The secret of oz [documentary]

[killer2021]

Very interesting documentary here. Its basically about how our monetary system is corrupt and needs to be reformed.

Pretty interesting documentary to watch and thinking of bitcoin as an alternative to this corrupt system. Its a long documentary (2hours) but well worth the watch if you haven't seen it.

Here is the trailer:

http://www.youtube.com/watch?v=6cq9yEVcGIU

and the full movie (free):

http://www.youtube.com/watch?v=swkq2E8mswI

The central theme is to move the power to print the money from the private fed and return it to the US treasury. This would create debt free money.

Now here is the kicker: Now that we have bitcoin. Do we even need the government or fed to control the issuing of the money? Absolutely not. We have bitcoin, where the algorithm has already been created and controls the printing of the money. By using your bitcoin client you are agreeing to the accept the code/rules of the system. We have all agreed that 21 million bitcions being generated over a geometric series is the most effective way to generate new money. Now the people (users of bitcoin) control the printing of the money. The power to print money has been moved from the feds and government and into the hands of the people. This idea is huge and could change the world.

[1713958413]

1713958413

[MaDDDog]

I will watch that, but that our current monetary system will fail was already predicted 100 years ago by Silvio Gesell.

[hugolp]

The movie is very misleading, has big errors, just like the previous one from the same guy.

[killer2021]

The movie is very misleading, has big errors, just like the previous one from the same guy.

Yes its not perfect but I use that documentary because its pretty much the only one which says that the power to print money should be returned to the us treasury. Most of the other documentaries basically say we should use gold and silver which for our modern digital/global economy is not suitable.

[hugolp]

The movie is very misleading, has big errors, just like the previous one from the same guy.

Yes its not perfect but I use that documentary because its pretty much the only one which says that the power to print money should be returned to the us treasury. Most of the other documentaries basically say we should use gold and silver which for our modern digital/global economy is not suitable.

The Fed already returns its benefits to the Treasury. So when the Fed monetizes government debt is roughtly equivalent to the government printing money. We are already more or less in the system the movie demands.

[killer2021]

The movie is very misleading, has big errors, just like the previous one from the same guy.

Yes its not perfect but I use that documentary because its pretty much the only one which says that the power to print money should be returned to the us treasury. Most of the other documentaries basically say we should use gold and silver which for our modern digital/global economy is not suitable.

The Fed already returns its benefits to the Treasury. So when the Fed monetizes government debt is roughtly equivalent to the government printing money. We are already more or less in the system the movie demands.

Would be true if the fed issued money at 0%. Thats not the case.

[hugolp]

The Fed already returns its benefits to the Treasury. So when the Fed monetizes government debt is roughtly equivalent to the government printing money. We are already more or less in the system the movie demands.

Would be true if the fed issued money at 0%. Thats not the case.

No. The interest payed for the bonds are benefits of the Fed. Those benefits are returned weekly to the government. Its like they are not payed.

Look this has been discussed in this forum, and I really dont want to go through the same again. The videos are very well done, but what they explain is false. The guy is a nutjob that does a disservice to the people, like me, who want to end the Fed.

[zef]

I really liked Bill Still's original documentary, The Money Masters, and Secret of Oz is pretty similar to it if a bit more condensed. I really enjoyed the history lesson on money and banking and the rise of central banking.  After I really started learning about economics though, looking back on his solutions to the problem, I don't agree with what he proposes.  I guess he takes sort of a constitutionalist approach that all money should be issued by the government, not a pseudo private central bank. He is definitely against the "free market" competing for the best currency, and he believes that our current system is a product of the free market.

[killer2021]

The Fed already returns its benefits to the Treasury. So when the Fed monetizes government debt is roughtly equivalent to the government printing money. We are already more or less in the system the movie demands.

Would be true if the fed issued money at 0%. Thats not the case.

No. The interest payed for the bonds are benefits of the Fed. Those benefits are returned weekly to the government. Its like they are not payed.

Look this has been discussed in this forum, and I really dont want to go through the same again. The videos are very well done, but what they explain is false. The guy is a nutjob that does a disservice to the people, like me, who want to end the Fed.

Wait, so the interest the fed gets from bonds is returned to the government??

Wow, kid, you don't know what you are talking about. Read here:

http://en.wikipedia.org/wiki/Federal_Reserve_System#Structure

[killer2021]

I really liked Bill Still's original documentary, The Money Masters, and Secret of Oz is pretty similar to it if a bit more condensed. I really enjoyed the history lesson on money and banking and the rise of central banking.  After I really started learning about economics though, looking back on his solutions to the problem, I don't agree with what he proposes.  I guess he takes sort of a constitutionalist approach that all money should be issued by the government, not a pseudo private central bank. He is definitely against the "free market" competing for the best currency, and he believes that our current system is a product of the free market.

Yup, I agree. Its the best documentary I could find.

Don't know any documentaries that say, "the fed is corrupt, use bitcoins."

[BubbleBoy]

If I were to plot the evolution of money it would be this:

1. Commodity money: gold, bitcoins; massively deflationary, prevent the economy from growing and reaching it's full potential, by artificially clamping the aggregate demand. Everybody is worse off and poorer, huge resources are wasted for acquiring an otherwise much less useful commodity. Decentralized, cannot be manipulated, but creates a self-enforcing plutocracy - the holders of the commodity.

2. Government-issued fiat. Solves the primary flaw of scarce commodity money and allows for real economic growth and improved welfare. Entirely dependent on the moods of the rulers. History has shown that both tyrants and democratically elected rules will abuse the money creation privilege, either for building palaces or for getting themselves reelected, and print much more than the economy needs, therefore stealing wealth from everybody. This is what various non-functional states like Zimbabwe have.

3. Independent central bank that loans money into existence. The prevalent system nowadays, far better than the preceding ones, but with it's unique flaws. The government can't print it's own money and is just another borrower competing along side private productive entities. In theory this should reduce it's appetite for money - it has to give it back. If too much money is loaned into existence and creates inflation, the central bank should, again, in theory, hike the interest rates and diminish everyone's appetite for money thus controlling inflation, wile allowing the money supply to grow as the economy grows.
In practice this system creates multiple instances of moral hazard:
  a. the central bank will always print more money to help private banks who are overexposed - for fear it might bring about meltdown
  b. the parliament, as the central bank's overseer, will always pressure it to go for low interest, low unemployment policies at the expense of inflation
  c. the government's appetite for money is not curbed; banks would much rather borrow the government that take risks with productive business
Overall, the system allows private banks to profit at the expense of the society because they have a key position where they can blackmail both the public and the politicians with systemic collapse. Massive misappropriation of resources ensues, skewing the price signals of the free market, various bubbles occur etc.

The Bitcoin crowd is still at point 1. entangled in a matrix scheme disguised with elementary economic fallacies.
The Oz guy wants us to go back to point 2., and watch our leaders print all our wealth away.
The current model 3. is clearly wrong.

I think it's time to start working on number 4:

4. Decentralized democratic fiat currency. Printed to the benefit on democratically elected charities, so as to target zero long term deflation/inflation, and circulated through a Bitcoin-like open network. Banks are not involved in creating the base money supply - they and their depositors are entirely responsible for the risk the take on when expanding M2. Governments have no say either, and are responsible to the voters when the debt spirals out of control.

I apologize to the TL;DR low attention span crowd.

[hugolp]

Wait, so the interest the fed gets from bonds is returned to the government??

Wow, kid, you don't know what you are talking about. Read here:

http://en.wikipedia.org/wiki/Federal_Reserve_System#Structure

Its sad the effect the nujob movies has on the people. Look, you are probably not a bad guy, but you should not talk like this to people you dont know, who know a lot more tahn you in monetary policy and that are taking time to explain to you how a nutjob has fooled you with a very well produced movie.

Yes, the Fed returns its benefits to the Treasury weekly (and btw that link is irrelevant to this issue).

[hugolp]

BubbleBoy, you are the troll with more knowledge in this forum, but you have serveral mistakes in this post. Your monetary policy part is lacking.

If I were to plot the evolution of money it would be this:

1. Commodity money: gold, bitcoins; massively deflationary, prevent the economy from growing and reaching it's full potential, by artificially clamping the aggregate demand. Everybody is worse off and poorer, huge resources are wasted for acquiring an otherwise much less useful commodity. Decentralized, cannot be manipulated, but creates a self-enforcing plutocracy - the holders of the commodity.

2. Government-issued fiat. Solves the primary flaw of scarce commodity money and allows for real economic growth and improved welfare. Entirely dependent on the moods of the rulers. History has shown that both tyrants and democratically elected rules will abuse the money creation privilege, either for building palaces or for getting themselves reelected, and print much more than the economy needs, therefore stealing wealth from everybody. This is what various non-functional states like Zimbabwe have.

3. Independent central bank that loans money into existence. The prevalent system nowadays, far better than the preceding ones, but with it's unique flaws. The government can't print it's own money and is just another borrower competing along side private productive entities. In theory this should reduce it's appetite for money - it has to give it back. If too much money is loaned into existence and creates inflation, the central bank should, again, in theory, hike the interest rates and diminish everyone's appetite for money thus controlling inflation, wile allowing the money supply to grow as the economy grows.
In practice this system creates multiple instances of moral hazard:
  a. the central bank will always print more money to help private banks who are overexposed - for fear it might bring about meltdown
  b. the parliament, as the central bank's overseer, will always pressure it to go for low interest, low unemployment policies at the expense of inflation
  c. the government's appetite for money is not curbed; banks would much rather borrow the government that take risks with productive business
Overall, the system allows private banks to profit at the expense of the society because they have a key position where they can blackmail both the public and the politicians with systemic collapse. Massive misappropriation of resources ensues, skewing the price signals of the free market, various bubbles occur etc.

The Bitcoin crowd is still at point 1. entangled in a matrix scheme disguised with elementary economic fallacies.
The Oz guy wants us to go back to point 2., and watch our leaders print all our wealth away.
The current model 3. is clearly wrong.

I think it's time to start working on number 4:

4. Decentralized democratic fiat currency. Printed to the benefit on democratically elected charities, so as to target zero long term deflation/inflation, and circulated through a Bitcoin-like open network. Banks are not involved in creating the base money supply - they and their depositors are entirely responsible for the risk the take on when expanding M2. Governments have no say either, and are responsible to the voters when the debt spirals out of control.

I apologize to the TL;DR low attention span crowd.

[kwhcoin]

The Fed already returns its benefits to the Treasury. So when the Fed monetizes government debt is roughtly equivalent to the government printing money. We are already more or less in the system the movie demands.

That is an interesting point about the Fed. However, we are not “more or less in the system the movie demands” because there are a few major differences. Currently our government has to spend money to pay interest on our debt because we don't just owe the Fed. Also, the Fed currently controls the money supply and the movie advocates that the government should be in control of a nations money supply. Also, we currently have a fractional reserve banking system and the movie wants to do away with fractional reserve banking.

[hugolp]

The Fed already returns its benefits to the Treasury. So when the Fed monetizes government debt is roughtly equivalent to the government printing money. We are already more or less in the system the movie demands.

That is an interesting point about the Fed. However, we are not “more or less in the system the movie demands” because there are a few major differences. Currently our government has to spend money to pay interest on our debt because we don't just owe the Fed. Also, the Fed currently controls the money supply and the movie advocates that the government should be in control of a nations money supply. Also, we currently have a fractional reserve banking system and the movie wants to do away with fractional reserve banking.

Yes, the only difference is that the movie demands no fractional reserve while now its allowed. For the rest, we are in the system they demand. He makes it like he wants a different monetary system, but its not like that.

Currently our government has to spend money to pay interest on our debt because we don't just owe the Fed.

I dont understand what you mean.

Also, the Fed currently controls the money supply and the movie advocates that the government should be in control of a nations money supply.

The part of the Fed that controls the money supply is the Board of Governors of the Federal Reserve System (Bernanke and the rest of the gang) and it is a federal government agency. So the government is already controlling the money supply.

As I say the guy shows half truths and lies to give the impression that we are in a system that is very different from what he wants, but appart from not allowing the banks to perform fractional reserve, the monetary part is right now how he wants it.

[andes]

As I say the guy shows half truths and lies to give the impression that we are in a system that is very different from what he wants, but appart from not allowing the banks to perform fractional reserve, the monetary part is right now how he wants it.

I just finished to watch this long movie. I will repeat what the movie explains, lets debate if that is actually true.

The movie not only wants to end fractional reserve banking as hugolp explains, but also end the creation of money out of debt. The movie explains that governments can't create dollars directly. Instead,  due to a convoluted process involving several institutions, money is created when banks lend money to the public, and at the same time goverments have to pay interests to the bankers on all money created, except the small fraction of physical money (coins).

The movie explains that the money being created out of debt means bankers receive the interest fees on all money in circulation, and that is in effect a constant transfer of wealth from the general population to the bankers. Also, banks can control the amount of money in circulation (expanding or shrinking the supply) by giving more loans or restraining from giving loans. This makes the bankers incredibly powerfull to the point of being able to control governments, and societies. Governments are servant to bankers, instead of being servants to the public.

So the movie's solution has 3 escencial parts: (1) end fracional reserve banking, (2) let governments issue money (dollars) directly without debt, and (3) not let the money supply be backed by gold.

This last point the movie makes is in opposition to all the gold and silver fans (which I condidered myself part of). The reason he gives makes sense, to be honest, although I am not totally convinved for several reasons. The movie says that if money is restrained to be backed by gold, those persons / countries that own the gold, own the money, which is quite true frankly. The movie argues that for a government, giving away the power to create its own money is giving away its sovereinty.

Discuss.

[Grant]

So the movie's solution has 3 escencial parts: (1) end fracional reserve banking, (2) let governments issue money (dollars) directly without debt, and (3) not let the money supply be backed by gold.

This is also the impression i got out of the movie. I gained huge respect for him (before i discovered bitcoin) due to the fact: he was anti-fed and he was anti-goldbug at same time (which is a RARE combination these days). The only part i don't like about it he seems to be a pre-bitcoiner, he still thinks that the issue of currency should be in the hands of the government. Has anyone tried to contact this guy and ask him about bitcoin ?

[hugolp]

The movie not only wants to end fractional reserve banking as hugolp explains, but also end the creation of money out of debt. The movie explains that governments can't create dollars directly.

Yes it does. What I said is 100% accurate.

It is because when the central bank monetizes government debt its roughtly equivalent to the government printing money. So a big part of QE1 and all of QE2 is basically financing the government with newly printed money. Its exactly what he wants to do and it is exactly what already happens. The problem is that there are several stages in the middle making the process complicated.

And again the government debt that the Federal Reserve holds does not reperesent an expense for the government because the Fed returns its benefits to the same government (weekly). The government does not pay interest to the bank.

These kind of manipulations is why I say that the guy is a nutjob and dishonest. And he will hate Bitcoin because he wants the government to force a monopolly on money onto the people, because its the only way to have a inflationary currency.

Anyway, I am done for today with my humanitarian task of trying to warn people of the charlatans that are trying to fool them. Do your research and decide.

PS: You might want to think about why it is better that the government finances with inflation, that is not controllable by the people because it has long term effects and people dont see them, than with direct taxation, that is more controllable by the people because people see right away how much money they have to give away. Financing through inflation is much more undemocractic than financing through direct taxation.

PS2: And while you are doing your research check the examples of nations that applied his theories. They all hyperinflated.

[andes]

The only part i don't like about it he seems to be a pre-bitcoiner, he still thinks that the issue of currency should be in the hands of the government. Has anyone tried to contact this guy and ask him about bitcoin ?

Yes, this is the part I dont like also, because I dont trust the wisdom of power-hungry polititians. But lets be honest, his solution would be much better than what we have today.

And regarding bitcoin, and this is the elephant in the room in this forum, it is obvious that bitcoin cannot survive against government will. As has been prooved, rendering bitcoin useless costs a couple of tens of millions of dollars at most, and any government could afford that. So, yes, bitcoin is a free market currency, but it can only survive with the cooperation of governments. In other words, we cannot, and will not be able to take governments out of the equation (to my deepest dissatisfaccion), but that is the way things are.

[andes]

And again the government debt that the Federal Reserve holds does not reperesent an expense for the government because the Fed returns its benefits to the same government (weekly). The government does not pay interest to the bank.

These kind of manipulations is why I say that the guy is a nutjob and dishonest. And he will hate Bitcoin because he wants the government to force a monopolly on money onto the people, because its the only way to have a inflationary currency.

Anyway, I am done for today with my humanitarian task of trying to warn people of the charlatans that are trying to fool them. Do your research and decide.

Hey Hugolp, we understand you are the hardest working moderator on this forum, keeping trolls in control and also educating people, but dont throw the towel with your humanitarian task!!   Seriously I am learning a lot in this thread.

Hey, you say that the whole process of money creation does not mean government pay debt on created money. Thanks for clarifying this, I had that exact doubt. Now consider this, as banks create the money, does this mean that PEOPLE, not governments have to pay interest for "the privilege" of having money in the economy? In other words, the whole society has to pay banks just to have money circulating, because we have to borrow money for it to exist? Is as we had to pay banks to have blood circulating through our bodies, instead of creating our own blood? Maybe that was the meaning of the movie.

Your thoughs?