Money as Debt
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Nov. 12th, 2007 | 01:36 pm
mood:
complacent
This seems to bring together a lot of things I knew individually to be true about money, but hadn't really considered all together:
http://video.google.com/videoplay?docid=-9050474362583451279
I'd be interested in hearing any comments. The simplest things seem to inspire controversy -- people get labeled as crackpots even when they're just referring people to primary sources, definitions, and written laws. There's too much la la la I can't hear you in the world.
http://video.google.com/videoplay?docid=-9050474362583451279
I'd be interested in hearing any comments. The simplest things seem to inspire controversy -- people get labeled as crackpots even when they're just referring people to primary sources, definitions, and written laws. There's too much la la la I can't hear you in the world.
(no subject)
from:
triple_entendre
date: Nov. 12th, 2007 09:04 pm (UTC)
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But from what this video says, it would be somewhat better if the government really *did* print more money and directly pay its debts with it than the current method of causing there to be more money by giving itself permission to borrow it? And it also points out that a gold or silver standard isn't much more "real" either?
I like how local currencies can embody human effort -- by being backed by hours of labor rather than a promise to borrow the money from someplace else.
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from:
taral
date: Nov. 12th, 2007 08:52 pm (UTC)
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I didn't see anything that you can't learn in Economics 101. It's just phrased like it's some big conspiracy.
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from:
triple_entendre
date: Nov. 12th, 2007 10:38 pm (UTC)
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Well, it's definitely big, and definitely produced by collaborations between parties who have a (both literally and in choice of costuming) vested interest in most people not understanding how it works. The only thing that makes it not a conspiracy is that it's not illegal. Except oh wait, it might be. Technically. But perhaps not in practice.
This is an interesting paragraph in light of the video's criticism of "usury". Without the interest, this is just a side system that circulates money-debt without creating more than is present in the effort people put in. If a lot of people charge interest, won't that eventually create more obligation than people are willing to cancel out with their effort?
Hmm, reading the essay, it sounds like the author of this video and ripplepay are mostly saying the same things.
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from:
taral
date: Nov. 12th, 2007 11:02 pm (UTC)
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Interest reflects the value of time. Work done today is worth more/costs more than work done tomorrow.
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from:
triple_entendre
date: Nov. 13th, 2007 06:46 pm (UTC)
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yes, the *existence* of this new money as it is being created has some value to the system, but it seems to be slightly less than the amount of value that its existence removes from the rest of the system. Even if it's equal, it still implies an arbitrary (and well-hidden) transfer of wealth. (If it's truly greater, we should find a way to do as much of it as possible and give it to everyone, and we'll all be infinitely rich!*)
The argument that banks receive this grant as compensation for risk only works if there's collateral that the *bank* is risking, which is not the case!
I am struggling to find a shred of difference between this system and Enron's. So far, I got nothin'. (Which is also mostly what Enron had. Well, actually, maybe what Enron had was the unconscious belief that the government had granted it the some of its power to print money...)
Apparently, Enron's mistake was not having a standing military.
If someone can explain the current (international) monetary system adequately, we may be able to use that explanation to construct perpetual motion machines. Either way, it's worth figuring.
- Trip
* or is that the same as us all being infinitely broke?
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from:
taral
date: Nov. 13th, 2007 09:26 pm (UTC)
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"Do 1 hour of work for me today and I'll do 2 hours of work for you next week."
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from:
triple_entendre
date: Nov. 14th, 2007 01:12 am (UTC)
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This property *not* being present in Ripple, and I assume that's a good thing, but I don't know enough to say for certain.
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from:
taral
date: Nov. 14th, 2007 01:36 am (UTC)
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from:
triple_entendre
date: Nov. 29th, 2007 10:24 am (UTC)
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from:
triple_entendre
date: Nov. 14th, 2007 01:25 am (UTC)
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from:
taral
date: Nov. 14th, 2007 01:38 am (UTC)
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from:
triple_entendre
date: Nov. 14th, 2007 02:09 am (UTC)
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I went ahead and posted it hoping someone might be inspired to make a better one.
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from:
triple_entendre
date: Nov. 14th, 2007 01:31 am (UTC)
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from:
taral
date: Nov. 12th, 2007 11:02 pm (UTC)
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from:
triple_entendre
date: Nov. 12th, 2007 11:09 pm (UTC)
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from:
taral
date: Nov. 13th, 2007 01:03 am (UTC)
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from:
triple_entendre
date: Nov. 29th, 2007 10:28 am (UTC)
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all this has happened before....
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from:
achild
date: Nov. 13th, 2007 01:23 am (UTC)
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Inflation is tied closely to our continuous cycle of increasing debt ratios, right? Well, the current system also traps people in that it perpetuates the myth of upward mobility in a crappy job. Take this example:
If you were making 30,000 a year in 1980, and 20 years later, your job had increased to 60,000 a year, you'd feel like you'd been getting raises, moving up in the world, etc.
But the truth is, thanks to inflation, you've actually moved down. According to this Inflation Calculator: http://www.westegg.com/inflation/infl.cgi
What cost $30000 in 1980 would cost $68606.17 in 2000.
Also, if you were to buy exactly the same products in 2000 and 1980,
they would cost you $30000 and $13118.35 respectively.
This is all food for more thought, definitely.
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from:
chefmonkey
date: Nov. 13th, 2007 05:16 am (UTC)
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I went to a previous employer with a graph showing how their three-year salary freeze represented a decrease in purchasing power because of CPI, and asked why I was getting the equivalent of a 3% pay cut each year while average real income across the US was increasing (even after adjusting for CPI). They didn't have a good answer. I was rather blunt with my evaluation about what this would do to employee retention, including my own. I left four months later. (It was actually quite satisfying -- they really wanted me to stay, to the point that the CEO and the VP of Engineering flew down the morning after I turned in my resignation to try to talk me out of it. They wouldn't take the step of taking real steps to fix the salary-versus-inflation situation, so I had to leave).
Anyone who has held on to a job through 20 years of less-than-inflation raises just wasn't paying attention. If (and that's an important "if") they wanted to use purchasing power as their meterstick for success, then they weren't moving up in the world because they couldn't be assed to pay attention (or failed to take meaningful action, which would be even worse). All of this assumes that the money involved is important to said individual, of course -- there are always other potential factors that are far more important than what a job pays.
Anyway, calling the effects of inflation a "myth" puts the air of conspiracy around it. There's no myth to it -- it's just solid, basic macroeconomics. Slight inflation stimulates an economy because of the effect it has on credit. Deflation stifles an economy because debt becomes increasingly onerous. The few deflationary periods we've had have borne this out. As long as consumers don't go batshit crazy with credit, it all actually works pretty well.
Oops.
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from:
triple_entendre
date: Nov. 13th, 2007 06:55 pm (UTC)
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re your anecdote: so did they spend significantly more money on efforts to convince you to stay than it would have cost them to just pay you more? Seems like the smart money would have been to give you a double+ raise iff you signed an agreement to stop talking about it to anyone.
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from:
triple_entendre
date: Nov. 29th, 2007 10:43 am (UTC)
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I'm pretty sure there are simple ways to regulate the blatant foolishness without impeding the overall markets.
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from:
triple_entendre
date: Nov. 14th, 2007 02:05 am (UTC)
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Who would be these mythical people who are paying attention, and what are they doing, then?
I quit working for a year or two, reduced my expenses to near zero, and made up the difference with my meagre savings. My quality of life felt about the same.
Now I'm back to doing consulting gigs, at least part-time, and still not doing much spending at all until very recently. (A possible side effect of having a steady girlfriend.)
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from:
triple_entendre
date: Nov. 29th, 2007 10:52 am (UTC)
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I guess that's why people start their own businesses, eh?
and to be fair, maybe the overall problem there is complexity, not economics.
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You don't know me, but...
from:
chefmonkey
date: Nov. 13th, 2007 05:18 am (UTC)
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Re: You don't know me, but...
from:
achild
date: Nov. 13th, 2007 03:39 pm (UTC)
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from:
marconiplein
date: Nov. 13th, 2007 07:57 pm (UTC)
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