Friday, Oct 12, 2007
A great video that sums up the real problems
You Tube: Corrupt Banking System
Posted in a thread last week. This 45 minute video sums up all that is wrong with the economics of mankind. A banking system that relies on ever increasing amounts of debt/money creation to survive. Unsustainable use of natural resouces. Failure to understand the exponential function (steady growth of 3% is not flat but exponential). Increasing population on a finite planet. An elite few controlling the wealth of the masses.
Posted by sold 2 rent 1 @ 01:31 PM (1080 views) Add Comment
21 Comments
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1. planning4acrash said...
I watched this. It is all good until the end, when it reaches a silly conclusion, that if all debt was paid off there would be no money. The reality is that we would return to the gold standard and the money that was retained would be worth more and the price of gold would go through the roof, so the financial system would not dissapear, it would alter, shifting wealth to soverign powers, institutions and some individuals who hold gold and other commodities which would rise in value and those without debt who held cash would see their cash become worth more as a result of mass deflation. Alternatively, you would get high gold, again and mass hyperinflation if government takes over and prints money instead.
2. shipbuilder said...
The most important part of this is the exponential function - the fact that our monetary system drives a constant need to grow, thereby ever more rapidly using up the now scant resources of this planet. Incredibly most people choose to ignore the fact that with no resources, THERE WILL BE NO ECONOMY - we are talking about the wrong things - everything is not going to return to the mean, we will not simply have a recession and return to economic growth, as normal, for the next 50-100 years. The vast majority of damage has been done in the last 50 years, so I would reckon we have 20-30 to go at the most. Still want that mortgage?
3. rickyb said...
Clearly mineral and energy resource usage cannot increase exponentially because they can be measured in physical units (unlike indexes and prices) and are limited resources. Without exponentially increasing energy usage, real economic growth is actually not possible.
4. sold 2 rent 1 said...
It is not totally clear how we actually change the system of money. The film suggests to create money as value (not as debt). This money would not be able to earn interest. Its supply would be controlled by the government and not private banks. This would solve the problem of having to have continuous growth just to keep you head above water on debt levels.
In reality the 80-100 year debt cycle is nearly at the top (as it was in 1834 and 1933) and changes will happen in the next 5-10 years.
I don't think that the elite few (bankers) who control the money creation will let the system change radically. They will instigate a return to the gold standard (of which they control most of the gold) and keep money as debt and interest earning.
Will we have to have a revolution for the system to change radically?
If so, then gold will do well during the turbulent years.
5. Paranoia Blue said...
I remember saying to an economist about 20 years ago that the only logical conclusion to an economic system based on the notion of ever-increasing expansion was into outer space, and beyond, for trade and exploitation.
However, as I suspected the moon-landing to being an elaborate hoax – we’ll have to resort to some sort of plan B!!
6. James said...
Blimey. It really is scary how easily you people are led. Go take Economics for Dummies, apply some rational thought, and you'll realise just how utterly feeble this video is.
7. su said...
If people buy gold, where will they store it - in the banks? And when we have a corrupt world government who controls the banks, what will prevent them from confiscating the people's gold? Or am I being overly pessimistic.
8. mrmickey said...
isn't it sad that mankind is dominated by the constant struggle for money. I suppose it's routes go back to the industrial revolution and the enclosures act forcing people off the land and in to factories as virtual slaves. Before this at least people had common land they could grow their own food on.
9. Drewster said...
@shipbuilder: A return to the gold standard won't result in world peace. Throughout history we've always had wars over gold: for example when the spanish discovered south america they looted the Inca gold. Mankind has been raping and pillaging nature's resources for millenia: England was more or less completely deforested by 1350 because we kept building ships to attack the french. So let's not blame fiat money for all the world's problems.
10. su said...
It is sad, mrmickey. But although mankind is dominated by money, not all individuals are. I do think the happiest people are those who are generous and care more about their neighbours than about their pay-packets.
11. James said...
I would imagine that someone reads my comments before refusing to post them. I would imagine they have some interest in making the site look credible. You might, therefore, consider that allowing the posting of such nonsense as this video and the universally appreciative comments following it do your reputation some not inconsiderable damage.
12. harold said...
"if all debt was paid off there would be no money."
This is not actually correct, because there is not sufficient money in the system to pay off all the debt - so if all the debt were paid off there would actually be minus money! This why the money supply must be perpetually inflated. Think about it: I am the bank and I issue (at 5% interest) $1 into the economy. I am owed $1 plus 5% interest. How much money is in the economy in order to pay me what I am owed? Answer: only $1. Therefore, in order that my debts are paid ($1 plus 5% interest) I must issue more money into the economy. But this money too has debt attached to it - so, in turn, I must issue more money, etc., etc. Result: inflation, i.e., a stealth tax on peoples' savings and, thus, labour.
13. enuii said...
Debt = Slavery
14. stillthinking said...
The idea of there being more debt than money is wrong, because money can change hands many times (velocity).
I have an apple and £1 pound. You have nothing. You trust me to look after all money so I just write stuff down in a notebook. At all times the single pound is in my possession. You then borrow £2 pounds from me. I write this down. You buy the apple from me for £1 pound and you pay me £1 to jump in the air twenty times oinking like a pig. I write all this down in my notebook.
Suddenly the debt is due. You need to pay me £2 pounds. I pay you £1 to roll over and bark like a dog, then you give this £1 back to your debt, and also I buy back the apple for £1, this £1 also goes back to your debt. You owe me nothing and the pretend £2 I lent has been repaid. There is still £1 in existence and an apple.
The expansion of the money supply facilitates economic activity. The fact that there is temporarily a pretend £2 for a while does not mean that the debt cannot be repaid.
15. stillthinking said...
Hence the comment, which I probably read here, that the world is going into spasm as a massive credit expansion (the £2) tries to turn back to just £1 overnight without barking, oinking or jumping to help things along. Or even the apple.
16. stillthinking said...
Which is deflation. A la Japan.
17. harold said...
stillthinking, but where is the money to pay the INTEREST you charge on the £2 loan? This is not 'pretend' and is still owed at the end of your oinking scenario. I.e., my apple eating activity has been 'taxed', despite the fact that I 'earned' the apple by rolling over and barking like a dog. Result = transfer of wealth from me to you in the form of debt. Velocity is a measure of economic activity, but does not change the principle of the issuing of debt via interest.
18. Su said...
I suppose there must be more debt than money because not everyone is able to repay their debt. The debt is then cancelled at a loss to the lender.
19. Matt_the_hat said...
stillthinking, the money created is not the extra £1 but the interest. WE all have to work harder to pay the interest on this made up money called debt. Thats why the economy grows @ 3% to cover interest payments. Look at the UK debt situation now up to £1bn but the economy has not grown rapidly!?!
20. shipbuilder said...
Stillthinking, the point is not the expansion of the money supply and debt itself, but that this constant expansion requires constant economic expansion, which is obviously tied in with population expansion and therefore a constantly increasing demand on dwindling resources.
It is looking like the full effect of this tail-off will become apparent within our lifetimes. We can give ourselves a soft landing by changing the money system now and compromising our lifestyles (and it will be OUR western lifestyles since we use the vast majority of the resources).
Unfortunately this will mean the rich (those running things) taking an almighty pay cut, and that's not even on their radar.
21. yoyo1 said...
I hope this isn't going too deep, but 2 mins into video 4 there is a brief yet highly significant reference made to the 'more likely' future of biometric/ID money. Similarly brief yet stated quite some time ago in the Bible, mention is made of a new biometric or personal identity money system that shall come into force, see Rev ch13: 16-18. It states that only those who are 'on board' will have the privilege to buy and to sell and the system will be admired by many having the appearance of a lamb but infact turns out to be a dragon (perhaps dictatorship as never seen before).......