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Money As Debt

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Scrooge McDuck Posted: Thu, Oct 9 2008 12:18 AM

Hello Everyone,

I have a question for discussion but I am not even sure how to ask it so I will just do the best I can and may refine the question later. I watched a video on Google Video called "Money As Debt" http://video.google.com/videosearch?q=money+as+debt&hl=en&emb=0&aq=f#

 

If you want to watch the whole video great but my questions come from time stamp 31:55 and 33:58. I will be happy to talk about any part of the video so I can learn.

 

If we used gold and silver as money like we used to then is what he is saying "the money lenders i.e. bankers would end up with all the money via interest? And futher more that Gold and Silver can't work because of the possiblity of Shaving coins, debasing the metal and cornering the market. Pretty weak argument if you ask me! Then he goes on to say how the problem can be solved by the "GOVERNMENT" printing money and supplying to the people instead of the government borrowning it from a private bank? Again giving the abiltiy to the government to print what it wants sounds like a very bad idea.

Can't wait to here what you have to say about my questions and the video.

Scrooge McDuck

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That guy's an idiot.

Permanent interest free money?

Govt taxes to destroy money as a way to control inflation?

Yet another believer in the Debt Virus...

"Governments would rise and fall on their ability to preserve the value of money."

"Tax money would go much further as none of it would be required to pay interest to private bankers."

That video is actually enjoyable in a train wreck kind of way.

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Paul replied on Thu, Oct 9 2008 12:48 AM

Haven't watched the video, but that's the typical monetary crank position - that interest is the root of all evil, it can't be paid back, and governments should print up money and force the interest rate to zero.  Nuts.

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Can anyone give me some referecne. Something to read that would help me understand why it can't work.

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Why don't price controls work? Apply price control theory to the interest rate being forced down to zero.

-Jon

Freedom of markets is positively correlated with the degree of evolution in any society...

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What I would like to see is a rebuttle to the theory that if all money is debt, there cannot be enough money in the system to repay all debt and that the bankers will end up with all the money.

I know it's nonsense, I just can't quite explain why.

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Sounds awfully familiar to the compound interest paradox. Mayhap you should search for some of the discussions on it on this site?

-Jon

Freedom of markets is positively correlated with the degree of evolution in any society...

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Fried Egg:

What I would like to see is a rebuttle to the theory that if all money is debt, there cannot be enough money in the system to repay all debt and that the bankers will end up with all the money.

I know it's nonsense, I just can't quite explain why.

This thread I think: http://mises.org/Community/forums/p/2906/40109.aspx#40109

"You don't need a weatherman to know which way the wind blows"

Bob Dylan

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xahrx replied on Thu, Oct 9 2008 9:21 AM

Since money is not debt the argument fails right there.  Real money is a commodity that is owned.  It makes no more sense to say all money is debt than it does to say all shoes are debt, or all pans are debt.  Ficuciary media on the other hand represent a claim to money, a promise to pay which can be construed as debt.  But claims to money are not themselves money and can and will be treated differently on the market.

"I was just in the bathroom getting ready to leave the house, if you must know, and a sudden wave of admiration for the cotton swab came over me." - Anonymous
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The money in circulation from the federal reserve is loaned out to us at interest. They could suck up a lot of money, but probably not all of it because people would just default etc.

"Neither a borrower nor a lender be" - Polonius

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It's like this - banks have no interest in collecting all the money.  If they did, it would no longer be money because normal people couldn't use it as a medium of exchange. Banks want to earn interest not to reloan it for a greater slice of the money supply, but because they can use it to buy real goods.  This is why bankers exist, not some conspiracy about enslaving the world and impoverishing everyone for fun.

Furthermore, banks invest in capital and hire employees.  This diminishes their ability to hoard the returns on loans.  Their employees and suppliers would spend this money into the economy.  This provides individuals with interest-free money in return for produced wealth.  Producers, from wage-earners to stock brokers, do not owe anyone anything, nor does anyone else owe them anything.  While the value of the dollar may change, both parties understand what they were trading.  The value of anything may change given another.  This means nothing about debt obligations.

Furthermore, debts can exceed money supply and still be paid off.  This is simply due to debts being able to be paid incrementally.  I can pay down a fraction of my debt with the entire money supply, produce a good, sell it to the bank for the money back, then pay the bank another fraction of my debt, until it is gone.  Interest-haters will try to argue that the bank is more interested in hoarding money than real goods.

Furthermore, as I said before.  No one person can hold the entire money supply.  Society would be forced to quickly find a substitute.  While we generally think we have one kind of money, that is not totally true.  They are inter-related, but there are differences between cash and money market demand accounts.  We also have gold/silver, and currencies based upon those like E-gold or Liberty Dollar.

Any theory about how evil bankers are trying to take over society needs to be presented with a simple question: why aren't everyone bankers?  Bankers compete to provide a market service in exchange for other desired goods.  Banking and money are both worth nothing in and of themselves.  They are only valuable to people because they can be used to acquire other goods.

If a bank or a money system was so bad, people could simply abandon the bank and money system.  The only true problems arise in government intervention, which create the very problems this video aims to solve.

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ecoli replied on Fri, Oct 10 2008 1:20 PM

The 'shaving coins' argument seems silly as well.  We'd still be using paper or digital currency, it would just be backed gold or silver.  If you want to actually redeem that for actual metal, you'll probably get jailed if you pretend your gold is worth more than it actually is. 

I think the fraud problem is much bigger deal in a money system in which a good counterfeiter can affect the value of the currency.

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This is a big bump, but someone recommended Money as Debt in the comments of Jeff Tucker's review of Inside Job and this was the only thread I found on it.  Kinda surprising there wasn't more discussion, but I figured I'd throw in my piece.

Unfortunately Money as Debt and its sequel are almost as misguided as the film in Tucker's critique. And the sad part is just as with Inside Job they are a missed opportunity. There’s a decent amount of accurate info about central banking and our current system, albeit with a few flaws, (such as notion of the Fed not creating enough money to cover the cost of interest on debt; and, therefore, the world must forever be in debt. G. Edward Griffin covered this in The Creature from Jekyll Island pp. 191-192.)

But worse than that, the conclusions the filmmaker reaches and his proposed solutions are no better than what he spends the entire film berating. He literally suggests that to fight inflation “the government could simply collect tax monies that it then takes out of use.” And then conversely “to control deflation” he suggests “the government would simply spend more money into existence.”

So, basically he is saying we should just eliminate the Fed and directly let the government print money out of nothing.

His whole issue is with the notion that money is created through debt. He sees nothing wrong with an all powerful central authority controlling the money supply, able to print money at will, backed by nothing.

It's actually strikingly similar to the notion advocated throughout Money Masters, which, is quite literally nothing more than "more of the same." Despite 3 1/2 hours of history of the manipulation of money supply for power and personal gain, the solution offered in that film is no more complex than "allow the politicians to create money out of nothing...not private bankers"...Just as in Money as Debt.  It is disturbing that such a notion could be viewed as a solution at all.

G. Edward Griffin offers a great critique of this and another film: Analysis of the documentaries Money Masters and Capital Crimes

 

And just for reference on the monetary issue:

Gold as Money: FAQ

What Has Government Done to Our Money?,

The Case for a 100 Percent Gold Dollar, & The Case for a Genuine Gold Dollar by Murray Rothbard

The Mystery of Banking by Murray Rothbard

 

 

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Clayton replied on Mon, Apr 4 2011 12:15 PM

@John James:

Disinformation is as effective as outright censorship. I don't think the Venus Project and related amateur crackpottery have arisen by mere accident.

Clayton -

http://voluntaryistreader.wordpress.com
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If the Fed is ever abolished, I'm sure it will be replaced by US Treasury greenbacks, because there are too many stupid people out there.  Ellen Brown and her White nationalist followers come to mind.  

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Bankers spend the interest earned. So you must be able to repay capital + interest : no more debt. Stupid video. Money as debt is very, very, very popular in France. Stupid french people...

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John James:
G. Edward Griffin offers a great critique of this and another film: Analysis of the documentaries Money Masters and Capital Crimes

That's a great article. I'm saving a few golden quotes from it for later use. Here is another awesome article by Gary North that I send to Greenbackers.

http://www.garynorth.com/public/8574.cfm

North makes some statements that creep me out about who or what is behind the whole Greenback movement like:

Next, there is a PowerPoint presentation. It was produced by something called the Council on Spiritual, Psychological, Economic Renewal. I could find no books sold on its site, or anything that showed who they are or what they are promoting. There is no indication who the narrator is. He sounds young. The video is here:

Check out my video, Ron Paul vs Lincoln! And share my PowerPoint with your favorite neo-con
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Yeah North actually has a whole series on popular Greenbacker Ellen Brown.  Tom Woods called it the most stunning demolition of anyone he's ever seen.  Of course he offers his own response to greenbackers here.  Here's more:

Another Neo-Greenbacker Central Banking Scheme

I Get Letters, Part 552

Picking a Fight With a 12 Year-Old Greenbacker

 

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FWIW, there's actually a third video in the series where the author changes his policy prescription somewhat and recommends a system where individuals issue their own credit.

 

"The limits of my language mean the limits of my world." ~ Ludwig Wittgenstein
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Here's a good critique of the film Money as Debt by G. Edward Griffin so the OP can have an easy answer:

http://www.freedomforceinternational.org/freedomcontent.cfm?fuseaction=money_as_debt

Do you agree with his analysis?

www.stratfor.com/analysis/love-ones-own-and-importance-place www.stratfor.com/weekly/20100503_global_crisis_legitimacy www.youtube.com/watch?v=p_KKN_jltI8 www.youtube.com/watch?v=sDQX3MybtVA batgap.com/ilona-ciunaite-elena-nezhinsky/
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By the way does this G. Edward Griffin guy has an economic qualification? According to Wikipedia he may have not.

www.stratfor.com/analysis/love-ones-own-and-importance-place www.stratfor.com/weekly/20100503_global_crisis_legitimacy www.youtube.com/watch?v=p_KKN_jltI8 www.youtube.com/watch?v=sDQX3MybtVA batgap.com/ilona-ciunaite-elena-nezhinsky/
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meambobbo replied on Sun, Oct 14 2012 4:00 PM

i don't think he holds a degree in economics, but he's a smart guy, and the Mises Institute economists occasionally drop his name...in a good way.  His major work - the creature from Jekyll Island is a great look at the Federal Reserve and our monetary system.  I've read the link you posted before, and don't remember seeing anything that made me say that he's wrong about anything.

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I haven't read his whole book, just listened to the shortened YouTube version (http://www.youtube.com/watch?v=lu_VqX6J93k) but it was a year ago. He made some good point but it wasn't goundbreaking. OK, he talks about the FED, but the world works as a net of interconnected independent nation states. Who talks about that?

By the way isn't he a conspiracy theorist? Just looking through the topics of his web site (http://www.freedomforceinternational.org/). Anyways, I plan to listen to his Jekyll Island work again, will report back! And he has another quite popular work: World Without Cancer: The Story of Vitamin B17.

> Check my blog, if you're a loser

Strangest byline, ever! :D

www.stratfor.com/analysis/love-ones-own-and-importance-place www.stratfor.com/weekly/20100503_global_crisis_legitimacy www.youtube.com/watch?v=p_KKN_jltI8 www.youtube.com/watch?v=sDQX3MybtVA batgap.com/ilona-ciunaite-elena-nezhinsky/
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I read Edward Griffin's response to Paul Grignon. But in fact you could reject his claim in just a few words (see my above comment).

By the way, you should have a look at this video.

http://www.youtube.com/watch?feature=player_embedded&v=Wkv9ZYfk7fs

Victoria Grant, a 12-years old canadian girl speaks about the money-debt. Of course, she's wrong. Anyway I have the feeling that what she has said is someone else's words.
 
Interview with Victoria Grant. Funny.
 
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Thanks, I'll look into Victoria Grant later!

www.stratfor.com/analysis/love-ones-own-and-importance-place www.stratfor.com/weekly/20100503_global_crisis_legitimacy www.youtube.com/watch?v=p_KKN_jltI8 www.youtube.com/watch?v=sDQX3MybtVA batgap.com/ilona-ciunaite-elena-nezhinsky/
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Actually Paul Grignon advocates this:

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

But it's just seems too complicated to me.

Pre-requisite:

https://mises.org/community/forums/p/32043/497878.aspx#497878

 

www.stratfor.com/analysis/love-ones-own-and-importance-place www.stratfor.com/weekly/20100503_global_crisis_legitimacy www.youtube.com/watch?v=p_KKN_jltI8 www.youtube.com/watch?v=sDQX3MybtVA batgap.com/ilona-ciunaite-elena-nezhinsky/
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