Outside the Debt-Money Paradigm, Coffee with Joe 12-11-11

[jeepndesert]

google roots of dismal science land and money

[Scottonthespot305]

Great, albeit underwatched video. I posted a link to the local Public Banking Group here in NY. We need to incorporate this somehow.

Even worse for the Paulistias - they support gold as money, an equation sure to lead to deflation/depression, as gold quantity will never be sufficient to meet growing needs. Still worse (as in Bill Still, who points this glaring mistake in Paul's position), gold is only mentioned once in Art. 1, sec. 10 to use by States to pay off their debts, not the Fed gov.

[tothemax01]

There is nothing wrong with fractional reserve banking. It is banking. Banks do not create money. Banks intermediate debt. Money cannot be settled, debt can be, therefore money is not debt. Banks provide callable debt for use as a substitute for carrying or storing money. Bank expansion of credit is limited by bank competition via the adverse clearing mechanism. No problem, stop wasting your time.

[joebhed]

@tothemax01 Stop wasting YOUR time. Fed's Modern Money Mechanics publication: pg 3 """Who Creates Money? The actual process of money creation takes place primarily in banks."" I have 20 quotes from central bank publications / bankers. What do you have? Jingoism about what is debt and what is money? Bring it. Why don't you challenge something I said in the video? And, if Banks do not create money, then WHO creates money? Banks should not be creating and destroying OUR money.

[tothemax01]

@joebhed I am, banks do not create money in the sense of a printing press. That is, they cannot create 'money' in the sense of 'cash'. If we must use 'money' in the overbroad sense of 'money(cash) and debts', then there is no problem 'creating money'. You can do so yourself, in the same manner as banks do, by writing loans into an account book, or issuing IOUs. Bank accounts are debts, they bear liabilities, and they are not 'free money' in the sense printing press money is.

[joebhed]

@tothemax01

Wow, banks don't "print in the sense" of currency is what you're saying. Who cares?

I'm talking about the real quality of money which is purchasing power in the national economy. I'm not even interested in chatting about whether double-entry bookkeeping

money creation is real or not.

FYI, so-called 'cash money', as you are using the term, is also debt-based.

How do you think banks acquire more 'cash'?

Answer, they pledge collateral, as in a loan.

Thanks for playing.

[tothemax01]

@joebhed Well then your position is effectively 'make lending illegal'. How could an economy possibly function like this? Lending and debt is an integral and important part of a functioning society.

[joebhed]

@tothemax01 Please explain WHY you presume what my position is? Actually, my position is to make lending both legal and moral. That would happen, like if I said: "Say tothemax01, can you LEND me $10 ?" And you would have two answers possible. "No Joe, don't have it." or "Yeah Joe, pay me back next week." The option you would NOT have is to say: "Joe, I don't have the tenski but I can still loan it to you." That's the immoral part of fractional reserve banking. Thanks

[tothemax01]

@joebhed But this is blending the lending and settlement process into one thing (similar to the way purchase and settlement occur in one step in most small purchases). It has two stages: the contract is established 'A owes B $10 now, B owes A $10 in a week', then B *can* demand settlement of the immediate debt now, and A *can* demand settlement of the 1 week debt in 1 week. B could choose to leave it with A, but get A to pay someone else $10 - for convenience sake. That's a Bank.

[joebhed]

@tothemax01

Lending and debt ARE an important part of a functioning economic society.

But NEITHER are necessary to introduce the means of exchange into that economy.

When we talk about debt-free money, we are talking about the 'issuance" of that money into existence.

BECAUSE it is not introduced as a debt, it is not cancelled any time loans are made and paid back.

It remains part of the permanent money system.

In perpetuity.

Do you have a better plan?

[tothemax01]

@joebhed My better plan is 'return to gold standard with no central bank and no government underwriting of or involvement in the banking industry'. Gold cannot be 'introduced as a debt', cannot be printed off at will, and is 'perpetual'. This system does (and did) force people to be careful which banks they put their money in, and forces bank shareholders to rein in risk taking/speculation and over expansion of credit - lest they loose their money.

[joebhed]

@tothemax01 A return to the gold standard? That's it? Maybe denationalize money? Maybe ending legal tender laws? Maybe free-bankers printing off their own dollars? We only agree on ending government 'underwriting'. Sorry, but this is MY money system. And I already said, I ain't giving it up to anybody. And I'm taking it back from the private monopolists. That's the deal here. The gold standard, deregulation and no government backstopping of banks did not go well in '29.

[tothemax01]

@joebhed So to answer your question, money (in the strict narrow non-liability bearing sense, i.e. cash) is created by the government via the fed, which is effectively a federal agency (based on where the profits flow and how its directors are appointed). The banks issue and accept debt (loans and deposits). They cannot print off non-liability bearing cash money, and they are thus not creating and destroying said money. Debts are created and destroyed all the time, and there is no prob.

[joebhed]

@tothemax01

Why the erroneous chicanery about differing types of money?

The Fed does not even create the cash.

BEP prints then sells to the Fed Regionals at cost. Private Fed parcels out to members based on collateral.

From collateral to cash - by the private bankers.

They create and destroy 'capital', according to Friedman, when they create and extinguish (bank-credit) loan money.

But, what's the point.

[joebhed]

@tothemax01

Banks do NOT create and destroy debt money ALL THE TIME.

If they did, we wouldn't be in a recession.

In a contraction - can you say like right now? - banks do NOT want to lend and instead would rather hoard reserves, so we have no money for keeping the national economy moving forward, for creating jobs and meeting aggregate demand. Instead, we have disastrous human and social suffering.

Yeah, private debt-money is great stuff.

Thanks.

[tothemax01]

@joebhed The recession was caused primary by two things. The first was the government sponsored underwriting of mortgages for people who could not afford them (fannie, freddie etc). The second was the central bank, which put rates to 1% (2% below inflation) in 2003. An obvious housing bubble inflated and then burst, putting us in the current recession. The credit contraction of the private banks is a result of this recession and its origin, not a cause.

[NickF1227]

Ron Paul's theory oh commodity money is no more antiquated than your theory of public money. That's a silly claim. Will make a video tonight Joe!

[Dai7261]

@NickF1227

Think of it in these terms value used instead of barter is a made made thing so anything that is recognised and represents swappable value is good to be used for money.

[joebhed]

@NickF1227

Did I say it was antiquated? As I think you know, I want to engage the options to a post-private Fed monopoly.

It's all on the table.

Thanks.

[NickF1227]

@joebhed

im sorry I event gotten around to responding to your second video. I haven't synced my video response to your first, not sure if Uve seen it. I work 65 hours a week and have a lady friend and sovial life... so this gets hsrd

[Dai7261]

keep the videos coming guy's the message needs hammering home.