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Money As Debt

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The more I think about it, the more I begin to wonder whether money really exists or whether it's a figment of my imagination!

Where's Injin......................

:ph34r:

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Where's Injin......................

:ph34r:

I think he must be having one of his occasional in-patient stays at the special hospital.

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While there are some valid points in that program, its an incredibly simplistic and one sided account.

It completely ignores the time value of money.

The principle is as follows, don't get hung up on the quantities...

If I'm 25 and borrow 100k from a bank to buy a house, the bank has not magically created anything. Instead it has traded my future earnings for capital released to me today.

My future earnings, cashflows, have a value. By being able to 'sell' them to the bank as a loan I am able to buy a house when I am 25 instead of waiting until I am 50.

The problem is one of degree, not of an intrinsic problem about the very existance of the monetary system. The problem is the positive feedback loop that occurs when regulation is not correctly designed.

The basic idea, that my future cashflows have a value is a good one. The trouble is that the greedy people (we know who they are) perverted this basically simple idea to create layers of leverage and misdirection. I heard it stated succinctly on the today program this morning, it might have been Robert Peston... the error was to remove the responsibility for managing the risk from the originator of the mortgage. By decoupling and removing that responsibility a monster was created.

I can't bring myself to believe that a world powered by 'LETS' will bring us the prosperity we all wish for ourselves and society at large.

If this guy has his way we will end up living in mud huts trading corncobs with each other.

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While there are some valid points in that program, its an incredibly simplistic and one sided account.

It completely ignores the time value of money.

The principle is as follows, don't get hung up on the quantities...

If I'm 25 and borrow 100k from a bank to buy a house, the bank has not magically created anything. Instead it has traded my future earnings for capital released to me today.

My future earnings, cashflows, have a value. By being able to 'sell' them to the bank as a loan I am able to buy a house when I am 25 instead of waiting until I am 50.

The problem is one of degree, not of an intrinsic problem about the very existance of the monetary system. The problem is the positive feedback loop that occurs when regulation is not correctly designed.

The basic idea, that my future cashflows have a value is a good one. The trouble is that the greedy people (we know who they are) perverted this basically simple idea to create layers of leverage and misdirection. I heard it stated succinctly on the today program this morning, it might have been Robert Peston... the error was to remove the responsibility for managing the risk from the originator of the mortgage. By decoupling and removing that responsibility a monster was created.

I can't bring myself to believe that a world powered by 'LETS' will bring us the prosperity we all wish for ourselves and society at large.

If this guy has his way we will end up living in mud huts trading corncobs with each other.

If your time value makes your future payments worth something, the fracking BANKsters should be paying YOU interest, not the other way round.

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While there are some valid points in that program, its an incredibly simplistic and one sided account.

It completely ignores the time value of money.

The principle is as follows, don't get hung up on the quantities...

If I'm 25 and borrow 100k from a bank to buy a house, the bank has not magically created anything. Instead it has traded my future earnings for capital released to me today.

Where does the bank get the money from to lend to you?

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While there are some valid points in that program, its an incredibly simplistic and one sided account.

It completely ignores the time value of money.

The principle is as follows, don't get hung up on the quantities...

If I'm 25 and borrow 100k from a bank to buy a house, the bank has not magically created anything. Instead it has traded my future earnings for capital released to me today.

My future earnings, cashflows, have a value. By being able to 'sell' them to the bank as a loan I am able to buy a house when I am 25 instead of waiting until I am 50.

The problem is one of degree, not of an intrinsic problem about the very existance of the monetary system. The problem is the positive feedback loop that occurs when regulation is not correctly designed.

The basic idea, that my future cashflows have a value is a good one. The trouble is that the greedy people (we know who they are) perverted this basically simple idea to create layers of leverage and misdirection. I heard it stated succinctly on the today program this morning, it might have been Robert Peston... the error was to remove the responsibility for managing the risk from the originator of the mortgage. By decoupling and removing that responsibility a monster was created.

I can't bring myself to believe that a world powered by 'LETS' will bring us the prosperity we all wish for ourselves and society at large.

If this guy has his way we will end up living in mud huts trading corncobs with each other.

Lack of congruity within your argument suggests you have not really thought it through. The money has been 'magically' created because whilst it is secured against future earnings, its impact within the economy is felt in the here and now. The productivity to back up the inflation of money supply to create your loan has not yet happened.

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Guest Steve Cook
I think he must be having one of his occasional in-patient stays at the special hospital.

:lol::lol:

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I'm pretty sure everyone has said their piece on this before...

Had it already been posted? I've seen so many questions about how money is created I hadn't thought so. Sorry if it's a repost.

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Guest DissipatedYouthIsValuable

They borrows their precious.

Desire and tomorrows promises makes the precious.

But first we must beg the gatekeepers.

Precioussssssss.....

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If your time value makes your future payments worth something, the fracking BANKsters should be paying YOU interest, not the other way round.

Let me make this simple.

Suppose I was going to give you £1 million pounds as a gift in a years time.

Or I offer you £999,999.00 today.

Which would you rather have?

You might get run over by a bus tomorrow. (Though I sincerely hope not).

If you can honestly say you would wait a year to earn one more pound then you have a point.

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Where does the bank get the money from to lend to you?

That is what the piece explains. It creates it, doesn't have to come from anywhere.

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:ph34r::rolleyes::lol:

Oh? So we have a comic among us haven't we?

Would you care to explain, if you can, what those erratic mood changes mean?

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Let me make this simple.

Suppose I was going to give you £1 million pounds as a gift in a years time.

Or I offer you £999,999.00 today.

Which would you rather have?

You might get run over by a bus tomorrow. (Though I sincerely hope not).

If you can honestly say you would wait a year to earn one more pound then you have a point.

so a pound in your hand has more value than physical effort and creative toil? give me a break- (nice you dont hate me though- I only use this site for its entertainment value- its better than the crap on the telly and theres nothing better than a good debate, and its cheaper than buying books to read)

Edited by Bloo Loo

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Oh? So we have a comic among us haven't we?

Would you care to explain, if you can, what those erratic mood changes mean?

Not mood changes. Three icons acting in concert to express my feelings about the content of the original post...

:ph34r: in this instance pointing out the (in my opinion, of course ;) ) black-helicopter awaiting tinfoil-hattedness of the original post.

:rolleyes: here indicating a general disbelief that the linked video should be considered 'required viewing', or indeed that the idea of 'money as debt' is (apparently) of such great concern on HPC.

:lol: in this case expressing my amusement at the way that this kind of topic seems to hold such serious sway on HPC.

I accept that there are plenty of other possible interpretations of the images as used in my initial post. However, that you saw them as representing a negative response to the original post shows that, even without explication, they got my feelings across well enough.

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:lol: in this case expressing my amusement at the way that this kind of topic seems to hold such serious sway on HPC.

Perhaps instead of expressing those kind of gratuitous expressions of amusement you might care to explain where this video is wrong? I find it to be surprisingly well presented and good enough to answer the question 'where does all this money come from'. It certainly beats all the economics books I've read on the subject.

I've read enough people in this forum who wonder how money is created, I haven't seen you volunteering to explain. Perhaps you have something better to offer? If so please share.

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Perhaps instead of expressing those kind of gratuitous expressions of amusement you might care to explain where this video is wrong? I find it to be surprisingly well presented and good enough to answer the question 'where does all this money come from'. It certainly beats all the economics books I've read on the subject.

I've read enough people in this forum who wonder how money is created, I haven't seen you volunteering to explain. Perhaps you have something better to offer? If so please share.

Money is created from nothing but represents a value, As Value does not exist in nature, and is a construct of the human mind, so is money. it is created from thin air and is worth the same in nature.

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Money is created from nothing but represents a value, As Value does not exist in nature, and is a construct of the human mind, so is money. it is created from thin air and is worth the same in nature.

Thanks but you still don't explain why the presentation should be laughable or why it should not be required viewing for anyone keen for some insight as to where money comes from.

And I genuinely believe it is more informative and complete than what you just wrote. Money as a unit of value is just one component of the definition of money.

Anyway, time for me to get off my high horses, but please don't deride something that should be useful for many.

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Thanks but you still don't explain why the presentation should be laughable or why it should not be required viewing for anyone keen for some insight as to where money comes from.

And I genuinely believe it is more informative and complete than what you just wrote. Money as a unit of value is just one component of the definition of money.

Anyway, time for me to get off my high horses, but please don't deride something that should be useful for many.

Now hold your horses, im on your side!

The creation out of thin air argument is true. people just dont believe it. And there are many books about the creation of money that agree with the film.

The film loses me a lot second half though.

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  • 294 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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