@maximum411 except for the ranting maniac in between
Jct : As if this needed another uneducated low-tech opinion. Would you like to put your money where your mouth is and make a bet that any one of the "ranting maniac's" opinions is wrong? If not, then you're a loud-mouth coward, aren't you? Have you got the balls, maximum411, to put up or shut up? Har har har. Another bites the dust.
Okay, since I don't have a lot of time, let me point out one of your blaring errors. You say that banks don't lend out the funds people deposit in them. Actually, that's exactly what banks do and the whole reason they exist. The reason banks can afford to pay you interest, and the reason they want to, is because they use the money you deposit to lend to people. This is why not everyone can withdraw their money from the bank at once- it's not there. Look up "bank run."
Here, do me a favor. Do a Google search for "how banks work." Click on any of the results, or the one that seems most reliable to you, and read the first few paragraphs (or more, if you so desire). Then come back to me.
@maximum411 Here, do me a favor. Do a Google search
Jct: Sorry, you haven't said "bet"yet. I'm not searching for what you can't explain. Besides, I have no doubt you found lots of places repeating "banks lend deposits" but that doesn't make it true. It's the second Big Lie of Economics.
Alright, I "bet" you $20 that banks lend out their depositors' funds. Now, please, go do some research. Try to prove me wrong, and discover in the process that you are wrong. I challenge you to find me one reliable source that says that banks do not lend out their depositors' funds.
@maximum411 I "bet" you $20 that banks lend out their depositors' funds. Now, please, go do some research.
Jct: I did. "how banks work" gets a whole bunch of sites explaining it wrong to kids. Now your turn: you search for "How banks create money" for the 600,000 hits you'll get. Check out the one at the Federal Reserve explaining it for you. You're sure an expert on where it doesn't come from, now tell me where the bulk of money comes from?
@maximum411 I "bet" you $20 that banks lend out their depositors' funds. Now, please, go do some research.
Jct: I did. Searching "how banks work" brings up a whole bunch of sites explaining it to kids with nothing on the multiplier reserve ratio anywhere. Now you go and search for "how banks create money" for the 600,000 hits that might explain it to you. Check out the one at the Federal Reserve.Where do you think new money comes from? It's why it's the 2nd Big Lie of Economics? You were fooled
You are a moron. There is no such thing as a "multiplier reserve ratio." There is a money multiplier, and a cash reserve ratio, which are the inverses of each other and most certainly not the same thing. The cash reserve ratio is the fraction of the money a commercial bank is lending out that the bank has to actually have (hold in reserve), and the money multiplier, as the inverse of that, is how much money it can "create" relative to its actual funds. Please read up.
The Fed creates money by setting the reserve ratio, and thus controlling how much money regular banks can create (by lending out their depositors' funds, and by lending out even more than their depositors' funds). Thus the banks are essentially always in the red, and if too many people were to try to claim their deposits, the bank wouldn't be able to allow those people to withdraw them, because many of them are part of the amount loaned out (the reserve).
@maximum411 thus controlling how much money regular banks can create (by lending out their depositors' funds, and by lending out even more than their depositors' funds).
Jct: Gee, I guess if you lend out more than your deposits, you're creating money. But you bet that banks don't create new money, you said they lend out deposits. Now you've contradicted yourself and admit that banks create money. I guess you've proven I was right and I win the bet.
No, I never bet that banks don't create money. Take a look at my past comments. I bet that banks loan out their depositors' funds, which they do. Therefore, I won the bet. Their depositors' funds constitute a fraction of what they loan out, and this fraction is set by the reserve ratio. The deposits constitute part of the total amount they loan out.
@maximum411 Their depositors' funds constitute a fraction of what they loan out,
Jct: And I bet that depositors' funds constitute zero of what they loan out, it all comes from the tap. And reserve ratio fraction is not they loan out, it's the fraction they keep in that permits the loaning out of the other 90% of new money out. You got that wrong too. You know enough to pick on "multiplier reserve ratio" rather than "reserve ratio multiplier" and still bet some deposits go out. I bet none!
No, you still have it wrong. Say the reserve ratio is 300% (unrealistic in most countries). Then the bank must have 3 times as much money in reserve as it loans out, and can loan out 1/4 of the money it has in deposits. Say the ratio is 100%. Then the bank is loaning out all of its money in deposits. Say the ratio is 10%. Then the bank is loaning out 10 times the amount of money it has in deposits. The amount of money it has in deposits determines how much extra it can loan.
M: Say the reserve ratio is 300% (unrealistic in most countries).
Jct : Not just unrealistic, impossible.
M: and can loan out 1/4 of the money it has in deposits.
Jct: That's not how the reserve ratio works. 10% RR lets them create and lend out new 90%, 20% RR creates 80% new loans, 50% RR creates 50%. So a reserve ratio of 75% would allow them to create and lend out a new 25% of new money. But you can't pass 100%!
DQ: Say the ratio is 100%. Then the bank is loaning out all of its money in deposits.
Jct: No you have that backward. If they have 100 in reserve, then they can't lend any new chips out at all.
DQ: Say the ratio is 10%. Then the bank is loaning out 10 times the amount of money it has in deposits.
Jct: The Voorhis mistake. A deposit of $100 does not permit the next loan to be $1,000. It permits the next loan to be $90, and as it gets deposited back, it multiplies up to the $1,000, not 10x loan
DQ: The amount of money it has in deposits determines how much extra it can loan.
Jct: What's this extra it can loan over deposits on hand if not new money? So you admit they lend out new money but insist they also lend out old savings too. So you admit I'm right but I won't admit you're right to say they also lend out old deposits. That's our $20 bet. So when do the loans come from the tap pipe and when do they come from the reservoir of old savings pipe? Find bankmath for the plumbing flows.
Actually, a reserve ratio above 100%, although rare, is very much possible. Less than 100% means that the amount being lent out is always greater than the amount kept in deposits. However, if the bank loans out less than the total amount it has in deposits, then the reserve ratio will be greater than 100%.
I was just doing a paper on economic history and it reminded me of this.
See Milton Friedman: "A Monetary History of the United States, 1867-1960"
in reference to the 1930s: "The arithmetic effect of gold imports is, therefore, to raise the numerator and denominator of the deposit-reserve ratio by the same absolute amount. Since the ratio is greater than one, the numerator is raised by relatively less than the denominator and hence the ratio tends to decline." (page 535)
@maximum411 "The arithmetic effect of gold imports is, therefore, to raise the numerator and denominator of the deposit-reserve ratio by the same absolute amount.
Jct: Sure, now include some golden poker chips too as you rephrase it to fit a simple physical model.
If the ratio is greater than 1 and the numerator (reserves) is greater than the denominator (total deposits), then the reserve ratio is greater than 100%.
@maximum411 If the ratio is greater than 1 and the numerator (reserves) is greater than the denominator (total deposits), then the reserve ratio is greater than 100%.
Jct: Now try to say that again with poker chips instead of money.
"If the ratio is greater than 1 and the numerator (reserves) is greater than the denominator (total deposits), then the reserve ratio is greater than 100%."
Jct: We're still waiting to have that translated into English using poker chips as a model. Not much luck, hunh?
Jct: Now try to say that again with poker chips instead of money.
The point is, the bank doesn't "have" the money if it's all being loaned out. If you buy a $50 meal with your debit card even though there's only $5 on it, you don't still have $5. You then have -$45. For the same reason, if a bank has $50 million in deposits and loans out $500 million, it doesn't still have $50 million. It then has -$450 million.
@maximum411 I "bet" you $20 that banks lend out their depositors' funds. Now, please, go do some research.
Jct: I did. "how banks work" brings up a whole bunch of sites explaining piggy banks to kids with no multiplier reserve ratio anywhere. Now you go and search for "how banks create money" for the 600,000 hits that might explain it to you. Check out the one at the Federal Reserve.Where do you think new money comes from? It's why it's the 2nd Big Lie of Economics? The Big Lie fooled you.
It isn't a receipt - its a medium of exchange end of... and doesn't need anything like gold to back it up. In POW camps, prisoners used to use cigarettes as a currency and other civilizations have used rocks etc. All that matters is that everybody cannot just make their own money but is hard to replicate, convenient to carry around and society accepts it as the medium of exchange.
Also, did you forget that when Quebec tried to separate they wanted to use our currency? Do you understand why? Creating a new currency basically puts your global purchasing power at ZERO. The very nature of any currency is to inflate and deflate based on how that economy operates, because some things, and some efforts are worth more or less. Even you know this because you decided to play poker for 50 an hour instead of work as an engineer for less. Even you hate zero sum currencies, lol.
"It works like a casino bank issuing new money" and then you go on to say that the chips aren't backed by trust they're backed by the exact 1:1 amount you gave. Which is it?
You seem to think Casinos are some kind of utopia that can be applied to all banking models. There is still inflation in the casinos because the money that backs it is subject to inflation, it is just covered up by altering prices ELSEWHERE because altering the machines would be too costly.
@Prinnycakes "It works like a casino bank issuing new money" and then you go on to say that the chips aren't backed by trust they're backed by the exact 1:1 amount you gave. Which is it?
Jct: Which is it? The one I said it was not, trust, or the one I said it was, the collateral left at the cage? Of course, I said it was backed by the collateral taken in by the cashier at the cage in exchange for the chips issued. What did you not understand?
@kingofthepaupers The money you are exchanging for the chips IS affected by inflation. What did you not understand ? Just because you move it into another currency does not mean that it is not affected by the inflation of the backing currency. Government run casinos can eat the cost because of the profits involved in a casino.
@Prinnycakes You seem to think Casinos are some kind of utopia that can be applied to all banking models.
Jct: You have confused casinos with the bank. I didn't say casinos were the utopia, I said the poker chips were. So we'll use another non-casino model. We'll ask the coat check girl to accept all collateral, not just coats, just like the casino cashier did, and issue coat checks instead of chips. Now, will you say I'm saying coat check girls are the key to utopia? Or the coat check tokens?
@kingofthepaupers You cannot use coat check tokens to buy other peoples collateral or anything so your analogy is useless. The model you are touting simply does not work outside of a very controlled environment, which does not and cannot exist on a global level. Things are worth more or less elsewhere and profits are made, and you will always run into an economy that does not adhere to it and will come out on top.
The resources required to control a currency in this manner is dependent on an outside system or source, if that system collapses so do your coat checks, casinos, and magical unicorn dollars.
@Prinnycakes There is still inflation in the casinos because the money that backs it is subject to inflation, it is just covered up by altering prices ELSEWHERE because altering the machines would be too costly.
Jct: It's incredible how many people think that what happens out on the casino floor matters to the cashier in the cage. He's got a $100US bill backing his $100US chip and when the guy comes back and cashes out, he complains that his $100US bill buys him less so the chips inflated? Har!
you are exactly right by the way. Isn't Money supposed to be a reciept for having gold in the bank? It isn't practical for people to be carrying around gold bars.
@TheProjektcc Isn't Money supposed to be a reciept for having gold in the bank?
Jct: The gold bullion merchants loved that "supposed do be" but money actually is a receipt that buys you time and Timedollars are the best kind of money.
When I watch this video, I cannot help but think of you as the halfwit spawn of a bygone era of drug-induced illusion. I won't even delve into the psychological implications of your attempt to take cheap shots at a man who would utterly destroy you in an open debate. However, I feel that everyone of mental means has an obligation to point out an obvious flaw in your critique. It is extremely well documented that banks DO lend out deposited funds. Please do more research this topic.
Jct: That's why I've got a degree in real science and you're an ignorant bad-education victim. What can I say but Flash the cash, bye bye trash. Didn't even read the end of your spew, didn't anything from someone who can't put his money where his mouth is can be of much interest. Join the list of loud-mouths who have backed down here. Har har har. Bye bye trash.
But I simply must implore that you examine any number of reputable resources that outlines the process whereby banks lend the money of depositors. You might even deduce as much if you currently have an account at a large bank that receives a small portion of the interest that the bank makes off of your deposited funds. Look, I know that the illuminati are trying to read you brain waves and all, but if you could just remove the tin foil from your head for one second and read something...
@GoldmarkIndustries examine any number of reputable resources that outlines the process
Jct: Graham Towers said: The banks, of course, do not lend out their depositors' funds.
So if you can't produce one such resource, I'll just assume you can't and say put your money where your mouth is and make it worth my rebutting "such resources" you can provide. Har har har. Citing any number of resources but not being abot quote one.
@kingofthepaupers Har, indeed! It is such a common practice that there is a term for it: "Fractional-reserve banking" is the banking practice in which only a fraction of a bank's deposits are kept as reserves (cash, etc.) available for withdrawal. But this would only be found on investopedia, investorwords, bankintroductions, wikipedia, economywatch, and a few thousand others. And I do congratulate you for also having a degree, U. of Phoenix has really opened up doors for men of your caliber!
@GoldmarkIndustries This is a sad display.. would you beat a three-legged dog? Would you kick a baby? You strike me as the type of person who enjoys poking fun at the handicapped! This person, I mean c'mon, CLEARLY has some sort of disability and you are exploiting his attempt to utilize a creative outlet for his frustration for your own amusement. He's talking about the illuminati! He's wearing a helmet for Christ's sake! Let him be. And I mean no offense to the creator of this, good for you!
@GoldmarkIndustries "Fractional-reserve banking" is the banking practice in which only a fraction of a bank's deposits are kept as reserves (cash, etc.) available for withdrawal.
Jct: 10% is kept on reserve for the FED, 90% is kept on reserve to cover withdrawals, and 90% new money is created. I bet you thought they lent out the 90% like a piggy bank, didn't you. They don't. They lend out 90% of the total deposit and none of the depositor's funds are moved out of his account but the FED's 10%
@kingofthepaupers You ARE a daft old arse aren't you? Nobody, not even the Prof., is saying that they literally reach into YOUR bank account, pull out the hard cash, and give it to somebody else. He is completely in the right in the form of "FRB". It is the process whereby a bank need only have a small fraction of the money in their care at hand. If what you're saying is true, then every single proprietor of a bank could go there at the same time, ask for their money, and the bank could oblige.
@GoldmarkIndustries "bank need only have a small fraction of the money in their care at hand."
Jct: Since the banks lend out new credits, not the actual deposit, where do you think the 90% from the depositor's account ends up? Have you even seen the blueprint I bet no one can prove wrong. Go see bankmath and see the blueprint of the pipes for money flows. Anyway, where do you think the old $90 from the depositor's account went because it didn't go to the borrower of $90 who got new.
@kingofthepaupers where then did it go? The bank does not have it. Did they burn it? The thing that is hanging you up is that it IS nobody's money in particular. If you were to take $90 cash money to the bank for deposit they wouldn't stick it in a drawer especially for you. It would enter into the pool of cash at the bank's disposal and your account would be "credited" an amount of $90, INVISIBLE MONEY! This is the future. Paper is as dead as the gold coin. The future is electronic credit.
@GoldmarkIndustries Electronic credit is just the expansion of the THE BANKING PONSIE schemes in which FRACTIONAL BANKING, is still making money out nothing than a peice of paper and signatures. THERE IS NO FUTURE FOR ANY MONETARY SYSTEM, as there has never been and never will be enough money created to supply all human needs long term. POOR MADE SHORT LIFE GOODS for money still owed after the goods have become unuseable etc. DEBTS OUTLIVE the SHELF LIFE OF MOST TRANSACTIONS. MONEY IS A FAILURE
@kingofthepaupers that is what happened during the Great Depression, when more money was hard and not virtual. The bank literally loaned a fraction of the deposited funds in their control. The depression hit, people rushed the banks for their cash, banks could not collect on the credit due to the depression, and the rest is history (bankers jumping out of windows).
Jct: Any time you'd like to put your money where your mouth is about any point where I said he's wrong, feel free to show some balls. Har har har har har.
@GoldmarkIndustries It is extremely well documented that banks DO lend out deposited funds.
Jct: I've got $100 that says you can't find any Economics book that teaches the money supply does not go up when they make a loan and even though you may be tricked into thinking they loaned out the depositor's money and the money supply did not go up, it does and you can't find any text book that will say it does not. New loans make the money supply rise because they are new money, not old deposits.
oh and guess what money isn't poker chips. You're thinking about the relationship that foreign banks used to have with our nation where they could redeem our fiat currency for gold at a current exchange rate. In one sense you are right about money being created by banks through fractional reserve banking but neither banks or states can create money in that they can't print (IOUs) as payment for their debts. Why? b/c Americans still trust in dollars not bank (IOU's). You get almost nothing right.
@jwilkers1 All you have to do is say "I bet" before you let the rest of the hot air out of your big mouth. If there are so many mistakes, you should have an easy time. Then again, look at how many others said I was wrong but then backed down from putting their money where their mouth is: Flash the cash, bye bye trash." Bye bye.
@kingofthepaupers Even the people who run the Fed and probably know a bit more than either of us disagree with you. The fed issues currency normally backed by treasury bonds which is why it was a big deal late last year when they announced creation of 600 Billion new dollars with no backing. This is where the poker chip analogy falls apart this would be like raiding the stash of chips and not paying anything then trying to cash them out. Our currency depends on our belief it is worth something.
@jwilkers1 This is where the poker chip analogy falls apart
Jct: I didn't see an "I bet $XXX" in there. Har har har. Flash the cash, bye bye trash. Put up or shut up because I don't listen to guys who can't put their money where their mouth is.
this guy couldn't be much more wrong about almost everything he says and yes i'm talking about the guy with the hard hat. this dumb ass is completely uninformed and entirely wrong about everything he breaks in to say. It is rare that you find someone that is this confident in such a ludicrous set of assumptions and assertions based on nothing more than his word. I mean the thought that all money is created by banks. Read some history you moron what about ancient societies w/out poker chip banks
@jwilkers1 Jct: The confidence comes from being able to say to guys like you "put your money where your mouth is and bet you found 1 flaw in my bankmath and then watch you turn tail and run away. Flash the cash, bye bye trash. All the money in your wallet was created by a bank no matter how many beads and pretty rocks they used in ancient history. Now go back down like all the others, cluck, cluck. A battle of wits with an unarmed man.
@kingofthepaupers I should have said all the credits in your bank account because the coins and notes are provided by the Treasury in exchange for the new money created by the banks. But go ahead and point out one spot where Niall Ferguson was right when I said he was wrong.
Mr self proclaimed "king of the paupers", you are lacking in your ability to use your brain. Mr Ferguson is the one man you should be listening to. Stop trying to make the general public even dumber than they already are, please.
Do you honestly believe that banks do not lend out their depositors money to its borrowers? I would say that doing so is the very definition of banking. What some Canadian said in 1939 is irrelevant because it's completely wrong. In order to make a sufficient return on its own capital, banks have to use leverage. Leverage in a ordinary retail bank is primarily the money it "borrows" from its depositors. If this was not the case, things like "bank runs" would not pose a threat to any bank.
Ferguson's definition of money is perfectly fine. He just speaks of it in slightly broader terms than you do. Is an "IOU" not a relationship? Also, what he means by "invisible money" is obviously money that is not printed as cash. I would agree therefore that it is invisible. Sure you can see numbers on a screen, but since there are so many numbers on screens that obviously aren't money the difference for the average person is that it TRUSTS that the numbers supplied by "the bank" is money.
He's the comedian making people laugh at you when you back down from from putting your money where your mouth is when I bet you $100 to explain how leveraging poker chips causes problems.
@FooFooTheClown It's the only copyright meterial I've ever posted under fair comment. Youtube orignally took it down but upon appeal, let it back up. That was impressive.
@Lynndavis411 My Book Report on David Astle's Babylonian Woe (on home page) details fractional reserve bankstering back to antiquity. For as long as there has been money, there has been loansharking. The Illuminati are just a recent incarnation of one arm of the loansharking octopus.
geez if you cut a video in make sure the audio is on the same level. i wont watch a video where i have to turn up the volume to max just to suddenly get my ears blown out when the audio gets loud again.
@RabbiViper Good for him. And he didn't steal anyone's money, he just borrowed new chips into existence and then took off. The money he got came from no one's account, it was new money.
@habibullah17 Okay, you've got your unbacked-up opinion on the record. Now, if you'd like to put your money where your mouth is, I'll bet $100 you can't find one thing the guy with Colbert says right that I say is wrong.
@habibullah17 You know, that's one of the dead giveaways of a provocateur. Telling someone to calm down in any heated debate is intended to inflame even more. Always does. When I hear that one pulled, I think "wicked, looking for strife." If you ever make a point other than the nasty pin pricks, then it'll get heated.
Balance your volume levels you assclown. I have to keep raising my volume all the way up to here the Colbert clip then lower it when you come BOOMING on like a late night infomercial. God man, learn how to edit your video clips.
John, I love this video and would like to link to it, but the audio is grossly uneven. Your parts are way too loud while Colbert's parts are far too soft.
I'll look into time-based money, but right now I like simply outlawing interest and structuring loans to collateral life. We need to stop cheating each other.
@olrailbird I've found trying to explain abolishing interest very difficult for the hypnotized masses to grasp (forever seeing without seeing) but I've found trying to explain Bus Bucks far less difficult for them to get. It's not only the bus rides that back up the chips, it's the work received that actually is backing up the chips. Linking the labor note to a bus ticket, a different initial value, simply gives people more confidence than in just a labor note. Bus Bucks are double backed.
@kingofthepaupers I think I grasp the concept behind Bus Bucks and it is very interesting. I will explore it further. Maybe I can "derive" another idea from it!
I wonder if God really approved the work Goldman Sachs is doing? Was this
just a rubber stamp? Does God really rubber stamp stuff? Looks like it.
"Let's see, two airplanes -- three buildings. Check."
Nah. God doesn't make mistakes, right? nano-thermite
John, I love this video and would like to link to it, but the audio is grossly uneven. Your parts are way too loud while Colbert's parts are far too soft.
I'll look into time-based money, but right now I like simply outlawing interest and structuring loans to collateral life. We need to stop cheating each other.
What about unsecured debt, like credit cards? What about when a bank gives you credit out of proportion to your real income? Personally I've spent about 10 grand of money I didn't have?
Jct: Are you saying you shouldn't have been trusted to return the 1000 Hours owed? All debt is secured by time. There's no such thing as "credit out of proportion" as long as there's no interest. Say you buy a $200,000 house that depreciates 1% per year for upkeep. As long as you can cover the depreciation, there's no loss. If you can't, it won't cost the group much. Do you think you should be paying interest to use your own IOUs?
Jct: Aren't these "back-shoot then run away" chickens fun? Especially when they don't know that the short for for "you are" isn't "your" it's "you're." Not an educated man's opinion.
Jct: Wanna bet $100 Canadian on the professor that banks lend out their depositors' funds like a piggy bank? I bet $100 banks lend out new chips like a casino bank. Put up and keep laughing or shut up and quit laughing. Har har har.
Niall Ferguson is in favour of the Fed. Here are some quotes from other people.
"We have, in this country, one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board. This evil institution has impoverished the people of the United States and has practically bankrupted our government. It has done this through the corrupt practices of the moneyed vultures who control it." -- Congressman Louis T. McFadden
"A great industrial nation is controlled by it's system of credit. Our system of credit is concentrated in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the world-- no longer a government of free opinion, no longer a government by conviction and vote of the majority, but a government by the opinion and duress of small groups of dominant men." -- President Woodrow Wilson
At 5:36 you say Money is created by banks. That isn't true. It's only created by the central bank.
I mean honestly he teaches at Harvard and Oxford yet you think you have outsmarted him on the stupidest issues. Like the definition of money....wow big win there.
Jct: Wanna bet? This "plumber" bets my blueprint of the banking system at the bankmath.htm page shows the proper flows from the tap to the drain with pipes.
Take a look at Endogenous money creation. The idea that money is only created by central banks fits neatly with mainstream neoclassical economics teachings....but its only theory and not necessarily supported by emperical evidence.
There is plenty of evidence if you look for it, that increases in broad money definitions lead narrow M1 definitions.....that is the credit money dog wags the fiat money tail!!
Ohhh people. To assume that someone is right because he is a Harvard Professor. Sad. He was on Bill Maher and when asked about the Federal Reserve was completely wrong. Institutions like Harvard teach the fucked up crooked monetary policies that we follow. Since it began the Federal Reserve has devalued the American dollar by 95%. Look into the Rothschilds in Europe. When you have privately owned central banks printing your currency, those bankers own you.
"From now on, depressions will be scientifically created." -- Congressman Charles A. Lindbergh Sr. , 1913
"The financial system has been turned over to the Federal Reserve Board. That Board administers the finance system by authority of a purely profiteering group. The system is Private, conducted for the sole purpose of obtaining the greatest possible profits from the use of other people's money" -- Charles A. Lindbergh Sr., 1923
Jct: If you think whatever it is you just said explains why Niall wins this argument, I'll Paypal you $10 if you can tell us what the argument is and how your statement proves it.
What argument does your statement prove? It's worth $10 to me to find out if I've been wrong all these years.
Trust/Relationship is the AXIOM of money. An axiom is a proposition that defeats its opponents by the fact that they have to accept it and use it in the process of any attempt to deny it. By saying that physical money is a receipt, etc. you're already alluding to a relationship of trust between the borrower and a lender. You can't escape it. He uses this axiom to define money, because IT DOES. Because THE CONCEPT is the only truth there is to "the receipt" - that's why Niall wins this argument.
I like how you are trying to explain some flaws in Niall's interview... because indeed banks do not operate as simply as a tap and reservoir, that money indeed is not just 'trust.' But Niall is on Colbert report! What do you expect him to do man, give the audience a Lecture on everything that the bank does with you deposits, and explain in depth what money is and means? The audience is probably thankful that he wasnt as detailed as you wanted him to be.
6. When you say money is not invisible, because you can see it represented as a charge or credit, you are stating the same thing as Niall except he believes that this makes it "invisible." As money is abstract, neither of you are correct or incorrect since we can't see abstract ideas. You can call it visible and Niall can call it invisible doesn't make a difference.
3. Its not an IOU, I can write a note saying IOU but no1 is going to trade me that.
4. Its not a poker chip. If the casino closes, your chip is worthless. If all the banks in the world closes, bank notes can still be used because people will still use it to facilitate trade.
5. You can't say its not "trust" though, thats entirely true even though it may not be the entire truth.
1. Lets say everything you said about deposits is true, that they are not turned into loan products. Banks still buy bondsand securities is in fact lending, or faciliting the lending process by increasing the liquidity.
2. Microfinance is lent without collateral. I can get a personal loan at my bank for no collateral. I can get even higher with a better credit rating.
Jct: 1. My bank plumbing shows that only loans are connected to the tap of new money. Purchases by banks are not and do not create new credits.
2. Others get loans that are over-collateralized so banks can give under-collateralized loans to their friends. Still, it is rare to have access to undercollateralized loans liike you do unless they're credit cards.
I'm afraid I stopped watching when you wanted to quibble about the differences between your definitions of 'money'. You are both defining it in basically the same way, but for some reason you think the way you define it is so much better or more important than his that you felt the need to differentiate.
I guess I'm the one who'll be sorry if later in the vid you made a comment that was actually worth listening to .... ^^
Niall is a harvard professor, he is an acedemic and a very good one at that, you are a straight out idiot and don't understand a thing about the operations of banking.Wearing that ridiculus hat talking utter crap. Maybe you should read his book, you are very ill informed, or have some sort or mental retardation?
Jct: Any time you'd like to put your money where your mouth is... Then again, though a few loudmouths have shouted Niall Ferguson's merits, no one has bet against anywhere I said he was wrong and I am right. Here's your chance to put up or shut up. Of course, when I flash the cash, it's bye bye trash.
Jct: Okay. Bet. The governor of the Bank of Canada graham Towers said "Of course, the banks do not lend out their depositors' funds." Every Economics textbook teaches how the reserve ratio and the multiplier effect provide loans of new money.
Go ahead and find a statement that banks lend out their depositors' funds in some article about the creation of money.
So if the banks don't create money when they make loans, where does new money come from?
Jct: Sure some money is based on trust, credit card debt say, but most money is based on collateral. You want to bet on something that's both?
He says banks lend out their depositors' funds, one of the big Ecoconomics lies. I say they lend out new credits. There is one clear disagreement. Let`s bet a tenner on that.
No they are based on trust because the bank requires your collateral because it cannot trust you without it. Microfinance for example is based wholely upon trust.
Ok: you say money isn't based on trust - it is if i want money from a bank i've got to secure it with collatoral, why? Because a bank doesn't automatically trust me, but i can be lent money by my boyfriend any time i like, why? He trusts that i'll pay it back! The only reason for collatoral being involved is that banks need security in order to trust you.
Your poker chip is only worth $500 because people who play you trust that you'll give them that $500 if you lose!
Jct: Now that you've precisely defined the issue as I've asked, how are you going to phrase the bet? Har har har har. Just can't into specifics, can you? Not even one point you can state.
Jct: I ask "where's my mistake" and your only answer is an imprecise "everywhere?" You can't even state one instance where I"m wrongwith any precision for the bet. Sounds like you're chicken.
Jct: That's why I flash the cash, so people who say they trust Harvard professors of economics over a real engineer get the chance to back down to my unique view on the banking system, from the top down of the banking sytsems engineer, not the bottom up of economists.
So where is he right and I am wrong?
Just one issue you'd like to bet on. Not big enough to be worth stiffing. For pride. To put your $10 bill on my wall. Or yours, Ha!
He's right here throughout! E.g money is based on trust, banks lend out people's money (which they do btw) he's basically spot on, don't like his political opinions but he's got it all right here.
No one can be certain that the collaterol will be worth the amount of money that is pledge against it at the time it is sold. In fact it may become worthless by the time it needs to be sold, as happened with sub-prime mortgages.
A receipt (or specie-backed note) is always at the agreed value because the sale has already happened. Ferguson is right, modern money is unbacked.
Alright. You concede at least that the money it takes to buy the housing can change in value relative to the money lent on it originally, and more importantly that it can change in value relative to the savings the bank steals from to provide the mortgage in the first place.
Jct: Yes, I concede that this is what I've been saying for the past 30 years, that the money it takes to buy the housing can change in value, not the housing.
re: invisible money. is it not true that banks don't take a deposit for 1$ and then in turn lend that 1$ out. But they are, in fact, permitted to lend, say, 1.15$ for every dollar deposited. Does that not make money invisible?
very interesting colbert report episode except for the ranting maniac in between
maximum411 3 months ago
@maximum411 except for the ranting maniac in between
Jct : As if this needed another uneducated low-tech opinion. Would you like to put your money where your mouth is and make a bet that any one of the "ranting maniac's" opinions is wrong? If not, then you're a loud-mouth coward, aren't you? Have you got the balls, maximum411, to put up or shut up? Har har har. Another bites the dust.
kingofthepaupers 3 months ago
@kingofthepaupers
I'm not uneducated. Niall Ferguson is my professor, in fact.
maximum411 2 months ago
@maximum411 I'm not uneducated. Niall Ferguson is my professor, in fact.
Jct: That explains why you weren't able to actually voice any actual error you allege I made and were limited to your cheap name-calling shot.
kingofthepaupers 2 months ago
@kingofthepaupers
Okay, since I don't have a lot of time, let me point out one of your blaring errors. You say that banks don't lend out the funds people deposit in them. Actually, that's exactly what banks do and the whole reason they exist. The reason banks can afford to pay you interest, and the reason they want to, is because they use the money you deposit to lend to people. This is why not everyone can withdraw their money from the bank at once- it's not there. Look up "bank run."
maximum411 2 months ago
@maximum411 You say that banks don't lend out the funds people deposit in them. Actually, that's exactly what banks do
Jct: I bet you $20 banks do not lend out their depositors' funds! Then we'll go to the Economics textbooks.
kingofthepaupers 2 months ago
@kingofthepaupers
Here, do me a favor. Do a Google search for "how banks work." Click on any of the results, or the one that seems most reliable to you, and read the first few paragraphs (or more, if you so desire). Then come back to me.
maximum411 2 months ago
@maximum411 Here, do me a favor. Do a Google search
Jct: Sorry, you haven't said "bet"yet. I'm not searching for what you can't explain. Besides, I have no doubt you found lots of places repeating "banks lend deposits" but that doesn't make it true. It's the second Big Lie of Economics.
kingofthepaupers 2 months ago
@kingofthepaupers
Alright, I "bet" you $20 that banks lend out their depositors' funds. Now, please, go do some research. Try to prove me wrong, and discover in the process that you are wrong. I challenge you to find me one reliable source that says that banks do not lend out their depositors' funds.
maximum411 2 months ago
@maximum411 I "bet" you $20 that banks lend out their depositors' funds. Now, please, go do some research.
Jct: I did. "how banks work" gets a whole bunch of sites explaining it wrong to kids. Now your turn: you search for "How banks create money" for the 600,000 hits you'll get. Check out the one at the Federal Reserve explaining it for you. You're sure an expert on where it doesn't come from, now tell me where the bulk of money comes from?
kingofthepaupers 2 months ago
@maximum411 I "bet" you $20 that banks lend out their depositors' funds. Now, please, go do some research.
Jct: I did. Searching "how banks work" brings up a whole bunch of sites explaining it to kids with nothing on the multiplier reserve ratio anywhere. Now you go and search for "how banks create money" for the 600,000 hits that might explain it to you. Check out the one at the Federal Reserve.Where do you think new money comes from? It's why it's the 2nd Big Lie of Economics? You were fooled
kingofthepaupers 2 months ago
@kingofthepaupers
You are a moron. There is no such thing as a "multiplier reserve ratio." There is a money multiplier, and a cash reserve ratio, which are the inverses of each other and most certainly not the same thing. The cash reserve ratio is the fraction of the money a commercial bank is lending out that the bank has to actually have (hold in reserve), and the money multiplier, as the inverse of that, is how much money it can "create" relative to its actual funds. Please read up.
maximum411 2 months ago
@kingofthepaupers
The Fed creates money by setting the reserve ratio, and thus controlling how much money regular banks can create (by lending out their depositors' funds, and by lending out even more than their depositors' funds). Thus the banks are essentially always in the red, and if too many people were to try to claim their deposits, the bank wouldn't be able to allow those people to withdraw them, because many of them are part of the amount loaned out (the reserve).
maximum411 2 months ago
@maximum411 thus controlling how much money regular banks can create (by lending out their depositors' funds, and by lending out even more than their depositors' funds).
Jct: Gee, I guess if you lend out more than your deposits, you're creating money. But you bet that banks don't create new money, you said they lend out deposits. Now you've contradicted yourself and admit that banks create money. I guess you've proven I was right and I win the bet.
kingofthepaupers 2 months ago
@kingofthepaupers
No, I never bet that banks don't create money. Take a look at my past comments. I bet that banks loan out their depositors' funds, which they do. Therefore, I won the bet. Their depositors' funds constitute a fraction of what they loan out, and this fraction is set by the reserve ratio. The deposits constitute part of the total amount they loan out.
maximum411 2 months ago
@maximum411 Their depositors' funds constitute a fraction of what they loan out,
Jct: And I bet that depositors' funds constitute zero of what they loan out, it all comes from the tap. And reserve ratio fraction is not they loan out, it's the fraction they keep in that permits the loaning out of the other 90% of new money out. You got that wrong too. You know enough to pick on "multiplier reserve ratio" rather than "reserve ratio multiplier" and still bet some deposits go out. I bet none!
kingofthepaupers 2 months ago
@kingofthepaupers
No, you still have it wrong. Say the reserve ratio is 300% (unrealistic in most countries). Then the bank must have 3 times as much money in reserve as it loans out, and can loan out 1/4 of the money it has in deposits. Say the ratio is 100%. Then the bank is loaning out all of its money in deposits. Say the ratio is 10%. Then the bank is loaning out 10 times the amount of money it has in deposits. The amount of money it has in deposits determines how much extra it can loan.
maximum411 2 months ago
maximum411: No, you still have it wrong.
Jct: No, you have it wrong.
M: Say the reserve ratio is 300% (unrealistic in most countries).
Jct : Not just unrealistic, impossible.
M: and can loan out 1/4 of the money it has in deposits.
Jct: That's not how the reserve ratio works. 10% RR lets them create and lend out new 90%, 20% RR creates 80% new loans, 50% RR creates 50%. So a reserve ratio of 75% would allow them to create and lend out a new 25% of new money. But you can't pass 100%!
kingofthepaupers 2 months ago
DQ: Say the ratio is 100%. Then the bank is loaning out all of its money in deposits.
Jct: No you have that backward. If they have 100 in reserve, then they can't lend any new chips out at all.
DQ: Say the ratio is 10%. Then the bank is loaning out 10 times the amount of money it has in deposits.
Jct: The Voorhis mistake. A deposit of $100 does not permit the next loan to be $1,000. It permits the next loan to be $90, and as it gets deposited back, it multiplies up to the $1,000, not 10x loan
kingofthepaupers 2 months ago
DQ: The amount of money it has in deposits determines how much extra it can loan.
Jct: What's this extra it can loan over deposits on hand if not new money? So you admit they lend out new money but insist they also lend out old savings too. So you admit I'm right but I won't admit you're right to say they also lend out old deposits. That's our $20 bet. So when do the loans come from the tap pipe and when do they come from the reservoir of old savings pipe? Find bankmath for the plumbing flows.
kingofthepaupers 2 months ago
@kingofthepaupers
Actually, a reserve ratio above 100%, although rare, is very much possible. Less than 100% means that the amount being lent out is always greater than the amount kept in deposits. However, if the bank loans out less than the total amount it has in deposits, then the reserve ratio will be greater than 100%.
maximum411 2 months ago
@maximum411 a reserve ratio above 100%, although rare, is very much possible.
Jct: I'll bet you another $20 you can't have a reserve ratio higher than 100%.
kingofthepaupers 2 months ago
@kingofthepaupers
I was just doing a paper on economic history and it reminded me of this.
See Milton Friedman: "A Monetary History of the United States, 1867-1960"
in reference to the 1930s: "The arithmetic effect of gold imports is, therefore, to raise the numerator and denominator of the deposit-reserve ratio by the same absolute amount. Since the ratio is greater than one, the numerator is raised by relatively less than the denominator and hence the ratio tends to decline." (page 535)
maximum411 2 months ago
@maximum411 "The arithmetic effect of gold imports is, therefore, to raise the numerator and denominator of the deposit-reserve ratio by the same absolute amount.
Jct: Sure, now include some golden poker chips too as you rephrase it to fit a simple physical model.
kingofthepaupers 2 months ago
@kingofthepaupers
If the ratio is greater than 1 and the numerator (reserves) is greater than the denominator (total deposits), then the reserve ratio is greater than 100%.
Q.E.D.
maximum411 2 months ago
@maximum411 If the ratio is greater than 1 and the numerator (reserves) is greater than the denominator (total deposits), then the reserve ratio is greater than 100%.
Jct: Now try to say that again with poker chips instead of money.
kingofthepaupers 2 months ago
"If the ratio is greater than 1 and the numerator (reserves) is greater than the denominator (total deposits), then the reserve ratio is greater than 100%."
Jct: We're still waiting to have that translated into English using poker chips as a model. Not much luck, hunh?
Jct: Now try to say that again with poker chips instead of money.
kingofthepaupers 2 months ago
@kingofthepaupers
The point is, the bank doesn't "have" the money if it's all being loaned out. If you buy a $50 meal with your debit card even though there's only $5 on it, you don't still have $5. You then have -$45. For the same reason, if a bank has $50 million in deposits and loans out $500 million, it doesn't still have $50 million. It then has -$450 million.
maximum411 2 months ago
@maximum411 I "bet" you $20 that banks lend out their depositors' funds. Now, please, go do some research.
Jct: I did. "how banks work" brings up a whole bunch of sites explaining piggy banks to kids with no multiplier reserve ratio anywhere. Now you go and search for "how banks create money" for the 600,000 hits that might explain it to you. Check out the one at the Federal Reserve.Where do you think new money comes from? It's why it's the 2nd Big Lie of Economics? The Big Lie fooled you.
kingofthepaupers 2 months ago
It isn't a receipt - its a medium of exchange end of... and doesn't need anything like gold to back it up. In POW camps, prisoners used to use cigarettes as a currency and other civilizations have used rocks etc. All that matters is that everybody cannot just make their own money but is hard to replicate, convenient to carry around and society accepts it as the medium of exchange.
qwert4327able 4 months ago
@qwert4327able All that matters is that everybody cannot just make their own money but is hard to replicate,
Jct: In a LETS, everyone issues their own time-based IOUs. As long as the ID is good, who is going to doubt someone else isn't going to work it off!
kingofthepaupers 4 months ago
Also, did you forget that when Quebec tried to separate they wanted to use our currency? Do you understand why? Creating a new currency basically puts your global purchasing power at ZERO. The very nature of any currency is to inflate and deflate based on how that economy operates, because some things, and some efforts are worth more or less. Even you know this because you decided to play poker for 50 an hour instead of work as an engineer for less. Even you hate zero sum currencies, lol.
Prinnycakes 5 months ago
"It works like a casino bank issuing new money" and then you go on to say that the chips aren't backed by trust they're backed by the exact 1:1 amount you gave. Which is it?
You seem to think Casinos are some kind of utopia that can be applied to all banking models. There is still inflation in the casinos because the money that backs it is subject to inflation, it is just covered up by altering prices ELSEWHERE because altering the machines would be too costly.
Prinnycakes 5 months ago
@Prinnycakes "It works like a casino bank issuing new money" and then you go on to say that the chips aren't backed by trust they're backed by the exact 1:1 amount you gave. Which is it?
Jct: Which is it? The one I said it was not, trust, or the one I said it was, the collateral left at the cage? Of course, I said it was backed by the collateral taken in by the cashier at the cage in exchange for the chips issued. What did you not understand?
kingofthepaupers 5 months ago
@kingofthepaupers The money you are exchanging for the chips IS affected by inflation. What did you not understand ? Just because you move it into another currency does not mean that it is not affected by the inflation of the backing currency. Government run casinos can eat the cost because of the profits involved in a casino.
Prinnycakes 5 months ago
@Prinnycakes You seem to think Casinos are some kind of utopia that can be applied to all banking models.
Jct: You have confused casinos with the bank. I didn't say casinos were the utopia, I said the poker chips were. So we'll use another non-casino model. We'll ask the coat check girl to accept all collateral, not just coats, just like the casino cashier did, and issue coat checks instead of chips. Now, will you say I'm saying coat check girls are the key to utopia? Or the coat check tokens?
kingofthepaupers 5 months ago
@kingofthepaupers You cannot use coat check tokens to buy other peoples collateral or anything so your analogy is useless. The model you are touting simply does not work outside of a very controlled environment, which does not and cannot exist on a global level. Things are worth more or less elsewhere and profits are made, and you will always run into an economy that does not adhere to it and will come out on top.
Prinnycakes 5 months ago
The resources required to control a currency in this manner is dependent on an outside system or source, if that system collapses so do your coat checks, casinos, and magical unicorn dollars.
Prinnycakes 5 months ago
@Prinnycakes There is still inflation in the casinos because the money that backs it is subject to inflation, it is just covered up by altering prices ELSEWHERE because altering the machines would be too costly.
Jct: It's incredible how many people think that what happens out on the casino floor matters to the cashier in the cage. He's got a $100US bill backing his $100US chip and when the guy comes back and cashes out, he complains that his $100US bill buys him less so the chips inflated? Har!
kingofthepaupers 5 months ago
Comment removed
Prinnycakes 5 months ago
@kingofthepaupers Holy shit, are you autistic? It absolutely does mean the chips are inflated.
Prinnycakes 5 months ago
Comment removed
Prinnycakes 5 months ago
Why do they have Nials teaching at Harvard when they could have this genius. Harvard's loss.
lusitanic777 6 months ago
weren't you on dragon's den?
you are exactly right by the way. Isn't Money supposed to be a reciept for having gold in the bank? It isn't practical for people to be carrying around gold bars.
TheProjektcc 9 months ago
@TheProjektcc Isn't Money supposed to be a reciept for having gold in the bank?
Jct: The gold bullion merchants loved that "supposed do be" but money actually is a receipt that buys you time and Timedollars are the best kind of money.
kingofthepaupers 9 months ago
When I watch this video, I cannot help but think of you as the halfwit spawn of a bygone era of drug-induced illusion. I won't even delve into the psychological implications of your attempt to take cheap shots at a man who would utterly destroy you in an open debate. However, I feel that everyone of mental means has an obligation to point out an obvious flaw in your critique. It is extremely well documented that banks DO lend out deposited funds. Please do more research this topic.
GoldmarkIndustries 11 months ago
@GoldmarkIndustries I cannot help but think of you as the halfwit
Jct: That's why I've got a degree in real science and you're an ignorant bad-education victim. What can I say but Flash the cash, bye bye trash. Didn't even read the end of your spew, didn't anything from someone who can't put his money where his mouth is can be of much interest. Join the list of loud-mouths who have backed down here. Har har har. Bye bye trash.
kingofthepaupers 11 months ago
But I simply must implore that you examine any number of reputable resources that outlines the process whereby banks lend the money of depositors. You might even deduce as much if you currently have an account at a large bank that receives a small portion of the interest that the bank makes off of your deposited funds. Look, I know that the illuminati are trying to read you brain waves and all, but if you could just remove the tin foil from your head for one second and read something...
GoldmarkIndustries 11 months ago
@GoldmarkIndustries examine any number of reputable resources that outlines the process
Jct: Graham Towers said: The banks, of course, do not lend out their depositors' funds.
So if you can't produce one such resource, I'll just assume you can't and say put your money where your mouth is and make it worth my rebutting "such resources" you can provide. Har har har. Citing any number of resources but not being abot quote one.
kingofthepaupers 11 months ago
@kingofthepaupers Har, indeed! It is such a common practice that there is a term for it: "Fractional-reserve banking" is the banking practice in which only a fraction of a bank's deposits are kept as reserves (cash, etc.) available for withdrawal. But this would only be found on investopedia, investorwords, bankintroductions, wikipedia, economywatch, and a few thousand others. And I do congratulate you for also having a degree, U. of Phoenix has really opened up doors for men of your caliber!
GoldmarkIndustries 11 months ago
@GoldmarkIndustries This is a sad display.. would you beat a three-legged dog? Would you kick a baby? You strike me as the type of person who enjoys poking fun at the handicapped! This person, I mean c'mon, CLEARLY has some sort of disability and you are exploiting his attempt to utilize a creative outlet for his frustration for your own amusement. He's talking about the illuminati! He's wearing a helmet for Christ's sake! Let him be. And I mean no offense to the creator of this, good for you!
Homeofthebrave76 11 months ago
@GoldmarkIndustries "Fractional-reserve banking" is the banking practice in which only a fraction of a bank's deposits are kept as reserves (cash, etc.) available for withdrawal.
Jct: 10% is kept on reserve for the FED, 90% is kept on reserve to cover withdrawals, and 90% new money is created. I bet you thought they lent out the 90% like a piggy bank, didn't you. They don't. They lend out 90% of the total deposit and none of the depositor's funds are moved out of his account but the FED's 10%
kingofthepaupers 11 months ago
@kingofthepaupers You ARE a daft old arse aren't you? Nobody, not even the Prof., is saying that they literally reach into YOUR bank account, pull out the hard cash, and give it to somebody else. He is completely in the right in the form of "FRB". It is the process whereby a bank need only have a small fraction of the money in their care at hand. If what you're saying is true, then every single proprietor of a bank could go there at the same time, ask for their money, and the bank could oblige.
GoldmarkIndustries 11 months ago
@GoldmarkIndustries "bank need only have a small fraction of the money in their care at hand."
Jct: Since the banks lend out new credits, not the actual deposit, where do you think the 90% from the depositor's account ends up? Have you even seen the blueprint I bet no one can prove wrong. Go see bankmath and see the blueprint of the pipes for money flows. Anyway, where do you think the old $90 from the depositor's account went because it didn't go to the borrower of $90 who got new.
kingofthepaupers 11 months ago
@kingofthepaupers where then did it go? The bank does not have it. Did they burn it? The thing that is hanging you up is that it IS nobody's money in particular. If you were to take $90 cash money to the bank for deposit they wouldn't stick it in a drawer especially for you. It would enter into the pool of cash at the bank's disposal and your account would be "credited" an amount of $90, INVISIBLE MONEY! This is the future. Paper is as dead as the gold coin. The future is electronic credit.
GoldmarkIndustries 11 months ago
@GoldmarkIndustries Electronic credit is just the expansion of the THE BANKING PONSIE schemes in which FRACTIONAL BANKING, is still making money out nothing than a peice of paper and signatures. THERE IS NO FUTURE FOR ANY MONETARY SYSTEM, as there has never been and never will be enough money created to supply all human needs long term. POOR MADE SHORT LIFE GOODS for money still owed after the goods have become unuseable etc. DEBTS OUTLIVE the SHELF LIFE OF MOST TRANSACTIONS. MONEY IS A FAILURE
nbm34 10 months ago
@kingofthepaupers Bank runs are still possible, so this is simply not true.
Prinnycakes 5 months ago
@kingofthepaupers that is what happened during the Great Depression, when more money was hard and not virtual. The bank literally loaned a fraction of the deposited funds in their control. The depression hit, people rushed the banks for their cash, banks could not collect on the credit due to the depression, and the rest is history (bankers jumping out of windows).
GoldmarkIndustries 11 months ago
@GoldmarkIndustries a man who would utterly destroy you in an open debate
Jct: Any time you'd like to put your money where your mouth is about any point where I said he's wrong, feel free to show some balls. Har har har har har.
kingofthepaupers 10 months ago
@GoldmarkIndustries It is extremely well documented that banks DO lend out deposited funds.
Jct: I've got $100 that says you can't find any Economics book that teaches the money supply does not go up when they make a loan and even though you may be tricked into thinking they loaned out the depositor's money and the money supply did not go up, it does and you can't find any text book that will say it does not. New loans make the money supply rise because they are new money, not old deposits.
kingofthepaupers 10 months ago
oh and guess what money isn't poker chips. You're thinking about the relationship that foreign banks used to have with our nation where they could redeem our fiat currency for gold at a current exchange rate. In one sense you are right about money being created by banks through fractional reserve banking but neither banks or states can create money in that they can't print (IOUs) as payment for their debts. Why? b/c Americans still trust in dollars not bank (IOU's). You get almost nothing right.
jwilkers1 11 months ago
@jwilkers1 All you have to do is say "I bet" before you let the rest of the hot air out of your big mouth. If there are so many mistakes, you should have an easy time. Then again, look at how many others said I was wrong but then backed down from putting their money where their mouth is: Flash the cash, bye bye trash." Bye bye.
kingofthepaupers 11 months ago
@kingofthepaupers Even the people who run the Fed and probably know a bit more than either of us disagree with you. The fed issues currency normally backed by treasury bonds which is why it was a big deal late last year when they announced creation of 600 Billion new dollars with no backing. This is where the poker chip analogy falls apart this would be like raiding the stash of chips and not paying anything then trying to cash them out. Our currency depends on our belief it is worth something.
jwilkers1 11 months ago
@jwilkers1 This is where the poker chip analogy falls apart
Jct: I didn't see an "I bet $XXX" in there. Har har har. Flash the cash, bye bye trash. Put up or shut up because I don't listen to guys who can't put their money where their mouth is.
kingofthepaupers 11 months ago
this guy couldn't be much more wrong about almost everything he says and yes i'm talking about the guy with the hard hat. this dumb ass is completely uninformed and entirely wrong about everything he breaks in to say. It is rare that you find someone that is this confident in such a ludicrous set of assumptions and assertions based on nothing more than his word. I mean the thought that all money is created by banks. Read some history you moron what about ancient societies w/out poker chip banks
jwilkers1 11 months ago
@jwilkers1 Jct: The confidence comes from being able to say to guys like you "put your money where your mouth is and bet you found 1 flaw in my bankmath and then watch you turn tail and run away. Flash the cash, bye bye trash. All the money in your wallet was created by a bank no matter how many beads and pretty rocks they used in ancient history. Now go back down like all the others, cluck, cluck. A battle of wits with an unarmed man.
kingofthepaupers 11 months ago
@kingofthepaupers I should have said all the credits in your bank account because the coins and notes are provided by the Treasury in exchange for the new money created by the banks. But go ahead and point out one spot where Niall Ferguson was right when I said he was wrong.
kingofthepaupers 11 months ago
Put your money where your mouth is. You can say I"m wrong
but you can't say where. Har har har har. Not impressed by
your bald no-back-up insults.
kingofthepaupers 1 year ago
For real man. Be part of the solution, not the problem.
teddude75 1 year ago
Mr self proclaimed "king of the paupers", you are lacking in your ability to use your brain. Mr Ferguson is the one man you should be listening to. Stop trying to make the general public even dumber than they already are, please.
teddude75 1 year ago
Do you honestly believe that banks do not lend out their depositors money to its borrowers? I would say that doing so is the very definition of banking. What some Canadian said in 1939 is irrelevant because it's completely wrong. In order to make a sufficient return on its own capital, banks have to use leverage. Leverage in a ordinary retail bank is primarily the money it "borrows" from its depositors. If this was not the case, things like "bank runs" would not pose a threat to any bank.
hausse37 1 year ago
@hausse37
Jct: I bet you $100 to $10 you can find an explanation of
how bank loans are from the tap and not the reservoir at the Federal Reserve site. For the blueprint of flows, see my youtube
video "how banks create money" which I cannot attach since a
youtube malfunction that no longer permits any but the last 100
to be attached and it was an earlier one. Do you honestly believe
banks work like piggy banks lending out olds savings and not
upping the money supply with new loans?
kingofthepaupers 1 year ago
Ferguson's definition of money is perfectly fine. He just speaks of it in slightly broader terms than you do. Is an "IOU" not a relationship? Also, what he means by "invisible money" is obviously money that is not printed as cash. I would agree therefore that it is invisible. Sure you can see numbers on a screen, but since there are so many numbers on screens that obviously aren't money the difference for the average person is that it TRUSTS that the numbers supplied by "the bank" is money.
hausse37 1 year ago
@hausse37 I didn't say it wasn't fine, of course a token of IOU is a token of
a relationship. I meant it wasn't as great as a "receipt for collateral."
Which gives you the greater understanding, the receipt for collateral
relationship or just relationship?
kingofthepaupers 1 year ago
He's the comedian making people laugh at you when you back down from from putting your money where your mouth is when I bet you $100 to explain how leveraging poker chips causes problems.
kingofthepaupers 1 year ago
who is this comedian (idiot) and how does he explain banks being over leveraged?
Avidcomp 1 year ago
You've got to work on equalizing your audio for future projects.
FooFooTheClown 1 year ago
@FooFooTheClown It's the only copyright meterial I've ever posted under fair comment. Youtube orignally took it down but upon appeal, let it back up. That was impressive.
kingofthepaupers 1 year ago
I can't watch it. TOOO much volume difference!
McGanhanSkjellyfetti 1 year ago
@McGanhanSkjellyfetti Too bad you'll miss all his errors.
kingofthepaupers 1 year ago
WOW see how fast he changed the subject when he mentioned the "ILLUMINATI" ?? hmmmm
Lynndavis411 1 year ago
@Lynndavis411 My Book Report on David Astle's Babylonian Woe (on home page) details fractional reserve bankstering back to antiquity. For as long as there has been money, there has been loansharking. The Illuminati are just a recent incarnation of one arm of the loansharking octopus.
kingofthepaupers 1 year ago
geez if you cut a video in make sure the audio is on the same level. i wont watch a video where i have to turn up the volume to max just to suddenly get my ears blown out when the audio gets loud again.
Vadios83 1 year ago
@Vadios83 I know, I'm new at making videos. You'll have to twirl the volume knob.
kingofthepaupers 1 year ago
Get as many Credit cards as you can. make a few small purchases, over a year ask for credit limit to be increased to the max.
Then in one fell swoop max ALL of them out for CASH and even the airline ticket to escape the Useless States.
Nothing the banks can do about it. They are fucked. I know a guy who did this and is living quite nicely in Brasil.
RabbiViper 1 year ago
@RabbiViper Good for him. And he didn't steal anyone's money, he just borrowed new chips into existence and then took off. The money he got came from no one's account, it was new money.
kingofthepaupers 1 year ago
this guy is stupid, the guy with colbert is right. also fix ur volume wtf
habibullah17 1 year ago
@habibullah17 Okay, you've got your unbacked-up opinion on the record. Now, if you'd like to put your money where your mouth is, I'll bet $100 you can't find one thing the guy with Colbert says right that I say is wrong.
kingofthepaupers 1 year ago
@kingofthepaupers wow calm down there
habibullah17 1 year ago
@habibullah17 You know, that's one of the dead giveaways of a provocateur. Telling someone to calm down in any heated debate is intended to inflame even more. Always does. When I hear that one pulled, I think "wicked, looking for strife." If you ever make a point other than the nasty pin pricks, then it'll get heated.
kingofthepaupers 1 year ago
Balance your volume levels you assclown. I have to keep raising my volume all the way up to here the Colbert clip then lower it when you come BOOMING on like a late night infomercial. God man, learn how to edit your video clips.
oahnmacleod 1 year ago
@oahnmacleod Sorry about twirling the volume, I'm a video newbie without the time to do it better.
kingofthepaupers 1 year ago
John, I love this video and would like to link to it, but the audio is grossly uneven. Your parts are way too loud while Colbert's parts are far too soft.
I'll look into time-based money, but right now I like simply outlawing interest and structuring loans to collateral life. We need to stop cheating each other.
Thanks for doing all you do.
olrailbird 1 year ago
@olrailbird I've found trying to explain abolishing interest very difficult for the hypnotized masses to grasp (forever seeing without seeing) but I've found trying to explain Bus Bucks far less difficult for them to get. It's not only the bus rides that back up the chips, it's the work received that actually is backing up the chips. Linking the labor note to a bus ticket, a different initial value, simply gives people more confidence than in just a labor note. Bus Bucks are double backed.
kingofthepaupers 1 year ago
@kingofthepaupers I think I grasp the concept behind Bus Bucks and it is very interesting. I will explore it further. Maybe I can "derive" another idea from it!
I wonder if God really approved the work Goldman Sachs is doing? Was this
just a rubber stamp? Does God really rubber stamp stuff? Looks like it.
"Let's see, two airplanes -- three buildings. Check."
Nah. God doesn't make mistakes, right? nano-thermite
So. Any progress against psychopaths is great.
olrailbird 1 year ago
John, I love this video and would like to link to it, but the audio is grossly uneven. Your parts are way too loud while Colbert's parts are far too soft.
I'll look into time-based money, but right now I like simply outlawing interest and structuring loans to collateral life. We need to stop cheating each other.
Thanks for doing all you do.
olrailbird 1 year ago
What about unsecured debt, like credit cards? What about when a bank gives you credit out of proportion to your real income? Personally I've spent about 10 grand of money I didn't have?
lusitanic777 1 year ago
Jct: Are you saying you shouldn't have been trusted to return the 1000 Hours owed? All debt is secured by time. There's no such thing as "credit out of proportion" as long as there's no interest. Say you buy a $200,000 house that depreciates 1% per year for upkeep. As long as you can cover the depreciation, there's no loss. If you can't, it won't cost the group much. Do you think you should be paying interest to use your own IOUs?
kingofthepaupers 1 year ago
your crazy . and please dont reply I will not be back to review your 'answer'
mrbillmacneill 1 year ago
Jct: Aren't these "back-shoot then run away" chickens fun? Especially when they don't know that the short for for "you are" isn't "your" it's "you're." Not an educated man's opinion.
kingofthepaupers 1 year ago
you are retarded. read his books, he is
a far deeper thinker than you
andykrin 2 years ago
Jct: Any time you'd like to put your money where your mouth is... Bye.
kingofthepaupers 2 years ago
hahaha.....harvard professor vs. some lunatic in a hard hat.....really?
ncsu1234 2 years ago
Jct: Wanna bet $100 Canadian on the professor that banks lend out their depositors' funds like a piggy bank? I bet $100 banks lend out new chips like a casino bank. Put up and keep laughing or shut up and quit laughing. Har har har.
kingofthepaupers 2 years ago
Niall Ferguson is in favour of the Fed. Here are some quotes from other people.
"We have, in this country, one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board. This evil institution has impoverished the people of the United States and has practically bankrupted our government. It has done this through the corrupt practices of the moneyed vultures who control it." -- Congressman Louis T. McFadden
martinez85 2 years ago
"A great industrial nation is controlled by it's system of credit. Our system of credit is concentrated in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the world-- no longer a government of free opinion, no longer a government by conviction and vote of the majority, but a government by the opinion and duress of small groups of dominant men." -- President Woodrow Wilson
martinez85 2 years ago
At 5:36 you say Money is created by banks. That isn't true. It's only created by the central bank.
I mean honestly he teaches at Harvard and Oxford yet you think you have outsmarted him on the stupidest issues. Like the definition of money....wow big win there.
Ridingit66 2 years ago
Jct: Wanna bet? This "plumber" bets my blueprint of the banking system at the bankmath.htm page shows the proper flows from the tap to the drain with pipes.
kingofthepaupers 2 years ago
Take a look at Endogenous money creation. The idea that money is only created by central banks fits neatly with mainstream neoclassical economics teachings....but its only theory and not necessarily supported by emperical evidence.
There is plenty of evidence if you look for it, that increases in broad money definitions lead narrow M1 definitions.....that is the credit money dog wags the fiat money tail!!
aussiemike427 2 years ago
"Money is created by banks. That isn't true"
Jct: Do you want to put your money where your mouth is? I bet $100CA it's true.
kingofthepaupers 2 years ago
Ohhh people. To assume that someone is right because he is a Harvard Professor. Sad. He was on Bill Maher and when asked about the Federal Reserve was completely wrong. Institutions like Harvard teach the fucked up crooked monetary policies that we follow. Since it began the Federal Reserve has devalued the American dollar by 95%. Look into the Rothschilds in Europe. When you have privately owned central banks printing your currency, those bankers own you.
martinez85 2 years ago
"Whoever controls the volume of money in any country is absolute master of all industry and
commerce." James A. Garfield, President of the United States
"I believe that banking institutions are more dangerous to our liberties than standing armies.
Already they have raised up a monied aristocracy that has set the government at defiance. The
issuing power (of money) should be taken away from the banks and restored to the people to
whom it properly belongs." — Thomas Jefferson, U.S. President.
martinez85 2 years ago
kingofthepaupers, you have not understood.
Ferguson is right. Your argument falls short...
franzmc72 2 years ago
"From now on, depressions will be scientifically created." -- Congressman Charles A. Lindbergh Sr. , 1913
"The financial system has been turned over to the Federal Reserve Board. That Board administers the finance system by authority of a purely profiteering group. The system is Private, conducted for the sole purpose of obtaining the greatest possible profits from the use of other people's money" -- Charles A. Lindbergh Sr., 1923
martinez85 2 years ago
Jct: If you think whatever it is you just said explains why Niall wins this argument, I'll Paypal you $10 if you can tell us what the argument is and how your statement proves it.
What argument does your statement prove? It's worth $10 to me to find out if I've been wrong all these years.
kingofthepaupers 2 years ago
Trust/Relationship is the AXIOM of money. An axiom is a proposition that defeats its opponents by the fact that they have to accept it and use it in the process of any attempt to deny it. By saying that physical money is a receipt, etc. you're already alluding to a relationship of trust between the borrower and a lender. You can't escape it. He uses this axiom to define money, because IT DOES. Because THE CONCEPT is the only truth there is to "the receipt" - that's why Niall wins this argument.
Aspetta17 2 years ago
I like how you are trying to explain some flaws in Niall's interview... because indeed banks do not operate as simply as a tap and reservoir, that money indeed is not just 'trust.' But Niall is on Colbert report! What do you expect him to do man, give the audience a Lecture on everything that the bank does with you deposits, and explain in depth what money is and means? The audience is probably thankful that he wasnt as detailed as you wanted him to be.
goied87 2 years ago
Jct: I'm not saying he wasn't detailed enough, I'm saying he wasn't right.
kingofthepaupers 2 years ago
6. When you say money is not invisible, because you can see it represented as a charge or credit, you are stating the same thing as Niall except he believes that this makes it "invisible." As money is abstract, neither of you are correct or incorrect since we can't see abstract ideas. You can call it visible and Niall can call it invisible doesn't make a difference.
goied87 2 years ago
Jct: I never said money is invisible because I can't imagine what that would mean.
kingofthepaupers 2 years ago
3. Its not an IOU, I can write a note saying IOU but no1 is going to trade me that.
4. Its not a poker chip. If the casino closes, your chip is worthless. If all the banks in the world closes, bank notes can still be used because people will still use it to facilitate trade.
5. You can't say its not "trust" though, thats entirely true even though it may not be the entire truth.
goied87 2 years ago
Jct: If all the banks close, I'm not taking any bank notes but I'm glad to think you will be.
I say money is not based on trust because money is based on collateral pledged in the cage. What's hard to get?
kingofthepaupers 2 years ago
I'll just point out a few mistakes
1. Lets say everything you said about deposits is true, that they are not turned into loan products. Banks still buy bondsand securities is in fact lending, or faciliting the lending process by increasing the liquidity.
2. Microfinance is lent without collateral. I can get a personal loan at my bank for no collateral. I can get even higher with a better credit rating.
goied87 2 years ago
Jct: 1. My bank plumbing shows that only loans are connected to the tap of new money. Purchases by banks are not and do not create new credits.
2. Others get loans that are over-collateralized so banks can give under-collateralized loans to their friends. Still, it is rare to have access to undercollateralized loans liike you do unless they're credit cards.
kingofthepaupers 2 years ago
I'm afraid I stopped watching when you wanted to quibble about the differences between your definitions of 'money'. You are both defining it in basically the same way, but for some reason you think the way you define it is so much better or more important than his that you felt the need to differentiate.
I guess I'm the one who'll be sorry if later in the vid you made a comment that was actually worth listening to .... ^^
timtamtyrant 2 years ago
Jct: You couldn't discern the difference that we were going to bet on?
kingofthepaupers 2 years ago
Niall is a harvard professor, he is an acedemic and a very good one at that, you are a straight out idiot and don't understand a thing about the operations of banking.Wearing that ridiculus hat talking utter crap. Maybe you should read his book, you are very ill informed, or have some sort or mental retardation?
fffffff3ff3 2 years ago
Jct: Any time you'd like to put your money where your mouth is... Then again, though a few loudmouths have shouted Niall Ferguson's merits, no one has bet against anywhere I said he was wrong and I am right. Here's your chance to put up or shut up. Of course, when I flash the cash, it's bye bye trash.
kingofthepaupers 2 years ago
Comment removed
fffffff3ff3 2 years ago
Jct: Okay. Bet. The governor of the Bank of Canada graham Towers said "Of course, the banks do not lend out their depositors' funds." Every Economics textbook teaches how the reserve ratio and the multiplier effect provide loans of new money.
Go ahead and find a statement that banks lend out their depositors' funds in some article about the creation of money.
So if the banks don't create money when they make loans, where does new money come from?
kingofthepaupers 2 years ago
From one central bank, as its literally printed in times of economic crisis as in post WW1 Germany, leading to a massive depreciation of currency.
In the UK for example the royal mint does this job, ordinary banks used by citizans do not.
What the governor ment is that they are usually, technically, not the actual notes (or cheques of course) given but in practice they may as well be.
imangrynow 2 years ago
Yes, Shift A inflation in Germany after WW1. Yes, the mint issues some.
I"ll bet ordinary banks used by citizens loan out the bulk! like in US and Canada.
What the governor meant was exactly what he said and not what you think he meant. Banks lend new credits into circulation. Pretty clear.
kingofthepaupers 2 years ago
Er well then the banks themselves do not issue the money!
imangrynow 2 years ago
Jct: Har har har har. Can't state a bet.
Har har har har.
kingofthepaupers 2 years ago
O right got ya ok i bet not 1 thing he says is BS and i bet money is based on trust.
imangrynow 2 years ago
Jct: Sure some money is based on trust, credit card debt say, but most money is based on collateral. You want to bet on something that's both?
He says banks lend out their depositors' funds, one of the big Ecoconomics lies. I say they lend out new credits. There is one clear disagreement. Let`s bet a tenner on that.
kingofthepaupers 2 years ago
Nooo collatoral is often required for trust.
I say banks lend out depositors funds.
imangrynow 2 years ago
Jct: So now that you think you've found your issue, frame your bet on how Niall Ferguson is right and John The Banking Systems Engineer is wrong.
kingofthepaupers 2 years ago
Yep that's my bet i have faith he may be a right winger but the guy's smart.
imangrynow 2 years ago
Jct: You're right, right. Right, right. Right. Right. Right. So
chips aren't based on trust, they're based on the collateral in
the cage. Your boyfriend trusts your time, the banks need
collateral because they don't. My IOU is worth $500 because I
have or will put back the 40 Hours owed.
kingofthepaupers 2 years ago
No they are based on trust because the bank requires your collateral because it cannot trust you without it. Microfinance for example is based wholely upon trust.
And i'm gonna trust the Harvard guy on this one!
imangrynow 2 years ago
Jct: You want to bet I'm wrong but you can't state one error I've made. Har har har har. ]
kingofthepaupers 2 years ago
Ok: you say money isn't based on trust - it is if i want money from a bank i've got to secure it with collatoral, why? Because a bank doesn't automatically trust me, but i can be lent money by my boyfriend any time i like, why? He trusts that i'll pay it back! The only reason for collatoral being involved is that banks need security in order to trust you.
Your poker chip is only worth $500 because people who play you trust that you'll give them that $500 if you lose!
imangrynow 2 years ago
Jct: Now that you've precisely defined the issue as I've asked, how are you going to phrase the bet? Har har har har. Just can't into specifics, can you? Not even one point you can state.
kingofthepaupers 2 years ago
Er i think you'll find it was YOU who asked for the bet mate i just agreed!
imangrynow 2 years ago
Jct: I ask "where's my mistake" and your only answer is an imprecise "everywhere?" You can't even state one instance where I"m wrongwith any precision for the bet. Sounds like you're chicken.
kingofthepaupers 2 years ago
No you say he gives Stephen a "whole bunch of bull-shit" and he doesn't. At all.
imangrynow 2 years ago
Jct: Actually, the bet isn't where he's wrong, it's where I'm wrong. Where am I wrong where he's right?
kingofthepaupers 2 years ago
You're wrong where you say he's wrong.
imangrynow 2 years ago
Jct: If you can't bet, it means you were right that Niall Ferguson had some issues right but I was right when I said he had some issues wrong.
kingofthepaupers 2 years ago
Nah i can bet mate but what i'm telling you is that he's right throughout here he's often wrong but not here.
imangrynow 2 years ago
Jct: 10 pounds, okay.
So where is he right and I am wrong?
kingofthepaupers 2 years ago
"banks lend out people's money (which they do btw) he's basically spot on."
Jct: Would you care to bet some cash on a discussion about it?
kingofthepaupers 2 years ago
Yer sure a bet based on trust as he explained no offence but i tend to trust Harvard Proffessors over guys who post videos on youtube for a hobby!
imangrynow 2 years ago
Jct: That's why I flash the cash, so people who say they trust Harvard professors of economics over a real engineer get the chance to back down to my unique view on the banking system, from the top down of the banking sytsems engineer, not the bottom up of economists.
So where is he right and I am wrong?
Just one issue you'd like to bet on. Not big enough to be worth stiffing. For pride. To put your $10 bill on my wall. Or yours, Ha!
kingofthepaupers 2 years ago
Everywhere mate! And it'll have to be £10 as i'm routing for my countryman on this 1 if you get my drift!
imangrynow 2 years ago
Ferguson's right here plus he's actually pretty witty, who knew?!
imangrynow 2 years ago
Jct: No one's objecting when he's right. We're objecting when he's wrong.
What is he so right about that mitigates his wrongness?
kingofthepaupers 2 years ago
He's right here throughout! E.g money is based on trust, banks lend out people's money (which they do btw) he's basically spot on, don't like his political opinions but he's got it all right here.
imangrynow 2 years ago
Jct: Okay, I did. What's your point?
kingofthepaupers 2 years ago
King of the Paupers, look up the word Semantics.
DemocracyPerth 2 years ago
No one can be certain that the collaterol will be worth the amount of money that is pledge against it at the time it is sold. In fact it may become worthless by the time it needs to be sold, as happened with sub-prime mortgages.
A receipt (or specie-backed note) is always at the agreed value because the sale has already happened. Ferguson is right, modern money is unbacked.
krevno 2 years ago
Jct: You might believe that the pledged housing becomes worthless but it's actually the money it takes to buy it that changed. The housing didn't.
Modern money is backed by taxation payable that's good enough for me.
kingofthepaupers 2 years ago
Jct: It's not the property that is more and more worthless, it's the money that is more and more worthless!
Go and try to get some money from a bank without bringing some collateral to back it up and tell me how you do.
kingofthepaupers 2 years ago
Alright. You concede at least that the money it takes to buy the housing can change in value relative to the money lent on it originally, and more importantly that it can change in value relative to the savings the bank steals from to provide the mortgage in the first place.
This is hardly solid currency.
In fact it's liquid currency- expect tides.
krevno 2 years ago
Jct: Yes, I concede that this is what I've been saying for the past 30 years, that the money it takes to buy the housing can change in value, not the housing.
kingofthepaupers 2 years ago
Jct: I never said the 1/(s-i) positive-feedback malfunctioning money system was stable, I say the 1/s no-feedback money system is stable.
kingofthepaupers 2 years ago
re: invisible money. is it not true that banks don't take a deposit for 1$ and then in turn lend that 1$ out. But they are, in fact, permitted to lend, say, 1.15$ for every dollar deposited. Does that not make money invisible?
usersimdave 2 years ago
Jct: Youtube for "how bank create money" and find out for yourself how much per deposit they are able to lend.
kingofthepaupers 2 years ago
"KingofthePaupers: How banks create money"
kingofthepaupers 2 years ago