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The Money Myth Exploded

phattonez

phattonez

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Written in 1936, this was a pamphlet that dealt with the issue of money creation and how banks have a claim on the entire productive capacity of an economy without actually providing anything.

It's only a few pages long, but it's a nice allegory to explain the concept.

This short segment explains the crux of the problem of a debt based monetary system.

“Can the population of the island taken as a whole” he mused, “meet its obligations? Oliver issued a total of $1000. He's asking $1080 in return. But even if we were to bring him every dollar bill on the island, we would still be $80 short. Nobody issued the extra $80. We turn out products, not dollar bills. Oliver can therefore take over the entire island, since we, together as a group, cannot pay back both money and interests

https://www.michaeljournal.org/articles/social-credit/item/the-money-myth-exploded

Sent from my phone. Instaurare omnia in Christo.
 
I wish I could have read that, but it wouldn't load for me. Is the bottom lime, "Banks are crooks?"
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DaveFagan said:
I wish I could have read that, but it wouldn't load for me. Is the bottom lime, "Banks are crooks?"
\/
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Interesting. Just search on Google for The Money Myth Exploded.

And yes. Yes it is.

Sent from my phone. Instaurare omnia in Christo.
 
phattonez said:
Interesting. Just search on Google for The Money Myth Exploded.

And yes. Yes it is.

Sent from my phone. Instaurare omnia in Christo.
Click to expand...

Took your advice. Thank you. Exactly as had expected. I'm no fan of bankers and see the Federal Reserve to be this mythical Banker. Fiat Currency. Wowser. Full faith and credit. "What dreams are made of." I'm certain that the fragility of the World economy because of this "Fiat" money is sorely underestimated. Of course, if one big ship sinks, it might drag many down with it, ergo the false "confidence" that supports the ships instead of intrinsic metals or productive capacity.
/
 
DaveFagan said:
Took your advice. Thank you. Exactly as had expected. I'm no fan of bankers and see the Federal Reserve to be this mythical Banker. Fiat Currency. Wowser. Full faith and credit. "What dreams are made of." I'm certain that the fragility of the World economy because of this "Fiat" money is sorely underestimated. Of course, if one big ship sinks, it might drag many down with it, ergo the false "confidence" that supports the ships instead of intrinsic metals or productive capacity.
/
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Please share what nations are using non fiat money.
 
DaveFagan said:
Do your own research, DoD BOT.
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I'm supposing new currency isn't created through debt like in the West.

Sent from my phone. Instaurare omnia in Christo.
 
Fledermaus said:
Do you keep your money in a mattress?

Or are you a silver and gold kinda guy.

When was the last time you you swapped your silver for gas?
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Did you read the story? Can you tell me what you found wrong with it?

Sent from my phone. Instaurare omnia in Christo.
 
phattonez said:
I'm supposing new currency isn't created through debt like in the West.

Sent from my phone. Instaurare omnia in Christo.
Click to expand...

Apparently it's just digitally created by a few keystrokes by the Federal Reserve. What could go wrong?
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DaveFagan said:
Apparently it's just digitally created by a few keystrokes by the Federal Reserve. What could go wrong?
\/
Click to expand...

Even worse, the Fed makes those keystrokes and then demands interest from us! Crooks are in control of our money.
 
DaveFagan said:
Apparently it's just digitally created by a few keystrokes by the Federal Reserve. What could go wrong?
\/
Click to expand...

Dave Fagan:

Wisdom from a 12-year old girl speaking publicly in 2012 to bankers who did her homework well and then spoke hard truths to those bankers and to the people of Canada. She was of course ignored however because those who profit from fractional reserve debt-based banking and the creation of fiat money by privately owned and publicly owned banks through the issuance of debt is just too profitable for the bankers to allow truth to derail their gravy train.



Then at age 13 young Victoria Grant gave this speech:


Cheers.
Evilroddy.
 
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Evilroddy said:
Dave Fagan:Wisdom from a 12-year old girl speaking publicly in 2012 to bankers who did her homework well and then spoke hard truths to those bankers and to the people of Canada. She was of course ignored however because those who profit from fractional reserve debt-based banking and the creation of fiat money by privately owned and publicly owned banks through the issuance of debt is just too profitable for the bankers to allow truth to derail their gravy train.Then at age 13 young Victoria Grant gave this speech:Cheers.Evilroddy.
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Ebil Roddy-Thank you but my download speeds won't allow videos. I'm sure that I would enfoy them because I have observed your post are often subject specific and well written. On a side note, what do you think of the current World Currency situation and future stability. Will China/Russia and allies succeed at alternate Banking systems to replace SWIFT, IMF, World Bank, etc. Will those systems be more of the same? Can you take crooked bankers out of Banking. A few decades ago I worked for an alternative power structure and noted the fact that all successful left handed monetary endeavors wind up with rooms full of cash. Not good. Thess power structures need banks to keep the monies working. Ergo, they buy banks to launder their ill-gotten (as the case may or may not be) booty. Many of the largest banks grew from these biginnings, for sure. Just recognizing the status quo without a sanitized narrative.\/
 
DaveFagan said:
Ebil Roddy-Thank you but my download speeds won't allow videos. I'm sure that I would enfoy them because I have observed your post are often subject specific and well written. On a side note, what do you think of the current World Currency situation and future stability. Will China/Russia and allies succeed at alternate Banking systems to replace SWIFT, IMF, World Bank, etc. Will those systems be more of the same? Can you take crooked bankers out of Banking. A few decades ago I worked for an alternative power structure and noted the fact that all successful left handed monetary endeavors wind up with rooms full of cash. Not good. Thess power structures need banks to keep the monies working. Ergo, they buy banks to launder their ill-gotten (as the case may or may not be) booty. Many of the largest banks grew from these biginnings, for sure. Just recognizing the status quo without a sanitized narrative.\/
Click to expand...

Dave Fagan:

Here is the text of the first speech. I cannot find a text for the second speech at this time, still looking.

https://lybio.net/victoria-grant-the-corrupt-banking-system-by-12-year-old/speeches/amp/

As to what I think, that really doesn't matter in the grand scheme of things. However, the 13-year old Victoria Grant offers the beginning of a solution in her second speech, focusing her attention on the Central Banks of Nation-states and the BIS.

Regarding a Eurasian or BRICS revolt against the currently Western controlled/dominated instruments of international finance, I do not have a crystal ball. I would guess/speculate that other groups of states could form parallel international financial systems like SWIFT if they put their minds to the task but I doubt whether they could challenge the West successfully at the level of the IMF, the BIS and the WTO. Instead the best way forward for non-western states is to seek out and support the Victoria Grants of the West to begin dismantling Western financial dominance from with in the West.

Whatever non-western states elect to do, they better form powerful and effective military alliances or they will suffer the same fate as Libya did between 2011 and the present. Gadaffi's plans to challenge Western banking interests by financing a North African development fund was one of the main reasons that France, the U.K. and America attacked Libya and a significant amount of that development fund seed-money has been reported to have disappeared in the chaos of the collapse of the Gadaffi regime. So challenging the dominance of Western Banking and Financial interests may now be a casus belli for powerful western states these days.

Cheers.
Evilroddy.
 
phattonez said:
Even worse, the Fed makes those keystrokes and then demands interest from us! Crooks are in control of our money.
Click to expand...

totally absurd. do you want Fed to give us money and not charge interest for it? 1+1=2 the need to pay interest makes us spend it intelligently rather than waste it and the nations scarce resources. Econ 101!! Embarrassing!
 
Evilroddy said:
Gadaffi's plans to challenge Western banking interests by financing a North African development fund was one of the main reasons that France, the U.K. and America attacked Libya
Click to expand...

if you have evidence I will pay you $10,000. Bet??
 
DaveFagan said:
Apparently it's just digitally created by a few keystrokes by the Federal Reserve. What could go wrong?
\/
Click to expand...

what could go right? We could have the highest standard of living in human history! China could copy and have 8% growth for 30 years!! See all that went right thanks to Republican capitalism?

Cool that liberals would find wisdom in the mind of 12 years olds!! Embarrassing!!
 
phattonez said:
Written in 1936, this was a pamphlet that dealt with the issue of money creation and how banks have a claim on the entire productive capacity of an economy without actually providing anything.

It's only a few pages long, but it's a nice allegory to explain the concept.

This short segment explains the crux of the problem of a debt based monetary system.

“Can the population of the island taken as a whole” he mused, “meet its obligations? Oliver issued a total of $1000. He's asking $1080 in return. But even if we were to bring him every dollar bill on the island, we would still be $80 short. Nobody issued the extra $80. We turn out products, not dollar bills. Oliver can therefore take over the entire island, since we, together as a group, cannot pay back both money and interests

https://www.michaeljournal.org/articles/social-credit/item/the-money-myth-exploded
Click to expand...

Assets = liabilities, always. It's just that not every asset is in the form of a paper dollar.

You take out a loan for $1000. The interest is $80.

Your asset equals the bank's liability, $1000.

Your liability equals the bank's asset, $1080.

While we have multiple loans open at once, and while we service our debt, old loans can be retired and new loans created.

Having to extinguish all loans at once is just a thought experiment. If that ever happened, it would be because the economy collapsed. Repaying loans would be the least of our problems. BUT, once all of the principal has been paid, the banks would simply write off the unpaid portion of their loans, which would extinguish both borrower's liability and the bank's asset (which are still equal), bringing everything back to zero on both sides of the ledger.

*******************

Banks do provide something to earn their profits; they take a very real risk when they lend money. Even though money is created "out of thin air" when loans are created, banks cover your check with hard assets (reserves) before you ever pay them a nickel.
 
JohnfrmClevelan said:
Banks do provide something to earn their profits; they take a very real risk when they lend money. Even though money is created "out of thin air" when loans are created, banks cover your check with hard assets (reserves) before you ever pay them a nickel.
Click to expand...

What is the risk? They're lending out money that they create against deposits that are not their own. Additionally, we have FDIC where the government will step in and pay deposits in the event that the bank cannot. The risk is that they fail, I guess, but they'll have already made a ton of money along the way.
 
phattonez said:
What is the risk? They're lending out money that they create against deposits that are not their own. Additionally, we have FDIC where the government will step in and pay deposits in the event that the bank cannot. The risk is that they fail, I guess, but they'll have already made a ton of money along the way.
Click to expand...

In theory, you can start a bank with nothing, just a ledger, and it all works just fine as long as borrowers don't default. You can even manage interbank settlement just by creating settlement accounts between banks.

In reality, you need some (hard) assets to start a bank. And in the U.S., you need reserves to get started, because reserves are what banks use for settlement. Those hard assets are what is at risk when borrowers default, because as soon as you get your loan, and before you ever make a payment, your bank transfers reserves in settlement of your check. If you default, your bank loses those real assets.

FDIC is just insurance that all banks have to kick in to. The real (moral) problem is when the government increases its own liabilities in order to decrease the bank's liabilities. Which doesn't really happen. It didn't even happen in 2008. But it could.
 
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