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Money as Debt

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Nov. 12th, 2007 | 01:36 pm
mood: complacentcomplacent

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.

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Comments {26}

JP Sugarbroad

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from: taral
date: Nov. 13th, 2007 09:26 pm (UTC)
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I'm not sure what you mean by "newly created money". Interest in Ripple reflects this type of agreement:

"Do 1 hour of work for me today and I'll do 2 hours of work for you next week."

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Triple Entendre

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from: triple_entendre
date: Nov. 14th, 2007 01:12 am (UTC)
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by "newly created money", I mean the money that happens when you (person A) borrow money from a bank, deposit that money in another bank, and it is then (in part) loaned out by that second bank to someone else (person B). The money that person B now has doesn't come from anywhere. Or the original money you deposited is now in more than one place at a time, which amounts to exactly the same thing.

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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JP Sugarbroad

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from: taral
date: Nov. 14th, 2007 01:36 am (UTC)
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Ah, that kind of created money. I don't see what's wrong with it. Banks are like any other business, but they increase the money supply instead of the velocity. Same macroeconomic effect.

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Triple Entendre

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from: triple_entendre
date: Nov. 29th, 2007 10:24 am (UTC)
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Alternatively, this suggests that whatever it is that's wrong with banks is also a problem with any other business, or that they have a different problem with a similar effect to it.

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Triple Entendre

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from: triple_entendre
date: Nov. 14th, 2007 01:25 am (UTC)
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Maybe the fractional reserve system + FDIC translates to "I promise to have someone do 2 hours of work for you next week if you promise to do 3 hours of work for me the week after that, but I'll only actually do 1 hour of work and replace the other with a promise to have someone else do it, and you'll never get around to demanding that it actually gets done. But if you insist, and I can't deliver that promise, 100 people you don't know will have to give you a penny."

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JP Sugarbroad

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from: taral
date: Nov. 14th, 2007 01:38 am (UTC)
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I don't think your analogy here works quite right.

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Triple Entendre

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from: triple_entendre
date: Nov. 14th, 2007 02:09 am (UTC)
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Be nice to it; it's been tortured and never quite recovered from the experience.

I went ahead and posted it hoping someone might be inspired to make a better one.

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Triple Entendre

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from: triple_entendre
date: Nov. 14th, 2007 01:31 am (UTC)
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I'm sorry; I wasn't being clear that I was responding to your information about Ripple with speculation about the monetary system at large, not Ripple.

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