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angryvoodoo
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A must see: make sure everyone you know gets to see this.
PostPosted: Sun Jan 27, 2008 4:38 am Reply with quoteBack to top

5 parts:

Part 1
http://www.youtube.com/watch?v.....re=related

Part 2
http://www.youtube.com/watch?v=hfXavRTM4Fg

Part 3
http://www.youtube.com/watch?v=_yvRZoM-2r8

Part 4
http://www.youtube.com/watch?v=f0p8LepIuVM

Part 5
http://www.youtube.com/watch?v=PzXZ_Hs1g6U



more at: moneyasdebt.net

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angryvoodoo
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Re: A must see: make sure everyone you know gets to see this.
PostPosted: Mon Jan 28, 2008 6:49 am Reply with quoteBack to top

a good follow-up, online book:

http://www.conciseguidetoeconomics.com/

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sless
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Re: A must see: make sure everyone you know gets to see this.
PostPosted: Mon Jan 28, 2008 7:21 am Reply with quoteBack to top

Some quick thoughts on the movie.


1)
To claim that money=debt, always seems to me to skew the argument of value of money.


As Milton Friedman says in Money Mischief , anything can be money:  stones, iron, gold, tobacco, silver, shells, cigarettes, copper, paper, nickel, etc. What makes these things money is not what they are, but what they are used for. They may have value in themselves, like gold ("commodity" money), or they may not ("credit" money, which means banknotes, bank deposits, tokens, markers, etc.); but their value as money is separate from their intrinsic value. What gives money value as such is that it is, or can be, used for exchange, replacing the original human system of trade, which was barter. The value of money is thus the value people attribute to what they want to exchange, no more, no less. As a medium of exchange, all money is in effect "credit" money:  credit on an incomplete barter, like an IOU. An IOU can also be anything, as long as it is recognized as a contractual obligation on an incomplete exchange.


What the value of money actually is (i.e. what units of the standard will buy, in general) depends on 1) how much money there is, 2) how much money is held out of circulation, and 3) how many exchanges circulating money is used to cover. This is the "quantity theory of money" and can be expressed in a famous equation by the American astronomer and economist Simon Newcomb:  MV = PT.  "M" signifies the actual quantity of money; "V" signifies the "velocity," which is the rate at which money circulates or how long money is held out of circulation; "T" is the number of transactions, or exchanges; and "P" is the level of prices. This equation easily illuminates most questions about inflation or deflation, which is how money becomes less or more valuable over time. The evidence for the "quantity theory" is that historically inflation and deflation have occurred independently of economic growth and recession, as can be seen in the data from Friedman and Schwartz.

Inflation is where the aggregate level of prices goes up and deflation where the aggregate level of prices goes down. Inflation will occur if V and T remain constant but M goes up, i.e. the supply of money increases without any other changes. Inflation can also occur if V goes up (people spend money more quickly) or T declines (the economy shrinks), as the other variables are constant. Most inflations, however, occur because of independent increases in the money supply. That can happen either with commodity money or credit money. A flood of silver from the New World caused a devastating inflation in 16th and 17th century Spain; and gold strikes in California, Australia, South Africa, and the Yukon produced inflations in the 19th and early 20th centuries. Now inflations are always the result of increases in the supply of credit money:  it is easy to print paper, and governments that have begun issuing paper money have always eventually fallen to the temptation of just printing and spending new money.

Or put in another way, Money possess the essential quality of scarcity. Every unit of measure has got a quality corresponding to that which it is supposed to measure. Since money is the unit of measure of economic goods, which are limited in quantity, i.e. they are scarce, money must also exhibit scarcity. An artificial increase of the supply without the correlating increase in the units that it measures, will lead to monetary inflation.

2) The movie fails to take into consideration the somewhat self balancing nature of the banking system.

A bad loan, to an unsuccessful person or business, cannot be paid off and so at some point must be written off as a loss by the bank. Thus the bank's "deposit" is simply lost, and the money supply thereby decreases by that amount. Banking therefore can stimulate the growth of an economy through loans but usually will not produce an inflation, as bad loans balance the transactions created by the good loans. Instead of inflation, sometimes loans and credit get overextended and their abrupt collapse can decrease the money supply to produce a conspicuous deflation. It was this deflation, caused by what Milton Friedman saw as the failure of Federal Reserve to exercise it's intended purpose, lead his claim that the institution made the situation worse.

The Federal Reserve System, which had been created to support the banks during credit crises (to replace ad hoc devices like the suspension of cash payments in 1907), failed to do so in the early 30's, allowing banks to fail in unprecedented numbers. This was particularly egregious because in the 1920's the Fed had encouraged banks to extend their credit further than ever before. The banks did, with confidence, since they understood that the System had been created to stand behind them if they might be threatened in a credit collapse. But when the collapse came, with all the force of a fall from an unprecedented height, and a banking panic began, the Federal Reserve mostly stood idly by and let the banks fail. By 1933 40% of all the nation's commercial banks had gone bankrupt or been closed by regulators. Nothing like that had ever happened before, in part because the banks had not let it happen. But the ability of the banks to protect themselves, and the public, had been taken from them and given to irresponsible bureaucrats whose only real interest was to protect themselves, not the banks or the public. The result was that the savings of businesses and individuals were wiped out, the currency deflated tremendously, and debts, mortgages, and taxes were suddenly many times more valuable than before. Countless bankruptcies and foreclosures followed.

3) Interests charged on laws are not necessarily bad, for if there was no incentive for compensation for failure to repay ones debt, than what incentive does one have to loan money? I for one am glad that "debtors prisoners" are relic of America's past"

Nothing very serious would ever get done economically without borrowing and lending. Even if one accumulates capital slowly until a large investment can be made without borrowing, success then means a larger accumulation of capital which will need to be disposed of in some way. People imagine that they would just put it in the bank. The bank, however, then has to worry what to do with it, especially if people expect to be paid interest on their money! So they loan it. Either way, the problem is what to do with money if one is not simply going to buy commodities for one's own use (or give it away, a favorite alternative for the very rich). It is to be invested, with the purpose of acquiring income. This can be done by buying land or buying a business, which directly provides one with rents or profits, but also requires some considerable supervision, if not substantial business skills to use property or run a business. Most people who already have money would like something simpler -- and buying one business after another with profits would result in a commercial conglomerate that one person could not supervise.

A businessman who buys up companies and then breaks them up and sells off the parts for a profit is an important component of the economy, since this easily creates jobs and increases production. A company can be broken up and sold for a profit only if it is worth less than what the sum of what its parts are worth individually. But if a company is worth less than the sum of its parts, then breaking up the company frees capital that can be used for other investment purposes, including creating jobs in other companies or industries. Otherwise the capital is locked up and useless.

While most people in the West and Far East now take loans and interest for granted, more sophisticated financial instruments and activities, like commodity futures or arbitrage, still seems to be viewed with suspicion and disapproval. This suspicion had grave financial consequences when financier Michael Milkin, the "king of junk bonds," was prosecuted for technical trading violations but was widely regarded as guilty of fraud for trading in junk bonds at all. However, there was nothing wrong with junk bonds, except that they were, and are, riskier than rated bonds. Because of the widespread idea that junk bonds were themselves fraudulent and worthless, Congress required that Savings and Loan institutions sell off their junk bond investments. Such forced sales, of course, drove down prices and meant that most Savings and Loans took nothing but losses, often serious losses, on their investments. Savings and Loans were already in financial trouble because the inflation of the 1970's had rendered their traditonal low interest loans worthless. The result was the collapse of the entire Savings and Loan industry, requiring billions of dollars from the government in payoffs for the federally insured (up to $100,000) accounts at the Savings and Loans. In evident public and political discourse, the blame for this has never properly been laid at the feet of the government. Just more "greed" of the 80's.



just my 2 cents
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Rotag
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Joined: 01 Nov 2007
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Re: A must see: make sure everyone you know gets to see this.
PostPosted: Mon Jan 28, 2008 12:13 pm Reply with quoteBack to top

Thanks, good read.

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angryvoodoo
Demolition Man


Joined: 20 Nov 2007
Posts: 2110
Location: ny

Re: A must see: make sure everyone you know gets to see this.
PostPosted: Mon Jan 28, 2008 2:53 pm Reply with quoteBack to top

sless wrote:
Some quick thoughts on the movie.


1)
To claim that money=debt, always seems to me to skew the argument of value of money.


As Milton Friedman says in Money Mischief , anything can be money: stones, iron, gold, tobacco, silver, shells, cigarettes, copper, paper, nickel, etc. What makes these things money is not what they are, but what they are used for. They may have value in themselves, like gold ("commodity" money), or they may not ("credit" money, which means banknotes, bank deposits, tokens, markers, etc.); but their value as money is separate from their intrinsic value. What gives money value as such is that it is, or can be, used for exchange, replacing the original human system of trade, which was barter. The value of money is thus the value people attribute to what they want to exchange, no more, no less. As a medium of exchange, all money is in effect "credit" money: credit on an incomplete barter, like an IOU. An IOU can also be anything, as long as it is recognized as a contractual obligation on an incomplete exchange.


fiat/dogma currency as is currently enforced by law eliminates the ability for anything else to be used as legal tender... 'legal' transactions have a dollar price tag at all times.

Try and buy with anything but... and mr. friedman albeit brilliant, doesn't call the shots. The point of the short film is that since IOU's are considered trade-able, it is an unsustainable system for the economy.

sless wrote:

What the value of money actually is (i.e. what units of the standard will buy, in general) depends on
1) how much money there is,
2) how much money is held out of circulation, and
3) how many exchanges circulating money is used to cover. This is the "quantity theory of money" and can be expressed in a famous equation by the American astronomer and economist Simon Newcomb:
MV = PT
"M" signifies the actual quantity of money;
"V" signifies the "velocity," which is the rate at which money circulates or how long money is held out of circulation;
"T" is the number of transactions, or exchanges; and
"P" is the level of prices. This equation easily illuminates most questions about inflation or deflation, which is how money becomes less or more valuable over time. The evidence for the "quantity theory" is that historically inflation and deflation have occurred independently of economic growth and recession, as can be seen in the data from Friedman and Schwartz.

Inflation is where the aggregate level of prices goes up and deflation where the aggregate level of prices goes down. Inflation will occur if V and T remain constant but M goes up, i.e. the supply of money increases without any other changes. Inflation can also occur if V goes up (people spend money more quickly) or T declines (the economy shrinks), as the other variables are constant.

Most inflations, however, occur because of independent increases in the money supply. That can happen either with commodity money or credit money. A flood of silver from the New World caused a devastating inflation in 16th and 17th century Spain; and gold strikes in California, Australia, South Africa, and the Yukon produced inflations in the 19th and early 20th centuries.
Now inflations are always the result of increases in the supply of credit money: it is easy to print paper, and governments that have begun issuing paper money have always eventually fallen to the temptation of just printing and spending new money.


... have you been shopping lately? ask the maid how much food $100 gets you now.

sless wrote:

Or put in another way, Money possess the essential quality of scarcity. Every unit of measure has got a quality corresponding to that which it is supposed to measure. Since money is the unit of measure of economic goods, which are limited in quantity, i.e. they are scarce, money must also exhibit scarcity. An artificial increase of the supply without the correlating increase in the units that it measures, will lead to monetary inflation.


obviously... but how does that debunk the theory presented in the film?
Besides its not about scarcity of the Emporer's New Clothes here... we all believe we see the money... its about the fact that uber-consumptionism relies on DEBT CREATION which supplies/creates money that we use to turn natural resources into garbage (a huge problem noone talks about MOUNTAINS OF GARBAGE) and a system whose endgame is failure on all levels.


sless wrote:

2) The movie fails to take into consideration the somewhat self balancing nature of the banking system.


Wrong. the whole point is that as defaults increase; and more loney is gained in interest giving greater leverage for more debt issuance, the endgame is the lenders end up with all the money AND all the assets.

Who do you work for??? Have you not seen REPO TOUR BUSES> GUARD DOGS IN REO PROPERTIES?? dude... wake up!


sless wrote:

A bad loan, to an unsuccessful person or business, cannot be paid off and so at some point must be written off as a loss by the bank. Thus the bank's "deposit" is simply lost, and the money supply thereby decreases by that amount. Banking therefore can stimulate the growth of an economy through loans but usually will not produce an inflation, as bad loans balance the transactions created by the good loans. Instead of inflation, sometimes loans and credit get overextended and their abrupt collapse can decrease the money supply to produce a conspicuous deflation. It was this deflation, caused by what Milton Friedman saw as the failure of Federal Reserve to exercise it's intended purpose, lead his claim that the institution made the situation worse.


Milton fails, big time. Its just a theory. I see costs rising, mountains of garbage rising, jobs decreasing, money devalued at epic scale and pace, banks closing...
I value your level of expertise but you are reinforcing the point rather than debunking it.


sless wrote:

The Federal Reserve System, which had been created to support the banks during credit crises (to replace ad hoc devices like the suspension of cash payments in 1907), failed to do so in the early 30's, allowing banks to fail in unprecedented numbers.
This was particularly egregious because in the 1920's the Fed had encouraged banks to extend their credit further than ever before. The banks did, with confidence, since they understood that the System had been created to stand behind them if they might be threatened in a credit collapse.
But when the collapse came, with all the force of a fall from an unprecedented height, and a banking panic began, the Federal Reserve mostly stood idly by and let the banks fail. By 1933 40% of all the nation's commercial banks had gone bankrupt or been closed by regulators. Nothing like that had ever happened before, in part because the banks had not let it happen.
But the ability of the banks to protect themselves, and the public, had been taken from them and given to irresponsible bureaucrats whose only real interest was to protect themselves, not the banks or the public. The result was that the savings of businesses and individuals were wiped out, the currency deflated tremendously, and debts, mortgages, and taxes were suddenly many times more valuable than before. Countless bankruptcies and foreclosures followed.


lots of HR's passed since eh


sless wrote:

3) Interests charged on laws are not necessarily bad, for if there was no incentive for compensation for failure to repay ones debt, than what incentive does one have to loan money? I for one am glad that "debtors prisoners" are relic of America's past"


I wonder if there is validity to the historical factoid offered up about olde societies using capital punishment to thwart usury, or charging interest on a loan, and if the 5 major religions also were down on it. Hadn't heard that one before. Any experts?


sless wrote:

Nothing very serious would ever get done economically without borrowing and lending. Even if one accumulates capital slowly until a large investment can be made without borrowing, success then means a larger accumulation of capital which will need to be disposed of in some way. People imagine that they would just put it in the bank.
The bank, however, then has to worry what to do with it, especially if people expect to be paid interest on their money! So they loan it. Either way, the problem is what to do with money if one is not simply going to buy commodities for one's own use (or give it away, a favorite alternative for the very rich).
It is to be invested, with the purpose of acquiring income. This can be done by buying land or buying a business, which directly provides one with rents or profits, but also requires some considerable supervision, if not substantial business skills to use property or run a business. Most people who already have money would like something simpler -- and buying one business after another with profits would result in a commercial conglomerate that one person could not supervise.


I give up.

sless wrote:

A businessman who buys up companies and then breaks them up and sells off the parts for a profit is an important component of the economy, since this easily creates jobs and increases production. A company can be broken up and sold for a profit only if it is worth less than what the sum of what its parts are worth individually. But if a company is worth less than the sum of its parts, then breaking up the company frees capital that can be used for other investment purposes, including creating jobs in other companies or industries. Otherwise the capital is locked up and useless.

While most people in the West and Far East now take loans and interest for granted, more sophisticated financial instruments and activities, like commodity futures or arbitrage, still seems to be viewed with suspicion and disapproval. This suspicion had grave financial consequences when financier Michael Milkin, the "king of junk bonds," was prosecuted for technical trading violations but was widely regarded as guilty of fraud for trading in junk bonds at all. However, there was nothing wrong with junk bonds, except that they were, and are, riskier than rated bonds. Because of the widespread idea that junk bonds were themselves fraudulent and worthless, Congress required that Savings and Loan institutions sell off their junk bond investments. Such forced sales, of course, drove down prices and meant that most Savings and Loans took nothing but losses, often serious losses, on their investments. Savings and Loans were already in financial trouble because the inflation of the 1970's had rendered their traditonal low interest loans worthless. The result was the collapse of the entire Savings and Loan industry, requiring billions of dollars from the government in payoffs for the federally insured (up to $100,000) accounts at the Savings and Loans. In evident public and political discourse, the blame for this has never properly been laid at the feet of the government. Just more "greed" of the 80's.



just my 2 cents

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maudejo
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Joined: 11 Dec 2007
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Re: A must see: make sure everyone you know gets to see this.
PostPosted: Mon Jan 28, 2008 3:32 pm Reply with quoteBack to top

I thought the clips were excellent. Also I agree with ...on the previous ...I'm tired of pretending all the sugar coated c**p we are fed is like some great ...we are SOL
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Rotag
Wrecking crew


Joined: 01 Nov 2007
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Re: A must see: make sure everyone you know gets to see this.
PostPosted: Mon Jan 28, 2008 4:47 pm Reply with quoteBack to top

angry,


So, what do we do? We don't control it. Sell all your assets, buy gold and go bury it in your rental apartments back yard? Of course I am joking. It sounds like Al gore. "We have global warming and I have no solutions"

Don't get mad at me I just don't know what you and I can do. Its very frustrating.

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angryvoodoo
Demolition Man


Joined: 20 Nov 2007
Posts: 2110
Location: ny

Re: A must see: make sure everyone you know gets to see this.
PostPosted: Mon Jan 28, 2008 7:03 pm Reply with quoteBack to top

unfortunately the way I see it is nothing can be done.

There is dissent and difference of opinion from the non-informed to the professional.

Even if the middle class would or could organize, it would disintegrate as fast as it formed due to indecision.

My whole point in sharing this info means the difference between being manipulated, but not fooled.

Don't do anything, it won't matter.

If I could change things at will like some sort of Emporer, I would
take this man's advice and do the following:

1) have the gov print money for its own use without paying interest.

2) make interest free federal grants to municipalities

3) disband the FED

4) disband the IRS

5) disband the FDA and ban toxic chemicals, fertilizers, preservatives, colorings and flavorings etc. Ban on junk foods, restore quality to meat and vegetable production.

5a) subsidize local farmers, mandate a max distance for groceries from source to destination.

6) ban plastic c**p we don't need. all of it. my kid will cry for my little pony but garbage is a big problem everyone ignores.

7) Endorse and Invest in any alternate energy that has a positive EROI

Cool Create a new system for handling garbage beginning with production:
same packaging for all products. One type of glass, one type of plastic.

Institute nationwide recycling centers based on a large scale sorting facility that breaks things into 7 categories... * See Vermont for beneficial waste management theory and a social conscience about preservation and low impact living on the citizen level.

9) Promote Education and strive towards really bettering Humans.
Start with teaching basics, as usual.. but how come credit isn't taught in school yet it affects EVERYONE with a SSN?



The problem is, the weakest link in the chain breaks our society. superstars from all walks of life permeate our system, from the street urchin to the wall street urchin. There is no escape. Opportunists with a knife and a gun or a pen and a contract will destroy any attempt to transform a 'free' society.

not 'free' societies that demand and force these changes end up run by the corrupt.

endgame = lose.

save yourselves.

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Last edited by angryvoodoo on Mon Jan 28, 2008 7:22 pm; edited 1 time in total
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icenvegas
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Joined: 22 Nov 2007
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Re: A must see: make sure everyone you know gets to see this.
PostPosted: Mon Jan 28, 2008 7:10 pm Reply with quoteBack to top

There is something you can do. You start with an idea. You spread your idea to others. At Bars, at networking events, and you dont be afraid to be called a nut.
You gather support, start small and let it grow. Idea's are the most dangerous weapon of mankind

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sless
Flash in the pan


Joined: 19 Dec 2007
Posts: 46

Re: A must see: make sure everyone you know gets to see this.
PostPosted: Mon Jan 28, 2008 8:23 pm Reply with quoteBack to top

I think there might be a slight miss-understanding, i was not trying to "debunk" the film but rather stating questions or issues that the film simply overlook.... I guess one can say my points were merely questions that i wished the movie took into consideration in their analysis. Maybe it is just me, but when things are presented in absolute statements, or posed as black and white rather than shades of gray, i tend to discredit their message.

Whether or not the banking system is self correcting is not completely relevant, at least to me, rather I see it as an obvious flaw in the logic used that banks simply create money when needed. AgaIN, i am not disagreeing, but one sometimes wants to hear not support for an argument, but also a rebuttal to any presumed counter-points. Which brings me to my next question, is the self executing nature of money act as a limit somewhat to the overall supply? Paper money's life is 6 months and than it is destroyed, and debt is paid off over time, one wonders how is this taken into consideration in the argument made by the movie...


Quote:
I wonder if there is validity to the historical factoid offered up about olde societies using capital punishment to thwart usury, or charging interest on a loan, and if the 5 major religions also were down on it. Hadn't heard that one before. Any experts?


From wikapedia

In 1833 the United States reduced the practice of imprisonment for debts at the federal level. Most states followed suit. It is still possible, however, to be incarcerated for debt: debts of fraud, child-support, alimony, or release fines can land a citizen in jail or prison, or prevent one’s release.

http://en.wikipedia.org/wiki/Debtor%27s_prison

l
Quote:
ots of HR's passed since eh


Funny you say that, i stumbled upon an article in entitled "Where the fallacy lies" written by a Tennessee man addressing hard and soft money and the "greenback" debate. It was printed in the september 10th 1878 the new york times..

http://query.nytimes.com/gst/a.....8383669FDE


While we are remembering what once was, this article about a move by a failed banks trustee to stop a fellow trustee from declaring bankruptcy and discharging his portion of the banks deficiency that is owed to it's depositors tended to reinforce Friedman's argument. Is the FDIC really a sound mechanism? Could banks fend for themselves prior to the creation of the Federal reserve system? Last, and to me the most important, if Benjamin Strong had not passed away prior to to the crash of 1929, would his strong leadership enabled the system to function properly? None the less,

http://query.nytimes.com/mem/a.....8383669FDE
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