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Money As Debt II



January 02, 2011 – Comments (29)

Well. This is interesting. 

Bailouts, stimulus packages, debt piled upon debt…Where will it all end?

How did we get into a situation where there has never been more material wealth & productivity and yet everyone is in debt to bankers?

And now, all of a sudden, the bankers have no money and we the taxpayers, have to rescue them by going even further into debt!

Money as debt II explores the baffling, fraudulent and destructive arithmetic of the money system that holds us hostage to a forever growing DEBT… and how we might evolve beyond it into a new era. 

29 Comments – Post Your Own

#1) On January 02, 2011 at 10:59 PM, ChrisGraley (28.48) wrote:

Finally! You get something economically right!

This video is 100% accurate!

+ 7.2 million recs!!!!

Watch this video over and over again 10,000 times!

Look at my last blog post!  Pay close attention to my reply to Tom in post #21.

Is inflation good or bad?

Is debt good or bad?

Does the creation of money debase money?

Is there any difference between what the commercial banks do and what the Fed does?

Is helicopter Ben still a good guy in your opinion?

Your almost there devoish, just open your mind!

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#2) On January 03, 2011 at 4:51 AM, mhy729 (30.30) wrote:

The thing is, are we to just go on living with this system, or is there any way to change it?  I've had conversations with people I know, and they are either disinterested or resigned to the way things are (after all, our lives aren't so bad compared to those with the misfortune of being born into poverty in third world countries).  As long as you can find ways to enjoy your life and pursue happiness, despite the rather f'd up monetary system we have, I seriously doubt any change is forthcoming.  Even with all of the sh*t that has happened and is still happening, I'm not sure it's enough to get us to effect any meaningful challenge to the current system.

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#3) On January 03, 2011 at 5:55 AM, FleaBagger (27.52) wrote:

Chris - did you watch the whole movie, not just the first 10 minutes?

#3 The recognition of this as a problem is very similar to what Austrian economists have been saying for over a century (see Fractional Reserve Banking on, and the way to do something about it is very simple (but not easy): stop letting government bail out banks or guarantee deposits. Then any bank lending out more than it has in deposit will be seen as reckless and lose its depositors.

The longer you watch the video, the more logical leaps, oversimplifications, and errors you see and hear. One error seems to underlie all the others, and it is an error of omission: the role of government in our current banking system is almost completely ignored! The Federal Reserve is not mentioned, even though it (or some other government bank) is the indispensable to private banks seeking to make money out of thin air without losing their reputation, their trust, and their depositors.

The ending hints at many different possible solutions, i.e., many different useful forms of money. This is the same thing Hayek, Rothbard, and most Austrian economists have been saying all along: if you want money to work well and be just, let money compete without government propping up one or another, and may the best money win!

Some people, perhaps the makers of this video, fear economic freedom because "there is nothing to control this or that," but this is not true. Scarcity controls itself through prices. That is, when commodities become more scarce, they become more expensive. When we start to run out of potable water, it becomes more expensive. This causes two things: 1) the overwhelming majority of people (who use the overwhelming majority of food and potable water) fall into one of two categories: the poor people who care about how much they spend and the middle class people who care about how much they spend. Caring how much they spend, these two groups start to find ways to conserve, or use less than ever before. 2) Entrepreneurs, who are always looking for a way to profit, find ways to make more potable water available at the higher, more profitable, prices. In the case of water, this can mean desalinization, finding new springs and rivers, and sanitizing waste water.

Of course, none of this good work (conservation and production) is done with water because our good governments fix prices and cartelize the industry, but you get the idea.

If government stopped pouring money into banks and bailing them out (along with their depositors), the banking industry would no longer be able to cause the business cycle, and productive, useful people would keep all those things that the parasites extract from the economy with their imaginary money. Like the bureaucrats I interfaced with in the D.C. area for almost two years, such bankers are worthless leeches that depend on our ignorance and apathy, and the embodiment of popular ignorance and apathy and greed, the government.

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#4) On January 03, 2011 at 6:25 AM, devoish (65.42) wrote:


The problem is easy, it is Davids solution that has always failed quickest.

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#5) On January 03, 2011 at 6:32 AM, devoish (65.42) wrote:

btw, there are eight vids in the series.

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#6) On January 03, 2011 at 7:57 AM, outoffocus (22.84) wrote:

Wow the spam here must be pretty bad.  When I first clicked the blog it said there were 15 comments.  I was expecting an all out discussion only find 5 comments. O.O

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#7) On January 03, 2011 at 8:29 AM, devoish (65.42) wrote:


Check out the vids ayway. They are good.

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#8) On January 03, 2011 at 8:30 AM, devoish (65.42) wrote:

TMF - thanks for the cleanup.

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#9) On January 03, 2011 at 8:41 AM, ChrisGraley (28.48) wrote:

I watched all 8 last night.

As far as the corporate banks role in the mess, it was pretty accurate. The only glaring mistake made was when they suggested that government could put money in the system by printing and spending on infrastructure. (Although they did state that it could only be done with restraint.) The government never shows restraint.

You do realise that this video demonstrates why inflation is bad for the economy right? It also does a fantastic job of explaining why growth can't be based on debt. It also shows how banks have the incentive to take on big risks because government is forced to bail them out. It also shows that to continue growth credit terms have to get more lax forcing the crash and the government bail-out.

Yes, it is simplistic and it makes the banks out to be the only villians. The government is a co-conspirator though, and the public is a willing victim.

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#10) On January 03, 2011 at 3:40 PM, djemonk (< 20) wrote:

Great video.  Thanks for sharing.  I watched the first one a couple of years ago and it was eye opening, and this one really helped clear out the picture.  I had been looking for insights to help me analyze banks and this put the pieces together for me.  

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#11) On January 04, 2011 at 3:34 PM, devoish (65.42) wrote:


Thank you.


Perhaps we watched a different series of videos?

The videos I watched demonstrated that all lending removes a dollar amount - equal to the interest collected - from the productive economy thereby leaving a shortage of dollars in the productive economy, guaranteeing someone eventually exists in poverty.

Unless the money supply is inflated in an amount equal to the interest.

The videos add excellent insight into understanding why Roosevelts New Deal was such a resounding success for working Americans - because it added money to the real economy - as compared to Paulsons Raw Deal, which did not.

The videos also demonstrated that growth of any kind is not sustainable beyond the ability of our planet to provide resources for that growth, an idea the liberal tree hugging left has been pointing out for decades, and conservatives also understand.

The videos also say that Government was not forced to bail out the financial industry, and that the Government had and still has other choices and an intelligent electorate would demand that Government get big enough to get in the way of the financial industry and redistribute funds away from the financial and military industrys and toward social programs that would improve the lives of upper middle class Americans with very little impact on the lives of the wealthy.



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#12) On January 04, 2011 at 6:33 PM, ChrisGraley (28.48) wrote:

The New Deal...

Ahhh, that's where you lost it.  So lets get this straight...  A bank loans you money that never existed in the first place and part of your misery is that you have to pay it back with interest. So your solution is to compel the government to put more money in existence so you have have money to pay the interest. The non-existent bank money and the non-existent government money eventually gets deposited in a bank that is now able to print even more non-existent money. Lending rules get even more lax to make sure that the extra non-existent money gets borrowed as well. We wind up in an even worse mess than where we started.

Here's an idea? Let's not put the nonexistent money in the system to begin with. Then we don't have to try the folly of having government throw more non-existent money at the problem.

There is no free lunch.

Big government only means more non-existent money. They are part of the problem not a solution.

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#13) On January 04, 2011 at 8:26 PM, devoish (65.42) wrote:


Ummm? What are you rambling on about?

The money "created" as part of the New Deal was put to work increasing the wealth and opportunity of and for Americans very successfully by creating real things of value. Paulsons Raw Deal did not. The Raw Deal was just a handout of created money to people who had already failed the test of being capable investors. "Business friendly" failed, "worker friendly" succeeded.

Lesson learned.


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#14) On January 05, 2011 at 12:48 AM, ChrisGraley (28.48) wrote:

Created money never increases wealth. It creates poverty. Normally it creates the poverty of your children at your benefit.

You can't suddenly say "Poof! there's more money!" and have everyone be better off. There will always be a price to pay for that created money. I know that you don't care that your kids pay that price, but the "What are you rambling about?" thing is getting pretty old when you are trying to warp facts into your opinion.

It doesn't matter if a bank created it or a government created it. It's still unearned money and it will be a burden to the people that actually produce wealth. 

Your solution of a really big government to keep the banks in check and show the restraint of not abusing the system themselves is comical.

Why would the legislators that they are bribing step up to the plate unless they can make more money without the banks?

Why can't you admit that government can be purchased?

Why is the solution to debt, more debt?

Why do I get the feeling that you'll refuse to actually think about real answers to any of these questions, and then fall back to painting this response as incoherant rambling when it's far more coherant than than the party line line that you are more than happy to regurgitate?

In the whole process there is a failure of both the left and the right.

You are the epitemy of the failure of the left.

When you decide to ignore your concerns about your personal well being and actually think about the well being of the country, you will be a better man. Until you do, your just as bad as the people that you despise.

The "I'm not as bad as my enemies." excuse is getting old.

I watched the same videos. They have all the answers. I watched them without bias though and you only watched them because they have bias. Facts are still facts no matter what you believe.

I try to stand as a man and you try to stand as a rung in the platform. When will you be a man? When will the thought of your kids paying your bills be unacceptable?

My kids would do anything for me, but I don't want them to do it under duress.

I'm just a blind squirell in this country, just trying to find a nut. Right is still right, and wrong is still wrong. Most people are still trying to sell me wrong. I really don't want to wake up tomorrow ashamed of what I did yesterday.

If you are willing to accept that, then you might understand. If you are towing the party line, you're just another float in the parade. If you want to break the trend, you have to think for yourself. If you are thinking for any party, you're really not thinking.



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#15) On January 05, 2011 at 6:48 AM, devoish (65.42) wrote:

epitemy = epitome.


I do not accept your partys lines. Neither do you. The environmentalists may lose the argument for common sense for a while, but inevitably small Government will fail large populations.

Best regards,


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#16) On January 05, 2011 at 8:43 AM, ChrisGraley (28.48) wrote:

You don't accept the party line? Really?

Is printing money good or bad for the economy?

Simple question, but the answer is very telling. There's the actual fact and there is the party line. You're smart enough to know both answers, but which one will you choose?

It's hard for me to have a party line when I don't have a party, but please continue to think that if it makes you more comfortable in your skin.

As far as enviromentalists losing the battle of common sense for a while, maybe they'll gain more credibility when they stop lying to the people funding their research. Just a thought.




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#17) On January 05, 2011 at 1:17 PM, devoish (65.42) wrote:


To me, your question demonstrates an emptiness of thought.

I disagree that the United States Government has "printed" more money than the financial industry is responsible for "printing" during the last decade. Goverment is faulted for abdicating responsibility to markets and banking and having stepped out of the way, not for having been to big and restrictive.

The environmentalists I fund are not lying to me. Some capitalists are.

Climate scientists who are measuring global warming and the resulting climate changes are not lying to you. Any hope that they were wrong is fading fast.

Those who are so easily convinced that they are lying have long since lost credibility to me.

Best regards,


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#18) On January 05, 2011 at 2:39 PM, ChrisGraley (28.48) wrote:

Hmm, I see that you chose door #3 on that question. Not to answer it at all.

Climate scientists who are measuring global warming and the resulting climate changes are not lying to you. Any hope that they were wrong is fading fast.

Heard of Climategate?

Does it really matter who is destroying the currency faster? Whether it's the banks or the government doing the printing, there is still no such thing as free money. It gets paid for eventually.


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#19) On January 05, 2011 at 2:59 PM, dargus (78.36) wrote:

Why is the solution to debt, more debt?

It isn't. Government deficit spending helps stimulate a stagnant economy. At this point in time, we happen to have a lot of debt and a stagnant economy, so we have a very hard choice to make. Cut the debt and run the risk of an economy where a large number of unemployed people can't even afford the basic staples of life, which could create many more unemployed as fewer and fewer have money to put back into the economy, or run up more short term debt in the hopes we spend less now then we'll take in as the economy improves.

Your question is really a false or intentioanlly misleading interpritation of the situation. Debt is supposed to be paid down in the good times, not the bad. Unfortunatly, that hasn't been the way things have been run in a long while.

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#20) On January 05, 2011 at 6:01 PM, ChrisGraley (28.48) wrote:

The debt can't be paid back in even the best of times. Taking money out of the system after the economy has adjusted to the inflationary levels will always result in someone's poverty. We are forced to perpetually borrow until people will no longer lend to us. Then we pay the ultimate price.

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#21) On January 05, 2011 at 6:23 PM, devoish (65.42) wrote:

Yes, in terms of a solution it does matter who is destroying the currency and thank you for acknowledging the point.

If you really insist on yes/no answers than you won't get one. Thedre are times when an increase in cash is good, and times when it is not. Possibly the money supply should be linked to population. Or produced goods.

Clearly the early founders of our Country had it correct when they limited the life of corporate charters and made their renewal dependent upon their contribution to the common good.

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#22) On January 05, 2011 at 6:54 PM, devoish (65.42) wrote:


The e-mails may serve as good gossip in the halls at the meeting, but will not play a big role otherwise, experts said.

For one thing, the researchers involved were only a handful out of thousands across the world that have contributed to a vast convergence of data that shows the world has warmed.

"Whilst some of the e-mails show scientists to be all too human, nothing I have read makes me doubt the veracity of the peer review process or the general warming trend in the global temperature recorded," said Piers Forster, an environment professor at the University of Leeds.

You are welcome to portray them differently.

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#23) On January 05, 2011 at 7:22 PM, ChrisGraley (28.48) wrote:

It doesn't matter who is doing the destroying, the solution is the same. The money should have never have been debased to begin with. If you are never able to take money out of the system, you should never put it in.

If you are never able to take money out of the system, then there is no good time to put it in either so the answer is always no.

I'm not sure where you are going with the limiting corporate charters thing as part of the solution, so I'll leave that alone.

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#24) On January 05, 2011 at 7:50 PM, dargus (78.36) wrote:

The debt can't be paid back in even the best of times.


It is called running a surplus. It has happened before. 

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#25) On January 05, 2011 at 8:46 PM, ChrisGraley (28.48) wrote:

No it has not. Running a surplus until we no longer have debt has never happened since we went into debt to begin with. The austerity required is not palletable to any politician.

Do you think that we can remove $14 trillion in debt, even over a period of decades, without it having an effect? That's just the reported debt and not the unfunded liabilities. And even if we pay all that debt and unfunded liabilities, the money and inflation that comes with it is still in the system. Once debt is paid, you are finally able to deflate.

We'll just ignore it until we can't ignore it anymore. Then you will see the mother of all depressions.



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#26) On January 06, 2011 at 1:47 PM, dargus (78.36) wrote:

I never said there wouldn't be inflation, nor did I say we'd run a surplus until we had no debt. The problem is excessive debt. If we balanced the budget today, I doubt debt would ever be a problem in the future. Debt only becomes a serious issue when it can't be serviced. 

If you set a target to pay off the debt over 50 years, you'd only need an average surplus of 280 billion a year. I agree this is a lot, but, as I said, you don't really need to pay down the entire debt. If you assume 2% inflation, that 14 trillion becomes 7 trillion by 2046, even if you don't pay back a single cent. It also makes the 280 billion dollar figure look a lot smaller.

The major problem with the budget is Medicade/Medicare. Other than this, I don't see any icebergs in the forseeable future.

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#27) On January 09, 2011 at 9:15 AM, AltData (32.15) wrote:


This is all fascinating stuff.

I just finished watching the playlist of vids. Thanks devoish.

The creator and producer of the video, Paul Grignon, is an interesting individual.

It seems to me that it all boils down to two different possible directions to follow. The first would be to have just one global currency. This would lead to problems with national sovereignties, and it's a path I believe we are being driven down to now. Solutions to national and local sovereignty will need to be discovered or created. It's all a who will have the power thing ain't it?

This gets me to thinking that organizations such as the CIA feel justified in things things they "may" have done in other countries, especially the countries that use the dollar. But that could be a subject of discussion for an entirely different blog.

The other route or direction to follow is to somehow insulate all the world currencies from each other. No dollars for yen, that type of thing. Only goods and services as described in the video under that original English contract law. Or something to that effect.

It also dawns on me that those original English laws and their subsequent changes are what created our America.

Anyway, it seems that everything is coming to a head sometime (What time? Who knows.) in the future. How it all plays out may be some sort of war. Or maybe we are already in the midst of it?

The only problem I can see with the "Digital Coin" is that it is all electronic. A good Electro Magnetic Pulse weapon would wipe it out. This type of weapon is feasible. There will be the need to have a backup nonvirtual version of this "Digital Coin".

Well, that's all my brain can handle for now.

May 2011 and after be profitable to you and yours. 

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#28) On January 09, 2011 at 10:24 AM, mhy729 (30.30) wrote:

lol..."$20free shipping accept paypal"

Maybe PayPal should cease doing business with these scum rather than cutting off Wikileaks.  Oh, I guess they aren't being pressured, I mean kindly requested, to cut them off.

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#29) On January 09, 2011 at 8:44 PM, outoffocus (22.84) wrote:

I knew it! Its all England's fault. 

But seriously, great documentary!

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