of the smoke and mirrors is the massive consumer debt and govt debt that only continues to climb. So while wealth looks like it is being created it is just offset on the balance sheet by the debt owed to others.
Paper money = debt
Digital paper money = debt
Its that simple. The more of it you lend, the more diluted it becomes.
Digital paper money = debt
Its that simple. The more of it you lend, the more diluted it becomes.
well going back to econ 101- in an island economy that produces 10 bananas and 10 dollars in circulation that over the course of time grows to 20 bananas you will have deflation (each daollar worth 2 bananas versus the original 1) unless you increase the currency in circulation.
much better to look at money growth versus output than simply money growth. banks lend to projects that they think will make money (increase growth) and usually require collateral (assets which back up the debt).
this video takes some basics from any beginning money and banking course and then extrapolates a bunch of untruths because he doesn't understand what any basic money and banking course would teach.
bank lending allows one to take collateral and use it to produce wealth, create growth, jobs, ect... if the projects for which they lend make money.
if monetary growth does not outpace economic growth by too much there is no problem.
much better to look at money growth versus output than simply money growth. banks lend to projects that they think will make money (increase growth) and usually require collateral (assets which back up the debt).
this video takes some basics from any beginning money and banking course and then extrapolates a bunch of untruths because he doesn't understand what any basic money and banking course would teach.
bank lending allows one to take collateral and use it to produce wealth, create growth, jobs, ect... if the projects for which they lend make money.
if monetary growth does not outpace economic growth by too much there is no problem.