tag:blogger.com,1999:blog-7608702.post4843315007995882467..comments2023-10-25T08:46:20.242-05:00Comments on The Distributist Review: The Money PowerJohn Médaillehttp://www.blogger.com/profile/16463267750952578888noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-7608702.post-22193704223576129492009-11-21T09:02:15.202-06:002009-11-21T09:02:15.202-06:00This comment has been removed by a blog administrator.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7608702.post-11893935920635641092008-09-29T10:37:00.000-05:002008-09-29T10:37:00.000-05:00Charles, An excellent question to which I must giv...Charles, An excellent question to which I must give a brief and inadequate answer. Money can be called into being in two ways: as debt or by production. For the second way, the government simply prints the money and either spends or lends it into circulation to support productive enterprise. In the first way, the current way, banks create the money when they make loans. This would actually work pretty well, if they only made loans for productive purposes. Credit and production would be related to each other. But as they loan more and more for speculative and consumer purposes, they create more money than the economy needs, and hence must then lend even more money to ensure that their will be enough money to pay off the speculative loans. It is an insane system, which always leads to the current kind of insanity.<BR/><BR/>Money is really an accounting system (see Usury: Wealth Without Work), which currency the visible credits and purchases the debiting of the those credits. The money needed to circulate all the goods and services for sale is exactly the value of all the goods and services for sale. More than this leads to inflation, and less to deflation. The banks are a poor way of matching the need to the reality, and sane economics is based in the reality.John Médaillehttps://www.blogger.com/profile/16463267750952578888noreply@blogger.comtag:blogger.com,1999:blog-7608702.post-62189206151047556162008-09-26T19:22:00.000-05:002008-09-26T19:22:00.000-05:00I am so thankful for your blog. I really enjoy re...I am so thankful for your blog. I really enjoy reading it, and I plan to purchase a copy of your book when/if you publish it.<BR/><BR/>I did not realize exactly how money was made (I regretfully did not pay much attention in econ), and when I told my friend, her response was, "Well, yeah. How else is money supposed to be made?" And so I ask you: I know it's ridiculous, but how else is money supposed to be made?Charles P.https://www.blogger.com/profile/15933142142763421447noreply@blogger.comtag:blogger.com,1999:blog-7608702.post-38876388184985007812008-09-09T18:54:00.000-05:002008-09-09T18:54:00.000-05:00bobc, the film is correct. Currency is not the iss...bobc, the film is correct. Currency is not the issue, since neither you nor I nor the Fed nor the banks use very much of it. <BR/><BR/>As far as not being able to cash checks, that happens every single day; the banks borrow from each other, or from the Fed discount window, on overnight loans. But the money flows through the system and eventually comes back to them.<BR/><BR/>I must totally disagree on who creates the money. The federal gov't only creates coinage, a tiny fraction of the money in circulation. The banks create everything else. And it says so on the dollar bill. If you look to the left of President Washington, you will see the stamp of one of the 12 private banks authorized to issue money, which they do in behalf of their member banks. The gov't prints the money and sells it to the banks at four cents/bill, the cost of printing it. <BR/><BR/>Before 1913, the money bore the name of your local bank in big prominent letters where the presidents' picture now stands. The banks wanted everybody to know that you were spending <I>their</I> money. This is still the case, they are just a bit more discrete about it, since most people think the Fed is some sort of government dept. It is not.John Médaillehttps://www.blogger.com/profile/16463267750952578888noreply@blogger.comtag:blogger.com,1999:blog-7608702.post-73507451466146627482008-09-09T11:10:00.000-05:002008-09-09T11:10:00.000-05:00That video has some problems in the economics. I ...That video has some problems in the economics. I could go into more detail, but that would make a really long post. So I'll keep it short.<BR/><BR/>Using their example. A bank with $1111 of capital is created. They "lend" 9 to 1 to someone a car loan for $10,000 by writing him a check. He goes to a second bank and deposits that check.<BR/><BR/>Now, here's the problem that the video never talks about.<BR/><BR/>That $10,000 goes through the check clearing system and gets to the first bank. They only have $1,111 in capital. What now? How is that check paid? It can't be paid, the bank only has $1,111 in capital. The check would bounce.<BR/><BR/>They make it sound like money is created out of thin air by private banks. No, the only one who can do that is the US Treasury when they print money and make coins. <BR/><BR/>If a bank gets $10,000 worth of deposits, they can lend out $9,000 and keep $1,000 in reserves on deposit at the Fed. This is not the same as what the video says, where a bank gets $1000 in deposits and lends $9000 more. There is just not enough currency to make that possible.<BR/><BR/>I'm not pro-Fed - I think it is unconstitutional, but that video has some serious flaws in it, and doesn't represent what goes on in the banking system.<BR/><BR/>The problem with our banking system is that it is built on a system of fiat money. This wasn't done by the private banks, this was done by our government which spends money out of control. <BR/> <BR/>Our government defaulted on its debt in 1933 when it ran out of gold to pay all the gold bonds, and gold certificates. It responded by confiscating private gold.<BR/><BR/>Our government then defaulted again on its debt in 1971, when it ran out of silver to pay all the silver bonds and silver certificates.<BR/><BR/>Again, both times because the government was spending out of control.<BR/><BR/>Now, we are heading into the third default. When we can't pay our fiat money debt, what then?<BR/><BR/>Three strikes, you're out.Anonymousnoreply@blogger.com