Money As Debt (1 of 5)
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Paul Grignon’s 47-minute animated presentation of “Money as Debt” tells in very simple and effective graphic terms what money is and how it is being created. It is an entertaining way to get the message out. The Cowichan Citizens Coalition and its “Duncan Initiative” received high praise from those who previewed it. I recommend it as a painless but hard-hitting educational tool and encourage the widest distribution and use by all groups concerned with the present unsustainable monetary …
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More detailed historical and theoretical accounts will help. And I understand that loans end up as deposits at other banks. That is fine and true in the video. What is not true is the claim that money is built on loans. Money is built on bank reserves. Loans are based on excess reserves. A $100 loan is based on $100 of excess reserves. The next bank can lend $90 of that. The video simply misses this starting point: banks loan excess reserves. Do go back and watch #2 carefully.
I was talking about the video, it doesn’t detail the history of anything, it’s a simplified cartoon account of basic principles of how banking started, anything BUT detailed, & certainly not a historical account. OF COURSE if you go to a good library, you will find a proper historical account (goes without saying, wouldn’t you agree?), but the video remains allegorical. As far as the video being misleading, you’re missing the fact that many deposits today are themselves loans from other banks.
The history of Italian deposit banking with fractional reserves, and with drafts, bankers acceptances, and clearing houses is not allegorical. Try reading the Cambridge economic history of Europe for a brief comparison of continental banking with English goldsmith warehousing. It is educational. A good library will have the mutli-volume history.
lol bob u are so literal. that was largely allegorical. history of english goldsmiths lol are u serious? i dont think u watched the whole thing maybe.
there’s a bank advert beside this video…
If the money has no real value, that means I’m working for free. That fucking sucks. L & L & L O L. . . . . X-D
You can sell gold and silver only once, although, in the new wondrous world of derivatives, maybe somebody has actually sold it twice!
Why is the text fuzzy? A year ago it was a as clear as day! I am suspicious that this is no accident; same goes for the “video starts in 15 seconds” bs. what the heck? its as though they’re trying to discourage us from watching this film. I noticed that the britney spears videos start right away.
Though not legal tender it is STILL MONEY! And yes banks don’t create money freely because of the fractional reserve system, but that wasn’t even the point. The point is that banks still create money out of nothing though REGULATED and RESTRICTED. The checks they issue isn’t even backed by anything whatsoever – even fiat money – it just writes them through the balance sheets and into the customer’s transaction accounts.
Nice fallacious reasoning called a strawman by the way..
“Money not being backed by anything still technically isn’t the same as printing money”
Hahaha, LOL!
You are talking about legal tender fool – the paper dollars and pounds that we see today. Of course they don’t print another legal tender, that would be tantamount to counterfeiting. Use your head
As I’ve said before, what the banks do is simply create this check IOU on TOP of the existing money supply. It doesn’t take this from the depositor’s money, it just creates them out of nothing
lend on leverage = YES
print money freely = NO
get the difference?
if they did be able to do that they wouldnt need savings accounts or capital at all. there would be no liquidity crisis, just alot of inflation. heck, anybody could start a bank and easily print money then.
debating with others saying they are 10 years old is an old way for saying you don’t have arguments at all. This is so much a waste of my time trying to explain to the nitwits here how dumb their assumptions are.
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they can print money freely, thats one of the video’s main points; did you even watch it? By the way, how about some subject verb agreement. Are you a fifth grader or something?
Money not being backed by anything still technically isn’t the same as printing money ;P the money still has to come from savings accounts.
Which goes back to my point, the banks still create “money” that isn’t backed by anything whatsoever. Technically it’s still the same no matter where you look at it. Banks do create money out of nothing. Some points in the vid are misleading but its still spot on when it comes to the money creation of banks..
Yes, that is because the 100 billion still shows up in savings accounts. That’s why I said they are leveraged 99 to 1 that way. It’s not money out of thin air technically, because they still need people to make deposits. But yes, the appearance is that the money they lends is always “fake money”
Though not thoroughly explained on how banks can just create money out of thin air..
But clearly that $99 loaned out from the bank did not exist since the depositor already withdrew his cash..what the bank did was simply add the $99 to the money supply, instead of taking $99 from the deposited cash made by the bank’s depositor. If the bank really lent out the existing capital by the depositors, the bank would tell the depositors they cannot withdraw since they lent it out to somebody else. Of course if that is the case then the depositor would be pissed. The vid is spot on..
to the money supply. How you may ask? Simple, remember that depositors can withdraw their money anytime they wish. So if the depositor withdraws his/her $99 legal tender from the bank whilst the bank already loaned out $99 IOU check to somebody else, it’s logical to assume that somebody else already has used the $99 to buy something. Though not legal tender, it’s still considered money. Tadah! Instant money magic!
“However the capital they lent out still existed”
LOL! To explain this to simpletons thoroughly on why banks just create money out of thin air it goes like this:
1) in your example of a 99:1 reserve, a bank can lend out 99% of the capital while 1% is to be reserved.
2) For instance, if someone deposits $100 to the bank, a bank can lend out $99 through checks/IOU the bank makes
3)It is logical to assume that the bank takes this $99 out of the deposit but it doesn’t, it simply just adds them
Fractional reserve means the banks have lent out more then the capital they have. However the capital they lent out still existed.
They cannot freely print money.
For example they have 100 billion and lend out 99 billion, 1 billion is the reserve capital. They are then leveraged 99:1 because if the one 99 billion loan defaults, the 99 billion that came from savings accounts is disappeared.
This video should be mandatory educational material in all grammar, high, and college schools. It never will be. Why? Because most academic idiots are just that… educated idiots… financial illiterates….
1.-copy and paste
2.-paste it in 2 different videos
3.. hold breath for 10 secs
4.- look at your hands