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I flagged it, but I felt bad doing it. The video is PURE TRASH, and I know that because I was raised by economists. But I strongly suspect it is not at all ob

I flagged it, but I felt bad doing it. The video is PURE TRASH, and I know that because I was raised by economists. But I strongly suspect it is not at all obviously pure trash to a lay person. That's what's so worrying about articles like that, they are not obviously crap to a majority of people.

axod 18y ago
Please... for the people who watched the video, please instead of saying it's "PURE TRASH", could you cite a few parts of the video that are factually incorrect?
- biohacker42 18y ago
  It's been a long time since I managed to sit through that whole video when it first appeared on reddit. Right of the top of my head I can point out that the video contradicts itself. It claims both that A: The money supply is constantly being inflated (that's correct) And B: That interest guarantees some borrowers MUST go broke. (that's wrong, we just agreed the money supply is constantly being inflated.) For more discussions: http://forums.somethingawful.com/showthread.php?threadid=2959709 http://forums.somethingawful.com/showthread.php?threadid=295...
  - swombat 18y ago
    The last post on that thread is an excellent and very thorough blow-by-blow debunking of this trashy "documentary".
- jganetsk 18y ago
  That the amount of debt in the world grows unchecked. The video did not do a great job of explaining what happens when debt is repaid. Let's say that the amount of bank-created money is defined as the total amount of money in everyone's account, minus the total amount in the bank's vaults. When one makes a payment on a loan, the payment is always part interest and part principal. The latter is dropped into the vault, and does not appear in anyone's account. So, this actually constitutes a removal of bank-created money from the system. The interest becomes revenue for the bank; the bank is a business and it should make money just like any other business. That revenue is used to pay the bank's operating expenses, dividends to the shareholders, and interest to all the depositors. So, it's not constantly accumulating in the hands of a wealthy few. And that brings up another important point that the video neglected to mention. Debt may increase exponentially, but so do savings. The other important detail left out is that payments are made with government-created money. Banks cannot print paper money... only the government. So the money in your wallet was not created by the bank. When your ATM served that money, the bank had to provide real cash. When you write a check, the bank has to transfer real money (entries on the Fed reserve's books) to the other bank. However, there are systems in place to reduce the amount of government-created money necessary (intra-bank transfers don't require any at all... inter-bank transfers are aggregated and canceled out where possible). So, the payments you make paying off your mortgage happen with government-created money, and do decrease the total amount of money and debt in the system.

axod 18y ago

Please... for the people who watched the video, please instead of saying it's "PURE TRASH", could you cite a few parts of the video that are factually incorrect?

biohacker42 18y ago
It's been a long time since I managed to sit through that whole video when it first appeared on reddit. Right of the top of my head I can point out that the video contradicts itself. It claims both that A: The money supply is constantly being inflated (that's correct) And B: That interest guarantees some borrowers MUST go broke. (that's wrong, we just agreed the money supply is constantly being inflated.) For more discussions: http://forums.somethingawful.com/showthread.php?threadid=2959709 http://forums.somethingawful.com/showthread.php?threadid=295...
- swombat 18y ago
  The last post on that thread is an excellent and very thorough blow-by-blow debunking of this trashy "documentary".
jganetsk 18y ago
That the amount of debt in the world grows unchecked. The video did not do a great job of explaining what happens when debt is repaid. Let's say that the amount of bank-created money is defined as the total amount of money in everyone's account, minus the total amount in the bank's vaults. When one makes a payment on a loan, the payment is always part interest and part principal. The latter is dropped into the vault, and does not appear in anyone's account. So, this actually constitutes a removal of bank-created money from the system. The interest becomes revenue for the bank; the bank is a business and it should make money just like any other business. That revenue is used to pay the bank's operating expenses, dividends to the shareholders, and interest to all the depositors. So, it's not constantly accumulating in the hands of a wealthy few. And that brings up another important point that the video neglected to mention. Debt may increase exponentially, but so do savings. The other important detail left out is that payments are made with government-created money. Banks cannot print paper money... only the government. So the money in your wallet was not created by the bank. When your ATM served that money, the bank had to provide real cash. When you write a check, the bank has to transfer real money (entries on the Fed reserve's books) to the other bank. However, there are systems in place to reduce the amount of government-created money necessary (intra-bank transfers don't require any at all... inter-bank transfers are aggregated and canceled out where possible). So, the payments you make paying off your mortgage happen with government-created money, and do decrease the total amount of money and debt in the system.