Tuesday, October 14, 2008

Apparently this is where...

This morning I asked the question: where does money come from.

I illustrated the post with a picture taken on my roadtrip outside an abandoned gas station in Moab, Utah. It turns out it was a pretty good answer to the question. Sorta.

The following video seemed to be about as informative a response as any. It's 47 minutes long, but I think it's worth it...


Anonymous said...

So basically, the majority of money is theoretical?
But if that's the case, where has it all gone? Why is the world facing economic crisis if the money isn't technically real?

Anonymous said...

FAB!!! Thanks Dave.

The Princess said...

I think I love you. You have enlightened me; I am now one step closer to understanding the mess we're in.

Ben Nuttall said...

Haha I can't believe I watched this, all 47 minutes of it! But yeh that was great. Very informative about how the concept of "money" (whatever it is) actually works. Borrowing, lending, creating...

Simmo said...

Again - I am still left perplexed - where do chocolate coins come into it all? SOMEBODY TELL ME!

Micklebring said...

Chocolate coins are special and only for use at Christmas. This year, interestingly, the exchange rate for chocolate coins will be far higher than for "real" money, albeit, as the video shows, real money isn't at all real.

Dominic said...

I think the first 20 minutes of the video are quite informative. The remainder is hippy paranoia (in my opinion).

The notion that the international banking system is closely controlled by a few powerful men doesn't equate to my personal experience of working in an investment bank. Senior management there seemed less interested in the long-term geopolitical future than in the size of this year's bonus.

If you want to understand the subtext of this video then Google "Bilderburg Group", "Illuminati" or (for heaven's sake) "Elders of Zion". Or any other fictional elite for that matter. You might as well believe in David Icke's 6-foot lizards.

I'm afraid there is no secret conspiracy, just a lot of people like you and me but a bit better paid.

Dave Gorman said...

@Dominic: Oh, I didn't buy into it as a conspiracy theory... and there were two or three moments when I thought it was going to get all mysterious and tell me about David Icke's lizards... but it never quite materialised. But as an explanation of how "new" money is created, it's (I think) pretty good. Simply put (as I understand it) banks are allowed (indeed encouraged) to lend money they haven't got and so long as the cycle continues and everybody doesn't suddenly want their money back at the same time it's okay. In an impossible kind of way.

Bill said...

So, how is it that the banks are currently in trouble? Is it that there is a 'run' on the bank at the moment as the video calls it, and so the banks are trying to call in their 'debts' to get something of real value such as American's houses? Am muchly confused...

Anonymous said...

@bill - I think the problem is that the lending got out of hand to the point where people couldn't pay it back, because to be able to lend out more to others, the banks have to keep having something coming in so the ratio can keep working, if the loans stop and the paying back stops everything kinda falls apart to the point where banks can't borrow from each other even...I think. *scratches head and feels confused again*

There was a run on the bank with Northern Rock, it needed an injection of cash for sure but the run killed it dead - remember those queues?

I found the film really really informative, yes a bit paranoid but that's easy enough to take with a pinch of salt (or single grain depending on inflation). My friends and I have been discussing this for hours now, superinteresting!

Anonymous said...

So if I create a facebook group "1,000,000 people willing to withdraw all their money as cash to end capitalism" we can potentially bring down the entire banking system in one go? Let's do it!

Anonymous said...

Revealing and disconcerting in the context of current events.

Anonymous said...

how did you all miss the point, that the governments let a bunch of private individuals "create" money out of thin air and then borrow it back at interest.

Thats the scam.

Governments should create and control money for the good of their populations, NOT for the good of private bankers.

If you dont believe this is a conspiracy, then thats fine, but look into the situation of the creation of the federal reserve act and the "laws" concerning US income tax, and then you might not be so scared about admitting that some of this "conspiracy" stuff might actually be true.

Often folks are scared of "appearing nuts" so they just sing along with the "This conspiracy stuff is nuts" meme, when all the evidence points to the contrary.

Anonymous said...

for another explanation of the scam , see the first half hour or so of ZeitGeist Addendum.

This and the original can be seen at the url below.


If those british amongst you still believe that our government controls the money supply, ask yourself why Gordon Brown has to write a letter to the bank of england to "ask" them to reduce interest rates.

The economy isnt being run for the benefit of the population. Maybe it should be - or could that be a radical conspiracy theory.

Anonymous said...

hohoho, look at all the conspiracy nuts.

JFK really was murdered by a lone nut, absolutely no possibility of a conspiracy there (he was definitely murdered by an italian rifle - pity they found a mauser first - oops - damn, quick, find *another* rifle in the book depository !)..
RFK was of course murdered by a lone nut (nice being able to shoot a guy in the back of the head whilst facing him from 9 feet away).
The US and UK never overthrew Mossadegh and installed the shah to get their hands on Iranian oil - after all where do you imagine BP came from.
The Gulf of Tonkin incident really did happen - honest. - oops.
Iraq really did have weapons of mass destruction - oops
The US really werent warned by the Australians about the approaching Japanese Fleet - oops
There really was nothing fishy about the sinking of the Lucitania - oops.
Hitler really wasnt bankrolled by US banks - oops
at least 3 Members of a secret society didnt conspire to murder a royal and in the resulting melee hope to reunite their country in 1914
Lenin and Trotsky really werent financed by US bankers either - oops,
The whole temperence movement wasnt funded by standard oil to get prohibition that would stop US Farmers fermenting their own grain - which at the time was looked on favourably by Henry Ford as a fuel for his new products -oops

I could go on, but of course, once you know about a conspiracy, its just history, and suddenly becomes just another fact.
No other conspiracies could ever happen because thats what the crazy people go on about right ?

Hohoho crazy people. Gotta love 'em.

Incidentally, what does Investment Banking have to do with what is discussed in "Money as Debt" ?
Its simply not the same thing, and as we've learned lately, you shouldn't imagine that investment bankers actually have a clue what they are supposed to be doing anyway (and Hank Paulson threatening the US government and demanding billions on his "say so" without offering to discuss how it would be spent isnt at all fishy (and he's just recently (now they've got the money) decided that he now isnt going to spend it on what he said he would when forced to explain). Considering how it was Paulson, as head of Goldman Sachs got the US Govt to change the law that lead to this mess in the first place) - Nope, no conspiracy here - thats just crazy talk.
He provably was a major cause of the root problem, he must be the guy to sort it out.

Theres a lot more going on in the world than they bother to report on the BBC.

(whilst i remember, search on Youtube for the live BBC news 24 report on 9/11 (11/9) reporting about WTC 7 collapsing - 20 minutes before it did - and all the time you can see it behind the reporter who is discussing its recent collapse.
I didnt see it, but i wonder how they explained that on their recent "conspiracy files" program ? - anyone know ?

Theres also nice side by side comparisons of Benazir Bhutto's interview with David Frost on Aljazera - repeated on the BBC - with about 4 very interesting seconds missing from the middle in the BBC version. Go look. Doesn't prove conspiracy at all but does nicely illustrate that you dont get the unadulterated truth from apparently one of the most trusted news organisations in the world.

*All* of the above can be lazily dismissed as the rantings of lunatics (because we dont want to be labelled as nuts, do we ?) and you are in no way encouraged to think for yourself or look into any of these crazy ideas any deeper. Independent thought is definitely not encouraged.

Pip Pip !