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Money as debt


pap
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The state of the economy looms large in most political discussions, rearing itself large-style in the recent Scottish Independence referendum. There, we saw numerous posters make noise about how it'd never work, often using financial what-ifs to prove points. They're not alone; many of the No voters would have had similar ideas kicking around their brains. "We might not get the pound. We'll have poor borrowing facilities. We might default on our debts." Money was a serious concern.

 

What strikes me when reading comments about the financial system is the small amount of knowledge that people have when it comes to monetary supply theory. Introducing "Money as debt", a 2006 animated documentary which attempts to explain monetary supply theory to the layman.

 

The key claims of the documentary are this:-

 

1) Money is backed by nothing but a "promise to pay" and the enforcement systems we have in the courts.

2) Our current financial system is based off the legalisation of fraudulent activity

3) Money created out of thin air by banks whenever anyone promises to pay (meaning you're not actually depriving anyone of anything when you sign up for a loan or mortgage).

 

https://www.youtube.com/watch?v=jqvKjsIxT_8

 

Well worth a watch. As a layman myself, I'd be interested in the views of those inside the banking industry.

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At 46 minutes I'll have to leave a watch until later. Everything is based on confidence, once you lose that then the value of money is quickly undermined. To me, money represents man-hours of work (or woman-hours, yes I know, man in this cas means mankind and not any particular man :rolleyes:. You can get money by doing work and it can buy you somebody else's work.

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At 46 minutes I'll have to leave a watch until later. Everything is based on confidence, once you lose that then the value of money is quickly undermined. To me, money represents man-hours of work (or woman-hours, yes I know, man in this cas means mankind and not any particular man :rolleyes:. You can get money by doing work and it can buy you somebody else's work.

 

Or as I've often said, belief. Even our bank-notes are mere promises.

 

The bigger questions centre on control of the money supply. If money is so arbitrary, why do we allow ourselves to be hurt by it so much?

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