Digital Coin - Paul Grignon on Economics 101

[DCUPtoejuice]

Would this then spawn a digital coin credit default swap?  LOL

[mididoctors]

@DCUPtoejuice In theory its impossible because the redemption side is always linked to the original creator

[DCUPtoejuice]

@mididoctors how does that preclude the creation of derivatives?

[mididoctors]

@DCUPtoejuice well it wouldn't but you would get something of value when they expired. A oil future for instance is a form of derivative.

a CDS is multiple selling of value on an "event" and would require a digital coin being in several places at once on expiration.

which isn't possible AIUI

[DCUPtoejuice]

This would require legalization of competing currencies. Yes? I believe that is what Ron Paul advocates. Although Paul advocates a gold standard, that is only as a means to limit the growth of government spending and he ultimately wants free competition like this.

[DCUPtoejuice]

Paul is the man. When can I come up to Canada to take a course?

[DCUPtoejuice]

1:32 "we sign a loan and the bank takes that as a promise from us and gives us a credit and then we spend the bank gives us a promise that they'll pay up but not to their promise to pay that and we have a checking account" - a little unclear

[Adriaan1950]

Please see:

LEAKED NEWS. 1: BERNANKE, TRICHET and IMF reform to NEGATIVE INTEREST MONEY.

[Stonegoal]

His site is down!!! This is the best idea I have ever heard about money creation.

[Stonegoal]

@khan1233214 You should research the digital coin because that is all explained. But you most likely want an answer. If bob some guy you met today issued you random money to do a service you would consider if the service or product is worth it.

Hmmm is this money who is issued by one person who produces nothing that you know about worth while? No. Unless you are brain dead you would not accept that money. It is likely you would accept Sony money because you know they produce.

[AuCanary]

Hi, If you like this report please read this: Paul has just released the third and final? DVD set in the MAD series explaining Digital Coin and self Issuing Credit and how it compares against other Monetary Reform proposals. This is Paul's Magnum Opus if you will and I highly recommend it for anyone interested in Monetary Reform. go to moneyasdebt (dot)net. James, if you read this comment, please contact Paul for an update. Thank you.

[TonyParkerTube]

Debt creates money.

Woodrow Wilson said it himself that he ruined out country when it began operating.

Maybe our country just doesn't realize it yet that we have been given the opportunity to loan money by a few men who want us to work our lives away to repay the interest while we make advances for them. I mean they will get there world bank as soon as it is our last resort. Do work Rockefellers.

[VenusFriend]

So we need money because we need food and stuff.

But we can produce more food and stuff then we can use.

Do we need money then?

With more automation, do we need to work for money or food?

If I could get what I need, I would work for free.

[Cosairman]

@VenusFriend Work for free? Would you now?How much would you work compared to the other guy if that is the case?Money for all its faults,acts as a value on work done and for what it can buy you.

You also imply that over production solves all problems.This is debatable as overproduction can lead to job losses and potential waste of resources as the goods may have a sell-by-date or be left just sitting there.

Cheers!

[zefvor]

Here's a good explanation of the system

ww w.debtdeflation . com /blogs/2009/01/31/therovingcav­aliersofcredit/

[zefvor]

Its a common misconception that central banks create money. if that were true, there could be no recessions, witch are caused by lack of money in the economy, "lack of liquidity" as they euphemistically say. That's why governments are in such a borrowing binge they are trying to create new money in to the economy by loaning from banks. Simple thing to know and understand if you study anything proper like modern monetary theory and not those junk economic schools out there

[hhaassaann134]

@zefvor, i dont believe thats true, central banks create base money/ high powered money, and commercial banks then extend that by extending loans. A central banks simplified balance sheet has government debt as assets and currency in circulation as liabilities. How did you arrive at your conclusion ?

[RuggedLike]

@zefvor so who creates money then?

[KolonelPanic]

Google "Money as Debt"

[zonsb]

The promissory note the borrow signs over to the bank, the bank sells for at least the principle amount of the loan. Thus, even though the bank loaned no money it has profited from the sale of the borrowers credit. The bank lends the borrower his own credit. And the borrower is stuck paying the bank again over the life of the mortgage.

[neven01]

Well its useful info

however the Idea of Credits smells like RFID Chips so selling this idea to the masses as hes states it (Sounds Good) but history tells us splitting atoms (Sounded Good) then those who saw profit from it decided to twist it for evil. This is another way they (Could) introduce Creditr system with the issuance of rfid chips already in the national ID's and Pssports too much room for corruption.IMHO

Precious metals 200 years ago our money was based on it and it worked!

[doobsta]

great ideas for sure and this would pretty much invalidate the government lol...theyd be pissed for sure...but who needs them?

after that I think gold and silver should still be used in conjuction with this future barter styl "money" the reason being is that it provides freedom from even having too many future obligations or work to do. It is a store of excess "work" and it goes far beyond using it as money or just rarity.

Gold is much more itneresting than that...ask David Hudson.. ;)

[galikazoid]

james corbett thanks yet again for a terrific guest and great infos

you're great at what you do

much appreciated

[shiftedstuff]

What software do you use for the video background?

[MrBankRuns]

Everyone will issue the Credit Coin to themselves. Then they will sit back and not work (not make good on their promise). It happens all the time. So we will have a digital collapse.

[jjrglobal]

Grignon fundamentally doesn't understand how the monetary system in the US is constructed. His idea of how fractional reserve banking actually works is completely wrong. He believes that loans are generated from thin air by banks, when the reality is the money loaned out by banks is generated from deposits of which the bank is required to keep 10%.and can loan out the other 90%. The only money that is created is interest on the 90% of deposits that was loaned out.

[TrappedKitty]

No, Grignon is correct that money is generated by the "Federal" Reserve out of thin air. The money given to banks as security (your 10%) is entered into a computer with no real worth backing other than the future debt of you and your progeny.

They are not given ten and told they can loan out nine.

They are given one and told they can loan out nine as long as that one is held in reserve.

[jjrglobal]

I agree that the Fed creates money from thin air, but regular banks dont. They do just like explained. I am a huge opponent of the fed and its open market operations because they DO print money from nothing. But I was talking about fractional reserve banking and if you watch his other videos his understanding is exactly what I put in the comment above. We are talking about two totally different things. Fractional Reserve banking will work, without a Fed

[ShwangShwing]

You are wrong. Commercial banks do create most of the money supply. Economists know that. Did you watch his movies carefully? He explains the fractional reserve banking quite well. By "creating money out of thin air" he means that banks don't have money, yet they lend money. If you deposit $100 in the bank and the bank you can say "I have $100", right? Now the bank lends $90 to some other person and he says "I have $90 that I've lent from the bank". Then you have $100 and he has $90, 190$ total

[jjrglobal]

But the bank still owes $100 to the depositor, he has 10 in reserves and if all goes well with the 90 he loaned he'll break even. Thats why they charge interest,interest truly is money that is created. Essentially the depositor made the loan, but the banker accepted all the risk. If you were right they would loan money to anyone anytime, if they can create it from nothing. Only the Fed can create money from thin air in collusion with the treasury of course

[ShwangShwing]

I don't understand if you are arguing that private banks don't create money, or you are just implying that they do create money (create meaning increasing total money supply) but not from thin air. If the bank lends $90 it increases the money supply by $90. Money from interest is not the money currently created, but money, given to the bank by the lender (these money are already in the money supply). Returning the loan destroys the money created and decreases the money supply.

Not my thoughts.

[jjrglobal]

Holy shit, no wonder you're confused. Disregard the moronic examples in wikipedia. The definitions are fine but the examples using Laura and the money multiplier is not just confusing they are flat out wrong. There is a very simple explanation by Irwin Schiff called how an economy works. This will walk you from the days of barter all the way thru to modern day banking with gov interference and the consequences of the interference.

[ShwangShwing]

Ive studied a little economy (one semester, because I studied telecommunications) and the money multiplier and the money supply were the same as shown in wikipedia. And... you say the definitions are ok, so what's the problem? I'll see this Irwin Shciff explanation when I have time. And I still don't get something: Are you saying that private banks don't create money by giving loans? (By creating money I mean increasing money supply, not making profit.)

[jjrglobal]

I guess it would depend on your definition of create. It puts money back into the system that it receives in deposits and keeps only a fraction of the deposit in reserve. Essentially when you deposit say $1000, the bank is required to keep $100 in reserves and loans out the other 900, but if you go to that bank tomorrow and withdraw $1000 then the bank would be -900 for the loan it made

[jjrglobal]

They do increase the money supply by loaning out money that they hold on their books, but they are responsible for the deposits of their customers. The problem I had with the WIKI were the examples they used with Laura

[jjrglobal]

My bad, I missed the word ten in front of $100 bills. Why didnt they just say $1000. The example is correct

[jjrglobal]

You really need to rethink what your saying here and just step back so you can see how ridiculous what you're saying really is.

[ShwangShwing]

Either I don't understand what you're saying, or you just don't get how money is created. Do you know what money multiplier is? It's a number that shows how much by what factor money that are printed are multiplied by loans by private banks. It's the reciprocal of the reserve ratio: 10% gives money multiplier of 10. That means that for every $1 hard money created, $9 is created as loans. And that does increase the money supply. Look "Money supply" in google... or wikipedia...

[jjrglobal]

"Then you have $100 and he has $90, 190$ total"

No, then I have $10 and you have $90 Total $100

The only increase in the money supply will be created by the interest you will pay on the $90 loan I gave you.

This is true for all banks except the Federal Reserve discount window, where money can be created from thin air. This is why the Federal Reserve needs to be audited.

[jjrglobal]

If what you say were true and the money that banks loaned out were created by the bank out of thin air then it wouldn't hurt the bank if that money was NOT paid back to the bank, right?

If they had the ability to create money from thin air and loan it out they would give a loan to everyone that walked through the door.