A Professional Video about Fiat Money

[Clark]

From the YouTube description:

Despite every effort by governments, the gap between rich and poor continues to grow. It is now the biggest it has even been in history. All sorts of reasons for this have been proffered, but few, however, seem to realise that is a simple, inevitable consequence of our system of money and credit. This video, a shorter version of which appears in the film The Four Horsemen, explains ...

http://www.youtube.com/watch?v=hx16a72j__8

Watching it reminded me of the 'What is Bitcoin?' video. I would like to see more videos like these made about Bitcoin and the Bitcoin economic experiment.

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[phorensic]

Excellent video.  This is about the 3rd video that I have watched about "money" since I discovered the bitcoin community and those of you who like to spread knowledge about how money really works.  I've learned more about money in the last 6 months than I have in the last 28 years.  The truths still shock me.

[BubbleBoy]

Banks don't create money out of thin air, only the central bank does. Just think for a millisecond, if Lehman had the power to print money, why didn't it use it to bail itself out ? Well, Lehman could not print itself out of trouble. That's because in order to print money, depositors need to enable the bank to do so, by letting it have their money. The depositors themselves create the money by treating the bank deposit as a money substitute: the "real" money are lent out, and the depositor is left with something of questionable liquidity depending on the bank's health.
Read that last line over and over if you are one the "banks print money out of thin air !" pinheads. The deposit you hold with the bank is not  money, you have purchased a highly liquid security that gives you a profit in exchange for accepting a risk of default, and that risk is much higher than we've commonly been led to believe. If you want to convince yourself that deposits are not money, just try to deposit your deposit at another bank (and that metadeposit at yet another bank, and so on up to infinite interest) . The other bank knows a deposit is not money, and will kick you out of the building.
This phenomenon happens just as well with a non-fiat currency: a gold receipt is not the same thing as gold, but the apparent gold quantity circulating in the economy can increase if people treat gold receipts as gold equivalents. Fractional reserve banking is not the product of fiat.

[Clark]

Well, I think the point is that fractional reserve banking increases the money supply, making funds available for lending beyond those that were deposited.

Nice article here: http://en.wikipedia.org/wiki/Fractional-reserve_banking

If you want to convince yourself that deposits are not money, just try to deposit your deposit at another bank (and that metadeposit at yet another bank, and so on up to infinite interest) .

I could, however, take out a loan from a bank and deposit it with another bank.

[ne1]

Excellent video.  This is about the 3rd video that I have watched about "money" since I discovered the bitcoin community and those of you who like to spread knowledge about how money really works.  I've learned more about money in the last 6 months than I have in the last 28 years.  The truths still shock me.

Phorensic,


check out "the secret of oz"
http://vimeo.com/14924997

or the grand daddy of money vids "money masters"
http://video.google.com/videoplay?docid=-515319560256183936#

if you haven't already.  Fascinating stuff.

[evoorhees]

Excellent video.  This is about the 3rd video that I have watched about "money" since I discovered the bitcoin community and those of you who like to spread knowledge about how money really works.  I've learned more about money in the last 6 months than I have in the last 28 years.  The truths still shock me.

It's very good to be learning about money - however I'd advise you to maintain a high level of skepticism on any theory that's put to you. Just because the "commonly held wisdom" about money and banking is totally flawed, doesn't mean that any given alternative theory is valid.

I can recommend no better book on money than Rothbard's "What has government done to our money?"  It can be read in a couple hours.

[hugolp]

Excellent video.  This is about the 3rd video that I have watched about "money" since I discovered the bitcoin community and those of you who like to spread knowledge about how money really works.  I've learned more about money in the last 6 months than I have in the last 28 years.  The truths still shock me.

Phorensic,


check out "the secret of oz"
http://vimeo.com/14924997

or the grand daddy of money vids "money masters"
http://video.google.com/videoplay?docid=-515319560256183936#

if you haven't already.  Fascinating stuff.

Wacko videos. The producer has even admited that Money Master is full of historic inaccuracies.

[322i0n]

From the YouTube description:

Despite every effort by governments, the gap between rich and poor continues to grow. It is now the biggest it has even been in history. All sorts of reasons for this have been proffered, but few, however, seem to realise that is a simple, inevitable consequence of our system of money and credit. This video, a shorter version of which appears in the film The Four Horsemen, explains ...

http://www.youtube.com/watch?v=hx16a72j__8

Watching it reminded me of the 'What is Bitcoin?' video. I would like to see more videos like these made about Bitcoin and the Bitcoin economic experiment.

Excellent!!!

[ThiagoCMC]

From the YouTube description:

Despite every effort by governments, the gap between rich and poor continues to grow. It is now the biggest it has even been in history. All sorts of reasons for this have been proffered, but few, however, seem to realise that is a simple, inevitable consequence of our system of money and credit. This video, a shorter version of which appears in the film The Four Horsemen, explains ...

http://www.youtube.com/watch?v=hx16a72j__8

Watching it reminded me of the 'What is Bitcoin?' video. I would like to see more videos like these made about Bitcoin and the Bitcoin economic experiment.

AWESOME VIDEO!!!

Who likes this video MUST watch more two:

Zeitgeist: Addendum

Zeitgeist: Moving Forward

http://zeitgeistmovie.com/

BEST!
Thiago

[ultima]

Also watch this. Don't get turned away because these videos are focused on gold and silver. It is all about fiat.

Debt Collapse - $20,000 Gold: http://www.youtube.com/watch?v=tj2s6vzErqY

Why gold and silver: http://www.youtube.com/watch?v=E5VNAEmmBQM

And also:
Part 1: http://www.youtube.com/watch?v=uzef43gdupk
Part 2: http://www.youtube.com/watch?v=0Wrrzsrb-wg

[tvbcof]

Banks don't create money out of thin air, only the central bank does.

Ummm...the Central what?

In a debt-based monetary system, money is created when someone takes on debt.

Just think for a millisecond, if Lehman had the power to print money, why didn't it use it to bail itself out ? Well, Lehman could not print itself out of trouble.

Lehman ran out the ability to take on debt.  So did almost everyone except the tax payers who have no choice in the matter.  Shit-canning the FASB accounting rules and ballooning the federal deficits are band-aids for the issue.  If we can control the energy resources going to China and force them to take on our debt, we could possible string things out for some time.  We are probably going to need to take Iran pretty soon though.

That's my take on things at least.

[Nubarius]

I can recommend no better book on money than Rothbard's "What has government done to our money?"  It can be read in a couple hours.

+1. I second the recommendation. I didn't really understand how money works until I read "What Has Government Done to Our Money?" and "The Mystery of Banking", both by Murray Rothbard. Even though I don't agree with all of Rothbard's views, he succeeds at explaining how the whole monetary system works, and what its weaknesses are. I haven't read any other books that explain these matters so convincingly.  Both books are available online thanks to the Ludwig von Mises Institute:

What Has Government Done to Our Money?
http://mises.org/books/whathasgovernmentdone.pdf

The Mystery of Banking
http://mises.org/Books/mysteryofbanking.pdf

[Etlase2]

From the YouTube description:

Despite every effort by governments, the gap between rich and poor continues to grow. It is now the biggest it has even been in history. All sorts of reasons for this have been proffered, but few, however, seem to realise that is a simple, inevitable consequence of our system of money and credit. This video, a shorter version of which appears in the film The Four Horsemen, explains ...

http://www.youtube.com/watch?v=hx16a72j__8

Watching it reminded me of the 'What is Bitcoin?' video. I would like to see more videos like these made about Bitcoin and the Bitcoin economic experiment.

speculative bubbles, pyramids, people profiting for doing nothing...

[Clark]

I just checked out a library book on the history of banks, published in 1837. It should be a very nice read.

[ultima]

I just checked out a library book on the history of banks, published in 1837. It should be a very nice read.

Whats the title?

[Clark]

Whats the title?

The History of Banks. You can read it online at Google Books or archive.org.

[finway]

Too bad i can't visit the youtube.com, due to the Great FireWall.

[tvbcof]

Too bad i can't visit the youtube.com, due to the Great FireWall.

Can you just get a cheap shell account (with BTC) and do a socks proxy via SSH?  That is what I did when I was in Beijing.  I sort of assumed that the authorities were aware of my tunnel but probably wouldn't harass me since I was a foreigner.  I always wondered if it were relatively safe for a native to do that, or would it result in re-education camp or some such?

[BubbleBoy]

Just think for a millisecond, if Lehman had the power to print money, why didn't it use it to bail itself out ? Well, Lehman could not print itself out of trouble.

Lehman ran out the ability to take on debt. 

That makes no sense whatsoever. I know you think it does, but in all honesty it doesn't. That's why it's so hard to talk to the "Occupy" wackos. They have very strong, but wrong ideas, and any attempt for a constructive dialogue stops in a brick wall: you either "get it", or you are one of the sheeple, a puppet of the financial elite.

[tvbcof]

Just think for a millisecond, if Lehman had the power to print money, why didn't it use it to bail itself out ? Well, Lehman could not print itself out of trouble.

Lehman ran out the ability to take on debt. 

That makes no sense whatsoever. I know you think it does, but in all honesty it doesn't. That's why it's so hard to talk to the "Occupy" wackos. They have very strong, but wrong ideas, and any attempt for a constructive dialogue stops in a brick wall: you either "get it", or you are one of the sheeple, a puppet of the financial elite.

You seem to have the same old simpleton understanding of banks relying on Grandma depositor's money for much of anything.  It makes enough intuitive sense that Joe Sixpack will buy it, so that is the story line which is pushed.  That's true to a tiny degree insofar as they (sometimes) have some capital requirements, but that is largely a quaint reminder of days gone by.  Banks primarily play around with debt (aka risk) in the OTC markets these days as evidenced by the notional value figures of the derivitive markets.  True, there are some pockets of 'hot money' value (pension liabilities, depositor funds, etc) which are particularly valuable poker chips.  These have already been lost so the only thing we have to look forward to now are how to break it to the losers (who didn't even know that they were playing) that there is nothing left.

I'm happy with my conception of how money works.  It has, to me, remarkable explanatory powers when it comes to providing solutions to the puzzling things that pop up.  As for being some sort of a 'puppet of the financial elite', I think I hardly qualify.  I've bent over backward to avoid sitting on USD for the last almost decade, and I don't play around with 'mainstream' financial instruments since I has zero confidence that the likes of Harvey Pitt, Mary Shiavo, or Tim Geithner to 'have my back'.  I laughed my ass off all the way through 2008, and have every confidence that I will do so again in 2012.