Can somebody please save me from Zeitgeist?

[napoleon_in_rags]

Okay, so I just watched this movie Zeitgeist 2. It makes the remarkable claim that money in the US is created as debt, by private banks. At the small scale, this actually makes sense to me: monetary supply should match the amount of goods and services in the economy, or else inflation would occur, or people wouldn't have enough money to buy the things out there, and the economy would go down. But on the large scale, it has crazy implications, which I literally can't believe, which I will get to in a minute.

I've had one person tell me Zeitgeist is a "Cult" like "Ron Paul", but he didn't actually address the claims. What makes it different from other conspiracies I've heard is that it makes falsifiable claims with a simple experimental signature.The experimental signature is this:

If money is not created as debt, the amount of money in the US should be greater than the amount of debt owed in the US.
If money is created as debt with no interest, the amount of money in the US should be equal to the amount of debt in the US
If money is created as debt with interest, the amount of money in the US should be lesser than the amount of debt owed in the US.

Think that through until you see why it must be correct. My research shows the third is true:

Total public and private debt was $50.2 trillion at the end of the first quarter of 2010
source: http://en.wikipedia.org/wiki/Economy_of_the_United_States

All told, anyone looking for all of the U.S. dollars in the world in July 2009 could expect to find around $8.3 trillion in existence.
(less than a trillion of which are actually printed as paper currency, same source)
source: http://money.howstuffworks.com/how-much-money-is-in-the-world.htm

This means that for every dollar which exists in any form in the US, investments, accounts, cash whatever, there are 4 dollars which don't exist which are owed to banks. So the only way for the US to become debt free is to create 40 trillion more dollars, but the only way to create 40 trillion more dollars is to have the banks create it as debt, which, with interest, will add more money to the debt than is created to pay off the debt. So whatever we do, the population of the US is forever in increasing debts to banks.

This simply CAN'T be right. So many things - like the austerity programs in Europe for instance - simply make no sense when you realize the banks will always own everything in the end anyway. And the people making those calls are smarter than I.

So what am I missing that makes this all make sense DU economists? There must be something, this just doesn't make a whole lot of sense to me. Save me from obsessing on what I saw in the Zeitgeist movie.

[Duer 157099]

1. Bookmarking for when I want to have a nervous breakdown n/t

[napoleon_in_rags]

2. Lol! I'm currently treating my own with a glass of win and John Lennon Therapy:

[Sekhmets Daughter]

3. Money is created as debt...

You go to a bank for a mortgage, or any type of loan, for $200K....The bank doesn't keep $200K in its vaults, what is does is make an entry on the books for the $200K, a system of debits and credits known as 'fractional reserve banking'...however it does not include the interest you owe on that debt. Thus, when you pay the interest, someone else is not able to pay theirs because, as you've figured out, there is not enough money out there to cover all of the debt. You might want to read "Web of Debt" by Ellen H. Brown...although, your worst nightmares will be confirmed.

The entire banking system has been designed to enrich a certain small number of people, by systematically pilfering from the rest of us.

[napoleon_in_rags]

5. Its BLOWING MY MIND.

Because there are so many ramifications to it.

Some years ago, a certain investor got very, very rich when he noticed that the home values were rising faster than incomes, so the money needed to pay down the adjustable rate mortgages simple wasn't there. A childish observation really, but with it he beat out all the derivatives "quant geniuses" wall street was relying on, and we had the housing bubble meltdown, TARP and all the rest.

Right here, we have a fundamental factor even more profound than what that investor saw: If the people put themselves in SLAVERY to pay off the debt for decades, the only result will be MORE DEBT than they tried to pay off, because the the only way for there to be enough money to pay off the debts would be to have banks create it, as MORE DEBT.

That means there exists NO WAY for the people's debts to be paid off, and therefore the only outcome which can happen is mass defaults on loans. What's keeping the system propped up surely must exist, but I confess at this point its a bit of a mystery to me.

[Sekhmets Daughter]

6. Well, that's what the mortgage crunch was all about....

But here's the thing...we can print money in the US...we don't really need to borrow it...that's a scheme cooked up on Jekyll's Island by a bunch of rich thugs when they created the Federal Reserve.

The only things you need to know are (1) that the entire "pay down the debt' meme was designed to cut the safety nets out from under average citizens. (2) every recession is a golden opportunity for the rich to soak up the devalued assets of the rest of us. (3) stay out of debt yourself.

The system is really on shaky ground these days because there are too few of us with enough disposable income to keep it going...the unrestrained greed of the top 10% will eventually bring the entire system down. You might want to consider Iceland...they don't allow their bankers to behave like common criminals.

[napoleon_in_rags]

7. You're supposed be calming me down, but what I'm hearing is - its true!!!

I can't BELIEVE it.

that the entire "pay down the debt' meme was designed to cut the safety nets out from under average citizens.

Of course, of course. I do math, and it all follows from the math: The amount of money that exists is far less than the amount of money owed, and the only way to create more money (which is needed to pay back the debt) is to create a greater amount of debt than the money created!

WOW! really? really? This is actually the system that all our smart representatives, all our leaders know exists? WTF???

[Sekhmets Daughter]

9. I do apologize, most sincerely....

but people being calmly unaware is what has allowed this freakin' mess to grow.

Give me one good reason for the original Bush tax cuts...rates were not too high... and those cuts have cost something like $3 trillion...Who wages 2 wars without raising taxes? Who passes Medicare Part D without paying for it? People who want to end the safety nets, that's who.

Enjoy your heart and man the barricades when you are called.

[napoleon_in_rags]

10. Oh, it was you! Thank you so much. But answer me one question:

Honestly, I'm having a hard time coming up with the words for the question I want to ask, so I guess I will just plunge ahead:

What gives you the psychological Chutzpah to carry on when you KNOW the vast majority of the world is basically sleep-walking in to a dead end trap?

Its a nice day here in Washington State, but I keep going outside smoking, pacing, thinking about this. I keep doing research, the kind that shoots down all the silly conspiracy theories, and the data keeps saying this is real. All my life I've believed that the social structures in the world have their problems, but are basically sane. But right now I see we're headed for a nasty wake up call, and its so huge. So... How do you deal?

I hope that question makes some kind of sense. How do you adapt when you know the entire structure of things is insane? ANY words of wisdom you can share are appreciated. Because right now I am truly freaking out.

PEace! (And thanks for the heart!)
-Nir

[Sekhmets Daughter]

12. I've known about this for years...

It's why I began donating to political campaigns etc. Sadly, I don't see too many people doing anything about it.... Although Dem Sen. Sherrod Brown of Ohio has put forth a bill, co-sponsored by Rep. David Vitter of LA (of all people) to break up the too big to fail banks...a good first step... What was very encouraging about this bill is that the conservative columnist George Will wrote in favor of it this am.

Here's how I see it all playing out: Eventually those people, who today vote Republican because they are doing okay...you know the type...making $150K or more a year, will find they are just as strapped as everyone else. If that happens before we've all been enslaved by our debt, something might be done to stop the nonsense. Or...we will have a world wide revolution. The third scenario is for more people to become informed and begin writing their congress critters and taking action to bring about reform.

Sometimes I see the glass half full, sometimes half empty.

[napoleon_in_rags]

14. But what reforms?

I mean, that's the thing that's blowing my mind: All these Republicans want to see debt paid down, but the only way to do that is to borrow more from the banks, to pay the workers to pay down the debt, increasing the debt further, increasing bank ownership of private property further. the only result can be cutting safety net programs, and effecting a sort of genocide, where only those aligned with a doomed-to-fail ponzi scheme are allowed to live. The American people have been ignoring this whole thing because it hasn't yet effected them. But do the elites really think it will have value when they try to cash it in? When they start asking people to die due to a dumbass ponzi scheme?

The only thing we know for sure is that the current system is going to completely and utterly collapse; its going to implode, that's written in the science with absolute certainty. Will it be when US debt reaches 20 trillion? 30 trillion? (when every American owes $1 million rather than the $100,000 they do today?

Surely business owners like you describe will become cash strapped. They make their money from consumers, who without money, cannot buy the goods/services they value from these business owners. So yes, they will also be calling for reforms in time.

Glass half full is what I'm having a hard time seeing right now. But then again, once we we embrace the fact that this status quo is doomed, that opens up the doors for a new and more positive system. So in some ways its a very exciting time, I guess I can see some hope in that.

Peace!
Nir

[Sekhmets Daughter]

18. The debt can be paid down by raising revenue and cutting spending...

debt is not paid down by transferring the balance to another card.

Reforms? How about rising the minimum wage to $20 an hour? In conjunction with making it illegal to outsource jobs that can be done right here? How about insisting corporations go back to offering "stated benefits" retirement packages to all workers? What about single payer universal health care? Let's close every single loop hole that allows corporations to do business here while keeping profits off shore to avoid taxes? How about charging import duties on all products made overseas by American companies? If the corporations choose to move, we close our markets to them. There is much that can be one...if there were enough people who demanded change....Let's do what they did in the UK and set ceilings on executive compensation.

Don't buy into the "Americans owe" BS. The largest single holder of US debt happens to be the Social Security Trust Fund...Americans are owed...not the other way around. Besides, the damned debt is just numbers on a page...

[truedelphi]

37. If you' re writing this from a comfy chair in front of a nice desk

With a roof over your head, you haven't experienced anywhere near the amount of ramifications that exist.

Some twelve million households have been foreclosed, as money really and truly is created as debt. While the housing bubble was expanding, people had jobs in the trades, and of course, there were plenty of jobs ancillary to those jobs (Think the local cafe, restaurants, boutiques for the fancy clotehs, etc.)

Back in the Nineteen Fifties, the manufactured consent by which so many Americans put everything on credit affected a much smaller number of people. A family lived in an apartment, until they had the money to buy a house outright, or else put one third down, and then spend one fourth their income to pay off the mortgage, interest and principal that was left over after the down payment was made. Houses were under $ 15,000 - and if you had $ 2K or $ 3 K you could buy a new car.

Now many Americans can't allow themselves to buy a house unless it has a 70,000 dollar kitchen - as realtors have told people they can't sell their house unless they have granite counter tops and 30,000 worth of refrigerators, grill tops, stoves, etc.

And what is the saddest part of this discussion is that the collapse in the economy was not simply about people buying homes they couldn't afford, but about the tycoons on Wall Street who gambled on exotic financial instruments - it is said there are still some one quadrillion dollars (i.e. five hundred trillions of dollars) worth of money out there on stuff that could go poof, and put us in another bottoming out of the economy. All this is because Congress and the Oval Office are basically owned by the Big Lords and Ladies of the Top Banks. That sort of corruption doesn't exist in Iceland,w here the Top Financial Crooks are now in orange jump suits in jail, instead of calling the shots.

[napoleon_in_rags]

38. I was SHOCKED at the answers to Elizabeth Warren today.

"have any of you took a banker to trial?"

crickets.

http://www.huffingtonpost.com/2013/02/15/elizabeth-warren-wall-street_n_2695212.html

[RevStPatrick]

4. I'm not an economist, and...

...I've never heard of Zeitgeist.
But that sounds about right.
4 dollars of debt for every dollar in circulation.
Banks can borrow 4 dollars from the Fed for every dollar they have in deposits.
That's my understanding...

[napoleon_in_rags]

8. But you sound so non-chalant about it!

What is the secret to that? I'm freaking out here. What I hear is that the amount of debt always exceeds the amount of money in existence by orders of magnitude, and that can only spell one thing: Total default on debts at some point, total collapse: Our society, a time bomb.

There MUST be some mitigating factor, something the wise economists know that allows them be calm on a daily basis, right?

[RevStPatrick]

15. I'm non-chalant about it because...

...this blew my mind years and years ago.
I can't be upset about it now, because there are so many more urgent things to be chalant about!

[napoleon_in_rags]

16. Like?

Please, be patient with me. I WANT to move beyond this. I WANT to move beyond total collapse being hard-wired into our monetary system as being a big deal. But how? Please tell me, what are the clear and present issues?

[RevStPatrick]

17. Global climate change?

For one...

[JDPriestly]

26. I think you can download this for free and it may help you feel more confident.

http://books.google.com/books/about/The_7_Deadly_Innocent_Frauds_of_Economic.html?id=hd5UbEkDVD0C

[napoleon_in_rags]

27. I'm reading it, but it keeps implying that the government creates money.

But research shows that it does not. One of many sources:

There is a common misconception that banks or governments create money. Governments only borrow money into existence from the banks.

http://www.vantagequest.org/trees/money.htm#.URczGH1kd3A

But from the book:

"We need the Federal Government's spending to get the money we need to pay our taxes."

Yet all my sources say that the private central bank - in the case of this country its called the Federal Reserve - alone creates money. The only ability our government has to mint money is as coins, and thus the talk of the Trillion Dollar Coin to pay off the debt:
http://www.huffingtonpost.com/ellen-brown/the-trillion-dollar-coin_b_2508437.html


I appreciate what the author is saying, many of the ideas ignore the false scarcity which can only lead us into debt slavery. But he doesn't address the fundamentals: An economy where 50 trillion is owed in debt, but only 10 trillion exists as money, and its all owed to private banks. Contrary to what he says, the government CAN be insolvent, and that amounts to a handover of all the public assets to private bankers, as we've been seeing in Greece.

[sendero]

28. Well it is...

... (built to collapse). Take comfort in the fact that TPTB don't want a collapse and they will keep the plates spinning as long as they can. Many are amazed we came through the 2008 debacle!

No one had any idea the lengths to which the Fed would be willing to go to keep the plates spinning. That said, if and when interest rates return to something like normal (zero is not normal) then you know we're either actually recovering or about to collapse for real.

[Warpy]

11. Well, money is debt at its heart

When you're a kid who's given ten bucks for shoveling a sidewalk, that ten bucks represents a debt of what is owed to you in goods and services for the work you did. You can redeem it wherever you want to. Otherwise, the little old lady whose walk you shoveled would be on the hook for finding something you might need to barter with so she doesn't land on her ass the next time she goes out to get the mail.

It's a convenient way of keeping score of who does what for whom, or it used to be.

However, this is a very limited way of looking at things and doesn't translate well into the upper reaches of finance, where just moving paper around generates more money without providing goods or services or doing the world's work in any sense of the word.

[napoleon_in_rags]

13. I'm with you on that.

Money and wealth are different things: Wealth corresponds to the goods and services created, money is what changes hands when wealth is purchased. All the wealth in the world comes from the efforts of workers, but money seems to be quite a different matter.

One question of interest to me, is how much wealth is in the world? The wealth associated with an individual is something like the integral of the absolute value of the individuals money: so when the individuals money goes down, the wealth goes up in accordance with what they purchased. When it goes up, the wealth goes up in accordance with what they produced and sold. That's overly simplistic as the same item, sold from person to person creates an increase in wealth, (and it shouldn't) but the real values for wealth are in their somewhere.

What alarms me is seeing the amount of debt which is 4 times greater than the amount of money in existence, and knowing the only way to increase the amount of money in existence is to create more debt than the money that was created. To me that spells out certain disaster in the not-too-long term, the ramifications of which profoundly effect us all.

PEace
Nir

[freshwest]

23. I've watched all the Zeitgeist flicks, and Kymatica which preceded it. This is CT, but interesting.

Last edited Sun Feb 10, 2013, 04:16 AM - Edit history (1)

I'll get back to this, so I'm really replying to get this into My Posts.

But what is always being ignored in the doomsaying is the social contract. That is keeping things going, with winners and losers. Many who think they have won, can be wiped out in a second. Many who think they are in the losing side of history, fail to understand or appreciate what they have that was created by this centuries long social contract. One which the Ron Paulies do not believe in, by the way.

What I was surprised to learn a decade or so ago, was that the USA government did owe debts at its beginning, not just to those who helped win the Revolutionary War, but money was also negotiated by Franklin o pay the Crown for their costs. It's in a paper at Cornel or Vanderbilt .edu, don't know which.

This does not mean the USA is not a soveriegn nation. It means there is a reason for that 'full faith and credit' clause in the Constitution. Another thing to consider is that, as the Founders said, every war - without exception - is a debt that will be paid by future generations. America was considered a weakling in the world at the time, an experiment that would fail. It had to stand up, be accepted, or be invaded.

The fact that war is always a debt is a damned good reason not to start one without good cause. Every nation has to distinquish itself with other nations to maintain trade. No country has been an island, so to speak - all must have trade treaties. These are both private and government agreements. The debt or whatever, is for real wealth exchanged between them - or else they go after each other in less pleasant ways.

Wars have been fought over trade, but they can be called something else. Trade is to obtain the real wealth of the world - land, water, minerals, etc. I'm certainly not any expert in this, but don't freak out with the doomsayers. That leads to going full wacko in a bunker. It's not a living strategy as we've seen demonstrated several times in history and the news.

Later...

[napoleon_in_rags]

24. I think there's reason in your optimism.

The simple truth is this: The wealth of the world is created by the people, for the people. Any claims laid to all of it by banks surely ignores the fact that people have a right to the fruits of their labor.

But at the same time, I must ask why we continue to labor under a system which takes as axiom that all the money in the world, and then four times as much, is owed to private entities for the privilege they claim of creating the money we trade. This system is bound to break, and I think we do a service by admitting as much, and not hiding it and pretending that things are okay. We the people, who create the wealth of the world, have no reason to cower before a new world where we are afforded the full fruits of our collective labor.

[napoleon_in_rags]

25. I wanna make one more comment on this great reply.

This:

That leads to going full wacko in a bunker. It's not a living strategy as we've seen demonstrated several times in history and the news.

This here is a complex and difficult universe we live in, but one of its attributes seems to be that if you focus on something long enough, you're sure to get a taste of it. If that something is fear, well sure enough, you're gonna face some scary situations.

Psychologists call this focus "cathexis".

In psychoanalysis, cathexis is defined as the process of investment of mental or emotional energy in a person, object, or idea. (wikipedia)

What you invest in tends to pay out in kind.

But I am strong, this is not my ballgame. My ballgame is peace. My ballgame is the Mothership connection:

I believe we can move on to a greater, more equitable system, and that's really cause for excitement, even for the bankers who have found themselves entangled in an unethical system. There's a whole lot in the human future to look forward to!

PEace,
Nir

[MrMickeysMom]

19. This conversation has been so good, I had to get some hearts my own damned self

1) Saw the series to which you refer, thus am familiar with concern
2) Do not have financial background except that of what I've learned by experts who think enough of me to explain
3) This is the more productive line of thought..

So, THANK YOU, NIR and SD!

[napoleon_in_rags]

20. Thanks for commenting.

I don't have the financial background either, i was hoping somebody who did would tell me why these thoughts were crazy, but instead I got quite the opposite: People telling me this profound information was actually correct!

For me its a life changer. I'm reeling right now, several hours after figuring it out. Our entire monetary system has two possible results: Slavery resulting in higher debt, or mass default, which will collapse the global economy.

I'm still holding out hope that some informed economist will come along and tell me why my concerns are unfounded. But until that happens, I'm personally reorienting my life, toward the stuff that really matters: Individual people, helping each other out.

Peace, and thanks for your voice here!
-Nir

[mbperrin]

21. Precisely why I left banks behind in 1978. I worked in banks for 10 years.

Then I figured enough out to get out. No bank accounts, no loans from banks, no anything at all from banks, no credit cards.

I figure that I have literally saved around $1 million in interest, charges, fees, and other bank junk since then, or more than $25,000 per year. I teach economics at the high school level, and I give my students some options as well.

PS: the other way out of paying interest is to walk off and leave the debt behind, which is all that can happen when everything has gone as far as it can, as in Greece. But banks don't want you to think about that. Truth is, banks serve one purpose: to enrich themselves, no others. I haven't missed them a minute.

[napoleon_in_rags]

22. Man, I'm glad we have teachers like you in our educational system.

I've been lucky: Some medical debts hurt my credit, and kept me out of the hamster wheel. But my partner not so much: She owes (growing) thousands to a credit card company.

I'm a gambling guy, I love poker. But when I look at the odds of bank debt, knowing that such a large majority of it must necessarily remain unpaid (4 times the amount of debt exists as money) all the sudden Vegas odds look a whole lot better than anything the banks are offering. And I see that you are correct: The wise man is the person who stays out of this game entirely.

PEace.
Nir

[2naSalit]

29. Good conversation by all

My two cents:


First penny: I am sure that the "system" is not there for our benefit and nobody in our government are willing to even consider making the banksters behave in humane fashion... as per Neil Barofsky who wrote Bailout, recently published...

http://www.thedailyshow.com/watch/thu-february-7-2013/exclusive---neil-barofsky-extended-interview-pt--1


http://www.thedailyshow.com/watch/thu-february-7-2013/exclusive---neil-barofsky-extended-interview-pt--2

Second penny (in response to the question of How do you deal with this knowledge?): I have been to the freak out wall and back a few times as I tried to figure out this whole scheme and I have come out of that realm of mind to discover that understanding that we have been conditioned to know and believe that what we see in this ugly dilemma has to be our fate and that is all there is to it, suck it up and shut up. But I have also discovered most recently that there is a whole big thing that we are told to recognize as bunk but is actually what we and our lives are about. It's not a religion, though it does require personal discipline; it's not a profession or something you need to buy or sell though you do need to make some psychological trades... as in trading your fear for something more positive. The first thing to realize is that all things seen and unseen are a form of energy. Your body, your belongings, your being, your thoughts and intentions are all a form of energy. And it is true that what you focus on will come to you whether it's fear, anger, love, compassion... it's what you are putting energy into attracting to you. So if you want something different than what is in your surroundings, change your focus and the intentions attached to that whateveritis because what ever whateveritis is, rest assured that it is a form of energy. There are lots of names for this including the popular law of attraction meme that became famous via the movie "The Secret" but it is a concept that has been utilized in Buddhism, Hinduism and the original Christianity (though that philosophy has been so corrupted by the authors of our "system" that it's better to eschew any of that stuff and go for an alternative like the others mentioned) and other philosophies and practices.

What the point here would be is that changing your focus from what is borne of fear and negativity can be redirected to positivity and more beneficial aspects of life. You can find a lot of info and practical starting points to making these changes on YouTube (of all places) but that would be my advice to changing your situation surrounded in fear and negative aspects of life. If more people were doing this, we would also find the pathway to getting rid of those who oppress us. What is known as the "Universal Mind" is the source of all energy but also everything we are, know, see and touch and when you can focus on that, everything begins to change to more positive events and acquisitions. There's a reason for the truism of: "You can't take it with you when you die" and this would be the basic reason. I have made this transition recently because everything in my world turned to shit in a hurry last year because I forgot to practice what I know to be true and was led to be negative by my former partner. When I stopped being angry and realized that I needed to get back into the positive realm, things started getting much better rather quickly. I was freaked out about all this stuff you brought up just last fall and now, things are way better since I decided to change my focus.

It doesn't matter what method you choose to get into the positive energy flow, just get yourself there and you'll feel better. If you have trouble finding a methodology that you feel comfortable about, PM me and I'll give you some leads to choose from.

Cheers.

[napoleon_in_rags]

30. That's a good post, I struggle with that question a lot.

Because two reasons: 1) I try to be a scientist, to see the world through reason. 2) I actually see what you're talking about happening again and again. Its difficult to put the two together in a meaningful way.

So one one hand, think of a kid starving in Africa: There's generally a physical reason, for instance in a drought combined with lack of infrastructure is to blame. Am I going to blame his negative attitude for his situation, when the physical causes are so clear? No.

But on the other hand, mindset does create reality a bit... As another poster and I were saying above, there are those who grab guns and head to bunkers when they see things going bad, and things tend to go worse for them. That's why I'm trying to keep my Parliment funk happy attitude about things like this: Keeping eyes wide open to the spectacle, to the problems, but not fearing, not hating anybody involved. I know its just the more powerful way to go, because our attitudes shape the outcomes, especially in social spheres.

So as far as going for the positive attitude (PA) as a solution to things, I really believe there's some power there, but you have to be careful too: You're positive attitude itself can remove your ability to impartially judge how much effect its having, so you see all these benefits when really its just the same, you're just seeing the positives...

But one thing is for DAMN sure: With all the problems facing the world, lack of morale - that which causes people to feel overwhelmed and sit on their asses is the number one threat. It would be so much better to just try and get something done, and whatever attitude one needs to take on to make that happen would be worth it if it delivers more action.

So yeah, if you have ideas, you can feel free to
1) PM me
2) Post them here (though a new thread might be better)

Peace!
Nir.

[Mattias]

31. If answerd already

I appologize

What the documentary presents is basically the reason why the western world prospered.

To create money from nothing is essentialy a good thing for everyone. The backlying reason is because money by itself is in basic trading nothing for something. The global economy is based on fiat based currency which essentialy is nothing but a way to trade somehting done for something that can get something else done. The money itself hold no value except the ability to convert it into something else.

In a barter economy the ability to trade is based on the the relative value of the trade as well as the individuals that trade knowledge of the value of what is traded. A starving highly skilled painter might offer 100 h of service to paint a picture for a cow at the same time as a fully fed painter offers only 5 h. A barter economy trading real assets for real assets might at glance seem as a perfect solution since you get what is asked for the instant a trade happen. The main problem is information as the trader not only have to know her/his demand but also the supply best matching this demand. In a monetary economy the asset a seller is willing to sell is transformed into another in itself not tradable asset, gold and/or silver usually. This gave the seller and buyer means to not have to pass many levels of barters to recive what was wanted. Eg. a cow was sold for x coins and then the x coins where traded for y, z, v coins to get the wished for whares. At the same time market prices at diffrent places became more similar as coins where easier to transport than goods.

The next step was the credit economy or creating money. A goldsmith could accept to hold other peoples gold at a cost in return giving them a reciept they held this gold. Assuming this gold deposit was credible the receipt itself could be used as payment in transactions in practicality "creating" new money as the reciept itself could be used as payment.

This led lenders to eventually realize this fact using the gold deposited by those who wanted to save to lend out to others that wanted to lend. The lenders used the gold to pay for goods and the recivers of the payment placed the gold recived in the vaults of a goldsmith. In escense gold deposited was lended to someone else and then redeposited. Then as now the event that every depositor would come at the same time to demand back there holdings where slim this meant that of the total deposits only a fraction of the gold had to be available for withdrawal.

So the money multiplier was born. With one weakness, it was based on gold. Meaning that the supply was fixed not by economic cycles but by amount extracted from mines and the supply/demand. By some goldstandard are regarded as something better than fiatstandard, what is forgotten by the ones stating that is that gold is as fiat as anything else. Spain is the most evident example as after Columbus a great flow of gold and silver reached Spain, in the assumption that it held real value the Spanish empire used much of the shiny things to wage war and little of its brain to adapt the economy. Withing 100 years Spain was not only turned into Europes poorest state for 400 years but also the least industrialized.

In any case, with a transaction currency in gold came the multiplier so its nothing new. The advantage of having a transaction currency is that as any other asset without defined value it follows the economic cycle. So in good times the credit expanded and in bad times it contracted. Before central banks and the fiat standard cycles where more harsh and depending on exogenus events, whith the emergance of central banks and control of money supply cycles are more in aligenement with cycles and smothed out.

What Zeitgeist presents as something horrific is something that is a part of the capitalistic economy. In good times the credit is good and the multiplier high, a prudent central bank reduce the supply by decreasing liquidity. In bad times everyone run to safety and a good central bank increase supply and increae liquidity. Money in the refined way is perfect to smoothe the real economy. 300 years ago an economic bust was starvation, 200 years ago it was loss of life savings, 100 years ago it was unemployment, now it is loss of health insurance. Id say the monetary mechanism have served us well.

[napoleon_in_rags]

33. Thinking about the stories behind it all...

Its just so interesting to me how we have these stories, and we can look at things in different ways.

I personally chilled out when I looked at the issue of wealth - houses, doughnuts things of value. There's $188 trillion dollars of it in US, only $10 trillion in money, which is made to circulate to facilitate transfer of wealth. But its wealth and wealth production (as measured by GDP) that really matters in my view. Once we view things in terms of the story of wealth, than things becomes clear.

The story of wealth: well, look at any item in your house. Why is it there? Because somebody did the work to produce it. More importantly, because somebody developed the technology to produce it, and even more importantly, because the energy existed to drive the technology. So it exists because of:
1) labor
2) technology
3) energy
The last one is really important: The measure of energy to do work is the joule, and if you break down the work of a man in joules vs the work of a gasoline engine, you find out that the gasoline engine can do the same work as a man but for pennies an hour in cost. So if you take on a socialist story about labor vs. management, you kinda have to remember that we're really all management at this point, and the exploited labor is the gasoline and machines. This influx in available energy, plus the technology to direct it, is what lies behind the prosperity of the last century.

So I have a scientific story about wealth creation.

Next, looking at the Zeitgeist story. What happened? Well, a guy who was holding people's gold noticed that people were just trading IOU's for gold in the bank while keeping the gold with him, so he realised he could create extra IOU's without people noticing. It was a counterfeiting scheme, a ponzi-like scheme. But it worked. Why? My answer is that because money, so long as people have faith in it, really does a very simple little job: All it does is facilitate the transfer and creation of wealth. When money is removed from the economy in large amounts and put it savings, the transfer of it diminishes, which means the creation of wealth diminishes. So that guy's scheme actually stimulated the local economy, by increasing the amount of money in circulation: People could buy more, which means more wealth was produced to satisfy their demands. It was, at its core, redistribution from the wealthy, to others. So the capacity to create wealth was increased in the economy with more money circulating.

The problem with modern banks is that they forgot they were in the Robin Hood business, they forgot they were there to facilitate the circulation of money. Thus we have this:


And an endlessly stagnating economy, driven by a party who thinks the best way to facilitate the creation of wealth is to keep money out of the hands of the people most likely to spend it (the poor) and put it in the hands of the people most likely to tuck it away (the rich), so as little of it circulates to produce wealth as possible. Then we are to wait on the rich to create jobs, by creating businesses to get money from consumers that consumers no longer have because of their own policies.

[Egalitarian Thug]

32. Conversations like this is why I come into this group. A couple of thing to help you cope.

First, I haven't seen the new Zeitgeist, I watched several versions of the first one as it was being produced and the financial parts are essentially correct. The parts about the Masons, Illuminati, etc., can be debated.

Here is a book you should definitely read, Debt: The First 5,000 Years by anthropologist David Graeber. It is enormously useful in explaining how all this came about. In addition to verifying everything you've recently learned, it brought to light some a couple of things I never realized, but are irrefutable since he has actually done the research to verify them.

First a bit of background, I didn't go into economics but was fascinated by it in college and took essentially all of the classes the econ majors did and I did very well in them. The career path I did choose was in IT and I concentrated on financials and accounting, so I have a pretty good understanding of how money works. The first thing I learned from Graeber's book is that the whole reason for money, the very foundation upon which all of this is built, that all of us has been taught going back to the very beginning of economics is a flat-out lie. In the first chapter, usually the first page, of every economics textbook has something along the lines of, "Money was initially created to ease the difficulties in transactions in a barter economy". Problem is, not one has ever existed anywhere at any time. The barter economy is a myth, an erroneous theory made up to explain the origins of currency long after the fact.

Once you wrap your head around the fact that money and the entirety of economics exist only because we all agree that they do, the rest gets easier and, since the whole thing is the creation of human imagination, solutions become possible. The key is to get enough people to understand that first part, that this exists for no other reason than we say so.

[napoleon_in_rags]

34. Will check it out:

http://www.amazon.com/Debt-First-5-000-Years/dp/1933633867

Once you wrap your head around the fact that money and the entirety of economics exist only because we all agree that they do, the rest gets easier and, since the whole thing is the creation of human imagination, solutions become possible. The key is to get enough people to understand that first part, that this exists for no other reason than we say so.

That's what's so amazing to me. The key part of it is realy faith: Not just faith that you have in money, but faith that you believe other people have in money. People talk about the occult "eye on the pyramid" symbol on dollars, and it really has the structure of an occult system.

The Banker should discover the real meaning of his existence,
the real motive which led him to choose that profession. He should understand
banking as a necessary factor in the economic existence of mankind, instead of
as merely a business whose objects are independent of the general welfare. He
should learn to distinguish false values from real, and to act not on accident
al fluctuations but on considerations of essential importance. Such a banker w
ill prove himself superior to others; because he will not be an individual limi
ted by transitory things, but a force of Nature, as impersonal, impartial and e
ternal as gravitation, as patient and irresistible as the tides. His system wi
ll not be subject to panic, any more than the law of Inverse Squares is disturb
ed by Elections. He will not be anxious about his affairs because they will no
t be his; and for that reason he will be able to direct them with the calm, cle
ar-headed confidence of an onlooker, with intelligence unclouded by self-intere
st and power unimpaired by passion. -Aleister Crowley, Magic in Theory and Practice

The idea in the above quote being (within the context of the work) the focusing on the mind of the banker on the establishment of his system, as a means to make that a reality, just as we make the value of money a reality through our faith.

What blows my mind is how powerful this is when you realize it. The word of an honest person is as good as gold. A town with no money can create money, in terms of providing services to people with a promise to receive a certain numeric amount of services in return. If people are honest and respect their

[Egalitarian Thug]

35. When previous cultures have reached the point we are at in the past,

the common remedy has been massive debt forgiveness, or Jubilee. Just another tidbit from that book.

[napoleon_in_rags]

36. Its in the Bible!

What was that, every 50 years or something?