Money = Debt
Where does money come from? What is "money," exactly? It's printed by the Federal Government, right? Not exactly. In fact, almost all of the money in existence is created every day, quite literally out of nothing, to contribute to an exponentially-increasing economic bubble which is fundamentally flawed - to the point that it is unsustainable.
Check out Paul Grignon's 47-minute animated film for a shocking, revelatory look at our monetary system.
6 comments:
The tone is that "'IT' IS A CONSPIRACY!" against us.
BUT CONSIDER: Each time you/I agree to "do 'something'" for return value, you or I become part and parcel of this inventive transactional system that is disparaged in such soothing if amusing tones by the Paul Grignon film.
Also, he ignores one big step, because he does not wish to take on the responsibility for debunkers of his film saying he is EITHER anti-Semitic OR anti-catholic -- or both (I can explain this by email, MR, if you are unaware of what I am alluding to: I'll doctor your memory. In doing so, he becomes entrapped in a half-the-story criticism but dares, then, to offer a solution...a possibly false one, because (I think) he says that there is something called a "sustainable" economy...but that ignores the need for not only risk but the on again, off again need for a larger sum of transactionable value than s/he has at hand: s/he needs a loan OR a partner/s to build an adequate sum.
HOW does that happen? Someone ought to begin asking THAT question in this film and in response to it.
My answer is: work. To repeat, "Each time you/I agree to "do 'something'" for return value, you or I become part and parcel of this inventive transactional system..." that is depended on for value: adequate sum in order to "do" and the very reason why we bother to "do" at all. Barter systems? My barter record journal against yours? Suddenly, Mike, when we barter at an elevated level such as touted in this film, Who is the banker?
You. Me.
The narrator pretends that the barter of pre-city history, because it was effective for a solely agrarian and closed-loop society that it would be good enough for ours too.
Do YOU believe that? I do not.
C'mon, sir! Give me something to celebrate instead of to criticize (okay...okay...I do NOT have to criticize what you blog: I can sit back in smug silence -- but would the creative you wish that? I have thought not.
Still, the flick is VERY well done: just so, it is no less dangerous that is intended, for the reverse reasons.
Where's my stethoscope?
I watched all 47 minutes of this, and it is thought provoking, but I think the author presents his evidence quite selectively. As the Doc observes, when a bank 'creates' money by giving a loan, it is exchanging it in return for the promise of future value generated by the borrower doing work to earn enough to pay off the loan.
As pointed out in the film, this bargain requires constant growth in order to both pay back the principal and pay interest. It also means that some parts of society (bankers) earn money without producing any actual value, but that's the price we pay for the system which has enabled continuous growth for the past several centuries.
It may be more challenging in the near future to maintain continuous growth, but I don't think the situation is as dire as the author implies. It's always difficult to see what the future economy will look like, and to date there has been no circumstance where ingenuity has not overcome obstacles which might have seemed insurmountable in previous decades.
Finally, I'm dubious that centralised government is likely to do a better job than the combination of Central (i.e. Governmental) and private banks that operates in most Western countries now. See, for instance, various inflation/stagnation crises in various countries with centrally-controlled monetary systems.
Good comments. A few things:
1) What struck me most was the revelation, at least to my perhaps juvenile understanding of money, that all money essentially represents debt, no matter what form it takes. The transition from silver certificates to "legal tender," the rise of the fractional currency system, the increasingly small fractions of actual money on deposit needed to create new money, the fact that banks do not lend money they have (while this was something I always "knew," I suppose, it wasn't until it was presented in the video that I actually thought about it) - this is what I found to be very compelling. The simple idea that banks literally create money with each new loan is astounding to me.
2) The film does have a slightly creepy conspiracy undertone of which I'm highly skeptical (and it's a bit overly dramatic, if well-presented).
3) I'm certainly not saying I personally advocate some sort of barter system. That would be absurd not only to implement, but as a practical economic system. I don't know what a better system would be.
4) Credit and debt aren't inherently bad. They're tools. But this film exposes their widespread abuse. Lack of regulation and poor lending practices (cf. the subprime mortgage crisis) motivated by greed create an untenable situation. I think this is a microcosm of what could happen to the worldwide economy down the road (and this could be hundreds of years, if not thousands. Perhaps it is possible for this system of accelerating growth to continue within practical bounds of human existence, i.e. millenia. This is an interesting question - any economists want to sound off here?)
Perhaps this similar to democracy - to paraphrase Churchill, the fractional reserve currency system is the worst economic system there is, except for all others. I certainly don't know enough about it at this point to comment on that.
But I did think the video provided a lot of food for thought. For me at least, after watching I felt like I understood our economy far better than I had before.
Hey -- don't get me wrong: I am glad I saw it, Friend; and like SO MUCH I have seen and learned in the past - what is it now? TEN years! - it is stuff, they are things I would NEVER have fallen over in The Great Big Forest of Life unless you, your friends, and dearest shazam had dropped them in my lap (like the many books she gifts me with from time to time: she is UNerring in her judgment of what will rock my world -- and you? YOU TWO just like to rock it ;-D
Actually, I did imagine that banks were loaning out money on deposit -- the whole fractional reserve thing was news to me (not that I'd ever given it much thought). So from that perspective it was an eye-opener.
But I agree that the conspiratorial tone smacks a little bit of a hippy with a kooky agenda (which seems borne out by a visit to the author's website).
@The Good Doctor: We like to keep you on your toes, Doc!
Post a Comment