What the hell is money? 2 of 2

[tuberesponder]

why all the throwing up the the magic hand signs?

a medium of circulation is a misnomer.

it's a medium of exchange

it's like saying the water in a river is the medium of circulation, it's not. it's the water that actually circulates.

The CURRENT SEE, flows between the BANKS of the River Economy.  It can FREEZE and stop circulating, but still be the CURRENT SEE. It often LIQUID (cash) or be VAPOR (credit). saving is not hoarding.

you keep equating "value" and "price"

[princeofexcess]

there is also another way to stabilize the problem. Its called backing money with a standard. Gold has real value of labor. Meaning it takes certain amount of labor to extract gold. It also has real value as a material (paper money also has that value but that value is the value of paper) Circulation is a disaster when there is an inflation in a recession. If a recession is caused by spending its saving that is the solution.

[badnewswade]

@princeofexcess Problem with gold is that it has little real value as a metal, or rather its value as a metal is out of all proportion to its value as a medium of exchange.

Also the supply of gold is every bit as vulnerable to "money printing" and inflation as paper money, when more gold is mined inflation occurs. (to be continued)

[badnewswade]

(contd) Also the system gets gamed, for instance the authorities refuse to audit Fort Knox & about half the gold in the world only exists on paper. Nothing magic about gold - Keynes once said it was like burying paper money and paying people to dig it up!

(to be continued)

[badnewswade]

(contd)

Wonder what would happen if you tied the value of money to a vital industrial commodity, like oil or a basket of energy commodities rather than have fiat money or a gold standard? I know oil is usually traded in US$ which gives the USD a lot of its power - anyone have any thoughts? @brendanmcooney ?

[princeofexcess]

@badnewswade golds value as a metal is the same as its value of medium of exchange. (just because you make something medium of exchange it does not mean its value changes gold is not a value of exchange but it still has a high value now)Gold inflation is possible however gold is a scarce resource it actually costs resources to get gold out of the ground and to find new gold ores and to transport goldThe costs are high so it only pays off to find new gold when there is huge deflation

[princeofexcess]

@badnewswade so gold inflation only happens as a result of really high gold deflation (like people begin to be much wealthier in other resources so gold becomes worth more and more because the ratio between the gold and other resources changes)

[68generation]

I like your videos because they are not academic and they give you the idea without so much effort, especially to people like me that have a bit of smattering of Economics and Marxirst theories but are not students at Uni. - thanks they are helping me a lot to understand Marx...by the way, before the first cartoon my head was actually aching a bit...Lol

[catgumart]

I often hear people say that welfare recipients are leeches of society living off taxpayers dollars, but I think this is false even if the welfare recipient does not work, as they (usually) don't horde or accumulate a store of value,,,they (me too because I am on welfare) get their money and recirculate it immediately for rent,food,whatever else they need, then it is gone till next welfare check comes, Id argue the RICH are the leeches as they accumulate wealth from labor,and credit and debt

[slaballinmytrunk]

So true, just because you're Warren Buffet or some fat cat doesn't mean you're gonna eat 100 chickens every day!

[catgumart]

That extra money is used to the advantage of the rich..like having privilege, having power backed by money to influence people, wealth is power and most people will do things that are morally questionable for money, it is hard to say no to money since having more money makes life much easier, if this wern't true then the rich would have no problem with progressive taxes or redistribution, there wouldn't be so much fighting & competition over economics...this is so obvious it needs to be reminded

[Invirtuo]

No, the principal arguments against progressive taxation at the marginal rate is that incentives are reduced and that inflationary pressures are produced. Redistributive transfer payments dampen efficiency, create dependency and diminish incentives among many other problems

[silencemagazine]

You don't have to be wealthy to live off credit in today's world either. Eventually to live w/o a capitalist society or someone giving you a handout everyman must work to produce for his needs. The factory just allows for more goods to be produced, hence more "wealth." The problem incurs when artificial credit is created and allocated with state protection where the public is not demanding it.

[catgumart]

Whatever the system there is going to have to be a development within human consciousness that understands that there are going to be people who need help and support and yes a handout. Needs that must be met in special ways, because of human uniqueness, human frailty, maybe character flaws or maybe genuine difficulties that lie in the persons uniqueness or circumstance. That is why I like socialism because it takes this more into account.

[catgumart]

I don't know if I'm a Marxist..I'm still learning about this, but I like government programs that help the lower stratum of society and regulate wealth, and this is known as socialism, any system can be used to oppress, I believe capitalism as Marx says is exploitative, I wonder if there is ways to organized a well balanced mixed economy or if the fairest way is truly some interpretation of Marxism, I know there are people who will always have trouble and will always have unique needs to be met

[Invirtuo]

"Socialism cannot exist in any economy with any form of exchange" Ludwig Von Mises

[00iam]

Money as debt cannot be allocated or distributed widely, so circulation problem is the root Lincoln geenback were debt-free and issued by Us Treasury, not privatised FED. So it is we the people who need to wake up and demnand debt-free money, which will make our government debt-free. Check out American Monetary Institute free conferences in the west coast.

[brendanmcooney]

Greenbacks depleted the government's gold reserves and made banks unable to respond to capitalist crisis effectively. This culminated in serious economic crisis in the 1890's and a long movement by the capitalist class to replace greenbacks with a more modern monetary system. What makes you think greenbacks can overcome the problems that led to their annihilation 1oo years ago?

[wilwon33]

@brendanmcooney

You appear to be unfamiliar with modern money theory (MMT). I suggest that you take a look at the writings of LR Wray, Marshall Auerback, Warren Mosler, Bill Mitchell (billy blog). These economists have developed the concepts of A Lerner, H Minsky, and others to explain how the fiat system in use in the US since 1971 would work if the expediters in Washington had the interests of the worker in mind rather than the system as it currently exists. Fiat money is not the problem.

[studentoflife01]

I think it was a bad idea to imply that someones brain would hurt after understanding the video. Everything thing else about it was great. You can put in cartoons but I beg you to stop it. I mean your explaination wasn't even that deep (That it would hurt my brain)..

[brendanmcooney]

well it hurt my brain trying to understand it so I assumed it might be a bit taxing to others as well.

[studentoflife01]

I know it may have hurt your brain, but it seems as if you are emphasizing it. As if it would, or could hurt another's. It does help keep interest, but I am sensitive to what you may express my potential to be. Although I have a will of my own, solely because I am trying to understand what you are saying I take it into consideration. Ergo I think about how your explanation my hurt my brain.

[Stockfield]

get lost you sensitive and weak person. I would love to scream insults at you just to see your bones break by themselves. what the fuck are you? a house of cards?

[studentoflife01]

What did I say that offended you personally? I do not understand why you are budding in on our conversation.

[zach345621]

*money money money* lol i really liked this video also!

[gbg112]

that was one of your best video's i have seen so far

[nbm34]

The reflex value of money is magnetised into debt which is the only way most people can afford the goods from the present modes of the means of production.There value is determined by cost,and profit margins,with speculation as the primary objective,in monopolies were they exist.

As modern debt has even gone beyond banks to control and realise their debts, when required. The state now bails out bankrupt banks with the taxpayers money. IN REAL TERMS CAPITALISM is a falsehood of debt.

[nbm34]

THIS IN ESSENCE is THE EQUIVELENT and directly the cause of SPECULATIVE INFLATION,in which borrowing is like printing your own money,as a promise to pay in the future the debts in question,at a rate of interest. As you point out this particularly EVIDENT in the housing markets, were inflation puts people in fanasy priced houses that the majority of people can no longer afford to buy, on average wages.

When people renage on their debts, with lossed

jobs and homes as in the present crisis....

[nbm34]

Brilliant like the cartoons and monty pYTHON SKETCH these are sophisticated images to get the message across which you do so well.

IN REFERENCE to your comments WHAT GOES RIGHT IN Capitalism and keeps money circulating. Is correct it is THE MEANS OF PRODUCTION under the terms of Capitalism.While people have jobs mainly they do not complain. Its other major foundation is Accumalitive debt, in which its goods are purchased. As we have seen DEBT on the American state scale of $3 to $5 TRILLION

[topicalone]

What's with the grim face when you say your next video is about the capitalist mode of prod.? lol... looks like you're not looking forward to it.

[brendanmcooney]

I wonder if other folks have input into the determination of the reflex value of money. Does anyone have any comments about my characterization of it in this video? I worry I make too much a point about supply and demand characterizing reflex value.