Awesome Video explaining our current Money Supply and where Money comes from!

[RoninLB]

well worth the time watching.. thx


there's a pelicanhead that occasionally rants that civilizations are shaped by war and economics, that central bankers are the most powerful people in the world, and that we are in a perpetual undeclared economic war with the rest of the world.


....... go figure

[on-ramp]

It is not a mystery banks have the tallest buildings in every major US city.

[Rearden]

Originally posted by on-ramp
It is not a mystery banks have the tallest buildings in every major US city.

Empire State Building, Sears Tower. Yea, you're right.

[s_wilwerding]

The only problem I had with the video is that they claimed that we had to use up "natural resources" in order to create the value that keeps the system running. I am a "knowledge worker" - I don't use "natural resources" - other than maybe the food I eat - to create value, and more and more, knowledge workers are a bigger part of our economy.

I think it is flawed to think that we can't keep creating value without exhausting natural resources.

[notfarnow]

Originally posted by s_wilwerding
The only problem I had with the video is that they claimed that we had to use up "natural resources" in order to create the value that keeps the system running.

I interpreted it as meaning that the expansion of the current financial systems during the industrial revolution depended on heavy use of natural resources.

Originally posted by s_wilwerding
I am a "knowledge worker" - I don't use "natural resources" - other than maybe the food I eat - to create value, and more and more, knowledge workers are a bigger part of our economy.

I think it is flawed to think that we can't keep creating value without exhausting natural resources.

I agree, but the throwaway nature of the consumer economy does deplete natural resources. Even if our wealth is acquired without using natural resources, the way we spend it has a huge impact.

[Rich76_911s]

Really interesting video. Oddly enough I just got done reading about the fed, reserve rates, and the money multiplier effect that this video speaks of.

I guess my question is that it has been going on for so long, that when does the music stop, and will it? If they have to keep the lending pumping to continue the system, but in the past couple of years they used up every trick in the book to continue the lending (fed lowering inter bank interest rates to 1%, arms, intrest only loans, etc) are the tricks all used up?

Could the massive amounts of money in the Yen carry trade effect this?

What can you do to prepare for it? Has the preperation already begun with the massive purchasing of commodities? Gold, Silver, Copper, Oil, Corn, you name the commodity, I'd bet it is up. Certainly if there is a collapse in the system even being short stock will not do you much good, as all you will have is extra worthless paper. You'd be much better off having a stockpile of oil or gold under your matress than a pile of cash if problems arose.

I've always wondered why, when you back out far enough and chart the DOW it has what appears to be exponential growth pattern. As seen here:

http://finance.yahoo.com/charts#chart6:symbol=^dji;range=19281010,20070711;charttype=line;crossh air=on;logscale=off;source=undefined


Is this a result of the exponetial growth of money?

The system is so huge that it is almost difficult for me to grasp, so I guess I just keep asking questions.

Studying economics sometimes can be frustrating like studying physics. In physics you always look at things "in a vacuum," and I feel that studying economics sometimes is very similar to that. When you take out the "in a vacuum" things get significantly more complex.

[Zeke]

What is interesting to me is that the video explains precisely what companies like Walmart, Home Depot and Starbucks know and have been doing for a long time. If any company similar in nature were to stop expanding, the "time lag" mentioned in the video brings about bankruptcy. And, we've seen proof of that many times when things like airlines can't expand anymore because the traffic is not there. With 2 HD's in Long Beach and a 3rd about to be built. methinks HD is not a good investment anymore. Neither would Starbucks be.

Furthermore, when technology sends a company spiraling such as Tower Records, the end is unavoidable. As such, in theory anyway, the cell phone market must have been a very good investment over the past years and should continue. I don't know, I don't have any stock and don't follow it. I just know that big chains are a house of cards just like the loan industry.

[Rich76_911s]

Good point Milt. Note also that they all want to become banks.

I'm about 99% sure Ford, and GE, make more money lending than they do building and selling products. GE has actually been cutting back, by selling off part of its lending business' though. Wal-Mart is trying to start putting its own banks into stores, though this has met some challenges. All of them are getting into the finance game. What store doesn't have a credit system attached to it?

[Rich76_911s]

It appears I am having a one way discussion here, so do not worry this is my last post on the subject.

What I have found to be the main critical error with this theory is that it completely ignores the fact that the interest earned money does not simply go into a vault and sit there. It goes back into the economy.

for a more in-depth perspective of this read, "the mathmatical flaw" on this web site:
http://home.hiwaay.net/~becraft/FRS-myth.htm#hd25

[p911dad]

I enjoyed that 47 minutes and really learned something. Thanks for the tip. I will pass that on to the kids. Most of us live in blissful ignorance of the financial system and always will.

[ChrisBennet]

Great video. I found this web site that addresses a couple of things the video raises:
Money and the Federal Reserve System:
-Chris

[Grady Clay]

Wayne,

Very interesting, I had an undergrad economics course in about ’64-’65 where the grad student instructor proposed this in class (I’m sure unknown to the professor who lectured).

I saved the video and I’ll watch it a few more times and read the links. I think Marx proposed the solution in 1917.

Clearly exponential anything is unsustainable. This will make for a good discussion.

Best,
Grady